Svenson v. First Nat. Bank of Boston

• Citation: 363 N.E.2d 1129,5 Mass.App.Ct. 440
• Parties: Gertrude SVENSON v. The FIRST NATIONAL BANK OF BOSTON, trustee, 1 et al. (and a companion case).
• Decision Date: 22 June 1977
• Court: Appeals Court of Massachusetts

Page 1129

363 N.E.2d 1129

5 Mass.App.Ct. 440

Gertrude SVENSON v. The FIRST NATIONAL BANK OF BOSTON, trustee, ¹ et al. (and a companion case).

Appeals Court of Massachusetts, Norfolk.

Argued Jan. 12, 1977.

Decided June 22, 1977.

Robert J. Brophy, Waltham, for plaintiff.

Christopher T. Carlson, Boston, for First Nat. Bank of Boston, trustee.

Before KEVILLE, ARMSTRONG, and BROWN, JJ.

BROWN, Justice.

The plaintiff, Gertrude Svenson, filed in a Probate Court, pursuant to G.L. c. 231A, § 1, a petition seeking a declaration of her rights as a beneficiary of the trust created by clause fourteenth of the will of Agnes A. Logan (testatrix). The plaintiff also contested the petitions filed by the trustee under the will, the bank, for the allowance of its accounts numbered seventeen through twenty. The trial judge granted a motion to consolidate the two cases. He heard the cases on the pleadings, a stipulation of facts, and certain exhibits, and filed 'Findings of Fact and Conclusions of Law.' The plaintiff appeals from the 'judgments' thereupon entered. See G.L. c. 215, § 9 (as amended through St.1975, c. 400, § 57).

We summarize the pertinent facts. The plaintiff was one of four servants who were in the employ of the testatrix at the time of her death in 1933. In clause fourteenth of her will the testatrix established a trust in which she authorized the trustee '(t)o pay the income therefrom quarter annually to each of my servants, Gertrude Svenson, Charolotte Olson, Selma Nylander and John P. Anderson (provided they are in my employ at the time of my death) in equal amounts, during their lives, and upon the death of the last survivor, the principal and any accrued income shall be added to the residue of my estate.' The fifteenth clause of the will ² established a residuary trust for the benefit of one Linus C. Coggan, the testatrix's lawyer, during his life (if he survived her, which he did); after his death either certain members of his family or such other persons as he might appoint were to take. In clause nineteenth of the will the testatrix 'appointed' Coggan to be trustee of the various trusts established under the will (see Wilson v. Stump, 310 Mass. 614, 617, 39 N.E.2d 416 (1942)); he was duly qualified in the Probate Court. See 2 Newhall, Settlement of Estates § 407 (4th ed. 1958).

John P. Anderson died on June 13, 1945. In 1949 the plaintiff received from Coggan a letter requesting that she assent to his eleventh through fourteenth accounts. These accounts, which were enclosed with the letter, covered the period immediately before and after Anderson's death. The letter informed the plaintiff that Anderson had died, that the trust income to which Anderson had previously been entitled was being 'accumulated, and (that) one-quarter of the income of the trust has been and will continue to be paid to you as usual.' The plaintiff assented to the allowance of the accounts, and the Probate Court allowed them in May, 1950.

Coggan died in 1952, and the bank was thereupon appointed the sole trustee of the trust created by clause fourteenth of the testatrix's will. ³ Selma Nylander (then known as Selma Lawson) died on May 4, 1965, and Charlotte Olson died on May 15, 1971. The bank, like Coggan, has, despite the deaths of the other three servants of the testatrix, consistently paid the plaintiff only one fourth of the net income of the trust created by clause fourteenth and has accumulated and held the one fourth shares of the deceased servants for the beneficiaries of the residuary trust. There is nothing in the record to suggest that either Coggan or the bank ever failed to give the plaintiff notice of the filing of their accounts or to send copies of those accounts to her in accordance with G.L. c. 206, § 24.

Clause sixteenth of the will provides in part that the trustee 'may decide . . . whether (trust) expenses shall be charged to principal or income. All such decisions made by may trustee in good faith shall be conclusive upon all parties in interest.' Relying on this clause, the bank has regularly charged its trustee service fees entirely to trust income. ⁴

The judge drew the following conclusions. Clause fourteenth of the will did not create a class gift with rights of survivorship among the beneficiaries but created four separate life estates, one for each of the four servants named. The accumulation by Coggan and the bank of the trust income to which the three deceased servants had previously been entitled was therefore proper, and the plaintiff has no right to share in any of that income. Clause sixteenth of the will gave the trustee discretion to decide whether trust expenses should be allocated to income or principal. Coggan and the bank acted in good faith in allocating such expenses entirely to income.

