Cromwell v. Converse

• Decision Date: 28 September 1928
• Citation: 108 Conn. 412,143 A. 416
• Court: Connecticut Supreme Court
• Parties: CROMWELL ET AL. v. CONVERSE ET AL.

143 A. 416

108 Conn. 412

CROMWELL ET AL. v. CONVERSE ET AL.

Supreme Court of Errors of Connecticut.

September 28, 1928

Case Reserved from Superior Court, Fairfield County; Allyn L Brown, Judge.

Suit between William Nelson Cromwell and others and Edmund C Converse, 3d, and others for the construction of the will of Edmund C. Converse, late of the town of Greenwich, brought to the Superior Court and reserved by the court, upon an agreed statement of facts, for the advice of this court. Questions answered.

Edmund C. Converse, of Greenwich, died leaving a will bearing date January 27, 1920, and a codicil thereto bearing date March 20, 1921, confirming the will. The will was duly admitted to probate, and the plaintiff Bankers' Trust Company, has duly qualified as executor and trustee, Alfred Jaretzki named in the will as executor and trustee, having died, the plaintiff William Nelson Converse was duly appointed as successor trustee and is now acting as such. The defendants A. L. Shively and Estella Converse are the duly appointed executors of Edmund C. Converse, Jr., who died November 2 1926, in the state of California. Estella Converse is the widow and sole legatee of Edmund C. Converse, Jr., to whom she was married in 1920, and Edmund C. Converse had knowledge of and approved of the marriage. Edmund C. Converse, 3d, and Roger Converse are minor sons of Edmund C. Converse, Jr., and Judith A. Salisbury, the former wife of Edmund C. Converse, Jr., who has been divorced from him and is now remarried and is the general guardian of Roger Converse. The defendant Edmund C. Converse, 3d, is now of age and made default of appearance, filing a statement in the superior court that since his interests were identical with those of his brother Roger, there was no occasion for his employing counsel.

Article 17 of the will, so far as it is involved in this reservation, is set forth in the footnote.^[1]

The gross annual income of the trusts of the residuary estate under this article has been in excess of $200,000. The trustees, acting under this article, during the period of the trust in the lifetime of Edmund C. Converse, Jr., have regularly credited on the account books of the estate one-sixth of the income of the residuary estate to Edmund C. Converse, Jr., as it accrued, and another one-sixth to Edmund C. Converse, 3d, and Roger Converse. The trustees have regularly paid to Edmund C. Converse, Jr., the one-sixth credited to him, reserving only income for contingencies and for the adjustment of any share of the expenses in the administration of the trust under this article due from him. On November 2, 1926, the date of death of Edmund C. Converse, Jr., there remained to his credit in the hands of the trustees an amount, collected upon his one-sixth of this income, of $22,924.11, subject to deductions for trustees' compensation, legal expenses, accountants' fees, and probate fees to be fixed at the end of the calendar year, and which prorated as at November 2, 1926, were $3,034, leaving the net amount of income to his credit $18,990.11.

Article 2 of the codicil is set forth in the footnote.^[2]

The trustees, acting under the provisions of this article, during the period of the trust, in the lifetime of Edmund C. Converse, Jr., have regularly credited upon the account books of the trustees the whole of the income of the trust of $1,000,000 under this article to Edmund C. Converse, Jr., reserving only income for contingencies and the adjustment of the expenses of the administration of the trust. On November 2, 1926, the date of death of Edmund C. Converse, Jr., there remained to his credit in the hands of the trustees the income collected upon this trust amounting to $20,216.67, subject to deductions for trustees' compensation, legal expenses, accountants' fees and probate fees to be fixed at the end of the calendar year, and which, prorated as at November 2, 1926, were $3,117.05, leaving the net amount of income $17,099.62.

Edmund C. Converse, Jr., deceased, was a man of education and refinement and of good character, and was held in affectionate regard by his father, Edmund C. Converse, the decedent. He was reared in an atmosphere of great wealth and influence. He attended a college preparatory school and entered college but did not graduate. Upon leaving college he made a business connection in New York, but failed to develop an interest in or attitude for a business career. In 1908 he moved to California where he engaged in the occupation of cattle ranching, in which occupation he continued during the remainder of his life. The operations of the ranch which he conducted produced little or no profit, and during the lifetime of his father, Edmund C. Converse, he frequently received from him financial assistance. Edmund C. Converse, Jr., at his decease, left a comparatively small estate.

