Berry v. Kyes

• Decision Date: 14 September 1939
• Citation: 304 Mass. 56,22 N.E.2d 622
• Parties: BERRY v. KYES.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

304 Mass. 56

22 N.E.2d 622

BERRY

v.KYES.

Supreme Judicial Court of Massachusetts, Suffolk.

Sept. 14, 1939.

Suit for an accounting by Walter J. Berry, administrator of the estate of Walter M. Berry, deceased, against Mathilda Catherine Kyes, administratrix of the estate of Mary F. Berry, deceased. From the dismissal of the petition by the probate court, plaintiff appeals.

Affirmed.

Appeal from Probate Court, Suffolk County.

S. R. Wrightington and F. M. Carroll, both of Boston, for appellant.

W. F. McDonough, of Boston, for appellee.

RONAN, Justice.

This is a petition for an accounting, brought by the administrator of the estate of Walter M. Berry against the administratrix of the estate of May F. Berry, who was the wife of Walter M. Berry. The parties were married on February 18, 1917. Berry had been retired as a police officer in 1907 and had received a pension of $50 a month until his death on August 1, 1933. He had been employed from November, 1920, until July, 1932, as a collector for a furniture company, receiving from $20 to $25 a week, together with an allowance for the use of his automobile. Mrs. Berry at the time of her marriage was engaged in conducting a lodging house. They had no children. Berry was survived by his wife and three children by a former marriage. Mrs. Berry never took out any administration on her husband's estate. She died March 23, 1937.

The petitioner contended that Walter M. Berry, by means of false representations, induced the trustee under the will of his mother to pay him all the principal of a trust created by her for his benefit; that such payment constituted a breach of the trust; that the wife received these trust funds; that certain savings bank deposits and co-operative bank shares, some in the joint names of the husband and wife and some in her name alone, are the property of the estate of the husband; and that the estate of the wife is liable by reason of her intermeddling with the assets of her husband's estate without having been appointed administratrix of it. The petitioner appealed from the dismissal of the petition by the Probate Court.

We have a full report of the evidence, which is both oral and documentary. The judge made no findings of material facts but his decision dismissing the petition imports a finding of every fact essential to support his conclusion. Durfee v. Durfee, 293 Mass. 472, 200 N.E. 395;Klefbeck v. Dous, Mass., 19 N.E.2d 308. A judge who has seen and heard the witnesses is in a better position to determine their credibility than is a court which is confined to the printed record. The situation is different in regard to findings made upon written evidence. In that respect this court stands in the same position as did the trial judge, and reaches its own conclusion unaffected by the findings made by the trial judge. Harvey-Watts Co. v. Worcester Umbrella Co., 193 Mass. 138, 78 N.E. 886;Glass v. Glass, 260 Mass. 562, 157 N.E. 621, 53 A.L.R. 1157;Rodrigues v. Rodrigues, 286 Mass. 77, 190 N.E. 20;Hopkins v. Hopkins, 287 Mass. 542, 192 N.E. 145, 95 A.L.R. 1286. The case, however, is to be decided upon the entire evidence, and findings of fact based wholly or partly upon oral testimony are not to be set aside unless plainly wrong. Edwards v. Cockburn, 264 Mass. 112, 162 N.E. 225;Bratt v. Cox, 290 Mass. 553, 195 N.E. 787;Malden Trust Co. v. Brooks, 291 Mass. 273, 197 N.E. 100.

Berry's mother died on September 30, 1922. Her will left one third of the residue of her estate in trust for her son, Walter M. Berry, who was to have the income during his life, and upon his death the principal was to be paid ‘to his issue living at his decease by right of representation.’ A codicil modifying this trust contained the provision: ‘I authorize my trustee for the time being, in his or its discretion to pay from time to time to my son Walter M. Berry or to apply for his benefit such portions of the principal of the trust fund provided for him in my said Will as my trustee for the time being may deem expedient, it being my intention to leave entirely to the discretion of my trustee for the time being the advisability of making such payments, and the times when, and the amounts in which such payments, if any, shall be made.’ A Boston bank was appointed trustee. Berry's counsel in July, 1924, wrote the trustee requesting it to pay $2,500 in order that Berry could discharge a mortgage of $2,000 on the house in which he lived, and to enable him to pay some debts. This letter, which was also signed by Berry, further stated that Berry had no ready money; that he was dependent upon his pension and what he earned from the furniture company; and that he had been ill and was not in good health. The requested payment was made by the trustee. The mortgage was discharged on July 31, 1924. It was on the house in which Berry and his wife resided. The title stood in the name of the wife but Berry and his wife had signed the mortgage and the note that it secured.

