150 Ky. 12 | Ky. Ct. App. | 1912
Opinion of the Court by
Reversing.
“I also will that my executors hereinafter named shall invest, in good safe bonds, a sufficient amount of money to yield an anual income or interest of $500, which said bonds shall be taken and held in the name of my son, James Albert McGoodwin who shall pay said income or interest over to my .said wife, Delia P., as soon, and at all times, when collected during her natural life.”
The seventh clause of the will is as follows:
“It is my will that at the death of my wife, Delia P., that the real estate together with the personalty, including the money directéd to be invested in bonds in paragraph 3rd herein be equally divided between my six children aforesaid. And for this purpose the real as well as the personal estate herein may be sold and conveyed by my son, James Albert, as my other real estate is directed in paragraph 6th to be sold and conveyed.”
The eleventh and twelfth clauses of the will nominate the wife, Delia P., and the son, James Albert, as executors without bond. Upon the probate of the will the nominated executors qualified without bond.
The testator owned at the time of his death six one-thousand-dollar Logan County bonds. Shortly after the probate of the will, J. A. McGoodwin, the executor, carrying out the provisions of the third clause of the will, bought three additional one-thousand-dollar bonds, which together with the six Logan County bonds named made an investment of $9,000 in bonds. These were six per cent bonds, yielding a net revenue of about $500 per annum, the amount directed by the third clause of the will to be paid annually to Mrs. Delia P. McGoodwin during her life. These nine bonds were held by the son, J. A. McGoodwin, and the annual income of $500 from them was paid to his mother as provided by the will, down until the year 1893 or the early part of 1894, when they were sold by J. A. McGoodwin and the proceeds of them were turned into the general estate of J. A. McGoodwin and used by him in his individual business ventures. His mother was apprised of his purpose to sell
On January 16, 1894, J. A. McGoodwin prepared in his own handwriting the following document:
“$1,500. Jany. 16, 1894.
“For value received I promise and agree to pay to Eva McG. Walker Fifteen Hundred Dollars being the one-sixth of the annuity fund provided for by the will of J. L. McGoodwin interest from which to be paid to Mrs, D. P. McGoodwin. It is agreed and understood that this obligation is not due or does not bear interest until the death of Mrs. D. P. McGoodwin, at which time the fund is to be distributed equally to the six heirs of J. L. Mc-Gpodwin.
“J. A. McGoodwin.”
This document was delivered by J. A. McGoodwin to the husband of Mrs. Walker. The husband took the document to his wife. She read it and without comment or observation returned it to her husband. At the time of the execution of this document, J. A. McGoodwin executed four others of like import, one each in favor of his brother, W. H. McGoodwin, and his listers, Hattie McGoodwin, Fannie McGoodwin and Mrs. Bird McGoodwin Finn. This brother and these three sisters were all living at the time at distant points from the home of J. A. McGoodwin. He did not deliver any of the four documents named, but put them and kept them among the papers appertaining to the settlement of his father’s estate. Within the course of a few months hu seems to have advised each of the four, as he would see them time from time to time, of his sale of the bonds.
In January, 1905, J. A. McGoodwin executed a deed of voluntary assignment of all of his property to theappellee, J. J. Milliken in trust for the benefit of his. creditors. Milliken accepted the trust and duly qualified as the.assignee.
Mrs. Delia P. McGoodwin died on October 9, 1910. In March, 1911, in an action theretofore brought by Mil-liken as assignee in the Simpson Circuit Court for the settlement of J. A. McGoodwin’s assigned estate, an order was entered permitting Mrs. Walker to file a sepa
In the first place, it is to be observed that there is no pleading by the assignee of any state of fact such as would suffice to work an estoppel in the general sense of that term, against Mrs. Walker and in favor of the creditors. It is nowhere alleged nor shown that their position or that of J. A. McGoodwin was altered to their or his hurt by any position affirmatively taken or negatively indulged in by Mrs. Walker. The defense is rather based upon that lesser form of -the law of estoppel known among the writers as an election; that is, that having had an opportunity to elect to insist upon a continuance of the bond investment upon the one hand and the personal use of the money by her brother upon the other, and having elected the latter by her silence upon the receipt of the paper — and the record shows no action by her other than silence — she will not now be heard to say
This doctrine of quiescence upon the part of a remainderman as affecting his right to the thing in trust has been treated of by the text-writers. In Perry on Trusts,’6th Edition, volume 1, section 467, the doctrine of estoppel by acquiescence is under discussion. It is there generally remarked that where a cestui que trust has full knowledge of all the facts and circumstances and the trustee is free from all suspicion of misrepresenta
The case of Bennett v. Colley came up before the vice-chancellor and is reported in 5 Simon’s Reports, 181. This was a case of a trust imposed upon the tenant for life of a leasehold estate, whereby the life tenant was charged with renewing the leasehold. He failed to renew. Later, in an action by the remainderman, it was adjudged that he, the remainderman, was barred by his acquiescence and laches. To this the vice-chancellor did not agree. The vice-chancellor remarked that though the failure to renew might have been the cause of an incipient damage, and though it indicated a prospective damage during the whole lifetime of the tenant for life, yet that the ultimate damage against which a court of equity might relieve would not happen until the death of the tenant for life; and the vice-chancellor expressed the further belief that though there might have been a preventive relief administered during the life of the tenant for life, the ultimate measure of justice to be distributed could not be defined or ascertained until the death of the tenant for life. He held, therefore, that the lapse of time and the silence during the life tenancy was no bar to the remainderman’s action brought after the termination of the life estate. The same case came up before Lord Chancellor Brougham on a petition for rehearing. The Lord Chancellor, in an opinion reported in 2 Mylne & Keene, 225, upheld the vice-chancellor. The Lord Chancellor also remarked that- if the suit had been brought during the lifetime of the tenant for life, it could
“The respondents relied much upon some observations which fell from the Master of the Rolls in the case of Brown v. Cross, seeming to import that, if a cestui que trust knows of a breach of trust, he is bound, although his interest may be reversionary, to take proceedings to have the matter set right, and will be held barred by acquiescence if he does not promptly do so, but this broad proposition was not necessary to the decision of that case, and with all deference to the Master of the Rolls, if he intended to lay down this proposition thus broadly, which I doubt, I am not, as at present advised, prepared to assent to it. It is the duty of the trustee to observe the trust and to preserve the property for the benefit of those entitled in remainder, and I am not prepared to hold that he can be permitted to escape from the liability incident to his duty by simply informing the cestui que trust that he has committed or intends to commit a breach of it. He cannot, as; I apprehend, where the trust is clear, throw upon the cestui que trust the obligation of telling him whát his duty is, and of cautioning him to observe it, thus involving the cestui que trust in
The Lord Chancellor entirely concurred in the view of the Lord Justice.
