Connecticut Bank & Trust Co. v. Lyman

• Citation: 148 Conn. 273,170 A.2d 130
• Court: Supreme Court of Connecticut
• Decision Date: 11 April 1961
• Parties: CONNECTICUT BANK AND TRUST COMPANY, Trustee, v. Katharine R. LYMAN et al. Supreme Court of Errors of Connecticut

Page 130

170 A.2d 130

148 Conn. 273

CONNECTICUT BANK AND TRUST COMPANY, Trustee, v. Katharine R. LYMAN et al.

Supreme Court of Errors of Connecticut.

April 11, 1961.

Max H. Schwartz, New Haven, with whom was Robert J. Engelman, New Haven, for named defendant.

Robert Ewing, Hartford, pro se as guardian ad litem for the defendant Brenda Verlaine et al.; with him, on the brief, was Robert L. Rosensweig, Hartford.

Henry S. Robinson, Jr., Hartford, appeared for plaintiff.

Before KING, MURPHY and MELLITZ, JJ., and ALCORN and BORDON, Superior Court Judges.

KING, Justice.

Richard S. Lyman, hereinafter referred to as the settlor, was born in Hartford in 1891, was graduated from Yale College in 1913, studied sanitary engineering at the Massachusetts Institute of Technology, and served in World War I. Thereafter, he entered Johns Hopkins Medical School, from which he was graduated with an M.D. degree in 1921. His interest lay in research and teaching rather than in practice, and he spent much of his professional career in foreign cities, including London, Munich and Shanghai.

In 1928, while living in Rochester, New York, he entered into an agreement with the plaintiff by which he established an inter-vivos trust of which the plaintiff was designated trustee. The trust agreement was subject to modification at any time by agreement of the parties to it, and to revocation at any time by the settlor. In fact, it was amended on February 21, 1930, April 2, 1930, December 19, 1932, February 17, 1936, August 29, 1936, September 30, 1938, and January 8, 1940. The final amendment of 1940 made the trust no longer revocable, or subject to modification except as to certain charities named as contingent beneficiaries.

In early 1930, the settlor and his first wife, Pauli, were divorced. Two children, the defendants Sonya Lyman Burgher and Richard Peter Lyman, had been born of this marriage. Mrs. Burgher, by her first marriage, had one child, the defendant Brenda Verlaine, a minor, who is represented in this proceeding by a guardian ad litem. The settlor, subsequent to his divorce from Pauli, was in Germany. In 1932, while there, he married the named defendant, Katharine R. Lyman, with whom he lived until his death on June 13, 1959. No children were born of this marriage.

In 1921, the settlor had established an agency account with the plaintiff. Largely because of heavy expenditures for his own research, he made inroads on the principal of the agency account as well as on the principal of the trust account, so that by November 20, 1956, the agency account was exhausted and therefore terminated. Thereafter, payments from the principal of the second part of the trust corpus, hereinafter described, were made to the settlor, on his request, in a total amount in excess of $16,000, the largest single payment being in the amount of $8000.

By amendment in February, 1936, the trust corpus was divided into two equal parts. It is sufficiently accurate for the purposes of this case to describe the first part as providing for a life income to Pauli with remainder over, upon her death, to the two children. Pauli, who had remarried, died October 9, 1957, and thereafter the principal of this portion of the trust, which then amounted to nearly $900,000, was equally distributed, outright, to the two children, Sonya and Peter, and this portion of the trust accordingly terminated.

The second part of the trust, as modified in 1940, contained the following provision, the proper construction of which is the real matter here in controversy: '(A) The entire net income shall be paid to the * * * [settlor], or as he may from time to time direct, throughout his life, and, after his death, such net income shall be paid over to Katharine R. Lyman, wife of the * * * [settlor], if she is then living and throughout her life. Payments from the principal shall be made to or for the benefit of the * * * [settlor] either on the judgment of the Trustee as to their being needed because of his illness or absence or other emergency, or at the written request of the * * * [settlor] or for both of said reasons, and in like manner, after the death of the * * * [settlor], payments of principal shall be made to or for the benefit of said Katharine R. Lyman either on the judgment of the Trustee as to their being needed because of her illness or absence or other emergency, or at the written request of said Katharine R. Lyman or for both of said reasons.'

It was further provided that upon the death of the survivor of the settlor and his wife, Katharine R. Lyman, the trust should terminate and 'the property constituting the same' should be paid over to the settlor's issue, per stirpes, and in default of such issue to certain designated charitable and educational institutions which were made defendants in this action. Five weeks after the death of the settlor, Katharine R. Lyman, hereinafter called the defendant, made written request to the trustee for a payment from principal of $25,000. The trustee immediately forwarded this sum to her. About five months later, she again wrote the trustee, requesting that the entire principal be paid her forthwith. The trustee then instituted this action for a construction of the quoted provision. ¹

The defendant claims that she is entitled to demand and receive payment of the entire corpus 'at * * * [her] written request.' The guardian ad litem claims that while it may be that the defendant could, by a series of requests, if each was based on a reasonable justification, obtain payments from time to time even to the extent of ultimately exhausting the entire principal, she cannot, without reason, accomplish that result in one or two steps, as she is attempting to do. There is no claim that she has need of any such amount of money at this time. Her life income from the trust amounts to almost $20,000 a year. In addition, she has other assets which produce an income of about $5000 a year. Obviously, the effect of a payment of the entire principal is to terminate this portion of the trust and destroy any possibility that from it the settlor's issue, or the contingent charitable beneficiaries, will receive anything.

We have rigorously adhered to the rule that a valid trust should be protected against unauthorized change, alteration or termination by agreement on the part of the beneficiaries. See cases such as Adams v. Link, 145 Conn. 634, 638, 145 A.2d 753. And even though an extremely liberal power of invasion of principal is given to, or for the benefit of, an income beneficiary, if any purposes of, standards for, or limitations on, the exercise of that power are expressed, we have required their enforcement, and have refused to permit an untrammeled invasion of principal where discretion was involved. See, for instance, such cases as Hull v. Culver, 34 Conn. 403, 405; Peckham v. Lego, 57 Conn. 553, 554, 19 A. 392, 7 L.R.A. 419; Hull v. Holloway, 58 Conn. 210, 215, 20 A. 445; Little v. Geer, 69 Conn. 411, 415, 37 A. 1056; Hooker v. Goodwin, 91 Conn. 463, 467, 99 A. 1059; Bishop v. Groton Savings Bank, 96 Conn. 325, 330, 114 A. 88; Guaranty Trust Co. of New York v. New York City Cancer Committee, 145 Conn. 542, 546, 144 A.2d 535.

On the other hand, we cannot rewrite a will or a trust instrument. The expressed intent must control, although this is to be determined from reading the instrument as a whole in the light of the circumstances surrounding the testator or settlor when the instrument was executed, including the condition of his estate, his relations to his family and beneficiaries, and their situation and condition. 'The construing court will put itself, as far as possible, in the position of the * * * [settlor], in the effort to construe * * * [any] uncertain language used by him in such a way as shall, conformably to the language, give force and effect to his intention.' Hoops v. Stephan, 131 Conn. 138, 143, 38 A.2d 588, 590. But '[t]he quest is to determine the meaning of what the * * * [settlor] said and not to speculate upon what he meant to say.' Chase National Bank v. Guthrie, 139 Conn. 178, 182, 90 A.2d 643, 645; First National Bank & Trust Co. of New Haven v. Parish of St. Thomas' Church, 141 Conn. 489, 497, 107 A.2d 246.

Here, the same provisions as to invasion of principal were used in the case of the defendant as were used by the settlor in describing his own powers of...