Court Opinion

ID: 8822129
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:36:18.250561+00
Date Added: 2024-06-11T17:04:40.029562
License: Public Domain

BINGHAM, Circuit Judge.
This is a proceeding in equity, in which it is sought to have the residuary clause of the will of Theodore M. Davis declared inoperative and void. Kate Atwood, a resident of Massachusetts and a half sister of the testator, brings the suit in her individual capacity and as executrix of the estate of Gertrude Galloway, a sister of the testator.. Theodore Davis Boal, a resident of Pennsylvania and executor of the will of Annie B. Davis, widow of the testator, is also a party plaintiff.
The bill originally was brought against the Rhode Island Hospital Trust Company, a Rhode Island corporation, as administrator with the will annexed and as trustee under a deed of trust made by Mr. Davis and bearing date August 14, 1911. Afterwards the Metropolitan Museum of Art, a New York corporation, Emma B. Andrews, a resident of Rhode Island, and Elizabeth A. Price, a resident of New York, intervened as defendants and by the direction of the court Annie Ghio, Margaret Eafarge, and Andrew Dwyer, all residents of Rhode Island and beneficiaries under the trust deed, were made defendants.
Mr. Davis resided at Newport, Rhode Island. August 14, 1911, he signed a trust agreement in which he made the Rhode Island Hospital Trust Company, trustee. August 16, 1911, he delivered the trust deed and securities of more than $2,000,000 in value to the Trust Company, and August 17, 1911, the Trust Company signified in writing its acceptance of the property and agreed to carry out the trust.
Under the terms of the trust the trustee was to manage the property, and pay the net income to Mr. Davis during his life, and upon his decease convert a sufficient amount of it into cash and pay forthwith certain sums to designated beneficiaries. The remainder of the trust estate, not required for the payment of certain benefits and annuities, was to be held in trust to pay the net income to Mrs. Davis and Mrs. Andrews. Upon the decease of tire survivor the trustee was directed to divide the principal of the remaining trust estate into equal parts, and to pay over said parts, free of all trusts, to certain persons designated in the deed of trust, comprising about 30 in all. In the deed Mr. Davis reserved the right at any time during his life to revoke “any or all of the trusts herein declared,” and “add to, annul, change, or modify in any respect whatsoever any of the trusts or powers hereby created or conferred.”
On the same day that he signed the trust deed, August 14, 1911, but subsequent to its execution, Mr. Davis executed his will, the ninth *515or residuary clause of which is in question. October 4, 1911, he executed a codicil to his will in which, after making certain modifications, he confirmed his will except as therein modified. October 5, 1911, which was the day after the execution of the codicil, he added four beneficiaries to the trust, giving them sums varying from $5,000 to $15,000 and amounting in the aggregate to $35,000. October 17, 1913, he made a further modification of the trust instrument by adding a new beneficiary, with a gift of $5,000, and canceling the provision made in the original trust deed of $3,000 to Amelia Burgnon. Neither of these modifications was executed as required by the statute of wills.
In the residuary clause of his will the testator provided as follows:
“Ninth: t give, devise and bequeath all the remainder of the property, real and personal, of which I die possessed or over which I have any power of disposition, including any of the foregoing gifts which shall fail for any reason, but excepting the remainder in my real estate in said Newport after the decease of my said wife and the said Emma B. Andrews, to my said executors, er any duly appointed administrator of my estate, in trust nevertheless, to convert the whole of said property into cash as soon as reasonably possible, with power to sell the same or any part or parts thereof at either private or public sale, and the net proceeds of such sale or sales to pay over to the said Rhode Island Hospital Trust Company to be hold, managed and disposed of as a part of the principal of the estate and property held by it in trust for my life and tlie lives of others in the same manner as though the proceeds of such sales had been deposited by me as a part of said trust estate and property ; and the receipt of said Trust Company shall be a full discharge to my said executors or administrators relieving them from all further liability or accountability in respect thereof. And I devise to the said Rlio'de Island Hospital Trust Company after the deaths of my said wife and the said Emma B. Andrews the estate in said Newport hereinbefore given to them for their lives, but in trust nevertheless for said Trust Company to convert said estaros into cash as soon as reasonably possible after it becomes entitled to the possession of said estates, * * * and to add the net proceeds of any such sale or sales to the principal of the trust estate and property then held by it under the trusts theretofore created by me, and to divide and distribute said net proceeds to the same persons and in the same proportions as they are entitled to the principal of my said trust estate under the terms of said trusts. * * * ”
In the court below it was held that the interest of the Rhode Island Hospital Trust Company in the litigation was identical and common with that of the beneficiaries under the trust deed, and that the same was true as to the Metropolitan Museum of Art, so far as it could be said to have any interest; that, this being so, neither the Metropolitan Museum of Art nor all the beneficiaries were indispensable parties; that the beneficiaries residing within the jurisdiction of the court were proper parties, and, as such, might be joined in accordance with rule 38 (198 Red. xxix, 115 C. C. A. xxix) to defend for all the beneficiaries as a class.
We think this ruling was correct, except in the particular hereinafter considered.
[1,2] It is urged that the ruling was erroneous, in that Amelia Burg-non, who was made one of the beneficiaries under the trust as originally constituted, and whose name, on October 17, 1913, was stricken from the list by Mr. Davis, is an indispensable party to the litigation; that her interest is not common with that of the Hospital Trust Company, *516either as administrator or as trustee, nor with the interest of the other beneficiaries; that her interest is antagonistic to those of all the other parties and especially to -the interests of the other beneficiaries, for if she is entitled to receive the $3,000 which the trust deed gives her, the interests of the other beneficiaries will be to that extent lessened.
If the contention of the Hospital Trust Company in its capacity as trustee and administrator should be upheld, as it was upheld by the decision of the court below, Amelia Burgnon would be precluded from receiving her gift of $3,000 because her rights would be determined by tire trust instrument as a nontestamentary disposition of Mr. Davis’ property.
On the other hand, if the will is construed as speaking from the date of the codicil, and the trust deed can be said to be sufficiently referred to in the residuary clause as an existing instrument, so as to be incorporated therein, it would seem that, inasmuch as the trust deed was in existence at the time the will was executed and confirmed by the codicil and Amelia Burgnon was named as beneficiary in the deed, she might be entitled to the $3,000 given to her, as a testamentary disposition, the gift not having been revoked in the manner provided for revoking testamentary dispositions. If, however, the trust deed should not be found to be incorporated in the residuary clause of the will, then Amelia Burgnon would not be entitled to the gift of $3,000 unless she could show that the' trust deed, being executed with all the formalties required by the statute of wills of Rhode Island, constituted a component part of the will and as such entitled her to participate as a beneficiary, the gift to her not having been revoked as required by law.
As the interest of Amelia Burgnon is practically in every aspect antagonistic to the interests of the other parties to the litigation, we regard her as an indispensable party to the proceeding. The record does not show where she resides. If her residence is such that she may be added as a party defendant without ousting the court of jurisdiction, she may be made a party by amendment; otherwise, the proceeding must be dismissed.
The 'decree of the District Court is vacated, and the case is remanded to that court for further proceedings not inconsistent with this opinion, with costs to the appellants.