First Wis. Trust Co. v. Hamburger (In re Hamburger's Will)

• Decision Date: 09 December 1924
• Citation: 185 Wis. 270,201 N.W. 267
• Parties: IN RE HAMBURGER'S WILL. FIRST WISCONSIN TRUST CO. v. HAMBURGER ET AL.
• Court: Wisconsin Supreme Court

185 Wis. 270

201 N.W. 267

IN RE HAMBURGER'S WILL.FIRST WISCONSIN TRUST CO.

v.HAMBURGER ET AL.

Supreme Court of Wisconsin.

Dec. 9, 1924.

Appeal from Milwaukee County Court; Hon. John C. Karel, Judge.

In the matter of the last will and testament of Nathan Hamburger, deceased. Proceeding by Nathan Hamburger, Jr., against the First Wisconsin Trust Company and others. From an order directing defendants to transfer certain corporation shares to petitioner, defendant named appeals. Reversed and remanded.

This is an action involving the construction of a will. The county court of Milwaukee county made an order by which the trustees under the will of Nathan Hamburger, Senior, were directed to transfer to the petitioner, Nathan Hamburger, Junior, 1,000 shares of the common stock of Gimbel Bros., Inc., out of about 23,000 shares held by them as such trustees, and to pay to Nathan, Jr., the dividends, if any, from the 1,000 shares, since they had notice of an assignment of those shares to the petitioner, by his mother, Bertha Hamburger Behal, formerly Bertha Hamburger. This order was made in a proceeding by Nathan seeking a construction of the will, and a judgment directing the trustees to deliver to him the shares of stock, which had been assigned to him by his mother. Two of the trustees approved the gift, but the appellantdeclined on the ground of lack of authority.

The testator, when a lad of 13, entered the employ of Adam Gimbel, who was the founder of the business, which has for so many years born the name of Gimbel Bros. In 1883 he was admitted as a partner, and at the time of his death in 1910 was a vice president and was in charge of the Milwaukee store. Five of the seven sons of Adam Gimbel are living and connected with the business, as are also nine of his grandsons. The grandsons are all vice presidents and stockholders of the corporation. Nathan, Jr., is the only son of the testator. He entered the employ of Gimbel Bros., Inc., in January, 1923, and became 21 years of age in May of that year; holds an executive position in the Philadelphia store, and desires to have a substantial interest in the business. The corporation of Gimbel Bros., Inc., took over the business originally conducted by the firm of Gimbel Bros. The partnership agreement provided that the sons of the partners might be taken into the business when 23 years of age, if of good character and sound business ability, after serving five years of apprenticeship, or if they had a college degree, three years of apprenticeship. Nathan did not have a college degree.

The will is a lengthy document consisting of 19 articles. It was dated March 30, 1908, and there is also a codicil dated June 28, 1910, revoking two former codicils. The most important article here involved is No. 16 which is as follows:

“All the rest, residue, and remainder of my property and estate of whatever kind and nature and wherever situate, real, personal and mixed, which I may own at the time of my death, I give, devise, and bequeath to my said executors, in trust, upon the trust that they hold and invest the same and pay the net income thereof to my beloved wife, Bertha Hamburger, for her own sole use and benefit so long as she may live, and subject only to this bequest in trust for and during the life of my said wife, the principal of this bequest is given, devised and bequeathed to my wife to become her sole and separate estate to be disposed of by her, by will or otherwise; and if she do not so dispose of it, to become upon her death part of her intestate estate; and the gift, devise and bequest made to my said wife in this will are in lieu of dower and other claim against my estate which my wife might have in the absence of this will; and I will and direct that the gift, devise and bequest made in this article of my will shall in any event include and carry no less than two-thirds of the appraised value of my estate, and that the other gifts and bequests in this will made shall, if necessary, be proportionately reduced in order to make the amount given by this article of my will at least such two-thirds portion of my estate.”

In the other paragraphs of the will there are numerous bequests providing for relations and charities, and there is careful provision for the appointment of executors and their successors in case of resignation or death. Other facts will be stated in the opinion.

Miller, Mack & Fairchild, of Milwaukee, for appellant.

Saul, Ewing, Remick & Saul, of Philadelphia, Pa., and Lines, Spooner & Quarles, of Milwaukee, for respondent Nathan Hamburger.

JONES, J. (after stating the facts as above).

