Waesche v. Rizzuto

Michaeeson, J., by special assignment, delivered the opinion of the Court. The appeal in this case is from a decree of the Circuit Court for Montgomery County, passed in a cause in which the complainant, Florence Rizzuto, sued the appellants, Russell R. Waesche, Jr., and Harry Lee Waesche, Trustees named in the Last Will and Testament of Russell R. Waesche, Sr., to have the court construe and enforce the testamentary trust alleged to have been created. By its decree, the lower court assumed jurisdiction of the trust, directed the trustees to render a complete accounting of all funds received by them as trustees under the will, and ordered them to pay certain monies to the appellee, Florence Rizzuto, as a cestui que trust. The facts in this case are somewhat complicated but, in substance, are as follows: Admiral Russell R. Waesche, Sr., at one time Commandant of the U. S. Coast Guard, died in Montgomery County, Maryland, on October 17, 1946.

His Last Will and Testament, executed on May 29, 1946, was ⁵⁷⁸ duly admitted to probate in the Orphans’ Court for Montgomery County. The two older sons of the testator, Russell R. Waesche, Jr., and Harry Lee Waesche, were named executors and co-trustees. At the time of his death, the testator left surviving him his widow, Agnes Rizzuto Waesche, and four sons, the above named two sons, a third son, James M., these three being children of a former marriage, and a fourth son, William Alexander Waesche, a child of the marriage to Agnes Rizzuto Waesche. The appellee, Florence Rizzuto, was a sister of Agnes Rizzuto Waesche, and she had lived in the Waesche home for approximately fifteen years prior to the death of Agnes R. Waesche on November 3, 1947.

During the time that Florence lived in the Waesche home, she was regarded as a member of the household and was treated accordingly. When the estate of Admiral Waesche was settled, the trustees received a net distribution of $21,564.66 as a part of the trust fund. At the time of the death of Russell R. Waesche, Sr., in 1946, his widow, Agnes, was not in good health, and she became almost helpless during the last year of her life. She executed a will on February 25, 1947, and died on November 3, 1947, a little more than a year after her husband’s death.

Her will was also admitted to probate in the Orphans’ Court for Montgomery County, Maryland. The testatrix named Russell R. Waesche, Jr. (who was one of the executors and trustees under her husband’s will) and Florence Rizzuto, her sister, as executors and trustees in her will, and she designated Harry Lee Waesche and her sister, Florence, as co-guardians of the minor son, William, who was thirteen years of age at the time of his mother’s death. After the death of his mother, William lived in the home of Harry Lee Waesche, except during the time he was away at school or serving in the Army. He became twenty-one years of age on August 8, 1954.

The provisions of the will of Agnes R. Waesche were similar in many respects to those of her husband’s will. She left the residue of her estate in trust for three purposes: (1) to provide for the proper support, comfort and education of her ⁵⁷⁹ minor son, William, (2) to provide for, or aid in, the support and comfort of her sister, Florence Rizzuto, and (3) to provide for a monthly payment of $15.00 towards the support of her mother. The trust which Agnes R. Waesche established was to terminate upon the completion of her son’s education or upon his reaching the age of majority and becoming self supporting. Upon the completion of the trusts established by the testatrix, the trustees were directed to pay any remaining balance to her son, William, outright.

(See third item of her will.) After Admiral Waesche’s death in 1946, Florence Rizzuto continued to live with her sister in the house which became the property of Agnes R. Waesche as the survivor of her husband. Florence helped to take care of her sister and helped to run the household until Agnes died in November, 1947. During this period of time the trustees of the Admiral’s estate made a number of payments or advances out of his estate to Florence Rizzuto- to defray the cost of managing the home and paying for the living expenses of Agnes R. Waesche and Florence. The total of these expenditures was approximately $9,400.

