76 Me. 172 | Me. | 1884
February 27, 1879, the complainant conveyed in trust to his son and daughter the most of his property. At, or about, the samé time he conveyed to the same grantees the remainder of his property absolutely. Soon after these conveyances the son died, and by a provision in the trust deed his widow became his successor in the trust. This trust deed is the foundation of the present suit, and out of it arise several questions which are presented for decision by the bill, answers and proof.
What is the proper construction of that part of the deed which provides for the annuity to be paid to the plaintiff and grantor ? Is it a charge upon the income only, or if there is a deficiency in that, shall such deficiency be paid out of the principal? The plaintiff claims that the latter is the true construction while the respondents contend for the former.
It is undoubtedly true that when the words of a written, instrument are of doubtful import, or susceptible of different constructions, the circumstances under which it was made, and the object to be obtained maybe proved to enable the court more-intelligently to ascertain from the language used the meaning of the parties. But when the language is free from doubt, and leaves no uncertainty as to the meaning of the parties, it must govern and cannot be controlled by any outside circumstances, whatever may be the equities growing out of them. In this case there is no doubt as to the meaning and proper construction of the deed which can, to any extent, be removed by the fact referred to. Were there any doubt whether the plaintiff intended to provide himself with an annuity, this fact might be of service in settling that question. But there is none. The language upon this point is so clear as to leave no question as to the provision, or the amount of it. The difficulty seems to be that as the respondents view it, the provision made does not accomplish the desired end. If the plaintiff’s expectations in this respect have been disappointed, if his sagacity or judgment have failed him and his estimates were too large, without any fault on the-part of the respondents, it is a misfortune which the court cannot remedy; it cannot affect the construction of the deed. By well: settled law the court may and must interpret a contract when the-parties disagree, but it cannot make a new one to correct any errors of judgment into which one, or the other of' the parties-may have fallen. This deed must be interpreted by the light obtained from its own language alone.
The principles of interpretation, by which this plaintiff seeks to maintain his construction of this deed, are those applicable to wills, and the cases cited are those in which the meaning of a testator comes in question. But the two cases are entirely different, and the rules of construction depend upon different facts and different principles. While in construing a wrill the
•Still, notwithstanding the difference in the instruments to be construed, the cases cited by counsel may, render some aid, though as Lord Brougham says in Baker v. Baker, 6 H. L. Cases 626-7: "It has been very justly observed, in regard to cases like this, where the sole question that arises is upon the construction of a will, and where the object is to ascertain the meaning of the words used by the testator, that nothing, generally speaking, can be more unfruitful than a reference to other cases where, instead of the question arising upon a principle of law, or a rule of Jaw, the whole question arose upon the
It is unnecessary to examine all the cases which have a bearing upon this question, for there is a remarkable unanimity in them, and no real inconsistency in those cited, or which might be cited upon the one side or the other. So far as cited they relate to the construction of wills, and as Lord Brougham says, " present no question arising upon any principle of law, but upon the meaning of the words- used,” that being the only thing to be ascertained.
The only question involved in these cases, in which we are now interested is, when a legacy or annuity is given with directions that it be paid from income or a particular fund, by what rules of construction shall we ascertain whether the testator intended that such legacy should be a specific or a general one; whether the direction for the payment is demonstrative, or is the legacy to fail if the fund from which it is to be paid fails. All the cases hold that whether the legacy be the one or the other, must depend alone upon the intention of the testator as gathered from all the words used which may throw any light upon such intention.
The case of Smith v. Fellows, 131 Mass. 20, is probably as favorable to the plaintiff as any which has been, or can be cited. In this case the testator, after giving certain legacies to his wife, in addition gave her an annuity of " one thousand dollars per year during her lifetime, the same to be paid from the income of my property.” This annuity was held to be a demonstrative legacy, and upon the failure of the income, payable out of the principal of the estate. This was upon the ground that it was the intention of the testator that his wife should be thus provided for, " that is, it was the gift of a fixed sum, which is to be paid annually, and is not made contingent or dependent upon the income of any-specific portion of his estate,” and that " the residue which was bequeathed to the daughter was described as that which remains: after the payment of the debts and expenses, and the payment of the legacies mentioned in the will.” Here were two legacies.,
This principle, and the authorities sustaining it, are quite fully discussed in the case of Greville v. Browne, 7 H. L. Cases, 688, decided in the house of lords in 1859, and which Smith v. Fellows, and numerous other cases in Massachusetts and New York afterwards followed. In Greville v. Brown, on page 696-7, Lord Campbell says : " For nearly a century and a half this rule has been laid down and acted upon, that if there is a general gift of legacies, and then the testator gives the rest and residue of his property, real and personal, the legacies are to come out of the realty. It is considered that the whole is one mass; that part of that mass is represented by the legacies, and that what is afterwards given, is given minus what has been before given, and, therefore, given subject to the prior gift.” Again, in the same case, on page 700, Lord Cr an worth, quoting from Sir John Leach, "with reference to the words, the rest and residue of my real and personal estate,” states the rule thus : " That the rest and residue mean something after something has been deducted. After what has been deducted ? Why, that which has been given before; and that appears to me to solve the whole difficulty.” In accordance with the rules of construction established by these cases of Smith v. Fellows and Greville v. Brown, are the .decisions in the several cases cited by the counsel and many others which have been decided within the last century and a ihalf.
