Wiegand v. Woerner

155 Mo. App. 227 | Mo. Ct. App. | 1911

REYNOLDS, P. J.

(after stating the facts).— First: Although counsel for the respective parties, with the exception of the learned counsel representing Mrs. Anna Rubelmann, have devoted most of their very elaborate briefs and arguments to the consideration of the question of allowance to the trustees of commission, and as to whether Mr. Woerner, by reason of occupying the position of executor of the will of Mrs. Rosalie Wiegand, in claiming this fund from himself and his co-trustee, has forfeited his right as trustee and should be removed as such, the material and underlying question in the case arises over the proper construction of the fourth clause or item of the will of George Wiegand.

Two questions arise on this: First. How much are the trustees appointed under that clause entitled to deduct from the capital to pay the amount claimed to fall due between the death of George Wiegand and the death of his wife Rosalie, assuming that the annuity created by the trust is apportionable? Second. Is the annuity apportionable at all?

Taking up the first proposition, it is clear from the evidence in the case that down to' the 8th day of July, 1908, the fund was in the hands, not of the trustees but of Mrs. Rosalie Wiegand herself, as executrix of her husband’s will. The only period that the fund had been in the hands of the trustees during the lifetime of Mrs. Wiegand was between the 8th and the 24th of July, a period of sixteen days. It is a very singular line of argument that holds the trustees, as such, liable to the estate of Mrs. Wiegand for interest on the trust fund when in her hands and before it came into their possession. Their title to it may revert back to the date of the death of the testator who created the fund; their responsibility for its investment and safe' keeping conld only attach from the time they received it. As the annuitant may die before the payment falls due and so lose it, she takes no vested interest in it; all she takes is the right to enforce payment of the annuity when it falls due, with the right to hold the trustees to their trust. [Kearney v. Cruikshank, 117 N. Y. 95.] If Mrs. Wiegand, as executrix, had not chosen to turn over the fund until a year after the issue of her letters testamentary it may have been within her right under the law so to have chosen. But she could then have been compelled to turn over certainly the capital fund. We do not consider or pass upon this. On the theory of the trustees and of the executor of Mrs. Wiegand, if she had held out the fund from the trustees for the year, immediately at the end of the year turning it over to them, they would have been forced to have turned back to her $5000, with the result that they would only in fact have received as of the trust fund $95,000, instead of the whole $100,000. In this case as it actually is, during the period intervening between the death of her husband and this 8th day of July, 1908, the trust as an entity was not in being; it existed only on paper. The fund itself, part of George Wiegand’s estate which was to be separated from his general estate and turned into, converted into a trust fund, was in Mrs. Wiegand’s own hands, possession and control as part of the estate in her hands as executor. If she did not make it yield interest, it was surely not for the trustees to allow her to deduct $5000 from it, nor is it equitable that her neglect should make the other beneficiaries of the trust fund suffer by a diminution of the capital, of the trust fund itself. If, when Mrs. Wiegand turnéd over the capital fund to the trustees, she had also turned over any interest accruing on it during the period the fund was in her hands, the case might present another aspect. She did not do this and there is no snch element presented for decision. We express no opinion whatever on this view of it. On this branch of the case, therefore, and under the facts peculiar to this case, we hold that the executor of Mrs. Wiegand, as such, had no right whatever to assert, as against the trust fund in the hands of the trustees, a claim for interest or an accounting for interest on the fund while she held it and before that fund came into the hands and under the control of the trustees, as such. Following this a little further, if it could be supposed that these trustees, failing to account for the interest at the end of a year from the time of the death of George Wiegand, had been sued by Mrs. Rosalie Wiegand for the $5000, is it possible that they would not have been allowed to set up in answer to this claim for the $5000, that the trust fund had never been in their hands during the year but during all that period had been in the possession of Mrs. Wiegand herself? Is it possible that any court of law or of equity would have mulcted them for the interest, or held them guilty of violation of their trust by not having the fund earn interest while it was not in their hands? Least of all should Mrs. Wiegand’s executor be permitted to take that interest out of the principal fund, a fund which, under the will, was to stand for the benefit of all the parties ultimately interested in the fund. The foregoing remarks are expressly limited- to the facts in this case.

