Saulsbury's Trust Estate, In re

• Decision Date: 21 September 1967
• Citation: 43 Del.Ch. 400,233 A.2d 739
• Parties: In re TRUST ESTATE of Willard SAULSBURY, Deceased.
• Court: Court of Chancery of Delaware

Page 739

233 A.2d 739

43 Del.Ch. 400

In re TRUST ESTATE of Willard SAULSBURY, Deceased.

Court of Chancery of Delaware, New Castle County.

Sept. 21, 1967.

George Tyler Coulson and William S. Megonigal, Jr., Wilmington, for petitioners.

Henry R. Horsey, Dover, amicus curiae and guardian ad litem.

Hugh L. Corroon, of Berl, Potter & Anderson, Wilmington, and Hogan & Hartson of Washington, D.C., for The Riggs National Bank of Washington, D.C.

MARVEL, Vice Chancellor:

Willard Saulsbury died in 1927, leaving a last will and testament which together with its codicil disposed of the bulk of his estate by creating a trust after making a number of bequests to numerous Delaware relatives and charities following a life estate to his wife. He also excluded his Kent County farms from the trust by devising them to a nephew and his son for life and upon failure of issue of the son to the State of Delaware. He appointed trustees as follows:

'* * * I appoint my friends Hugh M. Morris and Victor B. Woolley, Trustees of the property and estate hereby given and devised in trust and direct that upon the decease of either one of them The Washington Loan and Trust Company of Washington, D.C., of which I am now (1926) a director, become and be a co-trustee with the survivor of them.'

On February 22, 1945, Victor B. Woolley, trustee, died, and on March 23, 1945, The Washington Loan and Trust Company filed in this Court its acceptance, as of February 22, 1945, of the office of co-trustee of the Saulsbury trust. On the preceding day, namely March 22, 1945, such co-trustee had executed a 'Certificate of Registration of Foreign Corporation' * * * 'in order to qualify itself to act as such trustee and for no other purpose * * *'. Such document set forth the bank's assets and liabilities and appointed Corporation Trust Company '* * * as its authorized agent in the State of Delaware upon whom service of process may be made * * *'.

On May 26, 1945, an agreement was entered into between The Washington Loan and Trust Company and Hugh M. Morris as trustees, and Wilmington Trust Company as agent, under the terms of which designated securities were turned over to the custody of the Wilmington Trust Company to be held in safe-keeping by that corporation subject to the written instructions of the trustees. Such agreement specifically provided that it '* * * shall be binding upon Principals, their successors or assigns.'

On October 1, 1954, The Washington Loan and Trust Company, a banking corporation organized under the laws of the United States relating to the District of Columbia, was consolidated with The Riggs National Bank of Washington, D.C., a national banking association organized under the laws of the United States, pursuant to the provisions of then 12 U.S.C. § 34a, and on December 9, 1954, Riggs executed a so-called 'Certificate of Withdrawal of a Foreign Corporation', which after reciting that '* * * by virtue of 12 U.S.C.A., § 34a, the corporate existence rights, franchises and interests of The Washington Loan and Trust Company merged into and continued in The Riggs National Bank of Washington, D.C.' and that '* * * both of the consolidated corporations are qualified to do business in the State of Delaware * * *', went on to provide '* * * Fifth: that The Riggs National Bank of Washington, D.C. hereby withdraws The Washington Loan and Trust Company from the State of Delaware and surrenders the authority of said corporation to do business therein * * *'. On December 14, 1954, the Secretary of State of Delaware entered a 'Certificate in Relation to Foreign Corporations' which certified that '* * * the authority of the said 'The Washington Loan and Trust Company', is hereby revoked and its license to do business in the State of Delaware is hereby cancelled'. Prior to such action, namely on November 29, 1954, the Secretary of State of Delaware had executed a certificate to the effect that having submitted a sworn statement of its assets and liabilities and paid stipulated State fees that Riggs '* * * is therefore entitled to do business in this State * * *' provided that it should not be deemed to have the power '* * * of discounting bills, notes, or other evidences of debt, of receiving deposits, * * *' or otherwise engaging in customary banking practices.

Thereafter, on March 22, 1955, the agency agreement originally entered into by The Washington Loan and Trust Company and Hugh M. Morris with the Wilmington Trust Company was amended so as to provide that instructions concerning such agency were to be given in writing by Hugh M. Morris and '* * * two duly authorized officers of The Riggs National Bank * * *'.

