Court Opinion

ID: 8822130
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:36:18.253629+00
Date Added: 2024-06-11T17:04:40.032834
License: Public Domain

On Rehearing.
ANDERSON, Circuit Judge.
Since our opinion in this case was handed down, on January 14, 1921, a rehearing has been had upon the question whether, in the absence of Amelia Burgnon, a decree may be so framed as to do justice between the parties now before the court without injuriously affecting her rights. This question was not presented at the previous hearing. It has now been called to our attention that the. record discloses that Amelia Burgnon is not a resident of Rhode Island and is without the jurisdiction of the court, and it is conceded that she is probably now residing in France.
If Amelia Burgnon could be regarded as a member of a class and be said to be sufficiently represented by the trustee and the other beneficiaries, who were made parties to the suit as to the question whether *517Mr. Davis died testate or intestate as to the residue of his estate, then there would seem to be no question as to the jurisdiction of the court to proceed to judgment and enter a decree that would be binding upon the trustee and. all the beneficiaries, including Amelia. Supreme Tribe of Ben Hur v. Cauble et al., 255 U. S. 356, 41 Sup. Ct. 338, 65 L. Ed. -, decided by the Supreme Court, March 7, 1921. But in our previous decision it was held that Amelia Burgnon was not sufficiently represented by the trustee and the other beneficiarles, so that the court could proceed to judgment and enter a decree that would be binding upon her, that her interests were antagonistic to those of the oilier beneficiaries, and that the trustee occupied an inconsistent position as between Amelia and the other beneficiaries.
[3] The question raised by the motion for rehearing, therefore, is whether the court may entertain jurisdiction and proceed with the cause in her absence, and enter a. decree that will be binding upon the parties before it. The rule of the federal courts is that it may do so, if it con so frame its decree as not to prejudice the rights of the absent party and do justice as between those before the court (Waterman v. Canal-Louisiana Bank & Trust Co., Executor, 215 U. S. 33, 49, 30 Sup. Ct. 10, 54 L. Ed. 80); that, if this may be done the absent party, though ordinarily considered a proper or necessary party to the litigation, is not an indispensable party, in the sense that the court is without jurisdiction of the cause.
In Waterman v. Canal-Louisiana Bank & Trust Co., supra, it appeared that Frances E. Watermau, a citizen of Illinois, brought suit in the Circuit Court of the United States for Louisiana against the bank, executor of the will of Caroline S. Tilton, against seven charitable institutions, and against Robert Waterman and Frederick Waterman, all citizens of Louisiana. In the bill it was alleged;
That by her will Caroline S. Tilton bequeathed to Robert Waterman $3,COO, to said Robert Watermau and liis wife 15 premium bonds, to Frederick Waterman $3,000, and to Frederick Tilton Davis $1,000 and the whole series of No. 5963 premium bonds; that said Caroline died July 6, 1908: that the executor duly proved the will in the probate court for Louisiana, undertook the executorship, and possessed itself of the personal estate of the testatrix to an amount more than sufficient to discharge her debts, funeral expenses, and legacies.
That the complainant was the sole surviving niece of said Caroline; that Robert and Frederick Waterman and Frederick Tilton Davis were her sole surviving nephews; that there were no other persons within as near a degree of kinship, and that Frederick Tilton Davis .resided in Alabama,, outside the court’s jurisdiction; that Robert and Frederick Waterman and Frederick' Tilton Davis had received their legacies, and by so doing had renounced the succession of said Caroline, and also renounced all their rights as heirs at law, and became estopped and debarred from claiming any portion of the residue of the estate because of certain provisions of the will, stating them; that by reason of the renunciation and estoppel the complainant became the sole heir at law of said Caroline, aud as such entitled to the shares *518which would have gone to Frederick and Robert Waterman and Frederick Tilton Davis by right of accretion.
