The plaintiff Morristown Trust Company, as substituted trustee of three certain trusts and co-trustee of another, and Paul L. Thebaud as co-trustee of such fourth trust bring this action for the construction of two writings relating thereto made by some of the beneficiaries of said trusts, for the determination of the effect of a prior judgment of this court upon one of said agreements and for instructions with respect to the distribution of the several trusts.
It is unnecessary to go into the creation or the terms of said trusts, except to state that at the time with which we are concerned the plaintiffs held the same on these conditions, namely, to pay to Louisa J. Thebaud, wife of Edward P. Thebaud, the income thereof during her lifetime, and upon her death to distribute the remainder in equal shares to her children then living, and the issue of any deceased
child -- such issue to receive the parent's share. At the time of the execution of such writings she had three sons, Paul L. Thebaud, Louis B. Thebaud and Edward P. Thebaud, Jr. Under these trusts, which for convenience will be called the ancestral trusts, each of the sons had a vested remainder in one-third of the corpus subject to being divested if he predeceased his mother leaving no issue. Each of the sons had an interest in his brothers' shares contingent on the latter or either of them predeceasing their mother and leaving no issue.
The first of the writings that we are called upon to construe is an agreement entered into by the three sons and their wives on August 13, 1937. None of the sons, then or since, had issue. In it, after a description of the four ancestral trusts and a recital that the vested remainder of each of the sons was subject to divestiture if he predeceased his mother without issue, there is this recital:
"WHEREAS, in the event any of the said Paul L. Thebaud, Louis B. Thebaud and Edward P. Thebaud (Jr.) should predecease the said Louisa J. Thebaud leaving no issue, but survived by a widow, it is desired that such widow be provided for or that the share of the one so dying should be disposed of in such manner as the one so dying shall direct."
Then follows this provision:
"* * * that in the event any of the said Paul L. Thebaud, Louis B. Thebaud and Edward P. Thebaud [Jr.] shall predecease the said Louisa J. Thebaud, the share of the one so dying shall be by said trustees and their respective successors in office made over, paid and delivered to the order of the one so dying, pursuant to such instructions in writing as he may in his life time make and file with the said trustees, or failing that, to his executors or as he may in and by his last will and testament direct and appoint; * * *." (Emphasis added.)
And it is further provided that the parties
"do assign, set over, transfer, release and convey to the others of the undersigned, all their respective right, title and interest in such part of the funds constituting the above described trusts as would
go to enlarge (emphasis added) the shares of any of the undersigned in the event of the death of one or more of the others prior to the said Louisa J. Thebaud."
The next writing with which we are concerned is an indenture of trust entered into on September 18, 1937, between Edward P. Thebaud, Jr. as settlor and Morristown Trust Company as trustee, hereinafter called the instant trust indenture. In it there is a recital of the four ancestral trusts and the manner in which they were created, and of the fact that the settlor's interest is subject to divestiture in the event that he should predecease his mother, leaving no issue, and of his desire "to provide for his widow should he predecease his mother." After a reference to the agreement of August 13, 1937 and its salient provisions, the indenture provides as follows:
"WHEREAS, the Settlor has filed with the trustees of said trusts a duly executed copy of said agreement and has notified said trustees in writing that the interest which he shall take pursuant thereto shall be made over, paid and delivered to the Morristown Trust Company, as Trustee to be held and administered by said trustee, pursuant to the terms of this indenture;
NOW THEREFORE, in consideration of the premises and of the sum of One Dollar, by each of the parties hereto to the other in hand well and truly paid, at or before the ensealing and delivery of these presents, receipt of which is hereby acknowledged, the said Settlor, for himself, his executors and administrators, hereby confirms the agreement and assignment hereinabove referred to and hereby sets over, transfers and assigns unto the said Trustee hereinabove named its successors and assigns, all his right, title and interest in any funds which he shall receive pursuant to said agreement;
TO HAVE AND TO HOLD the same unto the said Trustee, its successors and assigns, IN TRUST, nevertheless, for the following uses and purposes, that is to say:
I. To receive, receipt for, hold, manage, invest, reinvest and to keep the same invested as one fund, and during the trust term herein determined to pay over the net income therefrom in ...