Hite v. Hite

• Citation: 93 Ky. 257,20 S.W. 778
• Parties: Hite et al. v. Hite et al.
• Decision Date: 17 December 1892
• Court: Court of Appeals of Kentucky

20 S.W. 778

93 Ky. 257

Hite et al. v. Hite et al.

Court of Appeals of Kentucky.

December 17, 1892

Appeal from Louisville law and equity court.

"To be officially reported."

Action by William W. Hite, Thomas L. Barrett, and John W. Barr executors and trustees under the will of W. C. Hite deceased, against Mary E. Hite, widow, and Mary E. Winston and others, children and grandchildren of testator, who were also devisees under his will, to obtain a construction of the will and a settlement of plaintiff's accounts. From a decree construing the will the devisees appeal. Reversed.

Holt C.J.

The questions in this case arise between tenants for life and remainder-men. The will of W. C. Hite provides: (1) "I nominate and appoint my friend, Thomas L. Barrett, and my son, William W. Hite, my executors and trustees, and devise and bequeath to them my entire estate, real, personal, and mixed, in possession, remainder, or reversion, and wherever situated, for the purpose and upon the trusts herein indicated. I give them full power and authority to sell convey, and reconvey, in their discretion, any real estate which I may own, or any which they may purchase for my estate. I give them full power and authority to sell transfer, and deliver any or all of my stocks, bonds, and securities of every kind, and full power and authority to invest and reinvest from time to time the proceeds of such sales in other stocks, bonds, and securities and improved real estate, whether situated in this state or elsewhere. Whenever sales are made by my said trustees, the title shall pass, and the purchaser need not look to the application of the purchase money. It is my will, and I give to my said trustees all power and authority which may be necessary and proper to carry out the purpose and trusts as herein indicated; and I do not desire that they be required to give bond with security, either as executors or trustees; nor do I wish them to file any inventory of my estate in the county court. The estate devised and bequeathed to my said trustees is for the use and benefit of my wife, Mary E. Hite, and my children and their descendants, and my devisees as indicated in this my will." (8) "After the payment of my funeral expenses and just debts, and the payment of and provision for the legacies and bequests as directed in this will, I desire and direct my trustees to manage, control, invest, and dispose of the balance of my estate, of every kind and description, including after my wife's death, that part of my estate which has been set aside for her annuity, in their discretion, so as to be safe, and produce income. My trustees shall, ten (10) years after my death, if my trust estate in their hands be sufficient for that purpose, pay over to each of my children ten thousand, ($10,000,) and, if any of my children be dead, leaving children then alive, they shall be paid their parent's part; but, should any of my children be dead without issue living, that child's share remains as part of the trust fund. My trustees shall, between the time of my death and the payment of said sums of $10,000, pay over the net income arising from said general trust estate to my wife, Mary E. Hite, and my children, Mary E. Winston, Nannie T. Hite, Wm. W.

Hite, Louis Hite, and Allen R. Hite, one sixth to each. If there should be any of my estate remaining after the payment of said sums directed to be paid my children, I desire it to be kept together by my trustees, and made productive of income. This estate shall remain undivided, and continue in trust during the lives of my wife and children, and during the life of the longest liver of them. At the death of the longest liver, the trust shall cease, and the trust estate be divided and distributed among the descendants of my children, according to the provisions of the statutes of descents and distributions as then existing in the state of Kentucky. The net income arising from said trust estate shall be divided annually between my wife and children, one sixth to each."

It is contended for the life tenants that under these provisions the unproductive real estate of the testator should be treated as converted as of the day of his death; and that, as the trustees sold it from time to time, the entire purchase money realized should not be treated as a part of the principal of the trust fund, but such a sum only as, with 6 per cent. interest per annum from the time of his death would amount to the purchase money; and that the difference between the two amounts should go to the life tenants. In other words, that under the doctrine of equitable conversion such a portion of the purchase money as would equal this interest must be regarded as income, and not as capital. The lower court, erroneously, as we think, accepted this view. The intention of the testator must govern. He undoubtedly intended that the trustees should so change and invest the estate as to make all of it productive of income. This is evident from the eighth clause of the will, which directs them to invest and dispose of it "so as to be safe, and produce income." He must have known, however, that this could not probably be done at once without sacrifice. This doubtless led to his giving them a broad discretion in the matter, and, while he provided that the life tenants should have any net income from his estate, yet he no doubt had in view income actually realized. The estate was large. Much of it, at his death, was already productive, and it cannot well be supposed he expected a part of the principal would be given to the life tenants to compensate for the delay which he knew must occur before the remainder of it could be made so. The doctrine of equitable conversion is at best an artificial, arbitrary one. It will not be applied, unless it is made the duty of the trustee to sell. Conceding, as we think is true, that this is so in this instance, and that the discretion given relates only to the time when it shall be done, yet, in view of the character of the entire estate, and...