Garfield v. State St. Trust Co.

• Decision Date: 10 January 1947
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: JAMES GARFIELD, trustee, v. STATE STREET TRUST COMPANY& another, administrators, & others.

320 Mass. 646

70 N.E.2d 705

JAMES GARFIELD, trustee, v. STATE STREET TRUST COMPANY& another, administrators, & others.

Supreme Judicial Court of Massachusetts, Suffolk.

January 10, 1947

May 10, 1946.

Present: FIELD, C.

J., LUMMUS, DOLAN RONAN, & WILKINS, JJ.

Power.

The donee of a general power of appointment may effectively exercise the power by creating a new power which does not offend the rule against perpetuities.

The will of a son of the donor in an indenture of trust, construed as a whole and in the light of the circumstances known to him at the time of its execution, required conclusions that his wife was the chief object of his testamentary bounty and that provisions of the will, purporting to exercise a power of appointment by will, given him in his father's indenture of trust over certain income and principal, by placing the property which was subject to the power, if his wife survived him, in trust for her benefit during her life and directing that on her death it should be paid over to such persons as she by her will should appoint, constituted a valid exercise of the power and not a mere attempted delegation thereof.

In the will of a wife, considered as a whole and with the provisions of the will of her husband, who had predeceased her, giving her a life interest in and a general power of appointment by will of both principal and income of certain property over which he himself had had a power of appointment by will under an indenture of trust executed by his father, an intention to exercise, and a valid exercise of, the power thus given her were manifest by certain provisions disposing of "all the rest, residue and remainder" of her "property including all property over which" she might "have any power of appointment under" her husband's will or under the indenture of trust of his father.

PETITION, filed in the Probate Court for the county of Suffolk on February 14 1945.

The case was heard by Dillon, J. J. Garfield, stated the case.

R. H. Wiswall, (C.

Y. Wadsworth with him,) for State Street Trust Company and others, administrators, and others.

E. G. Fischer, (H.

B. Powers with him,) for Massachusetts Society for the Prevention of Cruelty to Animals, and others.

R. Wait, for administrator with the will annexed of Rose L.

Dexter, and others.

F. T. Doyle, for the guardian ad litem, submitted a brief.

DOLAN, J. By this petition brought by the trustee under an indenture of trust of William S. Dexter, late of Boston, dated April 12, 1898 the trustee seeks instructions as to the proper distribution of the income from the trust estate subsequent to the death of Evangeline Hope Dexter, and as to the distribution of the principal of the trust estate at the termination of the trust -- the latter a question as to future duties when the case was argued before us, but now a question as to a present duty, the trust having since terminated by reason of the death, which has been suggested to us, of the respondent Rose L. Dexter, whose administrator with the will annexed has been permitted to appear and represent her interests in the proceeding. The judge entered a decree instructing the petitioner that one half of the net income of the trust fund was payable to the then respondent Rose L. Dexter and one half to the trustees under the will of William Dexter, and that no persons claiming as legatees, devisees or appointees under the will of Evangeline Hope Dexter have any interest in the principal of the trust property in question, by reason of the will of George T. Dexter, late of

Sherborn (a son of the creator of the trust), or by reason of the will of Evangeline Hope Dexter (the widow of said George). From this decree appeals were taken by the administrators with the will annexed of the goods not administered of the estate of Evangeline, by the trustees under her will, and by four charitable corporations to which were devised and bequeathed the balance of her estate upon the termination of the trust created by the residuary clause of her will. The case was heard in the court below upon the petition as amended, the facts set forth therein having been admitted by the answers of the respondents, and upon a stipulation of the parties to the effect that Evangeline Hope Dexter, and Thomas W. Ross, Westanna Lyon Ross and George Burton Ross who are named in the will of Evangeline, were all living prior to the creation of the trust indenture on April 12, 1898.

