Hanson v. Denckla

• Decision Date: 19 September 1956
• Citation: 100 So.2d 378
• Parties: Elizabeth Donner HANSON, individually and as executrix, et al., Appellants, v. Katherine N. R. DENCKLA, individually, et al., Appellees.
• Court: Florida Supreme Court

Page 378

100 So.2d 378

Elizabeth Donner HANSON, individually and as executrix, et al., Appellants, v. Katherine N. R. DENCKLA, individually, et al., Appellees.

Supreme Court of Florida, Special Division A.

Sept. 19, 1956.

Caldwell, Pacettil, Robinson & Foster and Manley P. Caldwell, West Palm Beach, and William H. Foulk, Wilmington, Del., for Elizabeth Donner Hanson, individually, as Elizabeth Donner Hanson, Individually, as Donner, Deceased, as Guardian Ad Litem for Joseph Donner Winsor and Donner Hanson and William Donner Roosevelt, Individually; McCarthy, Lane & Adams and Edward McCarthy, Jacksonville, for Elizabeth Donner Hanson as Guardian Ad Litem for Joseph Donner Winsor and Donner Hanson, appellants.

C. Robert Burns, West Palm Beach, and Redfearn & Ferrell, Miami, for appellees.

HOBSON, Justice.

This is an appeal by defendants from a summary final decree holding that assets of a trust created by Dora Donner during her lifetime passed under her will. Cross-assignments of error have been filed by the plaintiffs, who contend that the chancellor erred in holding that he had no jurisdiction over some of the defendants, the trustee and certain beneficiaries under the trust, who did not answer the complaint.

The essential facts of the case are not in dispute. Dora Donner died in Palm Beach, Florida, on November 20, 1952, leaving a will dated December 3, 1949, which was probated in Palm Beach County. She was formerly a citizen of Pennsylvania, but made her permanent home in Palm Beach County on or about January 15, 1944, and remained domiciled in Florida until she died.

On March 25, 1935, the testatrix executed a trust instrument in which she named the Wilmington Trust Company, a Delaware corporation, as trustee. The trust instrument provided in part as follows:

'Trustee shall pay over the net income of the trust fund unto Rustor, for and during the term of her natural life. Upon the death of Trustor Trustee shall assign, transfer, convey and deliver this trust fund, principal and undistributed income thereof, if any, free from this trust, unto such person or persons and in such manner and amounts and upon such trusts, terms and conditions as Trustor shall have appointed by the last instrument in writing which she shall have executed and delivered to Trustee, or failing such instrument, by her last Will and Testament, or in default of any such appointment then unto the then living issue of Trustor, per stirpes and not per capita.'

The trust assets consisted entirely of intangible personalty.

On April 6, 1935, Mrs. Donner executed a power of appointment under the terms of the trust. On October 11, 1939, she executed a new power of appointment, amending the previous power.

On December 3, 1949, (the same day she executed her will, and while domiciled in Florida) Mrs. Donner executed an instrument entitled 'Donner *First Power of Appointment' wherein she revoked all previous exercises of the power of appointment under the trust and ordered that certain sums be paid to a different set of beneficiaries.

On July 7, 1950, she executed an instrument entitled 'Donner *Second Power of Appointment' amending the instrument of December 3, 1949. This was the last 'power of appointment' the testatrix exercised before her death.

In her will, after making certain specific directions and bequests, the testatrix provided in part as follows:

'Fifth: All the rest, residue and remainder or my estate, real personal and mixed, whatsoever and wheresoever the same may be at the time of my death, including any and all property rights and interest over which I may have power of appointment which prior to my death has not been effectively exercised by me or has been exercised by me in favor of my Executrix, I direct my Executrix to deal with as follows, namely:--'

(Here follow certain directions and the names of residuary legatees, plaintiff-appellees here.) (Emphasis supplied.)

The complaint for declarator decree in this case was filed for the purpose of determining what passes under the residuary clause of the will quoted above. This determination, of course, requires a study of the trust agreement of March 25, 1935, and the powers of appointment exercised thereunder, to determine whether or not such powers as the testatrix had were 'effectively exercised' under the terms of the will. On this issue, the chancellor held in part:

'Concerning the declaration of trust dated March 25, 1935, and particularly the power of appointment dated December 3, 1949, no present interest passed to any beneficiary other than the Trustor (Testatrix). It seems clear to me, from the authorities, that the power of appointment was testamentary in character and did not constitute a valid inter vivos trust appointment. As the appointment had only one subscribing witness, rather than two, as required in Florida, it did not consititute a valid testamentary disposition. Hence, the executrix should receive the assets and dispose of them agreeable to the will under which she was appointed.'

