Wyckoff v. Garrison

Decision Date12 December 1967
PartiesGeorge W. WYCKOFF, Nathan W. Pearson, and Wilmington Trust Company, a corporation of the State of Delaware, trustees under an Agreement of Trust with Ailsa Mellon Bruce, Plaintiffs, v. Lloyd K. GARRISON and the Bank of New York, Executors of the Estate of Audrey B. Currier, and Guardians of the Property of the infants below named, Alan Dworsky and Edith Entenman, Guardians of the Property of the infants below named, Audrey B. Currier, Andrea B. Currier, Lavinia M. Currier and Michael S. Currier, infant children of Audrey B. Currier, Ailsa Mellon Bruce, Trustor of the trust, John G. Simon and Claire B. Simon, Guardians of the Persons of said infant children, Defendants.
CourtCourt of Chancery of Delaware

Edmund N. Carpenter, II, and James T. McKinstry, of Richards, Layton & Finger, Wilmington, for plaintiffs.

Richard F. Corroon and Robert K. Payson, of Potter, Anderson & Corroon, Wilmington, for defendants Lloyd K. Garrison and the Bank of New York, executors of the Estate of Audrey B. Currier.

James M. Tunnell, Jr., of Morris, Nichols, Arsht & Tunnell, Wilmington, guardian ad litem for defendants Andrea B. Currier, Lavinia M. Currier and Michael S. Currier.

MARVEL, Vice Chancellor:

Plaintiffs are the present trustees under an agreement entered into on August 6, 1935, between Ailsa Mellon Bruce as trustor and Wilmington Trust Company and two individuals, since resigned, as trustees. Under the terms of such agreement Mrs. Bruce placed certain property in trust for the benefit of her issue during their lifetime, with remainder over to the descendants per stirpes of deceased children of the trustor.

The death of Audrey Bruce Currier, the only child of the said Ailsa Mellon Bruce born within the initial accumulation period of the trust, hereinafter more fully explained, having been found to have occurred on January 17, 1967, plaintiffs seek instructions as to how income of the trust which had accumulated as of the time of Mrs. Currier's death but which had not been paid over to such life tenant as well as trust income which had accrued prior to Mrs. Currier's death but which had not been collected by the trustees prior to such sole life tenant's death, should be treated by the trustees as between the respective claims of Mrs. Currier's estate and those of the guardians of such life tenant's three minor children. Named as defendants to the action are the executors of Mrs. Currier's estate, the guardians of the property and persons of Mrs. Currier's minor children, and the trustor, Mrs. Bruce. The trustees' final monthly payment of income to the life tenant, Mrs. Currier, was made on December 30, 1966. Between that date and the date of her death, namely, January 17, 1967, the trustees received but did not pay out to the life tenant income of approximately $33,000. As of the same date some $45,000 of income had accrued in the trust but had not been received by the trustees.

The trust agreement here in issue provides that following a period of accumulation of income, namely twenty-one years after the date of the trust or upon the death of the trustor, whichever event shall first occur, the trust estate therein provided for '* * * principal and undistributed income thereof * * *', shall be divided into separate shares for trustor's then living issue. As of the effective date for such division, namely twenty-one years after the creation of the trust, the trustor's sole issue was Mrs. Currier, and from the time that Mrs. Currier attained the age of twenty-one years until shortly before her death, such life income beneficiary received '* * * the net income of such share set aside for such child, quarter-yearly or at such other regular intervals as Trustees from time to time shall find covenient, for and during the period of * * * her natural life * * *'. As a matter of practice, the trustees were paying over such income to Mrs. Currier on a monthly basis at the time of her death, her last payment of income having been paid out, as noted above, on December 30, 1967.

The trust instrument goes on to provide that upon the death of any issue of the trustor for whom property is so held in trust, that the trustees '* * * shall forthwith assign, transfer, convey, and deliver such share or the undistributed part thereof as shall then be held in trust hereunder, principal and undistributed income thereof, if any, free from this trust, unto the descendants per stirpes of the issue so dying * * *' with provision made for the accumulation and special spendthrift application of income for those descendants who had not then attained the age of twenty-one years. The agreement provides, however, that such share or portion of a share so paid over to a descendant of a deceased life tenant together with any accumulated income should nonetheless be deemed vested in interest in any such minor descendant.