The material facts may be summed up as follows: By the indenture of trust William S. Dexter, hereinafter referred to as the donor, transferred certain personal property to trustees for the following purposes: "To hold, manage, invest and reinvest the same with the powers hereinafter set forth, to collect the income thereof and after paying the expenses of administering the trusts herein declared, to pay the net residue of said income, as often as semi-annually to my four children, Elsie Dexter, George T. Dexter, Rose L. Dexter and Philip Dexter, in equal shares during their respective lives. After the death of each of them, to pay the share of said net income which the person so dying would have received if he or she had not died, to and among the survivors and survivor. But if any of them shall leave a husband, wife or issue, other than an adopted child or children, surviving him or her, then to pay such share of said income as the person so dying would have received if he or she had not died, in such manner as he or she may have appointed by a last will made at any time after the date of these presents. . . . Upon the death of the last survivor of them, the said Elsie Dexter, George T. Dexter, Rose L. Dexter and Philip Dexter to pay over, transfer and deliver the principal or capital of the trust fund, as then existing, in the proportions and to the persons who would have taken it if said survivor had owned the same and died intestate. Provided however, that if any of them, the said Elsie, George T., Rose L., and Philip, shall have left a husband, wife or issue, other than an adopted child or children, surviving him or her, the said capital shall upon the death of the last survivor of the said Elsie, George T., Rose L., and Philip, be paid over, transferred and delivered as such person or persons so leaving husband, wife or issue surviving him or her may have appointed by a last will made at any time after the date of these presents, the said capital to be divided into as many shares as there have been persons entitled under the provisions hereof to make such appointment, and one such share to be paid according to the terms of each such appointment. And in each case of default of such appointment by any person entitled to make the same, the share of capital which such person might have appointed shall be paid over and conveyed to such persons and in such proportions as would have taken it if the person so failing to appoint had owned the same property at the time of his or her decease and had died intestate immediately after such last survivor."

Elsie Dexter died September 3, 1905, leaving no husband or issue. Philip died July 25, 1934, survived by his wife, Edith W. Dexter, who died February 17, 1942, one son, William, who died February 8, 1943, and four grandchildren, Constance V. R., Nathaniel, Philip and Mary Ann. ^[1] The donor's son George died March 5, 1927, leaving a wife, Evangeline Hope Dexter, but no issue, and the donor's daughter Rose died September 17, 1946, leaving no husband or issue. Upon her death, as noted before, the trust under the indenture terminated.

The issues presented for determination are whether the donor's son George T. Dexter duly exercised the power of appointment given him by the terms of the indenture (a) as to income, and (b) as to principal, and whether his widow, Evangeline, effectively exercised the power of appointment given her by his will.

By his will the donor's son George provided as follows: "1. I give devise and bequeath to my wife Evangeline Hope Dexter, if she shall survive me, all the property real or personal of which I shall die seized or which shall come into my possession and control, of every kind and nature and wherever situate, to have and to hold to my said wife absolutely and in fee simple. 2. If my said wife survives me, I give, devise and bequeath to the State Street Trust Company, a banking corporation having its principal place of business in Boston in the County of Suffolk and said Commonwealth, all the property, real or personal and wherever situate over which I have power of appointment or disposition by will under the trust created in the will of my father, William Sohier Dexter, late of said Boston, and any other property over which I may have power of appointment or disposition by will under any other will, trust indenture or other instrument, to have and to hold to the said State Street Trust Company, solely in trust for the following purposes: To hold, manage and invest and to pay over the net income to my said wife, Evangeline Hope Dexter, if she shall survive me, so long as she shall live, in quarterly payments or oftener in the discretion of said trustee. I hereby further authorize and empower my said trustee in case of special necessity resulting from the sickness or disability of my said wife or from other unforeseen causes to pay over to my said wife such portion of the principal trust sum as may in their judgment be necessary for the care and comfortable support and welfare of my said wife. Upon the death of my said wife said trust shall be terminated, if she shall have survived me, and the principal sum shall then be paid over to such persons and for such purposes as she, the said Evangeline Hope Dexter, may by her will appoint, and in default of such appointment the...