178 P. 784 | Or. | 1919
The substance of the complaint is as follows:
That Stephen Mead died about December 9, 1875, in the State of Connecticut; and at the time of his death he was a citizen of and had his domicile in that state; that he left a last will and codicil duly executed, copies of which are annexed to the complaint; that the will and codicil were duly admitted to probate by the Court of Probate of Connecticut on April 5,1876; that the will and codicil were duly admitted to probate by the county court of Multnomah County, State of Oregon, on March 25, 1893, and duly recorded; that all of the persons named in the will and codicil as trustees of the trust therein created duly accepted the office of trustee and duly qualified and acted as trustees, except Joseph M. French, who on May 20,1876, declined to accept the appointment as trustee; and that the other persons continued to act as such trustee down to July 27,1892, when William W. Mead, the youngest of the testator’s then living children, became of age, and that thereafter and on or about October 2, 1893, the trustees for thémselves and on behalf of their cotrustee, William S. Ladd, who had died, duly trans
That the testator at the time of his death was the owner of real estate situated in the State of California; that the testator at the time of his death also owned an interest in the copartnership of Ladd & Til-ton of Portland, Oregon, which was disposed of by the trustees, and they ultimately invested the trust funds derived thereby in certain real estate in the City of Portland, Oregon, all of which real estate, except that portion of Mead’s Addition which was sold, is described in the complaint; that all of the deeds of conveyance of the real estate were taken in the names of the trustees, to wit, in the names of William S. Ladd, G-ranville B. Gillman, David M. French and Charles E. Tilton, and the testator never at any time held the legal title to any of the real estate-; that a portion of
That the best interests of all parties concerned, both from the standpoint of securing revenue from the property, and also from the standpoint of conserving the corpus of the estate for those who are to take the
That plaintiffs as such trustees have entered into a contract with Paul C. Murphy for the sale of one of the pieces of real estate for the sum of ten thousand ($10,000) dollars, subject to the approval of this court, and that a copy of the contract is attached to this complaint and marked Exhibit “B”; that the sale will be advantageous to all parties interested in the trust property for the following reasons:
The building on the lot is very old and the physical depreciation is very rapid; the character and nature of the district is changing very rapidly from one of agricultural implement and supply house district to that of second-hand and junk dealers; that movement is in progress now, opening up a logical market for-the property to men in this business. With this class of business established the economic depreciation, which is well under way now, will become even more
The second suit is brought by plaintiffs as such trustees against Paul C. Murphy to compel the specific performance of the contract made by the trustees with Paul 0. Murphy for the sale to him of one-half lot for the sum of ten thousand ($10,000) dollars. Appropriate allegations of the contract for the sale are set forth in the complaint to which defendant Murphy demurred. The only grounds on which he refuses to carry out his contract of purchase is that the decree in the first suit does not bind unborn persons who may ultimately have an interest in the trust property and does not bind any possible unknown defendants who have not been made parties defendant by name. For these reasons defendant claims that the title which the trustees might convey to him under the deed authorized by the court will not be a marketable title. The court overruled the demurrer to the complaint and defendant Murphy elected to stand upon the demurrer. The court thereupon entered a final decree directing specific performance of the contract.
‘‘It is further adjudged and decreed that the said plaintiffs as such trustees be and they are authorized and empowered to sell, exchange, mortgage, lease or otherwise deal with any or all of the real estate described in the complaint herein, subject, however, to the final approval of the court, and that said trustees be and they hereby are authorized and empowered to enter into any and all necessary contracts for the sale, exchange, mortgaging, leasing or otherwise dealing with all of said trust property, or any part thereof, which said contracts shall not be finally binding and shall not be consummated until after the same shall have been duly reported to the court and until after the court shall have received evidence for the purpose of determining whether the confirmation and consummation of said contracts be for the best interests of all parties interested in said trust property, including the interests of all contingent remainder-men living and yet unborn, and shall have confirmed the same.
