174 Iowa 449 | Iowa | 1915
The father of Ed L. Clark named Grant, John and Homer Clark as trustees in his will. In so far as is material here, that will provides as follows:
1. Trust management trustee by will: control by court. “I will, direct and constitute (named trustees) without bond to take charge of and control such legacies as may come to Ed L. Clark by virtue of this my last will and testa*452 ment to hold and control such property as may seem best in their judgment to advance the interests of such legatee, and if, in their judgment, it should be deemed advisable to give said legatee control of said estate, they are empowered to do so.”
In effect, the appellant presents that the trust created by the will is so absolute as that no court and no person, except the trustees named in the will, can pay for any services out of the trust fund created by said provision in the will; and that, therefore, the trustees being unwilling to make this payment, the court was without authority to compel them to make it inclusive, of necessity, that the cestui could do nothing by way of contract, and have no services performed for him which would authorize a court to allow payment to be made out of said trust fund. It is contended, as it must be, that whatever the power of the court over trustees, it has none over such as are appointed by the person who creates the trust, and not by the court. There are, however, some concessions which somewhat modify this contention. The appellant emphasizes that there is no pretense of advance authority from the court to carry on the litigation for which allowance was finally made. 'In appellant’s motion to dismiss, it is said:
“That the court, and no other person, has the right or jurisdiction to compel the turning over of said funds to said ward, or to any other person.” (Ab. 39.)
Finally, it is said in argument that appellees are mistaken in saying that appellants “advance the proposition that no court has any jurisdiction to examine the conduct of the trustees in relation to a trust fund, nor to control in any manner, or to any extent, their administration of the trust estate”. The actual claim of the appellant is'perhaps indicated by this statement in argument:
“The complaint is that the court has no right to ingraft burdens upon this trust fund that were not contemplated by*453 the one who created the trust, were not authorized by anyone who had the right or authority to authorize them, and were not, in fact, for the benefit of the cestui que trust.”
It is provided in Sec. 225 of the Code of 1897 that the district court has original and exclusive jurisdiction “in all matters in relation to the appointment of executors and trustees, and the management and disposition of the property of and settlement of such estates”. And Code Sec. 3293 is that “trustees appointed by will or by the court . shall be subject to control or removal by it in the same manner, and others appointed”. While, in Perry v. Drury, 56 Iowa, at 67, 68, there was refusal to control trustees, this was based on the proposition that the persons in question were not to be regarded as trustees, in the sense of thé Code sections just referred to; and it was held that, as to trustees within such statute, a court of equity would always interfere if the trustee, through any cause, failed to properly administer trusts conferred by will; that the powers of the court of chancery could be invoked to control, restrain and energize him in the discharge of his duties; and that he might be adequately dealt with, even to the extent of removal. When trustees refuse to act, they may be removed by the court and others appointed in their stead. In re Estate of Petranek, 79 Iowa 410. In Wolfe v. Jaffray, 88 Iowa 358, 364, it is held that, though there has been no default in the execution of the trust as to payment of annuities, and though nothing further is due during the lifetime of a named person, yet a court of equity will grant the beneficiaries protection, on the ground that the trustee is not doing his duty, or is doing wrong as trustee. Of course, all this is not absolutely in point here, but does tend to meet the contention that no court has any control over the administration of a trust by will, despite statutes which, in terms, give the district court sitting in probate control, even to the extent' of removal, over “trustees appointed by will or by the court”.
This condition of statute and case law satisfies us that the courts may, in a proper case, control the action of trustees created by will. It cannot be that the creator of a trust by will can absolutely exclude the courts from controlling any and all expenditures from the trust fund, or from making any allowances from such fund except upoñ the consent of the trustees, unless a citizen of the state has the power to set aside its laws. To give the maker of a will the prerogative of completely ousting the courts of jurisdiction in the premises is to allow him to nullify the statute provision which gives control of trustees appointed by will, even to the extent of removal. If the king can do no wrong, there is no need of law to punish him if he do wrong. If whatever the trustee by will does is final, and may never be the subject of judicial challenge, it was idle to make statutes permitting him not only to be controlled, but to be removed. If he is the absolute and final judge of what may or may not be done with the trust fund or expended therefrom, when could a ease arise in which the court could exercise' control over him and his administration; when could there be occasion to use the power to remove him? In fewer words, the testator cannot make a will which makes the trustee created by the will the sole judge of the propriety of expenditures from the trust fund, without thereby making nugatory the statutes which allow the courts to control the administration of trustees by will, and on proper occasion to remove them.
