Wilmington Trust Co. v. Wilmington Trust Co.
| Decision Date | 20 January 1942 |
| Citation | 24 A.2d 309,26 Del.Ch. 397 |
| Court | Court of Chancery of Delaware |
| Parties | WILMINGTON TRUST COMPANY, GUARDIAN FOR JOSEPH W. DONNER, JR., and CARROLL E. DONNER, JR., Complainant Below, and MARINE TRUST COMPANY OF BUFFALO and CARROLL E. DONNER, now LADY TENNYSON, Executors under the last will of JOSEPH W. DONNER, Deceased, and CARROLL E. DONNER, now LADY TENNYSON, Individually, Respondents and Cross-Complainants Below, Appellants, v. WILMINGTON TRUST COMPANY, SUCCEEDING TRUSTEE UNDER THE TRUST AGREEMENT dated November 20, 1920, WILLIAM H. DONNER, ET AL., and WILMINGTON TRUST COMPANY, TRUSTEE under the deed of JOSEPH W. DONNER, Deceased, dated October 9, 1929, MARINE TRUST COMPANY OF BUFFALO, TRUSTEE under the will of JOSEPH W. DONNER, Deceased, and CARROLL E. DONNER, now LADY TENNYSON, Individually, Respondents and Cross-Complainants Below, Appellees. WILMINGTON TRUST COMPANY, GUARDIAN FOR JOSEPH W. DONNER, JR., and CARROLL E. DONNER, JR., Complainant Below, and MARINE TRUST COMPANY OF BUFFALO and CARROLL E. DONNER, now LADY TENNYSON, Executors under the last will of JOSEPH W. DONNER, Deceased, MARINE TRUST COMPANY OF BUFFALO, TRUSTEE under the will of JOSEPH W. DONNER, Deceased, and CARROLL E. DONNER, now LADY TENNYSON, Individually, Respondents and Cross-Complainants Below, Appellants, v. WILMINGTON TRUST COMPANY, SUCCEEDING TRUSTEE UNDER THE TRUST AGREEMENT dated November 20, 1920, WILLIAM H. DONNER, ET AL., and WILMINGTON TRUST COMPANY, TRUSTEE under the deed of JOSEPH W. DONNER, dated October 9, 1929, Respondents and Cross-Complainants Below, Appellees |
APPEALS from a decree of the Court of Chancery.
Southerland Berl, Potter & Leahy, and Kenefick, Cooke, Mitchell, Bass & Letchworth, of Buffalo, N. Y. , for executors and trustee under the will of Joseph W. Donner, and for Carroll E. Donner, now Lady Carroll Tennyson.
William H. Foulk, for Wilmington Trust Co., guardian for Joseph W Donner, Jr., and Carroll E. Donner, Jr.
Reuben Satterthwaite, Jr., for Robert N. Donner, Elizabeth Donner Winsor, and Dora B. Donner, Jr.
William S. Satterthwaite, for Albert L. Massey, guardian ad litem for Robert Donner, Jr., Margaret H. Donner, Jr., William Donner Roosevelt, and Curtin Winsor, Jr.
Robert H. Richards, Caleb S. Layton, and Richards, Layton & Finger, for Wilmington Trust Co., trustee.
OPINION
The vexed question is one of conflict of law. Upon its determination depends the validity and effect of a deed of appointment under a power conferred by a trust agreement. The facts of the case and pertinent provisions of the writings involved have been fully stated in three opinions heretofore filed in the court below. They will be re-stated in the briefest possible way.
On November 20, 1920, William H. Donner, hereinafter referred to as the donor, then domiciled in Buffalo, New York, executed a deed of trust, conveying to his wife, Dora Browing Donner, certain shares of stock in trust for the benefit of his wife and his five children for their respective lives. Subject to certain conditions, the trust to the extent of each child's interest therein was to cease at death; but it was provided that the property and securities held under the trust to produce the income for such deceased child should be transferred and delivered to such lawful child or children or other lawful lineal descendants of the donor then surviving, and in such proportions, as such deceased child should appoint and designate by last will and testament, or other instrument, duly executed, sufficient for such purpose, or in default of appointment, to the lawful child or children or other lawful lineal descendants of the deceased child. Under certain restrictions, each child was empowered to devise not more than one-fourth of his or her share to such person or persons other than the said surviving children and lineal descendants, as he or she should appoint. The donor or any beneficiary was authorized to convey to the trustee additional money or property to be added to the principal of the trust, or to be added to any separate trust fund created or accumulating thereunder. The donor reserved to himself, or in the event of his death, to a majority of the adult beneficiaries, the right from time to time, to subdivide the trust into equal shares for the purpose of segregating into a separate trust or trusts the interests of any one or more of the beneficiaries. By the tenth paragraph of the trust agreement, a majority of the adult beneficiaries, subject to the approval of the donor during his lifetime, were authorized to change from time to time the trustee under the trust agreement, or under any of the separate trusts, to any trust company of any state, possessing certain qualifications, and in such event, it was directed that such successor trustee "shall hold the said trust estate subject to all the conditions herein to the same effect as though now named herein."
