S. Norwalk Trust Co. v. Knapp

• Decision Date: 17 December 1941
• Court: Connecticut Supreme Court
• Parties: SOUTH NORWALK TRUST CO. v. KNAPP et al.

23 A.2d 519

SOUTH NORWALK TRUST CO.

v. KNAPP et al.

Supreme Court of Errors of Connecticut.

Dec. 17, 1941.

Appeal from Superior Court, Fairfield County; O'Sullivan, Judge.

Action by the South Norwalk Trust Company, trustee (will of William Buchanan), against Edith J. Knapp and others, claiming a declaratory judgment determining whether certain stock dividends are principal and belong to the corpus of a trust or are income and belong to the life tenant, brought to the Superior Court in Fairfield County and tried to the court. From a judgment declaring that the stock dividends are principal, defendant Josephine A. Garrison appeals.¹

No error.

Argued before MALTBIE, C. J, and AVERY, BROWN, JENNINGS, and ELLS, JJ.

Arthur B. Weiss and Margaret E. Connors, both of Bridgeport, for appellant (defendant Josephine A. Garrison).

Walter E. Whitton, of So. Norwalk, for appellees (estate of named defendant et al.).

JENNINGS, Judge.

The questions to be decided are whether certain stock dividends received by the trustee belong to the life tenant or remaindermen and whether counsel fees may be allowed from the corpus of the estate.

The facts proved and found with reference to the first question were extremely involved but those essential to the decision of this appeal can be simply stated. William Buchanan died in Norwalk January 20, 1910, leaving a will creating a trust. The plaintiff is the trustee. The purposes of the trust have been accomplished. During the administration of the trust four stock dividends and a small sum in cash were received from the Westinghouse Air Brake Company and one stock dividend was received from the United States Steel Corporation. These are still held by the trustee. This action was brought by it praying for (1) a declaratory judgment determining whether this property is principal or income and (2) an allowance to the several parties for their expenses and counsel fees.

In the case of the Steel dividend, the amount transferred from earned surplus to capital for that purpose was much less than the difference between the amount of the earned surplus at the date of the formation of the trust and at the date of the declaration of the dividend. In the case of Westinghouse, the amount transferred from earned surplus to capital to pay the last two stock dividends was less than the difference between the balance of earned surplus after paying the second stock dividend and the net additions to earned surplus between that time and the declaration of the fourth stock dividend. It is admitted that all of these dividends, including the cash, were stock dividends, that the first two Westinghouse dividends were principal, that the rights of the parties are dependent on the construction of General Statutes, § 4966,² and that all of the dividends belong to two named remaindermen unless the life tenant comes within the second exception in the statute. The remaindermen must, therefore, prevail unless the life tenant has proved that the corporation expressly declared that the dividend was from earnings made since the formation of the trust.

There is no statement in the annual reports or various votes declaring these dividends that they are payable from the earnings made during any particular period or since any particular date. The remaindermen claim that therefore the requirement of an express declaration is lacking and that the life tenant has not proved that she comes within the exception. This was the basis of the decision of the trial court. The life tenant, attacking the finding and conclusions, contends that the action of the directors in declaring stock dividends in connection with the published financial reports adopted by them as the reports of the corporations amounted to the express declaration required by the statute, in view of the earnings made since the formation of the trust.

In other words, the remaindermen claim that the statute gives a simple direction which can have but one meaning, while the life tenant claims that it is ambiguous and should be construed in the light of the facts of this case. This point is exhaustively briefed and many cases from this and other states are cited. We are, however, unable to see any ambiguity in the provision in question which requires us to go outside of the common and ordinary meaning of the words used. "Such language does not require the aid of rules of construction or of interpretation to make the intention and meaning of the lawmaker plain and clear. Interpretation and construction, in the ordinary sense, in reference to such language, are alike out of place. 'If the words are free from ambiguity and doubt, and express plainly and clearly and distinctly the sense of the framers of the instrument, there is no occasion to resort to other means of interpretation. It is not allowable to interpret what has no need of interpretation.' McCluskey v. Cromwell, 11 N.Y. [593], 601." Lee Bros. Furniture Co. v. Cram, 63 Conn. 433, 437, 28 A. 540, 541. The short answer to the claim of the life tenant is that the statute requires an express declaration that the dividend was made from earnings since the formation of the trust and that neither corporation made such an express declaration. Harding v. Staples, 111 Conn. 325, 332, 334, 149 A. 846. It may be noted that the question has now been eliminated for the future by the passage of General Statutes, Cum.Sup.1939, § 1295e.

A statute, quite similar to that now under consideration and containing substantially the same exception, was passed in 1889. Public Acts, 1889, ...