[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]
In this case, which was submitted to this Court some months ago but in which additional briefs requested by the Court have been but recently filed, a question of primary importance is presented by appellants in the following words: "Should the will be construed to grant plaintiffs and appellants a vested remainder?" Mr. Justice REID'S opinion answers this question in the affirmative. I am unable to agree in that result.
At the outset it should be noted that because of a proposed adjustment acceptable to the persons who are annuitants under the Burt will, their rights will not be affected by decision herein. In general the factual background of this litigation is sufficiently presented in my Brother's opinion, but his quotation from the will seems inadequate. Since the construction to be given to the Burt will must be
controlled by the testator's intent, if within legal limitation, as gathered from the four corners of the will, other provisions of the will than those noted by my Brother must be quoted. For that reason we quote the following:
"(2) I hereby appoint the Second National Bank of Saginaw, Michigan, as trustee and executor to manage my estate after my death, as herein provided. * * *
"(3) Said bank or trust company is to take charge of all my estate, real, personal and mixed, of which I may die possessed, as hereinafter provided. To manage and conduct said trust, created by this will, with full power, except as hereinafter limited; to sell, convey and lease any of the same and invest and reinvest the proceeds of any sale, as hereinafter provided, until the termination of the trust herein created.
"(4) First, the trustee and executor shall pay all my funeral expenses and all my legal debts."
Here follows provisions for a large number of annuities requiring payment by the executor or trustee of upwards of $90,000 each year. As to such annuities the will provides:
"(14) * * * But shall the income for any year not be sufficient to make all the payments herein provided, then in that event, a sum sufficient shall be taken from the principal of the estate so that all payments herein provided may be made in full. * * *
"(16) * * * All annuities and all payments provided for in this will are limited and conditioned to continue only during the period of the trust created by this will. At the expiration of the trust, as hereinafter provided, all annuities and payments shall cease. * * *
"(17) In making the foregoing bequests it is my intention that the amounts herein provided to be
paid, shall be paid directly and only to the beneficiaries herein named, or their proper guardian, and that no legal title is passed to them that shall be subject to garnishee or attachment by creditors, or that they can make any transfer of, either by order or assignment, or any other document, which could be binding upon or accepted by the trustee and executor. * * *
"(18) All funds arising from income from securities belonging to the estate, or from the payment of securities themselves as they may be paid or as they may become due, or from the proceeds of the sale, of anything belonging to the estate, or from royalties from iron mines, or from any other source, after making all the payments herein provided, the surplus funds remaining on hand shall be invested every 30 days, as nearly as may be, by the trustee and executor, in United States government bonds, State Bonds or bonds (having other specified requirements). * * *
"(19) The iron mines, iron mining stocks or interests in iron mines located in the State of Minnesota, of which I may die possessed, shall not be sold or in any way encumbered by the trustee and executor. All the iron mine leases in Minnesota shall continue as now leased. All other real estate shall be disposed of from time to time as the opportunity occurs, at the best prices obtainable, and the proceeds of such sales shall be invested in the manner hereinbefore provided for surplus funds.
"(20) The trust herein created shall continue for and during the period of the lives of my two grandsons, Wellington Burt Hay and Wellington R. Burt. Upon the death of the last survivor of these two grandsons, all the real estate remaining in the trust shall be distributed among my legal heirs, but all personal property shall continue in the trust for 21 years after the death of my last surviving grandchild that shall be living at the time of my death, and shall be subject to the terms and conditions hereinbefore
set forth. At the end of 21 years after the death of my last surviving grandchild that shall be living at the time of my death, the trust shall terminate and all the funds of every name and nature remaining in the trust shall be distributed to my legal heirs.
"(21) As compensation for the carrying out of the provisions herein contained the trustee and executor is to have 1/2 of 1 per cent. on all moneys received from the estate to cover all their services for receipts and disbursements (with a subsequent provision for a minimum annual fee of $3,500). * * *
"(22) The trustee and executor shall make a yearly report in detail to my son, George R. Burt, as to the condition of the estate."
