Donaldson v. Allen

• Decision Date: 20 June 1904
• Citation: 81 S.W. 1151,182 Mo. 626
• Parties: DONALDSON et al., Appellants, v. ALLEN et al., Appellants
• Court: Missouri Supreme Court

81 S.W. 1151

182 Mo. 626

DONALDSON et al., Appellants, v. ALLEN et al., Appellants

Supreme Court of Missouri, First Division

June 20, 1904

Appeal from St. Louis City Circuit Court. -- Hon. Selden P. Spencer Judge.

Affirmed.

Judson & Green, Donaldson & Donaldson, Albert Arnstein and Henry Wollman for plaintiff-appellants.

(1) The devise to the executors of the real estate, subject to the life estate, was not to them personally, but to them as executors. The estate in trust was, therefore, annexed to the office of executor, and terminated therewith. Littleton v. Addington, 59 Mo. 275; Francisco v Winfield, 161 Mo. 542; Garesche v. Ins. Co., 146 Mo. 436. (2) While the learned judge was correct in holding that the devise in trust was incidental to the main purposes of the will, it is not necessary for the purposes of this case that the devise in trust should be held to have been definitely limited by the will. If this trust could be construed as a personal trust, apart from this executorship surviving in the sons after the death of the widow, the right of plaintiffs to a decree is equally clear. It is fundamental in the law of trusts that when the purposes of a trust are fulfilled, it will be discharged by the court on the demand of a beneficiary, and that a trust continue no longer than its purposes require. Pitts v. Sheriff, 108 Mo. 116; 1 Lewin on Trusts (1 Am. and 8 Eng. Ed.), p. 213; Young v. Bradley, 101 U.S. 782; 3 Jarman on Wills (5 Ed.), pp. 72 and 85; Inches v. Hill, 106 Mass. 578; Seamans v. Gibbs, 132 Mass. 241; Bowditch v. Andrews, 8 Allen 339; Sears v. Choate, 146 Mass. 395; Perry on Trusts (4 Ed.), sec. 320; Webster v. Cooper, 14 How. 489; Goyd v. Allen, 24 Ch. d. 622. (3) Under the facts in evidence it is clear that the purposes of the devise in trust have been fulfilled. Seamans v. Gibbs, 132 Mass. 241; In re Cooper's Estate, 150 Pa. 584; In re Muldroon's Heirs v. Fox's Heirs, 2 Dana (Ky.) 74; In re Weston's Estate, 91 N.Y. 502; Boyd v. Allen, 24 Ch. D. 622; In re Lockhardt, 4 Brad. 21. In this case no reason was urged for the continuance of the present protectorate over the property which might not be urged twenty years hence, or any time in the indefinite future, during the lifetime of the defendants or until the property is exhausted. Garesche v. Inv. Co., 146 Mo. 449. (4) As the court properly decreed the termination of the trust, it necessarily followed that plaintiffs were entitled to a partition of the real estate located within the jurisdiction of the court, that is, in the State of Missouri. Holloway v. Holloway, 97 Mo. 628. The limitations attending proceedings in partition are constantly weakening and the tendency to do full justice to the parties in the one action is becoming irresistible. Freeman on Cotenancy and Partition, sec. 650. It is well settled that a court of equity will entertain a bill to partition an equitable estate wherein the legal title is held by the defendant and the equitable title is in plaintiffs, even though the defendant trustee is in possession. The court having acquired jurisdiction of the case, may determine the whole controversy. James v. Groff, 157 Mo. 402. (5) There is no merit in the contention that the partition was ordered in contravention of the statute, section 4383, Revised Statutes 1899, as the partition ordered is not in violation of the intention of the will, but in accord with the purpose of the said will that all the property of the testator, real as well as personal, should be vested in his children, and the devise to the executors in trust was only in furtherance of that purpose. (6) As to the real estate located in other jurisdictions, it was clearly proper for the court, having decreed the termination of the estate of the trustees, to make its decree effective as far as its jurisdiction over the persons of the trustees permitted. The decree would have been obviously incomplete without such direction for the conveyance of undivided interests in the property of the trust located in other jurisdictions. The decree was entered in the court which had jurisdiction over the trust, as well as over the persons of the trustees. 1 Perry on Trusts (4 Ed.), secs. 71 and 72. (7) The trustees should have been held chargeable with the sum of $ 3,758.33, the defalcation of James W. Wallace. A trustee will be held responsible for losses to the trust fund occasioned by the negligent or criminal acts of an agent employed by him in the management or care of the trust property. 1 Perry on Trusts, sec. 441; Trutch v. Lamprell, 20 Beav. 116; Corwell v. Gatacome, 27 Beav. 568; Hapgood v. Parkin, L. R. 11 Eq. 74; Bostock v. Floyer, L. R. 1 Eq. 26; Fry v. Tapson, L. R. 28 Ch. D. 268; In re Litchfield, 10 Atk. 87. (8) The court should have held that the trustees did not exercise due care in supervising the acts of their agent employed in the affairs of the trust. A trustee is required to use the same care in the management of the trust estate that a careful and diligent man employs in the management of his own property. 1 Perry on Trusts, sec. 441; Fry v. Tapson, L. R. 28 Ch. D. 268; Finley v. Schlueter, 54 Mo.App. 458; Taylor v. Hite, 61 Mo. 142. To exonerate trustees from liability for losses to the trust fund occasioned by the act of an agent employed by them, there must be shown a necessity for the employment of the agent, that the trustees used due care and diligence in his selection and appointment, in looking after his actions as agent and in seeing that he rendered true accounts of the money of the trust in his hands. McCloskey v. Gleason, 56 Vt. 264; Bostock v. Floyer, L. R. 1 Eq. 26; Turner v. Corney, 5 Beav. 515; McRoberts v. Carneal, 44 S.W. 442. (9) The court should not have allowed the sum of $ 1,066, nor any sum, as compensation to the trustees for their services since 1898. Trustees guilty of a breach of trust or of gross negligence from which a loss to the trust estate results, are not entitled to compensation. Maginn v. Green, 67 Mo.App. 616; State v. Berning, 74 Mo. 87; Lathrop v. Baubie, 106 Mo. 470; State v. Richardson, 29 Mo.App. 603. The compensation of trustees should depend on their fidelity in the administration of the trust and should not exceed the value of their services to the estate. 2 Perry on Trusts, sec. 919; Carriers' Appeal, 79 Pa. St. 230; Perkin's Appeal, 108 Pa. St. 314.

