Ingalls v. Ingalls
| Decision Date | 28 June 1951 |
| Docket Number | 6 Div. 113 |
| Citation | 54 So.2d 296,256 Ala. 321 |
| Parties | INGALLS et al. v. INGALLS et al. |
| Court | Alabama Supreme Court |
Earl McBee, Birmingham, guardian ad litem for appellants.
Lange, Simpson, Robinson & Somerville, Birmingham, for appellees-cross-appellants Robt. I. Ingalls, Sr., and Ellen Gregg Ingalls.
Waites & Tucker, Birmingham, for appellee-cross-appellant Pixton.
Francis H. Hare and Chas. W. Greer, Birmingham, for other appellees.
This is an appeal from a decree of the equity court construing six trusts between living persons and ordering a reference to the register to ascertain and report with respect to a claim made by Robert I. Ingalls, Jr. in the amount of $51,747.56 for reimbursement for expenditures for the support and maintenance of the two minor appellants for a period beginning May 13, 1948 and ending December 31, 1949. The decree ordered Robert I. Ingalls, Jr. to file an itemized statement of his claim prior to the date of holding the reference. The trusts are six in number and for identification have been designated as trusts 'B', 'C', 'D', 'E', 'F' and 'G'. The names of the several trustees serving respectively at the time of the filing of the bill of complaint are listed in paragraph two thereof as follows:
'Trust B: Robert I. Ingalls, Jr.
'Trust C: Robert I. Ingalls, Sr., Robert I. Ingalls, Jr.
'Trust D: Robert I. Ingalls, Sr. and the First National Bank of Birmingham
'Trust E: Ellen Gregg Ingalls, Robert I. Ingalls, Jr. and the First National Bank of Birmingham
'Trust F: Ellen Gregg Ingalls, Robert I. Ingalls, Jr. and M. F. Pixton
'Trust G: Robert I. Ingalls, Sr., Robert I. Ingalls, Jr., and M. F. Pixton.'
The bill of complaint was filed by all of the trustees of the several trusts except Robert I. Ingalls, Jr. He was made a party respondent both individually and as trustee and his two minor daughters Elesabeth Ridgely Ingalls and Barbara Gregg Ingalls were also made parties respondent. These minor children as representatives of all of the descendants of Robert I. Ingalls, Jr. are the primary beneficiaries of all the trusts. They were well represented in these proceedings by a guardian ad litem.
The major questions involved on this appeal grow out of the following rulings made by the court, (1) the declaration of the court that Trusts F and G mandatorily require the distribution of income without respect to the discretion of the trustees and (2) the declaration of the court that Robert I. Ingalls, Jr. should be reimbursed for proper expenditures for maintenance, support, comfort and education made in behalf of his two daughters Elesabeth and Barbara for the period May 13, 1948 to and including December 31, 1949.
This litigation arose out of the failure of the trustees of the trusts to furnish the beneficiaries any support after Robert I. Ingalls, Jr. was discharged as President of the Ingalls Iron Works Company on May 15, 1948 and his salary of $45,000 per year terminated. Prior to that time he as their father had been furnished funds for their support without question when he requested it. Robert I. Ingalls, Jr. took the position that it was the duty of the trustees to provide for the comfort, education, support and expenses of travel of the beneficiaries and also that he should be reimbursed for what he had been forced to spend for that purpose when the trustees refused to furnish it.
The position taken by the trustees contrary to that of Robert I. Ingalls, Jr. was that none of the trusts contemplated disbursements from the trust estate for and to the extent that necessary funds are available from another source, that is, from the father. In other words the position was taken that the trustees should not make reimbursement on the theory that it was the father's legal duty to support his children.
There were ample trust funds available at all times for the support of the beneficiaries. The stock of the Ingalls Iron Works Company owned by them had for years paid an annual divided of $28,750. The trust estates owned numerous other valuable securities. The Ingalls Iron Works Company made after taxes $2,677,773.53 in 1948 and $1,955,545.19 in 1949. That concern had on deposit $11,000,000 in cash and bonds when this case was tried. There was $116,015.55 cash in the trust estates in 1948 and $129,347.56 cash in 1949.