In the American & English Encyclopaedia of Law, 2nd Edition, volume 28, pp. 1124-25, the general subject of a concurrence or acquiescence by the cestui que trust in the actions of the trustee, with a consequent estoppel because of such concurrence to complain of the actions of the trustee in making an improper investment, is up for discussion. The writer adds to the general discussion the statement that “a remainderman cannot acquiesce in the actions of the trustee until his interest falls into possession.”
In White v. Sherman, 168 Ill., 589, this subject was up for discussion. The court said:
“The trustee cannot escape the liability merely by informing the cestui que trust, that he has committed a breach of trust. The trustee is bound to know what his own duty is, and cannot throw upon the cestui que trust the obligation of telling him what such duty is. Mere knowledge and non-interference by the cestui que trust before his interest has come into possession do not always bind him as acquiescing in the breach of trust. As a general rule, acquiescence by a tenant for life, or by a 'cestui que trust for life, will not bind the person entitled to the remainder.”
In the case of Penn, Trustee, et al. v. Fogler, et al., 182 Ill., 76, it was urged that the beneficiaries in remainder of a trust by reason of their alleged laches and acquiescence in an improper investment of the trust property, were estopped to sue. The court, answering this contention, said: “Their interests were not accrued under the will until the death of the last survivor of the life annuitants. They are, therefore, mere remainder-men, and, under the law, a remainderman cannot acquiesce until his interest falls into possession.”
We find no authority opposing the position set out by the English and Illinois courts and the text-writers above discussed, save the case of Browne v. Cross, which, as was remarked, has been disapproved. We would feel impelled to be controlled by the authorities cited, even if it did not meet our full approval. As above pointed out, the general doctrine that a remainderman need not sue, either to preserve or possess his rights, until the termi*
We come now to tbe other defensive positions taken by tbe appellee. Tbe first is bis contention that J. A. McGoodwin bad paid to Mrs. Walker tbe entire portion of her father’s estate, including her interest in this trust fund. To sustain it there is put in evidence tbe personal representative’s appraisal made in tbe county court at tbe time of J. A. McGoodwin’s qualification as bis father’s executor; and then there are put in evidence tbe receipts executed by tbe various devisees of tbe elder McGoodwin, showing tbe payments made to them by J. A. McGoodwin. These receipts, it is true, show that each of tbe heirs bad received more than one-sixth of tbe total appraised value of tbe estate. There was, however, a ten-thousand-dollar life insurance policy upon tbe life of tbe elder McGoodwin, wbicb was collected by J. A. McGoodwin and paid out to tbe widow and six children. Tbe record does not disclose whether this sum was embraced in tbe receipts executed by tbe six children. It does not show that tbe appraised value of tbe estate of tbe elder McGoodwin was its actual value; and indeed,
It is next urged by the assignee that Mrs. Walker was married at the time of the probate of her father’s will and long before the enactment of the Weissenger Act of 1894, and that, therefore, she could pot maintain her action, unless her husband should join her. It is true that, as held in Rose v. Rose, 104 Ky., 51, the property rights of a husband and wife in property acquired before the Weissenger Act became a law, are fixed by the pre-existing law; but in the ease of Fowler v. Fowler, 138 Ky., 326, this court held that personal estate owned 5by the wife prior to the Weissenger Act, which had not been reduced to possession by the husband, might be held by the wife free from any control by her husband. Obviously, therefore, she could sue for it under the Weissenger Act, without her husband’s joining with her. In the case of Terrell v. Maupin, 26 K. L. R., 1203, we held that the enactment of the Weissenger Act did not so far remove the disability of coverture as to set in operation the statute of limitation against a married woman who was under the disability of coverture when the act was passed. That decision turned upon the statute of limitation, however, and not upon the Weissenger Act which gave a married woman a specific right to sue in her own name.- The court was careful to say that a married woman’s ability to maintain a suit under the act of 1894 was no test of whether the period of limitation was set running by that statute. As her husband did not reduce this property to possession, her right to litigate about it was a right complete in her after the Weissenger act became a law.
There is some suggestion of the plea of limitation in the answer. It needs no further discussion than to remark that Mrs. Walker’s right to sue did not accrue un
It is also objected that as Mrs. Walker failed to present her claim within three months after the assignment, her right is barred. The assignee relies- upon section 90 of the statute. He does not read the statute as it is written. It does not demand that the claim be presented within three months after the assignment. The statute provides that the creditor shall present his claim at the time or within three months after the time designated by the assignee as the time when he will sit- to receive the claim. This time and the place the assignee must designate by advertisement. The assignee here testifies that he never designated any such time or place; and, of course, did not advertise them.
Upon the foregoing considerations the case must be and is reversed for proceedings consistent herewith.