Hamilton Grover and Henry W. Allen for defendant-appellants.

(1) The powers conferred upon the trustees under the will are personal and discretionary in their character and are not attached to the office of executor. The trust continued although the estate was finally settled and the executors discharged. Woerner, Law of Adm. (1 Ed.), p. 721; Hazel v. Hagan, 47 Mo. 277; Beach on Trustees, art. 442; Owen v. Switzer, 51 Mo. 328; In re Rickenbaugh, 42 Mo.App. 328; Simpson v. Cook, 24 Minn. 180, 27 Minn. 147; Parson v. Lyman, 5 Blatch. 170; Anderson v. Earle, 9 S.C. 460; State ex rel. v. Boon, 44 Mo. 254; Williams v. Cushing, 34 Me. 370; In re Higgins Est., 15 Mont. 474; Daggett v. White, 128 Mass. 390; Fielding v. Rose, 61 Mo.App. 189; Compton v. McMahan, 19 Mo.App. 494; Tainter v. Clark, 13 Met. 220; In re Est. of Besley, 18 Wis. 451; Bennett v. Chapin, 77 Mich. 526; Collier v. Egerton, 21 Wend. 430; Ingle v. Jones, 9 Wall. 486; Hayes v. Pratt, 147 U.S. 567. (2) The trustees have been and are now engaged in the honest and conscientious exercise of the discretion conferred upon them by the will. They have been selling the property, from time to time, as opportunity offered, and distributing the proceeds. All the property left unsold has appreciated in value. When they can get what they consider a fair price for what is left, they will sell that. Until the balance of the property can be sold at what, in the judgment of the trustees, is a fair price, the purpose of Thomas Allen in the creation of the trust is not fully performed. (3) When a testator provides that certain acts shall be performed by trustees appointed in his will, but leaves the time and method of performing those acts to the discretion of the trustees, and they are honestly and conscientiously engaged in the exercise of that discretion, without the slightest suspicion of fraud or unfair dealing, a court of equity will not be justified in interfering with the management of the trust property at the suit of a minority of the beneficiaries who disagree with the trustees upon a question of judgment. It is the judgment of the trustees upon which the testator relied and not that of the beneficiaries, nor that of the court, and the doctrine holds good even though the court should differ with the trustees on the question of judgment, and especially is it true when it appears that the discretion of the trustees is being wisely exercised. 27 Am. and Eng. Ency. Law (1 Ed.), 140; Perry on Trusts (5 Ed.), sec. 510; In re Naglee's Est., 52 Pa. St. 159; Veazie v. Forsaith, 76 Me. 172; In re Jas. Marshall, 138 Pa. St. 260; Muldrow's Heirs v. Fox's Heirs, 2 Dana (Ky.) 74; Ames v. Scudder, 11 Mo.App. 192; Haydel v. Hurck, 5 Mo.App. 267; Stevens v. De La Vaulx, 166 Mo. 20; Smith v. Wildman, 37 Conn. 384; Bank v. Sutton, 147 Mass. 131; Bacon v. Bacon, 55 Vt. 252; Gerard v. Buckley, 137 Mass. 475; Hutchinson's Appeal, 82 Pa. St. 509. (4) The partition of lands contrary to the intention of the testator is prohibited in Missouri by express statutory enactment. R. S. 1899, sec. 4383. (5) The appointment of a receiver to take charge of the property of the trust estate, especially the lands out of the State of Missouri, was totally uncalled for, was not justified by any facts or circumstances requiring it, and was an abuse of the discretion of the lower court. Miller Bros. v. Perkins, 154 Mo. 637; Overton v. Railroad, 10 F. 866; Morris v. Buckner, Fed....