Trusts B, C and D were each created on December 31, 1938. R. I. Ingalls, Sr. was the donor of Trust B. Ellen Gregg Ingalls, the wife of R. I. Ingalls, Sr., was the donor of Trust C. Robert I. Ingalls, Jr. was the donor of Trust D. The original corpus of each of these trust estates consisted of 500 shares of Ingalls Iron Works Company stock. Each of these indentures contained the recital that the donor had 'carefully considered all of the provisions of the within trust indenture.' These trust instruments are almost identical in language and each expressed it to be the 'sole purpose' of the settlor to assure the beneficiaries 'of some degree of financial independence.' The beneficiaries of Trust B are Elesabeth Ingalls and any other such grandchildren or descendant of the grantor who may thereafter be born. The beneficiaries of Trust C are Elesabeth and Barbara Ingalls and Robert I. Ingalls' descendants 'hereafter born.' The beneficiaries of Trust D are Eleanor Flick Ingalls so long as she is the wife of Robert I. Ingalls, Jr. and his descendants 'heretofore or hereafter born.' There is no contention that Eleanor Flick Ingalls has now any interest in Trust D as beneficiary and no denial that her interest merged with that of Elesabeth and Barbara Ingalls after her divorce from Robert I. Ingalls, Jr. Trust E was executed December 27, 1941. Robert I. Ingalls, Sr. was the settlor. In a preamble to the indenture the settlor expressed a desire 'to see his descendants safely and adequately provided for' against the catastrophe of postwar depression as well as a desire to establish a 'back-log against the hazards of time and of their youth and inexperience.' Trust E beneficiaries are Elesabeth and Barbara Ingalls and 'such other descendants of Robert I. Ingalls, Jr. as may from time to time during the continuance of this trust be living.' The original corpus of Trust E was 1,000 shares of Ingalls Iron Works Company stock.
Trusts F and G were each created on March 15, 1943. Robert I. Ingalls, Sr. was the settlor of Trust F and Ellen Gregg Ingalls the settlor of Trust G. The corpus of Trust F was 2,000 shares of Ingalls Iron Works Company stock and the corpus of Trust G was originally 500 shares of Ingalls Iron Works Company stock. The beneficiaries of Trusts F and G are Elesabeth and Barbara Ingalls and such other descendants of Robert I. Ingalls, Jr. 'as may from time to time be living' during the existence of each trust. The provisions of Trust F and Trust G are substantially the same except that there is some variation in their respective preambles, both preambles, however, being designed to convey the same general idea. We set out the parts of Trust F which are regarded as material, as follows:
'Whereas, having gone through the period since the first World War and having witnessed many accumulations of years of effort swept away, and desiring to see his descendants safely and adequately provided for against the possibility of such a catastrophe, and desiring to establish a backlog for the protection of his descendants against the hazards of the time and their own youth and inexperience, the Grantor has long followed a policy of making liberal gifts in trust to his descendants heretofore or hereafter born;
'Whereas, commencing in the year 1925, the Grantor has been gradually relinquishing control of the business of The Ingalls Iron Works Company and its subsidiaries by making gifts of his stock interests therein to his son, Robert I. Ingalls, Jr., and to the children and descendants of said son;
'Whereas, the said policy of the Grantor has been further motivated by (a) a desire and determination to provide such descendants with an income, so that they may be assured of some degree of financial independence, irrespective of any adverse effect which changing conditions may hereafter have on the Grantor's remaining and independent estate, (b) the excessive rates of income taxes imposed by the Federal Government and the State of Alabama and (c) the ultimate desire of the Grantor to retire from business; and
'Whereas, the Grantor is desirous of further effectuating and carrying out said policy by providing such children and descendants of said Robert I. Ingalls, Jr., heretofore or hereafter born, with further income so that they may be assured of an added degree of financial independence, irrespective of any adverse effect which changing conditions may hereafter have on the Grantor's remaining and independent estate, by the execution and delivery of these presents.
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'The Trustees shall have the power to set up from time to time out of income such reserves for depreciation, taxes, or other possible expenditures or contingencies as they deem necessary or desirable.
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