North Adams Nat. Bank v. Curtiss

• Decision Date: 27 October 1933
• Parties: NORTH ADAMS NAT. BANK v. CURTISS et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

284 Mass. 330

187 N.E. 546

NORTH ADAMS NAT. BANK

v.CURTISS et al.

Supreme Judicial Court of Massachusetts, Berkshire.

Oct. 27, 1933.

Appeal from Probate Court, Berkshire County; Robinson, Judge.

Suit by the North Adams National Bank, trustee, against Roy A. Curtiss and others. From the decree, the executor of the will of Sophia Curtiss appeals.

Affirmed.

See, also, 278 Mass. 471, 180 N. E. 217, 83 A. L. R. 607.

C. T. Phelps, of North Adams, and J. A. Haughwout, of New York City, for Everett J. Esselstyn.

R. P. Berle, of New York City, and J. W. Lewis, of Pittsfield, for Roy A. Curtiss and others.

DONAHUE, Justice.

This is a petition for instructions as to the meaning of the twenty-second clause of the will of Frank Curtiss who died in 1918. By that cause there was given to named trustees ‘such bonds or other securities' as the testator might have at the time of his death ‘which shall be sufficient to produce the net income of Twelve thousand Dollars ($12,000) per year,’ and directed the trustees to pay the net income ‘to the extent of (and not to exceed) the sum of Twelve thousand Dollars * * * per year’ to his wife during her lifetime. It provided that the principal ‘shall be and become part of my residuary estate and be disposed of as hereinafter provided,’ and directed that if the income should ‘not be sufficient in any year during the life’ of his wife ‘to produce the said annuity’ the trustees should use so much of the principal as might be necessary to make up the deficiency, and ‘if the income * * * shall be more than enough to pay said annuity in any year during the life of my said wife, then I direct that such excess shall be and become at the end of any such year a part of my residuary estate and be disposed of as such.’ In the pertinent portions of the twenty-third clause in the will, which disposes of the residuary estate of the testator, it is directed that the residue of the estate be divided into two equal parts to be held in separate trusts and provided that the income of one part should be paid to his daughter Sophia Curtiss during her life. It is further provided that if his daughter should die without issue the trustees should ‘pay over the principal of said trust fund with any accumulations then thereon to her nephews and nieces * * * in such shares, estates and proportions and upon such terms, conditions and limitations as my said daughter shall by her last Will and Testament duly executed legally direct, limit and appoint. * * *’ The other half of the residuary estate was given to the trustees to pay the income to the testator's son Roy A. Curtiss for life with remainder over.

Sophia Curtiss died testate in 1928 without issue. In her will she exercised the power of appointment given her by her father's will, by dividing that part of her father's estate left in trust for her for life into four equal parts, one part to be held in trust for each of her four nephews, the income to be paid to the nephews for life with remainders over. This was a valid exercise of the power of appointment. North Adams National Bank v. Commissioner of Corporation and Taxation, 268 Mass. 42, 167 N. E. 294. The petitioner, the North Adams National Bank, is surviving trustee of the fund created by the will of Frank Curtiss for the benefit of his wife, who is still living. It is also trustee of the four trust funds created by the will of Sophia Curtiss for the benefit of her four nephews. During the administration of the trust created by the twenty-second paragraph of the will of Frank Curtiss the principal set aside to pay the annuity to his wife produced more income than was required for that purpose. The petitioner in its capacity as trustee of that fund held all the excess income both that which accumulated before and that which accumulated after the death of Sophia Curtiss until 1932, when it paid over to itself as trustee for the nephews of Sophia one half of the amount so held and now holds it as such trustee in four equal shares in the four trusts created by Sophia's will. The other one half of the accumulated excess income it paid over to the trustee for the other half of the residuary estate of Frank Curtiss.

The petition was heard by the judge of probate on the allegations in the petition which were admitted by the answers and the agreement of the respondents that the petitioner held the fund as alleged in the petition. No evidence was introduced. The decree of the probate court answering specific requests for instructions in the petition instructed the trustee that under the twenty-second paragraph of the will of Frank Curtiss the ‘excess income should become a part of the principal of the residuary estate and should be accumulated and disposed of as such principal,’ and that the excess income which accumlated prior and subsequently to the death of Sophia Curtiss ‘which has been paid over to and is now held by the petitioner, is so held by it as residuary principal and should be added to the other residuary principal held by the petitioner.’ The decree also...