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Cleveland v. Delaware Trust Co.

Supreme Court of Delaware

September 19, 1950

CLEVELAND et al.
v.
DELAWARE TRUST CO. et al.

[31 Del.Ch. 537] This is an appeal from a decision of the Vice Chancellor construing the Will of Lucy Merritt Carvin, deceased.

The testatrix executed her original Will on August 28, 1940 while under observation in a hospital in Philadelphia. On January 13, 1941 she executed a Codicil to her Will, and thereafter died on January 28, 1941.

The pertinent provisions of the Will are here stated:

'Sixth: I own certain securities hereinafter listed, and said securities and property, together with the investments, reinvestments and proceeds thereof, and such other securities and property as may thereafter be received by the executor hereunder, are herein called the 'Investment Fund'. * * * The executor shall hold, manage, invest and reinvest the Investment Fund, collect the income therefrom. * * * The executor shall use and apply the net income of the Investment Fund to the payment of $50.00 monthly to my sister, Olive Carvin Cleveland, and $50.00 monthly to my brother, Edward Terrence Carvin, for the period of seven calendar years following my death. If during the continuance of this investment fund, the net income payable to the estate from such investment fund is insufficient to cover the monthly payments to be made to Olive Carvin Cleveland and Edward Terrence Carvin, then the executor is authorized and empowered in his sole discretion to pay over unto Olive Carvin Cleveland and Edward Terrence Carvin, so much of the

Page 565

'Ninth: Following the lapse of seven calendar years after my death, such securities that may be then remaining in the investment fund, I hereby authorize and empower my executor, if he so elects, to convert into cash and to negotiate an instrument with some reliable insurance company whereby the proceeds of the investment fund may be used to purchase annuities that will provide for a monthly [31 Del.Ch. 538] payment as near to $75.00 or more to Olive Carvin Cleveland and as near to $75.00 or more to Edward Terrence Carvin for the rest of their natural lives, with the provision that should either die before the other, then such payments remaining to be paid the deceased shall become payable to the survivor, In the event that said Olive Carvin Cleveland and Edward Terrence Carvin should die before the principal of the insurance contract becomes exhausted, then such part or parts of the principal remaining to be paid shall be paid to my niece, Jeanne Carvin Edwards or her heirs, in a lump sum. * * *'

Insofar as concerns the question here presented, the provisions of the Codicil are as follows:

'Item III. Wherever in my said last Will and Testament reference is made to the 'Investment Fund' and the administration, possession and distribution of the income and principal thereof by my executor, I do now direct that said 'Investment Fund' shall constitute my residuary estate and I do give, devise and bequeath the same unto Delaware Trust Company, a corporation of the State of Delaware, to hold, administer and distribute the net income and principal thereof as my Trustee with all of the duties, powers and compensation granted in my Last Will and Testament unto my executor for like services.

* * *

* * *

'Item VI: Should any part of my trust estate remain upon the death of my brother, Edward Terrence Carvin, and my sister, Olive Carvin Cleveland, I direct that item Ninth of my said Last Will and Testament be modified to provide payments of Seventy-five Dollars ($75.00) per month to Jean Edwards in lieu of a lump sum payment to her and upon her death unto her issue, per stirpes, or if there be no issue of the said Jean Edwards then living, unto my cousin Albert McLaverty, if living, or his issue, per stirpes, until the trust estate has been thereby exhausted.'

The Vice Chancellor interpreted the provisions of the Will and the Codicil as authorizing the payments of $50 per month each to testatrix' brother and sister for life. On appeal to this Court the two principal beneficiaries, the brother and sister, contended that Item 9th of testatrix' Will should be so construed as to empower the Trustee to pay $75 monthly to them for life. A niece, Jeanne Edwards, who in accordance with Item 6th of the Codicil was designated as the recipient of certain monthly payments from the Trust Fund upon the death of the brother and sister should [31 Del.Ch. 539] the estate have any funds remaining at their death, has taken the position that there is a partial intestacy.

Daniel F. Wolcott (of Southerland, Berl & Potter), Wilmington, for plaintiff.

