In re Trust Estate of Holt, s. 3060 and 3061.

• Decision Date: 04 October 1957
• Docket Number: Nos. 3060 and 3061.,s. 3060 and 3061.
• Parties: IN THE MATTER OF THE TRUST ESTATE OF GEORGE H. HOLT, DECEASED.
• Court: Hawaii Supreme Court

42 Haw. 129

IN THE MATTER OF THE TRUST ESTATE OF GEORGE H. HOLT, DECEASED.

Nos. 3060 and 3061.

Supreme Court of the Territory of Hawai‘i.

Argued May 21, 1957.

Decided October 4, 1957.

OPINION TEXT STARTS HEREAPPEALS FROM CIRCUIT COURT FIRST CIRCUIT, HON. HARRY R. HEWITT, JUDGE.

Syllabus by the Court

Where a gift is made in a will to heirs of a designated person, the word “heirs” means persons who succeed to the property of such person under the statute which governs intestate succession.

When a gift to heirs is made, to take effect after the termination of a preceding life estate, heirs are determined as of the date of termination of such preceding estate.

Where a gift of income of a trust is made to heirs of a designated person per stirpes, and the corpus at the termination of the trust is also given to heirs of such designated person per stirpes, such gift of income is construed as a gift to persons who are from time to time heirs of such designated person when the income accrues.

Where a gift is made in a will to heirs of a designated person and the statute which governs intestate succession at the time of the execution of the will differs from the statute in force at the time that the gift vests, heirs are determined according to the later statute.

Under the statute in effect when the gift of income vested in this case, an adopted child could inherit through an adoptive parent and such child may be an heir of an ancestor of the adoptive parent per stirpes through the adoptive parent.

J. Harold Hughes (also on the briefs) for respondents-appellants Lydia Holt Wright and Jane Holt Thurston in Case No. 3060 and respondents-appellees Lydia Holt Wright and Jane Holt Thurston in Case No. 3061.

Robert G. Dodge ( Heen, Kai, Dodge & Lum on the briefs) for Trustee A. D. Castro, petitioner-appellee, in Case No. 3060 and Trustee A. D. Castro, petitioner-appellant, in Case No. 3061.

Henry T. Hirai ( Mirikitani & Hirai on the brief) for respondent-appellee Alberta Rebecca Holt in Cases Nos. 3060 and 3061.

Samuel Landau, guardian ad litem (also on the brief) for Halford Kekuewa, Wattie V. Holt, Merilyn E. Holt, Arletta Yvonne Holt, Glenda Beryl Holt and Robert William Holt, Jr., in Cases Nos. 3060 and 3061.

RICE, C. J., STAINBACK AND MARUMOTO, JJ.

OPINION OF THE COURT BY MARUMOTO, J.

This is an appeal from an order of the circuit judge on a bill for instructions with respect to the third article of the will of George H. Holt, which reads as follows:

“3rd: All the rest, residue and remainder of my estate I give, devise and bequeath to my trustees hereinafter named, and their successor or successors in trust: In trust to hold, care for and manage the same for as long a period as is legally possible; determination or ending of said trust to take place when the law requires it under the Statute; and during the pendency of said trust to pay the income from the same to my said wife during her life, or so long as she shall remain my widow, and after her death or future marriage, to stand possessed thereof, in trust as aforesaid, and to pay the income to all of my heirs in equal shares per stirpes, and upon the final ending of the term of said trust, as aforesaid, to divide my trust estate among the persons entitled to the same at that time under the law per stirpes.” (Emphasis added)

The will was made in 1914. Testator died in 1929. He was survived by his wife, Kemilia, and eleven children, George, Jr., Christopher, James, Lydia, Severina, Jane, Wattie, Rose, Charles, Robert and Elizabeth. The widow died in 1934. All children survived her.

After the death of the widow and before the filing of the bill for instructions, five children died, Rose in 1934, Elizabeth in 1943, Charles in 1946, Robert in 1948 and Christopher in 1949. Elizabeth died without issue. Rose, Charles and Robert left natural children surviving them.

Christopher left his wife, Julia, and an adopted daughter, Alberta, surviving him. Alberta is the natural child of Severina. She was born in 1926 and adopted in 1927. Testator encouraged the adoption. Christopher left a will in which he bequeathed $2,500 to Alberta and gave the residuary estate to his widow.

The income from the trust was paid to Kemilia during her lifetime. After her death and until the death of Elizabeth, the income was divided into eleven parts and paid to testator's surviving children and the issue of his deceased children per stirpes. Thereafter, until Christopher's death, the income was divided into ten parts and paid to testator's surviving children and the issue of his deceased children per stirpes.

