Stanton v. Stanton

• Decision Date: 22 December 1953
• Citation: 101 A.2d 789,140 Conn. 504
• Court: Connecticut Supreme Court
• Parties: STANTON v. STANTON et al. Supreme Court of Errors of Connecticut

Page 789

101 A.2d 789

140 Conn. 504

STANTON v. STANTON et al.

Supreme Court of Errors of Connecticut.

Dec. 22, 1953.

Charles V. James, Norwich, for plaintiff.

Carl H. Amon, Jr., Boston, Mass., Daniel L. Brown, Boston, Mass., on the brief, for defendants Clarence Ralph et al.

A. Emmet Clarie, Danielson, for defendants Annette L. Jerome et al.

Lester L. Egan, Glastonbury, Joseph P. Smith, Hartford, on the brief, for defendant C. Stanton Gallup, Trustee.

Paul J. Driscoll, Norwich, Allyn L. Brown, Jr., and Charles W. Jewett, Norwich, on the brief, for defendant Edward F. Stanton, Administrator.

Henry H. Pettis, Norwich, for defendants Voluntown Baptist Church et al.

Before BALDWIN, INGLIS, O'SULLIVAN, QUINLAN and WYNNE, JJ.

INGLIS, Chief Justice.

Upon this reservation we are asked to construe the fifth, seventh and eighth paragraphs of the will of Benjamin G. Stanton. These paragraphs are set forth in full in the footnote. ¹ The will was executed on November 24, 1944. A codicil thereto, dated September 18, 1946, substituted the plaintiff for the executor named in the will and added two trustees but otherwise made no changes. The following facts have been stipulated: The testator died September 17, 1948. He was the son of Avery A. and Laura C. Stanton. His only heirs at law were a brother, three sisters, two nieces and a nephew. Also surviving were eight nephews and nieces and numerous grandnephews and grandnieces who were not his heirs at law but were descendants of his father and mother. He left an estate appraised at $128,489.77.

At the time he executed the will the testator was a partner of the Clarence Ralph named in the fifth paragraph of the will. The partnership, started in 1934, did business under the name of Sterling Manufacturing Company in Mansfield, Massachusetts. Each partner had an equal interest. On January 6, 1947, the business was incorporated as the Sterling Manufacturing Company, Inc. The outstanding common stock of the corporation consisted of 476 shares, of which the testator and Ralph each owned 238. At the death of the testator the corporation was indebted to him in the amount of $15,200, as evidenced by notes. The business, both as a partnership and as a corporation, was always under the active management of Ralph and, other than by investing in it and by advancing money to it, the testator took no active part. From the time Ralph was thirteen years of age, in 1912, until he was twenty-four, and again for a period after Mrs. Stanton's death, he lived in the home of the testator. The testator regarded him as a son but had never legally adopted him. The Stanton homestead mentioned in the seventh paragraph of the will consists of a tract of about 270 acres with dwelling house, barns and other buildings thereon, located in Connecticut, partly in the town of Sterling and partly in the town of Plainfield.

The questions propounded are printed in the footnote. ² The first three arise by reason of the fifth paragraph of the will. They are improperly framed because question (a) contains two questions, i.e., whether Ralph is entitled to receive the shares of stock and whether he is entitled to receive the notes, and the answers to questions (b) and (c) are made dependent upon our answer to the double question propounded in (a). We will, however, answer the questions in a manner which will be adequate to guide the trial court in rendering judgment.

As to question (a), all the parties agree that the fifth paragraph is effective to bequeath to Ralph the testator's shares of stock in the Sterling Manufacturing Company, Inc. This necessarily excludes any consideration of a claim of ademption. See 57 Am.Jur. 1091, § 1592. The substantial question is whether the paragraph also gives to him the notes evidencing the indebtedness of the corporation to the testator. The answer to this depends upon what the testator meant by the expression 'all the interest that I may have * * * in the Sterling Manufacturing Company.' Here again all the interested parties concede that, although when the will was drawn the testator must have been referring to his interest in the partnership, we are, in construing the will, to treat this bequest as though it referred to his interest in the corporation.

