Porotto v. Fiduciary Trust Co.
| Citation | 75 N.E.2d 17,321 Mass. 638 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Decision Date | 19 September 1947 |
| Parties | SUSAN DAY POROTTO, executrix, v. FIDUCIARY TRUST COMPANY, trustee, & others. |
May 6, 1947.
Present: QUA, C.
J., LUMMUS, RONAN & SPALDING, JJ.
Rule against Perpetuities. Power. Devise and Legacy, Rule against perpetuities, Power, Individual or joint gift, Vested or contingent gift. Joint Tenants. Probate Court, Citation Accounts. Notice. Trust, Trustee's accounts. Laches. Limitations, Statute of. Executor and Administrator, Short statute of limitations.
Under the will of a testatrix, who had had an interest in the income of an inter vivos trust created before she had any children and a general testamentary power of appointment over the principal appointing the principal to a testamentary trustee to pay the income to the living children of the testatrix and to the issue of deceased children until the death of the last surviving child, a further provision, in effect giving each child or issue of a deceased child a right to augmentation of income upon the death of another child without issue or upon a failure of his issue, created contingent interests which were void under the rule against perpetuities because, even in the light of the facts existent at the death of the testatrix, they might not become vested within any life in being at the time of the creation of the inter vivos trust and twenty-one years after such life.
Under provisions of a will, establishing a trust to pay the income to the testatrix's living children and the issue of deceased children until the death of the last surviving child, and upon the death of a child without issue or upon a failure of his issue, to pay his share of the income to the other children or issue of deceased children, the children did not take vested estates in the income as joint tenants.
Neither the fact that the items in a trustee's accounts allowed before the effective date of St. 1938, c. 154, Section 1, had been "finally determined and adjudicated," nor the provision of that statute, as applied to later accounts allowed after its effective date, that they should "not be impeached except for fraud or manifest error," precluded one, who was interested in all the accounts and who proved that he had not in fact had notice of their presentation for allowance pursuant to the order of the Probate Court, notwithstanding a recital of proper service in the return of service upon the citation, from seeking revocation of the decrees allowing the accounts in order to correct substantial errors therein. The prima facie effect of a return of service of a citation issuing from a
Probate Court and requiring notice by publication and mailing of a petition for allowance of an account was overcome, and was of no effect to bar a petition by a party interested to revoke a decree allowing the account, where he proved that he in fact had had no notice as ordered.
Upon revocation of decrees allowing certain probate accounts, a previous account, allowed before the effective date of St. 1938, c. 154, Section
1, without its items being "finally determined and adjudicated," would also be reopened for the correction of errors.
Probate accounts, whose items were "finally determined and adjudicated" before the effective date of St. 1938, c. 154, Section 1, upon proper notice to interested parties, could not be reopened for the correction of substantial errors which were of such a character that they could be ascertained only by an elaborate reexamination of fact and law, but which related to matters fully open and susceptible of being tried at the original hearing on the accounts.
Laches did not bar a petitioner from seeking reopening of a trustee's accounts for correction of an erroneous distribution of income which ought to have gone to the petitioner, where, although he had delayed many years before taking action, there was no evidence that he knew during that period facts upon which his rights depended or that any of the opposing parties were prejudiced by the delay.
A beneficiary of a trust seeking to reopen accounts of the trustee in order to correct an erroneous payment of income made to another beneficiary, who had since died, instead of to the petitioner, and by the correction to reduce an amount presently payable from the trust to the estate of the deceased beneficiary, was not a creditor of that estate nor barred by the short statute of limitations applicable thereto.
PETITION to revoke decrees, filed in the Probate Court for the county of Essex on April 10, 1946.
The case was heard by Phelan, J.
W. B. Trafford, (C.
M. Storey with him,) for the petitioner.
S. H. Babcock, (A.
P. Lowell & G.
M. Taylor, Jr., with him,) for the executor of the will of Mary Martha Taylor.
R. H. Wiswall, (C.
Y. Wadsworth with him,) for Fiduciary Trust Company, trustee.
H. P. Goldstein, for Aimee Henry Mishou.
D. Schwartz, A.
B. DuBois & I.
Jaffee, for the Attorney General of the United States, submitted a brief.