Not only was there no power to make the trustee such absolute master of the trust fund, but by any reasonable construction the testator should not be held to have thus intended. The foundation of the trust is the feeling that the trust is necessary. This carries with it the desire that nothing shall be done to impair its efficacy; that all things necessary to preserve and accrete it shall be done. No matter how much
We believe it to be reasonable construction, which harmonizes all the factors involved in this controversy, to hold that, while the court may control the administration of a trust created by will, it may do so only in a proper case; that, while it may not do so upon a mere difference of judgment between the court and the trustees, it may intervene and compel expenditures from the trust in whatsoever is by the court found to be for the benefit of the trust, for its preservation, and to shield it from spoliation or gross mismanagement. In other words, where such a trust as this exists, the court is not authorized to make allowances therefrom for any and all purposes that may be deemed by it to be a just and proper expenditure, though general equity might demand the payment; it may not arrogate to itself the legitimate discretion of the trustees so as, for instance, to order payment for clothing bought by the cestui which the court thinks a reasonable purchase, while the trustees hold to the contrary. But this is all consistent with the limitation heretofore indicated, to wit: If the expenditure be to save, enlarge, or defend the trust itself, the statutory power referred to gets its application, and within those limits is its proper scope.
II. But without resort to review de novo> we are required to interfere if an allowance has been made for something that is not for the benefit of the estate. It seems that the cestui Ed L. made a contract with Homer Clark, who happens to be a trustee under this will, and one Frank, who is not such trustee, for labor to be done by Ed L. for these others. It was agreed, in turn, that therefor Ed L. should be conveyed a piece of land. Somehow Frank sold this land and got $3,200 for it. In no view did more result from this than that Frank, and possibly Homer, owed Ed L. $3,200, because they had appropriated the proceeds of a piece of land, when those proceeds should have paid Ed L. for labor done. One item of service allowed for is the obtaining an order, in effect, that this $3,200 was chargeable to the trustees under the will as “constructive trustees”. The court below thus held that the 40 acres in question, which had been sold by Frank, in equity belonged to Ed L., and, in effect, added the proceeds of its sale to what the trustees were chargeable with. On appeal from this order, we held that this was an exercise of equitable powers which the probate court did not have,
On what theory it could well be claimed that this $3,200 should be charged to the trustees, we are at loss to understand, and think that, though this was done below, appellees may fairly be held to an anticipation that, if an appeal were . taken, such charge to the trustees could not be sustained, and think that any attempt to charge the trustees with this sum was so clearly foredoomed to failure as that appellees should not be made an allowance for the services performed in this regard. • It seems, too, that services for others than Ed L. Clark are included in the allowance made to appellees.
2.
The cause must be reversed and remanded. On the remand, the district court will proceed to take testimony on what the services here held to be for the benefit of the estate are reasonably worth, upon what other services, if any, thus beneficial have been rendered, and their reasonable value, and thereupon will make allowance in accordance with what it finds by such evidence is justly due. — Reversed and Remanded.
Supplemental Opinion.
What the opinion does say, and clearly, is that, if testimony establishes what three items are worth in lump, and no recovery may be had as to one of them, there is no evidence of what any item of the three is worth by itself, and hence a total failure of proof; that, if a witness says three things together are worth a stated sum, and one of them may not be recovered for at all, the witness has not said what any one of the three is worth, separately. ■
There was testimony of what all items in a hypothetical question were together worth. Our holding is that, since the answer thereto does not separate the items, and some of the items may not be recovered for, there is no evidence of what any single item covered by such question and answer is worth.
The petition is overruled.