That the will bequeathed seven special legacies, among which were one to the Home for Insane of $3,000, and one to the Christian Woman’s Exchange of $1,000; that after the 'satisfaction of these special legacies, and after payment of all costs and expense^ in the settlement of the estate, the testatrix directed that the residue, if any remaining, should be divided between the seven charitable institutions pro rata in proportion to the amount of the legacies made to them respectively; that at the time of the making of the will and at the death of the testatrix there was no such institution or corporation in existence known as Home for Insane, nor was the testatrix capable of incorporating any such institution under her will; that the special legacy of $3,000 to the Home for Insane and its pro rata share of the residue remained undisposed of, because of the facts stated, and devolved upon complainant as sole heir and next of kin; that the Christian Woman’s Exchange was not entitled to share in the residue, because the bequest to it was not a charitable bequest and the Exchange was not one of the institutions mentioned in the will to share in the residue.
The prayers were: (1) That the legacy to the so-called Home for Insane and also the interest of said legatee in the residuum be declared to have lapsed because of the nonexistence of said legatee; (2) that Robert and Frederick Waterman had abandoned their rights as heirs in the lapsed legacy in favor of the so-called Home for Insane; (3) that the complainant alone was entitled to the special legacy bequeathed to the so-called Home for Insane, and to its proportionate share in the residue, and that the bank, the executor, pay over to the complainant the lapsed legacy together with its proportionate share in the residuum; (4) that it be decreed that the Christian Woman’s Exchange was not a charitable institution or entitled to participate in or receive any portion of the residue.
In the opinion it was pointed out that the complainant did not seek to set aside the prior regular probate of the will, but to have her interest in the legacy alleged to have lapsed and in the residuary portion of the estate established, and that the controversy was within the equity jurisdiction of the courts of the United States.
As to the question whether Frederick Tilton Davis, the nonresident legatee, was an indispensable party to the suit, and in his absence a dismissal of the cause would be required for want of jurisdiction in the court to proceed without him, the court said:
■ “The relation of an indispensable party to the suit must be such that no decree can be entered in the case which will do justice between the parties actually before the court without injuriously affecting the rights of such absent party. 1 Street’s Fed. Equity Practice, § 519.
“If the court can do justice to the parties before it without injuring absent persons, it will do so, and shape its relief in such a manner as to preserve the rights of the persons not before the court. If necessary, the court may require that the bill be dismissed as to such absent parties, and may generally shape its decrees so as to do justice to those made parties, without prejudice to such absent persons. Payne v. Hook, 7 Wall. 425.”
*519And, applying the above rule to the facts of that case, the court held:
“That the presence of Frederick T. Davis as a party to the suit is not essential to the jurisdiction of the federal court to proceed to determine the case as to the parties actually before it. In other words, that while Davis is a necessary party, in the sense that he has an interest in the controversy, his interest is not that of an indispensable party without whose presence a court of equity cannot do justice between the parties before it, and whose interest must be so affected by any decree to be rendered as to oust the jurisdiction of the court.”
See, also, on this subject, Barney v. Baltimore City, 6 Wall. 280, 18 L. Ed. 825; Horn v. Lockhart, 17 Wall. 570, 21 L. Ed. 657; Sutton v. English, 246 U. S. 199, 38 Sup. Ct. 254, 62 L. Ed. 664; United States v. Allen, 179 Fed. 13, 21, 103 C. C. A. 1; General Inv. Co. v. Lake Shore & M. S. Ry. Co., 250 Fed. 160, 171, 162 C. C. A. 296; Stevens v. Smith, 126 Fed. 706, 61 C. C. A. 624; Grigsby v. Miller (D. C.) 231 Fed. 521, 523.
If the rule of law stated in Waterman v. Canal-Louisiana Bank and Trust Co. was applicable to the facts of that case, then a fortiori is it applicable to the facts in the-case before us, for here the interest, if any, of Amelia Burgnon in the residue, is fixed at $3,000, while in the Waterman Case it would seem that the interest of Frederick T. Davis might be found to be a quarter, a third, a half, or perhaps the whole of the lapsed legacy, and a like proportion of the accretion from the residue, depending upon whether all the other heirs, or some one or more of them, had lost their rights in the lapsed legacy and its accretions.
