Mechanics' Bank v. Yale University

• Decision Date: 02 June 1930
• Citation: 111 Conn. 452,150 A. 526
• Parties: MECHANICS' BANK ET AL. v. YALE UNIVERSITY ET AL.
• Court: Connecticut Supreme Court

150 A. 526

111 Conn. 452

MECHANICS' BANK ET AL. v. YALE UNIVERSITY ET AL.

Supreme Court of Errors of Connecticut.

June 2, 1930

Case Reserved from Superior Court, New Haven County; Earnest C Simpson, Judge.

Suit by the Mechanics' Bank and others against Yale University and others to construe the will of Clarence E. Barton deceased. Reserved by the superior court on an agreed statement of facts for the advice of the Supreme Court of Errors on certain questions of law.

Questions answered.

Clarence E. Barton died December 6, 1925, leaving a widow, Maude W Barton, and two children, Barbara, born October 23, 1924, and Beverly, born July 15, 1918. He was the only child of Edward and Clara R. Barton, Edward, the father, died August 15 1917, owning 364 shares, par $100, of the common stock of Proctor & Gamble Company. Under his will his wife, Clara, received 208 3/5 and his son, Clarence, 109 shares of this stock. Clara, the mother of Clarence, died in Cincinnati, Ohio, leaving a will in which Clarence and Mr. Robertson were named as executors, and which made specific legacies amounting to $59,552, and gave the residue of her estate to her son. Her estate was appraised at $85,184.05, the principal items being 52 shares of common stock of Proctor & Gamble Company, $36,400, and 60 shares of common stock of this company, in the possession of A. & J. Frank, and appraised at $24,000, and subject to a loan of $18,000 which Clarence had assumed.

To pay these specific legacies in due course would have required the sale of some or all of this stock. All of the debts of the estate of Clara and the legacies under her will were paid prior to the death of Clarence; the last of these legacies, $25,000, was paid three days before he died, but of this he was ignorant. The cash in the estate at his death, $3,912.52, was insufficient to liquidate the court costs, some taxes, some cost of administration, including fees of the executor, and his counsel, approximating $9,000, and these could not have been paid at the time of the death of Clarence without selling some of this stock. Clarence moved from Ohio August 30, 1919, and ceased to act as executor from that time.

On December 22, 1919, Proctor & Gamble Company changed the par of its stock from $100 to $20, giving 5 shares for 1 of the old. The executor, Mr. Robertson, had in his possession at the death of Clarence as a par of her estate certificates in the name of the estate for 304 shares of stock of the then par of $20. None of this stock ever stood in the name of Clarence, and none of the certificates had ever been in his individual possession. In August, 1929, the Proctor & Gamble Company exchanged the 304 shares for 1,520 shares, no par value, and these are now held by the executor who also has in his hands, in addition to the $3,912.56, about $8,687, the increment of this stock.

On or about January 1, 1919, Clarence E. Barton made an inventory of his property in which he listed his remainder interest in the bonds given him by his father in which his aunt, Miss Barton, had the life use.

Clarence E. Barton graduated from Yale College in 1913, and from the Yale Law School in 1916. He was a member of the Ohio bar, and practiced law in Cincinnati until the summer of 1919, when he moved to New Haven, Conn., where he resided and practiced law, and engaged in various businesses until his death. He kept two books entitled " Record of Investments and Income" which contained information in regard to his stocks, bonds, notes, and real estate.

The earliest entry in the first book is August 23, 1918, and the latest August 15, 1923. The latest date of acquisition in the second book is November 4, 1925. In both books is listed his remainder interest in the bonds in which Miss Barton has the life use. In neither book is there listed any of the assets of his mother, Clara R. Barton, nor do either of these books contain any reference to that estate or to the securities held by it under any of their headings, except that the earlier book contains under the head " Memoranda" the isolated, undated pencil memoranda in his handwriting:

" P. & G. @ 115--residue of mother's estate-- 18000--amount due Frank."

The $18,000 was a loan contracted in the purchase of the 60 shares of Proctor & Gamble stock referred to heretofore. Upon a paper was written by him " Balance sheet as of July 1, 1925." This contained an inventory of his property as of this date. It comprises headings such as bonds, stocks, etc. Under the heading " Sundry" appears " Cash" and six other items, the last being:

" Interest in Estate of Clara R. Barton Proctor and Gamble @ 122 $39,000."

