Rhode Island Hospital Trust Co. v. Votolato, s. 46-48

• Decision Date: 14 July 1967
• Docket Number: Nos. 46-48,s. 46-48
• Parties: , 30 A.L.R.3d 1299 RHODE ISLAND HOSPITAL TRUST COMPANY, Trustee u/d of Charles R. Forrest v. Arthur N. VOTOLATO, Jr., Adm'r .c.t.a., Estate of Charles R. Forrest et al. RHODE ISLAND HOSPITAL TRUST COMPANY, Trustee u/d of Harriet T. Forrest v. Arthur N. VOTOLATO, Jr., Adm'r c.t.a., Estate of Harriet T. Forrest et al. (two cases). Appeal
• Court: Rhode Island Supreme Court

Page 491

231 A.2d 491

102 R.I. 467, 30 A.L.R.3d 1299

RHODE ISLAND HOSPITAL TRUST COMPANY, Trustee u/d of Charles R. Forrest v. Arthur N. VOTOLATO, Jr., Adm'r .c.t.a., Estate of Charles R. Forrest et al.

RHODE ISLAND HOSPITAL TRUST COMPANY, Trustee u/d of Harriet T. Forrest v. Arthur N. VOTOLATO, Jr., Adm'r c.t.a., Estate of Harriet T. Forrest et al. (two cases).

Appeal Nos. 46-48.

Supreme Court of Rhode Island.

July 14, 1967.

Tillinghast, Collins & Tanner, Providence, for complainant, William M. Sloan, Providence, of counsel.

[102 R.I. 485] Arthur N. Votolato, Jr., pro se ipso, as Administrator c.t.a.

Edwards & Angell, Edward F. Hindle, James H. Barnett, V. Duncan Johnson, Providence, Powers, Hall, Montgomery & Weston, Andrew C. Bailey, Hale & Dorr, John M. Maguire, Boston, Hinckley, Allen, Salisbury & Parsons, Ronald C. Green, Jr., Jacques V. Hopkins, Providence, Hooker, Alley & Duncan, New York City, of counsel, Graham, Reid, Ewing & Stapleton, Joachim A. Weissfeld, Providence, Robinson, Robinson & Cole, Hartford, John M. Donahue, Hartford, of counsel, Gardner, Sawyer, Cottam & Gates, Providence, Edward W. Day, Jr., Providence, Hatfield & Brady, New York City, Edgar W. Hatfield, New York City, of counsel, for other respondents.

OPINION

KLLEHER, Justice.

These actions have been brought by the plaintiff trustee and certified to us pursuant to the provisions of G.L.1956, § 9-24-28, as amended, for this court's instruction as to the disposition of certain assets held by the plaintiff as trustee of three inter vivos trusts established in 1911 and 1913 by Charles R. Forrest and his wife, Harriet T. Forrest, both now deceased.

Sometime after oral arguments were heard in this case, plaintiff trustee, pursuant to our permission, filed a supplemental brief. We thereupon permitted defendants to file such reply thereto as they deemed necessary. The court also requested that the record herein be supplemented with certain information as to the grandchildren of the settlors. Receipt of the briefs and the requested information is acknowledged. The court is appreciative of the diligence and cooperation exhibited by counsel in this regard.

We deem it necessary to set forth the pertinent facts of the Forrest family history which are relevant to the issues before us. In addition to the parents, the Forrest family consisted of five children, four daughters and one son.

On December 10, 1902, Charles R. Forrest executed his last will and testament and by its sole dispositive provision gave his entire estate to his wife, Harriet T. Forrest. On April 24, 1911, Harriet T. Forrest executed an inter vivos trust in which she reserved to herself for life the income from said trust and provided that the trustee then in its discretion could apply the income for the benefit of her son, George, during his life. Thereafter Mrs. Forrest gave the income for life to her daughters, Helen, Madeleine, Elsie and Virginia.

On June 5, 1911, Charles R. Forrest executed an inter vivos trust reserving for himself the income from said trust. When he died, the income of the trust was to be paid to his daughters in equal shares until the death of the surviving daughter.

Charles R. Forrest died on October 6, 1912, and over a year later on December 29, 1913, Harriet executed a second inter vivos trust which provided, as in the 1911 trust, that the income be paid to her for her life. Upon her death the income from this trust was to be paid in equal shares to the daughters until the death of the last surviving daughter.

All three trusts provided for the distribution of principal upon the decease of the last surviving daughter in substantially the same manner. It was to go to the children and more remote lineal descendants of the daughters who were then living and who would have been entitled to inherit if the settlor had died intestate immediately after the last daughter. Each trust contained a provision that no adopted child should be entitled to receive any share thereof.

