Sterling v. Ives , 78 Conn. 498 ( 1906 )

The general intent of the testator was to secure a division, first of the income, and ultimately of the principal, of his residuary estate — subject to specified reservations in favor of his widow and daughter and of certain charities — between his three children or their families in three equal shares.

After his widow, his children were the primary objects of his solicitude, and particularly with reference to their comfortable support and that of the families which each might have. To make this more sure he created, by the nineteenth clause of his will, a spendthrift trust, and by the twentieth authorized, in case of his wife and children and their families, additions to income from the principal, should the trustees think it necessary. So far as his daughter was concerned, he also gave her a certain preference over her brothers, in this respect, by the directions in the first codicil.

The provisions thus made for the family of any particular beneficiary became inoperative on the death of that beneficiary. The family intended was that of which he was and remained the head. His death would dissolve and destroy it. St. John v. Dann, 66 Conn. 401, 404.

The death of Walter in 1893, leaving surviving issue, brought the fourteenth clause of the will into operation as respects the third of the estate designed for him and his representatives. Thereafter the income previously payable to him, or for his benefit, was to be paid in like manner to, or for the benefit of, his widow and such surviving issue until such issue should respectively come of age.

For this purpose and until such times, the trustees were to continue in possession of the estate. But the ultimate title to two third of the share, which for convenience we may term Walter's, became vested at his death in his three surviving children, subject only to the provision for the death of any under age made in the fifteenth clause. The testator, after giving them two thirds of the income which their father had formerly enjoyed until one of them should become of full age, had provided in respect to the principal thus: "As they respectively attain said age, I give, devise, and bequeath to them respectively, their heirs and assigns, in equal portions forever, so much of the principal of my estate as is herein devised and bequeathed for the use and benefit of such deceased son or daughter: provided, that such surviving issue are to take per stirpes only and not per capita, and the shares of such as shall have attained the age of twenty-one (21) years at the time of the decease of such son or daughter, their ancestor, to be paid to them respectively immediately upon the decease of such ancestor."

Under the settled canon of construction that the law favors vested estates, this gift to them as they respectively came of age, being accompanied by a gift, in the case of any who should be minors, of the income meanwhile from their father's death, passed to each, on that event, a vested estate in his proportional share of two thirds of one third of the principal of the trust fund. Johnson v. Edmond,65 Conn. 492, 499. Such third was obviously what the testator meant by "so much of the principal of my estate as is herein devised and bequeathed for the use and benefit of such deceased son." The postponement of the delivery of possession to any grandchild until he should be of age was intended primarily for his protection, and secondarily to keep the property in the testator's family or send it to charitable uses in cases of the legatee's death when a minor.

As to the other third of Walter's share, the fourteenth clause of the will, after providing that one third of the income payable to or for the benefit of Walter during his life, should after his death be paid, "in like manner" to his widow for life, adds these words: "And upon her decease, leaving lawful issue of her deceased husband (my son) then living, said one-third part (1/3) income and the principal to go for the benefit of such issue in the same manner as the other two third parts (2/3) thereof. And in case of no such issue surviving her, said income and principal to be held and disposed of by said trustees in the manner provided in the clause next following."

The phrase "in the same manner," as thus employed, designates the mode in which the recipients shall be benefited. It cannot be regarded as intended to describe who such recipients are, and thus as sending either income or principal to those in whose favor estates in two thirds of Walter's share had already been created. The recipients intended are not left to be ascertained by inference, but are clearly designated. They are the issue of Walter who may be living at his widow's decease, and, should none such then survive, both income and principal were to go as the fifteenth clause particularly directs.

The phrase "one-third (1/3) part of the income herein directed to be paid to or for her deceased husband during his life," must be interpreted with reference to the previous provisions for a severance of Walter's third upon his death. If all his children had been then of age, and neither his wife nor the testator's widow had been living, it is plain that such a severance would have been required, for each child would have been immediately entitled to his share of the principal. Had the testator's widow been then in life, it would have been necessary and proper first to set apart, with the approval of the Court of Probate, a fund sufficient to produce an income which would satisfy all the provisions of the will in her favor, and to take a third of this fund for the time being out of what would otherwise be Walter's share. In like manner, Walter's widow can now be sufficiently protected by thus setting apart a third of that share to be held by the trustees for her benefit during her life; and the general intent of the will justifies and requires the adoption of that course.

Whether there are in the will any provisions which are invalid under the former statute of perpetuities we have no occasion to inquire, since no advice has been asked by the trustees with respect to that question, nor any claim in regard to it made by any of the parties in interest either in this court or in the court below. In view of these conditions, we intimate no opinion as to the validity of any provision affecting the interest of a grandchild who may die under age.

From and after the death of Walter, neither the income nor the principal of his share could be reduced, under any authority given by the twentieth clause of the will, by appropriations in favor of Sophia and her family, or Philo and his family. So long as he remained in life, he or his family might have been benefited by appropriations from the trust fund at the expense of his father's other children and their families, and they at his expense and that of his family. There was thus a mutuality of burden. Each child bore his part of it, and to each it might be a source of benefit. Walter's death cut off any further possibility of such benefits either to him or to his family. This termination of all opportunity for reciprocity in this regard, the provisions for a severance of the principal of his share, and the general intent of the testator to secure equality between his children, forbid a construction of the clause in question which would charge the share of any child, when once thus severed by reason of his death, with burdens in favor of any other child or of the family of any other.