The remaining provision in the will is for a successor trustee who:
"Shall carry out the trust to its final termination, in accordance with the terms and conditions herein specified, application for such appointment being made by any one who may be interested as a beneficiary or final distributee."
Surely no one could successfully contend, nor is it asserted by appellants (with whom we herein include cross-appellants), that the testator in the instant case did not create a testamentary trust; but appellants assert it was not a "true trust," evidently meaning it was only a trust of powers granted to the trustee. In this particular appellants point out that there is not contained in the Burt will words by which the testator expressly passed title of his estate to the trustee. And for that reason, as stated in appellants' brief: "It is plaintiffs' claim that the remainder vested, at death of testator, in his heirs and did not remain contingent upon survival at the respective times of distribution." And appellants, referring to testator's use in his will of the words
"my legal heirs," contend that testator's legal heirs should be held to be those persons who were such heirs at the time of testator's death. Unquestionably such contention would be sound if Mr. Burt had died intestate; but such may or may not be the rule to be followed in the event a deceased person has disposed of his estate by will. In the latter case the terms of the will govern. We quote the following from an extensive note in 33 L.R.A. (N.S.) p. 2:
"It is a general rule of testamentary construction, so universally recognized as to render superfluous a full citation of the cases which support it, that, in the absence of clear andunambiguous indications of a different intention to be derivedfrom the context of the will, read in the light of the surrounding circumstances, the class described as testator's heirs * * * to whom a remainder or an executory interest is given by will, is to be ascertained at the death of the testator. * * *
"The rule above stated, as is said in Heard v. Read,169 Mass. 216 (47 N.E. 778), `is not a rule of substantive law, but a rule of interpretation, which has been adopted by the courts as one means of ascertaining the intention of the testator as expressed in his will; and it never should be used to defeat what, from the whole will, appears with reasonable certainty to have been his intention.'
"It is a rule of mere construction, which the court cannot apply if the context excludes it. Valentine v. Fitzsimons, (1894) 1 I.R. 93.
"The rules of construction that the word `heirs' in a will is usually construed to mean those who are such at the time of the testator's decease, and that estates created by devise are to be held to be vested rather than contingent, must give way to the controlling rule of interpretation that the intent of the testator is to govern if it does not conflict with the rules of law."
A headnote of Carr v. New England Anti-Vivisection Society,234 Mass. 217 (125 N.E. 159), reads:
"In the construction of a will, the general rule, that, where there is a limitation over after a life estate (in the instant case after termination of the trust) to a class designated as the heirs at law of the testator, such heirs at law are to be determined as of the time of the testator's death, is not to be followed if it defeats the intention of the testator."
Thus on the record in the instant case it must be determined whether by the terms of the testamentary trust the trustee took title in trust to the assets of the estate, and as bearing upon the determination of that issue it must be ascertained what was the meaning and intent of Mr. Burt by his use of the words "my legal heirs" in paragraph 20 of his will. In will cases the primary rule of construction and the primary function of courts is to ascertain from the four corners of a will the intent of the testator and, if legally possible, that intent must prevail.Kirsher v. Todd, 195 Mich. 297; Michigan Trust Co. v.Driver, 270 Mich. 698. The Burt will discloses the following.
(1) That the testator when he made his will fully had in mind each of those persons who would have taken his estate had he died intestate. He named each of them in his will. But he did not give by his will to any of them direct title to any part of his estate. Instead, for each of them he provided substantial annuities — $30,000 for his only living son, $5,000 for each of his four daughters, and $5,000 for the widow and $2,000 to each of the three daughters of testator's deceased son, Charles W. Burt. For reasons with which we have no concern, testator by a codicil revoked the legacy at first provided
for his daughter Marion, and thus excluded her from participating in his estate, unless she should be living at the time of distribution.
(2) By his will the testator provided for payment of annuities out of the corpus of his estate, if the income proved inadequate to make such payment.
(3) Paragraph 16 provides specifically for termination of all annuities upon the expiration of the trust; not that the trust should terminate upon the expiration of the annuities.