C. Edward Duffy (of Logan, Duffy & Boggs), Wilmington, for defendants Olive Carvin Cleveland and Edward Terrence Carvin.

J. Rankin Davis, Wilmington, for defendant, Jeanne Carvin Edwards.

[31 Del.Ch. 537] RICHARDS, C. J., and TERRY, CAREY and LAYTON, JJ., sitting.

[31 Del.Ch. 539] LAYTON, Judge.

The problem presented by this appeal was caused by inexpert draughtmanship which resulted in Item 9th of the Will failing to provide what should be done at the end of seven years from testatrix' death in the event the Trustee did not elect to purchase an annuity which would yield $75 monthly each to Olive Carvin Cleveland and Edward Terrence Carvin, testatrix' brother and sister.

Item 6th directs that the sister and brother should receive $50 monthly for seven calendar years following testatrix'

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death. Item 9th employs this curious language 'Following the lapse of seven calendar years after my death, * * * I hereby authorize and empower my executor, if he so elects, to convert into cash and to negotiate an instrument with some reliable insurance company whereby the proceeds of the investment fund may be used to purchase annuities that will provide for a monthly payment as near to $75 or more to Olive Carvin Cleveland and as near to $75 or more to Edward Terrence Carvin, for the rest of their natural lives * * *.' The item is completely silent as to what were the Trustee's powers in the event it should not elect to purchase an annuity. Nor does the Codicil specifically answer this very important question.

Under the circumstances, counsel for Jeanne Edwards, [31 Del.Ch. 540] the niece, contends that a partial intestacy resulted after seven years from testatrix' death insofar as the brother and sister were concerned, and that his client should be declared the beneficiary of monthly payments in the amount of $75 for her lifetime, in accordance with Item 6th of the Codicil. The argument is not without merit for Courts, while they may interpret and construe, are nevertheless powerless to supply missing provisions in Wills. Miller v. Equitable Trust Co., Del.Sep., 32 A.2d 431. But aside from the natural reluctance on the part of Courts to declare an intestacy, we are of the opinion that the problem is otherwise capable of solution.

A careful reading of the entire Will and Codicil leads to the inescapable conclusion that testatrix' brother and sister were the paramount objects of her bounty and that she intended to give them a life income from the corpus of her estate, even to the extent, if necessary, of exhausting her entire estate. The most significant factor, though by no means the only one, pointing to this result is the language of Item 6th of the Codicil which states inter alia 'should any part of my trust estate remain upon the death of my brother, Edward Terrence Carvin, and my sister, Olive Carvin Cleveland * * *' then the Trustee is directed to pay $75 monthly to the niece, or to a cousin should the niece then be dead. We think, then, that without resort to extrinsic evidence, the Will is fairly capable of the interpretation that testatrix intended that her brother and sister should have a life income from the trust established by Item 6th of the Codicil. The Vice Chancellor apparently arrived at the same interpretation for he said, 'It is apparent from Item 6th of the Codicil that the testatrix contemplated the creation of a trust which would last during the lives of her brother and sister, or until the fund was exhausted.' The Vice Chancellor, however, concluded that Item 6th of the Codicil impliedly repealed Item 9th of the Will, the power to elect to purchase an annuity, and arrived at the result that Testatrix intended that her brother and sister [31 Del.Ch. 541] should each receive $50 monthly for life on the expiration of seven years from her death. While we are inclined to agree that the language of Item 6th of the Codicil, because inconsistent with Item 9th of the Will, impliedly emasculated the power of the Trustee to purchase an annuity under Item 9th, we think it does not necessarily follow that testatrix intended thereby to re-adopt the provisions of Item 6th providing for payments of $50 monthly which, by the very language thereof, was expressly limited to a period of seven years.