We have also come to the conclusion that the nineteenth clause does not apply to the testator's grandchildren. While the language used is sufficiently general to comprehend them, it is controlled by the obvious purposes to secure which the article is drawn, and by the words of absolute gift found in the fourteenth clause. There could be no substantial danger from giving to each minor grandchild the benefit of the entire income of his share. It would naturally be disbursed either by the trustees or by his guardian, and in case of the marriage of a granddaughter was by the sixteenth clause secured, so far as it might come into her hands, to her sole and separate use. Nor is it consistent with the general intent of the testator to make an equal distribution between the three stocks of descent, to bring back the fruits of property once severed from the corpus of the trust to increase that corpus, even conditionally and temporarily.

From the date of the severance of Walter's share, which is to be made as of the date of his death, until the death of Philo, the other two shares remained in one undivided and indivisible mass, subject to all the discretionary powers of the trustees which had existed in respect to the entire trust estate prior to the death of Walter.

From and after the death of Philo, his third should have been divided and set apart, and the immediate ownership and enjoyment of two thirds of it then passed of right to his children, if they were all then of age, to be equally divided between them; the other third of it being first set apart to be held by the trustees for the benefit of Philo's widow, for life, and then to go to his issue who may survive her, if any, in the manner already stated with reference to the fund to be set apart for the primary benefit of Walter's widow.

During the life of Sophia, the discretionary power given to the trustees by the twentieth clause of the will, to make appropriations from the principal of the third of the residuary estate, remaining after the severance of Walter's third and Philo's third, to secure her comfortable maintenance and that of her family, continues in full force as respects her third.

So far as respects any addition to the principal of the trust fund which may have been made under the nineteenth clause, and which remained a part of the principal at the death of Walter, it should, for the purpose of setting apart what represents his share of the principal of the estate, be considered as then fully incorporated into that principal. So far as respects any addition to the principal of the trust fund which may have been made under that clause between the death of Walter and that of Philo, and which remained part of the principal at Philo's death, it should, in like manner, as to those purposes, be considered as then fully and finally incorporated into that principal.

All payments of principal, made by the trustees in the exercise of their discretionary powers, to any beneficiary, operate as a withdrawal of the amount so paid, finally and forever, from the principal of the estate. Such payments the will only authorized for the purpose of securing the comfortable support of those to profit by them. All money thus appropriated was to be used up for present necessities, and not saved to enrich the possessors. They were to take it as part of their income to be spent as such, and neither they nor their representatives can be thereafter held accountable for it, any more than for the disposition of what was received and paid to or for them as part of the regular income of the trust.

Inequality of benefit, as respects the three stocks of descent, has thus resulted, but only because it was a leading object of the testator, carefully expressed, to secure to each child for life a comfortable support for himself and his family, whatever differences between the families might exist in respect to the number of persons included in each, or in the scale of expenditure corresponding to the social station in which each might be placed. Had he intended that such appropriations should, on a final reckoning, be treated as made at the expense of any particular share, to go to any particular child or his representatives, it may be safely assumed, in view of the precise directions as to advancements made in the seventeenth clause, that he would have so expressly provided.

It follows that the Superior Court erred in its conclusions. The material questions asked by the trustees should have been answered as follows: —

1. The estate should not be kept intact and held as an entirety and the income applied, as directed by the will and codicils, so long as any of the children of the testator are alive.

3. The widow of neither son is now entitled to a specific portion of the income of the entire estate; but the widow of each is now entitled to the income of a specific portion of the principal, to be set aside for her benefit.

4. The children of Philo, all being of full age, are now entitled to a portion of the principal of the estate; namely, to two thirds of half of what of right constituted the principal of the trust fund at his death.

6. The children of Walter, although all but one are minors, are now entitled, so far as ownership is concerned, to a portion of the principal of the estate; namely, to two thirds of one third of what constituted the principal of the trust fund at his death. Walter Edgar Ives became, on May 24th, 1905, absolutely entitled to the possession of one third of said portion. The others have each a vested interest in one half of what remains of it, subject to any valid provision that may exist for the contingency of their dying under age.

8. No payments of principal heretofore made to or for the benefit of the respective children of the testator or their families, by virtue of any discretionary powers conferred upon the trustees by the will and codicils, should be counted as a part of the principal of the estate.

9. The trustees have a discretion in future to make or withhold payments of principal or income to or for the benefit of legatees to the following extent: (1) All powers given them by the nineteenth clause continue unabridged as respects Mrs. Sophia I. Owen and her family during her life, with relation to the third of the estate remaining in their hands after Philo's share is severed. (2) All powers given them by the twentieth clause and the fourth clause of the first codicil continue unabridged as respects Mrs. Sophia I. Owen and her family, with relation to said third of the estate last above described.

10. Future payments of principal, if any, made to or for the benefit of Mrs. Sophia I. Owen or her family, by virtue of any of the discretionary powers conferred upon the trustees by the will and codicils, should not be counted as part of the principal of the estate upon any future distribution.

11. The trustees have no discretion to make any payment of principal to the widow of either son. As to the amount of income to be paid to each, they have the discretionary powers given them by the nineteenth clause of the will in respect to other legatees.

There is error, and the judgment of the Superior Court is reversed, and the cause remanded with directions to render a judgment in conformity with this opinion.

No costs will be taxed in this court in favor of any party.

In this opinion the other judges concurred.