288 Mass. 35 | Mass. | 1934
Article Seventhly of the will of Earle P. Charlton, dated January 2, 1926, declared that the testator had deposited with The First National Bank of Boston a large number of shares of common stock of F. W. Woolworth Co., and directed that at the death of the testator “it shall become a permanent trust fund to provide for the following charities and be set aside by said Bank and divided up in the following separate trusts, as follows — One-quarter of the total, but in no instance to be less than Five hundred thousand dollars ($500,000), to be put aside and invested, the income from same to be paid semiannually to the Truesdale Hospital of Fall River, Massachusetts.” The remaining three quarters, or excess above $500,000, as the case might be, was divided into three other trust funds, the income of the first to go to Tufts College, of the second to go to the Union Hospital of Fall River, Massachusetts, and of the third to go to The Johns Hopkins Hospital of Baltimore, Maryland, and the Fall River District Nursing Association in equal shares.
The testator died on November 20, 1930, the will was proved and allowed on January 2, 1931, and The First National Bank of Boston was appointed trustee under said Article Seventhly on February 9, 1931. By the decision of this court in First National Bank of Boston v. Union Hospital of Fall River, 281 Mass. 64, it was established that the corpus of the fund under said article, before division, consisted of twenty-five thousand shares. On May 22, 1931, the executors, consisting of said bank and two individuals, indorsed said shares to said bank, which appropriated to the trust for the benefit of Truesdale Hospital seven thousand four hundred seventy-seven shares. These, at the market value on that day of $66 7/8 a share,
This method of division is satisfactory to the beneficiaries under Article Seventhly, other than Truesdale Hospital. Truesdale Hospital, however, contends that a division was never lawfully made but remains to be made in the future. At the present time the low value of the shares, as compared with their value on May 22, 1931, would require the appropriation of many more shares to the trust fund for Truesdale Hospital in order to make up the $500,000 in value to which it is entitled, and the shares available for other trust funds under Article Seventhly would be correspondingly fewer.
The number of shares which Truesdale Hospital was entitled to have held for it in order to make up $500,000 in value, depended upon the value of shares at the time the trust should in fact be set up. Fisk v. Cushman, 6 Cush. 20, 28. Boston Safe Deposit & Trust Co. v. Reed, 229 Mass. 267, 272. In re Brown, 112 N. J. Eq. 499. If that trust was effectively set up on May 22, 1931, on the basis of the value of shares on that day, Truesdale Hospital has no right to have the trust reestablished according to the value of shares at any other time. If that trust was not effectively set up on that day, but still remains to be set up, it is impossible at this time to foresee how many shares will be necessary in order to make up the minimum of $500,000 in value.
Truesdale Hospital contends that the establishment of the trust for it on May 22, 1931, was incomplete, tentative and provisional only. If that be so, what was done on that day served no purpose and was an elaborate and empty form. That was hardly the intention of the bank, though
Truesdale Hospital contends, moreover, that whatever the intention of the trustee may have been, the set-up of the trust fund on May 22, 1931, was ineffective as matter of law. It relies on the rule that when the same person is both executor and a legatee, whether as legatee he takes in trust or free from trust, he does not cease to hold as executor nor take as legatee, until he has qualified as trustee, if his legacy is in trust, (Newcomb v. Williams, 9 Met. 525, 534, 535; White v. Ditson, 140 Mass. 351, 354; Collins v. Collins, 140 Mass. 502, 507; Little v. Little, 161 Mass. 188, 202; Coates v. Lunt, 213 Mass. 401,) and has shown by some authoritative and notorious act that he has elected to take title as legatee. Newcomb v. Williams, 9 Met. 525, 534. Miller v. Congdon, 14 Gray, 114, 117. Hobbs v. Cunningham, 273 Mass. 529, 534. Sherman v. Jerome, 120 U. S. 319. The latter requirement has so hardened that ordinarily nothing short of a paying over
This rule has been applied in settling the accounts of executors and trustees, and in actions upon their bonds (Brigham v. Morgan, 185 Mass. 27, 45, and cases cited; Lannin v. Buckley, 256 Mass. 78, 81; Mooers v. Greene, 274 Mass. 243, 252; Brackett v. Fuller, 279 Mass. 62; compare Cook v. Howe, 280 Mass. 325); in petitions for retention of assets for creditors, which must be brought before the estate is fully administered (Downer v. Squire, 186 Mass. 189, 198; Union Market National Bank of Watertown v. Gardiner, 276 Mass. 490, 495, 496); in a case where the question was whether an automobile had passed from an executor, in whose hands it was insured, to himself as legatee (Hobbs v. Cunningham, 273 Mass. 529); in a case where a creditor of the sole legatee sought unsuccessfully to trustee royalties payable to her as executrix (S. S. Pierce Co. v. Fiske, 237 Mass. 39); and in cases in which executors contended that personalty should have been taxed locally to them as trustees. Welch v. Boston, 211 Mass. 178. Sears v. Nahant, 221 Mass. 435. Sears v. Nahant, 221 Mass. 437, 439.