The second proposition covering the law as to the-right of apportionment of an annuity, while, so far as’ we know, touched on by but one decision of the appellate courts of this state — that of Lynch v. Houston, infra — is a proposition settled by authority and a long-line of decisions by courts of other jurisdictions. That at common law the right of apportionment did not exist, admits of no argument; tha/t the common law, unless changed by statute, is in force in our state, is beyond donbt; that we have no statute changing the common law on this, is equally beyond question. It is, however, universally conceded, that while at common law the right of apportionment of an annuity did not exist, two exceptions have been, by the application to them of principles of equity, engrafted upon that law. Judge Woerner, in his work on The American Law of Administration (2 Ed.), vol. 1, sec. 301, *p. 638, after announcing the rule of the common law that there is no apportionment of rent between successive owners, announces that the same rule with reference to apportionment applies to annuities. “They are not,” says that learned author, “in their nature apportionable either in law or equity, except annuities for the maintenance of the Avidow, or married women living apart from their husbands, or infants, in which case they are apportion-able on the ground of necessity.” But the cases which bring the widow within the exception and which support Judge Woerner in extending the exception are cases in which the widow was without other means. That is undoubtedly what the learned author had in mind when referring to the widow; that is, the case of a widow not provided for by dower or otherwise. Judge Ellison, in Lynch v. Houston, to be hereafter referred to, notes the same exception.

In Manning v. Randolph, 4 N. J. L. 144, it is said that no principle is better settled than that if a bond be for the payment of an annuity at a date certain and the annuitant died before the day, the annuity of that year is lost, and that in the case before the “court, as in the case at bar before us, the deceased could not herself have recovered the annuity before its anniversary, if she had been living; that the day of payment had not then come, “and surely,” says the court (l. c. 145), “her administrators can have no greater right than she herself would have had.”

In Tracy v. Strong, 2 Conn. 659, l. c. 664, referring to the exception to the common law rule, it is said that it “was introduced by courts of equity, and obtains only, where an annuity is payable, by way of maintenance, to an infant or feme covert — who, by reason of their legal disabilities, might be unable to procure credit for necessaries, if payment for them depended upon their living till the annuity should, by the common rule, become payable.” In this same case it is stated that the principle which underlies this rule of the common law is the same underlying that by which the common law holds that the payment of a debt must be on the day it falls due, so that neither a tender nor a demand of payment before that date is available.

In Irving v. Rankine, 13 Hun (20 N. Y. Sup. Ct.) 147, the rule is stated in the same way; that at common law there can be no apportionment of annuities', citing among other authorities in support of this, Williams on Executors, 109; 3 Redfield on Wills, 184, sec. 13; 1 Story’s Eq. Jur., sec. 410. Repeating the rule and noting that there are but two exceptions to it recognized by the English' authorities, one being the case of an annuity for the support and maintenance of infants, the other for the support of a wife living separate and apart from her husband, the court says (l. c. 149) : “These exceptions have been allowed from the necessities of the case, as otherwise the infants in the one case, or the wife living upon a separate maintenance in the other, could not procure credit for necessaries from the time when one installment became due to the next, unless the creditor should choose to take the risk of the annuitant surviving until the next installment became due. These, however, are noticed as remarkable exceptions to the general rule; and it has been held that they were not applicable to the case of a married woman living with and supported by’ her husband; and we do not find that they have ever been extended beyond the two cases referred to.” In this case of Irving v. Rankine, it was claimed by the executor of the widow, the latter having-died and her executor suing as in the case at bar, “that a provision in lieu of dower falls within the same principle; but, in this case at least,” says the court, “there cannot be the same ground of necessity, for, besides a large and valuable property given to' her in fee (the widow), had other valuable property, viz., the two farms which she took by survivorship.” The decision in Irving v. Rankine was affirmed by the Court of Appeals of New York (79 N. Y. 636), no opinion being filed. It is to be noted with reference to this case also that the court called attention to the fact that by chapter 75, Laws 1875, the state of New York had abrogated this rule, but that as the case in decision arose in 1858, when the testator died, the law of 1875 did not apply.

