Raymond W. George Trust, Matter of

• Decision Date: 12 May 1992
• Docket Number: No. 91-351,91-351
• Parties: In the Matter of RAYMOND W. GEORGE TRUST, Shirley G. Bragg, Trustee.
• Court: Montana Supreme Court

Page 1378

834 P.2d 1378

253 Mont. 341

In the Matter of RAYMOND W. GEORGE TRUST, Shirley G. Bragg,

Trustee.

No. 91-351.

Supreme Court of Montana.

Submitted on Briefs March 26, 1992.

Decided May 12, 1992.

Dan Yardley, Yardley & Yardley, Livingston, John T. Jones, Moulton, Bellingham, Longo & Mather, Billings, Robert Baldwin, Goetz, Madden & Dunn, Bozeman, for appellant.

Joseph T. Swindlehurst, Huppert & Swindlehurst, Livingston, for respondent.

McDONOUGH, Justice.

Shirley Bragg, Trustee of the Raymond W. George Trust (Trustee Bragg) appeals from an order of the Sixth Judicial District, Park County. The District Court denied Trustee Bragg's motion to withdraw her previously granted petition for declaration of right and authority to sell real property held in the trust to Double AA Corporation (Double AA). The court further ordered that Trustee Bragg proceed with the sale to Double AA and enjoined her from permitting logging operations on the ranch property. Intervenor, James W. Sievers (Sievers), and Trustee Bragg appeal. We affirm in part and reverse in part.

We will address the following issues:

I. Did the District Court err by granting Trustee Bragg the right and authority to sell real property held in trust?

II. Did the District Court err by ordering Trustee Bragg to proceed with the sale to Double AA?

III. Did the District Court err by enjoining Trustee Bragg from permitting any logging to occur on the subject property?

In addition to the issues as stated above, there is a motion before the Court to take judicial notice of admissions requested and unanswered in previous litigation involving this trust. We generally will not allow a party, Sievers as intervenor in this case, to introduce additional evidence once a case has been brought for appeal. Downs v. Smyk (1979), 185 Mont. 16, 604 P.2d 307. In Smyk, we refused to examine a deposition given in a proceeding previously decided by this Court because the deposition was extraneous to the record on appeal.

Here, the admissions we are asked to consider were filed in an action in United States District Court by Sievers in his attempt to remove Bragg as Trustee. The instant case arises from a petition filed by Trustee Bragg in the Sixth Judicial District Court requesting a declaration of right and authority to proceed with sale of trust real property to Double AA. The requested admissions were not considered by the trial court in this matter and will not be considered on appeal. "In equity cases and in matters and proceedings of an equitable nature, the supreme court shall review all questions of fact arising upon the evidence presented in the record..." [emphasis supplied] Sec. 3-2-204(5), MCA. Sievers' motion to take judicial notice of the requested admissions is therefore denied.

Raymond W. George died in April 1974. His will, probated in the Sixth Judicial District, Park County, created a testamentary trust, the corpus of which includes the real property that is the subject of this action. His widow, Olga George, was named as income beneficiary; Raymond's children were named as remaindermen; and Maxine George, one of Raymond's children, was named as trustee. Appellant, Shirley Bragg, another of Raymond's children, became successor trustee following Maxine George's death. Maxine's remainder interest in the trust passed at her death to Cleto McPherson, Maxine's husband and sole heir.

Leo Ray George, another of Raymond's children, and Cleto McPherson conveyed their remainder interest in the trust, by separate deeds, to intervenor James W. Sievers. Sievers currently holds a 5/9 interest as beneficiary in the remainder of the trust.

Trustee Bragg initiated this action after entering an agreement with Double AA Corporation to sell the real property held in the trust for $1,300,000, and other benefits. The court entered an order granting Trustee Bragg permission to sell the trust property. Thereafter, Trustee Bragg filed a motion requesting to withdraw her petition and to cancel the sale to Double AA. The District Court denied the motion and ordered that the sale proceed. The court further granted Double AA's motion to enjoin logging or any other waste from occurring on the property. Trustee Bragg and Sievers appeal.

Despite Trustee Bragg's initial request for court approval of sale of the subject ranch property, Bragg now contends that such sale is impermissible because it is inconsistent with the testator's intent and against the best interests of the beneficiaries. This action was filed pursuant to Sec. 72-35-301, MCA, which provides the court equitable jurisdiction, upon application of the trustee or any beneficiary, to approve discretionary acts of the trustee. The appellants contend that a review of Raymond George's will as a whole reveals that he intended to preserve the ranch unless sale was necessary to maintain the health and maintenance of his widow, Olga.

The will, and the trust instrument incorporated therein, expressly provides the trustee the power and necessary authority to sell the real property held in trust. However, the appellants contend that regardless of any expressed provision granting specific powers to the trustee, Sec. 72-34-130(1), MCA, mandates that a trustee:

... shall act in accordance with fiduciary principles and may not act in disregard of the purposes of the trust.

The appellants rely on various references to the trust as "real property", throughout the will, as demonstrating Raymond George's intent to maintain the corpus of the trust as real property. The appellants further rely on Paragraph V (the portion of the will which creates the trust), part b of the will which provides:

The Trustee may, in her sole and absolute discretion, invade the principle of the Trust and pay so much thereof as may be necessary, to or for the benefit of my wife, for her health and maintenance, if all other sources of property of my wife shall be exhausted.

The above language is argued to limit the sale of property to circumstances where such sale is necessary for the health and continued maintenance of Olga George. Because there is no such necessity in the instant case, it is argued that the sale is beyond the discretionary powers of the trustee.

We agree with the appellants that:

The intention of the testator should control the disposition and the intent shall "be found from all parts of the will ... construed in relation to each other ... to form one consistent whole."

Estate of Evans (1985), 217 Mont. 89, 94, 704 P.2d 35, quoting In the Matter of the Estate of Erdahl (1981), 193 Mont. 103, ----, 630 P.2d 230, 231, 38 St.Rep. 978, 980. However, we do not agree with the conclusion that Trustee Bragg would be acting beyond her discretion by exercising her power of sale of the property.

Paragraph V, part b, quoted above, does not limit the trustee's authority to sell the property. The words of...