Chestnut Street National Bank v. Fidelity Insurance, Trust & Safe Deposit Co.

Opinion by

Mr. Justice Gbeen,

It was conceded by the learned court below, and we think it must be regarded as settled law, that the writings in question in this controversy must be considered as being of a testamentary character, and therefore as revocable instruments. In Frederick’s Appeal, 52 Pa. 338, the settlor executed a deed of trust by which the income of the property conveyed was to be paid to himself during life, and the principal was to be divided among his nine children after his death. By another deed subsequently executed he revoked the first deed of trust and made a will leaving all his property to two of the nine children. In the litigation which resulted the lower court awarded the fund to the trustee for the nine children, but on appeal to this Court the judgment was reversed. Woodward, C. J., delivering the opinion said: “ Now on the part of the appellant it is maintained that the deed was a mere power of attorney, an instrument of agency, and therefore revocable at pleasure, whilst upon the part of the appellees it is regarded as a voluntary trust on behalf of the children fully executed by a legal conveyance and therefore to be supported in equity. ... We are of opinion that the deed in question here was made for the grantor’s own personal convenience, that the .trustees were to account to him for all they did under the powers vested in them, and that no beneficial interest was to vest in his children until after his death. A disposition of property to take effect after the grant- or’s death is testamentary, and therefore revocable.” The same doctrine was enforced in Rick’s Appeal, 105 Pa. 528, where the deed of trust was made by a woman seventy-five years of age to her brother for all her property," in trust for her maintenance and support during- her life, and upon her death to be divided, among certain beneficiaries. Afterwards she executed a deed of revocation and filed a bill in equity against tbe trustee for a reconveyance to her of her estate. This Court held that the deed of trust was revocable because it was a purely voluntary conveyance, intended merely to promote the convenience and protect the interest of the grantor, and because the rights of third parties did not intervene, the. provisions for the benefit of third parties, which were not to take effect until the grantor’s death, being either testamentary, and hence revocable, or covenants for posthumous gifts, and hence without consideration.

In the present case these considerations appear to be directly applicable. During the life of Mrs. Bryant, the settlor, the entire income of the trust was to be paid to her, and the deed must be deemed to have been made for her own personal convenience and advantage. No other interests arose during her life, and none were to accrue until after her death. There was no clause of revocation in the deed, and her attention was not called to the fact of the omission of such a clause, nor to the desirability of its insertion in case she should wish to make a provision for the protection of any of her sons against possible creditors. We think the case comes within the doctrine, so well expressed and carefully considered, in the leading case of Russell’s Appeal, 75 Pa. 269, where the absence of a power of revocation was held to be sufficient, in connection with the other facts of the case, to wai’rant a decree setting aside a deed of trust on the ground of mistake. It cannot be doubted in the present case that the settlor, had she been advised of the necessity of a provision to protect her son’s interest against the demands of creditors, would have- insisted upon the insertion of such a provision in the body of the deed.

But it is not necessary to extend the discussion of.this branch of the case, because it is scarcely in controversy, and the learned court below held that the second deed made by the grantor, being of a testamentary character, was a good and valid revocation and change of the trust as established by the first deed. The court held that under the authorities all the instruments must be regarded as of a testamentary character, and that because the testatrix in her last will expressly confirmed the first deed made in February, 1885, she must be considered as having revoked thereby the provisions of the second deed.

We are unable to agree with this conclusion. The will was executed on November 19,1889. At that time her son, Willis L. Bryant, had become indebted to the Chestnut Street National Bank in a sum so large that, on December IT, following, the bank recovered a judgment against him for the sum of $13,458.75. The second deed of trust was made on February 21, 1887, and the very object of making it was to protect the share of this particular son, Willis L. Bryant, against the claims of any creditors of his, so that in no event could they acquire any part of his share, either of principal or income. It is instructive and convincing to quote in this connection the language of the second deed, to wit: “ And as to the remaining one third part of the corpus of the said estate, to hold the same for the use and benefit of her son, Willis L. Bryant, so however that neither the income nor principal shall ever under any circumstances be subject to anticipation or assignment by him, or to attachment or seizure under any judgment, decree or other legal process, at the suit of any creditor he now has or ever may have. And in the event of any attempt at anticipation, assignment, seizure or attachment, the right on his part to receive said income shall instantly cease and shall become the property of his wife and children, if any he have, or failing marriage or issue shall go to and become the property of his brother or brothers who shall be living at the time; and upon the further trust ” to pay over the principal at the death of Willis L. Bryant to his children, or, failing children, to his brothers or their children. It must be further observed that this second deed contained a recital of the first deed and its provisions, and then expressed the desire of all the parties to change it in the manner immediately thereafter described, and at the end thereof there was inserted the following provision: “ In all other respects the said indenture of February 11, 1885, is hereby expressly ratified and declared to be of binding and continuing effect.”

This second deed was a tripartite deed between Ellen A. Bryant, the grantor, of the first part, The Fidelity Insurance, Trust and Safe Deposit Company, the grantee and trustee,, of the second part, and the three sons, ultimate beneficiaries, of the third part. It follows that the complete transaction, after the execution of the second deed, consisted of the two deeds taken together and explanatory of each other, the first one being ratified and confirmed in the second in all respects except as to the change made by the second. They could not thereafter be regarded as two separate, distinct and independent instruments, but as a combined whole, intended and designed to become operative together. It follows that when the testatrix at a still later date, November 19, 1889, executed her last will and testament, and therein repeated almost word for word the very provision in favor of her son, Willis L. Bryant, and protecting his share against any possible creditors, present or future, as was contained in the second deed of trust, she fully intended him to have the same interest and protection as was given by the second deed. It is perfectly manifest that when she said in the third clause of the will, “ I confirm the deed of trust which I executed to the Fidelity Insurance, Trust and Safe Deposit Company on the 11th day of February, 1885,” she absolutely intended to confirm it as it was affected by the second deed, the two being parts of one whole. This is most manifest from.the language of the fifth clause of the will wherein she expressly repeats the provision contained in the second deed in favor of her son, Willis L. Bryant, and protecting his interest against his creditors. Even if the confirmatory words of the third clause and the words of the fifth clause are to be regarded as inconsistent with each other, the last expression of the will would have to be regarded as the controlling one, and would prevail against the first. But we do not regard them as inconsistent with each other and therefore cannot attribute to the confirmatory words of the third clause the effect of revoking the provision of the second deed in favor of the son Willis.

It is also manifest from the remaining words of the third clause next after the confirmatory words at the beginning of it, that the testatrix did not mean that the first deed of trust was to prevail against the will, because those words expressly provide for another change in the effect of the first deed. They make provision for the daughter, Mrs. Rothermel, that she shall have a share equal to the shares of the sons under the deed of trust. In every point of view we regard the will as not in antagonism with either of the deeds of trust, but ratber as confirmatory of the effect of both when considered as one whole. The assignments of error are all sustained.

The judgment of the court below is reversed and judgment is now entered against the plaintiff and in favor of the garnishee upon the answers filed, with costs.