Du Pont v. Equitable Security Trust Company

122 A.2d 429, 35 Del. Ch. 514, 1956 Del. LEXIS 58
CourtSupreme Court of Delaware
DecidedMay 1, 1956
StatusPublished
Cited by16 cases

This text of 122 A.2d 429 (Du Pont v. Equitable Security Trust Company) 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
Du Pont v. Equitable Security Trust Company, 122 A.2d 429, 35 Del. Ch. 514, 1956 Del. LEXIS 58 (Del. 1956).

Opinions

Southerland, Chief Justice, for the majority of the Court:

The questions before us are (1) whether an inter vivos trust agreement should be so construed as to create a remainder by implication in the issue of a beneficiary, and (2) if so, whether the remainder has failed.

On August 26, 1929 Samuel Hallock duPont and Elizabeth Ormond Wrenn duPont, his wife,- having agreed to separate, entered into a trust agreement for the support of the wife and their infant daughter, Eve duPont, of whom the wife had custody. The agreement was to become effective upon the entry of a final decree divorcing the husband and wife from the bonds of matrimony.

Hallock and Elizabeth duPont were thereafter divorced. Elizabeth remarried in 1936 and died in 1942. Eve (now Eve duPont Remer) survived her mother, is married, and has two children. On April 5, 1954 Hallock and Eve served upon the trustee of the trust a notice that they elected to terminate the trust. They asserted that since the death of Elizabeth they have been the only persons with any interest in the trust, and that therefore they had the right under Delaware law to terminate it. See Weymouth v. Delaware Trust Co., 29 Del.Ch. 1, 45 A.2d 427. They accordingly demanded that the trustee deliver to them all the trust property. The trustee declined to do so and Hallock and Eve brought suit.

The Chancellor held that the agreement vested in the issue of Eve, by implication, a remainder interest in the corpus of the trust, and that it had not failed. See ante p. 261, 115 A.2d 482. He therefore dismissed the complaint. Hallock and Eve appeal.

[517]*517Our first task — and a laborious one, as the Chancellor observed— is to analyze the provisions of the trust agreement.

It consists of four parts numbered (1) to (4). Part (1) — the only one of importance here — is divided into several paragraphs. They are not lettered or numbered. Of these paragraphs three relate to the payment of income and distribution of the corpus, and are the ones that concern us. For convenience of reference, counsel and the court below have sub-divided these three paragraphs into eight sections lettered A to HE, and that method of designation is followed in this opinion.

The corpus of the trust consisted of 12,000 (now 48,000) shares of the common stock of E. I. duPont de Nemours & Company. It was transferred to Equitable Trust Company (now Equitable Security Trust Company) in trust to carry out the purposes of the agreement, including a direction “to divide and pay over the corpus of the trust estate in accordance with the provisions to that end hereinafter set forth”, and to collect and pay over the income as directed.

The eight sections, A to H, as before stated, deal with the disposition of the trust property. The possible beneficiaries of the trust are (1) Elizabeth, (2) Eve, (3) Eve’s issue, and (4) Hallock or his estate. Elizabeth’s interest and Eve’s interest are limited to income. Hallock also reserved certain rights to the income. The corpus is distributable only to Eve’s issue or to Hallock (or his estate).

Because of the many different contingencies that might happen, arising out of (1) different sequences of death, (2) marriage or remarriage of Elizabeth, and (3) death of Eve leaving issue or without leaving issue, the agreement is — possibly unavoidably — prolix and complicated, the dispositive provisions alone occupying six pages of the printed appendix. Much of the prolixity flows from the method adopted in dealing with the contingency of Elizabeth’s remarriage. Sections A to F (constituting the first two paragraphs of the agreement as actually drawn) deal with the payment of income and distribution of the corpus in the event that Elizabeth does not remarry. Sections G and H (constituting the third paragraph as actually drawn) deal, generally speaking, with the same subjects in the event [518]*518that she remarries. It was therefore necessary, if all contingencies were to be provided for, that provisions dealing with the various contingencies that depended on the sequences of death and upon Eve’s dying with or without issue should be set forth not only in Sections A to F, but also in Sections G and H. But, as will be seen, Sections G and H fail to provide specifically for at least one case covered by the other sections, viz.: disposition of the corpus if the sequence of events should be (1) Elizabeth’s remarriage; (2) death of Elizabeth and death of Hallock, Eve surviving; and (3) Eve’s death, leaving issue surviving her.

The following is a summary of the provisions of the agreement:

Sections A, B and C. These deal with the disposition of the income prior to the death of Elizabeth as follows:

$3000 a month to Elizabeth for life or until remarriage.
$1000 a month to or for the benefit of Eve; or, if Eve predeceases her mother leaving issue, to such issue until death of Elizabeth.
The remainder of the income to Hallock; and upon his death to Eve for life, or if she predeceases her mother leaving issue, to such issue until death of Elizabeth.
Section D. We quote it in full as follows:
“If the said Elizabeth Ormond Wrenn duPont should not, after she shall have been divorced, as aforesaid, remarry and should therefore continue to receive the income hereby provided for her from the said trust estate during the remainder of her life, then and in that event, upon the death of the said Elizabeth Ormond Wrenn duPont the said sum of $48,000, payable hereunder out of said net income of said trust estate unto the said Elizabeth Ormond Wrenn duPont and unto or for the benefit of the said Eve duPont or her lawful issue, shall be paid by the said Trustee, in equal monthly instalments, as follows, — the sum of Twelve Thousand Dollars ($12,000.00) shall be paid annually unto the said Eve duPont for life and the sum of Thirty-six Thousand Dollars ($36,000.00) shall be paid annually unto [519]*519the said Settlor, if he be then living, but if the said Settlor be not then living, or upon his death thereafter, the whole of the said sum of $48,000 shall be paid by the said Trustee, in equal monthly instalments, unto the said Eve duPont, daughter of the said Settlor, for and during the term of her life and, upon the death of the said Eve duPont, the entire corpus of the trust estate shall thereupon be assigned, transferred and paid over by the said Trustee unto the lawful issue of the said Eve duPont, in equal shares, per stirpes and not per capita, free and discharged from any and all trusts whatsoever.”

Section E. This deals with both income and corpus in the event Eve predeceases her mother leaving issue, as follows:

Income: Such part as Eve had at her death to her issue until the death of Elizabeth.
Corpus: Upon death of Elizabeth, to Eve’s issue.
Section F. This deals with corpus in the event Eve dies without issue as follows:
Corpus: Upon death of Eve without issue, either before or after her mother, to Hallock, or if he be deceased, to his issue, or in default of issue, to his next of kin.

Before examining Sections G and H we pause to note the following:

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Du Pont v. Equitable Security Trust Company
122 A.2d 429 (Supreme Court of Delaware, 1956)

Cite This Page — Counsel Stack

Bluebook (online)
122 A.2d 429, 35 Del. Ch. 514, 1956 Del. LEXIS 58, Counsel Stack Legal Research, https://law.counselstack.com/opinion/du-pont-v-equitable-security-trust-company-del-1956.