Boston Safe Deposit & Trust Co. v. Becker
| Citation | 186 N.E.2d 703,345 Mass. 207 |
| Parties | BOSTON SAFE DEPOSIT AND TRUST COMPANY, Trustee, v. Paul G. BECKER, Administrator, et al. |
| Decision Date | 06 December 1962 |
| Court | United States State Supreme Judicial Court of Massachusetts |
Joseph R. Watkins, Boston, stated the case.
Joseph J. Krohn, Boston (Thomas H. Mahony, Boston, with him), for Becker, Admr.
Mark M. Horblit, Boston (Arthur T. Wasserman and Samuel H. Kalish, Boston, with him), for Capitol Security Corp.
Before WILKINS, C. J., and WHITTEMORE, CUTTER, KIRK and SPIEGEL, JJ.
This is a petition for instructions by the trustee (the trust company) under the will of Francis X. Fitzpatrick (the testator) as modified by an agreement of compromise executed on December 31, 1921 (the compromise agreement). 1 The trust company desires instructions as to the disposition of (a) 'one-half ot the property held by it as [t]rustee for the benefit of Ann F. Fitzpatrick' (Ann), and (b) 'the property remaining in its hands as [t]rustee for the benefit of Antoinette R. Lawton' (Antoinette) and others. The answers admitted most of the allegations of the petition. The case has been reported without decision upon the pleadings and a statement of certain agreed facts.
The testator died on March 4, 1921. He left the residue of his estate to the trust company in trust to pay $225 per month to Antoinette for life and, subject thereto, to pay the income of one half of the residue to his son, James H. Fitzpatrick (James), for life with remainders over, and the income (subject to certain discretions) of the other half to his daughter, Ann, for life with remainders over, but subject to a proviso that if she should 'marry one Crawford Dearth' her share was to be very greatly reduced. Ann opposed the allowance of the will.
By the compromise agreement, ten per cent of the residue (after payment of debts, expenses, and certain specified legacies) was to be paid to James. The balance of the residue (Excerpt A) 2 'shall be divided into two equal parts; one part to go to Ann * * * and the other part to go to James * * * subject however to * * * trust provisions' thereafter set out.
The compromise agreement (see art. Sixth of the will as modified) then provided, (Excerpt B) 'Out of Ann['s] * * * share there shall be paid to her outright' $25,000. The balance of Ann's share was to be held in trust (Ann's trust) by the trust company. From the net income $112.50 was to be paid each month to Antoinette during her life. The remaining net income was to be paid 'to Ann * * * during her life.' Ann's trust at her death was to be distributed, after certain payments and reserves not now relevant, (Excerpt C) (emphasis supplied). Ann died leaving no issue on December 8, 1959, and appointed to her husband, Crawford Dearth, all the property which she had 'power to appoint under the will and [compromise] agreement.' The first prayer of this petition asks instructions as to the distribution of one half of Ann's trust under the provisions just quoted, amounting on December 22, 1961, to $144,744.
Article Sixth further provided, (Excerpt D) 'The share of James * * * shall be paid over to him * * * outright, as soon as * * * legacies * * * and debts * * * have been provided for * * * except * * * $80,000 [Antoinette's trust], which shall be * * * reserved in trust by the' trust company to pay $112.50 monthly to Antoinette for life and the balance to Lucy, wife of James, during Antoinette's life. The agreement then provided that upon the death of Antoinette, which took place March 10, 1939, 'one-half of the * * * [$80,000] trust fund * * * shall be paid over to James H. Fitzpatrick or his executors or administrators * * *' (emphasis supplied). 3 After provisions to be applicable in case Antoinette should die before Lucy (an event which did not happen) the balance of the trust fund was dealt with as follows, (Excerpt E) '[I]f Lucy * * * dies before Antoinette * * * the * * * [trust company] shall first reserve * * * out of one-half of said trust fund * * * the sum of * * * $35,000 * * * to provide for the payment upon the death of the survivor of James * * * Lucy * * * and Ann * * * of one-half of * * * [certain] bequests to * * * charitable institutions * * * and shall pay over the balance of one-half of said trust fund * * * after reserving * * * said fund of * * * $35,000 * * * to * * * James H. Fitzpatrick, or his executors or administrators, and shall also pay to said James H. Fitzpatrick, or his executors or administrators, the net income from said sum of * * * $35,000 * * * until the death of the survivor of James * * * Lucy * * * and Ann * * * and shall pay over to James H. Fitzpatrick or his executors or administrators the balance of net incone from the fund reserved for' Antoinette's annuity (emphasis supplied).
