Townsend v. Wilson ( 1904 )

The questions propounded for our determination arise out of the conflicting claims of the executors in their individual capacities, of the beneficiaries specifically named in article first, and of the children of Cornelia and those who represent their interests.

The claim of Maria Hoadley Bradley to one half of the clear net annual income of the estate held in trust, without deduction on account of payments for the support and maintenance of Heli Hoadley, is in accordance with the manifest intention of the testator as expressed in the will.

The provision for the support and maintenance of Heli Hoadley should be made out of the remaining one half of the net income. If said one half shall at any time prove insufficient for the purpose, so much of the principal of the trust fund should be used as may be necessary to fill out the measure of the provision made.

The claim of the executors — that any balance of the net annual income remaining unexpended after the payments of one half thereof to Maria Hoadley Bradley and for the support and maintenance of Heli Hoadley belongs to them in their individual capacities by virtue of the provisions of article first — is unwarranted. On their behalf it is contended, that the language of this article expressing the gift to the executors as of "all my estate" and "in fee simple," the powers conferred, the obligation as to Heli's support imposed, and the absence of any gift of said balance or provision for its accumulation, disclose an intention on the part of the testator to vest in them as individuals a beneficial title thereto.

The executors are correct in saying that the intention of the testator as expressed in the will must be controlling. But there are serious obstacles in the way of arriving at the expressed intention contended for. In the first article the gift in trust is made, and most of the objects of the trust are therein found. The gift is made to "my executors," and not to persons named. It is declared to be "in trust," and it is later provided that the property be held "on the following trusts," which are specified, and no beneficial interest to the executors or the persons who are executors is therein expressed. These are the salient features which presented themselves in Fairfield v. Lawson, 50 Conn. 501. In that case there was a gift of real estate to "my executor." The gift was not in this connection expressed to be in trust, but it was provided that the real estate be sold and the proceeds held in trust by the executor for purposes named. The trust failed, and the claim was made that the executor took a beneficial estate. The court, commenting upon the fact that the bequest was not to Fairfield by name but to the executor, and that it was provided that the proceeds were to be held in trust by him, said that the language used in these regards indicated that the testator intended to stamp all the property with a permanent trust, and held that the executor took nothing personally. The pertinency of this conclusion to the situation in the present case is emphasized by the fact already noted, that the trust feature of the gift is in the Hoadley will twice stated and thus more plainly stamped upon it. "If a testator expressly says, he gives upon trust, and says no more, it has been long established, that the next of kin will take." Lord Eldon in Morice v.Bishop of Durham, 10 Ves. Jr. 521, 526.

But this is not all. Article second provides that in the event named the trust should cease and the trust estate belong, absolutely and in fee simple, one third to each of the executors and the other third to the children of the testator's sister Cornelia. This provision is scarcely compatible with the theory that the testator intended, in the former article, to make a gift in fee simple to the executors subject only to certain trust charges. The relation to each other of the two articles, and their provisions, make it apparent that the testator intended, in the first to create and define a trust and nothing more, and in the second to provide for its termination and the gift over.

Much reliance is placed by the executors upon the absence of any provision for an accumulation of unexpended income. Over against this might be set the absence of any express gift of such income to the executors. But that aside, the absence of an accumulation provision is only one of several indications of the testator's intention, and, in view of the character and contents of the will, one by no means as significant as those of a contrary import already pointed out.

We are therefore of the opinion that the executors in their individual capacities are not entitled to receive the unexpended balance of net income as it is annually determined: that all such balances should accumulate in the hands of the trustees and be added to the principal of the trust fund; and that the net income for the purposes of division shall be regarded as that arising from the trust fund as it may have been so augmented.

The questions as to the persons who are entitled to receive any unexpended balance or balances of net income, and as to the time or times when the same are to be paid over, have already been answered by implication. As all such balances become a part of the trust fund and are to be divided as such, the provisions of the will which are not in controversy control the time and manner of division.

All the parties concede that the $1,000 proceeds of the bond were rightfully applied in reduction of the $4,277.77, due from principal to income. In so far as this application helps to restore the income account to its true figures for the purposes of its division, it is of course proper and right. All of the payments made out of income which should have been made out of principal, must be treated as income in the ascertainment of the amount Maria Hoadley Bradley is entitled to receive as her share of net income. This share she is entitled to receive. If it has not already been paid her, a matter concerning which the record is silent, the money must be forthcoming for that purpose. The provision for the support of Heli must be met, if it has not. In so far as these demands remain to be satisfied, the necessary funds should come first out of the $1,000 on hand in cash, and any balance from the only remaining source, to wit, the real estate, which, although it now stands in the principal account, represents income to the amount of $3,277.77.

If the exigencies of the situation as indicated require the raising of money out of said real estate, the will contains sufficient authority to the executors to sell sufficient of it to obtain the required funds, if they shall deem such sale necessary for the interest of the trust. This testamentary authority to sell, standing alone and unaided by other provisions of the will, does not, however, either involve or imply authority to mortgage. O'Brien v. Flint, 74 Conn. 502;Freeman v. Bristol Savings Bank, 76 id. 212. The only power to mortgage contained in the will is one limited in its purpose to the improvement of the real estate itself. General Statutes, § 253, provides a way in which real estate held in trust may, through the action of the Court of Probate, be mortgaged, whenever such mortgage will, in the opinion of the court, best promote the interest of the beneficiaries of the trust.

The Superior Court is advised to render judgment in accordance with the views herein expressed.

No costs in this court will be taxed.

In this opinion the other judges concurred.