A similar question was before us in Riverside Trust Co. v. Rogers, 89 Conn. 690, 96 A. 180, 181. We held that a bequest of 'all interest which I may have in' a named corporation did not carry with it the indebtedness of the corporation to the testator, saying 89 Conn. at page 696, 96 A. at page 182: 'An interest in a company--is not appropriate language with which to describe all obligations against the company which the testator might have. In this connection it means the right of property or share which the testator had in this company. This was evidenced by his certificate or certificates for certain shares of the stock of the company. While he used the words 'interest' and 'shares,' he intended in the use of each word the same thing, to include his part or portion of the company.' Ralph attempts to distinguish that case from the present on the ground that when the will before us was made the testator was obviously referring to an interest in a partnership and not a corporation. There is, however, no essential difference between a man's interest in a partnership and his interest in a corporation. His interest in a partnership, as in a corporation, is his interest in the net worth of the concern. It is his share of the capital and surplus. It does not include any indebtedness which the concern may owe him. It is his share of the assets of the concern over and above all of its indebtedness. This is the common meaning of 'interest in a company,' and there is nothing either in the context of the will now before us or the circumstances attendant upon its execution to indicate that the testator used the word interest in any other sense. The fifth paragraph of the will does not bequeath to Ralph the indebtedness of the company to the testator.

Questions (b) and (c) may be considered together, and they will be answered on the basis of our conclusion that Ralph is entitled to the stock, even though we also concluded that he is not entitled to the notes. The gist of the questions is whether the conditions imposed upon the bequest violate the rule against perpetuities. These conditions are that Ralph 'shall pay to [the testator's] estate' one-third of the net yearly income of the corporation and, upon its sale or liquidation, one-third of the sale price or the proceeds of liquidation.

The will bequeaths the interest in the company to Ralph 'to be his absolutely.' It is a sound rule of construction that an express and positive devise or bequest in fee cannot be cut down to an inferior estate by a subsequent clause in the will unless that is equally express and positive. Fanning v. Main, 77 Conn. 94, 99, 58 A. 472; Hull v. Hull, 101 Conn. 481, 486, 126 A. 699; Peyton v. Wehrhane, 125 Conn. 420, 426, 6 A.2d 313. In the paragraph of the will now under consideration, however, the testator has clearly expressed the intent of limiting to some extent the absolute estate in the stock given to Ralph by the imposition of so-called conditions upon his enjoyment of that estate. The only questions are just what the limitation is and whether it is valid.

In view of the fact that the paragraph speaks of the bequest as being 'in consideration' of Ralph's assuming an obligation, and in the light of all the attendant circumstances, it must be concluded that the testator did not intend to impose conditions in the technical sense upon Ralph's ownership of the interest in the business. He did not intend that if Ralph failed to comply with the requirements imposed he should forfeit the bequest. This is evident from the phrasing of the paragraph, in that it neither provides for a forfeiture nor in terms imposes any burden or lien upon the interest itself but rather provides that 'he [Ralph] shall pay to my estate * * *.' The obligation to make the payments is one which is imposed on Ralph personally. See Bishop v. Howarth, 59 Conn. 455, 468, 22 A. 432; Guthrie v. Wheeler, 51 Conn. 207, 210.

This interpretation is fortified if it is borne in mind that at the time the will was drawn the company was a partnership. It was an interest in a partnership which the testator thought he was bequeathing. The effect of the bequest might well have been believed by the testator to permit a continuance of the partnership after his own death. He probably believed, however, that the 'company' would have to terminate not later than the time of Ralph's death. Either the business would have been sold before that time or it would have to be liquidated as of that time. Accordingly, when the testator required Ralph to make payments until the company should be sold or liquidated, he contemplated that either of those events would necessarily occur not later than the time of Ralph's death. The fact that the partnership has since been converted into a corporation should not alter the will of the testator concerning his interest in the company.

The obligation which Ralph will assume upon acceptance of the bequest is a personal obligation to pay to the testator's estate one-third of the net yearly income from the operation of the company. This obligation will continue until the corporation (or Ralph's stock therein) is sold or until the corporation is liquidated. If neither of these events has happened prior to Ralph's death, his death, for the purposes of the fifth paragraph of the will, should be treated as the liquidation of the company. It follows that the obligation to be assumed by Ralph must be fully fixed during his lifetime, and therefore the benefits created by the fifth paragraph in favor of the testator's residuary estate do not violate the rule against perpetuities. The so-called conditions imposed in the fifth paragraph of the will are valid....