Charles Hartwell Chater v. Alfred Carter

• Court: U.S. Supreme Court
• Writing for the Court: Pitney
• Citation: Charles Hartwell Chater v. Alfred Carter, 238 U.S. 572, 35 S.Ct. 859, 59 L.Ed. 1462 (1915)
• Decision Date: 21 June 1915
• Docket Number: No. 544,544
• Parties: CHARLES HARTWELL CHATER, a Minor, by His Next Friend and Guardian, Charles H. Chater, et al., Appts., v. ALFRED W. CARTER, Trustee; Alfred W. Carter, Executor of the Last Will and Testament of Alfred S. Hartwell, Deceased; Mabel R. Hartwell, and Hawaiian Sugar Company

238 U.S. 572

35 S.Ct. 859

59 L.Ed. 1462

CHARLES HARTWELL CHATER, a Minor, by His Next Friend and Guardian, Charles H. Chater, et al., Appts.,

v ALFRED W. CARTER, Trustee; Alfred W. Carter, Executor of the Last Will and Testament of Alfred S. Hartwell, Deceased; Mabel R. Hartwell, and Hawaiian Sugar Company.

No. 544.

Argued April 30 and May 3, 1915.

Decided June 21, 1915.

This is an appeal from a decree of the supreme court of Hawaii (22 Haw. 34.), affirming a decree of the circuit court of the same territory, which dismissed a bill in equity brought by Charles Hartwell Chater, a minor, by his father, Charles H. Chater, as next friend and guardian, in which the father joined as a complainant in his own right and as administrator of the estate of his deceased wife, Charlotte Lee Hartwell Chater; the defendants being Alfred W. Carter, as trustee of a trust

created by the late Alfred S. Hartwell, deceased, in his lifetime, Alfred W. Carter, as the executor of the will of Alfred S. Hartwell, deceased, Mabel R. Hartwell, and the Hawaiian Sugar Company, a corporation organized and existing under the laws of the territory of Hawaii. The object of the bill was to require an accounting and transfer of 585 shares of the capital stock of the Sugar Company and the dividends declared thereon since August, 1909, including 292 1/2 shares of new stock issued as a dividend. The case was heard upon an agreed statement of facts in substance as follows:

'Alfred S. Hartwell died in Honolulu on the 30th day of August, 1912, leaving a will, duly proved in the circuit court of the first circuit, territory of Hawaii, on the 15th day of October, 1912. The defendant Alfred W. Carter was appointed executor in said will and qualified and is now acting as such. Charles A. Hartwell, also appointed, did not qualify. The deceased was from 1868 to 1874 a judge of the supreme court of Hawaii, from 1874 to 1904 one of the leading attorneys in Hawaii, and from 1904 to 1907 a judge, and from 1907 to 1911 chief justice of the supreme court of Hawaii. He was the father of seven daughters, all of whom, except Charlotte Lee Hartwell Chater, now survive, to wit, the five named in the instrument dated March 27, 1909, attached to the complaint herein and marked 'exhibit A,' namely: Charlotte Lee Hartwell Chater, Mabel R. Hartwell, Dorothy Hartwell, Bernice Hartwell, and Juliette Hartwell ('Lottie Lee,' named in said instrument exhibit 'A,' being Charlotte Lee Hartwell Chater, and 'Mabel,' being Mabel R. Hartwell), and also Madeline Hartwell Judd and Edith Hartwell Carter, the latter being then and now the wife of Alfred W. Carter, defendant. Charlotte Lee Hartwell Chater had been married to the complainant, Charles H. Chater, shortly before the date of said instrument, to wit, on July 15, 1908, and was then on March 27, 1909 of the age of thirty-two years and without children. The daughters named in said instrument, other than said Charlotte and Mabel, were at that time unmarried. All the daughters were of age. Mabel had children, who still survive.

'Charlotte Lee Hartwell Chater died in Natick, in the county of Middlesex, commonwealth of Massachusetts, where she had been residing with her husband, Charles H. Chater, on the 3d day of September, 1909, in childbirth, intestate, leaving the complainants, her husband, Charles H. Chater, and one child, the complainant, Charles Hartwell Chater, who was born on August 30, 1909; thereafterwards on the 15th day of November, 1909, the probate court of the county of Middlesex duly appointed the complainant, Charles H. Chater, administrator of the estate of said Charlotte Lee Hartwell Chater, and issued letters to him, and he duly qualified as such and is now acting; and said probate court, on the 17th day of December, 1909, duly appointed said Charles H. Chater guardian of the person and estate of the complainant, Charles Hartwell Chater, and issued letters of guardianship to said Charles H. Chater, who qualified and is now guardian of said Charles Hartwell Chater.

'The Hawaiian Sugar Company is and was at all times hereinafter named a corporation existing under the laws of the territory of Hawaii, having its usual place of business in Honolulu, in said territory.