In Kearney v. Cruikshank, supra, a case arising before the adoption of the law of 1875 by the State of New York, after announcing the common law rule that an annuity payable yearly or for the year was not apportionable, the New York Court of Appeals, speaking through Judge Andrews, said (l. c. 97) : f‘We are not at liberty to decide the question in this case upon our notions of natural equity and justice, provided the settled rule of law fixes the rights of the respective par-, ties, and determines the question presented.” Stating the rule at common law, that annuities were not apportionable, subject only to the two exceptions of where the annuity was given by a parent to an infant child or by a husband to his wife living separate and apart from him, the Court of Appeals says (1 c. 98.) : “But with these exceptions, it was the uniform and unbending rule of the common law, recognized both by courts of law and equity, that annuities, whether created inter vivos or by will, were not apportionable in respect of time. This rule, it has been said, ‘proceeds upon the interpretation of the contract by which the grantor binds himself to pay a certain sum at fixed days during the life of the annuitant, and when the latter dies, such day not having arrived, the former is discharged from his obligation.’ (Lurnley on Annuities, 291.) It re-suited from the general rule that, if the annuitant died before, or even on the day of payment,.his representatives could claim no portion of the annuity for the current year.” Many authorities are cited by the court in support of this proposition, both from the courts and the textwriters, and continuing the discussion of the subject, Judge Andrews, who delivered the opinion of the court gives (l. c. 101) as one reason why in the case before the court the annuity could not be either apportioned or its payment anticipated, that it would not be known whether the income would be sufficient to pay the annuity until the end of the year.

In Chase v. Darby, 110 Mich. 314, it is said that the word “annuity,” which must be given its technical meaning unless something is found in the contract that indicates a different meaning was intended, carries with it the idea of an annual payment and that unless the rule of the common law is changed bv statute, annuities are not apportionable.

In Wiggin, Admr. v. Swett, 6 Metc. (47 Mass.) 194, l. c. 201, Chief Justice Shaw announces the general rule, both at law and in equity to be, “that where an annuity is payable on fixed days during life, and the annuitant dies before the day, the personal representative is not entitled to a proportionate part of the annuity,” and that where no day is named for the commencement of the year and by the will, the annuity given was payable quarterly, that the beginning of each year was the date of the death of the testator, and that the annuity, if payable annually, fell due on each recurring anniversary of that date and not before. . In that case the annuity was payable in quarterly installments, one quarterly installment due the 25th of May, the next falling due the 25th of the succeeding August. The beneficiary, however, died on the 22d of that August. Chief Justice Shaw held that in that event it fell within the general rule previously stated and not within the exceptions to the rule and that there could be no payment or apportionment of it to the executor of the beneficiary for the period elapsing between the 25th of May and the 22nd of August of the same year.

In Dexter v. Flood, 121 Mass. 178, Mr. Justice Cray, then Chief Justice, has collated the authorities very fully, and treating of the general rule of the common law followed by chancery, that sums of money payable periodically at fixed times, are not apportionable during the intervening period, and calling attention to the difference in the application of this rule as to rents and legacies and annuities and agreements for interest or coupons on public securities on the one hand, and the rule applicable to interest upon promissory notes of individuals on the other, holds that in the former case the rule of apportionment does not lie while in the latter it does.

In Heizer v. Heizer, 71 Ind. 526, where a son, for a valuable consideration, agreed to pay his father during his life a. certain sum annually on a certain day of each year, the father died 20 days prior to the day on which the sum was payable. On suit being brought by his administrator to recover the proportionate part of such sum due at the time of his death, the Supreme Court of Indiana held, on a review of the authorities, that the sum thus contracted to be paid was an annuity; that at common law there can be no apportionment of an annuity, that the common law rule had not been changed by statute in Indiana, and that the administratrix could not recover.