Then, after a further provision, 4 art. Sixth provided (Excerpt G) 'Upon the death of the last survivor of James * * * Ann * * * and Lucy * * * if Antoinette * * * is then living, the * * * [trust company] out of the * * * trust fund shall pay over twenty-five thousand dollars to * * * [certain] charitable institutions, * * * and shall reserve cash * * * to support the * * * annuity * * * for * * * Antoinette * * * and shall pay over the balance of the principal * * * of the * * * fund * * * to the administrators and executors of * * * James * * * and during the life of * * * Antoinette * * * shall pay * * * to the executors or administrators of * * * James * * * any income remaining after the payment * * * monthly to * * * Antoinette * * * and upon the death of * * * Antoinette * * * shall pay over to the executors or administrators of * * * James * * * any of the principal and income of the said trust fund * * * then remaining' (emphasis supplied).
The second prayer of the present petition asks instructions as to the distribution of $7,206, remaining (as of December 22, 1961) after the distribution of $25,000 to certain charities at Ann's death in 1959.
On September 5, 1922, an involuntary bankruptcy petition was filed against James. On March 18, 1924, he was adjudicated bankrupt on this petition. Trustees in bankruptcy duly qualified. Lucy, wife of James, died June 3, 1924. Later in 1924, the trust company filed a petition for instructions with respect to the portion of Antoinette's trust (see Excerpt E, supra) which prescribed the payments to be made in the event, which had then happened, of Lucy's death before Antoinette's death. This petition was considered (with another matter) in National Shawmut Bank v. Fitzpatrick, 256 Mass. 125, 152 N.E. 328, decided in 1926. See fn. 8, infra. As a consequence of that decision, the trust company was instructed to pay to James's trustees in bankruptcy the part of the principal that then would have been payable to James, if he had not been adjudicated bankrupt, and also the remaining net income of Antoinette's trust after deducting Antoinette's annuity.
On January 14, 1928, the trustees in bankruptcy sold to one Spiel their interest (a) in the trust property held by the trust company, and (b) in the 'income accruing thereon * * * after January 1, 1928.' Spiel on January 20, 1928, sold this interest to Capitol Security Corporation (Capitol).
The trust company paid to Capitol the income of Antoinette's trust in excess of her annuity until her death on March 10, 1939. The trust company, on July 27, 1940, paid to Capitol $43,532.29, reserving in trust $35,000 to provide for payment of certain charitable bequests. James died intestate October 22, 1947. The trust company continued to pay Capitol the net income of the $35,000 until Ann's death on December 8, 1959. James never had any issue. Ann was his sole heir at law.
The present controversy is between Capitol and Paul G. Becker, administrator d. b. n. of James's estate and also administrator d. b. n. c. t. a. of Ann's will (Becker). The following are Becker's principal contentions. (1) As to Ann's trust. The remainder interest in Ann's trust, because it was limited (Excerpt C) to 'James * * * or his executors or administrators,' is 'to be construed as one [given] primarily to * * * [James] or by way of substitution to his legal representatives,' since he failed to survive to the end of Ann's preceding life interest. James had 'no title * * * in the substitutionary gift to be taken by his executors or administrators.' They are described in the compromise agreement by words 'used as words of purchase, not as words of limitation.' James's administrator takes this fund, not as part of James's estate but 'upon a separate and distinct trust for * * * [James's] statutory next of kin.' (2) As to Antoinette's trust. The gift (see Excerpt G, supra) 'to the administrators and executors of * * * James' is to these fiduciaries, described by words of purchase, 'of something which James was in no event to take.' Capitol contends that James took by the compromise agreement an assignable remainder interest in one half the trust fund of Ann's trust, and in the balance remaining in Antoinette's trust, which passed to James's trustees in bankruptcy and by assignment to Spiel and then to Capitol.
1. The original will was so greatly altered by this compromise agreement as to make irrelevant inquiry about the intent of the testator. The parties' rights are contractual and now rest upon the interpretation of the compromise agreement. See Ellis v. Hunt, 228 Mass. 39, 43-44, 116 N.E. 956; Forbush v. Home for Aged Women, 241 Mass. 433, 435-436, 135 N.E. 474; Budin v. Levy, 343 Mass. 644...
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