Wilmington Trust Co. v. Chapman

• Decision Date: 24 January 1934
• Court: Court of Chancery of Delaware
• Parties: WILMINGTON TRUST COMPANY, a corporation of the State of Delaware, Trustee under the Last Will and Testament of Charles F. Burnside, deceased, v. BESSIE BURNSIDE CHAPMAN, ELIZABETH MACIVOR CHAPMAN, FREDERICK WILLIAM CHAPMAN, ROBERT BURNSIDE CHAPMAN, MARIAN ELIZABETH BURNSIDE, ELLEN MARJORIE BURNSIDE, GRACE GRAY BURNSIDE, MARGARET BURNSIDE HILDERBRAND, MARGARET ELIZABETH HILDERBRAND, MARIE SCHWARTZ BOOTH, GEORGE HENRY BOOTH, BETTY BARTON BOOTH, GEORGE B. SCHWARTZ, ROBERT M. SCHWARTZ, ROBERT M. SCHWARTZ, JR., JACK BOGART SCHWARTZ, RICHARD SCHWARTZ, FRANK R. SCHWARTZ, FRANK R. SCHWARTZ, JR., WILLIAM BURNSIDE SCHWARTZ, JOSEPH SHERMAN SCHWARTZ, FREDERICK H. SCHWARTZ, FREDERICK H. SCHWARTZ, JR., GEORGE M. SCHWARTZ, SUZANNE SCHWARTZ, AND MARGARET B. HILDERBRAND, Administratrix of Lulu Burnside Buckingham, deceased

171 A. 222

20 Del.Ch. 67

WILMINGTON TRUST COMPANY, a corporation of the State of Delaware, Trustee under the Last Will and Testament of Charles F. Burnside, deceased, v. BESSIE BURNSIDE CHAPMAN, ELIZABETH MACIVOR CHAPMAN, FREDERICK WILLIAM CHAPMAN, ROBERT BURNSIDE CHAPMAN, MARIAN ELIZABETH BURNSIDE, ELLEN MARJORIE BURNSIDE, GRACE GRAY BURNSIDE, MARGARET BURNSIDE HILDERBRAND, MARGARET ELIZABETH HILDERBRAND, MARIE SCHWARTZ BOOTH, GEORGE HENRY BOOTH, BETTY BARTON BOOTH, GEORGE B. SCHWARTZ, ROBERT M. SCHWARTZ, ROBERT M. SCHWARTZ, JR., JACK BOGART SCHWARTZ, RICHARD SCHWARTZ, FRANK R. SCHWARTZ, FRANK R. SCHWARTZ, JR., WILLIAM BURNSIDE SCHWARTZ, JOSEPH SHERMAN SCHWARTZ, FREDERICK H. SCHWARTZ, FREDERICK H. SCHWARTZ, JR., GEORGE M. SCHWARTZ, SUZANNE SCHWARTZ, AND MARGARET B. HILDERBRAND, Administratrix of Lulu Burnside Buckingham, deceased

Court of Chancery of Delaware, New Castle

January 24, 1934

BILL FOR INSTRUCTIONS by the Wilmington Trust Company, trustee under the last will and testament of Charles F. Burnside deceased, against Bessie Burnside Chapman and others. Heard on bill and answers. The facts appear in the opinion of the Chancellor.

Caleb S. Layton, of the firm of Richards, Layton & Finger, for complainant.

John Biggs, Jr., for Lulu Burnside Buckingham.

Paul Leahy, and George E. Landis, of Columbus, Ohio, for the children of Minnie Burnside Schwartz, deceased.

James H. Hughes, Jr., of the firm of Ward & Gray, for the grandchildren of Minnie Burnside Schwartz, deceased.

OPINION

THE CHANCELLOR:

This case calls first for the construction of the will of Charles F. Burnside, who died May 23, 1928; and second for instructions to his testamentary trustee upon the question of apportionment of interest upon coupon bonds between the estate of Lulu Burnside Buckingham, who was a life beneficiary, and other life beneficiaries.

First as to the construction of the will. The question in this connection arises under the fifth item of the testator's will. By that item the testator gave his residuary estate to the complainant as trustee. He directed that upon his death it be divided into as many equal parts as he should have "sisters and lawful children then living, and sisters and lawful children then dead represented by issue then living." He left to survive him two children, viz Donald Drake Burnside who died December 19, 1932, leaving two children, and Bessie Burnside Chapman, who is living and has three children; two sisters, viz., Lulu Burnside Buckingham, who died August 9, 1931, without issue, and Margaret Burnside Buckingham, who is living and has one child; and five children of a pre-deceased sister (Minnie Burnside Schwartz), each of whom is living and has children, all of whom were born before the testator died. The residue of the estate was therefore divided by the trustee into five equal parts. Having directed a division of the residue of his estate, the testator provided that the parts should be held in trust and the income from one of said parts paid to each of his living sisters and children for life and upon the death of any such sister or child the corpus of the part set aside for that one should be transferred "in equal shares unto the issue of such sister or child," free from any trust; and if any sister or child should die leaving no issue surviving, then the corpus set aside for that one should "be divided equally among and added to the remaining parts of this trust fund." Then follows this language, which is the direct occasion for the controversy under the present head:

