Merchants Nat. Bank v. Curtis

• Decision Date: 27 May 1953
• Citation: 98 N.H. 225,97 A.2d 207
• Parties: MERCHANTS NAT. BANK v. CURTIS et al.
• Court: New Hampshire Supreme Court

Page 207

97 A.2d 207

98 N.H. 225

MERCHANTS NAT. BANK v. CURTIS et al.

Supreme Court of New Hampshire.

May 27, 1953.

McLane, Davis, Carleton & Graf and Wesley E. Whitney, Manchester, for Norwin S. Bean.

Warren, Wilson, Wiggin & Sundeen and Bartram C. Branch, Manchester, for Marjorie Quirin.

Craig & Craig and Floyd Thorp, Manchester, for Charlotte H. Marshall, George E. Hill, Jr., Janet Hill Montague, Laban W. Bond, Charlotte J. Black, and Lillian Bond Lanois.

Charles H. Barnard, Manchester, and James A. Sayer, Jr., Salem, for Kalmar Francisco Shively.

George P. Cofran and Paul A. Rinden, Concord, for Noyes F. Bond and Rufus F. Bond.

KENISON, Chief Justice.

The question transferred in effect asks us to decide who is entitled to how much of what trust moneys. This question depends in part on whether clause sixth of the will violates the Rule against Perpetuities. At the threshould of the dispute, however, is the issue whether the construction of this will in the case of In re Harrington's Estate, 97 N.H. 184, 84 A.2d 173, is res judicata of the present claim that clause sixth violates the Rule against Perpetuities. We consider this preliminary issue first.

The proponents of the will maintain that the Bean-Quirin interests are precluded from urging the invalidity of any part of the will under the doctrine of res judicata and rely on McAllister v. Elliot, 83 N.H. 225, 140 A. 708. That case is similar but distinguishable because of important factual differences. In the first McAllister case, McAllister v. Hayes, 76 N.H. 108, 79 A. 726 'counsel on both sides * * * made repeated references to the rule against perpetuities.' 83 N.H. 225, 228, 140 A. 708, 710. Furthermore the opinion in the second McAllister case states that the silence of the court relative to the Rule against Perpetuities '* * * is to be explained rather upon the ground that the inapplicability of the rule to any of the devises in the will was clear'. 83 N.H. 225, 229, 140 A. 708, 710. When In re Harrington's Estate, 97 N.H. 184, 84 A.2d 173, was argued and decided there was no reference to the Rule against Perpetuities in the reserved case, the oral arguments, or the written briefs and it was not mentioned in the opinion. Bean and Quirin were not parties. The issue of the validity of clause sixth of the Harrington will with relation to the Rule against Perpetuities was neither litigated nor determined in the prior action and is not res judicata of the issue in this proceeding. Gagnon v. Pronovost, 97 N.H. 500, 92 A.2d 904.

The Rule against Perpetuities, hereinafter called the rule, prevails in this state, Gale v. Gale, 85 N.H. 358, 159 A. 122, but it has never been 'remorselessly applied' as advocted by Gray in 'The Rule against Perpetuities' (4th ed.) § 629. The genesis of the modified rule in New Hampshire began in 1891 with Edgerly v. Barker, 66 N.H. 434, 31 A. 900, 28 L.R.A. 328, when a gift of a remainder interest to grandchildren reaching forty years of age, which offended the rule, was cut down to a gift to grandchildren reaching twenty-one years of age so as to not offend the rule. This decision was bitterly assailed by Gray in his treatise (appendix G) since he thought it was a dangerous thing to tamper with this ancient English rule 'which is concatenated with almost mathematical precision.' Gray, supra, § 871. Nevertheless, Edgerly v. Barker, supra, has been followed in subsequent decisions in this state and continues to remain in good standing here. Wentworth v. Wentworth, 77 N.H. 400, 92 A. 733; Flanders v. Parker, 80 N.H. 566, 120 A. 558; Gale v. Gale, supra; Amoskeag Trust Company v. Haskell, 96 N.H. 89, 91, 70 A.2d 210, 71 A.2d 408. See Quarles, The Cy Pres Doctrine; Its Application to Cases Involving the Rule against Perpetuities and Trusts for Accumulations, 21 N.Y.U.L.Q.Rev. 384 (1946). In England the same result has been achieved by legislation. Laws of Property Act, 1925, 39 & 40 Geo. V., c. 98, Sec. 163.