Clarence E. Barton left a will bearing date February 6, 1919; the important articles of which for this determination are sufficiently quoted or referred to in the opinion.

The questions reserved for the advice of this court are:

A. Whether the 304 shares (par 20) of the stock of the Proctor & Gamble Company (the equivalent of said 1,520 shares (no par), which at the time of the death of said Clarence E. Barton stood in the name of said Clara R. Barton, and certificates for which were in the possession of said William F. Robertson as executor of the will of said Clara R. Barton, who was in charge of the settlement of her unsettled estate, passed to defendant Stoehr as trustee under the provisions of subsection (c) of article twelfth of the will of said Clarence E. Barton, deceased, or passed to defendant Maude W. Barton, under article thirteenth of the will of said Clarence E. Barton, deceased.

B. Whether by the phrase " all my stocks," contained in subsection (c) of article twelfth of the will of said Clarence E. Barton, the testator, intended to include said 304 shares (par 20) of the stock of the Proctor & Gamble Company, or the equivalent thereof in shares of a different par value or of no par value, certificates for which at the time when said will took effect were in the possession of said William F. Robertson as executor of the will of said Clara R. Barton.

C. Whether by the phrase " all my stocks" in subsection (c) of article twelfth of the will of Clarence Barton, when read in connection with the phrase " all my property" in subsection (h) of the twelfth article of such will, the testator intended to include under the provisions of the twelfth article said 304 shares of the stock of the Proctor & Gamble Company (the equivalent of said 1,520 shares).

D. Whether by the phrase " all my stocks" used in said subsection (c) of article twelfth of the will of Clarence E. Barton, when read in connection with the phrase " the above securities" in subsection (j) of article twelfth of such will, testator intended to include within the provisions of such article twelfth such 304 shares of the stock of the Proctor & Gamble Company (the equivalent of said 1,520 shares).

E. Whether by the phrase " all my property" in subsection (h) of article twelfth of the will of Clarence E. Barton the testator intended to include said 304 shares of the stock of the Proctor & Gamble Company (the equivalent of said 1,520 shares).

F. Whether by the phrase " the above securities" used in subsection (j) of article twelfth of the will of Clarence E. Barton the testator intended to include said 304 shares of the stock of the Proctor & Gamble Company (the equivalent of said 1,520 shares).

Cleaveland J. Rice, of New Haven, for plaintiffs.

Frederick H. Wiggin and Huntington T. Day, both of New Haven, for Yale University.

Harrison Hewitt, William B. Gumbart, and Mary E. Manchester, all of New Haven, for defendant Maude W. Barton.

Arthur W. Chambers, of New Haven, for defendants Beverly Barton and others.

James E. Wheeler, of New Haven, for defendant Stoehr.

Argued before WHEELER, C.J., and MALTBIE, HAINES, HINMAN, and BANKS, JJ.

WHEELER, C.J. (after stating the facts as above).

In article twelfth, subparagraph (c) of the will of Clarence E. Barton, the testator gives all " my stocks and bonds" in trust to pay to his wife, " so long as she remains my widow," the income therefrom for her use and that of " my daughter and whatever other children we may have."

In subparagraph (g) he directs the trustee to transfer to the trustees of Yale University for their own use absolutely all of these stocks and bonds, " although these securities provide an income until my wife's remarriage, for my daughter Beverly and whatever other child or children we may have as well as for my wife," except that the trustee is to retain for each child $10,000, the cash income to be paid to each until each becomes eighteen years of age, when the principal sum shall be paid to each.

In subparagraph (h) the testator provides that, after the death of his wife, " I give to my child or children surviving her, share and share alike, an income similar to that which I have above provided for my wife during her life," with power to sell such portion of the securities " and give to them the proceeds as in his opinion is reasonably necessary" for the thorough education of his children and from the time the child becomes twenty-one, or, if the education be completed before the child reaches that age, then from that time until the child reaches twenty-five to give the child an income of $3,000 a year, " Provided, that no payment shall be made after completion of education or training which would give to any child more than his or her proportional share of the principal of my estate. If none of my children live to be twenty-five, I give, upon death of my wife and last surviving child, all my property to the trustees of Yale University absolutely."

Subparagraph (i) provides: " When the youngest of my children shall have reached her or his twenty-fifth birthday, if my wife be deceased, I...