Appeal from District Court, St. Louis County; H. J. Grannis, Judge.
WILSON, C. J.
This is a proceeding in equity in reference to the "Congdon Trust," seeking instructions, and directions to the trustees, as to the treatment and disposition of certain receipts, consisting of dividends and distributions paid or made by certain mining corporations upon the shares of stock of such corporations, held by the trustees as a part of the principal or corpus of the trust fund.
On August 3, 1916, Chester A. Congdon, as donor, executed to himself and his wife, Clara B. Congdon, and Walter B. Congdon, Edward C. Congdon, and Marjorie Congdon (now Dudley), children of the donor and his wife, as trustees, for the benefit of all said persons and also three other children, to wit Helen Clara Congdon, Elisabeth Mannering Congdon, and Robert Congdon, who were then minors, a certain trust instrument transferring to the trustees a large amount of personal property, consisting of bonds, shares of stock in corporations, and other personal securities, then owned and held by the donor, of a value exceeding $3,500,000, about $1,500,000 being represented by stocks of mining corporations, which is the basis of the principal element of our consideration. All the property therein mentioned was transferred to the trustees on the date of the trust. The donor died on November 21, 1916. The trust has been in force and operation since the date of said trust instrument. The beneficiaries of said trust include all the heirs at law of said donor. No person interested in this trust has ever attempted in any manner to rescind, disaffirm, repudiate, or otherwise attack or question the legality of the provisions of the "Congdon Trust," but, on the contrary, all interested persons strive to maintain the integrity of said trust, and the only object and purpose of this suit is to procure a construction
upon certain portions of the trust instrument and to have judicial instructions in reference thereto.
The donor died testate. He disposed of large holdings in mines and mineral lands by will. The property thus disposed of exceeded in value the properties transferred by the trust instrument. The trust property did not include any real estate.
By article 2 of the trust he clothed the trustees with power to invest the funds in their hands from time to time, but limited their field of investment to certain classes of securities.
Articles 3, 4, and 5 of said trust instrument read as follows:
Article Three.
"All rents and royalties derived from mines or mineral lands (including oil lands), and dividends or other money distribution paid or made by corporations owning mines or such lands and produced therefrom, are part of the capital assets of the trust fund and if distributed as income would cause a diminution of said fund; therefore all rents and royalties from mines, mineral or oil lands, received by the trustees, and all moneys or other property paid or delivered to the trustees, whether as dividends or distribution of capital assets, or otherwise, by any corporation owning or operating mines or mineral land, or oil wells, or oil land, shall be treated by the trustees as capital assets of the trust fund, and not as income therefrom, unless it shall clearly appear that the money or property so received from any such corporation was not produced by such diminution of its capital assets; all such capital assets so received by the trustees shall be by them from time to time reinvested as aforesaid, as a part of the principal of the trust fund: Provided, however, that the trustees may, in their discretion, treat not more than twenty per cent. of each sum of money so received, as income, and distribute the same as such among the beneficiaries hereunder, as herein provided."
Article Four.
"All reasonable and proper expenses of the trust hereby created shall be paid out of the income therefrom as herein defined, and
the net income then remaining shall be distributed among the beneficiaries in quarter yearly installments, as follows, namely:
"One-quarter thereof to Clara Bannister Congdon, the wife of the donor, so long as she shall live; the remaining three-quarters among the six children of the donor and his said wife, share and share alike, viz. Walter Bannister Congdon, Edward Chester Congdon, Marjorie Congdon, Helen Clara Congdon, Elisabeth Mannering Congdon and Robert Congdon: Provided
however, that in no event shall the income paid to each such child in any calendar year, while under the age of forty years, exceed the following sums, to wit:
"To any child under twenty-five years of age two thousand five hundred dollars; to any child twenty-five years of age, but not over thirty, three thousand five hundred dollars; to any child thirty years of age, but not over thirty-five, five thousand dollars; to any child thirty-five years of age, but not over forty, ten thousand dollars.
"Whenever and as often as the share of such income accruing to any child in any such calendar year shall exceed the amount payable to her or him for such year, such excess shall be invested by the trustees in any such securities as they are authorized to acquire with the principal of the trust fund hereunder; and all investments so made by the trustees for any child shall constitute a separate and distinct trust fund for the benefit of such child and his or her issue; and if in any subsequent calendar year the share of the income accruing to any such beneficiary shall be less than the sum hereinbefore named as the annual limit for any calendar year, such deficit shall be made good out of the excess so invested by the trustees for any such beneficiary; and all such accumulation shall be turned over, either in cash or securities, to each such beneficiary, when he or she shall reach the age of forty years.
"If any such beneficiary shall die before reaching the age of forty years, leaving issue, such accumulation shall be forthwith distributed among such issue, share and share alike, per stirpes, but if such beneficiary shall so die leaving no issue, such accumulation shall fall into and become a part of the principal trust estate created by this indenture.
"Nothing herein contained shall authorize or empower the trustees hereunder to accumulate the rents and profits of real estate, but all such rents and profits shall be distributed quarterly, as aforesaid, among said beneficiaries, in the proportions stated in the preceding part of this article and regardless of the limitations therein contained.
"Upon the death of the wife of the donor, or upon the death of any of said children leaving no issue, the share of the income theretofore paid to such deceased shall thereafter be paid to the surviving children, and to the issue of any deceased child, share and share alike, per stirpes. If a child of the donor, being a beneficiary hereunder, shall die, leaving issue surviving, the share of such income which would have been paid to such child if living shall thereafter be paid to the issue of such deceased child, share and share alike, per stirpes:
"Provided always, however, that nothing in this article contained shall require the trustees at any time to distribute all of the net income of the trust estate, but they may always retain in the banks such an amount of funds as they may deem necessary for the protection and advantage of the trust estate:
"Provided further that if any beneficiary hereunder shall at any time or times alienate, charge or dispose of the said income, or part thereof, or interest therein, or if by reason of his or her bankruptcy or insolvency or the occurrence of any other event, the said income shall wholly or in part fail or cease to be personally enjoyed by such beneficiary, but the same or any part thereof shall, or but for this provision would, be received by or belong to or become vested in any party or parties other than such beneficiary, then and thereupon, and so long as such condition shall continue, the right of such beneficiary to any part of such income, shall cease and be suspended, and the said trustees, during the continuance of any such condition, shall have the power, in their discretion, either
"(a) To pay over to such beneficiary only so much of said quarterly installments of income as may be necessary in their judgment to support and maintain such beneficiary, and his or her issue if any there be, in accordance with his or her station in life; and
the surplus of such income, if any, they shall invest in any such securities as they are authorized to acquire with the principal of the trust fund hereunder; or
"(b) To expend all such income in the maintenance and support and education of such beneficiary and his or her issue, if any there be.
"In any such case of the accumulation of income under the foregoing provisions, such accumulation shall be paid over to the beneficiary on whose account the same shall have been made upon his or her becoming again vested with the right of such income, free from any and every claim whatsoever, or, in the case of his or her death, to his or her issue, per stirpes:
"Always provided, however, that the trustees shall never accumulate the rents and profits of real estate under the foregoing or any provisions in this indenture contained; and whenever and so long as the right of any beneficiary to any part of said income shall cease and be suspended, save as...
