Haas v. McGinn, 1449.

• Decision Date: 09 February 1940
• Docket Number: No. 1449.,1449.
• Citation: 11 A.2d 284
• Parties: HAAS et al. v. McGINN.
• Court: Rhode Island Supreme Court

11 A.2d 284

HAAS et al.

v. McGINN.

No. 1449.

Supreme Court of Rhode Island.

Feb. 9, 1940.

[Copyrighted material omitted.]

Appeals from Superior Court, Providence and Bristol Counties; Alberic A. Archambault, Judge.

Proceeding by Mary E. Haas, executrix, and another against Mary J. McGinn, as trustee of a trust estate, for an accounting. From an unsatisfactory decree, complainants and defendant appeal.

Complainants' appeal sustained, respondent's appeal denied, and decree reversed in part.

Francis E. Sullivan, of Providence, for complainants.

Cooney & Nolan and James E. Smith, all of Providence, for respondent.

CAPOTOSTO, Justice.

The complainants, as executrices of the will of the late Catherine J. McGinn, who died in the city of Providence on December 12, 1934, brought this bill of complaint for an accounting against the respondent as trustee of a trust estate created by the will of Walter V. McGinn of Providence, deceased. The cause was heard by a justice of the superior court on bill, answer and proof. Both parties question certain rulings of the trial justice and have appealed to this court from a decree of the superior court which was entered in accordance with such rulings.

Walter V. McGinn died testate on September 8, 1929, seised and possessed of real estate taxed for $232,100. The real estate consisted almost entirely of low-renting tenement property, requiring constant oversight as to maintenance and tenants. His widow, Mary J. McGinn, the present respondent, was named and qualified as executrix of his will, and also as trustee of the real estate under a trust created by the testator in the third paragraph of the will, which is as follows:

"Third: I give and devise all of the real estate of which I may die possessed or which I may be entitled to, either in law or equity, to my beloved wife, Mary J. McGinn, in trust nevertheless, as follows: to wit:

"(A) The said trust to be and to continue until my said son shall obtain the age of twenty-five (25) years:

"(B) The income from said real estate is to be equally distributed as follows, to wit: —one third thereof to be paid quarterly to my beloved mother, Catherine J. McGinn for her own use during the term of her life, or, if she should be then living, until my said son shall attain the age of twenty-five (25) years; one third thereof to be paid quarterly to my said wife, Mary J. McGinn for her own use, during the term of her life, or if she should be then living until my said son shall attain the age of twenty-five (25) years; one third thereof to be expended by my said wife, Mary J. McGinn as such trustee, or by any Trustee who may be hereafter appointed in her place and stead, for the proper support, maintenance and education of my said son, Walter V. McGinn, Jr. until he shall attain the age of twenty-five (25) years, when said trust shall cease and terminate. * * *"

The testator's mother, Catherine J. McGinn, and his widowed sister, Mary E. Haas, one of the complainants in this cause, were living with him when he died. The mother was then eighty-five years old and almost totally blind. Following the testator's death, the mother and the sister continued to live as members of that household, which, in addition to themselves, included the testator's widow, Mary J. McGinn, the respondent here, and his son, Walter V. McGinn, Jr. Apparently their relations were friendly, at least until the death of Catherine J. McGinn on December 12, 1934. In August 1935, Mrs. Haas went to live with her sister, Lucy A. M. Thompson, the other complainant in this cause.

Catherine J. McGinn left a will naming her two daughters, Mary A. Haas and Lucy A. M. Thompson, as executrices, who duly qualified as such. The present bill of complaint was brought by them on August 11, 1936. The period for which the trustee is asked to account in this cause extends from the death of Walter V. McGinn, on September 8, 1929, to December 12, 1934, when Catherine J. McGinn died.

It appears in evidence that for manyyears prior to the death of Walter V. McGinn the respondent had assisted him in the collection of rents and in the maintenance of his real estate. After his death, she, as trustee of all his real estate, attended to these matters personally or in cooperation with Mrs. Thompson and the latter's daughter, Barbara T. McClusky. In the respondent's capacity as trustee, she kept the accounts relating to the trust in the same manner that her husband employed in his lifetime. No books or records of any kind were kept by her showing specifically the sources of income, or the application of the disbursements, which were represented merely by bills and cancelled checks without identifying notations. In this respect she treated the trust estate as if it were her own property.

By the terms of the trust, one third of the net income from the trust property was to be paid quarterly to Catherine J. McGinn until her death, when her interest in the trust estate would cease. No such payment was ever made to her by the trustee in her lifetime. Nor did the trustee render any account to Catherine J. McGinn before she died, or to her executrices, these complainants, until she was obliged to do so by decree of the superior court. The subpoena in this cause is dated August 25, 1936, and the trustee's amended account now before us was filed October 28, 1938. The trust was terminated for all purposes in December 1937, when Walter V. McGinn, Jr., the testator's son, became twenty-five years of age.

The respondent contends that the trial justice erred in refusing to allow her any compensation as trustee for the period covered by this accounting. Her testimony bearing on this point in substance is that the affairs of the household and the management of the property were unaffected by her husband's death; and that neither Catherine J. McGinn nor any one in her behalf ever asked for an accounting. In effect, her contention is that Catherine J. McGinn, knowingly waived, by conduct at least, any right to an accounting under the trust.

The testimony of the complainants is quite different. Mrs. Thompson testified that the question of an accounting was the subject of many discussions between her mother and the respondent, and that the latter's "answer was always T can't give you anything now, not until Walter is twenty-five years of age.'"

She further testified that she asked the respondent's attorney several times for an accounting to her mother; that on one occasion, when she and the respondent were going to his office, her mother told her in the respondent's presence to ask the attorney "When am I going to have my share of my son's estate? When is there going to be an accounting for me?"; that she carried out this request; that the attorney's answer to them was: "It is just a case of arithmetic; you just take and add up the figures, draw a line, write your result, and divide by three; just a matter of arithmetic"; and that when she told her mother what the attorney had said the latter expressed her feelings in the matter in rather forceful language.

The testimony of Mrs. Haas and Mrs. Thompson's daughter, Barbara T. McClusky, is generally to the same effect. Referring to Mrs. Thompson's testimony concerning the visit to the attorney's office, the respondent testified in rebuttal that she could not remember any such incident.

Mrs. Thompson also testified that, in March 1935, she asked the respondent to pay her mother's funeral bill, and that the respondent answered: "No, she couldn't, because there was no money for Mrs. C. J. McGinn in her son's estate." The respondent admitted this conversation, with the qualification that she did not have any money belonging to Catherine J. McGinn "at that time." According to the respondent's amended account in this cause, a substantial sum of money was due and owing from her, as trustee, to Catherine J. McGinn at the time of the latter's death on December 12, 1934.

The respondent's attorney testified that, following the death of the testator, the will was carefully explained to the respondent; that he then told her that she was to pay quarterly one-third of the net income from the trust property to Catherine J. McGinn; that he did not advise her at any time that she was under no obligation to account to Catherine J. McGinn; and that he did not know whether she had ever accounted to Catherine J. McGinn before her death, as the respondent had not consulted him regarding such matter. He further testified that when, in 1936, the respondent asked him about the present proceedings, he explained to her the purpose of this bill of complaint and advised her "to make" an account of her doings as trustee under her husband's will. "Q. Did she make one? A. No. There were various reasons why she did not make one." The alleged reasons were not given, but it seems that the respondent did not take...