(4) It is somewhat significant that by paragraph 17 of his will the testator attached spendthrift trust provisions to each of the provided annuities.
(5) The will fully empowered the trustee "to sell, convey and lease" all or any portion of the testator's estate (excepting the Minnesota iron ore lands which are no longer a part of the estate), and to invest and reinvest any funds of the estate.
(6) As just above indicated, the trustee was not given power to dispose of the Minnesota iron ore lands; and the fair inference is that the testator did not intend that anyone having an interest in his estate should have the right to dispose of the Minnesota lands until the time came for distribution of testator's real estate holdings.
(7) Then as to the duration of the trust the testator in paragraph 20 of his will provided as to his real estate holdings it "shall continue for and during the period of the lives of my two grandsons, Wellington Burt Hay and Wellington R. Burt;" and as to testator's personal property he provided: "But all personal property shall continue in the trust for 21 years after the death of my last surviving grandchild that shall be living at the time of my death."
Each of the above testamentary provisions, especially the one last above noted, is, to say the least, persuasive of the conclusion that the testator did not
intend to leave his estate to the persons who were his heirs at the time of his death; and taken collectively the above noted aspects of the will seem decisive of that conclusion, especially as no provision of the will leads at all convincingly to an opposite conclusion. We think it clearly follows that, reading the will as a whole, the testator in using in paragraph 20 of his will the expression "my legal heirs," meant those persons who would be his heirs at law at the termination of the respective phases of the trust.
If it were deemed at all necessary, it might be noted as bearing further upon the above phase of this litigation that the record in the instant case is somewhat unusual in the following particular. After settlement of a prospective contest of the will it was admitted to probate in August, 1920, the estate was probated, its assets assigned to the trustee under the will, and the trustee continued thereafter to execute the trust for more than 20 years prior to the commencement of the instant suit; and in all that time appellants herein or those with whom they are in privity acquiesced in the execution of the trust as herein construed. And during that time appellants who participated in various legal proceedings concerning the Burt estate were represented by able counsel. It is a fair inference from this record that during the above noted term of years appellants acquiesced in the construction of the will for which defendant-appellees now contend. In our view of the record we consider it unnecessary to pass upon the legal consequence of the order of assignment made in the probate court following the executor's final account, wherein the order, from which no appeal was taken, provided:
"That all the rest, residue and remainder of the assets of the estate, real and personal (as modified by the settlement agreement), * * * be and the
same are hereby assigned and distributed to the said Second National Bank of Saginaw, Michigan, as trustee under the provisions of the trust contained in and established by the said last will and testament of said Wellington R. Burt, with full power to handle, administer and dispose of the same according to the terms and provisions of said will as modified by said settlement agreement, under the authority and direction of this court."
However, I am in accord with my Brother's statement concerning the probate court's order of assignment to the trustee wherein he says:
"By that order the probate court adjudicated the trust established by Mr. Burt's will to be a valid trust. Such order is not subject to collateral attack. Chapin v. Chapin, 229 Mich. 515. The trust is thereby adjudicated to be a lawful trust. Plaintiffs cannot be permitted to treat the trust otherwise."
But it may be noted appellees further contend that the above order assigning the assets of the estate under the will to the trustee vested title to such assets in the trustee and is resjudicata of that phase of this litigation. We are about to dispose of that issue on other grounds.
In the light of the construction of the will, as above indicated, it remains to be determined whether, notwithstanding the will does not contain words specifically vesting title to testator's estate in the trustee, title thereto as a matter of law did vest in the trustee, or whether it vested absolutely or as a contingent or defeasible title in those persons who at the time of the death of Wellington R. Burt were his heirs at law. This phase of the law has been considered by numerous text writers and courts of last resort. Without attempting to exhaust the field of authority, we deem it sufficient to note the
following. We think it must be held that the following authorities are applicable to the instant case in consequence of the terms of the will which in its general effect, subject to final distribution, gave to the trustee the power during the term of the trust to completely control the management, use and sale of the assets of the estate (with the exception of the Minnesota iron ore lands which are no longer a part of the estate) as the testator himself, had he continued to live, could have done, subject only to payment of the annuities provided in the will. Under such circumstances, in view of the authorities about to be noted, it must be held that under the terms of the Burt will title to the corpus of his estate, as a matter of law, vested in the trustee.
