Tetlow v. Capron

• Decision Date: 04 April 1928
• Docket Number: No. 807.,807.
• Citation: 141 A. 326
• Parties: TETLOW et al. v. CAPRON et al.
• Court: Rhode Island Supreme Court

141 A. 326

TETLOW et al.

v. CAPRON et al.

No. 807.

Supreme Court of Rhode Island.

April 4, 1928.

Rescripts April 17, 27, 1928.

Case Certified from Superior Court, Providence and Bristol Counties.

Suit by Edwin Tetlow and others, trustees, against Ellen P. Capron and others, for construction of and instructions relative to testamentary trust. In superior court the cause, being ready for hearing and final decree, was certified to Supreme Court for determination under Gen. Laws 1923, c. 339, § 35. Instructions given.

Edwin J. Tetlow, of Providence, for complainants.

Ralph M. Greenlaw, of Providence, for executor.

Simon S. Lapham, of Providence, for respondent Capron.

Arthur E. Munro, of Providence, for respondents Barney.

Tillinghast & Collins and Colin MacR. Makepeace, all of Providence, and Joseph P. McCloy and H. Herbert Romanoff, both of New York City, for respondent Ruttenber.

Harold W. James, and Arthur A. Rhodes both of Providence, for respondents Pickens.

Edwards & Angell, Eliot G. Parkhurst, and John S. Dole, all of Providence, for respondents Daughaday and others.

Gardner, Moss & Haslam, of Providence, for Butler Hospital.

SWEETLAND, C. J. This case is brought by substituted trustees praying for the construction of certain provisions of, and for instructions relative to, a trust created by the last will and testament of James W. Gwinn, deceased, late of Providence. In the superior court the cause, being ready for hearing for final decree, has been certified to this court for determination.

James W. Gwinn died on December 15, 1906, and his will, executed March 6, 1906, was duly probated by the municipal court of Providence. At the time of the execution of the will, and also at the death of the testator, his wife and son were persons of unsound mind confined in the Butler Hospital for the Insane. The will provided that all of the testator's residuary estate should be held in the trust now in question. Under the terms of the trust, provision was made for the care and maintenance of the testator's wife and son during the life of each, with certain other provisions for the benefit of each if restored to soundness of mind. These latter provisions were inoperative, since each remained non compos mentis during life. The testator's son died September 15, 1914. His wife died January 14, 1926. The will further provided that upon the death of the survivor of the wife and son "my said trustees shall convert all of said estate into money and the foregoing trust shall terminate and cease, and thereupon all the said trust property with the accumulations thereof, if any, shall be divided into twenty-two (22) shares or parts and distributed as follows." Then follow provisions giving these shares to certain beneficiaries. One of these gifts was in the following terms:

"To my sister, Mary A. Gwinn, two (2) shares, but should the aforesaid Mary A. Gwinn at the termination of the aforesaid trust be dead, the above mentioned two (2) shares shall be divided pro rata among the remaining shares of the said trust."

Mary A. Gwinn died August 25, 1908, and the two shares bequeathed to her are to Be divided pro rata among the remaining shares, in effect rendering the estate divisible into twenty shares.

Controversy has arisen as to certain gifts of said shares. The first of these questions relates to the gift of three shares to Annie E. McCloy. The provision is as follows :

"To Annie E. McCloy, spinster, three (3) shares, but in case said Annie E. McCloy at the time of the termination and distribution of the aforesaid trust be dead and without issue, the last-mentioned bequest shall be distributed pro rata among the remaining shares of the said trust."

As has been stated above, the testator's wife died January 14, 1926. The trust estate, in addition to money on deposit, consisted to a large extent, of stocks, bonds, notes, and mortgages. The trustees, in accordance with the directions of the trust, began the conversion of the trust estate into money. Although carried on with due expedition, this conversion was not completed by the trustees until April 11, 1927. In the meantime on July 10, 1926, Annie E. McCloy, the beneficiary under this particular bequest, died testate, unmarried and without issue. The executor of her will contends that the three shares of the trust estate, which are the subject of the bequest in question, upon the decease of the survivor of those having the preceding interests, i. e., upon the death of the testator's wife, became vested in enjoyment in Miss McCloy, and should now be paid to him as her personal representative. Certain of the legatees have demanded that the trustees should now distribute the three shares in question pro rata among the legatees of the other twenty shares upon the ground that the interest of Miss McCloy became divested upon her death prior to the "termination and distribution of the * * * trust." In support of his contention, the executor of Miss McCloy urges that by the application of the doctrine of equitable conversion it should be held, for the purpose of construction, that upon the death of the settlor's wife, Mrs. Gwinn, there was an immediate conversion of the trust estate into money and the three shares in question were then payable to Miss McCloy, and hence there was no divestiture of her interest by her subsequent death prior to the actual conversion of the trust estate into money through the action of the trustees.

The doctrine of equitable conversion is a fiction of equity arising from an application of the familiar maxim that equity regards that as done which ought to be done. This doctrine is most frequently applied with reference to a direction in a will or deed that land be converted into money, sometimes with reference to a direction that money be expended in the purchase of land. We are not prepared to hold that it would violate equitable principles to apply the doctrine, as is now sought, with reference to a direction to convert personal property generally into the form of money. In such case, however, as in all others, its application would not be justified if thereby the plain intention of a testator or a settlor would be defeated. It will be necessary first to find, from the language of the trust, that it was the testator's intention that the trust should terminate and the shares become payable immediately upon the death of the survivor of the testator's wife and son. We will consider the question of the probable intention of the testator upon this matter in connection with the second contention of the executor of Miss McCloy, which is that the trust should be held to have terminated upon the death of the testator's wife although the trustees had further duties to perform in connection with the conversion of the property into money, a division of the trust estate into shares, and the distribution of such shares to the legatees. In support of this position the executor has cited a number of English cases and cases from New York, New Jersey, and other American jurisdictions. We have examined these cases. Some involve the question of the time of the vesting of a legacy in regard to which there was no provision for divesting. With such cases we can readily agree, as under the rule of the Rhode Island cases this court will hold that the legacy now under consideration...