182 Iowa 1056 | Iowa | 1917
“Third. I give, devise and bequeath to my son, W. H. Keating, in trust the following described real estate, [describing • a 120-acre tract of land] for the benefit of my son, Charles A. Keating, should he survive me, but should I survive him, then said real estate to vest in fee simple in my said son, W. H. Keating, after the payment of debts as aforesaid.
“However, should my said son, Charles A. Keating, survive me and he prove to be a careful and prudent man, then it is my desire, if my said trustee think best, that he, my said trustee, shall convey by a proper instrument, the title to all of said real estate, in fee simple to my said son, Charles A. Keating. But I hereby expressly declare that my said trusiee shall not be required to convey said real es*1060 tate under any condition, or order of court, except as he may deem for the best interest of my said son, Charles A. Keating; meaning hereby to give unto my trustee, frill power and authority over and control of said real estate, with only the following limitations:
“First: Thatduring the lifetime of my said son, Charles A., should he survive me, I desire that he be provided for, so far as can be, from the proceeds to be derived from the use of said real estate, after payment of taxes and necessary expenses or until such time as my said trustee may deem it advisable and prudent to convey said real estate in fee as aforesaid to my said son Charles A., and this trust is expressly created for the use of my said son Charles A. during his lifetime; but that the fee to said real estate shall be in my said trustee, subject to be conveyed to my said son Charles A. whenever my said trustee deems it advisable as hereinbefore stated; but in case no such conveyance is made by my trustee, then and in that case my said trustee shall be declared the absolute owner thereof and shall have full right and authority to make such disposition thereof as he may deem for the best interest of my estate, and this instrument to be his full and sufficient authority therefor, without any order of any court; subject however, to the life interest as aforesaid of my said son Charles A. should he survive my said trustee.”
William H. Keating was also made executor of the will, without bond. After the testator’s death, William H. Keating assumed charge of the estate, settled its affairs, and received his discharge as executor, From that time until the beginning of this suit, he has continued to hold the title to the land devised to him in trust, as aforesaid, and during that period has exercised control over the land, leasing it, paying taxes and other expenses. From time to time, he has paid sums of money to Charles, as representing income or rents of the property.
The defendant admits the will of his father, as stated, but denies that the purposes of the trust created thereby have been accomplished, and alleges that plaintiff is both physically and mentally incompetent to manage and properly care for the property. He further denies the jurisdiction of the court to control his discretion with respect to the trust, and insists that, under the terms of the will, he has full and uncontrolled right and authority to administer said trust as to him shall appear just and right.
Other alleged facts are pleaded in the petition and answer, to which, so far as material to the determination of the rights of the parties, reference will be made in the further progress of this opinion.
The evidence on plaintiff’s part tends to show that, for a period of several years, beginning before his father’s death, he suffered more or less from ill health, which he attributes to an injury to his back, and to the effects of a sunstroke. During the years 1893 and 1894, he attended school to some extent, and did some work as a canvasser in Iowa and Illinois, and followed this with six months’ attendance at Chadwick College; In 1897, he went to Kirksville, Missouri, for osteopathic treatment, and while there, pursued the study of osteopathy. In the following year, he returned to Oskaloosa, where, he says, he asked the defend
Of the value of this expert evidence, we have only to say: First, that it is at least very doubtful whether a medical expert, however learned, is any better qualified than the court or juror to declare that any given man is a careful and prudent person; and second, that the hypothetical question in this case is loaded with so much matter of assumed fact which is not established by the evidence that the answers thereto are entitled to little consideration.
Coming, then, to the testimony of the defendant himself, who alone undertakes to testify to the plaintiff’s physical and mental incompetence, his theory of his rights as trustee is not without value in construing and weighing his statements with respect to the disputed facts. This is illustrated in the following excerpts from the record. Among other things, he says:
“I have made no disposition of the real estate in question, and have not provided for it by will. I aim to carry out the purposes and intentions of my father, as provided for in his will, just exactly as therein stated. If my brother is entitled to the property, he will get it, if he is a competent and careful man. My interpretation of the will is that it gives me absolute, uncontrolled determination of that question.”
Following this, in answer to inquiries, he proceeds to say:
*1064 “I intend to convey the property to my brother Charles, in case I consider him a careful and prudent man. I do not consider him such now. This is because of his physical and mental condition — not such as is indispensable to the handling of property. I mean he is not mentally right. By the Court: What is there in his physical condition that makes you think he is not a careful and prudent man? A. My belief is that his mental [physical?] condition makes^ his mind weak. I do not think there is any other explanation I can make. By the Court: The simple statement that his mental condition is such that you do not consider him a careful or prudent man is not very clear to the court; what do you mean? A. Well, a trouble that has lasted since he was a child to the present. By the Court: What trouble? A. Self-abuse, that commenced when he was about ten years of age, and also through the past years. By the Court: You don’t mean the court to understand that applies to him now? ' A. Yes, I mean that it affects him now. As foundation for my statement I have his own statements written to me, and my taking him to a physician and having a physician examine, him. I have no written statement from him, because at his request I destroyed it. He said to me he had practiced self-abuse, but he has not said anything on the subject since he was thirty years of age.” [Plaintiff was forty-six years of age at the time of the trial below.]