This money was not improperly spent or wasted. The inventoried personal estate of Agnes R. Waesche consisted of $5,138.50, and the sale of her home after her death produced the net sum of $18,497.26. The executors of her estate, Russell R. Waesche and Florence Rizzuto, in May, 1948, repaid unto the trustees under the Admiral’s will the sum of $8,404.79, a major part of the above mentioned payments or advances totalling approximately $9,400.00. Admiral Waesche, at the time of his death, had an insurance policy of National Service Life Insurance in the amount of $10,000.

His two older sons, Russell, Jr., and Harry Lee, were named principal beneficiaries in this policy on May 29, 1946, each to receive the sum of $5,000. The two younger sons were designated as contingent beneficiaries. Prior to May 29, 1946, the Admiral’s wife, Agnes, was named as principal beneficiary and the four sons were named as contingent beneficiaries. It should be noted that this change of beneficiaries ⁵⁸⁰ was made on the same date as the execution of the Admiral’s Last Will and Testament.

Each of the two sons, Russell, Jr., and Harry Lee, received in all $5,000 from the insurance, and each beneficiary deposited the money in separate individual bank accounts. Harry Lee later invested his $5,000 in stocks, and he said that his brother, Russell, agreed to do the same with the $5,000 which he received. Harry Lee testified that his reason for putting the insurance into a separate bank account was that, in conversation with his brothers, it was determined that this money was not a part of the residue and remainder of his father’s estate, but that “it would be used under the intent of dad’s wishes”, that, although the stocks he purchased are registered in his and his wife’s names jointly, this fact has never altered his intention that “this money was to be used to further dad’s will”; that he didn’t consider it as his sole property; that if he had so considered it, he would have spent it long ago. After her sister’s death, Florence Rizzuto went to live, early in 1948, with another sister and their mother in New Jersey.

The trustees of the estate of Agnes Waesche paid to her or on her behalf from February, 1948, to September 30, 1954, the sum of $10,230.26. Of this amount approximately $8,700 was paid to her, and the balance for dental and medical expenses and on account of a business course. These payments started at $150.00 per month, were later reduced to $125.00 and then to $100.00 per month. She received $100.00 from the trustees of the estate of the Admiral on November 1, 1954, a premium for Blue Cross insurance in the amount of $8.90 was paid, and a check for another $100.00 was sent by the trustee, Russell R. Waesche, Jr., on November 29, 1954.

No further payments were made to her. The trustee, Russell R. Waesche, Jr., in correspondence with counsel for Florence Rizzuto, stated that no further payments were made to her because: “the only question with which I am concerned is her present ability to support herself or to assist in her support. My father’s will leaves it to the discretion of his trustees whether or not to contribute ⁵⁸¹ anything toward her support—in such manner as they shall decide.” The appellants contend: (a) that the testator did not create an enforceable testamentary trust; (b) that the lower court erred in finding that the approximate sum of $8,400 which was paid out by the trustees from the funds in hand and later returned to them was a part of the trust fund; (c) that the lower court erred in finding that the proceeds of the National Life Insurance policy in the amount of $10,000 were a part of the trust fund; (d) that the lower court erred in finding that the trustees abused their discretion by refusing to make payments to Florence A. Rizzuto after November 29, 1954. It is, principally, the construction placed on the third and fourth items or paragraphs of the will of Russell R. Waesche, Sr., which has caused the controversy in this case.

These items are as follows: “Third: I give, devise and bequeath all the rest, residue and remainder of my estate of whatever character unto my trustees to have and to hold the same, which is hereinafter referred to- as the trust fund, upon and for the following trusts and purposes : 1. It is my will and desire that my trustees, after giving careful consideration to the value of all property, bonds, cash in bank, and other assets, together with income therefrom, including any Government pension or other remuneration, which my beloved wife, Agnes Rizzuto Waesche, may own or become entitled to upon or subsequent to my death, determine from time to time what additional financial aid, if any, may be necessary and proper for the adequate support and comfort of my said wife, and, under such arrangements and at such time or times as they shall decide best, defray such additional financial aid, if any, as so determined, from the trust fund herein provided. 2. Florence Rizzuto, my sister-in-law, having made her home with us as a part of our household for ⁵⁸² approximately fourteen years, has become practically an established member of our family. Therefore, it is my will and desire that my trustees, after carefully considering (a) the financial ability of my wife, Agnes, to aid in or contribute from her own property and income for the support and comfort of her sister, Florence, and (2) the reasonableness and ability of my sister-in-law, Florence, upon the recovery or death of my wife, Agnes, to engage in employment to provide for or aid in her own support and comfort, make such arrangements from time to time as they shall deem just and equitable to assure the adequate support and comfort of the said Florence Rizzuto for the remainder of her life or until she marry, and defray the costs and expenses therefor from the trust fund herein provided in such manner as they may decide. 3.

