Corkery v. Dorsey

• Decision Date: 02 March 1916
• Parties: CORKERY et al. v. DORSEY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

223 Mass. 97

111 N.E. 795

CORKERY et al.

v.DORSEY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 2, 1916.

Appeal from Supreme Judicial Court, Suffolk County.

Suit by Francis D. Corkery and another against Mary Louise Dorsey and another. From a decree dismissing the bill, plaintiffs appeal. Reversed.

There was a finding by the court below that plaintiff Corkery, who prosecuted the bill, which was to set aside the action of a trustee in handing over the corpus of the trust to the cestui, was actuated by ill will against the trustee, and not by a desire to protect his interests as remainderman under the trust.

Fowler, Bauer & Kenney, of Boston, for appellants.

Charles M. Davenport, of Boston, for respondents.

RUGG, C. J.

This is a suit in equity, whereby the plaintiffs, interested in a trust fund, seek in substance for a revision of the discretion exercised by the trustee in paying over the entire corpus to one beneficiary. The decision turns upon the meaning of this clause in the trust instrument:

‘First. To pay over to Mary Louise Fay of said Boston when in the judgment of said O'Callaghan the said Fay is deserving and in need of aid, whatever part of said two thousand dollars ($2,000) or its earnings that said O'Callaghan may deem for the best interests of said Mary Louise Fay, in such sums and at such times as he may deem expedient or necessary, but said sum of two thousand dollars ($2,000) or any part thereof or its earnings shall not be subject to the control or interference of the creditors of said Fay, nor alienable by her save that she shall have the right to dispose at her death by any testamentary document, of whatever part of said two thousand dollars ($2,000) and its earnings as may be left at the time of her death.’

Other clauses provide for further trusts on the death of Mary Louise Fay and for the ultimate distribution of the fund. The case was heard by a single justice, who made this finding:

‘The trustee had known the beneficiary well for twenty years, and was familiar with her habits and wants; and he made the last payment without being solicited to do so by her or by Mr. Dorsey. On all the evidence I find that, acting in good faith and in the exercise of his honest judgment, Mr. O’ Callaghan thought, at the time of the payment, that Miss Fay was ‘deserving and in need of aid,’ in view of the condition of her health, her unemployment, and her approaching marriage.'

A decree was entered dismissing the bill, and the plaintiffs' appeal brings the case before us with a full report of the evidence.

[1] This finding of fact, although filed without request, is a part of the record and is entitled to all the weight of a finding made under R. L. c. 159, § 23; Cohen v. Nagle, 190 Mass. 4, 76 N. E. 276,2 L. R. A. (N. S.) 964,5 Ann. Cas. 553. The familiar rule in such cases is that it is the duty of this court to examine the evidence with care and to decide the case according to its judgment, giving due weight to the finding of the judge. His decision will not be reversed unless plainly wrong, when it depends upon oral evidence of witnesses who testified in person before him. Goodell v. Goodell, 173 Mass. 140, 146, 53 N. E. 275;Lindsey v. Bird, 193 Mass. 200, 79 N. E. 263;Sawyer v. Clark, 214 Mass. 124, 126, 100 N. E. 1079.

A careful study of the evidence does not convince us that the finding of fact was erroneous. The trustee doubtless exercised his honest judgment in good faith in reaching the conclusion in his own mind that Miss Fay was ‘deserving and in need of aid.’

That fact, however, is not decisive. The power conferred upon the trustee was the exercise of reasonably sound judgment. No arbitrary or capricious power was conferred even though honestly exercised. A trustee vested with discretionary power to distribute a fund in whole or in part is bound to use reasonable prudence. The possession of full power or wide discretion by a trustee means the kind of power and discretion which inheres in a fiduciary relation and not that illimitable potentiality which an unrestrained individual possesses respecting his own property. There is an implication, when even broad powers are conferred, that they are to the exercised with that soundness of judgment which follows from a due appreciation of trust responsibility. Prudence and reasonableness, not caprice or careless good nature, much less a desire on the part of the trustee to be relieved from trouble or from the possibility of making a foolish investment, furnish the standard of conduct. Davis, Appeal of, 183 Mass. 499, 67 N. E. 604;Amory v. Green, 13 Allen, 413, 416;Garvey v. Garvey, 150 Mass. 185, 187, 22 N. E. 889;Wilson v. Wilson, 145 Mass. 490, 492, 14 N. E. 521,1 Am. St. Rep. 477;Colton v. Colton, 127 U. S. 300, 320, 321, 8 Sup. Ct. 1164, 32 L. Ed. 138. Doubtless a trust might be created which by its terms would make the judgment of the trustee, however unwise it might be, the final test. Leverett v. Barnwell, 214 Mass. 105, 101 N. E. 75; Gisborne v. Gisborne, 2 App. Cas. 300. But the present instrument does not confer an uncontrolled and absolute discretion.

The conduct of the trustee must be tested by these principles. In view of the finding of the single justice, the real question is whether the trustee failed to exercise sound discretion. Taft v. Smith, 186 Mass. 31, 70 N. E. 1031. The money which formed the corpus of this trust was accumulated by the savings from a small store by the sister of the plaintiffs. In her family for some twenty years had lived Miss Fay, for whose benefit this spendthrift trust was established. She was a worthy and industrious young woman, without substantial financial resources, who supported herself by work in a store. The amount of the fund was $2,000. It was established in December, 1908. Small amounts had been paid to her when ill or for other purposes, about...