Plaintiff denies making any such statement, and denies that he ever practiced the vice mentioned. He admits that, prior to 1897, he suffered from nocturnal losses, but says the weakness was the result of accidental injury to his back,’ and that, in the year named, he was cured by treatment administered to him at Kirksville, Missouri. In view of the denial by plaintiff, and of defendant’s admission that the evidence upon which he relies for his sweeping statement relates to a time not less than sixteen years in the
• Indeed, while defendant asserts the alleged incompetence of the plaintiff, we think it clear that he relies for his defense less upon this ground than upon the construction he places upon his father’s will. It is his contention that the will clothes him with absolute and uncontrolled discretion in the matter of turning over the estate to plaintiff, and that neither the plaintiff nor the court has the power or right to compel a termination or surrender of the trust, or to inquire into his reasons for refusing so to do. Such is the plea made in 'his answer, and such is his -attitude as a witness. He says:
“If my brother is entitled to the property, he will get it. My interpretation of the will is that it gives me absolute and uncontrolled determination of that question.”
It is not too much to say that he interprets the will as
“You evidently do not know the fact that, long before father or mother died, I promised Charlie that, if no will was left or anything done, that my share of the estate should go to him for his care of father and mother, as he actually lost his health. I fail to see how you could even ask anything of him or from him, knowing his health and his condition. During all this time that I have had control of this affair, I have never used one penny from the estate. I keep the fund entirely separate from my own, so that when I go out of life, it will be a separate and distinct fund. I have even gone so far as to make provision in my will for the care of you and Charlie as long as the farm will care for you. The time when you will need this care will be when you cannot help yourself, and that time is coming. It will come to all of us sooner or later, and since you have not made provision for the future, and cannot do so now, you have perhaps that consolation of knowing that, when Charlie is done with the income from the farm, the entire income will be yours. The farm will then go to Earl Keating, in order to keep it in the Keating name, should he turn out to be a good boy. If he doesn’t, and should become like his father, reckless and dissipated/ it would only make him that much worse to give him anything, and then I shall do something else with the farm. If my own girl be a good girl, it is possible that I would give it'to her, if I lived*1068 to know that she was, in case Earl should turn out to be bad. But if she is not a careful and prudent woman, giving her property of this character would simply add to her downfall, and I would give it then to some institution for the benefit of the unfortunate.”
This language is fairly expressive of his conception of the trust reposed in him and the attitude he has at all times taken with respect thereto. This brings us, then, to the vital question in the case, — a question of law. What is the legal force and effect of the devise? If it be true that it vests in the defendant what he terms an absolute, uncontrolled discretion, such answer ends this case, and the judgment below must be affirmed, without regard to what may be the truth of.the facts on which the witnesses disagree.
“When it appears that any trustee, no matter how broad the discretion which is bestowed on' him, is so administering his trust that it fails to accomplish the purpose for which it was created, then it seems to me that the time has come for the court to intervene.”
The same court, in Clark v. Clark, supra, says:
“There can be no doubt that, however large the discretion of trustees- may be, the court never loses its power to review the use of this discretion, and if need be to correct any abuse of its exercise.”
See also In re Stevens’ Estate, 20 Misc. Rep. 157 (45 N. Y. Supp. 9,0-8). In Bacon v. Bacon, 55 Vt. 243, property was devised to a trustee for the benefit of a son, but providing substantially, as in the present case, that the trustee should hold the estate until, in his judgment, the son should “prove worthy of the safne, and then and not until then deliver it.” The will also, as in this case, directed that, if the trustee should not at aiiy time judge it best to deliver the property, “it shall remain his property forever.” Speaking of the authority of the court in such cases, it is there said:
“A trustee cannot exercise his discretion and judgment from fraudulent, selfish, or other improper motives; nor can he refuse to exercise them from such motives. And if he acts or refuses to act upon such grounds, the court will interfere, and give a remedy to the party injured by the fraudulent act or refusal to act. A person having a power must exercise it bona fide for the end designed.” See, also, 2 Perry on Trusts, Section 508.
Nor can any provision in the trust instrument, however emphatically expressed, intended to relieve the trus
' “If this had been an attempt wholly to exclude the authority of the court to control the conduct of the trustee, and to vest in him arbitrary authority to sell and dispose of the estate in harmony with his own pleasure and without regard to the best interests of the estate, no doubt the trust would, at least, to the extent of such grant of arbitrary power, be declared void. Trusts of this kind are subject to the supervisory control of the courts, even' in cases where attempt is made by express stipulation between the parties to avoid judicial interference.”
And we think, if the devise in this case were to be construed in accordance with the defendant’s theory, as being intended to give him absolute and uncontrolled discretion, independent of" any authority in the court to control its arbitrary exercise, it would have to be held, to that extent, void.
The authorities to which our attention has been called by appellee have, at most, only remote bearing on this controversy. Of the precedents cited, nearly all have reference to a class of trusts to which this trust does not belong. They treat of provisions by which a trustee is authorized or directed at his discretion to pay money or deliver certain benefits to the beneficiary, from time to time, but which are to cease upon the insolvency or bankruptcy of the latter. Such a trust constitutes a devise by which a parent or other friend may contribute to the necessities or support of a child or other person, without danger that-the fund established for that purpose will be diverted from' its intended end, and subjected to the claims of creditors of the beneficiary. Such a trust Vests no estate in the beneficiary; or, more correctly speaking, the estate is a terminable one, and ceases upon the occurrence of insolvency in the beneficiary, or of other specified act or event which, but for such restriction, might expose the estate to seizure for his debt. These are what are known as “spendthrift trusts.” Such is not the effect of the devise for the benefit of the present plaintiff.
Having found that the court has jurisdiction in the matter, we have no difficulty in arriving at the conclusion that the decree below should be reversed, and the cause remanded to the tri,al court, with directions to enter a decree terminating the trust, and for a final accounting by the defendant with respect thereto.