T. A. Henry, for De Sartiges and another, submitted a brief.
This is a companion case with Fiduciary Trust Co. v. Mishou, also decided this day. Most of the pertinent facts appear in that case and will not be restated here. That case was a petition by the trustee under the will of Martha S. Parker for instructions primarily as to the distribution of the principal of the trust. This case relates primarily to past distributions of income of the trust and particularly to past distributions of income under the provision of Mrs. Parker's will whereby upon the decease of a child without issue (or the failure of issue of a child) the portion of income previously paid to him or her should go to augment the income payable to any child who survived and to the issue of any deceased child.
After the death without issue of Charles T. Parker in 1912, he being the first to die of Mrs. Parker's three children, the trustees, apparently proceeding upon the theory that all the limitations of Mrs. Parker's will were valid, divided that portion of the income which Charles had been receiving equally between the two surviving children, James and Mary, and after James died in 1930, the entire income was paid to Mary. Seventeen trustee's accounts were allowed showing these payments. The petitioner in this case is the executrix of the will of Charles. It is her contention that the provisions of Mrs. Parker's will by which, upon the death of a child without issue (or upon failure of issue), income which that child had been receiving would be shifted to another child or to the issue of a deceased child were invalid as to income derived from property traceable from the trust under the marriage settlement of 1851 because in violation of the rule against perpetuities; that the income involved in these augmenting limitations, in so far as derived from such property, should have gone to the three children and their estates under the will of their father, Richard T. Parker, in the proportions of three twentieths to the estate of Charles, eleven twentieths to James and after his decease to his estate, and six twentieths to Mary, the last child to die. The present petition has for its object the revocation of the decrees allowing the trustee's accounts in order that the necessary corrections may be made, and that the trustee may be ordered to pay out of the fund in its hands a sum which, it is contended, these corrections will show has been paid to Mary at the expense of the estate of Charles. The judge entered a decree dismissing the petition.
In our opinion the position of the petitioner is to a great extent correct. We think that the limitations in Mrs. Parker's will above mentioned, providing for augmentation of income, were contingent interests which were not vested at Mrs. Parker's death and which might not vest until more than twenty-one years after any life or lives in being in 1851, when Mrs. Parker's power of appointment was created. These interests were contingent not only upon the person or persons who might take them being "living" persons at the times when they might take but also upon the death of a child without issue or the failure of issue of a child. Who the takers would be could not be ascertained until the events occurred. Dunn v. Sargent, 101 Mass. 336 . Shaw v. Eckley, 169 Mass. 119 . Gardiner v. Savage, 182 Mass. 521 , 524. Alexander v. McPeck, 189 Mass. 34 , 39-43. Clarke v. Fay, 205 Mass. 228 . Gardiner v. Everett, 240 Mass. 536 , 539. Springfield Safe Deposit & Trust Co. v. Ireland, 268 Mass. 62 , 66. Whiteside v. Merchants National Bank, 284 Mass. 165 , 174. We cannot accept the opposing contention that Mrs. Parker's children took vested estates in the income as joint tenants. In a joint tenancy the survivor takes the whole, but Mrs. Parker's will provided that in some circumstances issue and not the surviving children should take. Neither can we accept the contention that the children had at Mrs. Parker's death vested interests in the augmentation of income the enjoyment of which was merely postponable in case issue should intervene. This construction seems to us strained and inconsistent with the words used. We think that the shifting gifts of income upon the death of a child (or failure of his issue) were limitations over; that the income so limited might go to other children of Mrs. Parker or might go to the issue of the deceased child or might go to issue of a child who had previously deceased; and that the future interests in the income were contingent. In re Legh's Settlement Trusts, [1938] 1 Ch. 39. Whitby v. Von Luedecke, [1906] 1 Ch. 783.
It follows that the limitations over of income upon the death of Mrs Parker's children (or the failure of their issue)...
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