Avery v. Bender
| Decision Date | 02 October 1956 |
| Docket Number | No. 1071,1071 |
| Citation | 126 A.2d 99,119 Vt. 313 |
| Parties | Albert Gray AVERY v. Emilie B. BENDER; Katharine Avery Hettinger, individually and as Guardian ad litem of the infant, Thomas Hettinger; Josephine Gray Avery. |
| Court | Vermont Supreme Court |
Lawrence C. Jones, Rutland, Wayne C. Bosworth, Middlebury, for plaintiff.
Lawrence & O'Brien, Rutland, Robert W. Owens, Jr., New York City, of counsel, for defendants.
Before JEFFORDS, C. J., CLEARY, ADAMS and HULBURD, JJ., and HAROLD C. SYLVESTER, Superior Judge.
This is a petition for a declaratory judgment brought to the court of chancery for Rutland County. It involves the construction of certain parts of an inter vivos trust instrument and the rights of the plaintiff and the defendants thereunder. It is here on exceptions of the defendants.
A hearing was had by the chancellor on the petition, amendments thereto, answers, pleadings, agreed statement of certain facts, exhibits and statements of counsel. No oral testimony was taken. The chancellor made and filed findings of fact. A declaratory decree was entered in favor of the plaintiff. The defendants, Emilie B. Bender, Katharine Avery Hettinger, individually and Josephine Gray Avery, trustee, excepted to certain findings of facts, to the chancellor's failure to find certain requests for findings, and were also allowed exceptions to the decree. They filed a joint bill of exceptions.
Unexcepted to material findings show that on September 21, 1921, Brainard Avery, who practiced law in New York City from about 1904 to 1938, and his wife, Josephone Gray Avery, both then residents of New York City, executed and established in New York an inter vivos trust by deed of property situated in New York. They named therein Robert K. Wehner, Esq., of Newark, N. J. and The New York Trust Co. of New York City as joint trustees. At that time Brainard and Josephine, the settlors, had three minor children, Albert, the plaintiff, born March 23, 1904, Katharine, the defendant Hettinger, born, September 29, 1908 and Brainard, Jr., born, February 24, 1911. The latter deceased on July 7, 1926, unmarried, intestate and without issue.
The plaintiff and the defendants, Emilie B. Bender and Katharine Hettinger now reside in the city, county and state of New York. In 1939, both Brainard and Josephine moved to Middletown Springs, Rutland County, Vermont where they had maintained a home since about 1906 and they both continued to reside there until the decease of Brainard. Josephine has continued to reside there since then and she is now 81 years old.
The defendant, Katharine, has one son, Thomas A. Hettinger, a minor, who resides with her and he is her only child. She first married Reginald Coggeshall in 1935, from whom she obtained a divorce in 1942. In 1944 she married Herman S. Hettinger from whom she was divorced in 1952. The defendant Bender is not related by blood or marriage to any of the parties hereto.
At the time the deed of trust was executed in 1921, Brainard Avery had two brothers, John W. Avery and Wayland Avery, who then and thereafter until their deaths lived outside the state of New York. They both survived Brainard and died in California in 1953. On April 23, 1937, John had three adult children and Wayland had three minor children.
In 1921, when the trust deed was executed the property granted by it consisted of personal property only and it was specifically enumerated therein. In 1939, the trust property was removed to Vermont and it has remained there since then.
The original deed of trust was amended seven times; first, on March 17, 1937; second, on April 9, 1937, third, on April 19, 1937; fourth, on April 23, 1937; fifth, on June 13, 1937; sixth, on November 28, 1939 and seventh, on December 30, 1946.
