Van Bokkelen v. Tinges

58 Md. 53 | Md. | 1882

Miller, J.,

delivered the opinion of the Court.

Margaret E. Morton by the residuary clause of her will devised all the residue of her estate to trustees, in trust for the benefit of the children and descendants of her half-sister. By its terms this trust was to continue until the cestuis gue trust severally attained the age of tAventy-one years, and it is admitted the trust is still continuing. And in order to facilitate the management and division of the property, she gave the trustees poAver “to sell and dispose of any part or all of her estate” “at their discretion, and, if the trust continues, to re-invest the proceeds on the same trusts, and so on from time to time as often as they may deem necessary and proper.”

Part of the residue thus devised to the trustees was the reversion in a parcel of land in Baltimore County, the leasehold interest in Avhich was vested in Libertus Van Bokkelen. By the terms of the lease, the lessee had the right to extinguish the rent of $150 per annnm, at any time after the 1st of January, 1860, on payment of the sum of $2500, and Van Bokkelen under this privilege tendered himself ready to pay this sum. The trustees having found what they regarded as a good investment for the money so to he paid to them, filed a bill in equity stating that Van Bokkelen was ready to pay; hut desired to be relieved from responsibility for the re-investment of the money, that they had a good investment for the same, and praying that the money might be paid by him, and the re-investment thereof made by them under the direction and sanction of the Court. Van Bokkelen in his answer to this hill after admitting its averments, suggests that the cestuis que trust under the will are necessary parties to the suit, and without their being made parties he cannot obtain a clear title to the reversion, nor he relieved from liability in reference to the re-investment of the money, as there is no clause in the will relieving him from such liability. The case being submitted on bill and answer, the Court passed a decree authorizing Van Bokkelen to pay the 82500 to the trustees, and directing them to convey to him the land mentioned in the lease, “ and that thereupon he shall not in any manner be required to see to the application of the purchase money," and also authorizing the trustees to invest the money as proposed. From this decree Mr. Van Bokkelen has taken an appeal.

It is plain there is no ground for reversing this decree, unless it he held that Mr. Van Bokkelen upon payment of his money was hound to see that it was applied as the will directs. In this respect lie stands upon the same looting as if he had been the purchaser of part of the trust property from the trustees, and it seems to be well settled that under a trust such as this will creates, with power to the trustees to sell at their discretion, and not to pay the money directly over to the cestuis que trust, hut to hold and re-invest the proceeds on the same trusts, and so on from time to time as often as they may deem necessary and proper, the purchaser would not he hound to see to the application of the purchase money. The law upon the subject is well stated, and the authorities carefully collected in the notes to Elliott vs. Merryman, 1 Lead. Cases in Eq., 118, 119, where it is said: “All the cases seem to agree that where the disposition of the proceeds depends in any material particular upon the discretion of the trustee, or where an interval must or may properly elapse between the sale and the application of the purchase money, the purchaser will be freed from liability by a payment to the trustee, and will not be responsible for a subsequent misappropriation by the latter. Trusts for sale and re-investment are emphatically within the operation of this principle, because every investment requires the exercise of discretion in the selection and choice of the security, and must necessarily be delayed until a suitable opportunity is found for investment; and the rule has consequently been said to be, that where a trustee is required or authorized to sell and re-invest for the same trusts or purposes, the purchaser will be discharged from responsibility for the application of the money paid by him to the trustee.” And in 2 Story’s Eq., sec. 1134, and 2 Perry on Trusts, sec. 794, the law will be found stated in substantally the same terms.

(Decided 2nd March, 1882.)

Being then very clearly of opinion that Mr. Van Bokkelen can safely pay his money to these trustees, and that he will acquire a perfect title to the property by accepting a conveyance from them, we shall affirm the decree appealed from and remand the cause.

Decree affirmed, and cause remanded.