5 Mo. App. 267 | Mo. Ct. App. | 1878
delivered the opinion of the court.
Plaintiffs are devisees, legatees, and beneficiaries under “the last will and testament of Eosa D. Eice, deceased, and defendants are the legal representatives of Peter J. Hurck, deceased, who was her executor and testamentary trustee. The will, which was probated Aug. 12, 1869, conveyed all the testatrix’s property to her executor and his heirs, successors, and assigns, in trust for the uses and purposes therein set forth, with full power to sell, deed in trust, lease, mortgage, convey, or in any other manner dispose of the same at private or public sale; the proceeds of sale, together with the “rents, income, or revenue” of the estate, to be invested and reinvested by the trustee in •such securities as to him might seem best. Out of the money which should come into his hands, the trustee was •directed to pay the debts of the testatrix, erect a monument
“Third. One-third of the balance of my estate, or of the proceeds thereof, my said trustee is to hold for the benefit of the two children of my deceased sister Ann, till the youngest of them arrives at the age of twenty-one, when he is to give, convey, or make over the same to them, or to the survivor of them, or to some trustee, for his, her, or their sole use and benefit. But should both of them die before that time without leaving descendants, then this third clause of my will shall be void, and the one-third hereby devised shall be held by my said trustee upon the trusts set forth in the fourth and next succeeding clause of my will. Should the said children of my sister Ann, or either, marry and die before attaining the age of twenty-one years, leaving issue, then the share of such child of my deceased sister Ann is to go to the said issue, child or children, and is to be held in trust for said child or children until they attain the age of twenty-one years, and then to be conveyed or delivered to him, her, or them.
“Fourth. Out of the proceeds, interest, rents, income, or profits of the balance of my estate my said trustee shall, from time to time, pay over to my brother, John W. Rice, such sum or sums of money as my brother may need for his support. Not knowing how much may be necessary for that purpose, I leave the amount entirely to the discretion of my said trustee, with the understanding that the aggregate shall not exceed the remaining two-thirds of the proceeds of my said estate, except in case the preceding clause of my last will and testament in favor of the children of my deceased sister Ann should become void, for in that case my said trustee may also employ that one-third for the support of my brother, should my said trustee deem it proper and expedient to do so. Should my said brother John marry and*271 die, leaving issue him surviving, then my said trustee shall, hold all the above balance of my estate in trust for such child or children of John, share and share alike, and may convey the same to them in equal shares, or some trustee,, for their sole use and benefit.”
“Sixth. The balance or remainder of my estate I give- and bequeath to the managers of the Roman Catholic-orphan asylums of St. Louis, whom I appoint residuary legatees.”
The executor and trustee died in August, 1875. The-petition prays for the appointment of a new trustee, a. divestiture of title out of the defendants, and an accounting' between the administrator of the deceased trustee and the-new trustee, when so appointed. An interlocutory order was entered, appointing Michael J. Hartnett trustee under-the will, and making him a co-plaintiff. The heirs of Hurck filed a separate answer, ignoring most of the material allegations in the petition, and alleging that their ancestor had, in good faith, made large advances to John W. Rice, beneficiary under the will, which created a charge upon the estate of the testatrix. They prayed that this charge be-enforced in their favor by a sale of the interest of John W. Rice, and for other proper relief. The administrator answered, setting forth the account of his intestate’s receipts- and disbursements. Plaintiffs replied, admitting the correctness of the several items, but denying that payments- or advances to John W. Rice were made in good faith, or-were authorized by the terms of the trust, or could create-any charge upon the estate in favor of the deceased trustee's representatives.
Upon hearing the testimony, the court found that the-deceased trustee was indebted to the plaintiffs Laura and Edward Haydel in the sum of $2,801.11, and that the new trustee had in his hands the sum of $1,025.22, from rents-collected. The court directs this sum to be paid to said plaintiffs, and that the remainder of their claim be satisfied.
It appears from the testimony that a fair average valuation of the estate left by the testatrix would be about $90,000. This is encumbered to the amount of $36,600, of which $5,000 is from a deed of trust executed by Hurck after the estate came into his hands. During his trusteeship of six years his entire receipts were: From rents,
It is not doubted that a trustee may, under suitable circumstances, make advances in order to accomplish the objects of the trust. But such advances will not be sanctioned if in contravention of any express provision in the instrument by which the trust is created. The defendants insist that by the term “ proceeds ” the testatrix meant, not merely the current income from rents, etc., of her estate, but also the sums arising from sales of any parts or the whole of the property itself, or from loans raised thereupon, under the plenary powers granted to her trustee. But if this interpretation be conceded, it is still certain that the
Another limitation upon the trustee’s right to make advances is, that they will not be allowed in any case if the disbursement be such as a court of equity, upon application made in due form, would refuse to order. If the decree of the Circuit Court in this case, approving the advances made, and affirming its approval by an order authorizing a sale of so much of the corpus of the estate as would reimburse the trustee, was equitable and proper, then it must be true that the trustee, under the powers conferred upon him, might have sold, in the first instance, so much of the property as would suffice for the disbursements made to the beneficiary ; or that a court of equity might have directed him so to do. The converse of this proposition is equally true, and vice versa. So that, if such a sale as last supposed might not properly have been made, or would not have been authorized by a court of equity, the decree of the Circuit Court was erroneous.
