Opinion
No. 4186.
Decided May 27, 1953.
A construction formerly placed upon a will was not res judicata of a later claim that a particular clause of such will violated the rule against perpetuities where the parties to the two proceedings were not the same and the issue of the validity of the clause with relation to such rule was neither litigated nor determined in the prior proceedings. The rule against perpetuities prevails in this state although in modified form. Where a residuary clause of a will creates alternative contingencies upon which it would take effect and the first contingency has actually occurred within the period of perpetuities, the gift may be considered valid. In determining whether a testamentary remainder interest was bequeathed in violation of the rule against perpetuities the court may consider the matter the light of the events as they have in fact occurred since the date of testatrix' death. Hence, a devise to testatrix' children as life tenants with remainder to only granddaughter living at testatrix' death with further provision that if such granddaughter or other unborn grandchildren survive both children and leave no heirs remainder should be distributed among testatrix' brothers and sisters or their representatives in equal shares did not violate the rule against perpetuities where upon death of both life tenants without other issue it became certain that the remainder would in fact vest upon the death of the granddaughter, a life in being at testatrix' death. While future contingent interests may be transferred by deed, the grantee takes nothing where the grantor's interest is contingent on surviving granddaughter of testatrix and the grantor predeceases the granddaughter.
PETITION, for partition of certain real estate situated at the corner of Elm and Manchester Streets in Manchester. The real estate was sold and a portion of the proceeds of the sale amounting to $32,975.11, together with accumulating interest, is in the hands of the clerk of the Superior Court for distribution in accordance with the ruling of the Supreme Court on certain stipulated facts agreed to by all the parties. On the basis of the stipulated facts, and the exhibits, the Court (Wheeler, C.J.) transferred without ruling the following question of law: "What individuals are entitled to participate in the distribution of the trust moneys deposited with the Clerk of Court, and in what proportions are they entitled to share"?
The petition was originally brought by the plaintiff in March, 1914, claiming an undivided two-thirds interest in said real estate, the defendant Delana B. Curtis owning an undivided eleven fifty-fourths interest and the devisees under the will of Margaret A. Harrington a seven fifty-fourths interest. Margaret A. Harrington had previously died in 1902, leaving a will which was duly probated. At her death she owned the undivided seven fifty-fourths interest. in this real estate. Under the provisions of her will her only children, a son, Edward Harrington, and a daughter, the above mentioned Delana B. Curtis, received a life estate in this real estate. By clause fourth the remainder was devised "to my Grand Daughter Margaret May Curtis, and her heirs forever." The will further provided:
"Fifth: In the event of either of my children having other heirs of their body, surviving them such heir or heirs shall share equally with Margaret May Curtis, and in that event I give bequeath and devise my estate to them, and their heirs, on the death of my children.
"Sixth: If my Grand Daughter Margaret May Curtis or other grand children shall survive both of my children and shall have and leave no heirs of her or their body, then and in that event, I give, bequeath and devise all my estate unto my brothers and sisters then living and to the representatives of those not living, and to my late husbands niece, Almeda S. Goyscan formerly Almeda. S. Harrington, in equal shares . . . ."
The said Almeda S. Goyscan predeceased the testatrix leaving no issue. The testatrix' son, the said Edward W. Harrington, survived the testatrix and died leaving no issue. The testatrix' daughter, the said Delana B. Curtis, also survived the testatrix and died leaving no children other than her said daughter, Margaret. Margaret was twice married and, at the time of her death without issue, on January 16, 1951, her name was Margaret May Curtis Reynolds Vreeland.
The testatrix, Margaret A. Harrington, had three sisters and three brothers, who were living or who had issue living at the time of her death, namely: Abigail Bond Chandler, Nancy Bond Corliss, Maria Bond Hill, James B. Bond, Jonathan Bond and John R. Bond. All of these brothers and sisters left representatives in interest in this case, with the exception of Nancy Bond Corliss, who died on July 1, 1910, leaving an only child, George W. Corliss, who died unmarried and without issue on September 6, 1922. Accordingly, the parties to this proceeding are the representatives in interest of five brothers and sisters of Margaret A. Harrington, who were living at the death of Margaret May Curtis Reynolds Vreeland on January 16, 1951. The representatives of these brothers and sisters have been stipulated by the parties.
Subsequent to the filing of the petition for partition and before the sale of the real estate, the defendant Delana B. Curtis secured certain deeds from the then living representatives of Abigail Bond Chandler, Maria Bond Hill, James E. Bond and Nancy Bond Corliss, four of the six brothers and sisters of Margaret A. Harrington. These conveyances refer to the sixth clause of the. will of Margaret A. Harrington for their title. The later deed from Delana B. Curtis to William E. Quirin, purporting to convey an undivided one-third interest in the premises, excepted and reserved whatever title the heirs of Jonathan Bond and John Bond had in the premises by virtue of the will of Margaret A. Harrington.
