Phillips Exeter Academy v. Gleason

• Decision Date: 17 February 1960
• Citation: 102 N.H. 369,157 A.2d 769
• Parties: PHILLIPS EXETER ACADEMY v. Isabel M. GLEASON et al.
• Court: New Hampshire Supreme Court

Page 769

157 A.2d 769

102 N.H. 369

PHILLIPS EXETER ACADEMY v. Isabel M. GLEASON et al.

Supreme Court of New Hampshire.

Argued Oct. 6, 1959.

Reserved Case Amended Dec. 16, 1959.

Decided Jan. 27, 1960.

Rehearing Denied Feb. 17, 1960.

Perkins, Holland & Donovan, Robert B. Donovan, Exeter, for plaintiff.

Burnham B. Davis, Conway, and Upton, Sanders & Upton, Concord, Robert W. Upton, Concord, for defendant Isabel M. (Fish) Gleason, individually and as executrix of the will of Josephine Fish Pendergas.

George R. Scammon, Exeter, for defendant Ralph B. Fish, furnished no brief.

Ernest R. D'Amours, pro se.

KENISON, Chief Justice.

I. Three of the questions transferred without ruling may be summarized as follows: did the Superior Court have jurisdiction (a) to appoint and qaulify the plaintiff, Phillips Exeter Academy as trustee; (b) to allow the annual accounts filed by the trustee; and (c) are the decrees of the Superior Court allowing the annual accounts of plaintiff binding on the parties? For the reasons hereafter stated the answer to each question is in the affirmative in the circumstances of this case.

The defendants contend that the Superior Court had no jurisdiction to appoint and qualify the plaintiff as trustee or to allow the annual accounts filed by it and that its action in so doing was void and without force or effect. Reliance is placed on Rockwell v. Dow, 85 N.H. 58, 154 A. 229, decided in 1931. There is no doubt that this case definitely established the exclusive jurisdiction of the probate court in the appointment and qualification of testamentary trustees and their accounting. Lisbon Savings Bank & Trust Co. v. Moulton's Estate, 91 N.H. 477, 22 A.2d 331. However it is to be noted that in considering the present case we do not write on a slate new and clean since the plaintiff was appointed a trustee in 1917. At that time the decisions were in conflict as the Rockwell case itself plainly indicates from the following quotation at page 68 of 85 N.H., at page 234 of 154 A.: 'In so far as the earlier cases hold that equity has concurrent jurisdiction with the probate court in the settlement of the accounts of trustees, or in the appointment or removal of trustees, they have in effect been overruled * * * and are not to be followed.' (Emphasis supplied.) See also, Barker v. Barker, 1905, 73 N.H. 353, 62 A. 166, 1 L.R.A.,N.S., 802; Hoyt's Probate Practice, c. xx (1901).

After notice and hearing at which all interested parties appeared by counsel and the State was represented by the Attorney General, the plaintiff was appointed and qualified as a trustee in 1917 by a decree of the Superior Court and ordered to make annual accounts to the Superior Court. No objection to the decree was made then or to the thirty-six annual accounts thereafter filed by the trustee and allowed by the Superior Court. So far as appears neither court nor counsel prophesied in 1917 the coming of Rockwell v. Dow, 85 N.H. 58, 154 A. 229, which was decided March 3, 1931 and became effective June 25 following. The proceedings taken under the decree of 1917, and the accounts filed and allowed pursuant thereto before the effective date of the Rockwell decision or within a reasonable time thereafter are valid and binding on the parties, unless that decision is to be given retroactive effect.

When a decision overrules earlier precedents it may be given retroactive effect but there is no constitutional requirement that it must be. Great Northern Ry. Co. v. Sunburst Oil & Refining Co., 287 U.S. 358, 53 S.Ct. 145, 77 L.Ed. 360; Opinion of the Justices, 95 N.H. 533, 536, 64 A.2d 204. Particularly in probate matters where previous decisions are overruled this jurisdiction has frequently stated that the overruling decision will not be applied retroactively to the detriment of those who had previously relied on the former decisions. Thus in Langdell v. Dodge, 100 N.H. 118, 123, 122 A.2d 529, 532, which overruled Holbrook v. Holbrook, 74 N.H. 201, 66 A. 124, 12 L.R.A.,N.S., 768, and established a new rule relating to stock dividends, it was stated that the 'opinion will not be retroactive to affect prior reliance on the Holbrook rule.' There is a strong public policy in probate matters to see that decisions cause 'no disruption of the settlement of estates.' Langdell v. Dodge, supra. We conclude that the Rockwell case is not to be given retroactive effect as applied to the appointment and qualification of the plaintiff as trustee and to the annual accounts which were allowed before the Rockwell decision.

