37 F.2d 259 (10th Cir. 1930), 142, Ingram v. Lewis

Docket Nº:142.
Citation:37 F.2d 259
Party Name:INGRAM v. LEWIS et al.
Case Date:January 10, 1930
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit

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37 F.2d 259 (10th Cir. 1930)



LEWIS et al.

No. 142.

United States Court of Appeals, Tenth Circuit.

January 10, 1930

Eliot D. Turnage, of Muskogee, Okl. (Charles A. Chandler, of Muskogee, Okl., on the brief), for appellant.

R. Emmett Stewart and C. F. Gordon, both of Muskogee, Okl. (Chas. G. Watts and E. J. Broaddus, both of Wagoner, Okl., on the brief), for appellees.

Before LEWIS, COTTERAL, and McDERMOTT, Circuit Judges.

McDERMOTT, Circuit Judge.

This action is one by a beneficiary of an express trust for an accounting by two of his three trustees. He asks no relief against Minerva

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Jones, his mother; and the third trustee is not in court. The Citizen's National Bank was joined as an alleged custodian of trust property, but the proof did not so develop, and the bill was properly dismissed as to it. After hearing the plaintiff's evidence, the trial court dismissed the bill. The trial court stated that the fees exacted by the trustees for themselves and counsel employed by them were exorbitant and unwarranted, but he felt that the defendants had successfully avoided an accounting because of certain releases which they procured from the plaintiff. This appeal challenges the correctness of that decree.

The evidence developed this state of facts: The plaintiff is a Creek Freedman, and the owner of valuable oil lands. Prior to his majority, July 30, 1924, his properties were managed by guardians.

About 15 months prior to his coming of age, Lewis and Wesley, who later became two of his trustees, advised the plaintiff to move from Oklahoma to Washington, D.C., which he did; during his residence there, Wesley repeatedly wrote the plaintiff that he was engaged in protecting the plaintiff from crooks who were undertaking to get hold of his property. In November, 1923, the plaintiff made a will, at the suggestion of Wesley, making Lewis and Wesley his executors. About six weeks prior to the plaintiff coming of age, Wesley came to Washington and suggested that he and the plaintiff take a trip to Europe, so that the plaintiff would be out of reach of the crooks and grafters when he came of age. Wesley and the plaintiff went to Europe, the plaintiff not knowing who paid the expenses of the trip. They returned to this country just prior to the plaintiff's birthday, and on the morning of his twenty-first birthday, at Cleveland, Ohio, Mr. Wesley and Mr. Lewis presented to the plaintiff about 25 or 30 documents for plaintiff for sign. He had no other advice, but he had implicit confidence in Mr. Wesley. He signed these instruments without reading them and without any understanding of what they contained, excepting that he would be protected in the enjoyment of his property for 21 years, out of which he would get $200 a month. On the trip to Europe no mention had been made of these instruments, and at the time of the execution of them, Wesley and Lewis said they were in a hurry to get back to Oklahoma.

Among these instruments was a deed of trust, conveying all of his properties to Wesley and Lewis and his mother, Minerva Jones, in trust for a period of 21 years. The trustees were given the broadest and most comprehensive powers, and the trustees were to receive a reasonable compensation for their services, to be determined from time to time by the trustees and the plaintiff.

Among the instruments signed that day was one authorizing Wesley and Lewis to pay immediately to P. A. Lewis the sum of $5,000, 'in consideration of money advanced by the said P. A. Lewis'; and to pay to the law firm of Wesley, Atkins & Chandler, the sum of $15,000 'as payment for legal services rendered to my estate and on behalf of my mother from March, 1923, to July, 1924.' Prior to that morning, the plaintiff's estate had been administered by a Court of Probate in Oklahoma. The defendant Lewis, in his answer, admits that the sum of $15,000 was paid under such authority, but alleges that it was in payment for services rendered after the plaintiff had attained his majority, which was but a few hours prior to the execution of the authority.

The trustees came into the possession, management and control of the plaintiff's properties under such deed of trust. There was evidence that Lewis was one of the trustees of another trust, called the Tucker trust, and that as trustee for the plaintiff he had purchased from himself as trustee of the Tucker trust, mortgages in the amount of $11,000, to the detriment of the plaintiff's interests. There was also evidence that from September 8, 1924, the date the trustees came into the possession of the property, until March 1, 1926, the date they turned it over, they had received in cash a total sum of $180,513.68, from which there was paid to Wesley and Atkins the sum of $59,624.57, and to the defendant Lewis the sum of $20,658.56. That the net cash balance turned over to the plaintiff upon the termination of the trust was the sum of $496. There was other evidence which it is unnecessary to relate.

The existence of the trust imposed upon the trustees the duty of an accounting. Dillman v. Hastings, 144 U.S. 136, 12 S.Ct. 662, 36 L.Ed. 378; Irvine v. Dunham, 111 U.S. 327, 4 S.Ct. 501, 28 L.Ed. 444; 26 R.C.L. 252; 39 Cyc. 464. Unless the matters hereafter referred to relieve the defendant Lewis from this obligation, the burden is upon him to account to the plaintiff for all properties received by the trustees, and for the disposition thereof.

The defendant Lewis asserts, and the trial court has found, that he is relieved from this

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primary obligation to account, by virtue of certain transactions, concerning which the plaintiff's evidence showed:

That the properties of the plaintiff were in Oklahoma, and the trust was being there managed; that the plaintiff lived in Ohio, and knew little or nothing concerning the administration of his property, excepting such information as he received from his trustees, and that he was getting...

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