Pursuant to the petition for partition the premises were sold at public auction for $297,500. The plaintiff bank was the purchaser and as owner of an undivided two-thirds interest in the premises sold, it was required to pay only one-third of the purchase price, $99,166.67, which was deposited with the clerk of court. In accordance with the prayer in the petition of the said William E. Quirin and on the strength of the conveyances offered in support of his petition, the Court decreed in October, 1914, that of the fund eleven-eighteenths thereof ($60,601.85) represented the individual interest of Delana B. Curtis and that it should be paid to Quirin without prejudice to further rights claimed by the said William E. Quirin in seven-eighteenths of this fund ($38,564.82) said latter sum representing the interest of the Margaret A. Harrington estate.
This fund of approximately $38,000 was thereafter administered by a trustee appointed by the court to pay the income to William E. Quirin as he claimed to be entitled to such income until the death of Margaret May Curtis Reynolds (Vreeland). The trustee continued to pay the income thereof to William E. Quirin and his assignees until the death of Margaret Vreeland on January 16, 1951. On September 2, 1924, William E. Quirin assigned all his interest in the trust fund to his wife Grace.
In subsequent litigation between Norwin S. Bean as plaintiff and William E. Quirin and Grace H. Quirin as defendants, a compromise settlement was made as a result of which on February, 1936, the Quirins made an assignment to Bean of thirty per cent of the income and principal of the fund. In August, 1946, Grace H. Quirin assigned all her interest in said trust fund to her daughter, Marjorie Quirin.
The Quirin-Bean interests have entered into the following ancillary stipulation: "The undersigned parties further agree that as between Marjorie Quirin and Norwin S. Bean as assignees of the former interest of William E. Quirin the principal of the trust fund available for distribution is $28,219.02; that such portion of said amount as may be decreed to be the Bean-Quirin interests shall be divided seventy per cent (70%) to Marjorie Quirin and thirty per cent (30%) to Norwin S. Bean; and that Norwin S. Bean has no interest in the additional amount of $4,755.99 representing the difference between total trust fund of $32,975.11 and the agreed figure of $28,219.02."
McLane, Davis, Carleton Graf and Wesley E. Whitney (Mr. Whitney orally), for Norwin S. Bean.
Warren, Wilson, Wiggin Sundeen and Bartram C. Branch (Mr. Branch orally), for Marjorie Quirin.
Craig Craig and Floyd Thorp for Charlotte H. Marshall, George E. Hill, Jr., Janet Hill Montague, Laban W. Bond, Charlotte J. Black, and Lillian Bond Lanois.
Charles H. Barnard and James A. Sayer, Jr. (Mr. Barnard orally), for Kalmar Francisco Shively.
George P. Cofran and Paul A. Rinden (Mr. Cofran orally), for Noyes F. Bond and Rufus F. Bond.
The question transferred in effect asks us to decide who is entitled to how much of what trust moneys. This question depends in part on whether clause sixth of the will violates the rule against perpetuities. At the threshold of the dispute, however, is the issue whether the construction of this will in the case of In re Harrington Estate, 97 N.H. 184, is res judicata of the present claim that clause sixth violates the rule against perpetuities. We consider this preliminary issue first.
The proponents of the will maintain that the Bean-Quirin interests are precluded from urging the invalidity of any part of the will under the doctrine of res judicata and rely on McAllister v. Elliot, 83 N.H. 225. That case is similar but distinguishable because of important factual differences. In the first McAllister case (McAllister v. Hayes, 76 N.H. 108) "counsel on both sides . . . made repeated references to the rule against perpetuities." 83 N.H. 225, 228. Furthermore the opinion in the second McAllister case states that the silence of the court relative to the rule against perpetuities ". . . is to be explained rather upon the ground that the inapplicability of the rule to any of the devises in the will was clear." 83 N.H. 225, 229. When In re Harrington Estate, 97 N.H. 184, was argued and decided there was no reference to the rule against perpetuities in the reserved case, the oral arguments, or the written briefs and it was not mentioned in the opinion. Bean and Quirin were not parties. The issue of the validity of clause sixth of the Harrington will with relation to the rule against perpetuities was neither litigated nor determined in the prior action and is not res judicata of the issue in this proceeding. Gagnon v. Pronovost, 97 N.H. 500.
