Oellien v. Galt

• Citation: 131 S.W. 158,150 Mo. App. 537
• Parties: OELLIEN et al. v. GALT.
• Decision Date: 01 October 1910
• Court: Court of Appeal of Missouri (US)

131 S.W. 158

150 Mo. App. 537

OELLIEN et al. v. GALT.

St. Louis Court of Appeals. Missouri.

October 1, 1910.

1. TRUSTS (§ 226)—DUTY OF TRUSTEES—PAYMENT OF TAXES.

A trustee to pay net income to the beneficiary was bound to first pay the taxes.

2. TRUSTS (§ 226)—BREACH BY TRUSTEE—ACCOUNTABILITY.

Though a trustee has technically broken his trust, as by permitting penalties for nonpayment of taxes to accrue, equity will not make him account for the loss to the beneficiary, where such breach was authorized, induced, or concurred in by the beneficiary while sui juris, and not otherwise incapacitated.

3. TRUSTS (§ 277) — TRUSTEES — REIMBURSEMENT FOR ADVANCES.

A trustee can reimburse himself for advancements out of money in his hands.

4. APPEAL AND ERROR (§ 1008)—REVIEW— EVIDENCE.

The Court of Appeals will not disturb a finding on testimony which is susceptible to two or three different constructions.

Appeal from St. Louis Circuit Court; Charles Claflin Allen, Judge.

Suit by Fred D. Oellien, trustee, and others, against Frances F. Galt, executrix. From a judgment for plaintiffs, defendant appeals. Modified and affirmed.

Thomas F. Galt, for appellant. Marion C. Early, for respondents.

NORTONI, J.

This is a proceeding in equity for an accounting. The court found the issue for plaintiff, and gave judgment against defendant for $1,284.57. Defendant prosecutes the appeal.

One of the plaintiffs is trustee under the will of Robert Anderson, deceased, and successor to defendant's testator, who formerly occupied the same position of trust under the will. The other plaintiff is Robert Spain Anderson, cestui que trust under the will of his father, Robert Anderson, and as such is the real party in interest; for the accounting is sought in his favor. Defendant is the executrix of the last will of Smith P. Galt, who in his lifetime was the original trustee under the will of Robert Anderson to the use of plaintiff, Robert Spain Anderson, the cestui que trust. It appears that Robert Anderson departed this life some time prior to April 1, 1892, and by his last will settled a trust estate in favor of his son, Robert Spain Anderson, with remainder over in event of his death to the heirs of said Robert Spain Anderson, if any, and, in event there were none, then to the heirs of the settlor of the trust. By the terms of the will Smith P. Galt was appointed trustee thereunder and vested with the title to two parcels of real estate, known as 2639 and 2641 Washington avenue, in the city of St. Louis, the same being two residences occupied by tenants. The will directed that out of the net income from the property, after deducting all payments and expenditures incident to the trust estate, its management and control, including a reasonable compensation to the trustee, the trustee should pay to Robert Spain Anderson during his life, for his maintenance and support, such sums from time to time and at such times as the trustee in his discretion deemed best, and, upon the death of Robert Spain Anderson, the remainder, as otherwise provided in the will, should be payable to the lawful descendants of Robert Spain Anderson, if any. In event Robert Spain Anderson left no heirs, the remainder should go to the heirs at law of Robert Anderson, settlor of the trust.

Smith P. Galt entered upon the discharge of the trust in April, 1892, and discharged the duties thereof until the time of his death, June 2, 1905. During all of those years, he looked after the property, collected or caused to be collected the rents, made repairs, paid the insurances, etc., and paid different sums of money to the cestui que trust and others for him. After the death of the trustee, William Baggot was appointed his successor in trust, in accordance with the will of Robert Anderson, and some time thereafter he, together with Robert Spain Anderson, the cestui que trust, instituted this suit for an accounting against the defendant, who is executrix of the last will of Smith P. Galt, the original trustee. The court made an order on defendant to state an account of the trust which was complied with. To the account thus stated, plaintiffs filed certain exceptions, and the cause was continued from term to term, but finally heard and disposed of by a judgment in which the exceptions to the trustee's account were sustained, the account surcharged, and a balance of $1,284.57 declared to be in the hands of the executrix as funds of the trust estate. Judgment was given for this balance, and it was ordered to be paid to the plaintiff trustee for the benefit of the trust estate. Since the appeal was perfected to this court, William Baggot, trustee, has departed this life, and his death has been suggested here. The case now stands revived in the name of Fred D. Oellien, who has been substituted as trustee under the will.

In the statement of account as prepared and filed by defendant, it was shown that there remained a balance in the hands of the executrix to the credit of the trust estate of $831.62. This much is conceded, and there is no controversy with respect to this matter, but in a claim for compensation to the trustee this amount is sought to be absorbed. Plaintiffs insist they are entitled to a further amount of $701.05 which the account of the trustee shows was paid out by him as penalties accrued because of the nonpayment of the current taxes accrued on the property during the years 1895, 1896, 1897, 1898, 1899, 1900, 1901, and 1902. They insist the account should be surcharged to such extent. The argument is that, as by the terms of the will declaring the trust the trustee was directed to pay the funds to the cestui que trust out of the net income of the estate, it devolved upon him, of course, to first pay the taxes on the property, and not permit penalties to be levied against it for their nonpayment. The statement of account shows that during a portion of the years mentioned the income from the property had materially decreased and practically all of the money was paid by the trustee to the cestui que trust which occasioned the taxes to lapse and the penalties to accrue. There can be no doubt that there is a technical breach of the trust with respect of this matter, for beyond question it was the duty of the trustee to first pay the taxes from the income of the property and make no payments to the cestui que trust until after such was done. But a recovery on this score should not be allowed to the plaintiffs for the reason it appears that the cestui que trust both induced and concurred in the breach. Indeed, the proof is clear that the trustee defaulted in paying the taxes for the several years referred to because Robert Spain Anderson, the cestui que trust, constantly importuned him for money to relieve his urgent necessities....