It is my will and desire that my trustees, after carefully considering the financial ability of my wife, Agnes, to aid in or contribute from her own property and income for the support, comfort and education of our minor son, William Alexander, determine from time to time what additional financial aid, if any, may be necessary and proper for the adequate support, comfort and education of William Alexander, and, under such arrangements and at such time or times as they shall deem best, expend from the trust fund such amounts for such financial aid and pay the same to whomsoever acts as guardian and provides a home for William Alexander, such financial aid to be continued until his education is completed, or until he reaches the age of majority and becomes self-supporting, as may be determined by my trustees in their discretion.” "Fourth: I have designated my two executors and trustees as the principal beneficiaries of my National Service Life Insurance, and, realizing it is beyond my power by this will and testament to do so, but ⁵⁸³ relying upon faith and confidence in my trustees that they will comply with my desires, it is my wish that, upon my death, the monthly payments of insurance to my trustees be included in the trust fund and be administered for the carrying out of the trusts herein provided.” The first question to be decided is whether or not it was the intention of the testator to create an enforceable trust and whether he did, in fact, create such a trust under the foregoing provisions of his will. The creation of an express trust must include the following essentials: first, a subject matter for a proper trust; second, a person competent to create a trust; third, one capable of holding the property as trustee, and fourth, a person for whose benefit the trust property is held. Sieling v. Sieling, 151 Md. 536, 550 ; Miller, Construction of Wills, § 169. Whether or not a trust is created by the terms of a will is a question of intention, technical words not being required.

It is enough that the intention to create a trust is apparent. Jarman on Wills (5th ed.), §§ 355, 356; Coudon v. Updegraf, 117 Md. 71, 78 . In that case this Court stated that, in the interpretation of wills “the cardinal canon around which all others center is this, that the intention of the testator when ascertained from the whole instrument, or from the instrument as read in light of surrounding circumstances existing at the date of its execution, must be given effect if that intention does not antagonize or conflict with some rule of law or property.” Henderson v. Henderson, 64 Md. 185 ; Darden v. Bright, 173 Md. 563 ; Robinson v. Mercantile Trust Co., 180 Md. 336 ; Jones v. Holloway, 183 Md. 40 ; Robb v. Berryman, 215 Md. 161 ; 95 C.J.S., Wills, §§ 590, 592. A reading of the will shows clearly that the testator intended to provide for the welfare of the natural objects of his bounty, who were named as his beneficiaries, namely, his wife, his minor son, and also the complainant, Florence Rizzuto, who was referred to in the will as “having made her home with us as a part of our household for approxi ⁵⁸⁴ mately fourteen years, has become practically an established member of our family.” The testator, in the Third item of his will, gave, devised and bequeathed all the rest, residue and remainder of his estate of whatever character unto his named trustees “to have and to hold the same, which is hereinafter referred to as the trust fund, upon and for the desired trusts and purposes.” (Emphasis supplied.) He then expresses, in the three ensuing sub-paragraphs, his “will and desire” to be executed by the trustees.

The testator points out the specific property which should comprise the trust fund, and he sets forth in detail the duties to be performed by the trustees in behalf of the designated beneficiaries. Further, in the Fifth item of the will, the testator provided for the final distribution of the balance of the trust fund by the trustees upon completion of the trusts. Thus it would seem pertinent to inquire: If the testator did not intend to create a valid testamentary trust, and did not establish a trust, what did he intend to do ? In