There is, however, another class of cases of equal authority with those just considered, and in fact, not inconsistent with
A leading case of this class is that of Baker v. Baker, 6 H. L. Cases, 616, reported also in 56 Eng. Com. L. E. 691, in which it Avas held that an annuity could only be paid from the income as directed and that failing, the insufficiency could not be made up from the capital. In this case the testator gave all his real and personal estate to his brother in trust, and directed his trustee to raise thereout and invest in good securities such a sum of money as when so invested should produce the clear annual income of two hundred pounds and pay to or permit his wife to take such income in two half yearly payments during her life or widoAvhood, and after her decease or second marriage, the said trustee was to stand possessed of the principal and the stocks, funds and securities in which the same should be invested, in trust for himself, brothers and sister in equal shares. The residue of his estate after taking out sufficient to raise the annuity for the wife Avas given to his brothers and sister. Upon the settlement of the estate the whole amount was insufficient to raise the tAvo hundred pounds. The provision with regard to the residue was, therefore, immaterial, for there Avas none. It was not the residue of the capital from which the income was obtained, but the residue of the estate after the capital was taken out. Both these legacies were held to be specific. The testator clearly intended that his wife should have the annual income of tAvo hundred pounds during life or widoAvhood. It is equally clear that he intended that his brothers and sister should have the principal from Avhieh that income’ Avas to be obtained, that the principal should not be diminished while producing the income. Both these intentions could not be carried out. "Which should fail? Evidently that Avhieh of necessity must fail, that for which no sufficient means had been provided. If the residue of the capital only had been given, it would have been evidence that
It is noticeable that this case was first decided by the master of the rolls, and the other way upon the authority of Wright v. Callender, 2 DeG. M. & G 652, which was a case where the residue of the capital was given over. The appellate court, reversing the decision of the master, admit the correctness of the conclusion in Wright v. Callender, but distinguish it on the two grounds that there the whole language show that the weekly allowance was to be paid in full, and the residue only was given over.
Another noticeable and instructive feature shown in Baker v. Baker, is that while it was apparent that the testator supposed that he had property more than sufficient to produce the two hundred pounds yearly, it turned out otherwise, and showed that he was mistaken in his estimate. Instead of drawing an inference from this that he intended the full amount of the annuity to be paid, it was not permitted to affect the construction, on the ground that if it should, the court would "under a state of circumstances never in the testator’s contemplation give a different construction to the will, and impose, as it were, a new intention upon the testator.”
In all respects this case bears a striking resemblance to the one at bar and would be decisive of it, if the instrument to be construed were a will instead of a deed. No case cited, and so far as we have been able to ascertain none can be, which to any extent weakens its authority. Its reasoning is instructive and satisfactory. Upon grounds already stated, it is stronger for the defendants when applied to the deed.
The language of the deed in question, is so clear and explicit that even without authorities there would seem to be no doubt as to its meaning. The property is first conveyed to the grantees, not in general terms, but each piece by a specific and definite description, "to have and to hold to them, the said Alfred Yeazie and Annie Yeazie Forsaith, and the survivor of them, and his or her heirs and assigns, in trust, for the following uses and
That the grantor made and disposed of two distinct funds, the principal and income of his estate, is further evident - from the fact that he did not reserve to himself the whole of the income, but only a portion of .it. A part is given to each of the,grantees and the payment to these is required in terms just as absolute as to himself. The only difference is that one has the precedence of the other, and only the final disposition is qualified by the words "and what remains of said income if anything.”
•This disposition of the income shows clearly that the grantee had a full belief that the income would be very much more, than sufficient to supply his annuity. It may therefore be that he was mistaken in his estimate of the future production of his property. But this cannot be considered in the construction of the deed; otherwise we may construe the deed under "circumstances never
The bill prays for a full account of the trust property which has come into the possession of the trustees, of the income received and their application of it. That account has been rendered and it is admitted that it is a true account of all the trust property and money that had at that time come into the hands of the trustees; and that they had paid the several sums and for the purposes stated.