Similar letters, some from counsel and some from Berry, followed, making other requests for payments upon the trustee. The trustee, as shown by its accounts filed in the Probate Court, made payments, commencing with July 30, 1924, and ending on June 27, 1931, of the entire trust fund amounting to $7,562.

The trustee was bound to comply with the provisions of the will. It was required to act in good faith, with reasonable prudence and sound judgment, guided by a due and rational appreciation of the fiduciary obligation and actuated by an honest, intelligent and diligent effort to discharge fully the responsibility which it had voluntarily accepted. Kimball v. Whitney, 233 Mass. 321, 123 N.E. 665;State Street Trust Co. v. Walker, 259 Mass. 578, 157 N.E. 334;Exchange Trust Co. v. Doudera, 270 Mass. 227, 170 N.E. 73;Creed v. McAleer, 275 Mass. 353, 175 N.E. 761, 80 A.L.R. 1117.

One who receives trust property, with notice that its delivery constitutes a breach of trust, holds the property as a constructive trustee for those who are entitled to have it. The transferee of such a person, who takes with such notice or without consideration, has no greater rights, and likewise becomes a constructive trustee liable to reconvey the property or, if unable to do so, to pay the owner the proceeds or to compensate him for its value. Otis v. Otis, 167 Mass. 245, 45 N.E. 737;Sargent v. Wood, 196 Mass. 1, 81 N.E. 901;Allen v. Stewart, 214 Mass. 109, 100 N.E. 1092;Locke v. Old Colony Trust Co., 289 Mass. 245, 193 N.E. 892;Jones v. Jones, Mass., 7 N.E.2d 1015;Jones v. Swift, Mass., 15 N.E.2d 274; Am.Law Inst.Restatement: Trusts, §§ 289, 291, 292.

The measure of discretion possessed by the trustee must be determined by the provisions of the will, construed in accordance with the established principles of law. The testatrix left the advisability of making payments of principal as to both amounts and times entirely to the discretion of the trustee. The power was not unlimited and it could not be exercised unreasonably, arbitrarily or capriciously. The authority conferred must be regarded as the means that the testatrix selected and deemed appropriate to effectuate the accomplishment of the general purpose for which the trust was created. She did not, however, expressly condition the exercise of the discretion granted upon the happening of any contingency or upon the existence of any particular facts. Corkery v. Dorsey, 223 Mass. 97, 111 N.E. 795;Boyden v. Stevens, 285 Mass. 176, 179, 188 N.E. 741;Cronan v. Cronan, 286 Mass. 497, 190 N.E. 721;Old Colony Trust Co. v. Rhodes, Mass., 12 N.E.2d 809. If the trustee, possessing the broad powers conferred upon it by her will, in its sound judgment and prudent discretion concluded that it was advisable to make payments of the entire principal, over a course of years, it was authorized to do so. Leverett v. Barnwell, 214 Mass. 105, 101 N.E. 75;Boyden v. Stevens, 285 Mass. 176, 188 N.E. 741;Dumaine v. Dumaine, Mass., 16 N.E.2d 625, 118 A.L.R. 834. No representative of the corporate trustee testified as to the reasons that prompted it to pay over the principal of the trust. Some of the payments followed letters from Berry and his counsel, while others were made upon the signing by Berry of what appears to have been the usual form of a request furnished by the trustee. The first payment of $2,500 was the largest, and it is evident that $2,000 of that sum was paid for a discharge of a mortgage upon the house in which Berry lived. The balance of the trust fund, amounting to approximately $5,000, was paid to him in the course of the next seven years. The petitioner concedes in his brief that the codicil may have been sufficient authority to the trustee to make these payments to Berry, yet he contends that such payments were induced by the false representations of Berry and constituted, as against the remaindermen, a misappropriation of the trust funds. Whether the representations of Berry were fraudulent and whether they induced the trustee to make these payments were questions of fact for the determination of the judge of probate. The first payment was made on the same date as the letter. Whether Berry furnished additional information to the trustee, or knowledge the latter had before it made the payments, is not disclosed by the record. The mere exercise of its admitted power to pay out the trust funds did not, upon this record, constitute a breach of trust and we cannot say that the judge was wrong in finding, as he must have found in dismissing the petition, that the...