Again, unless it can be said that Frederick T. Davis was sufficiently represented by the complainant in the issue with the seven charitable organizations that were to share in the residue, as to whom it was open to assert that the legacy of $3,000 to the Home for Insane never had any existence and fell with its accretions into the residue to swell the shares going to them, it would seem that Frederick T. Davis was an indispensable party to the issue as to whether Caroline died intestate as to that legacy, in which case it would go to the heirs at law, or whether she died testate and it fell into the residue to be divided between the seven charitable organizations, among whom the residue was to be proportionately distributed, unless it could be said that, as to that issue, the decree could also be so framed as not to prejudice his rights.
The interest, if any, of Amelia Burgnon in the residue, is $3,000, and we think the court may so fashion its decree as to1 protect her rights in case the complainants should prevail, by directing the retention of a sufficient sum in the hands of the executor to be adjudicated in another suit, or by requiring that the executor be given adequate security to protect any interest which she may have.
In view of the foregoing, our previous order of January 14, 1921, is vacated, and we proceed to consider the case on its merits.
The discussion, not only in the elaborate opinion of the District Judge, but in the briefs and oral arguments of counsel, has taken a wide range and evoked a wealth of learning. But the real case seems *520to us to fall within narrow compass. On analysis, it is apparent that there is and can be no substantial difference of opinion as to the construction of the ninth paragraph, contended by the plaintiffs to be void for indefiniteness. Abbreviated, it provides:
“X give * .* * tbe remainder * * * to my said executors, * * * with power * * * to sell * * * and pay * * * the proceeds over to the * * * Trust Company, to be held, managed and disposed of as a part of the principal of the estate and property held by it in trust for my life and the 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. * * * ”
Concerning this paragraph there is general agreement:
(1) That it does not incorporate by reference any existing trust instrument.
This case, therefore, is not within the doctrine of Newton v. Seaman’s Friend Society, 130 Mass. 91, 39 Am. Rep. 433. This point requires no further comment.
(2) That, unexplained by parol evidence, it is manifestly void for indefiniteness.
(3) That, interpreting this paragraph in the light of the parol evidence admitted below as to the inter vivos trust, the paragraph is to be construed as covering trust provisions then and thereafter made by the testator.
The first question that arises, therefore, is as to the admissibility of parol evidence concerning the trusts. We regard it as far from clear that the weight of argument and of authority is not against the admissibility of such evidence. See Olliffe v. Wells, 130 Mass. 221; Booth v. Baptist Church, 126 N. Y. 215, 246, 28 N. E. 238; Wigmore on Evidence, §§ 2407, 2472, 2473; Lewis v. Douglass, 14 R. I. 604; Rhode Island Hospital Trust Co. v. Bradley, 41 R. I. 174, 103 Atl. 486; Wilkins v. Allen, 18 How. 385, 15 L. Ed. 396; Weatherhead v. Baskerville, 11 How. 329, 13 L. Ed. 717; Patch v. White, 117 U. S. 210, 6 Sup. Ct. 617, 710, 29 L. Ed. 860; Gilmer v. Stone, 120 U. S. 586, 7 Sup. Ct. 689, 30 L. Ed. 734; Best v. Berry, 189 Mass. 510, 75 N. E. 743, 109 Am. St. Rep. 651; Jones v. Bennett, 78 N. H. 224, 99 Atl. 18; Perkins v. Mathes, 49 N. H. 107; Stratton v. Stratton, 68 N. H. 582, 44 Atl. 699; Cotton v. Smithwick, 66 Me. 360; Golder v. Chandler, 87 Me. 63, 70, 32 Atl. 784; University of North Wales v. Taylor (1908), L. R. Prob. 140; Allen v. Maddock, 11 Moore, P. C. 427, 454; Bryan v. Bigelow, 77 Conn. 604, 613, 614, 60 Atl. 266, 107 Am. St. Rep. 64; Reynolds v. Reynolds, 167 App. Div. 90, 152 N. Y. Supp. 661; Id., 224 N. Y. 429, 121 N. E. 61; Turner’s Appeal, 48 Mich. 369, 12 N. W. 493; Glass v. Glass, 127 Iowa, 646, 103 N. W. 1013; Curley v. Lynch, 206 Mass. 289, 92 N. E. 429.
