In Re Watkins' Estate. Appeal Of Howard Nat. Bank & Trust Co.

• Decision Date: 02 February 1943
• Docket Number: Nos. 304, 305.,s. 304, 305.
• Citation: 30 A.2d 305
• Court: Vermont Supreme Court
• Parties: In re WATKINS' ESTATE. Appeal of HOWARD NAT. BANK & TRUST CO.

30 A.2d 305

In re WATKINS' ESTATE. Appeal of HOWARD NAT. BANK & TRUST CO.

Nos. 304, 305.

Supreme Court of Vermont.

Feb. 2, 1943.

COPYRIGHT MATERIAL OMITTED.

Exceptions from Probate Court, District of Chittenden; Francis D. Foley, Judge.

Proceeding in the matter of the estate of Harris R. Watkins, deceased, wherein Emily Tenney Morgan and others filed a petition against the Howard National Bank & Trust Company alleging that the trust company was wrongfully attempting to act as executor of the estate of Harris R. Watkins deceased, and requesting that a suitable person be appointed administrator with the will annexed. Decree for the petitioners, and the Howard National Bank & Trust Company brings exceptions.

Decree affirmed, and cause remanded.

Before MOULTON, C. J., and SHERBURNE, BUTTLES, STURTEVANT, and JEFFORDS, JJ.

Lawrence & O'Brien, of Rutland, for petitioners.

Guy M. Page, John J. Deschesnes, Frederick P. Smith, and Grace Johnson Murphy, all of Burlington, for defendant.

MOULTON, Chief Justice.

This is a petition brought on June 11, 1941, to the Probate Court for the District of Chittenden by Emily Tenney Morgan, and her sons Richard Morgan and William S. Morgan, Marian Bayley Buchanan, and the latter's minor children, Lucia Bayley Buchanan, Edwin Bayley Buchanan, Ellen Grier Buchanan and Eustace Watkins Buchanan, represented by their guardian ad litem (hereinafter called the petitioners), all of whom are parties in interest in the estate of Harris R. Watkins, deceased, against the Howard National Bank and Trust Company (hereinafter called the petitionee). It is alleged that the City Trust Company, a banking corporation organized under and by virtue of the laws of the State of Vermont, which was the executor named in the will of Harris R. Watkins and was appointed as such by the Probate Court has wholly ceased to function and carry on its corporate business, including the exercise of its authority and the performance of its duties as executor since March 12, 1931, and that the petitionee, a banking corporation organized and existing under and by virtue of the laws of the United States, which has not applied for appointment as executor or administrator with the will annexed, and has given no bond, and has not been appointed executor or administrator, has wrongfully and without legal right taken possession and control of the assets of the estate and has wrongfully undertaken and attempted to act as executor; and that the petitionee has, by its acts and conduct relating to the estate, become an executor de son tort, and that there is now no legal executor or administrator of the estate. The prayer is that some suitable person be forthwith appointed administrator with the will annexed, and for general relief.

The answer of the petitionee alleges that on March 12, 1931, the City Trust Company, theretofore the executor of the will of Harris R. Watkins, was consolidated with the Howard National Bank, a corporate instrumentality of the United States, into a corporation of the United States under the name and style of the Howard National Bank and Trust Company, having the same offices and directors of the City Trust Company, and, by virtue of the laws of the United States, and in harmony with the Laws of the State of Vermont, the powers, property, rights, obligations and duties of the City Trust Company as fiduciary, including the executorship under the will of Harris R. Watkins, devolved upon the consolidated corporation, the petitionee, and having been exercised by it; that the City Trust Company has continued its existence as a constituent part of the petitionee, and is an instrumentality of the United States the corporate existence of which the State of Vermont, since the date of the consolidation, has been without power to regulate, control or terminate, as such constituent part; that the consolidated corporation and its nature were known to the Probate Court, and by its decrees the petitionee was recognized as the executor, and that the petitioners knew of the merger and that the petitionee was acting as executor, and consented thereto and accepted payments made by it in pursuance to decrees of the Probate Court, and are therefore estopped, both by the record and by matters in pais, to deny the right of the petitionee to act as executor.