"If the will, when taken as a whole, shows an intention to devise or bequeath property to a trustee, full effect will be given to such intention although the will contains no express words of devise or bequest." 3 Page on Wills, 3d (Lifetime) Ed., p. 520, § 1189.
"If he (testator) has named a person in that instrument and has directed him to carry out all or a portion of the provisions which have been made for others therein, and the person thus named cannot execute such provisions of the will, except the legal title to the property shall be vested in him as trustee, then that person will be a trustee by implication, though there may have been no direct devise of the legal title to him and the word `trustee' or `trust' was not used." 2 Underhill on Wills (1900 Ed.), p. 1111, § 781.
Similar statements of the law will be found in 1 Perry on Trusts Trustees (7th Ed.), p. 549; 2 Schouler on Wills, Executors and Administrators (6th Ed.), p. 1519; and Thompson, Construction of Wills, §§ 560 and 564.
"It is not essential that the words `trust' or `trustee' should be found, nor that there should be a direct devise in terms to the trustee. * * * It is sufficient if the intention to create a trust under the statute can be fairly collected from the instrument, and what is implied from the language used is, as in other instruments, deemed to be expressed.
"The will of Mr. Striker did more than grant to his executors a power. It created a trust estate vested in them as trustees. Such a result necessarily follows from its terms." Striker v.Daly, 223 N.Y. 468 (119 N.E. 882).
Another decision in a case having a quite similar legal aspect is reported in Woodward v. James, 115 N.Y. 346 (22 N.E. 150). Speaking of the widow of deceased, who was named as executrix, the court said:
"And she, as executrix, was to have the management, direction and disposition of the property and income `as devised.' She was to have its management and direction. That involved the collection and receipt of the income and rents and profits of the estate, the investment of its funds and the leasing of its lands. It involved also the payment by her, out of the income, of the charges existing and thereafter to accrue during her life. She was to have the disposition of the property `as devised,' that is, in accordance with the provision of the will, and so the duty was confided to her, as it seems to me, of ascertaining and paying over every year during her life the balance of the income which might be due to the heirs.
"We are of the opinion that the authority and duty thus conferred and imposed upon the widow respects the whole estate and requires that the legal title should be vested in her, as trustee, for the term of her life. It is true that the testator did not, in direct words, devise to her such an estate, or use the expression `trusts' or `trustee.' That fact is one to
be noted and weighed, but does not prevent the creation of a trust by implication where the exigencies of the situation require it, and such an intention is indicated."
The supreme court of Massachusetts has said:
"Where there is no express devise to the trustees, it must appear that it is the intention of the testator that they shall take an estate, and where from the nature of the duties to beperformed, it appears that the taking of an estate is necessary, the intention of the testator will be presumed." Fay v. Taft, 66 Mass. (12 Cush.) 448, 450.
In the instant case the testamentary trustee was expressly given the power to invest and reinvest the funds of the estate and to dispose of real property of the estate. Hence a headnote to the case of Booth v. Krug, 368 Ill. 487 (14 N.E. [2d] 645, 117 A.L.R. 1193), is pertinent to the instant case. The Illinois headnote reads:
"The presumption against intestacy is so strong that courts will adopt any reasonable construction of a will to avoid it, and it cannot be said there is a partial intestacy because the testator did not specifically devise his real estate to his trustees where the concluding paragraph of the will names certain parties as trustees and executors `to carry out and execute the provisions of this will.'"
In Webster v. Thorndyke, 11 Wn. 390, 398 (39 P. 677), the court said:
"In our opinion the intention of the testator can be gathered from the language used (in the will), and, if it can, it is the duty of the court to see such intention is given effect. The appellants call attention to the fact that there are no technical words which show an intention to pass the title in the real estate to the executor or to any other person. This is
probably true, but the fact that such words are not made use of is immaterial, if the intent to pass the title is apparent. This intention may not clearly appear from any one clause or provision, but we think it does appear from the language used when construed as a whole."