Compare Baskett v. Loge, 23 Beav. 138 (1856); Nightingale v. Phillips, 29 R. I. 175, 72 Atl. 220; Eustace v. Robinson, 7 L. R. Ir. 83 (1880); In re North, 76 L. T. 186 (1897); In re Walpole’s Marriage Settlement, 1 Ch. 928 (1903); In re Beaumont, 1 Ch. 325 (1913); Dexter v. Harvard College, 176 Mass. 192, 198, 57 N. E. 371 (1900); Jackson v. Babcock, 12 Johns. (N. Y.) 389; Berry v. Dunham, 202 Mass. 133, 138, 88 N. E. 904; Metcalf v. Sweeney, 17 R. I. 213, 21 *521Atl. 364, 33 Am. St. Rep. 864; Abbott v. Lewis, 77 N. H. 94, 88 Atl. 98; Ginter v. Shelton, 102 Va. 185, 45 S. E. 892; In re Becker, 39 Misc. Rep. 756, 80 N. Y. Supp. 1115; In re Klein’s Estate, 35 Mont. 185, 88 Pac. 798; Clarke v. Treasurer & Receiver General, 226 Mass. 301, 115 N. E. 416, L. R. A. 1917D, 800; Shepard v. Shepard, 57 Conn. 24, 17 Atl. 173; In re Benson’s Estate, 169 Pa. 602, 32 Atl. 654; In re Bacon’s Estate, 140 Wis. 589, 123 N. W. 262; Knowles v. Knowles, 132 Ga. 806, 65 S. E. 128; McKinley v. Martin, 226 Pa. 550, 75 Atl. 734, 134 Am. St. Rep. 1076; Markham v. Hufford, 123 Mich. 505, 82 N. W. 222, 48 L. R. A. 580, 81 Am. St. Rep. 222; [Dennis v. Holsapple, 148 Ind. 297, 47 N. E. 631, 46 L. R. A. 168, 62 Am. St. Rep. 526; Lear v. Manser, 114 Me. 342, 96 Atl. 240; Reinheimer’s Estate, 265 Pa. 185, 108 Atl. 412; Harriman v. Harriman, 59 N. H. 135; Jay v. Lee, 41 Misc. Rep. 13, 83 N. Y. Supp. 579.
[4] But we think it unnecessary for us to reach a conclusion on this point; for, assuming it determined in the respondents’ favor, we are clear that the plan disclosed in the will and the inter vivos trust together is obnoxious to the statute of wills, falling plainly within the condemnation of the rule pungently stated by Sir George Parker in Johnson v. Ball, 5 De G. & Sm. 85, 93, where he said:
“A testator cannot by bis will prospectively create for him yd £ a power m dispose of Ms property by an instrument not duly executed as a will or codicil.”
This is exactly what Davis undertook to do as to the residue of his testamentary estate. ,
The case is on all fours with Olliffe v. Wells, 130 Mass, 221, and the other numerous cases to the same effect.
Rending the ninth clause of tlxe will in connection with the trust instrument, which contains full power of revocation and modification, ■Davis said:
“I give Hie residuo of my estate to said Trust Company to be disposed of to such persons and in such proportions as I may llave instructed or shall hereafter instruct said Trust Company.”
Such instructions might be given in writing or orally. A cablegram from him sent from Egypt would have been legally sufficient to change the destination of the entire trust fund, including the increment from his testamentary estate under the residuary clause. Indeed, the defendants concede that oral instructions would, as matter of law, have been equally effective; that writings are of no importance, except as persuasive evidence. Nor is the fact that in this case the trust fund was upwards of $2,000,000, and the residue of the testamentary estate by comparison small, of any import; the plan devised would have been equally effective if the inter vivos trust had been $5,000, divisible under the trust instrument into fractions to various named persons (and subject to change or modification at any time, orally ox-in writing), and the augmentation under the will had been $5,000,000.
