Benjamin v. Morgan Guaranty Trust Co.
Appellate Division of New York
202 A.D.2d 536 (1994)
Henry Benjamin's will created a marital trust for his wife, Germaine Cromwell, giving her a power of appointment over the remainder. Cromwell, under an agreement with trustee Morgan Guaranty Trust Company (defendant), appointed the trust remainder to two hospitals. The Benjamins (plaintiffs) sued to invalidate the appointment, arguing New York law bars contracts to exercise a power of appointment in a particular way, making the underlying agreement unenforceable and, they claimed, the appointment itself invalid. The lower court granted summary judgment upholding the appointment, and the Benjamins appealed.
Whether an appointment made within the scope of a power of appointment is invalidated because it was made pursuant to a contract that itself is unenforceable under state law barring contracts to exercise appointment powers.