In our own state the case of Lynch v. Houston, reported 138 Mo. App. 167, 119 S. W. 994, the decision by the Kansas City Court of Appeals, the opinion written by Judge Ellison, the case heretofore referred to, is the only one in our appellate courts to which our attention has been called or which we have found, discussing the question of an annuity. That learned judge holds that the general rule of common law, recognized also by the courts of equity, that an annuity is not apportionable in respect to time, is in force in this state. He cites (l. c. 171) Nehls v. Sauer, 119 Iowa l. c. 441, and quoting from that, to the effect that the practically universal holding of the courts is that an annuity will not be apportioned and that if the annuitant dies during the year, even though it be on the last day before the payment falls, due, the right to demand the annuity dies with him and his executor can recover no part of it. Judge Ellison notes as an exception, that where the annuity is to be paid to the widow in lieu of her life-dower estate, or to minor children for support, it may be apportioned so that she or they will receive a proportionate amount for the year in which either may die. “But the rule itself,” says Judge Ellison, “as stated in Nehls v. Sauer, supra, is approved and emphasized in what appears to be an unbroken line of cases.” The only' authority the learned judge cites for extending the exception to the widow is Blight v. Blight, 51 Pa. St. 420; Sheen v. Osborn, 17 Serg. & Rawle 171; Sweigart v. Feay, 8 Serg. & Rawle 299; and Lackawanna Iron Co.’s Case, 37 N. J. Eq. 26. As to this latter case, Judge Ellison notes it as an exception engrafted on to the rule to meet the particular facts. That is our view of the Lackawanna case. The Pennsylvania cases cited by Judge Ellison are among those relied on by counsel for respondents. We do not think they meet the point in issue here, nor do we think them, so far as they do touch on that issue, exactly in line with the great weight of authority. Nor does Judge Ellison seem to consider them as controlling the case before him. We are not to be understood as dissenting from what the Kansas City Court of Appeals held in this case. The distinction we draw as between that and the one at bar rests on the differences found in the instrument construed there and that here under construction. The rule was not applied by the court in Lynch v. Houston, for the reason that a consideration of the whole will showed that it was in contemplation of the testator that by providing that the payments should cease at the death of the beneficiary, he intended that they should continue up to the death. “The effect of the law,” says Judge Ellison (l. c. 175), considering a motion for rehearing in the case, “as to an unapportionable annuity is not that payments shall cease at death, but, in reality, that they shall cease at the last annual payment next before death; that is, before a death occurring prior to the day for the next payment; and when words are used showing that not to be the intention they should be allowed their natural force and meaning.” After holding that intention may be shown in a great many ways, he holds as the conclusion of the court, that the parties intended that if the death of the beneficiary occurred before the day when the annual payment would have been due, the amount of that payment should be apportioned and payment be made of the proportionate part thereof up to his death.

We are referred to the decision of the Kansas City Court of Appeals in the case of In re Estate Catron, 82 Mo. App. 416. We dismiss that from consideration as we do not think that it has any application whatever to the case at bar. It did not concern the question of the apportionment of a legacy, and was a case in which the executor in charge of the estate, having the whole of the estate in his possession, was called on to account for interest, the interest being the legacy. We had occasion to consider, and as- far as applicable, follow the decision of the Kansas City Court of Appeals in this Catron case in the case of Good Samaritan Hosital v. Mississippi Valley Trust Co., 137 Mo. App. 179, 117 S. W. 637. No such issues arise here.

These are the cases illustrating the law on this ■matter. Several of them are of very recent date, the Lynch case decided May 17, 1909. So that it can hardly be said that in modern times the rule has met with disfavor. It is suggested that we have a rule in our state, to the effect that all deeds, wills or other instruments in writing whereby an estate or other benefit is conferred by one to another, mnst be construed so as to effectuate the intent and purpose of a grantor or testator, and that this rule has, in effect, abrogated the common law rule against apportionment of an annuity. We are unable to appreciate the force of this, or to agree that one rule abolishes the other. Both can and do prevail, and all courts have so held. If it is necessary to carry out and effectuate the intent of the grantor or testator that the annuity is to be apportioned, no court has ever failed to recognize the right or apportionment. That the Kansas City Court of Appeals illustrated and enforced in the Lynch case, supra, at the same time recognizing and not attempting to overthrow the common law rule.

A cardinal rule to be observed in the construction of wills is that the intention of the testator is to be sought out and when ascertained, that intention given effect. [Tisdale v. Prather, 210 Mo. 402, l. c. 407, 109 S. W. 41.] This is also a statutory requirement. [R. S. 1909, sec. 583.] When, however, technical words are used in a will, they are to be interpreted in their established legal sense, and so the testator is presumed to employ them, unless a contrary meaning is plainly intended by the context of the will, [Drake v. Crane, 127 Mo. 85, l. c. 103, 29 S. W. 990; Cross v. Hoch, 149 Mo. 325, l. c. 338, 50 S. W. 786.]