During the years 1921 to 1923, inclusive, the donor made substantial additions to the trust estate, and on January 16, 1924, the value of the securities held by the trustee exceeded $ 2,000,000.00.
By an instrument dated January 16, 1924, Dora Browing Donner, the wife of the donor and the trustee under the trust agreement, Robert Newsom Donner and Joseph W. Donner, sons of the donor, they being all of the adult beneficiaries under the trust agreement, constituted and appointed Wilmington Trust Company as the trustee to succeed Dora Browing Donner; and she, as trustee, was authorized and directed to transfer and deliver to the successor trustee all of the money, securities and property held by her under the trust agreement. On February 16, 1924, the principal of the trust was delivered to Wilmington Trust Company as successor trustee at the City of Wilmington; and since that time it has administered the trust.
Subsequent to the appointment of the successor trustee, large additions were made to the trust fund, and, inter alia, to a separate trust fund for the benefit of Joseph W. Donner, by the donor, by Dora Browing Donner, and by Joseph W. Donner himself.
On February 4, 1927, Joseph W. Donner, residing at Buffalo, New York, executed a last will and testament making no reference whatever to the power of appointment conferred on him by the trust agreement, nor to the property to which the power applied. He possessed property in his own right, however, upon which the will could operate. After making certain dispositions, he devised all of the residue of his estate to Marine Trust Company of Buffalo in trust for the benefit of his wife, Carroll E. Donner, for her life; and on her death, he devised and bequeathed the property constituting the trust fund to his children then living and to the issue then living of any deceased children, share and share alike, the issue of any deceased child to take the share of the parent.
On October 9, 1929, Joseph W. Donner executed an instrument in which express reference was made to the power of appointment conferred on him by the trust agreement. He appointed and designated his two children, Joseph W. Donner, Jr. and Carroll E. Donner, Jr. to receive all of his interest and share in the trust fund, that is, the share of the principal of the trust fund from which his income thereunder had been derived, including the separate trust fund thereunder, subject to certain conditions. He directed that all of the property and securities thereunder or thereafter subject to his power to devise or appoint should be held by the trustee as a separate trust fund under the article of trust for the benefit of his two children, the income to be paid to them in equal shares. It was provided that at the death of each of the children the trust was to cease to the extent of the deceased child's interest or share, and that all of the property and securities so held under the trust to produce income for such child should be transferred and delivered as such child should have devised or designated, or in default thereof, to his or her lawful lineal descendants, if any; otherwise to remain in trust for the benefit of the survivor of the children; and if there should be no survivor, the share should remain as part of the principal of the trust for the benefit of all of the cestui que trustents thereunder.
On November 9, 1929, Joseph W. Donner died, leaving to survive him his widow, and the two children. The will was probated in Erie County, New York; and the executors named, Marine Trust Company of Buffalo and the widow, Carroll E. Donner, duly qualified as such.
On January 23, 1931, William H. Donner, Jr., one of the sons of the donor, died while still a minor, unmarried, and without having executed the power of appointment conferred on him by the trust agreement.
In these circumstances, Wilmington Trust Company, as guardian for the two children of Joseph W. Donner, deceased, sued in the court below to compel Wilmington Trust Company, as successor trustee under the trust agreement of the donor, to account for and to pay over to the complainant the property which it held in trust for the benefit of the deceased. Marine Trust Company of Buffalo, and Carroll E. Donner, now Lady Carroll Tennyson, executors of the will of Joseph W. Donner, deceased, and Marine Trust Company of Buffalo, as trustee under the will, intervened as complainants. The successor trustee filed an answer. It also filed a cross-bill to which answers were filed by the original complainant and the intervenors.
At the first hearing before the late Chancellor no question of conflict of law was raised. It was agreed, apparently, that the...
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