90 Ky. 613 | Ky. Ct. App. | 1890
delivered the opinion op the court.
Prior to November 10, 1882, B. P. Avery gave to his son, the appellee, W. S. Avery, one hundred shares •of stock in the incorporated company, known as “B. P. Avery & Sons;” and at the date named the donee
“The portion of said stock which shall, under the-third item, fall to my son, Sidney, shall be held by my sons, Samuel L. Avery and George C. Avery, in. trust for the benefit of said Sidney until he shall arrive at the age of twenty-seven years, when the trust as to him shall cease, provided that, in the judgment of my> wife, and my sons, Samuel and George, the habits of 'said Sidney are such as to render it prudent that said trust shall cease, and until that time said Sidney shall have the use only of the dividends arising upon such stoclc.” If I should die during the minority of said. Sidney, then he shall have during his minority only such portion of said dividends as may be necessary, in.the judgment of said trustees, for his education and support, the excess over that of said dividends being ■safely invested for his benefit.”
In February, 1887, the appellee, being then twenty-nine years old,' conveyed all the stock in trust to the appellants, they, as his trustees, being already in con
It is claimed upon the side of the appellants that it was but a consolidation of the testamentary trust and that created by the deed of 1882 to the mother, while the appellee contends, not only that it is forbidden by law as against public policy, and, therefore, void, but that it operated as a renunciation of the previously existing trusts, and as an exercise by the trustees under the will of the discretion therein confided to them as to the stock given to the appellee. Acting upon this belief, he brought this action, asking that the deed of 1887 be annulled as fraudulent; that the testamentary trust and that under the deed of 1882 be held to have been surrendered, and that he be adjudged the absolute possession of the-stock.
The answer traverses, in the main, the averments of the petition; gives a history of the transactions relating to the stock; avers that the habits of the appellee have not improved, but that he is still improvident, and that a prudent regard for his interests forbids that any of the trusts should cease. The lower court sustained a demurrer to the answer, and gave the appellee the absolute control of the stock. It did this, as its. opinion shows, upon the ground that the deed of 1887 was void, but yet was an exercise of the discretion given by the will to the trustees, and operated as a renunciation of both the testamentary trust and that, created by the deed to Mrs. Avery of 1882.
If a trustee contracts to his own advantage, as to the trust property, with the cestui que trust, while the trust relation exists, he can not fee allowed to profit thereby. The law will not permit him to thus place his individual interest in conflict with that of the .cestui que trust. (Perry on Trusts, section 197.) He can not be permitted to thus tempt his own vir
It is urged that the appellants, in the deed of 1887, expressly renounced the two trusts theretofore existing ; and if this be not so, yet the fact that the trustees under the will, by the deed of 1887, contracted with him, should be held to be a concession upon their part of his fitness to manage his estate, and should be held to operate as an exercise in his favor of the discretionary power under the will.
It is true that the twelfth clause of the deed of 1887 provides: “Susan H. Avery, of the second part, •expressly renounces, for the benefit of the successors named herein, the trusts and the conditions named in the deed of November 10, 1882, and the said Susan H. Avery, Samuel L. Avery and George C. Avery, in exercise of the discretion and trust named in the will of B. F. Avery for the use of said W. S. Avery, now renounce the same for the benefit of the successors named herein;” but it is evident that it was
Here, however, it is claimed that this was done by a deed in which the former trustees evidently intended not to do it. The deed of 1882 was executed by parties who were sui juris, and it was unquestionably valid. It, however, was for the benefit of theappellee only, and a court of equity has the power,
The deed of 1887 being invalid, all the parties were remitted to the trusts previously existing, and the lower court should have overruled the demurrer to the answer and heard the case upon the merits. If upon such hearing the chancellor should be of the opinion that the necessity, as indicated in B. F. Avery’s will, for the continuation of the testamentary trust no longer exists, and that the need as
Judgment reversed, and cause remanded for further proceedings consistent with this opinion.