If the Will, as we think, left a life income from the trust to the brother and sister, then the only question remaining is one of interpretation, namely, how much they were to receive. And in analogous cases Courts have not infrequently resorted to an examination of the entire instrument, together with such extrinsic evidence as may be germane, in order to arrive at the intention of the testator with respect to amount. [1]

This is not a situation where a testator left a life estate in a fund without specifying the amount of income the beneficiary should receive. In such event it would be

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Now, bearing in mind our conclusion that the brother and sister were the life beneficiaries of the fund, and that the payments of $50 each monthly were to last for seven [31 Del.Ch. 542] years, then the inference from Item 9th, though not conclusive, nevertheless strongly suggests that the testatrix intended that the monthly payments should be raised to $75 in any event at the expiration of seven years from her death.

Moreover, we are of the opinion that resort to certain extrinsic evidence may properly be had in order to arrive at testatrix' intent in this respect. The uncontradicted evidence shows that, at the time she made her Will, certain insurance policies were in force which she had taken out on her own life to provide monthly payments of $50 to her brother and a like sum to her sister. These payments would commence, of course, upon her death and under the terms of the policies would continue for seven years thereafter when the payments thereunder would terminate. This one fact sheds considerable light upon the terms of the Will and Codicil. From the insurance proceeds and from Item Sixth of the Will, her two principal beneficiaries would receive $100 monthly each for seven years following her death, that is, $50 each from the trust and $50 each from the insurance. After seven years, the insurance payments would cease. What is more natural to suppose than that testatrix wished the monthly income from the trust to be increased after seven years in order to compensate partially for the loss of the insurance payments?

Assuming the correctness of this reasoning it is not difficult to conclude that testatrix intended at the expiration of seven years from her death that the monthly payments to her brother and sister should be increased to $75 for their lives, or until the corpus became exhausted. We say this because in our judgment it would be altogether unreasonable to suppose that testatrix intended an increase in the monthly payments only if accomplished by means of the purchase of an annuity.

The problem here presented is not an easy one. A layman prepared the Will and the choice of language was most [31 Del.Ch. 543] inept. However, the Will itself is fairly susceptible of the construction that testatrix' predominant intention was to provide for the support of her brother and sister through the creation of a trust which was to last for their lives or until the fund was exhausted. In concluding that a gift of income for life was intended, and we are confident that it was, we have not written a missing provision into the Will in violation of the principle announced in Miller v. Equitable Trust Co., supra, and the only remaining question is how much were her brother and sister to receive after the expiration of seven years from testatrix' death. The ambiguity thus presented is one capable of being solved with reasonable certainty by resort to the language of the Will itself and the extrinsic evidence above considered. Few direct precedents are found in cases interpreting Wills because of the infinite variety of situations presented and we can only look to the decisions for certain basic principles of construction which we believe were not violated here in arriving at the result found. If it should be said that our interpretation of this Will is somewhat strained, we can only say that the construction of Wills is always a matter of speculation to a greater or lesser extent, and that the solution here arrived at more accurately represents the true intention of the testatrix. Basically we have differed with the Vice Chancellor only in considering certain extrinsic evidence which he deemed inadmissible, but if examined, throws a much clearer light on

Page 568

what was intended concerning the monthly payments at the expiration of seven years from testatrix' death. Evidence of the situation of the testator and the circumstances surrounding him at the time of the making of the Will is generally admissible in resolving an ambiguity. Bird v. Wilmington Trust Co., Del.Sup., 43 A.2d 467. And the fact that we have considered evidence of the circumstances of this testatrix at the time she made her Will in connection with a Codicil executed some six months later does not violate settled principles in view of the fact that, with the [31 Del.Ch. 544] exception of the inference to be gained from Item 6th of the Codicil to negative the power to purchase an annuity, nothing in the Codicil indicates an intention to change substantially the terms of the Will itself. Indeed, by Item Three of the Codicil testatrix directs her trustee to 'administer and distribute the net income and principal thereof with all the duties, powers and compensation granted in my last Will and Testament * * *'.

The decree of the Vice Chancellor is accordingly modified and a mandate will be entered in conformity wich the views expressed.

TERRY, Judge (dissenting).

The pertinent provisions of the Will and Codicil, together with the contentions of the respective parties, appear in the majority opinion of this Court and in the ...


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