The petition for instructions here in issue, which was filed by the executors of the estate of the deceased trustee Hugh M. Morris and Wilmington Trust Company, concludes by submitting a number of prayers for instructions concerning the claim of the Riggs National Bank that it is the sole surviving trustee of the Saulsbury trust; the duties, if any, of the executors of the estate of Hugh M. Morris concerning the investments held in the Saulsbury trust, and such executors' claimed right to be paid additional commissions out of trust principal.

On May 6, 1966, the executors of the Morris estate moved for an order for the appointment of a guardian ad litem to represent '* * * the remainder interest or interests in the testamentary trust created under the Last Will and Testament of Willard Saulsbury * * *' and for the appointment of an amicus curiae '* * * to advise the Court with respect to the right of The Riggs National Bank of Washington, D.C. to act as sole trustee of the trust estate of Willard Saulsbury and to take a position adverse to said bank with respect thereto * * *'. The Riggs National Bank having been heard on such oral motions, the Court appointed Henry R. Horsey as guardian ad litem and amicus curiae for the purposes recited in its May 6 order. Copies of such order were mailed to Willard Saulsbury, a grandnephew of the testator and a beneficiary under his will, and also to the Attorney General of Delaware. The latter have taken no part in these proceedings.

On May 27, 1966, Riggs answered the pending petition. Such answer affirmatively pleaded its claim that it is the sole surviving de jure trustee of the Saulsbury trust. Such answer also asserted its claimed right to remove the securities held in the Saulsbury trust from the custody of the Wilmington Trust Company, and in an affirmative defense questioned the standing of the executors of the Morris estate to seek instructions concerning an estate in which they have no interest. Such answer also contended by way of affirmative defense that inasmuch as the late Hugh M. Morris had advised Riggs concerning its duties as trustee, including qualifying Riggs to act as trustee of the Delaware trust here in issue, that the executors of the Morris estate are estopped to question the regularity of the appointment of Riggs as trustee. Full opportunity was afforded to all appearing parties to supplement their pleadings by affidavits, interrogatories and requests for admissions and to brief their respective positions concerning the matters in issue. This is the Court's opinion on petitioners' prayers for relief.

Riggs first contends that the pending petition must be dismissed because petitioners have no interest in the Saulsbury trust, not being in any sense fiduciaries of such fund. They cite Miller v. Cooch, 5 Del.Ch. 161, in which an original bill for construction of a will was threatened with dismissal because it was filed by the executor of a legatee and not by the administrator charged with the carrying out of the terms of the will. The Court had further indicated that the bill was deficient in that it failed to contain a sufficient prayer for relief. However, the bill having been amended by the parties in interest, the points in issue were decided and the Chancellor's rulings were affirmed on appeal, in Cooch v. Cooch, 5 Houston 540.

In the case at bar, the appointment of a guardian ad litem and amicus curiae, on petitioners' application, made with the knowledge of Riggs, has led not only to a full exposition of the matters now to be decided as well as the ultimate rights and interests of the remaindermen of the trust in issue, but also of the opposing views on the claimed need for the appointment of a co-trustee. Furthermore, as executors of the Morris estate, petitioners actually have an interest in the Saulsbury trust inasmuch as the executors of such estate are asserting a right to receive additional principal commissions allegedly due the Morris estate from such trust fund, and the Wilmington Trust Company is obviously concerned about the situs of the assets of the trust estate. In any event, statutes such as 10 Del.C. § 6501, which are designed to provide for declaratory relief where an actual controversy exists, would appear to permit any person with an interest in a trust to seek instructions from a court of equity. See National Shawmut Bank of Boston v. Morey, 320 Mass. 492, 70 N.E.2d 316. Finally, the critical issues here are whether or not Riggs became a de jure trustee upon the consolidation of Riggs and The Washington Loan and Trust Company and whether or not Riggs is now authorized to act as sole trustee.

In view of the primary question raised by petitioners, namely whether or not a corporation may rely on the principle of joint tenancy to establish its claim to be sole surviving trustee, they might well have been derelict in their duty not to have invoked judicial aid. See Bogert, Trusts and Trustees (2nd Ed.) § 529 p. 384. I conclude that to require a realignment of parties now as well as an amendment of the pleadings would result in a needless circuity of action in view of the full presentation of the interested parties' respective contentions. Riggs' motion to dismiss the pending petition for instructions will be denied.

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