Lannin v. Buckley

• Decision Date: 28 May 1926
• Citation: 256 Mass. 78,152 N.E. 71
• Parties: LANNIN et al. v. BUCKLEY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

256 Mass. 78

152 N.E. 71

LANNIN et al.

v.BUCKLEY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

May 28, 1926.

Appeal from Probate Court, Suffolk County; Alden P. W. White, Special Judge.

Petition by Joseph J. Lannin and another, trustees under the will of C. James Connelly, for allowance of two accounts, opposed by Annie E. Buckley and another. From decrees allowing accounts, respondents appeal. Case remanded for amendment of schedules and for entry of decrees allowing accounts as amended.J. J. Mansfield and J. F. Creed, both of Boston, for appellants.

J. L. Sheehan, of Boston, and J. A. McAleer, for appellees.

SANDERSON, J.

This is an appeal from decrees allowing two accounts of the petitioners, as trustees under the will of C. James Connelly, by which two trusts were established; one, by the gift of $10,000 to the trustees to pay the net income to the testator's sister Annie E. Buckley during her life, and, at her decease, to pay $1,000 of the principal to her daughter Catherine A. McAleer, wife of John McAleer, and to divide the balance among all of Mrs. Buckley's children including Catherine A. McAleer; the other, by the gift to the trustees of the rest and residue of the testator's property, to pay the net income thereof to the testator's widow during her life, or while she remained unmarried, and with the direction that upon her death or remarriage the residue should be divided between the testator's sister Mary E. Connelly and the children of his sister Annie E. Buckley.

The petitioners were appointed executors July 30, 1914, and on September 1, 1914, received their appointments as trustees. In April, 1923, they filed their first account as trustees for the benefit of Annie E. Buckley and others, for the period beginning the tenth day of July, 1914, the date of the testator's death, and ending the tenth day of April, 1923; and their first account as trustees for the benefit of Agnes G. Connelly and others, for the period beginning August 1, 1916, and ending April 1, 1923. The appeal from the decrees allowing these accounts was taken by Annie E. Buckley and Catherine A. McAleer who is one of the residuary beneficiaries. On July 17, 1923, the appellants requested the court to report the evidence on which the findings and the allowance of the accounts were based, and to report the facts. The latter request was complied with, but the court did not report the evidence. Before the hearing no request was made for the appointment of a commissioner to take the evidence.

The provisions of G. L. c. 215, § 13, giving a judge of probate the right to reserve and report evidence and all questions of law thereon to the full court, relate only to the discretionary power of the court. No right is given upon appeal to have evidence reported unless a request therefor is made before any evidence is offered. G. L. c. 215, § 12; chapter 214, § 24. In the absence of such request, compliance with the provisions of G. L. c. 215, § 11, entitles the party appealing to a report of material facts, and the only question then before this court is, whether the conclusion reached is consistent with those facts. Cleveland v. Hampden Savings Bank, 182 Mass. 110, 65 N. E. 27;Eddy v. Fogg, 192 Mass. 543, 78 N. E. 549;Knowles v. Knowles, 205 Mass. 290, 91 N. E. 213;Simpkins v. Old Colony Trust Co. (Mass.) 151 N. E. 87.

[3] ‘An executor who is also trustee under a will cannot be considered as holding any part of the assets in the latter capacity until he has settled an account in the Probate Court as executor, in which he is credited as executor with the amount which he holds as trustee; and such account should not be allowed by the judge of probate, without first requiring him to give bond for the faithful performance of his duties as trustee.’ Crocker v. Dillon, 133 Mass. 91, 98. An allowance of the executors' account under such circumstances would discharge him as executor and vest the trust fund in him as trustee, and after the trust is thus established the sureties on the trustee's bond are held. Eliott v. Sparrell, 114 Mass. 404;Sheffield v. Parker, 158 Mass. 330, 333, 33 N. E. 501;Brigham v. Morgan, 185 Mass. 27, 41, 69 N. E. 418;Welch v. Boston, 211 Mass. 178, 97 N. E. 893. The executors' first and final account, filed November 21, 1916, was allowed December 12, 1916. In this account they charged themselves with cash paid James F. Creed and Joseph J. Lannin, trustees for Annie Buckley $10,000, and also with personal property passed to themselves as trustees, $142,995.75. The inventory of said trustees for the benefit of Annie E. Buckley and others, filed October 16, 1916, consists of one item in this form: ‘Cash interest in estate of C. J. Connelly $10,000.’ Their inventory for the benefit of Agnes G. Connelly and others, filed on the same date, is thus summarized: ‘Various certificates of shares of stock and household furniture, pictures and other personal property from James F. Creed and Joseph J. Lannin, executors of the will of C. James Connelly * * * approximately in value $150,000.’ The trustees' inventories were filed about one month before the executors' account was filed and about three months before December 12, 1916, the date when it was allowed. The trustees held the property in both trusts and were responsible for it as trustees from the time when the executors' account was allowed.

The trial judge found, in substance, that the $10,000 trust for the benefit of Annie E. Buckley for life was not segregated as a separate fund, but that the trustees had administered the estate, including both trusts, as an entirety, charging the total amount of principal with $10,000 as belonging to the Buckley trust, and paying to Mrs. Buckley from the income of the combined estates six per cent net on $10,000 per year. It appears from the account that less than that rate of interest was paid for the first two years after the testator's death. It is the duty of trustees holding two distinct trust funds to segregate them. They cannot ordinarily be invested together and the net income prorated to the beneficiaries. It is only by keeping them separate that the losses and charges can be allocated properly. Moore v. McKenzie, 112 Me. 356, 92 A. 296. The judge found that the object of keeping the funds together was to provide Mrs. Buckley, the life tenant, with a larger amount of income that could otherwise be paid to her; and that this arrangement was accepted by her, understanding her rights, and was known to and approved by Mrs. Connelly, the testator's widow, they being the sole beneficiaries entitled to income under the two trusts. They could consent to a division of income on a different basis from that required by the will, and they both assented to the trustees' accounts. A beneficiary who has consented to a breach of trust cannot thereafter complain of...