In re Sexauer's Trust

• Decision Date: 01 August 1939
• Docket Number: 44740.
• Citation: 287 N.W. 247
• Parties: In re SEXAUER'S TRUST.
• Court: Iowa Supreme Court

287 N.W. 247

In re SEXAUER'S TRUST.

No. 44740.

Supreme Court of Iowa.

August 1, 1939

Appeal from District Court, Polk County; John J. Halloran, Judge.

" Not to be reported in State Reports."

Application by beneficiary asking for the termination of a trust or the removal of the trustees and appointment of new trustees. Said application was dismissed and the applicant appeals.

Affirmed.

Holliday & Myers, of Des Moines, for appellant.

Gillespie & Moody, of Des Moines, for appellees Rolfe O Wagner and W. J. Liechty, trustees.

HALE Justice.

The applicant, Roscoe Sexauer, is the beneficiary under a trust created by the will of his father, Matthew Sexauer, who died November 22, 1928. The conditions of the trust, as stated in the will, were that the trustees should hold, manage, and control the property set apart for the use and benefit of the testator's daughter Rosanna and his son Roscoe until such time as the trustees shall deem it safe and advisable to entrust either or both of them with her or his share of the principal. It directed that the trustees should exercise full supervision and control over the trust estate during the lifetimes of Rosanna and Roscoe; directed them to convert the trust estate into money as soon as they deemed it advisable to do so, and to loan or invest the same in first mortgage, interest-bearing securities. The earnings from such investment were directed to be paid from time to time in equal shares and proportions to Rosanna and Roscoe, and to be used by them for their own use and benefit, under the supervision and direction of the trustees. The trustees were enjoined to use their best endeavors to persuade the said Rosanna and Roscoe to use such money in such manner as would be best designed to encourage and train them in habits of industry and frugality; and they were further authorized to pay over to either of them the principal sum of his share in the trust estate, whenever in the best judgment of the trustees, either of them " shall have attained such years of discretion and habits of life which indicate that the principal sum will not be dissipated or squandered." Rolfe O. Wagner and W. J. Liechty were originally appointed as executors, and thereafter as trustees, and are now acting as trustees for Roscoe Sexauer, but not for Rosanna because her indebtedness to the estate offset any interest she had in the estate property.

Matthew Sexauer at his death left a considerable estate, heavily incumbered. The executors of that estate filed their final report and the estate was closed May 27, 1930. A partition action between the heirs was terminated by a stipulation dated October 29, 1930, which was carried out by authority of the court, and with the written consent of the beneficiary Roscoe Sexauer, and under such arrangement an 80-acre tract of land was turned over to the trustees. This was subject to a mortgage indebtedness of $7000, which was offset by a mortgage from another heir to the trustees of the same amount. At the time of the trial these had been reduced to $3300 each, and the land is now claimed in argument to be clear. This tract, with a third interest in 320 acres of Idaho timber land, constitutes the trust estate. The Idaho land has produced no revenue, but negotiations were pending for the sale of the timber. In all the proceedings involving the partition of the Matthew Sexauer lands, and in all matters relating to the trust, including annual reports, orders for hearing and notice to the beneficiary were made and due notice given; and all reports were approved by the court.

Among other proceedings in the trust estate there was filed on May 16, 1936, a petition to construe will, filed by these trustees, at the hearing of which Roscoe appeared by counsel. A decree was entered by the district court construing the Matthew Sexauer will and holding the trust in question to be a spendthrift trust, that Roscoe had no right to the principal until the trustees may, in their discretion and best judgment, feel that he has attained such years of discretion and habits of life as will indicate to the trustees that the principal will not be dissipated and squandered, and barring all persons from receiving any of the income until such income is received by the beneficiary.

The application in this action makes various charges as to the handling of the trust estate, which will be noticed hereafter; and asks, first, for termination of the trust and an accounting, and that the property be turned over to the beneficiary; and second, alternatively, for the removal of the trustees and the appointment of new trustees. To this application the trustees make a general denial, and allege that they have sold the grain and corn from the trust property at the...