Fleet Nat. Bank v. Colt

• Decision Date: 14 July 1987
• Docket Number: No. 86-89-A,86-89-A
• Citation: 529 A.2d 122
• Parties: FLEET NATIONAL BANK, as Trustee Under the Will of Samuel Pomeroy Colt v. Samuel P. COLT et al. ppeal.
• Court: Rhode Island Supreme Court

Page 122

529 A.2d 122

FLEET NATIONAL BANK, as Trustee Under the Will of Samuel Pomeroy Colt v. Samuel P. COLT et al.

No. 86-89-Appeal.

Supreme Court of Rhode Island.

July 14, 1987.

William P. Robinson, Edwards & Angell, Judith Savage, Edwards & Angell, Providence, for plaintiff.

A. David Tammelleo, Providence, for Theodora Flynn Bergey.

Richard Zacks, Providence, for Samuel P. Colt et al.

Noel Field, Providence, for Melba C. Delmouzos.

Steven Rosenbaum, Providence, for Marika Delmouzos.

OPINION

SHEA, Justice.

This case is before the court following a Superior Court granting of a joint motion for certification filed by the complainant and the respondents pursuant to Rule 72(a) of the Superior Court Rules of Civil Procedure. The question involves the application of the rule against perpetuities to the testamentary disposition of a portion of the estate of Samuel P. Colt. We are asked to decide whether the children of a second life tenant, which children were not lives in being at the death of either their great grandfather Samuel P. Colt (the testator) or their first life tenant grandparent, ¹ are entitled to receive their second life tenant parent's share of Colt's estate. We answer the question in the affirmative but, for reasons set forth later in this opinion, we limit our holding to those children who are in a position to inherit immediately.

The petitioner in this case is the executor of and trustee under the will of Samuel P. Colt. Those parties respondent who filed briefs with this court include the administrator c.t.a. of the estates of Russell G. Colt, son of the testator, and executor of the estate of Russell's wife Gwendolyn M. Colt; the executor of the estate of Caldwell C. Colt, son of Roswell C. Colt and grandson of the testator; Samuel Peshmalyn Colt and Julia Wedgewood Colt, the children of Caldwell; and Merika I. Delmouzos, daughter of Caldwell's sister Melba C. Delmouzos. An appointed guardian ad litem representing the position of the contingent interests of persons not in being or ascertainable whose interests may be affected by this cause also filed a brief. Certain other parties respondent were defaulted for failure to answer the complaint pursuant to Rule 55(a) of the Superior Court Rules of Civil Procedure.

It is possible that this opinion could be the last of a succession of legal actions that began in 1921 when the testator died. The recitation of facts giving rise to this action is lengthy but necessary to an understanding of the issue. The question before the court involves trusts created in clauses twenty-seven and twenty-eight of the Last Will and Testament of Samuel Pomeroy Colt (the Will).

In the twenty-seventh clause the testator created a trust consisting of certain real estate in the town of Bristol, Rhode Island, to be held for his children and grandchildren, a portion of which was to be made available for their use and enjoyment during their natural lives (the 27th Clause Trust). According to the Will the trustee was to convey the real estate, discharged of all trust, to the survivor of said children and grandchildren. The trustee of the 27th Clause Trust was also charged with holding and managing all of the testator's other real estate located in Bristol "and from the net income, rents and profits derived from said other real estate, to apply so much thereof as may be necessary for the expenses attending the care * * * " of certain real estate held in trust. In addition, the executor was instructed to "set apart one-half of [the] residuary Estate to be held * * * in special trust to apply the net income thereof or so much as may be necessary toward the expenses" of certain trust real estate. The testator provided that any surplus of such income was to be applied "as provided in the Twenty-eighth clause of this Will with reference to the income of the residuary Estate to be held by my Trustee. And upon the termination of the trust hereinbefore expressed concerning my real estate in said Town of Bristol, said one-half of my residuary estate shall fall in and become a part of the other half of my residuary estate to be divided and distributed or held as provided in clause Twenty-eighth of this Will."