Thus, at the time of his death, Christopher was entitled to one-tenth of the income. When Christopher died, the trustee, being in doubt as to who was entitled to the share of the income which would have been paid to Christopher had he continued to live, requested the instruction of the court.

The circuit judge decided as follows:

“A. The income given to Christopher did not terminate at his death, but continues so long as the trust continues. Hawaiian Trust Company, Limited v. McMullan, 23 Haw. 685.

“B. Since Christopher's interest in the income was for the full period of the trust, his interest was an estate of inheritance which he could dispose of by will or by assignment. Hawaiian Trust Company, Limited v. Galbraith, 25 Haw. 174.

“C. Had Christopher died intestate, Alberta, as an adopted and only child, would have inherited his share of the income, subject, of course, to dower. Estate of Kamauoha, 26 Haw. 463.

“D. Christopher's interest in the income, being a vested interest--an estate of inheritance--went by his will to his widow, Julia. Walker v. O'Brien, 35 Haw. 13.

“E. At the time of distribution, upon termination of the trust, Alberta and her children will be in the line of descent, and entitled to a share of the corpus, the amount to be taken to be determined at that time dependent upon who is alive to take and the degree of kinship. Estate of Kamauoha and Walker v. O'Brien, supra.”

The trustee and two of testator's children, Lydia and Jane, appealed from the decision and the order which was entered pursuant thereto.

The trustee appealed on the ground that he has a pecuniary interest in the final outcome of the case. The trustee states in his brief that Rose, Charles and Robert left surviving spouses. Upon the death of Rose, Charles and Robert, the trustee has been paying to their children per stirpes the shares of the income which would have been paid to the parents if they continued to live. He has not paid any part of such shares to the surviving spouses. In the circumstance, if the interests of testator's deceased children in such shares were estates of inheritance and subject to dower or courtesy in favor of the surviving spouses, the trustee would be subject to the claims of the surviving spouses. The record is silent as to whether Rose, Charles and Robert left surviving spouses. However, we deem it unnecessary to have proof that they left surviving spouses. Such fact is immaterial in view of our conclusion which is stated below.

Lydia and Jane appealed on the ground that Christopher's share was a life estate which terminated upon his death without natural issue and passed on to testator's surviving children and the natural issue of his deceased children per stirpes.

The will provides that after the death of the widow the income of the trust be paid to testator's heirs in equal shares per stirpes.

When a gift is made in a will to heirs of a designated person, the word “heirs” means persons who succeed to the property of such designated person under the law which governs intestate succession. (Thurston v. Allen, 8 Haw. 392;Carter v. Carter, 10 Haw. 685; von Holt v. Dreier, 34 Haw. 131)

Heirs of a designated person are ordinarily determined as of the date of death of such person, unless the testator shows a contrary intent. This court has held that where a gift to heirs is postponed until the termination of a preceding estate a contrary intent is shown and that the heirs will be determined as of the date of the termination of the preceding estate. (Auld v. Andrade, 31 Haw. 1; Crescent City Motors v. Nalaielua, 31 Haw. 418)

In this case the testator gave the income of the trust to his widow for life and thereafter to his heirs. So, the heirs were, initially, determinable as of the date of death of the widow. Testator's heirs on such date were his eleven surviving children.

If the gift, after the death of the widow, were a gift of the corpus, no further problem would arise. In such case the right to the corpus in existence on the date of the death of the widow would vest in the heirs initially determined, that is, in testator's eleven surviving children, and such corpus, together with any income that might have accrued thereon after the death of the widow, would have been distributable to such heirs in equal shares.

But here there is an intermediate gift of income which accrued after the death of the widow and which will accrue until the corpus is ultimately distributed upon the termination of the trust. When the testator provided for the payment of such income to his heirs, did he intend that the word “heirs” be limited in its application to persons who were initially determined to be his heirs upon the death of the widow, or did he intend that the word include persons who were his heirs from time to time as the income accrued?

If the testator intended the former, then each of the persons who were initially determined to be testator's heirs would have an estate of inheritance in the right to a proportionate share of the income accruing during the entire period of the trust, including the income accruing after such heir's death. Such heir might assign his right to the share of the income. If such heir died without assigning his right, the right would go to his estate. (Hawaiian Trust Company, Limited v. McMullan, 23 Haw. 685;Hawaiian Trust Company, Limited v. Galbraith, 25 Haw. 174) If such...