The word “annuity,” carries with it, in itself, the idea of a sum payable annually. An annuity, says Black, Law Dictionary, is “a yearly sum stipulated to be paid to another in fee, or for life, or years,” citing Coke-Littleton. Chancellor Kent, Lect. LII, par. V, *p. 471, states .that the principle underlying the rule that an annuity, like a rent charge, cannot be apportioned is, that it is an entire contract. So that treating of rent charge, which differs only from an annuity, in that it is a charge upon lands, while the annuity is a personal charge alone — if the tenant for life gave a lease for years, rendering a yearly rent and died in the course of the year, the rent could not be apportioned and the tenant would go free of rent for the first of the year. While a technical word, it has a commonly accepted, a popular meaning. Thus in section 11579, Revised Statutes 1909, in the chapter concerning taxation and revenue, in defining the word “credit,” as used in that chapter, we find this: “The term ‘credit,’ whenever used in this chapter shall be held to' mean and include . . . ‘ every annuity or sum of money receivable at stated periods,” thus making the word annuity synonymous with the words “a sum of money receivable at stated periods.” That is, if nothing to the contrary appears, and' the word “annuity,” alone is used, it is to be construed as meaning a sum payable annually at the end of each year after it attached, for life, or as otherwise limited.

Turning from the law to the facts and contrasting the facts in the Lynch case with those in the- case at bar, no such intention- as found to exist in the Lynch case, to make the charge on the trust anything other than an annuity, can be' found in or gathered from a consideration of the fourth clause of this will now under consideration. It is clearly and unmistakably an annuity. It has all the attributes of an annuity. By the force of which term, and by law, the first payment thereof became due on the first anniversary of the death of the testator. Not before then. It is idle to claim in the case at bar, that this provision creating this trust was necessary to the support of the widow, or that it was so intended. Mr. Woerner himself testified that there was no reason why the trust fund should not have been turned over at the time it was, because, he said, the estate was entirely solvent; that the outstanding debts were very insignificant and whatever debts existed could be paid out of the residue of the estate. While the learned trial judge, incorrectly, as we hold, ruled out the inventory of the estate, its omission happens to work no particular harm, as we have before us, in the order of distribution, which was made on the petition of Mrs. Wiegand, ample evidence that there was no necessity whatever for the anticipation of the payment of this annuity before the arrival of its anniversary, to provide support for the widow. Even if we close our eyes to knowledge we may have of current events, accepting the statement that the securities there referred to are worth only par, the testimony shows they drew from' three to seven per cent, so that the income from them was certainly ample to support the widow, particularly in view of the fact that she was given the homestead with all its appurtenances, and that she had a right, under the law, even outside of this annuity, to have claimed the $400 as the absolute amount allowed her as the widow, as well as to an allowance for the support of her family for' one year. [Whiteman v. Swem, 71 Ind. 530.] We can gather no meaning from the fourth clause of this will, other than that it was intended to be an annuity. Such being so, and no time for the annual payments being fixed, then, as said by Chief Justice Shaw, in Wiggin, Admr. v. Swett, supra, the time for payment is the anniversary of the death of the party creating the trust, in this case, the testator, George Wiegand, Sr. This clause directs the trustees to pay annually to his wife Rosalie for and during her lifetime the sum of $5000. If the net profits, interest and income be insufficient to pay that sum the testator directs his trustees to take from the capital of that fund enough to make up the sum of $5000, so that in any event his' wife, so long as she shall live, shall “receive an annuity of that amount independently of any other provisions made for her in this will.” There is no mistaking this language. When the testator gave the direction that his wife is to receive an annuity, the presumption is that he knew what that term “annuity” meant, which is to say, a sum payable annually, unless by the terms of the will itself the annuity was payable in installments, of which there is no intimation of any snch intention in this will. How would it be possible for the trustees to determine, until the expiration of the year, how much they should take from the capital fund to make up the $5000? ' If they took any part of the $5000 out of the capital in advance, or quarterly even, anticipating the income before the expiration of the year, the fund itself would be diminished, the capital on which interest was to be earned for the year, and hence the interest or the income itself on the remainder of that capital would be diminished just so much. If they could anticipate the payment of any part of this annuity, they could anticipate all of it, justifying themselves on the assumption that they would pay it back, if the interest earned on the fund amounted to $5000, and that' if the interest did not amount to $5000, it would be perfectly right to have taken it out of the principal. This would have amounted practically to waste of the fund itself, for every dollar taken out of the capital diminished the capital on which interest was to be earned. It was distinctly provided in this clause of the will, that if the net profits, interest and income exceed the amount of $5000 “each year herein directed to he paid her ” then the excess shall be added to and form part of the capital fund. Clearly this 5 s the expressed intention that the $5000 is to be paid, not in installments, not anticipated, but each year. This clause further provides that upon the death of his wife, the trust shall cease “and the capital fund in its then condition shall be paid to and vest in my three children in equal shares.” What does this term, “in its then condition,” mean but the principal and the then accrued interest, provided the principal has not, at a preceding anniversary of payment, been diminished by having been drawn on to make up the annuity? It covers the fund, principal and accrued interest as then existent. It is expressly provided that interest earned, over the annuity shall go into the principal. That interest and the principal constitute the fund to be distributed at its then condition on the day of distribution. There is nothing whatever in this clause, or, for that matter, in any other clause of the will, to indicate the slightest intention present in the mind of the testator, to make this other than an annuity in the sense in which the term annuity is used at law. It is no argument against this to say that the common mind is not acquainted with the fact that an annuity cannot be anticipated, but can only be payable on each anniversary of its payment, unless another period of payment is designated. This is the law and every one is presumed to know the law. Holding up the instrument by its four corners, construing it by every rule applicable, it appears to us futile for a court to say, in the face of its provisions, that this fourth clause is to be read other than in its literal language, as that language is interpreted by law, and that it. creates an annuity, payable at the anniversary of the death of the testator, and not apportionable. It is not for a court to attempt to make a will for a man which he did not intend, in contemplation of law, to himself make.