The twenty-eighth clause provides for the distribution of the testator's residuary estate which was also placed in trust (the 28th Clause Trust). The trustee was instructed to divide the residuary estate into six equal shares, three of which were to be conveyed outright to the testator's two sons Russell G. Colt and Roswell C. Colt, and to his brother LeBaron B. Colt, respectively, free of all trust. The net income from the three shares remaining in trust was to be paid, in equal shares, to Russell, Roswell, and LeBaron for life. Upon their deaths, their surviving children were to receive their respective parent's share for life. The clause further provides that "upon the decease of such child or children of my said sons and my said brother, as the same shall respectively happen, my Trustee shall convey, transfer and set over to the child or children of such deceased child or children, per stirpes, and not per capita, his, her or their proportionate share of this trust estate, as an estate vested in fee simple, discharged of all trust."

The testator died survived by his two sons, Russell and Roswell, and by his brother LeBaron. ² These three individuals were the first life tenants under the twenty-eighth clause. Also living at the time of the testator's death were four of his grandchildren; three the children of Russell, and one child of Roswell. In addition, LeBaron had three children, nieces of the testator, all of whom were alive at the death of their uncle. After the testator died, Roswell had three more children who, along with the testator's four grandchildren and three nieces alive at his death, constitute the second life tenants under the twenty-eighth clause.

The issue now before the court arises because of the death of Caldwell C. Colt, one of the three children of Roswell born after the death of his grandfather the testator. According to the agreed statement of facts filed in the Superior Court, Caldwell was receiving the net income from his respective share of principal under the 28th Clause Trust and a certain share of surplus income under the 27th Clause Trust at the time of his death. ³ Likewise, all of the second life tenants still living are receiving, and those second life tenants who have died were receiving at the times of their deaths, shares of principal and surplus income under both trusts.

Prior judicial interpretation of the Will has dictated the distribution of the respective shares of 27th Clause Trust surplus income and 28th Clause Trust principal held by those previously deceased second life tenants. Caldwell's death, however, presents this court with a question not addressed in its previous decisions. Caldwell leaves two children, Samuel Peshmalyn Colt and Julia Wedgewood Colt, great-grandchildren of the testator. Neither of Caldwell's two children were lives in being at the death of the testator or at the death of their first life tenant grandparent Roswell. Hence, we must decide whether Caldwell's children may inherit their father's share of the testator's estate. Before reaching this question, however, further background must be presented to outline prior decisions of this court regarding dispositions of respective shares of the trusts at the deaths of other second life tenants, and to explain their impact on both this decision and the present composition of Caldwell's estate.

This court has had the opportunity to interpret the Will on a number of occasions. The first opportunity to interpret the twenty-seventh or twenty-eighth clause arose in 1929 in Colt v. Industrial Trust Co., 50 R.I. 242, 146 A. 628 (1929). ⁴ The Colt court addressed the intent of the testator in creating the 27th Clause Trust consisting of his Bristol real estate, certain portions of which were to be held for the benefit of his children and grandchildren "for and during [their] natural lives * * * until all but one of them shall have deceased, when my Trustee shall convey * * * to such survivor, discharged of all trust" all of said real estate. Id. at 244, 146 A. at 629. In Colt, the testator's sons, beneficiaries under the twenty-seventh clause, filed suit for the purpose of terminating the 27th Clause Trust. They claimed that by the word "grandchildren," the testator intended to include any and all grandchildren, even those born after his death. This interpretation would render the 27th Clause Trust invalid as it would be a devise in violation of the rule against perpetuities because it was possible that more grandchildren would be born after the testator's death and the survivor of such grandchildren would not be determined within a life in being plus twenty-one years. The court held that through the twenty-seventh clause, the testator intended to preserve his homestead estate and his farm for his surviving son or grandchild. Id. at 247, 146 A. at 631. The four grandchildren alive at the testator's death, the court stated, were known to him and loved by him. Id. at 247, 146 A. at 630. In order to effectuate the intent of the testator and preserve the validity of the 27th Clause Trust, the court held that the word "grandchildren" in the twenty-seventh clause meant only those grandchildren living at the time of his death. Id. at 248, 146 A. at 631. This interpretation avoided any rule-against-perpetuities problem.

The Colt decision has an impact on the fact situation before us because in 1986 the next to last survivor of the testator's sons and grandchildren, alive at his death, died. That individual's death triggered the termination of the 27th Clause Trust and caused the Bristol real estate to be conveyed to Elizabeth Stansfield, the sole survivor. Because of the termination, surplus income is no longer paid out of the 27th Clause Trust, leaving...