The decree of the Superior Court of 1917 remained unquestioned until the present proceedings. The 1917 decree became the law of the case and the accounts filed and allowed in reliance thereon, including the thirty-sixth annual account, are not now open to question. Miller v. McCutcheon, 117 N.J.Eq. 123, 175 A. 155, 95 A.L.R. 702; Union Oil Co. of California v. Reconstruction Oil Co., 58 Cal.App.2d 30, 135 P.2d 621; Annotation 95 A.L.R. 708. See Zielinski v. Cornwell, 100 N.H. 34, 39, 118 A.2d 734. The thirty-seventh and thirty-eighth annual accounts which are pending and have not been allowed, and future accountings should be made to the probate court.

In view of the result reached on this issue it is unnecessary to decide whether the parties would be bound by the decrees because of laches (Knight v. Hollings, 73 N.H. 495, 63 A. 38) or on the ground of res judicata. Restatement, Judgments, s. 10; Bickford v. Bickford, 74 N.H. 448, 69 A. 579; McAllister v. Elliot, 83 N.H. 225, 227, 140 A. 708; City of Keene v. Martin, 96 N.H. 504, 506, 79 A.2d 13.

II. Another transferred question is whether 'the defendant, Isabel M. (Fish) Gleason, in her capacity as executrix, is entitled to one-half the income which accrued prior to the death of her testatrix, Josephine Fish Pendergast, and was undistributed at her decease.' Josephine Fish Pendergast died testate August 2, 1955. This accrued and undistributed fund of one-half of the income is claimed by the executrix of Josephine Fish Pendergast on the one hand and by Ralph B. Fish on the other hand. The fund represents undistributed income received or accrued for the three months' period since the last quarterly distribution was made on May 10, 1955.

'Unless it is otherwise provided by the terms of the trust, income which accrued prior to the death of the life beneficiary is payable to his personal representatives.' Restatement (Second) Trusts, s. 235A, comment a. It is the general rule that where a trust provides that income shall be payable at designated intervals to a life beneficiary, and the beneficiary dies between such intervals, his personal representative is entitled to the net income earned from the date of the last payment up to the time of his death. 3 Scott, Trusts (2d ed. 1956) s. 238; 4 Bogert, Trusts and Trustees, s. 816, p. 236; 1 Nossaman, Trust Administration and Taxation (2d ed. 1957) s. 16.03. In the absence of any contrary provision in the will, we follow the general rule in this case. See Martin v. Eaton, 57 N.H. 154, 156.

By way of example from the specific facts of this case we consider the item of interest on certain Commonwealth Edison bonds which were due and payable August 1, 1955 (which was prior to the death of the beneficiary Josephine Fish Pendergast on August 2, 1955) but was not received by the trustee until August 9, 1955. This is income to which the Pendergast estate is entitled. See also, Restatement (Second) Trusts, s. 238(1), comment b, illustration 1: 'A bequeaths certain bonds to B in trust to pay the income to C for life in quarterly payments on the first of January, April, July and October. C dies on February 1st. His personal representatives are entitled to net income earned between January 1st and February 1st.'

The transferred question is answered in the affirmative and the trustee is advised to pay to the executrix one-half the income which had accumulated but was undistributed at the decease of Josephine Fish Pendergast. A subsidiary matter relates to apportionment of the expenses of administration. If apportionment is proper the parties have agreed that the sum of $263.37 shall be charged against the undistributed income. The trustee is advised that such apportionment of expenses is proper. Taylor v. Bentinck-Smith, 304 Mass. 430, 24 A.2d 146, 126 A.L.R. 857; 3 Page, Wills, s. 1158, pp. 437, 438. See Page v. D'Amours, 99 N.H. 441, 443, 113...