Cobb v. Fant

• Decision Date: 28 March 1892
• Parties: COBB v. FANT et al.
• Court: South Carolina Supreme Court

14 S.E. 959

36 S.C. 1

COBB v. FANT et al.

Supreme Court of South Carolina

March 28, 1892

Appeal from common pleas circuit court of Anderson county; KERSHAW Judge.

Suit by Martha M. Cobb against O. H. P. Fant, trustee, and others, to compel said trustee to account for and pay over to plaintiff certain funds. Judgment for plaintiff, and defendant Fant appeals. Judgment modified.

Joseph N. Brown, for appellant.

Mr Scuddy and J. L. Tribble, for respondent.

McGOWAN J.

On July 24, 1875, the plaintiff, then Martha M. Dawson, in consideration of love and affection for her daughters, Anna Virginia Dawson and Mary Emma Dawson, duly executed a deed to the defendant O. H. P. Fant, of the county of Anderson conveying to him 5 shares of stock in the State Savings & Insurance Bank of Anderson, and 38 shares of stock in the National Bank of Anderson, of the par value of $100 per share, upon the following uses and trusts: "In trust for my own use; that is, to pay the dividends, income, issues, and profits thereof as they may accrue to me, for and during the term of my natural life; and at my death to continue the collection of the same, and divide them, that is, the income and profits, equally between my said daughters, for and during the terms of their natural lives; and if either," etc., "with limitations over." It appears that these stocks proved to be a remarkably fine investment. Dividends on the 43 shares were declared semi-annually, amounting generally to 12 per cent. per annum. These dividends were regularly drawn by the trustee, Mr. Fant, and paid to the plaintiff, the cestui que trust for life. And, in addition to these dividends paid, it seems that there were very considerable accumulations of "issues and profits" from the 43 shares of stock, amounting to about $15,000, which, as we understand it, was never paid out to stockholders, but kept in bank, having, however, the incidental effect of increasing the market price of the stocks. Now, the banks have closed up their business, and are ready to distribute the assets, including these accumulations, along with the original stocks, as if they had been sold. This made it necessary to determine how these funds should be paid out, as between the plaintiff, cestui que trust for life, and her daughters in remainder, etc.

The plaintiff, cestui que trust for life, instituted this action against the trustee, Fant, making her daughters and grand-daughters parties; claiming that she is entitled to all the issues and profits on the original shares during her life; that profits have accumulated in bank to the amount of $15,000, which, in winding up the affairs of the bank, she is entitled to receive under the deed, but which the trustee refuses to pay her; and praying that Fant, the trustee, be required to account and pay over to her all the income, issues, and profits on said stock, as provided by the deed of trust. The other adult parties put in answers concurring with the prayer of the complaint, and the infants, by guardian ad litem, merely formal answers, submitting their rights to the protection of the court; but the trustee, Fant, in order to protect the rights of the cestuis que trustent in remainder, and also to make himself safe, answered, denying the construction of the trust-deed contended for by the plaintiff, and alleging that the increased value of the stocks inured to the benefit of the remainder-men; that, at the time of the execution of the trust-deed, there had already accrued considerable profits, admitted to amount to 26.70 per cent., and continued to increase until it amounted to about 450 per cent., etc.

There was no verbal testimony, but, upon the papers and the admission of the parties, his honor, Judge KERSHAW, decided that "the accumulated dividends are certainly profits of the stocks, and the general rule in such cases is that the profits inure to the life-tenant, and to the same purport are the terms of this trust. Although there is some conflict in the authorities upon the question, it appears to me that upon principle and sound reason, plaintiff is entitled to the relief demanded;" and he therefore ordered that "the trustee, O. H. P. Fant, after paying the costs of this proceeding, and retaining to himself 2 1/2 per cent. commissions for receiving and paying over the same, do pay to the plaintiff, Martha M. Cobb, life-tenant, or her attorney, the remainder of all such sums as he may receive for the accumulated income, issues, and profits, or extra dividends, by whatever name called, directed to be paid to her for life under the said deed of trust," etc. From this decree the trustee, Fant, appeals to this court, upon the following grounds: "(1) Because his honor erred in holding that the accumulated profits of the bank-stocks belonged to the plaintiff. (2) Because his honor erred in holding that the profits of the bank-stocks, earned before the execution of the trust-deed, belonged to plaintiff. (3) Because his honor erred in holding that the...