There is this also to be said: Mrs. Wiegand, during her life, does not appear to have drawn on the trust fund; she turned it over in full to the trustees. There are two inferences that may be.drawn from this: either she had it. invested and drew the interest, or she did not need the income. It, is not claimed that the income is needed-to pay off any debts contracted by Mrs. Wiegand. What is demanded is, that it shall go into her general estate for the benefit of her residuary legatee. Surely the testator in establishing the trust fund, had no such intention in mind. He had provided for that legatee by making her an equal participator with her two brothers, in the whole fund, less such part thereof as might, under this fourth clause, have been paid over to her mother. We therefore hold, construing this fourth clause, that there could be no apportionment whatever of this annuity, but that the beneficiary in the trust, the widow, dying before the anniversary, her executor is not entitled to recover even for the time that the trust fund was in the hands of these trustees.

Second. This brings us to a consideration of the question of credits and allowances. We are compelled to say that we think that the allowance of $1500 to these trustees, considering the time they held the trust fund until demand was made on them to turn it over, that is to say, from the 8th of July to the 3d or 5th of August, 1908; considering the shape in which that fund came into their hands, that is to say, interest paying bonds and a certificate of deposit, in an absolutely safe bank; considering the fact that the trustees were not required to give and gave, no bond and were therefore. saved the trouble, cost and expenses giving' a bond might have entailed, and considering the acts of these trustees which made this suit necessary, we hold that they are not entitled to the amount allowed, $1500) certainly not to the amount claimed which was $3000. On consideration, of all the facts in the case, we hold that a proper allowance to the trustees for their services down to final settlement and discharge, will be one-half of one per cent on the fund, that is to say $500.

We also think and hold that the trustees are entitled to a reasonable counsel fee. They were brought into court and made defendants, as trustees, and were necessary parties. While it was no part of their business to defend for the executor of Mrs. Wiegand, they were bound to make their appearance in court. We think that as covering services of counsel heretofore rendered and hereafter to be rendered in the circuit court, in connection with carrying out the order we will make herein, as well as for their services in this court, $250 is a reasonable allowance. When it is borne in mind that the amount actually in controversy here is only $2138.85, we think $250 a very liberal allowance for counsel.

The allowance of a credit of $10 for the services of C. F. A. Mueller, in connection with looking after property offered as security, and of $105.56 for interest accrued and $25 for premium on certain bonds, is also proper and should be allowed.

Credit for taxes for the years the trustees are liable for taxes on the funds while in their hands should be allowed on presentation of proper vouchers showing payment by them. These are all the allowances which should be made against the fund. Deducting these, whatever remains of tbe trust fund with- its interest and earnings while in the hands of the .trustees, should be ordered distributed to the parties plaintiff and to Mrs. Rubelmann, in equal amounts, one-third each.