Counsel for plaintiffs and for the guardian ad litem take the position that not only income on hand at the time of Mrs. Currier's death but also that which had accrued as of such date should be paid over to or held for the benefit of Mrs. Currier's children. Counsel for the executors of Mrs. Currier's estate contend, on the other hand, that not only income on hand at the time of Mrs. Currier's death but that which had merely accrued on said date should be paid over to such executors.

Counsel agree that under Delaware law a trustor is free to specify the manner in which income shall be apportioned between a life beneficiary and trust remaindermen and that apportionment here is governed by the language used in the instrument in issue. However, it is the law generally that unless the trustor has indicated a contrary intent that a trustee is required to pay over to the estate of a life tenant not only income in his hands at the time of a life tenant's death but also that accrued at the time of such event, Bogert, Trusts and Trustees, § 818 p. 346, and Vol. 3, Scott on Trusts (2nd Ed.) § 235A, p. 1802. Compare Wilmington Trust Co. v. Wilmington Trust Co., 25 Del.Ch. 193, 15 A.2d 665.

Thus, the question to be decided is whether or not the directions contained in the trust agreement in issue constitute a sufficient showing of intent on the trustor's part that income on hand or accrued at the time of Mrs. Currier's death should be paid to her descendants per stirpes rather than to the estate of such life tenant.

The cases relied on by the executors to sustain their contention that the trustor in the case at bar failed adequately to disclose an intent that remaindermen should receive income either on hand or accrued at the time of the death of the life tenant appear to be influenced to a considerable degree by the strict rule against accumulations existing in the jurisdictions involved at the time of the decisions relied on. 1 See In re Weinmann's Estate, 223 Pa. 508, 72 A. 806; In re Kenney's Estate, 393 Pa. 30, 141 A.2d 839, and Matter of Keogh, 112 App.Div. 414, 98 N.Y.S. 433, aff'd mem., 186 186 N.Y. 544, 79 N.E. 1109. Such strict rule, however, has not been recognized in Delaware by statute or otherwise. See Equitable Guarantee and Trust Company v. Rogers, 7 Del.Ch. 398, 44 A. 789, Lewes Trust Co. v. Smith, 28 Del.Ch. 64, 37 A.2d 385, and compare Asche v. Asche, 41 Del.Ch. 481, 199 A.2d 314, reversed on other grounds, (Del.Sup.Ct.) 210 A.2d 306.

The result reached in those cases decided in favor of a life tenant's...

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  • Byrd v. Caruth
    • United States
    • Texas Court of Appeals
    • December 31, 1974
    ...Chancery New Jersey 1934); and Horlick v. Sidley, 241 Wis. 81, 3 N.W.2d 710 (1942). On the other hand the appellees have cited Wyckoff v. Garrison, 237 A.2d 139 (Ct. of Chancery Delaware 1967); Rhode Island Hospital Trust Co. v. Otis, 77 R.I. 296, 75 A.2d 210 (1950); Loring v. Cotter, 339 M......
  • Coca-Cola Bottling Co. v. Coca-Cola Co., Civ. A. No. 81-48 MMS.
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    • U.S. District Court — District of Delaware
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    ...same document. Radio Corp. of Am. v. Philadelphia Storage Battery Co., 23 Del.Ch. 289, 6 A.2d 329, 334 (1939); Wyckoff v. Garrison, 43 Del.Ch. 465, 237 A.2d 139, 142 (1967). In the Consent Decrees, the term "sugar" is used without modification four times: once each in paragraphs 5, 6, 7, an......
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    • Ohio Court of Common Pleas
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    ...the estates of the deceased life beneficiaries: In re Rhode Island Hospital Trust Co. v. Otis, 77 R.I. 296, 75 A.2d 210; Wyckoff v. Garrison, 237 A.2d 139 (Del.Ch.); Fidelity Union Trust Co. v. Stengel, 43 N.J.Super. 513, 129 A.2d 302; In re Montfort's Trust, 41 Misc.2d 88, 244 N.Y.S.2d 526......

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