In March 1915 Harriet T. Forrest amended both the 1911 and 1913 trusts. The provisions of these amendments are not material to the issues to be resolved in the instant causes. Thereafter, on June 21, 1915, Mrs. Forrest executed her will in which she made various testamentary dispositions of her property.

At the time of Harriet Forrest' death on November 8, 1920, she was survived by all of her five children. Except for her daughter Madeleine, none of the five children had issue. Madeleine was the survivor. She died on September 17, 1963. Although Madeleine had married and had issue, the issue predeceased her. As a result of this unfortunate incident, each of the trusts failed because none of them contained any provision for the eventuality which has occurred, that is, the death of all the daughters without any issue of them surviving.

The plaintiff alleges that in these circumstances it is uncertain as to the distribution of the principal in each of the three inter vivos trusts and therefore commenced the instant actions.

All the parties have agreed that Rhode Island law shall be applied to determine the persons who will benefit under the resulting trusts. In this regard the issue is whether we should invoke the rule enunciated by this court in Industrial National Bank v. Drysdale, 83 R.I. 172, 114 A.2d 191, and reaffirmed in Industrial National Bank v. Drysdale, 84 R.I. 385, 125 A.2d 84, and accordingly impose a resulting trust in favor of the next of kin of Charles R. Forrest and Harriet T. Forrest, or whether these particular assets should revert to the respective estates of the settlors and be distributed by the appropriate provisions of their respective wills.

If Drysdale is not applicable, we must then ascertain which clause of the will of Harriet T. Forrest is dispositive of the assets presently in the possession of plaintiff. Since Mrs. Forrest died a resident of Connecticut, we will, in construing her will, apply the appropriate Connecticut law.

After a careful consideration of all facets of these causes and the well-documented and researched positions of the several claimants to the undisposed trust assets, we are of the opinion that the Drysdale rule is not applicable. In Drysdale the testator bequeathed $10,000 to a trustee to pay the income in equal portions to a charitable organization, The People's Mission, Incorporated, and then left his residuary estate to certain individuals. The trust had been operating for 18 years when it terminated because the corporate charitable beneficiary had been dissolved. In the first Drysdale case we held that the testator had demonstrated a specific charitable intent to aid the mission exclusively and not the poor generally. Therefore, we said the doctrine of cy pres was not applicable and thereupon we ruled the gift lapsed and the trust fund reverted to the next of kin by way of a resulting trust. We pointed out in the second Drysdale case that when we employed the term 'lapsed,' we were not using that term as it is used in the law of wills. We held that under the law of wills a legacy lapses and falls into the residuary only when the intended legatee dies before the testator and there is no express limitation or bequest over. Upon reflection, it is our opinion that much of the misunderstanding as to our holding in Drysdale comes from our use of the term 'lapse' in a manner different from its usual connotation when it is associated with a testamentary disposition. Being possessed of 20/20 hindsight, we admit now that it might have been better if instead of the word 'lapsed,' we had used the word 'failed.'

After our opinion was filed, we granted a reargument, and in the second Drysdale case, we adhered to our earlier ruling. In his opinion, which was rendered after a hearing on the reargument, the late Chief Justice Condon pointed out that when the first Drysdale opinion stated that the trust funds reverted to the testator's next of kin, it meant next of kin and not his residuary legatees. It was clear in Drysdale that the gift had vested in the trustee some 18 years prior to the dissolution of the beneficiary. It was also evident that so far as the testator was concerned he did not intend that any other clause of his will was to affect this particular bequest. The title to the trust fund remained vested in the trustee and could not be divested except by an act of law creating a resulting trust. In an effort to place the parties as near as possible in statu quo in Drysdale we applied the trust fund for the benefit of the next of kin without regard to the testator's will since this was an equitable estate which arose by operation of law and not by a supposed intention of the testator. While some of defendants have urged us to adopt the Drysdale rule in these causes, we believe after a careful analysis of both Drysdale cases, having due regard for the facts set forth therein, that the principle of law they contain is limited in its application to the circumstances present in Drysdale, to wit, where there has been a failure of an operating testamentary charitable trust which had vested in the trustee and where there is no general charitable intent evidenced by the testator.

In Drysdale, the fact that the gift was created by a testamentary instrument allowed us to base our decision on the reasoning of In Re Slevin, 2 Ch.L.R. 236. There a bequest was made to an orphanage. The orphanage was in existence before and after the testator's demise but it went out of existence before the legacy could be paid over. The English court rejected the contention that the legacy had lapsed and became part of the residuary estate. The rights between a particular legatee and the residue are fixed, it said, at the time of the testator's death. In Drysdale we adopted this reasoning and held that it was equally applicable when title had vested in the trustee. Moreover, we emphasized in Drysdale that there was a charitable trust which had...