It appears from this account that nothing was received or paid out upon income for the first year of the trust, ending February 27, 1880. The plaintiff claims that two sums which were received at a later date, one of which is credited to income of 1880, the other to the principal, should both have been credited to income for 1879. The trustees not admitting this, say the plaintiff is not entitled to his annuity for that year, as he made no demand for it within the year and thereby forfeited it. As the plaintiff is by the provision of the deed, to receive his annuity each year, "provided the same is called for by me” (him) and as called for, and as the remainder of the income for each year is otherwise disposed of, it must follow that in the absence of a demand or a waiver, he would forfeit his annuity for that year. The plaintiff, however, claims that there was a demand, or if not, a waiver.
There is an allegation in the bill that a demand for the annuity was made each year. This is not denied in the answer, and it is claimed that here is sufficient proof of the demand. The allegation is somewhat indefinite, but it would be admissible evidence of some force tending to show by way of admission, the truth of the statement. But at the hearing it does not appear to have been used as such. The case, however, does show a transaction between the parties, which must be considered equivalent to a demand, or a waiver of one.
In the summer of 1879, one of the trustees, whose notes
It is necessary, therefore, to ascertain whether the case shows any such income.
In the account we find credited to income for 1880, $3780.00 for fourteen months’ interest on the Gilman, Webster and Co.’s notes. This appears to have been received April 9th of that year, less than two months from February 27, 1880. Hence the most of that interest was earned during the year 1879, and when received should be credited to that year. Unlike an annuity or a dividend which is not earned until it becomes payable and therefore cannot be apportioned, interest accrues from day to day and can be apportioned. The beneficiary will be entitled to so much as has accrued for the time being, though not payable till a subsequent day. Perry on Trusts, § 556, and cases cited.
Whether by changing this credit, or its proportional part, to the year 1879, where it belongs, will make any difference in the result, is not so apparent; as it is already credited to income and the plaintiff seems to have had the full benefit of it.
The same principles would apply to the item of $437.50, charged to the trustees on income account, April 7, 1880, as one year’s interest on the Alfred Veazie note for $6250. A part of this interest must have accrued during the year 1879 and should have been charged to the trustees on that year’s income. This note, it appears, was secured and was paid in full and the interest correctly credited to income with the above exception.
These notes were a part of the original trust property. When the maker died, it proved that his estate was largely insolvent. It was not, however, so represented, but it was agreed by all interested, including the plaintiff in this case, that the executors of that estate should convey all the property belonging to it after all other debts were paid, to these trustees in payment of these notes. This property was insufficient to pay the principal and therefore the trustees credited it to the principal of the trust fund, contending that no interest had been paid, while the plaintiff contends that both principal and interest were paid in the same proportion. All the notes were upon interest, payable annually, and the principal of each had become payable at the time of this arrangement. The property conveyed in payment was received by the trustees at different times, and no valuation of it was agreed upon, except that it was receipted for by the trustees at the appraisal made to .the executors. If these payments had been made upon the notes in the usual course of business, each payment in the absence of an appropriation by the parties, would have been appropriated to the payment of interest so far as necessary and the balance to the principal, and under this rule all the interest would have been paid and the loss would have fallen upon the principal. It is, however, as clearly competent for the parties in this case to make an appropriation of the amount paid, as in any other. There was perhaps here no appropriation in terms made, but in effect there was. By the implied if not express agreement of both trustees and beneficiary, the notes were discharged, both principal and interest. The executors must have so understood it, otherwise they would hardly have been protected in neglecting to render the estate insolvent. We could hardly expect the plaintiff to have consented to a discharge of his interest without any consideration, for he would have received something if the estate had been rendered insolvent. If then, under such an agreement the notes were as completely discharged as they would have been in insolvency,
The authorities cited upon either side, though in some respects unlike this case, sustain the view that the beneficiary is not to sustain more than a ratable share of the loss, with the exception perhaps of Grabowski’s case, L. R., 6 Eq. 12, in which it was held that there could be no apportionment, but the lesser fund which had been paid into court, must be treated as principal and the annuitant would be entitled to the use of that, but not to the fund itself. The opinion gives no reason or grounds upon which the conclusion is based. The loss occurred by the fault of the trustee, and the claim was for a part of the amount recovered of the trustee to cover the loss of interest or income which would but for the default, have been earned after the loss and before the recovery. The inference is that in the opinion of the court, from the terms of the settlement no such interest or income was earned. Otherwise the case would seem to be overruled by the case of Cox v. Cox, L. R., 8 Eq. 343, in which the loss accrued before the trustees received the principal, but in which some interest had been earned after it came into their hands and before the amount of the loss was ascertained. In this case it was held that the amount recovered by the trustees, should be apportioned between the capital and interest. But as the beneficiary was entitled to recover interest since the loss, only upon that part which should be credited to the principal in the apportionment, it was necessary to ascertain what amount of capital at the given rate of interest, would produce the amount recovered at the time it was recovered, and the difference between that capital and the sum recovered would be the amount due the beneficiary for past interest, and the division was so made. To the like effect are the cases of Maclaren v. Stainton, L. R., 11
In this division it does not follow that the whole amount of interest due upon the notes is to be considered as one sum and credited to income. The trust deed was finally executed February 27, 1879. The plaintiff is entitled to his annuity only from that time. Hence whatever interest had then accrued and was unpaid, if any, should be credited to the principal and that which has accrued since, and before the settlement, should be credited to income for the years in which it was earned, subject, of course to the discount.
