18 D.C. 39 (D.C.D.C. 1888), 7007, Edwards v. Maupin

Docket Nº:Equity 7007.
Citation:18 D.C. 39
Opinion Judge:Mr. Justice JAMES:
Attorney:Messrs. LEIGH ROBINSON and HENRY WISE GARNETT for complainants: Mr. FRANK W. HACKETT for defendant.
Case Date:November 19, 1888
Court:Supreme Court of District of Columbia

Page 39

18 D.C. 39 (D.C.D.C. 1888)




Equity No. 7007.

Supreme Court, District of Columbia.

November 19, 1888

1. A testator may direct that the same discretionary power which he has given to trustees designated by himself shall belong to the trustee appointed by the court in case of a vacancy; but if he omits to do so, a discretionary power will be construed to be personal.

2. Where a sale has been made by a trustee appointed by the court, all parties interested in the estate are entitled to a hearing before the sale is finally ratified.

3. The rule which applies to this court in regard to appeals is entirely different from that applying to the Supreme Court and the circuit courts of the United States; in this court an appeal lies from any order involving the substantial rights of the parties.

4. An order overruling a motion to vacate an order ratifying a trustee's sale is an appealable order.

5. Where a purchaser at a trustee's sale having been notified of proceedings being taken to vacate the sale, voluntarily permits such proceedings to go on to a final decree without his intervention, it will be too late to come in after such decree has been affirmed.

APPEAL from an order of the Special Term in Equity refusing to set aside its former order confirming a sale made by a trustee.

THE FACTS appear in the opinion.

Messrs. LEIGH ROBINSON and HENRY WISE GARNETT for complainants:

In equity the cestui que trust is the absolute owner of the trust estate. The authority of the trustee is limited to the duties prescribed to him. The right of property given to these, the said trustees, and therefore the right which they had the power to sell, at public or private sale, was an estate commensurate with that of the beneficiaries for whom they held, to wit, a life estate. Payne vs. Soll, 2 Dev. & Bat. Eq., 455. William vs. Holmes, 4 Rich, Eq., 475, 485; Smith vs. Metcalf, 1 Head 64; Ellis vs. Fisher, 3 Sneed 231.

But when once a suit has been instituted for the execution of a trust, that attracts the jurisdiction of the court, and the trustee, even the testamentary trustee, from that time, and even where he orginally had discretion, is not justified in proceeding to a sale of the property without the sanction of the court.

Again, where a power given to the original trustee is of a kind that indicates personal confidence it will, prima facie , be confined to the individual to whom it is given, and will not without express words pass to others, to whom by legal transmission the character of the trusteee may happen to belong; and though the estate, with the trust attached to it, will be in the trustee appointed by the court, yet the power (being one of that description) will be extinct. Hill on Trustees, 211 and 331; Cole vs. Wade, 16 Ves. 45. A power of sale in a settlement was given to A and B, the trustees to preserve contingent remainders, and the survivor of them, and the executors and administrators of the survivor: Held , that trustees appointed by the court in place of A and B could not exercise the power. Newman vs. Warner, 1 Sim., N. S., 456; Hill, 226.

As a general principle, a trustee has no power to change the character of a trust fund; and if he assume the power of converting real estate into personal, or personal into real, he acts at his peril.

If a loss has been sustained from the trustee exceeding his authority by an unauthorized and illegal disposition of the trust funds in his hands, he is liable for the loss. Quick vs. Fisher, 9 N. J. Eq., 802.

It is competent for the trustee to sell trust property by and with the consent and approbation of the cestui que trust , provided there be no restriction upon his powers in the deed and limitation over to children or third persons. Arrington vs. Cherry, 10 Ga. 429.

In decreeing a sale, the court will regard the interests of persons most to be affected by its action. Troy vs. Troy, 1 Busbee (N. C.), Eq. 85.

" It is certainly well settled that property held in trust or for life, with remainder limited over to persons, either known or unknown, is not absolutely uncontrollable, nor necessarily to be preserved unchanged in the same form and condition in which it was when it was first received under the original grant or devise. By the authority of the legislature, and under suitable restrictions it may be sold ." Clarke vs. Hayes, 9 Gray 428.

" It is not the practice of the court of chancery to authorize the sale of a future interest in real estate belonging to infants, except under very special circumstances; nor for the mere purpose of increasing the income of an adult owner of a present interest in the estate ." In the matter of Margaret Jones, 2 Barb. Ch., 22.

Where the cestui que trust is of age, or sui juris , the trustee has no right ( unless express power is given ) to change the nature of the estate, as by converting land into money or money into land, so as to bind the cestui que trust . 2 Story, Eq., Sec. 978.

The law will not permit the slightest antagonism on the part of the trustee. Clarke vs. Deveaux, 1 S. C., 172-185; 2 Johns. Ch., 254; 13 Ves. 381; 1 Story Eq., Sec. 322.

A trustee is under no circumstances to set up title adverse to his cestui que trust . Lewin, 285.

A cestui que trust may enjoin a trustee from the wanton exercise of his legal...

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