Since November 2, 1926, the trustees have paid out of the income in their hands resulting from these trusts $2,500 to Estella Converse as an emergency payment made to her at the time of the sudden death of her husband, Edmund C. Converse, Jr., while they were temporarily sojourning in British Columbia, and $3,056.80 on account of expenses incurred for his funeral. The receipts of income of the executors for 1926, as appear in the administration account filed in the probate court, were $118,307.12 and the expenses chargeable against the income $50,053.05, leaving a net income of $68,254.07. In the receipts of income was included $99,960 received on December 29, 1926. This was an annual dividend declared on December 28, 1926, upon the stock of the Stanwich Corporation; all the capital stock of the company being owned by the estate of Edmund C. Converse except qualifying shares. It also appears from the account that the receipts of income which came into the hands of the executors prior to November 2, 1926, were less than the payments made for expenses chargeable to income prior to that date.

The executors and trustees shortly after the death of Edmund C. Converse caused books to be opened for the several trusts. Among others an account was opened for the specific trust of $1,000,000 under article 2 of the codicil and an income account set up for Edmund C. Converse, Jr., under said article. All of the income under this trust has been regularly credited as it accrued on the books of the trustees to Edmund C. Converse, Jr. The trustees decided at the beginning of the administration of the trust to pay to Edmund C. Converse, Jr., all of the net income from this trust for his maintenance and support. They never altered the exercise of this discretion, and the accounts have been regularly kept in accordance with that state of facts.

At the end of each calendar year after the $1,000,000 trust under article 2 had been established the balance to the credit of said Edmund C. Converse, Jr., on the books of the trustees was as follows:

December 31, 1923 $6,193.37

December 31, 1924 4,654.45

December 31, 1925 4,744.18

November 2, 1926, collected 8,551.92

accrued 11,664.75

The executors and trustees shortly after the death of Edmund C. Converse caused books to be opened for the residuary trust under article 17 of the will, and separate income accounts set up for all of the several beneficiaries under that article. The income of the trust of one-third of the income of the residuary estate for the benefit of Edmund C. Converse, Jr., and his children, has been distributed upon the books of the trustees as it accrued in three parts: One-half of the one-third share of the income under the residuary article has been regularly credited as it accrued on the books of the trustees to Edmund C. Converse, Jr., and the other one-half of one-third has been regularly credited in equal shares to Edmund C. Converse, Jr., and Roger Converse. The trustees decided at the beginning of the administration of this trust to pay to Edmund C. Converse, Jr., one-half of the net income of this one-third of the residuary estate for his maintenance and support, and they never altered the exercise of this discretion, and the accounts have been regularly kept in accordance with that state of facts.

At the end of each calendar year after the establishment of the residuary trust the balance on the books of the trustees to the credit of Edmund C. Converse, Jr., under said trust were as follows:

January 1, 1923 $59,250.00

December 31, 1923 9,067.42

December 31, 1924 2,591.68

December 31, 1925 13,654.52

November 2, 1926, collected 11,898.01

accrued 10,126.10

The decedent, Edmund C. Converse, was one of the organizers of the Bankers' Trust Company, had served as a director and member of the executive committee of said Bankers' Trust Company from 1903 to the date of his death, and was president of said Bankers' Trust Company from 1903 to 1913. Alfred Jaretzki was a member of the firm of Sullivan & Cromwell, attorneys for Edmund C. Converse, the decedent, and was a business associate and friend of the decedent. William Nelson Cromwell is a member of said firm of Sullivan and Cromwell and was a business associate and friend of the decedent.

The Stanwich Corporation is a corporation with a capital stock of 25,000 shares, organized by the decedent, Edmund C. Converse during his lifetime, for the purpose of holding certain of his securities. During his lifetime the shares of stock belonged to him, except for a few shares belonging to his wife. The directors were: Edmund C. Converse, Edith D. Converse (his wife), and H. S. Miller (his secretary). At the time of the decedent's death the corporation held numerous securities of considerable value. The estate of Edmund C....