305 Mass. 116 | Mass. | 1940
This case turns upon the construction of the will
The will was executed July 9, 1928. On June 29 of that year, ten days before the date of his will, the testator executed with The First National Bank of Boston an agreement creating a trust, of which the bank is now sole trustee. The testator, who is referred to in the trust agreement as the “Donor,” deposited with the bank certain life insurance policies and a “Note of Edmund A. Rothwell,” the respondent, for approximately $84,000. By the terms of the trust agreement the assets held under it were to be used for the payment of any debt of the donor and of taxes payable from his estate, to make loans to the donor’s executor, to purchase any mortgage upon real estate of the donor or of his wife, to purchase and hold as an investment any property belonging to the estate of the donor, and upon and after the donor’s death to pay certain annuities. It was further therein provided that such part of the trust fund as might remain after compliance with the foregoing provisions should be invested, and that “the income actually received by the Trustees from the said note of his . said son, or from securities bought with the proceeds received upon the collection of said note” should be paid over to the donor’s said son (the respondent), after assuming its proportionate part of the expense of administering the trust. Any balance of net income was to be paid to the donor’s wife, since deceased, during her life. Upon the de
The will of the testator, after dealing in its first and second paragraphs with matters not here material, contained in paragraph “Third” a proviso “that any and all of the gifts hereunder to my son Edmund A. Rothwell or to his issue shall be contingent upon his making payment of his note of approximately . . . $84,000, which I have assigned to The First National Bank of Boston under a trust agreement made with me, dated June 29, 1928; and in the event that for any reason said note shall not be enforceable against him, I direct that any gift hereunder to my son or to his issue shall be contingent upon the payment of the sum of . . . $84,000, plus interest from the date of the note herein referred to, to the Trustee for the time being under said trust agreement, dated June 29, 1928.” The same paragraph contained a further proviso charging against the respondent’s “interest hereunder” the total of all advances made by the testator to the respondent’s former wife to be paid by the trustees under the will “from the shares given to my said son or to his issue” to the trustee under the trust agreement. In this same paragraph “Third” the testator cancelled, annulled and forgave any advances, or loans to his children, “Except as above provided.” The fourth paragraph deals with household goods and the fifth with inheritance taxes. Then follows in the sixth to twelfth paragraphs inclusive the testamentary trust of the residue of the testator’s estate. It is as trustees under
At the hearing the respondent offered in evidence the record of a suit in the Superior Court brought by the trustees under the trust agreement against the respondent to enforce collection of the note for approximately $84,000. The respondent offered to show that in that suit findings were made that the respondent’s signature upon the note was procured “for the purpose of protecting his property from claims incidental to his divorce proceedings and upon the representation that it was not intended to evidence
It will not be necessary to determine whether the ruling of the judge excluding the record of the suit in the Superior Court was technically correct. We do not intimate that it was not. The petitioners’ admission that the note was held not enforceable and the bill dismissed would seem to have given the respondent the equivalent of the excluded record. At any rate this decision would be the same if we assume all that the respondent offered to prove in connection with the record. See Old Colony Trust Co. v. Third Universalist Society of Cambridge, 285 Mass. 146, 149, 150. We deal with the case on the assumption that the note was never legally enforceable, and that when it was made there was no legal indebtedness from the respondent to the testator.
We have thought it necessary to state at some length the tenor of the trust agreement and of the will in order that the contentions of the parties and the issue might be fully understood. The question is whether the trustees under the will should be allowed in schedule E of their account a credit of $4,058.19 paid by them out of income from the testamentary trust to the trustee under the agreement. This sum represented the respondent’s one third of the income under paragraph “Seventh” of the will, hereinbefore quoted. The authority to pay it to the trustee under the agreement must be found, if found at all, in the last sentence of paragraph “Seventh” of the will — “Any income payable to my son or to his issue shall first be
It follows from what has been said that the petitioners as trustees under the will and in accordance with paragraph “Seventh” could rightly pay the sums mentioned in the disputed item to the trustee under the trust agreement toward “interest due on the obligation” referred to in paragraph “Third.” The amount of “interest due” must have greatly exceeded the sum of the payments. The petitioners have therefore paid correct amounts to the person entitled to receive them, and there is no contention that these payments were not made at proper times. But the footnote attached to the disputed item of the account of the testamentary trustees describes these payments as having been “transferred” to the trustee under the agreement “to reduce the Principal of the demand note of said Edmund A. Rothwell held in said account” (i.e. in the trust under the agreement). There is no provision in the will for payment of the respondent’s share of income under paragraph “Seventh” of the testamentary trust to reduce the principal of this note. The provision is for application of the money toward “interest due on the obligation.” It was only for that purpose that the petitioners had any right to make these payments. The First National Bank of Boston as trustee under the agreement knew when it received these payments, or must be held to have known, that it and its cotrustee under the will had power to make
The respondent has argued that under the terms of the trust agreement the sums paid to the trustee of the agreement by the trustees of the will under paragraph “Seventh” of the will toward “interest due on the obligation” referred to in paragraph “Third” of the will were “income actually received . . . from the said note,” and should therefore be paid, less a proportionate part of the expense of administration, to the respondent as a beneficiary under the trust
The decree as modified is affirmed. Costs and expenses of this appeal as between solicitor and client are to be in the discretion of the Probate Court.
Ordered accordingly.