The rationale of the Barker case was that, wherever possible, a will should be construed to carry out the primary intent to accomplish a legal testamentary disposition even though the will may have inadvertently exposed a secondary intent to accomplish the testamentary disposition in an ineffective manner. That rationale has been applied in many recent will cases that have not involved the rule itself. 'Traditionally, the courts of this jurisdiction have shown a signal regard for the intent of the testator * * * at times at the expense of other recognized principles deemed less cogent in their application. Cf. Edgerly v. Barker, 66 N.H. 434, 31 A. 900, 28 L.R.A. 328.' Petition of Oliver Wolcott, 95 N.H. 23, 26, 56 A.2d 641, 643, 1 A.L.R.2d 1323. The same thought received expression in different language in Burtman v. Butman, 97 N.H. 254, 258, 85 A.2d 892, 895: 'Probably no jurisdiction has stood more steadfastly for giving effect to the intention of the testator rather than to arbitrary rules of law than New Hampshire.' The refusal of this court to apply in unmodified form common law principles which defeat normal and reasonable estate plans has not been limited to wills but applies to conveyances as well. Therrien v. Therrien, 94 N.H. 66, 46 A.2d 538, 166 A.L.R. 1023.

The rule is a technical one, difficult of application and is often enforced to frustrate testamentary intent although the policy of the rule may not require such enforcement in a particular case. It is not surprising, therefore, that there has been an increasing tendency to avoid the application of the rule by various judicial techniques. There is a constructional preference for considering interests vested rather than contingent. Upton v. White, 92 N.H. 221, 29 A.2d 126. 'The public interest in keeping the destructive force of the rule against perpetuities within reasonable limits is a considerable present factor supporting the public interest in that construction which accomplishes the earlier vesting.' 3 Restatement, Property, § 243 comment i. (Emphasis supplied). If a gift is made upon alternative contingencies, one of which might be remote, while the other is not, the gift is valid where the second contingency actually happens. This doctrine is used to prevent the application of the rule in many cases. Annotation 64 A.L.R. 1077. 'Essentially this represents a revulsion against the rule requiring absolute certainty of vesting as viewed from the creation of the interest * * * Courts have a strong tendency to 'wait and see' wherever possible.' 6 American Law of Property (1952) § 24.54. These techniques have the salutary effect of avoiding the punitive and technical aspects of the rule but at the same time confirming the policy and purpose of the rule within reasonable limits. Wentworth & Co. v. Wentworth, 77 N.H. 400, 92 A. 733.

Clause sixth of the will is capable of at least two possible constructions. The first construction is that clause sixth created two contingencies upon which it would take effect: one to occur, if at all, on the death of Margaret May Curtis; the other to occur, if at all, on the death of unborn grandchildren. Since the first contingency actually occurred and is within the period of perpetuities, the gift may be considered valid. A closely parallel case is Springfield Safe Deposit & Trust Co. v. Ireland, 268 Mass. 62, 167 N.E. 261, 64 A.L.R. 1071. Under this construction the event occurs at the death of Margaret May Curtis, a life in being, and clause sixth would not be considered violative of the rule.

The second possible construction of this sixth clause is the one urged by the Bean-Quirin interests. They argue that the will gives the brothers and sisters an executory interest upon a single contingency which may occur at the death of as yet unborn grandchildren. While this is not the only construction that the clause is susceptible of, it is not a labored one. There is no doubt that, if there had been another grandchild who died after Margaret May Curtis without leaving heirs of his body, this event would have occurred beyond the period allowed by the rule against perpetuities.

Assuming this second construction to be permissible, we come to the crucial question whether we are justified in deciding the perpetuities issue on the facts which actually occurred rather than on facts that might have happened viewed as of the death of the testator. There is little case authority for deciding upon facts occurring...