1. We address ourselves first to the arguments of the parties as to the correct interpretation of clauses fourteenth and sixteenth of the testatrix's will.

a. The plaintiff argues that the testatrix, contrary to the judge's conclusions of law, intended that the gift of income to her four servants contained in clause fourteenth be a gift to those servants as a class, not as individuals, and therefore intended that, as each servant died, the trustee should pay the portion of the trust income previously paid to that servant to the surviving servants rather than accumulate that income. We agree. As a general rule, when there is a gift by will of the income from a testamentary trust to several named legatees in equal shares, the gift is to them as individuals rather than as a class even where, as here, the named legatees are described as a class. Fitts v. Powell, 307 Mass. 449, 453--454, 30 N.E.2d 397 (1940), and cases cited. Sutherland v. Flaherty, 1 Mass.App.Ct. 388, 389--390, 298 N.E.2d 869 (1973). But this rule must give way to the fundamental rule for construing wills 'that the intention of the testator is to be ascertained from the whole instrument, attributing due weight to all its language, considered in the light of the circumstances known to him at the time of itx execution and, when so ascertained, that it be given effect unless some positive rule of law forbids.' Old Colony Trust Co. v. Treadwell, 312 Mass. 214, 217, 43 N.E.2d 777, 778 (1942). Old Colony Trust Co. v. Stetson, 326 Mass. 641, 644, 96 N.E.2d 245 (1951), and cases cited. Sutherland v. Flaherty, 1 Mass.App.Ct. at 390, 298 N.E.2d 869.

Had the testatrix intended that her four servants take as individuals rather than as a class, it would necessarily follow that she intended that, as each servant died, the trustee dispose of the income to which that servant was previously entitled in either of two ways: (1) that the trustee disburse that income to the deceased servant's legal representative until the death of the last surviving servant or (2) that the trustee hold and accumulate that income until the death of the last surviving servant, when the accumulated income together with the trust principal would pass to the residuary See Meserve v. Haak, 191 Mass. 220, 221, 77 N.E. 377 (1906). But it is clear that the testatrix did not intend that the trustee dispose of the income previously paid to a deceased servant in either of these ways. The testatrix indicated her intent that this income not be disbursed to a deceased servant's legal representative by her direction that the trustee make payments to the servants only 'during their lives.' Meserve v. Haak, 191 Mass. at 222, 77 N.E. 377. If the testatrix had contemplated that upon the death of a servant the trustee should accumulate the portion of the trust income previously paid that servant and not disburse the entire trust income (not allocated to trust expenses) in the quarter annual disbursements clause fourteenth directs the trustee to make, it is reasonable to assume that the testatrix would have included in her will a provision authorizing the accumulation of income. The will contains no such provision. See Meserve v. Haak, 191 Mass. at 222, 77 N.E. 377, Anderson v. Bean, 220 Mass. 360, 361, 107 N.E. 964 (1915), and Old Colony Trust Co. v. Treadwell, 312 Mass. at 218, 43 N.E.2d 777. The reference to 'accrued income' in clause fourteenth does not suggest such an authorization; it constitutes simply an effort by the testatrix to make clear her intent that no part of the trust income earned during the period between the last quarterly disbursement to the last surviving beneficiary and the death of that beneficiary pass to the legal representative of that beneficiary by the operation of G.L. c. 197, § 27, but that all such income go to the residuary trust. See Loring v. Cotter, 339 Mass. 689, 690--692, 162 N.E.2d 294 (1959). See also Griswold, Spendthrift Trusts § 352.2 (2d ed. 1947), 1 Newhall, Settlement of Estates § 85 (4th ed. 1958), and In Re McManus, 282 N.Y. 420, 423--424, 26 N.E.2d 960 (1940).

We therefore conclude that the testatrix named the four servants, not to indicate her intent that servants take as individuals, but to provide greater certainty as to who was properly a member of the class entitled to receive income and thereby to eliminate the possibility that a servant hired after the execution of the will would take any share of the income. See Old Colony Trust Co. v. Treadwell, 312 Mass. at 217, 40 N.E.2d 777, and 4 Page, Wills § 35.4 (1961). Contrast Boston Safe Deposit & Trust Co. v. Reed, 229 Mass. 267, 271, 118 N.E. 333 (1918). The fact that clause fourteenth directs the trustee '(t)o pay the income' to the servants and does not direct that the income be divided among them lends support to our conclusion that the testatrix intended that the servants take as a class. Old Colony Trust Co. v. Treadwell, 312 Mass. at 217, 43 N.E.2d 777. Contrast Boynton v. Boynton, 266 Mass. 454, 460, 165 N.E. 489 (1929). A further indication that the testatrix considered the servants as a class is the fact that the testatrix provided that the income payments...