The rule against perpetuities, hereinafter called the rule, prevails in this state (Gale v. Gale, 85 N.H. 358) but it has never been "remorselessly applied" as advocated by Gray in "The Rule against Perpetuities" (4th ed.) s. 629. The genesis of the modified rule in New Hampshire began in 1891 with Edgerly v. Barker, 66 N.H. 434, when a gift of a remainder interest to grandchildren reaching forty years of age, which offended the rule, was cut down to a gift to grandchildren reaching twenty-one years of age so as to not offend the rule. This decision was bitterly assailed by Gray in his treatise (appendix G) since he thought it was a dangerous thing to tamper with this ancient English rule "which is concatenated with almost mathematical precision." Gray, supra, s. 871. Nevertheless, Edgerly v. Barker, supra, has been followed in subsequent decisions in this state and continues to remain in good standing here. Wentworth v. Wentworth, 77 N.H. 400; Flanders v. Parker, 80 N.H. 566; Gale v. Gale, supra; Amoskeag Trust Company v. Haskell, 96 N.H. 89, 91. See Quarles, The Cy Pres Doctrine: Its Application to Cases Involving the Rule against Perpetuities and Trusts for Accumulation, 21 N. Y. U. L. Q. Rev. 384 (1946). In England the same result has been achieved by legislation. Laws of Property Act, 1925, 15 Geo. V., c. 20, s. 163.
The rationale of the Baker case was that, wherever possible, a will should be construed to carry out the primary intent to accomplish a legal testamentary disposition even though the will may have inadvertently exposed a secondary intent to accomplish the testamentary disposition in an ineffective manner. That rationale has been applied in many recent will cases that have not involved the rule itself. "Traditionally, the courts of this jurisdiction have shown a signal regard for the intent of the testator . . . at times at the expense of other recognized principles deemed less cogent in their application. Cf. Edgerly v. Barker, 66 N.H. 434." Petition of Wolcott, 95 N.H. 23, 26. The same thought received expression in different language in Burtman v. Butman, 97 N.H. 254, 258: "Probably no jurisdiction has stood more steadfastly for giving effect to the intention of the testator rather than to arbitrary rules of law than New Hampshire." The refusal of this court to apply in unmodified form common law principles which defeat normal and reasonable estate plans has not been limited to wills but applies to conveyances as well. Therrien v. Therrien, 94 N.H. 66.
The rule is a technical one, difficult of application and is often enforced to frustrate testamentary intent although the policy of the rule may not require such enforcement in a particular case. It is not surprising, therefore, that there has been an increasing tendency to avoid the application of the rule by various judicial techniques. There is a constructional preference for considering interests vested rather than contingent. Upton v. White, 92 N.H. 221. "The public interest in keeping the destructive force of the rule against perpetuities within reasonable limits is a considerable present factor supporting the public interest in that construction which accomplishes the earlier vesting." 3 Restatement, Property, s. 243, comment i. (Emphasis supplied). If a gift is made upon alternative contingencies, one of which might be remote, while the other is not, the gift is valid where the second contingency actually happens. This doctrine is used to prevent the application of the rule in many cases. Anno. 64 A.L.R. 1077. "Essentially this represents a revulsion against the rule requiring absolute certainty of vesting as viewed from the creation of the interest . . . . Courts have a strong tendency to `wait and see' wherever possible." 6 American Law of Property (1952) s. 24.54. These techniques have the salutary effect of avoiding the punitive and technical aspects of the rule but at the same time confirming the policy and purpose of the rule within reasonable limits. Wentworth v. Wentworth, 77 N.H. 400.
Clause sixth of the will is capable of at least two possible constructions. The first construction is that clause sixth created two contingencies upon which it would take effect: one to occur, if at all, on the death of Margaret May Curtis; the other to occur, if at all, on the death of unborn grandchildren. Since the first contingency actually occurred and is within the period of perpetuities, the gift may be considered valid. A closely parallel case is Springfield Safe Deposit Trust Co. v. Ireland, 268 Mass. 62. Under this construction the event occurs at the death of Margaret May Curtis, a life in being, and clause sixth would not be considered violative of the rule.
The second possible construction of this sixth clause is the one urged by the Bean-Quirin interests. They argue that the will gives the brothers and sisters an executory interest upon a single contingency which may occur at the death of as yet unborn grandchildren. While this is not the only construction that the clause is susceptible of, it is not a labored one. There is no doubt that, if there had been another grandchild who died after Margaret May Curtis without leaving heirs of his body, this event would have occurred beyond the period allowed by the rule against perpetuities.