Manifestly, then, the real disposition of this residuary estate is made, not by the will, but by the shifting provisions in the trust instrument. No amount of discussion or elaboration could make plainer *522the absolute destruction by such plan of the safeguarding provisions in the statute of wills.
Eearned counsel for the respondent Trust Company recognize that the case cannot be distinguished from Olliffe v. Wells, and attack Olliffe v. Wells as bad law. We do not so regard it. In our view, the decision in Olliffe v. Wells is sound in principle and supported by the overwhelming weight of authority. Hammond v. Hammond, 234 Mass. 554, 125 N. E. 686; Minot v. Attorney General, 189 Mass. 176, 75 N. E. 149; Bailey v. Wood, 211 Mass. 37, 43, 97 N. E. 902, Ann. Cas. 1913A, 950; Davison v. Wyman, 214 Mass. 192, 195, 100 N. E. 1105; Blunt v. Taylor, 230 Mass. 303, 119 N. E. 954; Payton v. Almy, 17 R. I. 605, 24 Atl. 101; Fitzsimmons v. Harmon, 108 Me. 456, 81 Atl. 667, 37 L. R. A. (N. S.) 400; Haskell v. Staples, 116 Me. 103, 100 Atl. 148, L. R. A. 1917D, 819; Amherst College v. Ritch, 151 N. Y. 282, 332, 45 N. E. 876, 37 L. R. A. 305; Reynolds v. Reynolds, 224 N. Y. 429, 434, 121 N. E. 61; Condit v. Reynolds, 66 N. J. Law, 242, 49 Atl. 540; Magnus v. Magnus, 80 N. J. Eq. 348, 84 Atl. 705; Smith v. Smith, 54 N. J. Eq. 1, 32 Atl. 1069; Sims v. Sims, 94 Va. 580, 27 S. E. 436, 64 Am. St. Rep. 772; Heidenheimer v. Bauman, 84 Tex. 174, 19 S. W. 382, 31 Am. St. Rep. 29; In re Davis (D. C.) 112 Fed. 129.
Our views are also confirmed by the recent decision of the Court of Appeals in the Eighth Circuit, Circuit Judges Sanborn and Hook, and District Judge Amidon, in Thomas v. Anderson, 245 Fed. 642, 158 C. C. A. 70, holding invalid a gift of a residue to the executor “to * * * dispose of * * * following as nearly as may be possible for him to do, any instructions, directions or requests that I may hereafter give, make or request.” That learned court held that this trust was “too indefinite for enforcement,” citing as the cases which presented the closest analogies, the following: Christman v. Roesch, 132 App. Div. 22, 116 N. Y. Supp. 348; Ingram v. Fraley, 29 Ga. 553; McCurdy’s Appeal, 124 Pa. 99, 16 Atl. 626, 10 Am. St. Rep. 575; Briggs v. Penny, 3 De Gex & Sm. 525; Schmucker’s Estate v. Reel, 61 Mo. 592; Condit v. Reynolds, 66 N. J. Law, 242, 49 Atl. 540; Davison v. Wyman, 214 Mass. 192, 100 N. E. 1105; Gross v. Moore, 68 Hun, 412, 22 N. Y. Supp. 1019; Hughes v. Fitzgerald, 78 Conn. 4, 60 Atl. 694.
But it is contended that this case can be distinguished from Olliffe v. Wells, because, in the language of Denio, C. J., in Langdon v. Astor’s Ex’rs, 16 N. Y. 9, the trust in this case is not “indifferent in itself and having no pertinency, except its effect upon his testamentary dispositions.”
