Loring v. Marshall

• Decision Date: 07 November 1985
• Citation: 484 N.E.2d 1315,396 Mass. 166
• Parties: Augustus P. LORING et al. 1 trustees, v. Colin S. MARSHALL et al. 2
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1315

484 N.E.2d 1315

396 Mass. 166

Augustus P. LORING et al. ¹ trustees, v. Colin S. MARSHALL et al. ²

Supreme Judicial Court of Massachusetts,

Suffolk.

Argued May 8, 1985.

Decided Nov. 7, 1985.

Eric F. Menoyo, Boston, for plaintiffs.

Nicholas U. Sommerfeld, Boston, for Lawrence Coolidge & another, executors.

Joseph R. Watkins (Randall L. Holton, Boston, with him) for Charles Jackson, Jr., & another, executors.

Francis S. Moulton, Jr., Boston, for Colin S. Marshall & another.

Alan M. Spiro (Marion R. Fremont-Smith, Boston, with him) for Museum of Fine Arts & others.

Kevin A. Suffern, Assistant Attorney General, for the Attorney General.

Before HENNESSEY, C.J., and WILKINS, LIACOS, ABRAMS, NOLAN, LYNCH and O'CONNOR, JJ.

WILKINS, Justice.

This complaint, here on a reservation and report by a single justice of this court, seeks instructions as to the disposition of the remainder of a trust created under the will of Marian Hovey. ³ In Massachusetts Inst. of Technology v. Loring, 327 Mass. 553, 99 N.E.2d 854 (1951), this court held that the President and Fellows of Harvard College, the Boston Museum of Fine Arts, and Massachusetts Institute of Technology (the charities) would not be entitled to the remainder of the trust on its termination. The court, however, did not decide, as we now must, what ultimate disposition should be made of the trust principal.

Marian Hovey died in 1898, survived by a brother, Henry S. Hovey, a sister, Fanny H. Morse, and two nephews, John Torrey Morse, Third, and Cabot Jackson Morse. By her will, Marian Hovey left the residue of her estate in trust, the income payable in equal shares to her brother and sister during their lives. Upon her brother's death in 1900, his share of the income passed to her sister, and, upon her sister's death in 1922, the income was paid in equal shares to her two nephews. John Torrey Morse, Third, died in 1928, unmarried and without issue. His share of the income then passed to his brother, Cabot Jackson Morse, who remained the sole income beneficiary until his death in 1946.

At that point, the death of the last surviving income beneficiary, Marian Hovey's will provided for the treatment of the trust assets in the following language:

"At the death of the last survivor of my said brother and sister and my two said nephews, or at my death, if none of them be then living, the trustees shall divide the trust fund in their hands into two equal parts, and shall transfer and pay over one of such parts to the use of the wife and issue of each of my said nephews as he may by will have appointed; provided, that if his wife was living at my death he shall appoint to her no larger interest in the property possessed by me than a right to the income during her life, and if she was living at the death of my father, he shall appoint to her no larger interest in the property over which I have a power of disposition under the will of my father than a right to the income during her life; and the same limitations shall apply to the appointment of income as aforesaid. If either of my said nephews shall leave no such appointees then living, the whole of the trust fund shall be paid to the appointees of his said brother as aforesaid. If neither of my said nephews leave such appointees then living the whole trust fund shall be paid over and transferred in in [sic ] equal shares to the Boston Museum of Fine Arts, the Massachusetts Institute of Technology, and the President and Fellows of Harvard College for the benefit of the Medical School; provided, that if the said Medical School shall not then admit women to instruction on an equal footing with men, the said President and Fellows shall not receive any part of the trust property, but it shall be divided equally between the Boston Museum of Fine Arts and the Massachusetts Institute of Technology." ⁴

The will thus gave Cabot Jackson Morse, the surviving nephew, a special power to appoint the trust principal to his "wife and issue" with the limitation that only income could be appointed to a widow who was living at Marian Hovey's death. ⁵ Cabot Jackson Morse was survived by his wife, Anna Braden Morse, who was living at Marian Hovey's death, and by his only child, Cabot Jackson Morse, Jr., a child of an earlier marriage, who died in 1948, two years after his father. Cabot Jackson Morse left a will which contained the following provisions:

"Second: I give to my son, Cabot Jackson Morse, Jr., the sum of one dollar ($1.00), as he is otherwise amply provided for.

