Gaines v. Dahlin

• Decision Date: 12 April 1934
• Docket Number: 3 Div. 84.
• Citation: 228 Ala. 484,154 So. 101
• Parties: GAINES v. DAHLIN et al.
• Court: Alabama Supreme Court

154 So. 101

228 Ala. 484

GAINES v. DAHLIN et al.

3 Div. 84.

Supreme Court of Alabama

April 12, 1934

Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.

Bill in equity by Estelle Gaines, a minor, suing by her next friend Edith G. Gaines, against Estelle Dahlin and others, and cross-bill by the named respondent. From a decree sustaining demurrer to the original and cross-bills, complainant appeals and cross-complainant files cross-appeal.

Reversed rendered, and remanded on direct appeal; affirmed on cross-appeal.

Wm. F. Thetford, of Montgomery, for appellant.

Wm. J. Fuller, of Montgomery, for cross-appellant.

Steiner, Crum & Weil, of Montgomery, for appellee.

KNIGHT Justice.

Bill by Estelle Gaines, a minor, by her next friend, against Estelle Dahlin, A. Guy Gaines, and the First National Bank of Montgomery, seeking to have a certain agreement executed by and between the respondents to the bill declared to be null and void, and also to require the said bank to account to the said Estelle Dahlin, as trustee under the will of William L. Gaines, deceased, for the proceeds derived by the bank from the collection of a certain mortgage, and to deliver the fund to said Estelle Dahlin as such trustee.

The cause is in this court on appeal from an interlocutory decree of the circuit court, sustaining the demurrers filed by the First National Bank to the original bill of complaint, and to the cross-bill filed by Estelle Dahlin.

It is made to appear, from the averments of the bill, that William L. Gaines departed this life on or about November 19, 1926, leaving a last will and testament. After devising one-half of his estate (after the payment of certain bequests) to his daughter, Estelle Peters, now Estelle Dahlin, the testator gave and devised to his said daughter (after the payment of his debts and certain bequests) all the balance and residue of his estate in trust for his son, A. Guy Gaines, with a further provision, annexed thereto, providing for the education of his granddaughter, then a child of about three years of age, and who is the complainant in the original bill. The provisions of said will, presently pertinent, are contained in section 7 thereof, and we here reproduce the same: "I give and devise and bequeath to my daughter, Estelle Peters as trustee for my son A. Guy Gaines, after the payment and settlement of the above bequests all of the rest and residue of my property, of every kind, nature and description of which I may die seized and possessed of, or to which I may be entitled at the time of my decease. The said trustee shall manage and control all of said property, and shall be authorized and empowered to make deeds, transfers and to do any and all acts necessary in the transaction and management of said trust estate, and she may invest the same in a safe and conservative manner, as she may see fit, and she may pay over to the said A. Guy Gaines the interest or proceeds, or any part of the principal of said trust estate bequeathed to her as such trustee but she shall reserve a sufficient amount out of said trust fund, as in her judgment will be proper to educate Estelle Gaines, the daughter of A. Guy Gaines, and she shall have authority to expend such an amount as she may deem fit, and use to educate the said Estelle Gaines with, and the said amount expendid [expended] shall be a proper charge against said trust fund. She is authorized to make payment to the said A. Guy Gaines of such amounts out of said trust fund, as she sees fit, and is requested to use her best judgment in making such payments to him.

"My said trustee shall have full power and authority to execute all mortgages, deeds, receipts, releases, acquitances or any other instrument necessary or incident to the performance of the trust herein imposed, and the management of said trust estate shall be according to her wishes, and none of said trust property shall be subject to or liable in any way or responsible for the payment of any debts or obligation contracted by the said A. Guy Gaines, and shall be managed without any right or authority from the said A. Guy Gaines to dictate or interfere in the investment of said estate."

The bill avers that after the said Estelle Dahlin had taken upon herself the execution of the trust created by the will, she, along with the said A. Guy Gaines, entered into an agreement with the First National Bank of Montgomery, by which the said trustee "withdrew from the portion of the estate devised to the said A. Guy Gaines, for the education of said Estelle Gaines, the sum of $2,000.00, as represented by the promissory note of William F. Thetford, Jr., for the sum of two thousand dollars," and this amount, represented by the notes and mortgage of said Thetford, was placed with the First National Bank of Montgomery for the purposes set forth in the agreement, which appears in the report of the case.

The bill charges that the will of said William L. Gaines conferred upon the said Estelle Peters, now Estelle Dahlin, discretionary powers relative to the property devised to her in trust, "which said powers rested in a personal trust and confidence which were reposed by the testator in said Estelle Peters." That the powers conferred by said will could not be lawfully delegated to any one; that the said agreement was therefore void, in that it undertook to delegate to the First National Bank of Montgomery powers which the will conferred upon said Estelle Peters.

The respondent Estelle Dahlin answered the bill, and admitted all its allegations, and, in addition, she averred that she executed the agreement with the said bank "without proper consideration or advice"; that she has "since been advised by counsel, and believes, and, therefore, states that for the reasons given in said bill, she had no authority to delegate any of the powers which were conferred upon her as trustee by the will of said William L. Gaines, deceased."

The said respondent made her answer a cross-bill, making the said Estelle Gaines, the complainant in the original bill, and the said A. Guy Gaines and the First National Bank of Montgomery parties defendant thereto. She prayed that the court make and enter a decree requiring the said First National Bank of Montgomery to account to her as trustee under the will of said William L. Gaines, deceased, for all money, or its equivalent, collected by said bank under the agreement she made with it, and to deliver to her the custody of the funds.

To both bill and cross-bill the respondent the First National Bank of Montgomery demurred, and these demurrers were sustained. The demurrant, among other grounds, assigned the ground that both bill and cross-bill were without equity.

It must be understood that no bad faith, or any intentional wrong, is imputed by the bill to either the respondent bank, or to Mrs. Dahlin, nor are we impressed with any such idea.

If the agreement by which Mrs. Dahlin undertook to transfer a certain...