The findings of fact set forth verbatim a large part of the trust deed ( 3). It provided that the trustees should make no investments or reinvestments without the written direction of Brainard and Josephine or in the event of Josephine's death or ceasing to be Brainard's wife of Brainard alone. During the lifetime of Brainard the sole responsibility of the trustees was for the preservation of the securities and cash and accounting therefor. After Brainard's death, the trustees became responsible for the investment and reinvestment of the trust property as authorized by the laws of New York pertaining to the investment of trust funds. (Article II)
No loans were to be made to Brainard and/or Josephine, directly or indirectly, without adequate security. (Article III)
The trustees were directed to open three bank accounts with The New York Trust Co. in their names as joint trustees. 1. A principal account for the deposit of all principal sums belonging to the trust to be invested. 2. An insurance fund. Beginning with October 1, 1921, and on the first of each and every month thereafter, there should be deducted from the income, $75 which should be deposited in this account to be dealt with as provided in Schedule G Insurance Fund. 3. Income account, in which should be deposited all the remaining income in cash to be disbursed during the lifetimes of Brainard and Josephine; (a) subject to their joint check or order or to either one alone if the other should so elect. (b) If Josephine should survive Brainard or if Brainard should become insolvent then to Josephine alone for her life. (c) If Brainard should survive Josephine, then to him alone for his life. If Josephine should cease to be Brainard's wife, then at his election, she should lose all interest in the income and the entire income then be paid to Brainard during his life, subject to Article VI at his election. Brainard and/or Josephine reserved the right to direct the deposit by the trustees of the income or any part of it in any other bank. (Article IV)
Securities could be withdrawn from the trust by Brainard and/or Josephine by the substitution of cash or other securities of equal value. (Article V)
Should Brainard become entitled to the entire income, he could, at his election and under such conditions as he might prescribe, renounce his interest for life or for a period less than that in all or any part of the income in favor of any one, two or all three of the children of the marriage, naming them and their birth dates. (Article VI)
We now quote from the trust deed;----
'(a) Upon the decease of both Brainard and Josephine, said Trust Estate shall, in case of the failure of Brainard to exercise the power of appointment first hereinbelow mentioned vest in the said three children of said marriage, or in the survivors or survivor of them, share and share alike.
'(b) Brainard, however, shall have the right (and Josephine hereby consents thereto) to dispose of all or a part or parts of said Trust Estate, by power of appointment contained in his Last Will and Testament, to such one, ones or all of the three children of said marriage (Albert, Katharine, and Brainard Junior) as he may direct and appoint, and subject to such conditions and restrictions as he may impose: all subject, however, to Josephine's life income in the Trust Estate.
'(c) Should Brainard survive Josephine and all of said three children, he shall have the right (and Josephine hereby consents thereto) to in his discretion dispose of all or a part or parts of said Trust Estate to such of his next of kin as he may direct and appoint in and by power of appointment contained in his Last Will and Testament.
'(d) Should Brainard survive Josephine and all of said three children of said marriage, and should he in such case fail to exercise the power of appointment hereinbefore last mentioned, then upon Brainard's death said Trust shall terminate and said Trust Estate shall be divided equally among Brainard's next of kin.'
The compensation of the trustees was fixed by Article VIII.
During the lifetimes of Brainard and Josephine, the trustees or either of them could be removed by notice in writing signed by Brainard and Josephine or by Brainard alone if he survived Josephine or the marriage ceased. There were certain provisions about successor trustees having to be, in some cases, a bank or trust company. (Article IX)
Article X contained general provisions in regard to the powers and duties of the trustees and is not particularly material in connection with the questions discussed in this opinion.
We again quote from the trust instrument;----
'XI Amendment of Trust Deed.
'This deed may be amended in writing, but not revoked, at any time by the concurrence of Brainard and Josephine, and upon Josephine's death by Brainard alone, if he shall survive her.'
Brainard died testate in Middletown Springs on February 6, 1947, without ever exercising the power of appointment referred to in the deed of trust. ( 4)
On September 26, 1921, Josephine executed to Brainard an irrevocable power of attorney in which she made, constituted and appointed Brainard 'my true and lawful attorney-in-fact, for me and in my name to do, execute and perform any and all acts which I could do if personally present with respect to my property, property rights, business and financial affairs, with full power and authority in any and all the premises, and in such manner as my said attorney shall think proper, * * * of which my said attorney shall judge expedient or necessary in and about, for or concerning, the premises or any of them, as fully as I * * * could do if personally present, * * *.' ( 14)
From an examination of the provisions of the trust deed, it fairly appears, subject to the non-revocation provision, that the settlors, during the lifetime of both and particularly Brainard, during his lifetime, because of special provisions pertaining to him alone, including the power of attorney, retained complete control and domination over the trust property and its attributes. They parted with the title only and that was not entirely...
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