"Third: The power of appointment which I have under the wills of my aunt, Marian Hovey, and my uncle, Henry S. Hovey, both late of Gloucester, Massachusetts, I exercise as follows: I appoint to my wife, Anna Braden Morse, the right to the income during her lifetime of all of the property to which my power of appointment applies under the will of Marian Hovey, and I appoint to my wife the right during her widowhood to the income to which I would be entitled under the will of Henry S. Hovey if I were living.

"Fourth: All the rest, residue and remainder of my estate, wherever situated, real or personal, in trust or otherwise, I leave outright and in fee simple to my wife, Anna Braden Morse."

In Welch v. Morse, 323 Mass. 233, 81 N.E.2d 361 (1948), we held that the appointment of a life interest to Anna Braden Morse was valid, notwithstanding Cabot Jackson Morse's failure fully to exercise the power by appointing the trust principal. Consequently, the trust income following Cabot Jackson Morse's death was paid to Anna Braden Morse until her death in 1983, when the principal became distributable. The trustees thereupon brought this complaint for instructions.

The complaint alleges that the trustees "are uncertain as to who is entitled to the remainder of the Marian Hovey Trust now that the trust is distributable and specifically whether the trust principal should be paid in any one of the following manners: (a) to the estate of Cabot Jackson Morse, Jr. as the only permissible appointee of the remainder of the trust living at the death of Cabot Jackson Morse; (b) in equal shares to the estates of Cabot Jackson Morse, Jr. and Anna Braden Morse as the only permissible appointees living at the death of Cabot Jackson Morse; (c) to the estate of Anna Braden Morse as the only actual appointee living at the death of Cabot Jackson Morse; (d) to the intestate takers of Marian Hovey's estate on the basis that Marian Hovey failed to make a complete disposition of her property by her will; (e) to Massachusetts Institute of Technology, Museum of Fine Arts and the President and Fellows of Harvard College in equal shares as remaindermen of the trust; or (f) some other disposition." Before us each named potential taker claims to be entitled to trust principal.

In our 1951 opinion, Massachusetts Inst. of Technology v. Loring, 327 Mass. at 555-556, 99 N.E.2d 854, we explained why in the circumstances the charities had no interest in the trust: "The rights of the petitioning charities as remaindermen depend upon the proposition that Cabot J. Morse, Senior, did not leave an 'appointee' although he appointed his wife Anna Braden Morse to receive the income during her life. The time when, if at all, the 'whole trust fund' was to be paid over and transferred to the petitioning charities is the time of the death of Cabot J. Morse, Senior. At that time the whole trust fund could not be paid over and transferred to the petitioning charities, because Anna Braden Morse still retained the income for her life. We think that the phrase no 'such appointees then living' is not the equivalent of an express gift in default of appointment, a phrase used by the testatrix in the preceding paragraph." In Frye v. Loring, 330 Mass. 389, 393, 113 N.E.2d 595 (1953), the court reiterated that the charities had no interest in the trust fund.

It is apparent that Marian Hovey knew how to refer to a disposition in default of appointment from her use of the terms elsewhere in her will. She did not use those words in describing the potential gift to the charities. A fair reading of the will's crucial language may rightly be that the charities were not to take the principal unless no class member who could receive principal was then living (i.e., if no possible appointee of principal was living at the death of the surviving donee). Regardless of how the words "no such appointees then living" are construed, the express circumstances under which the charities were to take did not occur. The question is what disposition should be made of the principal in the absence of any explicit direction in the will.

Although in its 1951 opinion this court disavowed making a determination of the "ultimate destination of the trust fund," the opinion cited the Restatement of Property § 367(2) (1940), and 1 A. Scott, Trusts § 27.1 (1st ed.1939) ⁶ to the effect that, when a special power of appointment is not exercised and absent specific language indicating an express gift in default of appointment, the property not appointed goes in equal shares to the members of the class to whom the property could have been appointed. For more recent authority, see 5 American Law of Property § 23.63, at 645 (A.J. Casner ed.1952 & Supp.1962) ("The fact that the donee has failed to apportion the property within the class should not defeat the donor's intent to benefit the class"); Restatement (Second) of Property § 24.2 (Tent.Draft No. 7, 1984). ⁷

Applying this rule of law, we find no specific language in the will which indicates a gift in default of appointment in the event Cabot Jackson Morse should fail to appoint the principal. The charities argue that the will's reference to them suggests that in default of appointment Marian Hovey intended them to take. On the other hand, in Welch v. Morse, 323 Mass. at 238, 81 N.E.2d 361, we commented that Marian Hovey's "will discloses an intent to keep her property in the family." The...