After hearing, and making a written finding of facts, the Probate Court entered a decree by which it was adjudged that the petition should be allowed; that the City Trust Company has ceased to exist as a corporate entity, for the purposes of the case; and that a vacancy exists in the office of executor of the Estate of Harris R. Watkins, which vacancy must be filled by the appointment of an administrator with the will annexed. The petitionee has brought the cause to this Court on exceptions to the decree. The petitioners also excepted to certain of the findings of fact and to the refusal of the Court to comply with certain of their requests for findings.

The Maryland Casualty Company, surety on the bond of the City Trust Company, was made a party to this proceeding, and moved to be dismissed as being improperly joined. This motion was denied, but since no exception was taken, we give the matter no further attention.

We first consider whether the consolidation of the City Trust Company and the Howard National Bank caused the rights and duties of the City Trust Company, as executor of the Estate of Harris R. Watkins, to devolve upon the petitionee, the consolidated corporation, and automatically to constitute it the legal executor. Upon this question the following facts, found by the Probate Court, are pertinent:

Harris R. Watkins died testate on February 18, 1930, leaving him surviving his widow, Nellie E. Watkins, but no issue. In his will he named the City Trust Company, a banking corporation organized and existing under and by virtue of the laws of the State of Vermont, as his executor. After directing the payment of his just debts and funeral expenses, and bequeathing certain personal property to his widow, he devised and bequeathed all the residue of his substantial estate, both real and personal, to the City Trust Company, upon trust to hold, manage, invest and reinvest the same for the benefit of Mrs. Watkins and to pay over the net annual income to her during her life. Upon her death, and after the payment of two legacies, he directed the income from the trust fund to be divided equally between his nieces, Emily Tenney Morgan and Marian Bayley Buchanan, and paid to them in quarterly installments as long as they both should live; and within one year after the death of one of them, the fund to be distributed in equal shares to the issue of the two nieces.

The will was proved and allowed and the City Trust Company, having given the required bond, received its letters testamentary by decree of the Probate Court for the District of Chittenden on March 18, 1930, and thereupon took possession and control of the assets of the estate as executor.

Nellie E. Watkins died on April 14, 1930, and the two legacies, payable upon her death, have been delivered to the legatees.

On March 12, 1931, the City Trust Company was consolidated with the Howard National Bank, a banking corporation organized and existing under the laws of the United States, both corporations having prior to that time occupied the same banking rooms in Burlington in Chittenden County, and having had the same officers. The consolidation was effected under the authority of the Act of Congress of November 7, 1918, C. 209, sec. 3, as amended February 25, 1927, C. 191, sec. 1, 44 Stat. at Large, 1225, 12 U.S.C.A. § 34a, and received the approval of the Comptroller of the Currency of the United States on March 12, 1931, and a certificate of public good from the Commissioner of Banking and Insurance of the State of Vermont on March 6, 1931. The consolidated corporation took the name of the Howard National Bank and Trust Company, by its charter, granted under the laws of the United States. On June 1, 1932, the Secretary of State of the State of Vermont issued a certificate by which the charter of the City Trust Company was declared to be revoked because the franchise tax had not been paid on or before April 1 of that year, as provided by G.L. Chap. 46, Sec. 1046 (P.L. Chap. 43, sec. 1000).

On or about the date of the consolidation the petitionee took possession and control of the assets of the estate and proceeded to act as executor, although it did not apply for appointment as administrator or furnish a bond and it has never received an appointment as administrator from the Probate Court. On July 31, 1931, it was appointed trustee of the trust fund established by the will, but the fund has never been decreed to it as such trustee. After March 12, 1931, the directors of the City Trust Company never took action as a board and the affairs previously conducted by that company were directed and controlled by the directors and officers of the petitionee.

The Act of Congress (Nov. 7, 1918, c. 209, sec. 3, as amended Feb. 25, 1927, c. 191, sec. 1, 44 Stat. 1225, 12 U.S.C.A. § 34a), by the authority of which the consolidation was effected, is, so far as material, as follows: “Any bank incorporated under the laws of any State ***, may be consolidated with a national banking association located in the same county, city, town, or village under the charter of such national banking association,” under certain conditions and procedure therein prescribed; “and all the rights, franchises, and interests of such State *** bank so consolidated with a national banking association in and to every species of property, real, personal, and mixed, and choses in action thereto belonging, shall be deemed to be transferred to and vested in such national banking association into which it is consolidated without any deed or other transfer, and the said consolidated national banking association shall hold and enjoy the same...