Beals v. State Street Bank & Trust Co.
Beals v. State Street Bank & Trust Co.
Opinion of the Court
The trustees under the will of Arthur Hunnewell filed this petition for instructions, seeking a determination of the proper distribution to be made of a portion of the trust created under the residuary clause of his will. A judge of the Probate Court reserved decision and reported the case to the Appeals Court on the pleadings and a stipulation of facts. We transferred the case here.
Arthur Hunnewell died, a resident of Wellesley, in 1904, leaving his wife and four daughters. His will placed the residue of his property in a trust, the income of which was to be paid to his wife during her life. At the death of his wife the trust was to be divided in portions, one for each then surviving daughter and one for the then surviving issue of any deceased daughter. Mrs. Hunnewell died in 1930. One of the four daughters predeceased her mother, leaving no issue. The trust was divided, therefore, in three portions at the death of Mrs. Hunnewell. The will directed that the income of each portion held for a surviving daughter should be paid to her during her life and on her death the principal of such portion should “be paid and disposed of as she may direct and appoint by her last Will and Testament duly probated.” In default of appointment, the will directed that a daughter’s share should be distributed to “the persons who would be entitled to such estate under the laws then governing the distribution of intestate estates.”
In February, 1944, Isabella, who was then a resident of New York, executed and caused to be filed in the registry of probate for Norfolk County an instrument which partially released her general power of appointment under the will of her father. See G. L. c. 204, §§ 27-36, inserted by St. 1943, c. 152. Isabella released her power of appointment “to the extent that such power empowers me to appoint to any one other than one or more of the . . . descendants me surviving of Arthur Hunnewell.”
On December 14, 1968, Isabella, who survived her husband, died without issue, still a resident of New York, leaving a will dated May 21, 1965. Her share in the trust under her father’s will then consisted of an interest in a contract to sell real estate, cash, notes and a certificate of deposit, and was valued at approximately $88,000.
In support of their argument that Isabella’s will did not exercise the power of appointment under her father’s will, the executors of Jane’s estate contend that (1) Massachusetts substantive law governs all questions relating to the power of appointment, including the interpretation of Isabella’s will; (2) the power should be treated as a special power of appointment because of its partial release by Isabella; and (3) because Isabella’s will neither
1. We turn first to a consideration of the question whether Isabella’s will should be construed according to the law of this Commonwealth or the law of New York.
If the question were before us now for the first time, we might well adopt a choice of law rule which would
2. Considering the arguments of the parties, we conclude that there is no indication in Isabella’s will of an intention to exercise or not to exercise the power of appointment given to her under her father’s will. A detailed analysis of the various competing contentions would not add to our jurisprudence.
When this court first decided not to extend to a special power of appointment the rule of construction that a general residuary clause executes a general testamentary power (unless a contrary intent is shown by the will), we noted significant distinctions between a general power and a special power. Fiduciary Trust Co. v. First Natl. Bank, supra, at 6-10. A general power was said to be a close approximation to a property interest, a “virtually unlimited power of disposition” (9), while a special power of appointment lacked this quality (10). We observed that a layman having a general testamentary power over property might not be expected to distinguish between the appointive property and that which he owns outright, and thus “he can reasonably be presumed to regard this appointive property as his own” (9). On the other hand, the donee of a special power would not reasonably regard such appointive property as his own: “[h]e would more likely consider himself to be, as the donor of the power intended, merely the person chosen by the donor to decide who of the possible appointees should share in the property (if the power is exclusive), and the respective shares of the appointees” (10).
Considering the power of appointment given to Isabella and her treatment of that power during her life,
4. A decree shall be entered determining that Isabella H. Dexter did exercise the power of appointment partially released by an instrument dated February 25, 1944, given to her by art. Fourth of the will of Arthur Hunnewell and directing that the trustees under the will of Arthur Hunnewell pay over the portion of the trust held under art. Fourth of his will for the benefit of Isabella H. Dexter, as follows: one-third each to George Baty Blake and Julia O. Beals; and one-sixth each to Margaret B. Elwell and to the estate of George B. Cabot. The parties shall be allowed their costs and counsel fees in the discretion of the Probate Court.
So ordered.
The significant portion of the residuary clause reads as follows: “All the rest, residue and remainder of my property of whatever kind and wherever situated (including any property not effectively disposed of by the preceding provisions of this my will and all property over which I have or may have the power of appointment under or by virtue of the last will and testament dated November 27, 1933 and codicils thereto dated January 7, 1935 and January 8, 1935 of my husband, the late Gordon Dexter) ... I devise, bequeath and appoint in equal shares to such of my said nephew GEORGE BATI BLAKE and my said nieces MARGARET CABOT and JULIA O. BEALS as shall survive me and the issue who shall survive me of any of my said nephew or nieces who may predecease me, such issue to take per stirpes.”
