New England Merchants Nat. Bank of Boston v. Mahoney

• Decision Date: 02 February 1970
• Citation: 356 Mass. 654,255 N.E.2d 592
• Parties: NEW ENGLAND MERCHANTS NATIONAL BANK OF BOSTON, trustee, v. J. Harold MAHONEY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 592

255 N.E.2d 592

356 Mass. 654

NEW ENGLAND MERCHANTS NATIONAL BANK OF BOSTON, trustee, v. J. Harold MAHONEY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Dec. 3, 1969.

Decided Feb. 2, 1970.

J. Lindsay Ware, Fitchburg (Charles F. Haywood, Boston, with him) for J. Harold Mahoney.

John J. Gartland, Boston, for James N. Enright and others.

Before SPALDING, CUTTER, KIRK, SPIEGEL, and QUIRICO, JJ.

SPIEGEL, Justice.

The petitioner seeks instructions regarding the distribution of principal which it holds as successor trustee under Article 6 of the trust indenture (trust) of Bertha K. T. Mahoney and Dr. J. Lewis Mahoney, both of whom died domiciled in St. Petersburg Florida. The probate judge entered a final decree ordering the funds distributed as follows: '$20,000 of the trust property to the Right Reverend Monsignor John J. Mullens, superintendent of St. Paul's Catholic School in St. Petersburg, Florida'; one-half of the 'rest, residue, and remainder of * * * (the) trust property' after fees and expenses to the Right Reverend Monsignor James F. Enright, one-eighth portions of said remainder to the Missouri Province Educational Institute of St. Louis, The Catholic Extension Society of the United States of America, The Pontifical Society for the Propagation of the Faith, and The Passionist Missions, Inc. This is an appeal by J. Harold Mahoney, a nephew of Dr. Mahoney. The trial judge made a 'Report of Material Facts' and the evidence is reported.

Article 5 of the Mahoney Trust stated that after the death of the surviving settlor the trust property not previously disposed of should be divided 'into two equal shares * * * Dr. Mahoney's half and Mrs. Mahoney's half.' Article 6 provided: 'As to Dr. Mahoney's half the Trustee shall distribute the same to such persons and charitable institutions in such shares and amounts as Dr. Mahoney shall appoint by a written direction, signed and acknowledged by Dr. Mahoney, and delivered to the Trustee during the lifetime of Dr. Mahoney. In default of and subject to such appointment, Dr. Mahoney's half shall be distributed as follows: one-half shall be distributed to Mr. Francis Hartnett, a nephew of Dr. Mahoney * * *; the remaining half shall be distributed to Mr. J. Harold Mahoney, a nephew of Dr. Mahoney, now residing in Parrsboro, Cumberland County, Nova Scotia; if said J. Harold Mahoney is not living at the death of the survivor of Bertha K. T. Mahoney and J. Lewis Mahoney, said half shall be distributed in equal shares to those of the children of said J. Harold Mahoney who are alive at that time; if neither said J. Harold Mahoney nor any of his children are living at said time, said half shall be distributed in equal shares to Boston University, Boston, Massachusetts, for use in the Medical School, and to Boston College, Newton, Massachusetts' (emphasis supplied).

We summarize pertinent portions of the judge's finding. 'On March 20, 1941 a Living Trust was created by Dr. J. Lewis Mahoney and Bertha K. T. Mahoney, the Day Trust Company being named as the Trustee of such Indenture.' New England Merchants National Bank of Boston is the present trustee since it absorbed the Day Trust. The present litigation involves only Dr. Mahoney's share of the trust. On August 14, 1944, November 22, 1944 and December 15, 1944, 'Dr. Mahoney made distributee substitutions of his share * * * in accordance with the provisions of the Trust.' Dr. Mahoney died on January 2, 1945. The power of appointment exercised by Dr. Mahoney on November 22, 1944, 'in accordance with Article VI, by a written directive acknowledged by him,' revoked the appointment executed on August 14, 1944. 'On December 15, 1944 Dr. Mahoney amended the Appointment made November 22, 1944.' Mrs. Mahoney died June 6, 1967. Francis Hartnett 'predeceased both Dr. & Mrs. J. Lewis Mahoney.'

J. Harold Mahoney does not claim that the trust is invalid but contends that the power of appointment exercised by Dr. Mahoney under the trust is invalid for reasons which we will discuss later in this opinion.

Initially, we must decide whether the law of Massachusetts or the law of Florida is to govern. 'An inter vivos trust * * * is generally held to be valid if valid in the place of administration fixed by the settlor. If the trust is valid under that law, so also * * * an appointment * * * made by the exercise of a power of appointment contained in the trust' will be valid. Scott, Trusts (3d ed.) § 635, at p. 4034.

Dr. Mahoney was domiciled in Florida when the trust was created and died a domiciliary of that State. The trust instrument, however, was held in Massachusetts by a Massachusetts corporate trustee; it was duly executed in Massachusetts and the property composing the trust was delivered to the trustee in Massachusetts at the time of the creation of the trust. There is nothing in the record indicating that the trust res ever left Massachusetts. In these circumstances, there is reason to believe that Dr. Mahoney intended the trust to be administered in Massachusetts. Scott, Trusts (3d ed.) § 612, at pp. 3952--3953. Amerige v. Attorney Gen., 324 Mass. 648, 659, 88 N.E.2d 126; Boston Safe Deposit & Trust Co. v. Alfred University, 339 Mass. 82, 85, 157...