Schapira v. Connecticut Bank and Trust Co.

• Decision Date: 21 July 1987
• Docket Number: No. 13102,13102
• Citation: 204 Conn. 450,528 A.2d 367
• Court: Connecticut Supreme Court
• Parties: Ilse Beer SCHAPIRA v. CONNECTICUT BANK AND TRUST COMPANY, et al.

Page 367

528 A.2d 367

204 Conn. 450

Ilse Beer SCHAPIRA v. CONNECTICUT BANK AND TRUST COMPANY, et al.

No. 13102.

Supreme Court of Connecticut.

Argued June 2, 1987.

Decided July 21, 1987.

Jeffrey L. Crown, New Britain, for appellant (plaintiff).

P. Michael Lahan, Norwich, for appellee (defendant Milton L. Jacobson).

Steven M. Greenspan, Hartford, for appellee (named defendant).

PETERS, C.J., and ARTHUR H. HEALEY, SHEA, GLASS and COVELLO, JJ.

PETERS, Chief Justice.

The sole issue on this appeal is whether an adopted child is entitled to a remainder interest distributable in accordance with the terms of an irrevocable inter vivos trust created in 1919. The plaintiff, Ilse Beer Schapira, brought an action for a declaratory judgment to determine whether she, as an adopted child, could take as "issue then living" under a trust agreement providing for distribution upon the death of a life beneficiary. ¹ The defendants are the Connecticut Bank and Trust Company, which serves as the trustee of the trust, and Milton L. Jacobson, who, as conservator of the estate of Eva Virginia Smith, claims a competing right to the entire remainder interest. After a trial to the court, judgment was rendered for both defendants. The plaintiff appealed to the Appellate Court. This court transferred the appeal to itself. We find no error.

The facts are undisputed. On May 9, 1919, Leonard O. Smith, as settlor, created an inter vivos trust (the trust) and named the predecessor of the defendant Connecticut Bank and Trust Company as trustee. The corpus of the trust consisted of 471 shares of capital stock in several major oil companies. The trust directed the trustee to divide the corpus into three equal parts and to distribute the income equally among three beneficiaries: the settlor's wife, Eva Crowell Smith, and two daughters, Eloise Crowell Smith (known after marriage as Eloise C.S. Beer), and Eva Virginia Smith. Pursuant to the third article of the trust, after the death of the settlor's wife in 1943, her one third interest was divided equally between the two daughters. ²

Article four of the trust established the rights of Eloise Crowell Smith, the settlor's daughter, and her issue. ³ The trust directed the payment of income to Eloise during her life. Upon her death, her share of the principal was to "be divided, per stirpes, among her issue then living" unless she was survived by a child or children under the age of twenty-one. In the event that Eloise died without issue and was not survived by her mother, her part of the principal was to be paid to the settlor's other daughter, Eva Virginia Smith.

Finally, article six of the trust provided that if both daughters died without issue and neither was survived by their mother, the assets were to be distributed "to the next of kin of said Donor" as defined by state law in effect at the time of distribution. ⁴ This provision does not govern the distribution of the assets because Eloise is survived by her sister Eva.

The plaintiff was the niece of Sanel Beer, whom Eloise married in 1942. The plaintiff and Sanel Beer had immigrated together to the United States from Austria in 1938. Sanel and Eloise C.S. Beer formally adopted the plaintiff in 1956; she was then thirty-six years old. On September 5, 1979, Eloise died, leaving the plaintiff as her only child.

It is apparent from these undisputed facts that the settlor of the trust, who died in 1925, had no knowledge of the plaintiff's adoption. The plaintiff contends that he nonetheless intended to include her within the class described as "issue then living" at the time of the death of Eloise. The defendant Jacobson, as conservator for Eva, argues, to the contrary, that Eloise died without issue and that Eva is therefore entitled to the one half interest created initially for the benefit of Eloise and her "issue then living."

The trial court rendered judgment for the defendants. The court determined that the term "issue" primarily signifies descendants of the body, and that in the absence of a contrary intent of the settlor, adopted children are presumed to be excluded. Applying the so-called "stranger to the adoption" doctrine, the court ruled that because the settlor was not himself the adopting parent, and the adoption occurred after the settlor's death, the plaintiff had failed to prove that the settlor specifically meant to share his bounty with adopted grandchildren. Additionally, the court concluded that the law in effect at the time of distribution of the trust in 1979 did not warrant a judgment in favor of the plaintiff. Finally, the trial court held that the trust's direction, in article six, to distribute the corpus to statutory heirs in the event that both daughters died without issue did not illuminate the meaning to be ascribed to "issue" under article four.

