Weeks v. Pierce

181 N.E. 231, 279 Mass. 108, 1932 Mass. LEXIS 930

• Court: Massachusetts Supreme Judicial Court
• Decided: April 22, 1932
• Status: Published

Opinion

Crosby, J.

This is a petition in equity, filed by the trustees under the will of John H. Pierce, praying instructions with reference to a present distribution of a portion of the principal of the trust to the residuary legatees, and with reference to certain accumulated income. The will and a-codicil are printed in the record. After making several specific bequests, including a gift to his daughter, Elsie Pierce, the testator gave all the rest, residue and remainder of his estate to trustees upon the following trusts: (1) an annuity of $300 a year to each of three persons; (2) “And in the event of the distribution of the whole or any part of the principal of said trust fund as hereinafter provided, I direct my said trustees to first reserve a sum adequate in their judgment to produce an annual net income sufficient to pay said annuities and also to pay said bequests payable out of the principal of my said estate. Any portian of the same not required for the aforesaid purposes is to fall into the residue of my estate and be disposed of as hereinafter provided”; (3) to pay to the testator’s daughter “ two undivided third parts of the remaining net income” of the estate in quarterly payments, and also to give her the use and occupation of his homestead estate and of all his real estate in the town of Lincoln for the term of her natural fife. In the event of her decease testate, then to pay over a sum not exceeding $50,000 out of the principal of the trust estate to such persons as said daughter by her last will shall devise, bequéath and appoint; (4) to pay to the testator’s son, Robert, “one undivided third part of the net income of my said estate remaining after the bequests and annuities aforesaid preceding that to Elsie Pierce in equal quarterly payments for and during the term of his natural life . . (5) upon the death of bis son, leaving a widow, to pay her $3,000 a year during the term of her fife, and annually to divide $10,000 equally among the children of Robert living at his decease until the youngest child shall have attained the age of twenty-one years, and thereupon to divide the sum of $100,000 of the principal of the estate equally among the children or issue of Robert living at his decease “according to the right of representation”; (6) upon the death of the testator’s daughter he gave his real estate in the town of Lincoln to the inhabitants of that town, and in addition thereto an annual income of $3,000 for the maintenance of the same to be used for a hospital and park for the use and enjoyment of the inhabitants of the town forever. “A sum requisite in the judgment of my said trustees to produce said annual income of Three thousand dollars is to be reserved by my said trustees and their successors out of the principal of my estate and invested by them in accordance with the rules laid down in this will, and the income paid to the Inhabitants of Lincoln in equal quarterly payments forever”; (7) “All the rest, residue and remainder of my estate, including all the sums reserved to support the several foregoing annuities and bequests and not expended therein, I give, devise and bequeath in equal proportionate parts to” seven named charities, the principal to be invested and the income thereof to be expended for the general uses and purposes of said charities.

The testator’s daughter died in 1926, and by her will exercised the power of appointment. The trustees thereafter had a reappraisal of the personal estate, and set aside $22,000 to support the three annuities of $300 each, and then divided the remainder of the personal property into two parts. One part consisted of one third of the remaining personal property, the income from which has been paid to the testator’s son. From the second part, consisting of two thirds of the remaining personal property and termed by the trustees the “Main Trust,” was paid $50,000 to Elsie’s appointee, and the remainder of the two-thirds fund, approximately $64,000, was considered as set apart for the purpose of providing for the payment of the $3,000 annually to the inhabitants of Lincoln.

It appears that from the sums set apart for the payment of the several amounts there has been a surplus of income. One third of the surplus income from the $22,000 fund, and one third of the income from real estate in New York which belongs to the estate and never has been divided, have been paid to Robert. Two thirds of the surplus income from the $22,000 fund, .the entire surplus income from the $64,000 fund, and two thirds of the income from the New York real estate have been accumulated. According to the petition, there remained in the hands of the trustees on July 15, 1927, a balance of income amounting to $5,139.24.

The decree of the Probate Court instructed the petitioners not to make any distribution of principal to the charities who are the residuary legatees “until the youngest surviving child of said Robert Morris Pierce shall have attained the age of twenty-one years or until the death of the widow, if any, of said Robert Morris Pierce, whichever event last may happen, or until the further order of this court . . . .” The trustees were further instructed and directed to pay to Robert in his several capacities, namely, (1) as legatee under the will, (2) as one of the two heirs-at-law and next of kin of the testator, and (3) as assignee of the residuary legatees of Elsie Pierce, who was the other heir-at-law and next of kin of the testator, in regular quarterly payments during his life, the entire net income of said estate, including accumulations of income and income thereon, accruing upon said estate from and after the death of Elsie Pierce, after reserving a sum sufficient to secure the payment of all the annuities and bequests. They were further instructed and directed to pay to Robert quarterly during his life all the surplus income, if any, accruing from the sums reserved to pay,the annuities. The guardian ad litem and the seven charities named in the residuary clause of the will appealed from the decree.