After this final decree was entered, a suit which had been brought in Delaware by Elizabeth Donner Hanson, as executrix and trustee under the Donner will (one of the appellants herein) to determine the validity of the trust agreement resulted in a summary judgment of the Court of Chancery of the State of Delaware in and for New Castle County, holding that the trust was valid. An appeal from this judgment is pending in Delaware but, so far as the record here before us shows, has not yet been determined.

Appellants have lodged with us a copy of the Delaware chancellor's opinion and judgment and, on the basis thereof, have moved to remand the instant case with directions to dismiss it, taking the position that the Delaware judgment is dispositive of the main issue raised on this appeal.

We shall first consider the contention of appellants that the circuit court of Palm Beach County erred in holding the trust and the powers of appointment exercised thereunder invalid as testamentary in character. As a preliminary inquiry, it is necessary to determine whether or not jurisdiction existed in the courts of Florida to pass upon the validity of these instruments.

There can be no doubt that the court below possessed substantive jurisdiction to determine this issue. Jurisdiction existed by virtue of the will, which had been july probated in Florida, the testatrix' domiciliary state. Reference having been made in the will, as we have seen, to powers of appointment, and the question of effective exercise thereof having been properly raised, the chancellor below had no alternative but to examine the trust instrument and documents executed thereunder and declare them valid or invalid. This is to be distinguished from a case wherein questions of administration or validity of a purported inter vivos trust arise absent a will or any reference therein. Cf. Wilmington Trust Co. v. Wilmington Trust Co., 26 Del.Ch. 397, 24 A.2d 309, 311, 139 A.L.R. 1117, wherein the settlor had executed a will 'making no reference whatever to the power of appointment conferred on him by the (previously executed) trust agreement * * *' and it was held that the Delaware courts had jurisdiction to determine the validity of trust powers, although the settlor died a domiciliary of another state. In the case now presented, it would have been an abdication or abandonment of jurisdiction, which we would have been obliged to correct, if the chancellor below had failed to answer the question which was duly brought before him for adjudication.

The next question is the source of the applicable law to test the validity of the attempted trust disposition. The trustee, Wilmington Trust Company, is a Delaware corporation with its principal place of business in Delaware. Securities representing the intangible personalty which forms the corpus of the trust are also located in Delaware. The settlor was domiciled in Pennsylvania when she executed the original trust instrument. The first two 'powers of appointment', now revoked, were executed while the settlor was domiciled in Pennsylvania. But these considerations alone are insufficient to persuade us that the law of either Delaware of Pennsylvania is applicable, for reasons which will hereinafter appear.

Assuming, for the moment, that this was an inter vivos trust, the only exercises of the power of appointment which could have been intended to create an interest to be enjoyed at the settlor's death were those reflected in the documents of 1949 and 1950. The settlor obviously intended these documents, if any, to make the controlling disposition, for she revoked all previous exercises of the power and even called the 1949 and 1950 papers the 'first' and 'second' power of appointment respectively, although she had previously executed similar instruments. He chancellor in Delaware, in expressing his opinion that the trust was valid under Delaware law, sanctioned payment to the remaindermen named in these last two powers of appointment. In the last analysis we, too, are concerned with the interests of these remaindermen in our inquiry as to whether or not the instruments which created their interests were effective to shift the trust property out of the estate of the testatrix. We do not question the validity of the beneficial life estate reserved by the settlor.

It is urged upon us that the remaindermen possessed during the life of the settlor a present right to future enjoyment of the trust property. In making this argument, appellants state in part in their brief that:

'* * * since the right to amend is specifically reserved in the Trust Agreement of March 25, 1935, each appointment should be construed as an amendment to and a republication of the original agreement. Therefore, the trust agreement and appointments thereunder must always be construed together.' (Emphasis supplied.)

In Henderson v. Usher, 118 Fla. 688, 160 So. 9, 11, we observed that an inter...