Assuming this second construction to be permissible, we come to the crucial question whether we are justified in deciding the perpetuities issue on the facts which actually occurred rather than on facts that might have happened viewed as of the death of the testator. There is little case authority for deciding upon facts occurring after the testator's death in a case such as the one before us. However, recognized modern commentators present convincing arguments for doing so. Leach, Perpetuities in Perspective: Ending the Rule's Reign of Terror, 65 Harv. L. Rev. 721 (1952); 6 American Law of Property (1952) s. 24.10; and a full study by a Pennsylvania law revision commission resulted in a statute that permits such events to be considered. Pa. Estates Act of 1947, s. 4, Purdon, Pa. Stat. Ann. tit. 20, s. 301.4. There is no precedent in this state that compels us to close our eyes to facts occurring after the death of the testator.
In the present case we are called on to determine the validity of clause of a will that did not in fact tie up property beyond the permissible limit of lives in being plus twenty-one years. There is no logical justification for deciding the problem as of the date of the death of the testator on facts that might have happened rather than the facts which actually happened. It is difficult to see how the public welfare is threatened by a vesting that might have been postponed beyond the period of perpetuities but actually was not. The recent decision in Sears v. Coolidge (Mass.), 108 N.E.2d 563, allows the court to take a "second look" under powers of appointment. While this is not direct authority for doing the same thing with a devise or bequest, it is bottomed on the same proposition that the glacial force of the rule will be avoided where the interests actually vest within the period of perpetuities. 6 American Law of Property, s. 24.35. When a decision is made at a time when the events have happened, the court should not be compelled to consider only what might have been and completely ignore what was. Analogy may be found in cases where the validity of a remainder interest is not considered until the facts existing on the death of the life tenant can be established. See Orr v. Moses, 94 N.H. 309; Durfee Trust Co. v. Taylor, 325 Mass. 201.
At the death of the survivor of the life tenants, Edward Harrington and Delana B. Curtis, both of whom were lives in being at testatrix' death, it became certain that no grandchildren of the testatrix would be born after her death. This in turn made it certain that the gift in clause sixth of the will would in fact vest at the death of Margaret May Curtis Reynolds Vreeland, also a life in being at testatrix' death. Consistent with the principles above stated, the facts existing at the death of the two life tenants are taken into consideration in applying the rule.
We therefore conclude that clause sixth does not violate the rule against perpetuities. The individuals who are entitled to participate in the distribution of the trust moneys and the extent of their interests are to be determined under this clause.
Since Almeda S. Goyscan predeceased the testatrix leaving no issue and since the testatrix' sister, Nancy Bond Corliss and her only child George died without issue before the death of Margaret, the division is to be made among the representatives in interest of five brothers and sisters of the testatrix as stated in In re Harrington Estate, 97 N.H. 184, 187.
The brother Jonathan is represented by two grandchildren whose interests are equal. Similarly the brother John is represented by two grandchildren whose interests are likewise equal. The interests of these representatives of the two brothers are unaffected by any conveyances. Consequently, the representatives of each brother share equally in one-fifth of the fund.
The sister Maria is survived by three grandchildren, all children of George E. Hill, who conveyed his interest in 1914, but predeceased Margaret. Similarly the brother James B. is survived by two grandchildren, both children of Arthur J., who conveyed his interest in 1914, but predeceased Margaret.
The sister Abigail is survived by three children and a granddaughter representing a deceased child all of whom conveyed their interests in 1914, the granddaughter's interest being conveyed by a guardian's deed.
While it was the common law rule that future contingent interests were not alienable (Hayes v. Tabor, 41 N.H. 521), this is not the majority rule today. 2 Restatement, Property, s. 162; 3 Simes, Future Interests, s. 714; 2 Powell, Real Property (1950), s. 283. More recent cases in this state indicate the growing tendency to uphold conveyances of unvested rights. Peterborough Bank v. Hartshorn, 67 N.H. 156; Ladd v. Higgins, 94 N.H. 212, 214. Accordingly it is held that the deeds given in 1914 were effective to convey whatever interests the grantors then had, which interests were contingent upon the grantors surviving Margaret. Since those who were the representatives of the sister Abigail in 1914, all survived Margaret, the interests conveyed by their deeds belonged at the time of vesting to the successors of the grantee, now the Quirin and Bean interests. These interests are entitled to one-fifth of the fund. On the other hand since the children of the sister Maria and the brother James B. who conveyed in 1914, predeceased Margaret, no interests vested in them and Quirin and Bean, the successors of the grantee, took nothing from them. The representatives of this brother and sister living at the death of Margaret take under clause sixth of the will. Golladay v. Knock, 235 Ill. 412; Whitesides v. Cooper, 115 N.C. 570; 2 Powell, Real Property (1950) supra, pp. 504, 505. The three representatives of Maria are each entitled to one-fifteenth of the fund and the two representatives of James B. are each entitled to one-tenth.
The Quirin and Bean one-fifth part of the fund is to be divided between them in accordance with the ancillary stipulation which they filed.
Case discharged.
All concurred.