1. The first question of law presented by the record for decision is whether or not any of the principal of the trust should be distributed at this time. It is a well settled rule that specific gifts in a will are to be paid before any distribution is made to residuary legatees. Treadwell v. Cordis, 5 Gray, 341, 348, 352, 358. Richardson v. Hall, 124 Mass. 228, 233, 234. Porter v. Howe, 173 Mass. 521, 526. Old Colony Trust Co. v. Smith, 266 Mass. 500, 501. The only gifts that can possibly be said to be specifically unprovided for are those to Robert’s wife and children, which are payable on the death of Robert. It is the contention of counsel for the charities named in the residuary clause that it was the intention of the testator, as shown by the language of the will, that these gifts should be paid out of the one third of the personal estate reserved on the books of the trustees for the payment of Robert’s interest. But it is by no means certain that the one third of the principal so reserved will be sufficient to pay the annuities amounting to $13,000 and the $100,000 bequest which are to become payable in the future, especially if Robert’s widow survives after his youngest child becomes twenty-one years of age. The present case is entirely different from that of Williams v. Thacher, 186 Mass. 293, and Welch v. Episcopal Theological School, 189 Mass. 108, where a partial distribution was ordered before the termination of the trust. See also Sears v. Hardy, 120 Mass. 524, and Sears v. Choate, 146 Mass. 395, which are also distinguishable in their facts from the case at bar. There is no doubt as to the power of this court entirely to terminate a trust, or to terminate it as to certain property and continue it as to other in a proper case. Unless, therefore, it is plain that it was the intention of the testator from the words of the will that there was to be a physical segregation of assets, and that the amounts to become due after the death of Robert are to be paid solely from the sum set aside for his benefit during his lifetime, there can be no distribution of any of the principal at this time. To construe the will differently would require us to disregard the testator’s intention as expressed by language that seems to be certain.

The will provides that the trustees are to pay to Robert “one undivided third part of the net income of my said estate remaining after the bequests and annuities aforesaid preceding that to Elsie Pierce ... for and during the term of his natural life . . . .” It further provides that upon the decease of Robert leaving a widow living at his decease, “then to pay over the sum of Three Thousand dollars . . . per year ... to the widow ... for and during the term of her natural life,” and that upon the death of Robert $10,000 per year is to be divided among his children. It is not specified that either of these last two bequests is to be paid out of any particular fund or part of the estate. The bequest of $100,000 to the children of Robert is to be paid “out of the principal of my estate.” There is nothing to indicate that any sums are to be set apart for the payment of these bequests. In fact it is a reasonable inference that no sums are to be set aside, for in other parts of the will the testator showed that he well knew how to make a segregation of assets when he desired to do so, and the omission to do so indicates that, with reference to these gifts, the entire remaining estate should be held as security for their payment.

It cannot rightly be held that there should be a segregation of any part of the trust fund in the absence of a clear intention to that effect .on the part of the testator. He seems to have béen a man of intelligence whose will expresses clearly the disposition which he desired to make of his entire estate. The fact that the trustees have reserved one third of the personal' estate on their books cannot affect the intention of the testator as expressed by his will. Parkhurst v. Ginn, 228 Mass. 159, 168. Renwick v. Macomber, 225 Mass. 380, 385, and cases cited. We find no intention expressed in the will that the gifts payable on Robert’s death are to be paid only out of one third of the principal. It follows that the trustees cannot be so instructed. It is plain, therefore, that there should be no distribution of principal to the seven charities at this time

2. The second question is whether or not the accumulated income from the estate not needed for the payment of any legacies now due should be distributed either to the charities, as a part of the residue of the estate, or to Robert, the next of kin, as intestate property. It appears from the report and from the testimony of one of the trustees that the trustees have been paying to Robert the income from one third of the total principal remaining at the death of Elsie, after first setting aside $22,000 to pay annuities given before the bequest to Elsie, one third of the income from the New York real estate, and one third of the surplus income from the $22,000 annuity fund.

It appears that Robert is now receiving the income from one third of the principal, which was set aside for him by the trustees upon the death of Elsie. Whether or not Robert should receive one third of the surplus income from the $22,000 fund set up to provide for the three annuities depends upon whether the annuities for which the fund was directed to be set aside are gifts “preceding that to Elsie.” Although there are different possible interpretations of the language used by the testator, we are of opinion that the true construction is that Robert should receive one third of the surplus income received from the $22,000 fund. The direction to set aside a sum to pay the annuities is only in the event of the “distribution of the whole or any part of the principal of said trust fund as hereinafter provided.” It is manifest that this means only upon the death of Elsie or Robert. It results that the surplus income from the $22,000 fund should be divided into thirds, one of which is to be paid to Robert, and the remaining two thirds are to be disposed of as hereinafter directed.

