70 S.E. 817 | S.C. | 1911
March 28, 1911. The opinion of the Court was delivered by Reference may be had to the decree of the Circuit Court and the exceptions thereto, herewith reported, for a full statement of the facts and issues.
We notice first the question as to the proper construction of the trust deed executed, August 26, 1858, by John H. Williams to James W. Williams, trustee. After reciting the consideration, natural love and effection for his grandchildren named and their release of all claims against him on account of certain slaves, the grantor conveyed the tract of land in Abbeville district containing 2,057 acres known as the Burgiss tract, unto said trustee, his heirs and assigns forever upon the following trusts: "In trust for the sole and separate use of my aforesaid grandchildren for and during their natural lives, and, at their respective deaths, their respective shares of said land or the proceeds thereof if sold, shall be divided among their respective issue living at their respective deaths, according to the provisions of the Acts of the General Assembly of this State for the distribution of intestates' estates, but should either of my said grandchildren die, leaving no issue living at the time of his or her death, then and in that event, the *277 share of such grandchild so dying shall go to the survivor or survivors of my said grandchildren, to be held by the said James W. Williams as trustee upon the same terms and limitations that he holds the original shares, and in case all three of my said grandchildren should die without leaving issue surviving them, then and in that case the said land or the proceeds thereof, if sold, shall be equally divided among my four children, James W. Williams, Robert C. Williams, Elizabeth C. Williams and Theresa O. Williams, the child or children of a deceased child taking the share its or their parent would have taken if living at the happening of contingency last mentioned, as part of the trust of this deed."
It is contended in behalf of plaintiff that the proper construction of this deed requires the conclusion that upon the death of Eliza F. Buist, childless, the corpus of the funds now in the trustee's hand, will become intestate property of John H. Williams, the original grantor, or a resulting trust in him or his heirs.
The three grandchildren were Eliza F. Williams, plaintiff, now wife of H.B. Buist, Martha E. Williams who died unmarried and childless, and William A. Williams who died in 1888 leaving as his issue defendants J. Hudson Williams and William A. Williams. It is contended that as Eliza F. Buist is the last survivor of the three grandchildren, upon her death childless, there will be no one answering the description "Survivor of my said grandchildren," and that the estate cannot go over to the four children named because all three of the grandchildren did not die without leaving issue surviving them, hence the estate reverts to the grantor and his heirs.
The Circuit Court declined to accept this view and sustained the conclusion of the master, who reported in part as follows: "After careful perusal of deed and close consideration of it, as a whole, and in reference to the words, *278 phrases and clauses therein contained, it is manifest to the master that the intention and desire of the grantor was,
"(1) To part with his whole estate in the land, and to convey it for the benefit of his three grandchildren as payment for the release on their part of certain claims, which they held against him. In other words: There was a valuable consideration paid to him by these grandchildren alone. No other relatives of the grantor contributed towards the payment of this consideration, for the claim was held by these three grandchildren, and by none of his other relatives. Clearly then, this conveyance was exclusively for the benefit of these three grandchildren and their issue, and not for the benefit of the grantor's other relatives, so long as any of these three grandchildren or their issue should be in existence.
"(2) That these three grandchildren should not own the land absolutely, but only for their lives.
"(3) That upon the death of the grandchildren, the land was to go to the issue absolutely, free from all trusts.
"(4) That the land was not to revert to the grantor's estate, nor to go to any of his other relatives, unless all three of his said grandchildren should die without leaving issue surviving them.
"Then, if these conclusions are the expressed intent of the grantor, the existing circumstances admitted by the pleadings being that the plaintiff is to die without issue, and the defendants, J. Hudson Williams and William A. Williams, will be living at the time of her death, then upon the death of Eliza F. Buist her share of the trust fund, freed from all trusts and limitations, will go to the surviving issue of the grandchildren, to wit: J. Hudson Williams and William A. Williams, or, if either of them be not living, then to the surviving one."
We affirm this construction. This is a trust deed. A court of equity in its jurisdiction over trusts is not bound by the technical rules of the common law, and will seek the *279
intention of the grantor from the whole instrument.McMichael v. McMichael,
We agree with the Circuit Court that the cestuis quetrustent are not entitled to a proportionate interest in the 82.1 acre tract, because of the two payments of $318.70 and $540 derived from the trust fund. This land on July 12, 1873, was conveyed by the Marshall devisees to Hugh B. Buist as guardian of Eliza F. Buist, and on February 7, 1877, was conveyed by Hugh B. Buist as guardian of Eliza F. Buist. At that time $318.70 was due on the mortgage given by H.B. Buist for the purchase money which originally was $4,150. On that day H.B. Buist qualified as trustee in the place of James W. Williams and gave his bond to the probate court with Eliza F. Buist as surety and to secure this bond Eliza F. Buist executed a mortgage on said tract. The amount $318.40 due the Marshall devisees on the mortgage to them for the purchase money was paid by H.B. Buist from the trust fund. The cestuis que trustent claim a proportionate part of the land, invoking the rule of equity that cestuis quetrustent have the option to follow the fund into the new investment and claim the profits or hold the trustee liable for the breach of trust. This is a well established rule, but it cannot apply in this case to the extent claimed. No land was acquired by means of the trust fund, as it had been acquired long before the inception of the trust. All that was acquired was the removal of a lien upon this land, and all the claims of equity will be vindicated by subrogating the trust estate to the lien removed by the trust fund. This was in effect done when Eliza F. Buist became surety on *280 the trustee's bond and mortgaged this property to secure the same. All agree that the bond is well secured.
With respect to the $540 payment it appears that while this sum was paid on the Marshall mortgage previous to the time when H.B. Buist became trustee from money furnished by Mrs. Williams, the mother of Mrs. Buist, the amount was afterwards repaid out of the trust fund. Of course, the trustee is accountable for this money and the Court so holds, and the trustee raises no objection thereto; but it does not follow that such use of the trust fund gives the cestui quetrustent the right to claim a proportionate part of the land. The greatest reach of equity could not go beyond impressing a lien upon the land to the extent of the payment. This also has been already accomplished by the mortgage given by Mr. Buist on this land to secure the trust estate. The cases of Wallace v. McCullough, 1 Rich. Eq. 426, and Green
v. Green,
We think the master and Circuit Court were correct in holding that the trustee should not be charged with the present value of the Piney Mountain land. It appears that the trustee bought this tract paying therefor $730.47 out of the trust fund subsequently spent $813.50 improving it, and sold it for $2,288, making a profit of $744.03. The land was deeded to Mr. Buist as trustee and sold as trustee, and he has been held accountable for the money expended from the trust fund and the profit made, to which he makes no objection. It is manifest from the statement that the present value of the land is not chargeable against the trustee. The master, while holding the use of the trust funds in buying and improving real estate was a technical breach of the trust, acquits the trustee of any dishonest motive. Equity is fully satisfied by charging the trustee with the profits made, together with the trust fund expended. *281
It is very clear also that the trustee should not be charged with the present value of the Burgiss land. The sale was not wrongful, but was made under the authority and discretion conferred by the trust deed, acting in good faith. In such case the trustee can only be required to account for the proceeds of sale.
The judgment of the Circuit Court is affirmed.