Third. This disposes of all matters except as to costs and those are largely determinable on consideration of the attitude of Mr. Woerner in the case and as one of the trustees. Referring to the connection of Mr. Woerner with the case, it appears that he was the attorney. for George Wiegand, deceased, and had written his will, and also represented Mrs. Rosalie Wiegand in the contest over that will and in the settlement which was effected between Mrs. Wiegand and the plaintiffs herein, the result of which was the dismissal of the contest and the confirmation of the will. He acted as attorney for Mrs. Wiegand in all her matters. He was also appointed executor of the will of Mrs. Rosalie Wiegand, who was his cousin. There was nothing whatever in these professional or blood relations of Mrs. Woerner to debar him from being trustee; to the contrary, it was entirely fit that he should be appointed as such. Nor had anything occurred that rendered his position as trustee under George Wiegand’s will and as executor of Mrs. Wiegand’s will antagonistic, until between the 3d and 7th of August, 1908. Being approached by one of the attorneys for plaintiffs, with a request for a distribution of the fund held in trust, Mrs. Rosalie Wiegand being dead, tbe question was sprung as to the apportionment of the annuity, riot exactly in that shape possibly, but over that. Mr. Woerner, as executor, claimed the right of apportionment. The attorney for plaintiffs suggested a partial distribution of the fund then, leaving in the fund a sufficient sum to cover items which might be in dispute. Mr. Woerner rejected the proposition, replying that he would not consent to a partial distribution but wanted the whole matter disposed of together and by one act. It appears that Mr. Woerner was sustained in this position by his associate trustee, the Trust Company. This could only mean that Mr. Woerner used his position as trustee to enforce his demand as executor. This he had no right to do, no matter how honest may have been his motives. The trustees, as such, could have no possible interest in that fund beyond that of a mere stakeholder. It was their duty, as trustees, when such a situation arose, to stand aside, and have the adverse claimants determine it between themselves, by agreement or in court. Failing action by these, the trustees could have brought the fund into court and required the parties to interplead. It is no answer to this to say that by precipitate action of plaintiffs, the trustees were cut off from this. What we are here seeking to enforce is the duty of the trustees to stand aloof. The controversy over that question of apportionment was clearly one between the estate of Rosalie Wiegand on the one side and these plaintiffs and Mrs. Rubelmann on the other, they being the parties interested in the trust fund as opposed to this right of apportionment. Mrs. Rubelmann, in point of fact, however, was interested as against these plaintiffs, in the apportionment being made as claimed by the executor of Mrs. Wiegand’s will, Mr. Woerner. If the apportionment was made and the amount claimed was taken out of the trust fund, Mrs. Rubelmann would, as one interested in the trust fund, be required to contribute one-third of it, but the apportionment being allowed, and the fund turned over to Mr. Woerner as executor, she not only recovered back as residuary legatee under her mother’s will, this third, but would receive the two-thirds which her brothers would have lost from the trust fund. In point of fact the interests of Mrs. Rnbelmann and that of Mr. Woerner were identical. Prom that time on and when that situation arose Mr. Woerner should have surrendered his office of executor or of trustee. He could not, consistent with the rigid rules applicable to the duties of a trustee, which required him to be an entirely disinterested party, hold on to both positions. The result of his action as .trustee and executor combined, was to tie up the whole fund and prevent distribution thereof until protracted litigation, which' Mr. Woerner ought to have known would be the inevitable result of the action on his part, could be terminated. It appears that after this demand of August 3d, the matter of distribution was left in abeyance until the 5th of September, when the officer of the Trust Company, on being called on by counsel for plaintiff with reference to this question of apportionment of the annuity, told counsel for plaintiffs that any action taken by the trustees would have to be taken by both of them; that one could not act without the other and that the Trust Company would have to act with Mr. Woerner, and he referred him to Mr. Woerner. Hence it very clearly appears that the position of Mr. Woerner as trustee, standing by his claims as executor, was the direct cause of the refusal of this co-trustee and resulted in tying up the Avhole fund. That this was a position which no trustee had a right to occupy, is too clear for argument.