[1] It is first contended by the plaintiff's counsel that by the terms of the will the life interest and the remainder are merged in the widow; that the language of the will clearly evidences a gift of the principal directly to her without the intervention of trustees; that she was given the title and all the rights incident to the title, including the right of disposition by will or in any other way she might choose. Reliance is also placed on the clause, “and if she do not so dispose of it, to become upon her death part of her intestate estate.” It is further argued that since the life estate and the remainder merged in the widow, the trust is terminable by her.

The Wisconsin case principally relied on for this claim is Holmes v. Walter, 118 Wis. 409, 95 N. W. 380, 62 L. R. A. 986. There the language of the will was:

“After the payment of my just debts and funeral expenses, I give, devise, and bequeath to my beloved wife, Mary, in trust for herself and my children, all of my estates, both real and personal with full power to continue my business if for the best interest of my estate.”

All of the children were minors with the exception of one when the suit was brought. It will be observed that as compared with the will now before us, the language relied on to create the trust was rather vague and uncertain. In the lower court it was held that the will created a mere passive or dry trust and that it must be considered as if there were no trust at all and that the property was given direct to the beneficiaries. On appeal, in an opinion by Mr. Justice Marshall, it was held that the devise and bequest were not made absolutely to the trustee, the widow, but for herself and her children, and that all were to share equally in the benefits of the trust; that it was evident that the trust concerned more than the mere title, and that the immediate use and possession were not intended to go to the beneficiaries. It was held that the trust was not void as indefinite or uncertain; that it was not a dry or passive trust. The judgment of the lower court was reversed, and the trust was not terminated. In discussing the question whether the trust was void for uncertainty because no time was stated for its termination, it was said:

“Again, since the will contains no prohibition, express or implied, against terminating the trust, and all parties that can be interested are in esse, when all are sui juris they can, by uniting, cause its termination, subject to the restraints contained in sections 2089 and 2091, Stats. 1898 (citing cases). The mere fact that the trust is in terms perpetual does not affect it. That feature is not objectionable so long as it does not offend against the prohibition against suspending the absolute power of alienation. Perry, Trusts, § 23.”

This language is much relied on by counsel for the respondents. It will be observed that this quotation has the qualification “since the will contains no prohibition, express or implied, against terminating the trust.” This is a condition often referred to in cases cited by the respondent, and attention is called to it in a later opinion by Mr. Justice Marshall. Will of Rice, 150 Wis. 401, 453, 136 N. W. 956, 137 N. W. 778. Counsel also rely on authorities from other jurisdictions, and especially on decisions of the Supreme Judicial Court of Massachusetts, and the following cases are cited: Bowditch v. Andrew, 8 Allen (Mass.) 339;Inches v. Hill, 106 Mass. 575;Whall v. Converse, 146 Mass. 345, 15 N. W. 660;Sears v. Choate, 146 Mass. 395, 15 N. E. 786, 4 Am. St. Rep. 320;Langley v. Conlan, 212 Mass. 135, 98 N. E. 1064, Ann. Cas. 1913C, 421;Eakle v. Ingram, 142 Cal. 15, 75 P. 566, 100 Am. St. Rep. 99;Tilton v. Davidson, 98 Me. 55, 56 A. 215;Armistead's Ex'rs v. Hartt, 97 Va. 316, 33 S. E. 616. In these cases for various reasons the courts held that the trusts might be terminated, and in Sears v. Choate, supra, a case often cited, the rule in Massachusetts was thus stated:

“There is no doubt of the power and duty of the court to decree the termination of a trust, where all its objects and purposes have been accomplished, where the interests under it have all vested, and where all parties beneficially interested desire its termination. Where property is given to certain persons for their benefit, and in such a manner that no other person has or can have any interest in it, they are in effect the absolute owners of it, and it is reasonable and just that they should have the control and disposal of it, unless some good cause appears to the contrary.”

It seems hardly necessary to review in detail the cases. An examination of them will show that one or more of the following considerations led the court to terminate the trust. All the interests had become vested in the beneficiary or beneficiaries, and no third person could be interested; or all the purposes of the trust had been accomplished; or there was no express or implied prohibition of the termination; or it was a mere dry trust and all the beneficiaries desired its termination; or such events had transpired after the execution of the will as had not been and could not have been anticipated by the testator, which rendered the continuance of the trust unnecessary.

In Claflin v. Claflin, 149 Mass. 19, 20 N. E. 454, 3 L. R. A. 370, 14 Am. St. Rep. 393, a...