Again in Sherlock v. Thompson, 167 Iowa, 1 (148 N.W. 1035, Ann. Cas. 1917 A, 1216), the court held:
"Upon the proposition * * * that, where a trust is intended, the courts will honor it although words of devise in trust are lacking, and that equity does not allow a trust to fail for lack of a trustee holding legal title, see * * * (numerous cases cited)."
See, also, Estate of McCray, 204 Cal. 399 (268 P. 647);Ryder v. Lyon, 85 Conn. 245 (82 A. 573), which together with numerous other cases which might be cited are in accord with the holdings in the authorities above noted.
If, as must be done, the will in the instant case is read and construed as a whole, and consideration given to the powers and duties of the trustee, the inevitable conclusion follows that title in trust to the assets of the Wellington R. Burt estate vested in the trustee. Appellants' contention to the contrary is not tenable.
In arriving at the above conclusion I have not overlooked the supposititious reasons which have led my Brother to an opposite conclusion. We are not concerned with the advisability or wisdom of the testator's will. If, as we hold the provisions of the will are within the requirements and limitations of law, the testator's disposition of his estate, as it appears from the four corners of his will, must be sustained.
My Brother comments on paragraph 22 of the will wherein it is provided the trustee and executor shall
make yearly reports in detail to the testator's son, George R. Burt, as to the condition of the estate. From this it appears to be reasoned that the testator could not have had in mind the continuance of the trust as to real estate until the death of the survivor of two named grandsons, and as to the testator's personal property until 21 years after the death of the last survivor of testator's grandchildren who were in being at the time of his death. To so hold is to delete from the will the definitely expressed provisions of paragraph 20. And further, if the will were so construed, it would deprive from participation in the ultimate distribution of this estate the persons whom the testator definitely selected as his ultimate beneficiaries.
In view of this circumstance I cannot agree with my Brother wherein under his holding he says "All the provisions of the Burt will are given effect by applying the established rule of property heretofore spoken of." And obviously it would be a violent assumption that the testator who, as my Brother states, is assumed to have been "a man of business acumen," did not thoroughly appreciate there was little probability that his son, George R. Burt, would outlive the last of testator's grandchildren in being at the time of his death. Nor do I find any particular force in my Brother's reasoning that the estate will suffer unless there is someone in being at all times who has a present interest in the estate. As a matter of fact that condition has prevailed since the death of George R. Burt in 1930, and we know of no complaint of maladministration of the estate in the meantime. And it is a far-fetched assumption that there will come a time when there will be no living person who does not have at least a prospective personal interest in the estate. In the present case there are 20 or more appellants who are asserting
such an interest. Nor can it be said that such prospective or contingent interest is remote. For example, the real estate holdings of the Burt estate might be subject to distribution in the very near future upon the death of the survivor of the two grandsons named in paragraph 20 of the will.
It is quite unnecessary to review or comment upon the holding in the numerous cases cited in my Brother's opinion, because it may be admitted that such holdings are sound in law when applied to a proper factual background; but they are not applicable to the instant case in view of the construction that we herein place upon the will of Wellington R. Burt, deceased. For example, in arriving at the conclusion that those who were the legal heirs of Wellington R. Burt at the time of his death "took vested estates," Justice REID relies much upon our decision in ReShumway's Estate, 194 Mich. 245 (L.R.A. 1918 A, 578). But that case materially differs from the instant case because in the Shumway will there was no semblance of a provision whereby the testator sought to create a trust charged with the management and control of his estate, the sale of real property, the investing and reinvesting of estate funds, or the paying of numerous annuities presumably extending years into the future, as in the instant case. The foregoing comment relative to the ShumwayCase is likewise applicable to Rood v. Hovey, 50 Mich. 395,Porter v. Porter, 50 Mich. 456, and In re Patterson'sEstate, 227 Mich. 486, cited and relied upon by my Brother in reaching his conclusion.
