Nat'l Shawmut Bank of Boston v. Joy

• Decision Date: 02 February 1944
• Parties: NATIONAL SHAWMUT BANK OF BOSTON et al. v. JOY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

315 Mass. 457

53 N.E.2d 113

NATIONAL SHAWMUT BANK OF BOSTON et al.

v.JOY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Feb. 2, 1944.

Petition by National Shawmut Bank of Boston and another, as trustees, against Minnie B. Joy and others for instructions as to distribution of trust property at the termination of trust. From the decree entered, some legatees appeal.

Decree affirmed.Appeal from Probate Court, Suffolk County; Dillon, Judge.

Before FIELD, C. J., and DONAHUE, LUMMUS, and QUA, JJ.

J. C. Coughlin, of Boston, stated the case.

M. A. Shattuck, of Boston, for National Shawmut Bank of Boston.

C. C. Milton and A. H. Sheedy, both of Worcester, for John Anthony Bettencourt and another.

J. S. Allen, of Boston, for Minnie B. Joy and others.

H. Snyder, of Boston, for S. H. Wildman.

D. F. McCormack, of Boston, for A. E. Wildman and another.

LUMMUS, Justice.

This petition, filed October 31, 1942, is brought by The National Shawmut Bank of Boston and Haven Parker as trustees under an indenture of trust under seal entered into by them as trustees with WilliamW. Nicholls of Boston as settlor, dated March 12, 1936, for instructions as to the distribution of the trust property at the termination of the trust.

The evidence is reported, but the material facts are not in dispute. William W. Nicholls, who was born in England on October 24, 1860, emigrated to Massachusetts with his mother and sister in 1872. He grew up in Boston, where he became a naturalized citizen on May 12, 1886. He never married. Apparently before 1890 he went to the Azores to live, and there became agent for a steamship line and for a time was American consul. He lived there at Brown's Hotel, kept by Miss Sophia Brown, at Ponta Delgada on the island of Sac Miguel. But he retained his domicil in Boston, and always described himself as of Boston. Rummel v. Peters, 314 Mass. 504, 51 N.E.2d 57;Cassen v. Cassen, 315 Mass. 35, 51 N.E.2d 976.

After he went to the Azores, his mother and sister continued to live in Boston in a house maintained by him until they died about thirty years ago. Even after their deaths he continued to visit Boston every year or two, although he no longer maintained a house there.

He had friends of long standing in New England, some of whom he made legatees in his will. At some time he told one of them that his friends meant much more to him than his relatives in England. One of his friends was Louis G. Neville, a dealer and broker in securities in Boston, who from about 1920 was given a free hand in buying and selling securities for Nicholls.

On October 21, 1926, while on a visit to Boston, Nicholls made his will, which was under seal. He named the petitioning bank as executor, and devised and bequeathed to it as trustee all his property. The income was made payable to Sophia Brown during her life, and after her death to another person (who in fact died before Sophia Brown) for his life. At the death of the survivor of them, pecuniary legacies were made payable to the respondent Minnie B. Joy and several other persons, and the residue was given to the respondents Bettencourt and DeCosta. The will when executed was put into the custody of the petitioning bank, and remained in its custody until after Nicholls died on October 7, 1937. The will was proved and allowed, and the bank was appointed executor, by the Probate Court in and for the county of Suffolk at Boston on June 5, 1939.

In 1936, while Nicholls was in the Azores, Neville, his son-in-law Haven Parker, an attorney at law, and the bank decided that it would be advisable for Nicholls to establish a voluntary trust. It does not appear that Nicholls had been consulted. An instrument of trust was drawn and sent to Nicholls, and he executed it in the Azores on March 12, 1936. It was in form an indenture, and when executed bore the signatures and seals of Nicholls as settlor and the bank and Mr. Parker as trustees. It was amended, under a power reserved by Nicholls, by another instrument similarly executed, dated May 29, 1936. The combined instruments will be described as though one. The property thereby conveyed by Nicholls to the trustees consisted entirely of corporate stocks and bonds. It was provided that the trust was established under the laws of Massachusetts, and was to be governed by those laws. Codman v. Krell, 152 Mass. 214, 218, 25 N.E. 90;Proctor v. Clark, 154 Mass. 45, 48, 27 N.E. 673,12 L.R.A. 721;Harvey v. Fiduciary Trust Co., 299 Mass. 457, 464, 13 N.E.2d 299; Loring, Trustee's Handbook, 5th Ed. 1940, §§ 118-120; Commonwealth v. Stewart, 338 Pa. 9, 12 A.2d 444, affirmed Stewart v. Commonwealth, 312 U.S. 649, 61 S.Ct. 445, 85 L.Ed. 1101. There is nothing to show that Nicholls did not understand the effect of the trust instrument upon his property and upon his earlier will. But whether he did or not, the terms of the trust instrument, as far as they are valid, bound him and bind all who claim under him.

