State v. Bankers Trust Co.
| Decision Date | 07 February 1933 |
| Citation | 164 A. 377,105 Vt. 220 |
| Parties | STATE v. BANKERS TRUST COMPANY ET AL |
| Court | Vermont Supreme Court |
January Term, 1933.
February 7, 1933.
Trusts---Construction To Give Effect to Intent of Grantor---Effect of Supplemental Trust Indenture Disposing of All of Trust Funds in Original Trust Indenture---Construction of Instrument Containing Repugnant Gifts in Separate Clauses.
1. Trust instrument is to be construed so as to give effect to intent of grantor as manifested by language used, and, if his words are plain and unambiguous, there is no necessity for judicial construction.
2. Supplemental trust indenture, complete in itself, held from clear and explicit language used, to be intended as substitute for original indenture, and only rights interests, and estates in and to corpus and income of trust are such as were created under such supplemental indenture.
3. Where supplemental trust indenture disposed of all trust funds, it being impossible for any of dispositions made by original indenture as modified to stand, they are revoked.
4. Where instrument contains repugnant gifts in separate clauses, gifts contained in later clause will stand.
APPEAL IN CHANCERY. Bill was brought by the Tax Commissioner of the State of Vermont Against the Bankers Trust Company of New York and all others named in a series of trust instruments executed by the late James A. Wilbur, in which the Bankers Trust Company was named as trustee. Heard on bill, answers and findings of fact, by Sherman, Chancellor, after the March Term, 1932, Washington County. From a decree stating that the supplemental trust indenture constitutes the now-existing modified form of trust indenture, and holding that the interests and estates created by the original, as modified were divested by the execution and delivery of the supplemental indenture, and that the rights, interests, and estates in and to the corpus and income of the trust are only such as are created under the supplemental agreement defendants American Antiquarian Society, Colonial Society of Massachusetts, and Massachusetts Historical Society, appealed.
Decree affirmed with costs, and cause remanded.
Wayne C. Bosworth, T. Hovey Gage (of Worcester, Mass.) and Frank W. Grinnell (of Boston, Mass.) for the appellants.
J. Ward Carver and Guy M. Page for the appellee, the University of Vermont.
Jeremiah M. Evans and White & Case (of New York City) and Henry DeLand Strack (of New York City) of counsel, for Trustee, Bankers Trust Company.
Present: SLACK, MOULTON, THOMPSON, and GRAHAM, JJ., and DAVIS, Supr. J.
On August 12, 1919, James B. Wilbur executed an indenture of trust, hereafter called the original indenture, with the Bankers Trust Company as trustee. The trust funds consisted principally of stocks, bonds, and mortgages. By the first article of the indenture the trustee is directed to receive, hold, invest, and reinvest the property transferred to it by Mr. Wilbur and to pay the net income thereof to him during his life. He also reserved to himself the absolute power to "modify, or alter in any manner, or revoke, in whole or in part, this indenture and the trusts then existing, and the estates and interests in property hereby created."
In articles second to sixth, inclusive, the donor directs that upon his death the trustee shall set aside five several trust funds from the securities in its hands and pay the income thereof to certain persons during their respective lives, with remainder over to the University of Vermont.
In article eighth, the trustee, immediately after setting aside the respective trust funds provided for in articles second to sixth, inclusive, is directed to divide the remainder of the trust property into two equal parts and to pay one-half of the same to the Art Institute of Chicago, and, by article ninth, to pay the other half to the Field Museum of Natural History.
After the execution of the original indenture and prior to March 5, 1928, Mr. Wilbur, under the power reserved, executed ten instruments which altered, modified, and revoked certain provisions of the indenture and particularly those of article eighth. On October 10, 1925, when the last of those instruments had been executed, article eighth provided that immediately after setting aside the respective trust funds provided for in articles second to sixth, inclusive, the trustee should pay over, transfer, and deliver securities of the par value of $ 650,000 to six societies and institutions. Among these societies were the American Antiquarian Society, the Colonial Society of Massachusetts, and the Massachusetts Historical Society, the appellants in this proceeding, who were made beneficiaries to the amounts respectively of $ 200,000, $ 25,000, and $ 100,000, and the University of Vermont, the appellee in this proceeding, who was made a beneficiary to the amount of $ 200,000. Article ninth had been modified so that it provided that the remainder of the trust fund should be paid to the University of Vermont.
No other changes were made in the original indenture until March 5, 1928, when Mr. Wilbur and the Bankers Trust Company, as trustee, executed an instrument which he termed, and which we will call, the supplemental indenture. No changes had been made in this instrument when Mr. Wilbur deceased on April 28, 1929. Provisions for the disposition of the entire trust fund after Mr. Wilbur's death are made in this instrument. The appellants are not named as beneficiaries, nor is any mention made of them. The twenty-eighth article reads: "This trust has been accepted by the Trustee in the State of New York, and all questions pertaining to its validity, construction and administration shall be determined in accordance with the laws of that state."
The decree states, so far as the issues here are concerned, that the supplemental indenture is the now-existing modified form of trust indenture; that the interests and estates created by the original indenture, as modified, were divested by the execution and delivery of the supplemental indenture; that the only rights, interests, and estates in and to the corpus and income of the trust are such as are created under the supplemental indenture; and that that instrument expresses the terms of a valid and subsisting trust. The legal effect of the decree is that the gifts made to the appellants by the original indenture were, as matter of law, revoked by the provisions of the supplemental indenture.
The appellants contend that the chancellor erred, in that under the law of New York or of this jurisdiction, whichever governs the interpretation of the original indenture, as altered and modified, Mr. Wilbur created a vested interest in remainder in them in the trust funds in the hands of the trustee to the extent of the several sums specified as of the date when they were designated donees, the same to be paid before the remainder of the trust funds disposed of by article twelfth of the supplemental indenture can be ascertained; and that the respective gifts to them remain unrevoked, unaltered, and unmodified. They raise the question by appropriate exceptions to certain findings, to the refusal of the chancellor to find as requested, and by their appeal from the decree. This is the only question before us for consideration.
Many decisions of the highest court of New York were received in evidence at the hearing below on which the chancellor based certain findings of the law of New York as applicable to this case. Those decisions are a part of the record before us. The appellants contend that the findings of the law of New York are merely rulings of law; "that all the New York decisions, whether received in evidence or not, were in this particular case, brought within the judicial notice of the Court by the provisions of article 28 of the supplemental indenture which incorporates by reference the whole New York law of construction as part of the express...
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