Taylor's Appeal

7 Sadler 466 | Pa. | 1887

OniNioN by

Mr. Justice Green:

We are quite clear that the defendant was an incompetent witness as to any matters between himself and A. K. Joyce during his life, but entirely competent as to any matters between the complainants and himself after Joyce’s death.

On the construction of the deed of trust we are unable to agree with the learned court below in all respects. The claims of the defendant for rent of the store and farm, it seems to us, are within the provisions of the trust. The requirements, both for shelter and occupation, are embraced within the meaning of either of the words wants or necessities and the express terms of the trust enjoined upon the trustee the positive duty of supplying the wants and necessities of Joyce and his wife during all the term of their natural lives.

That duty demanded the expenditure not only of the rents, issues, and profits of the real estate, but also the appropriation of the real estate itself, if necessary. It is true a sale or mortgage of the real estate were the methods indicated in the deed of trust for getting at its available product; and the power to mortgage was duly exercised by the trustee within the very letter of the trust and up to the full mortgage value of the property.

Of course the trustee might have sold the real estate, and thus have left the trust barren of a subject, and avoided the present litigation. But it would have involved the sacrifice of the trust property, and would have wrought distress to the principal cestui que trust, and much loss to the present complainants. The trustee adopted a more kindly and, as the result proved, a wiser course, and one which has proved far more advantageous to these plaintiffs. He paid the debts of Joyce, made advances of money to him, started him in the store business, and, when that proved a failure, placed him on one of his own farms where he lived a number of years supporting his large family out of the farm products to a considerable extent. In his account the trustee claims credit for rent of the store at the rate of $250 per annum and $800 for the farm. These amounts the master found to be reasonable charges; and an examination of the testimony of quite a number of witnesses other than the defendant fully sustains his finding.

The master allowed these claims but the court disallowed them, for the reason, substantially, that they were not founded upon a literal execution of the powers conferred by the deed of trust. In other words they simply represented an indebtedness due upon contracts made with the cestui que trust subsequently to the making of the deed, and for all such indebtedness as that the deed expressly provided there should be no liability of the trust estate.

There is much force in this view of the subject, and we are of opinion that it must be applied to some of the items for which credit is claimed. But we do not agree that it must necessarily be enforced as to the claims for rents, or rather for the price of the occupancy of the real estate in possession of which the cestui que trust was placed by the trustee. If the trustee had leased these premises from strangers, and had paid the rents, it could not have been denied that the payments were for necessaries. Of course Joyce and his family must have suitable shelter, and of such a character as to enable him to prosecute some kind of calling.

It is perfectly manifest that the income of the Minor street property which was but $600 for several years, and out of which had to be paid interest on a $5,500 mortgage and taxes and repairs, was not, and could not be, sufficient for the maintenance of Joyce and his family.

The remainder in the Market street property did not fall in until April, 1867, nearly eighteen years after the deed of trust was made. The rent of the Minor street store was but $600 per year until 1855 and then only rose to $750 until 1861; and it was necessarily inadequate after fixed charges were defrayed, for the support of Joyce and his family. What then was the duty of the trustee under his quite broad powers? He might have sold the real estate and had a mere trifle left after payment of the mortgage, or he might have used the rents to support the family, and neglected to pay interest and taxes and thus brought on the forced sale of the property under the mortgage; but he did not do this. He paid the interest and taxes and other expenses, and indeed went beyond those limits and made advances and took promissory notes from Joyce part of which proved a loss. The notes representing indebtedness from Joyce to Taylor are produced, and credit is claimed for them in the account; but as they are not supported by evidence showing that they were given for any indebtedness which it "was within the power of Joyce to create so as to make it a charge upon the trust estate they must be rejected.

So far we agree with the learned court below. As to the claims for rent, viewing them as claims for necessaries which were furnished by the trustee, we do not perceive the necessity of a technical execution of a mortgage upon the trust estate in order to sustain them or preserve them. The trustee could not give a mortgage to himself, and it was not necessary to do so as he held the legal title to the trust estate, and that was a sufficient pledge to him in his position for all legitimate advances within the terms of the trust.

The plea of the statute of limitations is not applicable for the same reason. The question is, on what terms must the trustee now transfer the legal title ? And equity will not compel him to convey it, except upon reimbursement for such of his claim as is legitimately within the powers conferred upon him by the deed. We see no objection to the allowance of the claim for over payments made to the widow after Joyce’s death. It cannot be doubted that he continued to act as trustee for a number of years after the death of Joyce by the express consent of the widow and.children; and the deed in terms required that the trust should continue during the lives of both Joyce and his wife. There is nothing in the evidence to call in question the ^perfect goad faith of tbe trustee in continuing in the trust after Joyce’s death. His receipts during several years while he so continued to act were very considerable and are not fairly to be • questioned as to their character. They appear to be within the trust and are really not challenged in their details.

It is true that the trustee was derelict in not filing his ac- ■ counts and especially in not having a settlement with the widow and children after Joyce’s death. But they also were derelict in not calling him to account. Instead of doing this they clearly assented to his continuance in the trust, and have had the benefit not only of his services as trustee but of the large advance in the value of the trust estate which was preserved to them by his method of administering the trust. As. he will lose a consider- . able portiou of his claim in consequence of his delay in the settlement he is the severest sufferer from that cause.

Without elaborating more fully upon the details of the controversy we think it sufficient to say that the account as adjusted by the master should be corrected by striking out the credits for the two checks for $1,500 and $300 dated the 3d and 21st of March, 1854, paid to Joyce to start him in a store, and certain notes a list of which appears in the printed argument for ap-pellees at page 6, together with all sums of interest charged on •all of said items, and confirming the report as to the remainder ■of the account as found by the master.

Decree reversed and record remitted with directions to correct the account in accordance with the foregoing opinion, the «costs of this appeal to be paid by the appellees.