Applying this somewhat abstruse and confusing language to this case, we understand it to mean that, because the trustee named in Mr. Davis’ will had, with reference to some of Mr. Davis’ property, functions to perform other than those created by the will alone, the gift to such trustee is thereby made valid; in other words, that because the respondent Trust Company had, apart from the provisions in the will, a trust relationship to Davis, the bequest to it became valid, although it would have been invalid if this Trust Company had stood *523towards the testator as Wells stood in Olliffe v. Wells, with no trust relationship except that arising under the will itself.
In our view, this is a distinction without any legal difference. The real question is whether the residue of this estate was disposed of by Mr. Davis’ will. Plainly it was not. No additional sanctity attaches to this trust because as to the property vested in the same trustee by Mr. Davis during his lifetime it had duties enforceable either in a court of equity or to the performance of which it was bound by contract. No multiplication of words or refinements can alter the result above stated ■—'that Davis had by this plan sought “prospectively to create for himself the power to dispose” of property vested in him at the time of his death by instruments not executed in accordance with the statute of wills.
It seems equally clear to us that this case does not fall within the rule which permits a testator to determine to some degree the objects of his testamentary bounty by his own subsequent conduct, as, for instance, in cases of gifts to servants in the employ of the testator at his decease, or to surviving partners, or to the persons or institutions caring for the testator in his last sickness. It is, of course, true that the volition of the testator as to who shall be his servants or partners, or final attendants, is a factor in selecting the objects of his testamentary bounty. But it is not the only factor. The volition and acts of such legatees are also factors in determining whether the designated relationship shall or shall not exist at the time of the testator’s death. There is a great practical as well as legal difference between such relationship—arising “in the ordinary course of his affairs or in the management of his property”—and a relationship which arises solely out of the bounty-giving volition of the testator. The distinction, however fine, is well recognized in the authorities, and we cannot hold ourselves at liberty to disregard it. Dennis v. Holsapple, 148 Ind. 297, 47 N. E. 631, 46 L. R. A. 168, 62 Am. St. Rep. 526; Lear v. Mansar, 114 Me. 342, 96 Atl. 240; Harriman v. Harriman, 59 N. H. 135.
These cases, as well as cases involving advancements (see Langdon v. Astor’s Ex’rs, 16 N. Y. 9; Lawrence v. Lindsay, 68 N. Y. 108; Moore’s Case, 61 N. J. Eq. 616, 47 Atl. 731; Robert v. Corning, 89 N. Y. 225; Harris v. Harris’ Estate, 82 Vt. 199, 72 Atl. 912; Coyne v. Boyce, 78 Md. 22, 26 Atl. 1021; Blackstone’s Appeal, 64 Conn. 414, 30 Atl. 48; Holmes v. Coates, 159 Mass. 226, 34 N. E. 190; Sanford v. Raikes, 1 Merivale, 646, 653), undoubtedly involve gilts dependent in part upon future acts of the testator. But we agree with counsel for the plaintiff that none of them sustains the proposition that a testator may make a valid testamentary provision incorporating an extrinsic trust created by him and subject to change as his testamentary desires may change, so that every alteration, oral or written, of the trust instrument is really a change in the disposition of his testamentary estate.
Compare In re Sexton, 162 Ill. App. 214, 221; Hartwell v. Martin, 71 N. J. Eq. 157, 63 Atl. 754.
The decisions in Condit v. De Hart, 62 N. J. Law, 78, 40 Atl. 776, and Matter of Piffard, 111 N. Y. 410, 18 N. E. 718, 2 L. R. A. 193, *524seem to us to rest on the principle of incorporation by reference, admitted by learned counsel for-the respondent Trust Company not to be applicable to the instant case.
The result is that, on principle and authority, we find ourselves constrained to conclude that the residue of the personal property of Theodore M. Davis, held by the respondent Trust Company, is—subject to proper proceedings in the Probate Court as prayed for, and subject also to the contingent provision hereinabove indicated safeguarding the rights, if any, of Amelia Bergnon—held under a resulting trust for the plaintiffs.
The decree of the District Court is reversed, and the case remanded to that court for further proceedings not inconsistent with this opinion, with costs for the appellants.