It seems to be assumed for defendants that the comprehensive grant of power to the trustee to “ sell, deed in trust, lease, mortgage, convey, or in any other manner dispose of the same at private or public sale,” together with the unlimited discretion he might exercise as to the amount necessary for the beneficiary’s support, left him absolutely free from control in all such matters ; so that he might deal with them as if the property were his own. But this is a mistake. A court of equity will never favor a construction that confers upon the trustee absolute and uncontrollable powers. Topham v. Duke of Portland, 1 De G. J. & S. 568. In this case, the will provides: “ The proceeds of such sale, together with the rents, income, or revenue of my estate, my said trustee may invest and reinvest in such
If the canons of equity jurisprudence were silent on the subject of breaking into the capital of a trust-fund, we might still find in the will before us a pretty clear indication of the rule intended by the testatrix herself. One-third of her entire estate is to be eventually conveyed absolutely to the descendants of her deceased sister. The two-thirds remaining may be conveyed away only in the event that her brother shall marry and die leaving issue. The managers of the Roman Catholic orphan asylums of St. Louis are made residuary legatees. But both these last provisions would be nugatory if the corpus of the two-thirds should be sold and conveyed away in order to provide for the support of the brother. It is possible to suppose that the testatrix contemplated a partial sale for her brother’s support, leaving still a remainder for the residuary legatees. But there
It is settled by a large number of adjudications, that trustees for infants should never, without authority from the superintending court, break into the capital of the trust-fund for the maintenance of their wards. 2 Perry on Tr., sec. 618. Even the power of the court to authorize it must be exercised with great caution. A case of clear necessity must appear. But if there be a limitation over to a stranger on the death of the infant, neither the trustee nor the court can expend any part of the capital fund for the maintenance of the ward. Lee v. Brown, 4 Ves. 362. A rigorous application of these principles to the case before us would exclude any allowance in favor of the trustee, for disbursements to John W. Rice, beyond two-thirds of the rents received, or about $5,500 during the six years of his trusteeship. The beneficiary, it is true, is not an infant. But the discretion committed to the trustee in fixing the amount of his allowance seems to constitute a quasi guardianship in this particular, so that little reason appears, in principle, for a special discrimination between the cases.
We think, however, that in view of the large discretion left to the trustee by the testatrix, and of her manifest desire that her brother should be comfortably provided for, a liberal margin should be allowed, without restriction to the absolute needs of maintenance, in fixing the amount to be paid him from time to time. Yet, considering also the express limitation of his allowance to two-thirds of the actual proceeds, etc., of the estate, together with the fact of the residuary bequest, we caunot but conclude that the trustee, in making the allowance exceed the entire proceeds for the time being, and in thus creating a necessity for a diminution of the capital fund, went much beyond the intentions of the testatrix, as these may be gathered from her will. A different view of his powers would permit the trustee to sell the entire two-thirds of the estate in a single
It is objected that the plaintiff John W. Eice, Having received the benefit of these advances, is estopped to deny their propriety, and, therefore, has no rights to be enforced or protected in this proceeding. It maybe true that he can assert no claim against the defendants on the ground that those payments were improper But the error, if any, of the trustee, cannot deprive him of his right, present and future, to a maintenance from the estate. He has a right to an accounting, as prayed for, and is especially interested against a diminution of the capital fund, as demanded by the defendants, and as decreed, contingently, by the Circuit Court.
For the purpose of showing that the other plaintiffs, as legatees, residuary or otherwise, have no such interest as may enable them to maintain the suit, defendants refer us to Sawyer v. Banfield, 55 N. H. 149. In that case, the testator had bequeathed to a trustee the sum of $9,000, to be employed for the benefit of his widow. It was held that the heirs and residuary legatees had no right to interfere in a proceeding for the appointment of a new trustee. No parallel here appears with the present case. There, the intervening parties had not the remotest interest in the trust-fund. If it had been absolutely destroyed, no right of theirs would have suffered in consequence. But here, the plaintiffs, as holders of a fractional interest in the capital
The judgment will be reversed and the cause remanded. The Circuit Court, after rendering judgment in favor of the plaintiffs Laura and Edward Haydel against the estate of the deceased trustee, for the balance which will be found due them, will proceed to ascertain from competent testimony what would be a fair annual allowance to John W. Eice, — neither limiting this to the bare necessities of life, nor amplifying it to the extent of a luxurious extravagance. Let the new trustee be directed to reserve from the future income of two-thirds of the estate all that remains over the allowance, to be paid from time to time, as realized, or at fixed periods, to the proper legal representatives of the deceased trustee, until the amount of' his advance to John W. Eice over his net receipts, after deduction of other expenditures, including the balance payable to Laura and Edward Haydel, shall be reimbursed, without interest.