On appeal, the plaintiff claims that the trial court erred in: (1) excluding her from the meaning of "issue" in article four of the trust; (2) failing to apply the law in effect at the death of the life beneficiary to define the meaning of "issue" in article four; and (3) relying on the "stranger to the adoption" doctrine to presume that the settlor meant to exclude an adopted grandchild from the meaning of "issue" in article four. We find no error.

I

The plaintiff's first claim is that the trial court misconstrued the intent of the settlor by holding that an adopted grandchild was not within the meaning of "issue" in article four. We disagree.

In construing the word "issue," we have often noted that, in its primary meaning, "issue" connotes lineal relationship by blood. Connecticut Bank & Trust Co. v. Hills, 157 Conn. 375, 378, 254 A.2d 453 (1969); Bankers Trust Co. v. Pearson, 140 Conn. 332, 356, 99 A.2d 224 (1953); Trowbridge v. Trowbridge, 127 Conn. 469, 472, 17 A.2d 517 (1941). Significantly, the common law presumed that an adopted child is not within the intended bounty of a settlor who, as a nonadopting parent, is a stranger to the adoption. Mooney v. Tolles, 111 Conn. 1, 9, 149 A. 515 (1930); Middletown Trust Co. v. Gaffey, 96 Conn. 61, 67-68, 112 A. 689 (1921).

These common law presumptions do not invariably govern interpretation of the terms of a will. Because the touchstone of trust interpretation is the intent of the settlor, the presumptions in favor of ancestral blood give way when an intent to include adoptees "definitely appears from a reading of the instrument in light of the circumstances surrounding the settlor at the time of execution." Connecticut Bank & Trust Co. v. Bovey, 162 Conn. 201, 206, 292 A.2d 899 (1972); see also Connecticut Bank & Trust Co. v. Lyman, 148 Conn. 273, 279, 170 A.2d 130 (1961). We have held on several occasions that language ordinarily indicating a preference for ancestral blood can be shown to include adoptees. Parker v. Mullen, 158 Conn. 1, 4-5, 255 A.2d 851 (1969); Mooney v. Tolles, supra, 111 Conn. at 10-11, 149 A. 515; Ansonia National Bank v. Kunkel, 105 Conn. 744, 753-54, 136 A. 588 (1927).

The plaintiff argues that an intent to include adoptees can be discerned in this case in article six of the trust agreement. That article provides for the distribution of the trust assets to the "next-of-kin" or statutory heirs of the settlor in the event that both daughters die without issue. Since adoptees were entitled to take as statutory heirs at the time of the execution of the trust instrument; Close v. Benham, 97 Conn. 102, 105-106, 115 A. 626 (1921); the plaintiff reasons that the settlor implicitly intended to modify the meaning of "issue" in article four by referring to a broader category of statutory heirs in article six. We are not persuaded. Article six, by its own terms, becomes operative only if both of the settlor's daughters die without issue. The primary intent of the settlor, clearly evident in articles three, four and six, was to benefit his wife, two daughters and any surviving "issue" of his daughters. The trust did not provide that upon the death of Eloise the trust assets held for her were to go directly to her statutory heirs or "next-of-kin." Only upon the death of any and all surviving descendants of the settlor's body were the assets to be statutorily distributed. The trust itself draws a valid distinction between "issue" in article four and "next-of-kin" in article six. To overlook this clear distinction would do violence to the intention expressed in the trust instrument.

II

The plaintiff next makes a two part claim that the meaning of "then living issue" in article four is to be determined with reference to the law in effect at the time of distribution upon Eloise's death in 1979. The plaintiff first argues that the trust instrument, by its use of the phrase "then living," postponed the vesting of the trust until the death of the life tenant. Building upon this predicate, the plaintiff then asserts that the governing law in 1979 must determine the definition of "issue." These arguments do not establish that the trial court's judgment was in error.

As a general rule, a remainder to be distributed to a class of beneficiaries at the termination of a life estate vests upon the creation of the trust or as soon thereafter as a remainderman comes into existence. Hartford National Bank & Trust Co. v. VonZiegesar, 154 Conn. 352, 358, 225 A.2d 811 (1966). This preference in favor of early vesting is only a rule of construction, however, and must give way to a contrary intent disclosed in the trust instrument. Id., 358-59, 225 A.2d 811.

Under the circumstances presented by this case, nevertheless, we need not decide whether the trust instrument discloses an intent for late vesting. Similarly, we need not decide whether the law effective upon the termination of a life estate in a late vesting case would dictate the meaning of a particular word drafted sixty years before. These questions are of hypothetical interest only because, even if they were both resolved in favor of the...