20 Del. Ch. 278 | New York Court of Chancery | 1934
The trustee desires to be instructed upon whether or not it may invest the proceeds of per
The trust corpus is composed of real and personal property. The trust in general is “to hold the said real estate and personal property, and to invest the said moneys and keep the same invested,” etc. (Item 13.). There is of course nothing in that language which reveals the conferring of an investment discretion in the trustee broader than the statutory measurements.
But it is said Items 14 and 15 contain language which reveals such broader discretion. Item 14 authorizes the trustee to sell any of the real estate with the concurrence of the life beneficiary whenever it deems a conversion of the real estate to be beneficial to the trust and “the proceeds
• Two deductions are drawn by the adult defendants from Items 14 and 15 which are said to sustain the width of discretion contended for as reposed by the testatrix in the trustee.
The first is drawn from the language found in Item 14 wherein the testatrix authorizes proceeds from real estate “to be by said trustees re-invested in their discretion and with the concurrence as aforesaid either in whole or in part in other real estate or securities.” From this language the adult defendants draw the conclusion that discretion is conferred on the trustee to select from securities generally the types for investment without regard to the statute’s permissive classification. Their conclusion is based on the proposition that the phrase “in their discretion” modifies the words “re-invested * * * in other * * * securities.” But it is plain that the phrase in its context is quite logically capable of meaning that the discretion is confined simply to the matter of choice between realty and personalty as media for reinvestment. If so, when the choice has been made between realty and personalty as the desirable form in which a given reinvestment is to be
The second deduction before referred to is drawn from the circumstance that as an investment in real estate is not among the “legáis”' permitted by the statute and as the testatrix clearly authorized the trustee to invest in real estate, it follows that the testatrix meant her trustee to manage the trust without regard to the statute’s standards for trust investments. This argument amounts to saying that because the testatrix was willing to have her trustee depart from the statutory list as regards one type of investment, viz., real estate, therefore she was willing that her trustee should be permitted to depart from the list as regarding all other types of investment. • Putting it in another and more emphatic way, the argument amounts to this—that because the testatrix made an addition of real estate to the legáis she must be considered as having intended to make an addition of all other kinds of investments to the legáis. The
The foregoing discussion shows out of what debate and doubt the discretion contended for, if it exists, must be evolved. The case is not one where an intent to confer the' wide discretion contended for is manifested with utmost clearness. In Re Barker’s Estate, supra, it was said that where extra statutory discretion is claimed for a trustee, “all doubts should be resolved against the party asserting it.” Since the primary object to be attained by a trustee in the matter of investing the funds committed to his control is their safety, [In re Cook’s Estate, ante p. 123, 171 A. 730], and since the list of legáis prescribed by the statute is supposed best to guard that safety, it is reasonable to say, as courts have, that whenever a discretion is sought to be recognized which could disregard the safeguards that the statute provides, if doubt exists concerning the existence of the discretion it ought to be denied.
Decree in accordance with the foregoing.