Ranzau v. Davis
| Decision Date | 03 July 1917 |
| Citation | 165 P. 1180,85 Or. 26 |
| Parties | RANZAU v. DAVIS ET AL. |
| Court | Oregon Supreme Court |
Department 2.
Appeal from Circuit Court, Marion County; Wm. Galloway, Judge.
Suit by Arthur J. Ranzau, by Dorothea V. Ranzau, his guardian ad litem, against J. C. Davis and another. Judgment for defendants, and plaintiff appeals. Affirmed.
See also, 158 P. 279.
Chas. E. Lenon, of Portland and John H. McNary, of Salem (Chas. L. McNary, of Salem, on the brief), for appellant. W C. Winslow, of Salem, for respondents.
This suit involves the question as to whether or not the farm described in the complaint is subject to an execution upon a judgment in favor of defendant Davis obtained for services performed, boarding help, and expenses incurred raising and harvesting a crop of hops on the land. The trial court held that the property was liable for the debt, and plaintiff appealed.
The plaintiffs assert that the real estate is the property of Arthur J. Ranzau, a minor; that the same is held in trust by Dorothea V. Ranzau, his mother. The circumstances relating thereto are about as follows: The grandfather of the alleged beneficiary, John P. Ranzau, at different dates advanced money to his daughter-in-law. She testifies that in 1897 she and her husband borrowed $1,100 to pay off hop pickers; that at one time her father-in-law advanced $500 for the purchase of an organ and a team of horses for her husband; that in 1908 he purchased town property in Grants Pass of the value of $3,000, taking a deed in the name of his daughter-in-law and furnished a home for them; that about 1900 he advanced $1,400 which was used to redeem property belonging to her mother-in-law; that in 1901 he supplied $1,100 for a hophouse and the purchase of 160 acres of adjoining land. According to Mrs. Ranzau's testimony, a short time before the death of her father-in-law he told her to destroy the book in which the memorandum of the money loaned and expended had been kept, to put this money aside for his grandchild, and to invest it in real estate when he became 21 years of age. She states that in the meantime "I and my husband was to have the benefit," and he said "for me to put in trust for my son." The Ranzaus resided for a time in Grants Pass. On selling the property there they went to Woodburn, where Mrs. Ranzau invested in real estate. Selling out in the latter place, they went to Portland, where they again invested in property which they sold. After that they purchased the farm in question in Marion county in 1909 paying down about $4,000 or $5,000, and having between $500 and $1,000 of their funds remaining. The deed was executed to "Dorothea V. Ranzau, trustee, and her successors and assigns." In 1911 they purchased an adjoining farm. The property was all adapted to raising hops, and they carried on the business, keeping a bank account in different banks in the name of Dorothea V. Ranzau, trustee, where deposits were made of considerable sums, at one time depositing $5,000, the proceeds of the sale of hops. Mrs. Ranzau also gave notes to the bank signed as trustee. In 1914 the defendant Davis performed the services and advanced money for the expenses mentioned in the cultivation of the hops and in picking and caring for the same. He was paid for his work mostly in checks by Mrs. Ranzau as trustee, that is, up to July. From then until December of that year his labor and the expenditures made by him were not liquidated.
There is considerable controversy in regard to whether the deed was executed to Mrs. Ranzau, as trustee, for the benefit of her son, or for the purpose of avoiding the payment of indebtedness. She claims that she stated to Mr. Davis that the property belonged to her son, and yet in her testimony she refers to the fact of having given a mortgage for $8,000 on her farm, the one in question, to the Portland Trust Company of Oregon. Considering the property as held in trust, the directions given by the settlor when he attempted to make the gift were oral, and it is not perfectly clear what his desires were.
Taking the most favorable view of the facts as claimed by the plaintiff, we understand that the grandfather was desirous of assisting his son and daughter-in-law. On account of the son's habits he preferred to advance the money and convey the property to his daughter-in-law with the request that when the granchild arrived at the age of majority it should be invested for him. The purchase of a home in Grants Pass for his son and his wife, and also the loan to pay the hop pickers were concrete examples of the manner in which they should use the property. His acts speak with greater clearness than his words. It seems that Mrs. Ranzau has managed the property and the funds derived therefrom with a view to carrying out his intentions, sometimes making losses and sometimes gains. It therefore appears that the trustee and her husband have a beneficial interest in the property as long as their son is a minor.
It is a general rule that the disbursements that would be allowed a trustee would depend very much upon the character of the trust and the directions given by the instrument of trust. If a trustee has the power of managing an estate, he will be entitled to all the expenses of keeping it up, such as the hire of servants, salaries, taxes, costs of repairing, rebuilding farmhouses, manuring, draining, fencing, and other expenses of that kind. 2 Perry on Trusts, § 913. It is stated in 28 Am. & E. Enc. of Law, at page 942:
--citing, among others, North Am. Coal Co. v. Dyett, 7 Paige (N. Y.) 9; Mathews v. Stephenson, 6 Pa. 496; Woddrop v. Weed, 154 Pa. 307, 26 A. 375, 35 Am. St. Rep. 832.
A transaction to create a liability against the estate in favor of a third party must be more than the personal engagement of the trustee; for, while the expenses of properly administering a trust are a lien on behalf of the trustee on the estate in his hands, this right against the estate unless in exceptional cases, does not extend to the person employed by him. In general their only remedy or compensation is against the trustee personally unless he is insolvent. In a case in Iowa, however, it was held that, where a claim against the estate is adjudicated with all parties interested before the court, and the amount found due...
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