“It is further adjudged and decreed that after said report has been filed the court may * * take up the matter of a hearing upon said report; that upon said hearing any party shall have the right to introduce such evidence as he desires touching the question whether the said report should be confirmed.”
The trust property consists of seventeen parcels of property in the City of Portland ranging in size from a half lot • twenty-five feet by one hundred feet to an acreage tract of sixteen acres, all lying within the city limits, and all lying on the "West side. These pieces-range in character from business locations in the very heart of the retail district to the different classes of cheaper retail, jobbing, manufacturing and small cheap residence property. A good deal of the property is now calling for improvement and there is some piece suitable for almost every class of development. A good deal might be classed as having high-grade apartment house possibilities, and in realty valuation in many cities first-class apartment property ranges as second in value to intensified retail store property, when properly improved.
The two appeals present four questions: First, should the decree of the court in the first suit conferring upon the trustees the broad powers therein speci
It should be noted at the outset that the plaintiffs do not seek to destroy or impair the trust, nor do they ask that any of the corpus of the trust estate be converted into income and divided. The sole purpose of the suit is to enable the trustees to so handle the trust estate as to preserve it and at the same time produce a reasonable income for the beneficiaries under the trust. The evidence introduced satisfied the trial court that the broad powers sought by the plaintiffs should be conferred upon them. The court, however, in its decree provided that in no case should any of these powers be finally exercised by the trustees without submitting the particular transaction to the court for investigation and approval or rejection. The court also provided in its decree that any defendant although in default, should have the right at any time to appear and be heard with respect to any exercise of power by the trustees. The court also approved the sale of one of these pieces of real estate to Paul C. Murphy and authorized the trustees to execute a deed of the same to Murphy on the payment of ten thousand ($10,000) dollars.
In 1917, the legislature of this state enacted Chapter 198, Laws of 1917, page 303. Defining and enlarging the powers of trustees in cases of trust, authorizing courts of equity to supervise and control the
“Section 1. When any trust in real or personal property, or both, shall have heretofore been created, or shall hereafter be created, by will, deed or otherwise, and the trustee or trustees of such trust, or any person interested in said trust or any person interested in the property embraced in said trust upon the termination thereof, whether such latter interest be by way of a vested or contingent remainder, executory devise, conditional limitation, shifting use, or of any other nature, shall deem it for the interest of all persons who are or may become interested in said property that the same or any part thereof should be sold, mortgaged, improved, exchanged or leased; or otherwise dealt with in any other manner, such party or parties may commence a suit for the purpose of obtaining a decree for the sale, mortgaging, leasing, improving, exchanging of, or otherwise dealing with said property, or any portion thereof. Any court of equity in a county in which any of such trust property may be situated shall have jurisdiction to hear the cause of suit and enter the proper decree.”
The act directs that all persons who are living at the time of the commencement of. such suit, and who are interested whether as trustees or as beneficiaries in the property under the trust, or who have any vested, contingent, executory or reversionary interest therein at the termination of the trust, shall be made parties to the suit, and provides that any person whose name, identity or existence is unknown may be made a party by being designated in the title of the suit as “other unknown parties who have or claim some title, estate, lien or interest in the property described in the complaint herein.” If such unknown parties are the heirs of any such deceased person, they
“All interested persons who, are born subsequent to the commencement of said suit shall be deemed parties to said suit by being represented therein by the defendants served, and shall be bound by any decree or decrees therein as fully as if made parties and duly served with process therein.”
Courts of equity have inherent power to authorize trustees to so handle the trust property as to conserve it and protect all interests, even though the instrument creating the trust does not give the trustees such power, this in order to carry out the main purpose of the trust: 39 Cyc. 352; 2 Perry on Trusts, § 764; Hale v. Hale, 146 Ill. 227 (33 N. E. 858, 20 L. R. A. 247); Gavin v. Curtin, 171 Ill. 640 (49 N. E. 523, 40 L. R. A. 776) ; Marsh v. Reed, 184 Ill. 263 (56 N. E. 306); American Trust Co. v. Nicholson, 162 N. C. 257 (78 S. E. 152).
Affirmed.