Since, as we hold, that under the Burt will those who were his heirs at law at the time of his death did not take a vested title in the assets of the estate, but on the contrary title to those assets by the terms
of the will vested in trust in the trustee, cases cited by my Brother, wherein a different factual condition existed, are not at all controlling herein. Instead, the following applies:
"A consideration of our own cases establishes the rule that where upon an examination of the will it clearly appears that it was the intent of the testator that the estate should vest only on the happening of a particular event such intent will govern."In re Churchill's Estate, 230 Mich. 148.
Headnotes of the quoted case read:
"Although the vesting of estates at the earliest possible moment is favored in the law, said rule must not be applied to frustrate the manifest intent of a testator in disposing of his estate by will.
"In the construction of a will, the intent of the testator must govern, and when the intent is found from the four corners of the instrument the duty rests upon the court to effectuate it if it may lawfully be done."
Justice FELLOWS, who wrote for the Court in the ChurchillCase, cited Fitzhugh v. Townsend, 59 Mich. 427 and In reLamb's Estate, 122 Mich. 239, which are in full accord with our quotation from the Churchill Case. To the same effect see, also, Plant v. Weeks, 39 Mich. 117; Garman v. Hawley,132 Mich. 321; and Hunter v. Hunter, 160 Mich. 218.
The plain, and we think the inescapable, intent and purpose of Wellington R. Burt's will was quite impossible of fulfillment except by means of a trust wherein title to the estate assets was vested in the trustee. We are convinced that such was his clear intent. It is a fair inference from the will of Wellington R. Burt that in postponing distribution of his large estate he sought ultimately to do the greatest
good to the greatest number of his descendants, rather than to greatly enrich those persons who were his heirs at law at the time of his death; and as to each of whom he made ample provisions by way of substantial annuities.
Careful consideration brings us to the conclusion that by the terms of his will Wellington R. Burt vested title in trust to the assets of his estate in the trustee named in the will; that as yet none of appellants have become possessed of a vested right in the remainder of the estate at the termination of the trust, and that distribution of the real estate holdings should be made, under the terms of the will, upon the death of the survivor of the two grandsons named in paragraph 20 of the will, such distribution to be to the then legal heirs of Wellington R. Burt. Further, that the distribution of the personal assets of the estate shall be made as of the time of the death of the last surviving grandchild of Wellington R. Burt who was in being at the time of his death, and such distribution shall be among the then legal heirs of Wellington R. Burt.
I am in accord with my Brother's holding that the decree of Judge Snow entered in the circuit court in chancery of Saginaw county in 1920 "contains no express or implied adjudication that the legal heirs (of the Burt estate) were to be determined at the termination of the trust." I also agree, contrary to appellants' contention, that notwithstanding the fact by operation of law the Minnesota property "was taken out from under the operation of the will," the Burt will was not thereby rendered "void in toto." In view of our holding herein, we deem it unnecessary to comment upon the merit of appellees' contention that appellants are barred from obtaining relief in the instant case in consequence of laches, waiver or estoppel.
In addition to the issues hereinbefore considered, appellants present the following: "May the mortgage trust be terminated and distributed?" The appellants contend the answer should be in the affirmative. The circumstances which, after the death of Wellington R. Burt, gave rise to the so-called mortgage trust and the rights and obligations incident thereto are in such great detail and so complicated that we deem it unnecessary to attempt to review them herein. It is sufficient to note that appellants' claim to relief in this particular, is urged on the assumption that they have a vested remainder in the assets of the Burt estate and are presently entitled to have such assets distributed. Since in that regard our holding herein is adverse to appellants, it follows they are not entitled to relief incident to the trust mortgage transaction.
The decree entered in the circuit court dismissing plaintiff's bill of complaint is affirmed, with costs to appellees.
CARR, C.J., and BUTZEL, SHARPE, and BOYLES, JJ., concurred with NORTH, J. DETHMERS, J., did not sit.