As the trustees credited the whole amount received, at the time it was received, to the principal, it will be seen that since that period they have been accounting for the income for the whole fund received, when they were required to account only for that less the amouut deducted on account of interest. It does not appear what that income may have been and perhaps it is not material for as they have retained that sum in their hands it is but equitable that they should account for whatever income they may have received from it, and it does not appear that they have accounted for any more.
In 1880 the mills which were a part of the trust property had been leased to Bing and Ayer. By the terms of that lease the lessees had a right to pay a portion or all of the rent in repairs upon the mills. Upon settlement it was found that they had thus paid §2943.36 which sum was allowed them and in the account rendered this item is omitted. The plaintiff claims that it should be credited to income for that year as so much rent received. But it was not received by them as rent, nor
It is also claimed that a portion of the repairs made in 1881 should be charged to the capital and not to income, but no particular portion of the amount or any particular item of repair is specified. The same remarks applied to the last item are applicable to the repairs for this year. The plaintiff and all his witnesses testify that no permanent repairs were made but all were temporary, — made only for the purpose of keeping the mills running for the time being, and that they were so is a cause of serious complaint on the part of the plaintiff and the main ground upon which he asks for the removal of these respondents. If then these repairs were properly made they are chargeable to income. If they should have been more permanent and thorough in the first instance, so as to have been properly chargeable to capital, then that they were not so made, may be a cause of complaint. But whether it would be such a cause of complaint as will authorize or require any interference by the court is a question for consideration. Thus is presented the question as to the power and duties of these trustees in respect to these repairs arising from the deed under which they are acting.
We must therefore treat this mill property as the trustees did, not as a fit permanent investment for the trust funds, but to be disposed of in such way and in such time as would be for the interest of that fund, considering both the capital and the income. This disposition necessarily includes the repairs to bo made such as should be charged to capital as well as such as may be charged to income. Ordinarily no repairs to such property can be charged to capital. The life tenant whether legal or equitable,
Another ground upon which the removal of the trustees is asked is their general bad management arising from a want of experience and incompetency. The proof fails entirely to show any want of good management, either in the repairs which have already been considered or otherwise. The plaintiff himself seems to have had very much, to do in the supervision of the repairs, and in other respects the proof shows no cause of complaint. There seems to have been a considerable falling off in the value of the property and a disappointment of what was probably a just expectation of the amount of income to be derived from it. But this appears to be imputable to a change of business and insolvency of debtors and perhaps other causes,, rather than to any fault on the part of the trustees.
The allegation that one of them has abandoned all right to any part in the management is negatived by the evidence. It is true that they have to a large extent employed agents to assist in the business affaire of the trust; but this was made necessary by the condition and situation of the property, as well as by the extent of the work to be done, and the case shows that these
The want of experience or knowledge of business in the trustees-, was as well known to the plaintiff at the time of their appointment as since, and wherever there has been a failure on this-, account, if any, the want has been fully supplied in the labor.- and advice of men in whom there was no lack in this respect..
These suggestions show that there is no occasion for the court', to intefere by way of injunction to prevent the sale of the milk property. The proof shows that such an interference would not be judicious and the plaintiff by the discretion which he gave the-trustees in the deed, has taken that power from its jurisdiction.
Thus all that remains to be done is to change the income-account so that the portion of interest on the Gilman, Webster- and Company notes earned in the year ending February 27, 1880, should be credited to income for that year, instead of to-the following year, as it now is. This can be done by an inspection of the note.
Also apportion the interest upon the Alfred Yeazie notes and: credit that part which has been paid, upon the principles laid, down in this opinion j to the income of the different years in. which it was earned.
In order to ascertain what interest has been paid upon these-notes settled under the compromise, if the parties do not agree upon the appraisal as the value of the property turned -out in¡ payment, it will be necessary to have a master appointed to-ascertain that value and the time of the several payments.
• This may make some other changes necessary in the account',, such as changing the time for charging the amount paid on the: notes given by plaintiff and indorsed by one of the trustees in: 1879, as that should offset the income of 1879 so far as it goes.
Gase to stand for the appointment of a master to adjust the trustees’ account in conformity with this opinion.