'Said Alfred S. Hartwell, being a man of ample means and the owner of a large number of shares in the Hawaiian Sugar Company, on the 27th day of March, 1909, transferred to the name of Alfred W. Carter, as trustee for Charlotte Lee Hartwell Chater, 585 of such shares and caused a certificate to be issued to the said Alfred W. Carter as trustee for Charlotte Lee Hartwell Chater for said 585 shares, and delivered said certificate to said Al- fred W. Carter, trustee, and, at the same time, executed and delivered a declaration of trust, as follows:

'Honolulu, T. H., March 27, 1909.

'Mr. Alfred W. Carter,

'City.

'Dear Alfred:——

'I enclose certificate in your name as trustee for Juliette for 415 shares and another certificate in your name as trustee for Dorothy for 420 shares, another in your name as trustee for Lottie Lee for 585 shares, also a certificate in Lottie Lee's name (being those which I gave her before she was married) for 250 shares, also three blank forms of receipts in duplicate for you to sign and hand to me, if you please.

'The trust for both Juliette and Dorothy is to see that the dividends are paid to them, or, what I presume would be better, placed to their credit with Bishop & Co. where each of them now has an account. If either of them should die before returning here her shares are to be divided between the two surviving unmarried girls; if neither of them returns both their shares go to Bernice, if living, otherwise to all the surviving sisters equally. I am aware that this is simply a temporary arrangement—I hope it is—and that either of them has a right to call upon you to make over the shares to her at any time.

'The trust for Lottie Lee is to cause the dividends to be paid to her during the three years from January 1st next and if she shall then be living to transfer the shares to her or hold them in trust for her benefit as she may in writing request, unless at the end of three years she shall have no child living, in which case the trustee is to hold the stock paying her the dividends during her lifetime, with power to change the investment and vary it at any time at discretion and at her death to divide the trust funds or securities equally among her sisters who shall then be living, and if none shall then be living among their children then living, my object being, as Mr. Chater will observe, that as to these additional 585 shares they shall remain in my family.

'I also enclose for you to retain for Mabel certificate No. in her name for 200 shares Hawaiian Sugar Stock.

'I have been arranging with the Brewers to draw my salary and to pay Lottie Lee and Mabel on the 15th of each month their dividends. I can continue to do this although it may be better for some reasons to arrange with Alexander & Baldwin to remit the dividends directly to them from New York, in which case there would be a charge of 20 ct. a hundred unless they shall accede to my request to make no charge for exchange.

'I also enclose certificate in Bernice's name for 420 shares which I am now giving her and also for 165 shares which I gave her recently. I do not know where the certificate for 250 shares which I formerly gave her is. I think it would be wise if the certificates of all the girls should be retained in your office and to have that understood by them.

'Very truly,

'Alfred S. Hartwell.'

'This declaration of trust is the aforesaid 'exhibit A.'

'At the same time, similar certificates were issued and delivered to said Alfred W. Carter, as trustee for Juliette Hartwell and Dorothy Hartwell, for the shares mentioned in said declaration.

'On the same day Alfred S. Hartwell caused a certificate to be issued in the name of Charlotte Lee Hartwell Chater for the 250 shares referred to in the declaration of trust, which certificate was also handed to said Alfred W. Carter.

'Charlotte Lee Hartwell Chater was duly notified of these transactions, the information coming through a letter from Alfred S. Hartwell to Charles H. Chater on March 29, 1909, as follows 'Honolulu, T. H., March 29, 1909.

'Mr. Charles H. Chater,

'South Natick, Mass.

'My Dear Mr. Chater:——

'I have not been a good Correspondent for I have many cares and responsibilities resting upon me.

'I am simply writing to you now about a matter of Lottie Lee's which I do not wish to write to her under present conditions or to trouble her at all about it. It is this before her marriage I had given her 250 shares of the Hawaiian Sugar stock paying regularly a monthly dividend of $75. Since a sale was made last summer of my large holdings in the American Sugar Co. (Molokai ranch) I have paid off the heavy indebtedness which had been burdening me for several years and am now dividing the shares in the Hawaiian Sugar stock which formerly had been pledged for my indebtedness in such way as to give Lottie Lee 585 shares more, which I am placing with Alfred W. Carter in trust (as explained in my letter to him) 'to cause the dividends to be paid to her during the three years from January 1st next and if she shall then be living to transfer the shares to her or hold them in trust for her benefit as she may in writing request, unless at the end of the three years she shall have no child living, in which case the trustee to hold the stock paying her the dividends during her lifetime, with power to change the investment and vary it at any time at discretion and at her death to divide the trust funds or securities equally among her sisters who shall then be living, and if none shall then be living among their children then living, my object being, as Mr. Chater will observe, that as to these additional 585 shares they shall remain in my family.'

'I have been in the habit of arranging...