The parties agree that in these circumstances the intestate recipients, and the proportion due to each, are the same under the laws governing the distribution of intestate estates in Massachusetts and New York.
The applicable rules of construction where a donee’s intention is not clear from his will differ between the two States. In the absence of a requirement by the donor that the donee refer to the power in order to exercise it, New York provides by statute that a residuary clause in a will exercises not only a general power of appointment but also a special power of appointment, unless the will expressly or by necessary implication shows the contrary. 17B McKinney’s Consol. Laws of N. Y. Anno. § 10-6.1 (1967). See Matter of Hopkins, 46 Misc. 2d (N. Y.) 273, 276 (1964). “‘Necessary implication’” exists only where the will permits no other construction. Matter of Deane, 4 N. Y. 2d 326, 330 (1958). In Massachusetts, unless the donor has provided that the donee of the power can exercise it only by explicit reference to the power, a general residuary clause in a will exercises a general power of appointment unless there is a clear indication of a contrary intent. Boston Safe Deposit & Trust Co. v. Painter, 322
Of course, the law of the donee’s domicil would be applied if the donor expressed such an intention. See Walker v. Treasurer & Recr.
Isabella’s residuary clause disposed of her “property.” Because the trustees had agreed to distribute her trust portion to her and had largely done so and because, in a sense, she had exercised dominion over the trust assets by executing the partial release, a reasonable argument might be made that she regarded the assets in her portion of the trust as her “property.” However, a conclusion that she intended by implication to include assets over which she had a special power of appointment within the word “property” is not justifiable because her residuary clause refers expressly to other property over which she had a special power of appointment under the will of her husband.
Clearly Isabella had only a special power of appointment after she partially released the general power given to her under her father’s
Concurring Opinion
(with whom Tauro, C.J., joins) concurring in the result. I concur in the court’s conclusion that the general residuary clause in the will of Isabella H. Dexter exercised the power of appointment given to her by art. Fourth of the will of Arthur Hunnewell. However, I would reach that result without regard to whether the power of appointment was, either when it was created or when it was exercised, a general power of appointment or a special power of appointment, and without perpetuating the distinction made between the two types of powers in our decision in Fiduciary Trust Co. v. First Natl. Bank, 344 Mass. 1, 6-10 (1962). I would hold that the “settled canon of construction that a general residuary clause will operate as an execution of a general testamentary power unless a contrary intent is shown by the will” (Fiduciary Trust Co. case, 5), quoting from Second Bank-State St. Trust Co. v. Yale Univ. Alumni Fund, 338 Mass. 520, 524 (1959), which has been a part of the case law of this Commonwealth at least since our decision in Amory v. Meredith, 7 Allen 397 (1863), applies equally to the execution of a special power of appointment, provided, of course, that (a) the residuary clause includes any beneficiary within the scope of the special power of appointment, (b) the instrument creating the special power does not prohibit its exercise by a general residuary clause, and (c) the residuary clause includes no disclaimer of intent to exercise the special power.
It is with reluctance that I advocate a departure from the holding in the Fiduciary Trust Co. case which was decided in 1962 by a quorum of distinguished Justices of this court, but I am persuaded to do so by the policy considerations discussed below. The Fiduciary Trust Co. case itself represented a departure from views expressed, by way of dicta, in several cases which preceded it. In Stone v. Forbes, 189 Mass. 163, 169 (1905), we said: “If it were necessary to determine the question we should hesitate to follow the . . . [distinction drawn in the
The basic judicial objective in this and similar cases is to ascertain the testamentary intent of the donee of the power. I am unable to accept the proposition that a testator who subscribes to a will which includes a residuary clause in substantially the common form, broadly covering “all the rest, residue and remainder of my property” does not thereby express quite clearly an intention to dispose of all of the property and estate which can be the subject of testamentary disposition by him. Neither am I able to accept the proposition that such language, reasonably construed, permits any inference that the testator intended, by the use of such broad language, to exercise a general power of appointment but not a special one.
In its decision in the Amory case, supra, from which there evolved the “settled canon of construction that a general residuary clause will operate as an execution of a general testamentary power unless a contrary intent is shown by the will,” this court first reviewed the develop
It is apparent that in the case of Fiduciary Trust Co. v. First Natl. Bank, 344 Mass. 1 (1962), the court distinguished general powers and special powers in part on the basis of the distinction between powers and property.
The court said, at 9: “We think that, unlike a general power, a special power is not ‘a close approximation to a property interest .... It is our opinion that the traditional common law distinction between ‘property’ and ‘powers’ . . . which with regard to general powers has in effect been overridden in cases cited above, persists with un
Reference
- Full Case Name
- E. Mauran Beals & Another, Trustees, vs. State Street Bank and Trust Company, Executor, & Others
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