According to the testimony of Mr. Orr, the trust officer of thé Trust Company, in a conversation he had had with one of the counsel for plaintiffs, along about the 1st of August, 1908, Mr. Orr suggested to that counsel that if no agreement could be reached on the construction of the will over this matter of apportionment, that there could be a partial distribution and that the trustees could come into court .and ask for a construction, it appearing that the point in the mind of this trust officer at the times and which he suggested to one of the plaintiffs, was not whether the annuity was payable at all but whether it dated from the date of the testator’s death or from the date of the trustees receiving the fund. At all events it is very clear from the testimony of Mr. Orr, and the statement of Mr'. Woerner to one of the counsel for plaintiffs, that Mr. Woerner insisted on keeping the whole fund intact until this question in which he, as executor of the estate of Mr. Wiegand, was interested was settled. This witness, Mr. Orr, further testified that in the discussion ' between himself and Mr. Woerner over the matter of the annuity, they both agreed that it should date from the date of Mr. Wiegand’s death, rather than the date of the receipt of the capital fund by the trustees. This course was so obviously in the interest of the estate which Mr. Woerner represented as executor, that it is very clear that Mr.- Woerner should not have participated as trustee in any decision of this question by his co-trustee. It further appears from the testimony of Mr. Orr, that when he, representing the Trust Company, and Mr. Woerner, as trustees, were considering the permanent investment of the capital fund in real estate, it appearing that such investment could be had for the whole fund at 5 per cent on security which the committee of the Trust Company had approved, that Mr. Woerner raised the question that within five or seven months the trustees would have to pay $5000 of that fund at or near that time. Where upon they decided to put the $10,000 in bonds which would be readily convertible so as to be able to make this payment as and when required without sacrificing the securities. The trustees took no outside legal advice, acting on their own view of the law. The action of Mr. Woerner as co-trustee was so evidently governed by his interest as executor, that it was highly improper for him to have acted in the dual capacity.

• As we have said, the association of Mr. Woerner with the parties did not, in itself, disqualify him as trustee, but he could not be both trustee and executor when the duties of the two conflicted as here. It is not a question of right action — the action in each character may have been entirely proper. The real core of the matter lies in the rule that no one individual, no matter how pure his motives or how high his character or exalted his ability, can be allowed to hold two positions, the respective duties of which are, or may become, antagonistic.

We are asked to remove Mr. Woerner as trustee. To remove one as trustee there must be a clear necessity for such act, a clear necessity for it, in order to save the trust property. “Mere error or even breach of trust, may not be sufficient; there must be such misconduct as to show want of capacity or of fidelity putting the trust in jeopardy.” [1 Perry on Trusts (6 Ed.), sec. 276, foot page 478.] We find no necessity for such action to save this trust fund, in the first place; and in the second place, we do not' find any such conduct on his part as to show either want of capacity or of fidelity, putting the trust fund in jeopardy. Our criticism of Mr. Woerner’s action is on the sole ground that he occupied an incompatible position here, when called on to act as trustee and as executor. We decline, by silence to admit that one can properly do that.

We notice this now as it concerns the question of compensation and of costs. This litigation arose over a desire to add to the estate of Mrs. Rosalie Wiegand. Mr. Woerner, as executor, insisted on the apportionment before distribution. His co-trustee agreed to this. That insistence brought on this litigation. It was solely in the' interests of the estate, of which Mr. Woerner was executor. The estate and the residuary legatee therein are the real parties to be benefited by the maintenance of the claim to the apportionment. Accordingly we direct that all the costs of this cause in the circuit court,- as well as in this court and in the circuit court on it again reaching that court, be taxed against Wm. F. Woerner, as executor of the last will of Mrs. Rosalie Wiegand, deceased.

We will add that we are asked to disallow the claim of the Trust Company and of Mr. Woerner, as trustees, for any allowance for their services as trustees' or for counsel fee in this case. The rule is that a trustee who breaks the trust should be denied compensation for his services. [Newton v. Rebenack, 90 Mo. App. 650, l. c. 676.] We find no such breach here, but it is beyond ques-ion that where one of two or more trustees acts in harmony with his co-trustee in connection with an adverse claim of the latter, néither of them is entitled to com- • pensation. Without denying this rule, we do not think it proper to enforce it in this case, as the trustees acted in apparent good faith. We have placed the allowance to be made to them by the circuit .court at $500, which, under the facts in this case, is all we think they should Tie allowed.

The judgment and decree of the circuit court of the city of St. Louis is reversed and set aside, and the cause remanded with directions to the court that the cause be proceeded with as herein directed.

Nortoni and Caulfield, JJ., concur.

Case Details

Case Name: Wiegand v. Woerner

Court Name: Missouri Court of Appeals

Date Published: Jan 24, 1911

Citation: 155 Mo. App. 227

Court Abbreviation: Mo. Ct. App.