By those terms, Nicholls was to be paid $230 a month out of the income or, if necessary, out of the principal.¹ It was provided that ‘the trustees may make other payments from the principal of the trust fund as they in their absolute discretion may deem necessary for the benefit of WilliamW. Nicholls.’ After his death, the income, and so much of the principal as the trustees in their absolute discretion might deem necessary, were to be paid to Sophia Brown during her life. After the death of both Nicholls and Sophia Brown, the principal and any accumulated income were to be paid over free from trust ‘to such person, persons or corporation as the donor [Nicholls] may appoint by an instrument duly acknowledged by him and under his seal and deposited with the trustees,’ and in default of such appointment ‘to such person or persons as are entitled to take from the donor [Nicholls] under the laws of intestacy of the Commonwealth of Massachusetts.’ It does not appear that Sophia Brown knew during the life of Nicholls of the existence of the trust, but such knowledge was not necessary to its validity. Aronian v. Asadoorian, 315 Mass. 274, 52 N.E.2d 397.

After Nicholls died on October 7, 1937, the trustees made payments under the trust instrument to Sophia Brown until her death on July 24, 1942. They now hold personalty, comprising the principal of the trust property, amounting to more than $29,000, besides nearly $1,000 of income remaining unpaid at the death of Sophia Brown. The Probate Court instructed the trustees to pay over the accumulated income as though it were principal, and the administrator of the estate of Sophia Brown did not appeal. The Probate Court instructed the trustees to distribute the principal and accumulated income equally among the three first cousins of Nicholls in England (including the administrator of the estate of one of them who died on April 11, 1939) living at the death of Nicholls on October 7, 1937. They were his statutory next of kin under the Massachusetts statute of distributions, G.L.(Ter.Ed.) c. 190, §§ 2, 3(6). Am.Law Inst.Restatement: Property, §§ 310, 311. Some of the legatees named in his will appealed. Apart from the trust property, Nicholls left less than $1,000, and what he left has been consumed in paying debts and expenses of his estate.

1. The will was not a valid exercise of the power of appointment reserved by Nicholls in the trust instrument. Whether the fact that the will antedated the trust is material need not be decided. Am.Law Inst.Restatement: Property, § 344. Nicholls could appoint only by an instrument (a) under his seal (b) duly acknowledged by him and (c) deposited with the trustees. Am.Law Inst.Restatement: Property, §§ 346, 347, 365. Scott, Trusts (1939) § 330.8. One of the attesting witnesses happened to be a notary public qualified to take acknowledgments. G.L.(1921) c. 183, § 30. G.L. c. 4, § 6, Sixth, as amended by St.1926, c. 187, § 2. But it is not shown that Nicholls knew that fact, or ‘acknowledged’ the will before the notary public as such. There is nothing to show that the notary public undertook to act in his official capacity, or took any acknowledgment in the sense in which that word is used in Massachusetts conveyancing. On the face of the will he did nothing as notary public, but merely subscribed as an attesting witness like the other witnesses. And the will, though deposited with the bank that nearly ten years later became a trustee, was never held by the bank in its capacity as trustee, so far as appears, and was never deposited with or held by the individual trustee at all. There was therefore no valid exercise of the power to appoint. We need not consider whether, if the will were a valid exercise of the power, the pecuniary legacies could be deemed appointments. Slayton v. Fitch Home, Inc., 293 Mass. 574, 200 N.E. 357, 104 A.L.R. 669;Old Colony Trust Co. v. Allen, 307 Mass. 40, 45, 29 N.E.2d 310; Am.Law Inst.Restatements: Property, s. 343.

2. The legatees under the will contend that the gift over, in default of appointment, to the ‘person or persons * * * entitled to take’ from Nicholls ‘under the laws of intestacy’-in other words, to his statutory next of kin ² -was to have effect only in the event that Nicholls should actually die intestate so that his statutory next of kin would take by descent, and would not need to claim as purchasers by virtue of any gift to them in the trust instrument. The provision in question uses the indicative instead of the subjunctive. The legatees contend that that provision does not refer to the persons who would be the statutory next of kin if Nicholls should die intestate, but refers to persons who because of intestacy in fact become entitled ‘under’ and by the actual operation of the ‘laws of intestacy.’ Since Nicholls did not die intestate, they contend that the contingency thus provided for did not happen, and that the result is the same as though the trust instrument had created the life estates and then had stopped,...