In Crocker v. Dillon, 133 Mass. 91, 98, and Mooers v. Greene, 274 Mass. 243, one of the trustees was the executor, while in Newcomb v. Williams, 9 Met. 525, as in the present case, one of the executors was the trustee. We need not consider whether such a want of complete identity of those filling the two offices takes the case out of the rule, for we think that the rule itself has no application to the question under discussion. If the number of shares to which the
In Massachusetts Institute of Technology v. Attorney General, 235 Mass. 288, 293, 294, the rule requiring the allowance of an account showing a distribution by the executors to themselves as trustees, was not applied where the question concerned merely the time of setting up the trust. Although, as was pointed out in Miller v. Congdon, 14 Gray, 114, 118, the exact point was not argued in Hubbard v. Lloyd, 6 Cush. 522, the opinion by Shaw, C.J., in the latter case held that the beneficiary of a trust fund of $50,000, actually set apart, was not entitled to have the setting up of the fund remain provisional during the settlement of the estate so that any possible diminution in value of the fund might be made good. In the present case, the question is not whether title passed to the trustee, nor whether the executors were relieved of liability as such for the safety of the shares appropriated to the trust. It is simply whether enough was done to determine the number of shares to which the trust was entitled. We think that what was done on May 22, 1931, was not a mere “mental determination” (Miller v. Congdon, 14 Gray, 114, 117; Collins v. Collins, 140 Mass. 502, 507; Sheffield v. Parker, 158 Mass. 330, 333; Sherman v. Jerome, 120 U. S. 319), but was sufficient for the present purpose, notwithstanding the unfortunate and needless omission of the trustee for many months to inform Truesdale Hospital of it.
The remaining contention of Truesdale Hospital is, that if the number of shares be held to have been fixed on May 22, 1931, the trustee The First National Bank of Boston is liable for holding the shares since that time on a falling market.
In the absence of authority or direction in the will to
Furthermore, the intent of the testator was that the shares of the corporation in which he had made his fortune might be retained by the trustee, so that the corpus of the trust might consist wholly of such shares. The stock, the will declared, was to “become a permanent trust fund . . . and be . . . divided up” among the trusts for the different beneficiaries. It was stock, not money, that was to be “put aside and invested” for Truesdale Hospital. It may be that the word “invested” implies a right to change investments, though that becomes unimportant in view of the power to do so under G. L. (Ter. Ed.) c. 203, § 19, which the will does not negative. Nevertheless the trust fund was to consist primarily of common stock of F. W. Woolworth Co. to the value of $500,000. Unless there should be reason to fear for the safety of the investment, the trustee under this will had the right to retain the trust fund in the form in which it was received. Kinmonth v. Brigham, 5 Allen 270, 277. Old Colony Trust Co. v. Shaw, 261 Mass. 158, 166, et seq. Anderson v. Bean, 272 Mass. 432. North Adams National Bank v. Curtiss, 278 Mass. 471, 481. Ward v. Kitchen, 3 Stew. (N. J.) 31, 36. Richardson v. Knight, 69 Maine, 285. Taylor’s Estate, 277 Penn. St. 518; 37 Am. L. R. 553, and note page 571.
Having that right, there is nothing to show that the retention of the shares on a generally falling market was a breach of duty, under the Massachusetts rule stated in Creed v. McAleer, 275 Mass. 353, 357, and Roulston v. Roulston, 285 Mass. 489. The trend of a market is notoriously hard to discover except in retrospect. At every level skilled observers are apt to disagree as to its probable course. Kimball v. Whitney, 233 Mass. 321, 334. Matter of Clark, 257 N. Y. 132, 139. People’s National Bank & Trust Co. of Pemberton v. Bichler, 115 N. J. Eq. 617. Moreover, the pendency of litigation over the creation and composition of the trust fund tends to excuse inaction on the part of the trustee. Dimmock v. Bixby, 20 Pick. 368, 374, 375. Creed v. McAleer, 275 Mass. 353, 358.
What has been said covers all the contentions now urged. The six decrees from which appeals were taken are affirmed. The matter of costs and expenses is to be in the- discretion of the Probate Court. Boynton v. Tarbell, 272 Mass. 142.
Ordered accordingly.