The term “surplus income,” hereafter referred to, includes two thirds of the surplus income from the $22,000 fund, all of the surplus income from the $64,000 fund, and two thirds of the total net income from the New York real estate.

“The general presumption is that the testator intended to dispose of his entire estate and not to die intestate as to any part of it ... . And the intention of the testator is to be ascertained from a consideration of the provisions of the will read together, and not from isolated portions.” Gardiner v. Pelton, 260 Mass. 577, 582. Towne v. Weston, 132 Mass. 513. Jones v. Gane, 205 Mass. 37, 43. The question is whether there is any language in the will that shows that the surplus income should not become a part of the residue. We find nothing to that effect, and are of opinion that surplus income is not intestate property, but is a part of the trust property, and is eventually to be distributed in accordance with the residuary clause of the will. Brown v. Wright, 168 Mass. 506. Welch v. Hill, 218 Mass. 327. Old Colony Trust Co. v. Forsyth Dental Infirmary for Children, 271 Mass. 511. The residuary clause reads as follows: “All the rest, residue and remainder of my estate, including all the sums reserved to support the several foregoing annuities and bequests and not expended therein, I give, devise and bequeath in equal proportionate parts” to the seven named charities. It is apparent from this clause, and from the whole will, that the testator did not intend that any of his property should be disposed of as intestate property. If without the clause “including all the sums reserved to support the several foregoing annuities and bequests and not expended therein,” the surplus income would fall into the residue as indicated by the cases previously cited, the presence of that clause does not exclude surplus income from the residue. The cases of Sears v. Hardy, 120 Mass. 524, and Loring v. Dexter, 256 Mass. 273, and Abbott v. Williams, 268 Mass. 275, are distinguishable from the case at bar.

Although this surplus income will eventually become a part of the residue, it does not follow that it should be distributed at the present time. The same rules apply as in the case of the principal hereinbefore set forth. Notwithstanding the $100,000 given to Robert’s children after the death of Robert is directed to be paid out of principal, and assuming without deciding that the surplus income could not be used to satisfy this bequest, there is no direction as to the source from which the annuities to Robert’s wife and children, amounting to $13,000 yearly, are to be paid. As it is not certain that there will be a sufficient sum out of the estate to pay these gifts there can be no distribution of residue at this time. The surplus income should be retained by the trustees and kept separate from the principal to make sure that there will be sufficient assets of the estate to pay these annuities. See Welch v. Hill, 218 Mass. 327, 329; Porter v. Howe, 173 Mass. 521; Old Colony Trust Co. v. Smith, 266 Mass. 500.

3. The only other question for decision relates to the admissibility of certain evidence offered in the Probate Court by counsel for the Boston Provident Association, one of the respondents, and excluded by the judge. This respondent offered to prove by one of the trustees “that the testator, at the time the will was drawn, anticipated that he had a large enough estate to cover the payment to his daughter’s appointee and to the inhabitants of Lincoln out of two thirds of the residue of the trust created in the will and that he anticipated that the one third from which Robert received a life income would be sufficient to pay his children their legacies and his widow her annuity.” This offer was excluded subject to the respondent’s exception. We assume that the offer of proof related to a conversation which the witness had with the testator respecting his will. The language of the will is free from ambiguity, it speaks for itself, it cannot be changed or modified by statements made by the testator as to his intentions or what he “anticipated” respecting the carrying out of its provisions. What he may have intended or anticipated is to be gathered from the will itself in the light of the contemporaneous circumstances. Denfield, petitioner, 156 Mass. 265. Gould v. Chamberlain, 184 Mass. 115, 121. Child v. Child, 185 Mass. 376. Lathrop v. Merrill, 207 Mass. 6. Moffatt v. Heon, 242 Mass. 201, 205, and cases cited.

It results that the decree should be modified by directing that two thirds of the surplus income from the $22,000 fund, the entire surplus income from the $64,000 fund, and two thirds of the total income from the New York real estate, be accumulated and held under a separate account until after the death of Robert’s widow, and until Robert’s youngest child reaches the age of twenty-one years, at which time the accumulated income, if any, together with the unexpended principal, should be distributed to the seven charities in actiordance with the terms of the will; as so modified the decree is to be affirmed. Costs as between solicitor and client are allowed to be paid out of the fund; the amount thereof to be determined by a judge of the Probate Court.

Ordered accordingly.