"As to any of said equal parts of this trust fund set aside for the issue of any deceased sister or deceased lawful child, I direct my said Trustee to pay over the net income from any such part, in equal shares, unto the issue of such deceased sister or deceased lawful child of mine until said issue respectively attains the age of forty (40) years, except that in the event of any of said issue being under twenty-one (21) years of age, I direct that my Trustee pay over to or for the benefit of such issue only such portion of the net income from their respective shares as, in the discretion of my Trustee, may be required for their respective maintenance, support and education during the minority of any of such issue, and upon any of such issue attaining the age of twenty-one (21) years, to pay over to him, her or them any accumulated income from their respective shares. Upon any of such issue of a deceased sister or deceased lawful child of mine attaining the age of forty (40) years, I direct my said Trustee to assign, transfer and pay over, absolutely and free and discharged from any trust, unto such issue his or her equal share of the part of this trust fund set aside for such issue. Should any of said issue of a deceased sister or deceased lawful child die after my death and before attaining the age of forty (40) years, I direct that the share set aside for the issue so dying shall be distributed equally among the shares of any surviving issue of said deceased sister or deceased lawful child, and in the event of no surviving issue then said share or shares shall be added to the parts of this trust fund set aside for my other sisters and/or lawful children, and or their issue."

How is the word "issue" as used in the will to be interpreted? That is the question. Is it to be understood as meaning that the issue of Mrs. Schwartz would take their interest per capita? If so, the children of the children of Mrs. Schwartz would share equally with all their ancestors. If the issue of Mrs. Schwartz, however, are to take their interests on the principle of a stirpital division, then, of course, each child of Mrs. Schwartz is the head of a stock and the respective rights of her issue are determined according to the principles of representation and degrees of kindred.

The argument in behalf of the grandchildren of Mrs. Schwartz starts with the proposition that the word "issue" in the absence of phraseology indicating a contrary intent, includes lineal descendants generally. That "issue," without qualifying context, in its ordinary signification means lineal descendants was held by this court in Security Trust Co. v. Lockwood, 13 Del.Ch. 274, 118 A. 225, and In re Estate of Joel Frist, 18 Del.Ch. 409, 161 A. 918. To say, however, that the rule of those two cases allows children to compete with their living parents, as appears to be said on one of the briefs before me, is to deduce from them a proposition which they neither assert nor even so much as consider. Those cases deal with "issue" as a word designative or descriptive of beneficiaries. They do not touch upon the question which is here involved, viz.--When issue are designated generally as beneficiaries, are the issue to take their interests on a per capita or on a per stirpes basis?

The authorities are not harmonious upon the question. In Freeman v. Parsley, 3 Ves. Jr. 421, 30 Eng. Rep. 1085, decided in 1797, Lord Chancellor Loughborough held that where the gift is to issue generally the division must be between all the issue living at the testator's death and that accordingly children should share with parents in an equal distribution. The Chancellor admitted that his decision was probably at variance with the testator's intention. He decided as he did, however, because he could see no middle ground between admitting grandchildren with children as participants and excluding grandchildren altogether. Of course, if he had adopted the scheme of the statutes of descent and distribution which are based on the principle of stocks, the middle ground which he could not find would have been supplied to him.

There are American cases which follow Freeman v. Parsley. See McPherson v. Snowden, 19 Md. 197; Soper v. Brown, 136 N.Y. 244, 32 N.E. 768, 32 Am. St. Rep. 731; Schmidt v. Jewett, 195 N.Y. 486, 88 N.E. 1110, 133 Am. St. Rep. 815; Gest v. Way, 2 Whart. 445; Wistar v. Scott, 105 Pa. 200, 51 Am. Rep. 197; Corbett v. Laurens, 5 Rich. Eq. (S. C.) 301; ( Gourdin v. Deas, 27 S.C. 479, 4 S.E. 64; Ridley v. McPherson, 100 Tenn. 402, 43 S.W. 772; Pearce v. Rickard, 18 R.I. 142, 26 A. 38, 19 L.R.A. 472, 49 Am. St. Rep. 755; Price v. Sisson, 13 N.J.Eq. 168; Weehawken Ferry Co. v. Sisson, 17 N.J.Eq. 475; Security Trust Co. v. Lovett, 78 N.J.Eq. 445, 79 A. 616. As already stated Lord Loughborough expressed the apprehension that the rule adopted by him and accepted in these American cases was violative of the testator's intention. To the same effect in substance is the comment by Vice Chancellor, Sir R. T. Kindersley, in Cancellor v. Cancellor, 2 Dr. & Smale, 194, 62 Eng. Rep. 595. That the rule of these cases is probably subversive of the testator's intent is also the view of Chancellor Kent (4 Kent's Commentaries, 278), and Judge Redfield (2 Redfield on Wills, [3rd Ed.] Ch. 1, Section 3).

In 1891 the court of last resort in Massachusetts in the case of Jackson v. Jackson, 153 Mass. 374, 26 N.E. 1112 1113, 11 L.R.A. 305, 25 Am. St. Rep. 643, declined to accept the rule adopted by these cases which, as has already been indicated, was the subject of criticism and, when followed, was at times accompanied with something in the nature of an apology to testators for a frustration of their probable intent. In Jackson v....