Gartside v. Gartside

• Decision Date: 31 December 1892
• Citation: 20 S.W. 669,113 Mo. 348
• Parties: Gartside et al., Appellants, v. Gartside
• Court: Missouri Supreme Court

20 S.W. 669

113 Mo. 348

Gartside et al., Appellants, v. Gartside

Supreme Court of Missouri, Second Division

December 31, 1892

Appeal from St. Louis City Circuit Court,--Hon. J. E. Withrow Judge.

Reversed and remanded.

D. T Jewett for appellants.

(1) Plaintiffs say that in view of all the facts disclosed by the evidence the defendant has grossly violated his duty as trusteee, because he has sold a large amount of real estate in his hands as trustee, without any authority under the will, or authority under a decree of a court, and expressly against the wishes of the cestui que trusts, and in violation of the law applicable to trust property. 2 Story's Eq Jur. secs. 978, 1276, 1289; Perry on Trusts, sec. 764; Gamble v. Gibson, 59 Mo. 595. These authorities are all to the point, that a trustee has no authority, unless authorized by the instrument creating the trust or by a court of equity, to sell real estate, unless the cestui que trusts are all of age and consent. (2) The trustee has violated the terms of the will and his duty as trustee, and ought to be removed. 2 Story on Equity, secs. 1287, 1288.

Fisse & Allen for respondent.

(1) There are two classes of trust estates created under the will of the testator, as to which the petition may apply, although it does not discriminate between them, or particularly recognize either of them. The first is the general trust--that comprehended his whole estate. The second includes the particular estates created in the partition of the general estate. (2) The motion, if designed to accomplish the removal of the defendant as trustee of the general estate, or to require him to give bond for the safe preservation of the same, must fail, because that trust estate has been determined by the partition made by defendant and his co-trustee, pursuant to the directions of the will. (3) The motion must likewise fail if intended to apply to the particular estates created in the partition of the general trust estate, for, as to the property included in these particular trusts, the defendant has resigned all control to the plaintiffs, and retains only a bare title to prevent acquisition of title by any one as tenant by the curtesy. When possession of property is rightfully given up, actual control of the property ceases; responsibility for it also ceases. Under such circumstances a bond ought not to be exacted. (4) The petition is one which addresses itself to the discretion of the chancellor, and his decree in disposing of it will not be reviewed, except to ascertain if the discretion was abused. In the case at bar, it can not be affirmed that the circuit judge has been guilty of such wrong conduct against these plaintiffs. The judgment ought to be affirmed.

OPINION

Thomas, J.

This is a bill to remove defendant from the position of trustee of the property of three of the plaintiffs, Emma and Julia Gartside and Mrs. Matty Duffy, or to compel him to give bond for the faithful discharge of his duties. After a hearing the court dismissed the bill and plaintiffs appealed.

The undisputed facts are about these: Joseph Gartside, father of the lady plaintiffs and of defendant, died December, 1876, leaving a large estate of $ 700,000 or $ 800,000. By his will he appointed the defendant and one Joseph W. Branch his executors and trustees, placing all the property which he gave to his four daughters in the hands of his said son and said Branch as trustees. He left one other daughter besides plaintiffs (married at the time of his death), and one other son besides defendant, six children in all. The will does not say whether the trustees shall or shall not give bonds. They never gave any bonds as trustees. The defendant, Charles E. Gartside, declined to act as executor, and Branch alone gave bond and was sole executor.

The estate left by the father consisted of considerable real estate in the city of St. Louis, and a large mining property in the state of Illinois. The coal mines in Illinois were owned by a stock company, organized under the laws of Illinois and were valued at $ 600,000, the deceased owning all the shares except a few given to each of his sons so they could be members of the company. The shares were each $ 100. The will provided that the widow should have the use of the dwelling house in St. Louis during her life, and an annuity of $ 5,000 a year; that each of the daughters, after they became of age, should have $ 1,000 a year, to be paid them yearly and to be finally charged to them in the distribution of the estate; that, when the youngest daughter became of age, then the estate should be equally divided among the children, after reserving enough to pay the widow's annuity. But the shares of the four daughters were still to remain in the hands of the trustees, so that no husband could ever get control of it. The youngest daughter became of age (18) in August, 1882.

In 1882 Branch turned over to himself and defendant, as trustees aforesaid, about $ 500,000 worth of stock of the coal company and got credit for $ 25,000 commission thereon. It seems, however, that the debts had not been paid, and he continued in charge of the estate as executor till 1887, when upon final settlement had with him he was found to be short in his accounts in the sum of $ 14,000, which his sureties afterwards paid. About this time he resigned as trustee, leaving defendant sole trustee. Defendant paid to Branch, as executor, the whole income of the estate coming into his hand from 1882 to 1887, for the purpose, as he alleges, of enabling him to pay the debts. The trustees did not pay to the daughters the $ 1,000 per annum each, as provided by the will, on the ground, as they claim, that they had nothing to pay with. In 1887 a disagreement sprung up between defendant and the beneficiaries, and this went to such an extent that all social intercourse between them ceased. Defendant while admitting a hostile feeling between him and his sisters, claims that it grew out of the interference of Mrs. Duffy's husband. Be that as it may, it is evident the family is divided into two extremely hostile factions, the mother, one sister and a brother constituting one faction under the leadership of defendant, and the other three sisters constituting the other faction under the leadership of Joseph A. Duffy, the husband of one of them.

After some litigation and a good deal of negotiation, partition of the estate as provided in the will was made in 1889, and deeds were duly executed conveying to defendant, as trustee, the real and personal estate allotted to the four sisters in severalty. In this partition the sisters obtained the annuities due them under the will, payment of which had not till then been made, and at the same time an agreement was entered into between all the parties by which it was stipulated that the sisters should receive the rents and income of their estate without molestation from the trustee, and so far as the real estate in the city is concerned there seems to be no trouble but the defendant has in possession the shares of the stock of the Illinois Coal Company belonging to his beneficiaries, each having about six hundred and sixty shares. Defendant is president and treasurer of the company, and he is enabled, without the consent of plaintiffs, to control the election of the board of directors, as he, his mother, his sister that sides with him, and his brother own four thousand and twenty of the shares, while plaintiffs own one thousand nine hundred and eighty. He pays the dividends on the stock to his sisters. After the institution of this suit defendant did not vote the stock of the plaintiffs, although the by-laws of the company authorized him as trustee to vote it, and it seems that after that time their stock was not voted. He refuses to give his sisters any information in regard to the business of the coal company. The company sold lands in Illinois for $ 337,000, $ 265,000 of which defendant invested in bonds of counties in Missouri other than the city and county of St. Louis, which bonds are in the custody of the officers of the company, the will providing that all surplus funds of the estate should be invested in real estate, in United States bonds, or bonds issued by the state of Missouri and the county and city of St. Louis.

I. The court erred in not requiring defendant to give bond for the faithful discharge of his duties as trustee. Section 8685 Revised Statutes, 1889, provides that every trustee appointed by any last will, deed or other instrument of writing to hold, manage or dispose of any property for the use of another person may be required by the circuit court to give bond, ...