Crumlish v. Delaware Trust Co.

46 A.2d 888, 29 Del. Ch. 503, 169 A.L.R. 451, 1946 Del. LEXIS 17
CourtSupreme Court of Delaware
DecidedApril 29, 1946
StatusPublished
Cited by7 cases

This text of 46 A.2d 888 (Crumlish v. Delaware Trust Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crumlish v. Delaware Trust Co., 46 A.2d 888, 29 Del. Ch. 503, 169 A.L.R. 451, 1946 Del. LEXIS 17 (Del. 1946).

Opinion

Speakman, Judge,

delivering the opinion of the court:

The present case involves within a narrow compass the correctness of two divergent views. This divergence concerns the question as to whether a trust, not spendthrift in character, is created, and the beneficiary is solely entitled, without limitation, to the income, and also has either a vested remainder or absolute interest in the principal, and is sui juris and no other person is interested in the trust, whether under such circumstances the beneficiary may terminate the trust, irrespective of the intention of the creator of the trust. In its narrowest aspect the cases divide into two distinct groups in which the pivotal question is, whether, under the facts just stated, the intent of the creator of the trust is of supreme importance.

1. There is a line of English and Canadian cases stemming from Saunders v. Vautier, 4 Beav. 115, 49 Eng. Reprint 282, affirmed Cr. & Ph. 240, 41 Eng. Reprint 482, in which it was held that where a legacy was vested, although the enjoyment was postponed, it may be ordered to be paid to the beneficiary when he is or becomes sui juris. These cases are based upon the theory that the postponement of enjoyment is inconsistent with absolute [507]*507interest given, and that this is so irrespective of the intent of the creator of the trust.

2. A second class, illustrated by Claflin v. Claflin, 149 Mass. 19, 20 N.E. 454, 3 L.R.A. 370, 14 Am. St. Rep. 393, hold that even though the right be vested, the enjoyment may be postponed in accordance with the plain intent of the creator of the trust, unless it contravenes some positive rule of law or is against public policy.

Practically all of the English and Canadian cases and a few American jurisdictions follow the conclusion of Saunders v. Vautier, supra. Attention has been drawn to the fact that the doctrine of these cases had its origin in a jurisdiction where restrictions against alienation of absolute interests in the income of trust property were void and “spendthrift trusts” unknown.

The doctrine of Saunders v. Vautier has been approved and extended to charities by the House of Lords in Wharton v. Masterman, [1895] App. Cas. 186, affirming Harbin v. Masterman, [1894] 2 Ch. 184. It is true that in Wharton v. Masterman Lord Herschell said:

“The point seems, in the first instance, to have been rather assumed than decided. It was apparently regarded as a necessary consequence of the conclusion that a gift had vested, that the enjoyment of it must be immediate on the beneficiary becoming sui juris, and could not be postponed until a later date unless the testator had made some other destination of income during the intervening period. It is needless to inquire whether the courts might have given effect to the intention of the testator in such cases to postpone the enjoyment of his bounty to a time fixed by himself subsequent to the attainment by the objects of his bounty of their majority. The doctrine has been so long settled and so often recognized it would not be proper now to question it.”

The American cases, with some few exceptions, refuse to follow the doctrine of Saunders v. Vautier. In line, with Claflin v. Claflin, supra, they hold that even though the right be vested the enjoyment may be postponed in accordance with the intent of the creator of the trust, unless it [508]*508contravenes some positive rule or law, or is against public policy. In that case the estate was placed in trust and the trustee directed to pay one-third part to a named son of the testator in the manner following, viz.: “$10,000.00 when he is of the age of 21 years; $10,000.00 when he is of the age of 25 years and the balance when he is of the age of 30 years.”

The court held the interest of the son was vested and absolute, and no other person had any interest in it, and that the son’s interest was alienable and could be taken by creditors to pay his debts. Notwithstanding this absolute interest in the son, the court held that the intent of the testator in postponing the payment to the son was not an illegal postponement, and refused to terminate the trust.

It is entirely clear that the rule of Claflin v. Claflin has been the subject of severe criticism.

It is equally clear that the rule of Claflin v. Claflin has been followed in a large majority of American cases where the question has arisen. Shelton v. King, 229 U.S. 90, 33 S. Ct. 686, 57 L. Ed. 1086; De Ladson v. Crawford, 93 Conn. 402, 106 A. 326; Evans v. Rankin, 329 Mo. 411, 44 S. W. 2d 644; First Wisconsin Trust Co. v. Hamburger, 185 Wis. 270, 201 N. W. 267, 37 A. L. R. 1413, and cases there collected; Gray, Rule Against Perpetuities, (4th Ed.), Sec. 121.2, etc.

The rule of Claflin v. Claflin was adopted by the Chancellor in Delaware in Lewes Trust Company v. Smith, 28 Del. Ch. 64, 37 A. 2d 385. In that case the entire estate was placed in trust to pay to a daughter of the testator $40 per month during her life. The trustee was directed to accumulate all surplus income during the life of the daughter, and Upon her death to pay this accumulation of income and all other current income to John Barnes Smith, grandson of the testator, and son of the daughter receiving the life income. The grandson made an assignment to his mother of his interest in the surplus income, accumulated and to accumulate, [509]*509and instructed the trustee to pay over such income. The Chancellor held that the grandson took a vested interest in the accumulation of interest, and, adopting the principle of Claflin v. Claflin, further held that the intent of the testator that the accumulation of income should not be paid until the death of the daughter prevented an earlier payment.

In the present case when it was before the Court of Chancery (28 Del. Ch. 155, 38 A. 2d 925, 927), the Chancellor, in refusing to terminate the trust, said: “Lewes Trust Co. v. Smith, 28 Del. Ch. 64, 37 A. 2d 385, involved somewhat similar facts, and is the governing case.”

It is the duty of the court to consider the rule of Claflin v. Claflin as adopted in Lewes Trust Co. v. Smith, and to consider its application to the present case.

With due and merited respect for the opinion of the Chancellor, we think the cases of Claflin v. Claflin and Lewes Trust Co. v. Smith did not cover precisely the same field. In the Claflin case the trust was sought to be terminated by the original beneficiary, entitled to both income and corpus. This termination was refused because the court saw an intent of the testator to postpone the benefit to the original beneficiary to a later date, but during his lifetime. The court said [149 Mass. 19, 20 N.E. 456], “It is true that the plaintiff’s interest is alienable by him, and can be taken by his creditors to pay his debts,” but the case only involved the right of the beneficiary to terminate the trust, and not that of his assignee. Lewes Trust Co. v. Smith,

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Related

Wilmington Trust Co. v. Coyne
373 A.2d 867 (Court of Chancery of Delaware, 1977)
Stuart v. Stuart
106 A.2d 771 (Court of Chancery of Delaware, 1953)
Delaware Trust Co. v. Delaware Trust Co.
91 A.2d 44 (Court of Chancery of Delaware, 1952)
Lewes Trust Co. v. Smith
68 A.2d 433 (Court of Chancery of Delaware, 1949)
Delaware Trust Co. v. FitzMaurice
38 A.2d 925 (Court of Chancery of Delaware, 1944)

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Bluebook (online)
46 A.2d 888, 29 Del. Ch. 503, 169 A.L.R. 451, 1946 Del. LEXIS 17, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crumlish-v-delaware-trust-co-del-1946.