Roberts v. Hale

• Decision Date: 09 June 1904
• Citation: 99 N.W. 1075,124 Iowa 296
• Parties: M. J. ROBERTS v. GEORGE H. HALE, and WASHINGTON NATIONAL BANK, Appellant
• Court: Iowa Supreme Court

99 N.W. 1075

124 Iowa 296

M. J. ROBERTS v. GEORGE H. HALE, and WASHINGTON NATIONAL BANK, Appellant

Supreme Court of Iowa, Des Moines

June 9, 1904

Appeal from Washington District Court.--HON. W. C. CLEMENTS, Judge.

A. C HALE, who was the owner of the property in controversy, died testate May 24, 1893. Prior to her death her husband, George H. Hale, had acted as her agent in carrying on the business of buying and selling grain in the market at Washington, Iowa and in storing the same in an elevator covered by the mortgage hereinafter mentioned, and in selling the grain so stored. The will, after directing the payment of all just debts, was in words the following:

(2) I hereby bequeath and devise to my husband George H. Hale in trust as trustee for my children, Clara B. Hale, Harry C Hale and Nathan G. Hale my entire estate and property both real and personal, and direct that upon my death he shall immediately take and retain possession of the same.

(3) I direct that the said George H. Hale shall hold the office of said trustee during his entire lifetime.

(4) Said trustee shall, after my death, during the entire term of said trust, continue my business interests and the investment of my entire property, including the management and control of the same, and all business transactions pertaining thereto, as he may see fit, for the financial interests of my said children. And in the performance and transaction of all matters and duties imposed upon him herein said trustee shall not be subject to or governed by any order of court, and shall be relieved from making report to court of his transaction in the matter unless charged with fraud or inexcusable mismanagement. All profits arising from the said property in the continuation of my said business by said trustee shall be by said trustee retained in his possession and be by him added to and applied and managed in manner and form identically with the aforesaid trust fund.

(5) At the death of my husband, George H. Hale, said entire estate including all accumulation thereto, shall in equal shares, be delivered and distributed to my aforesaid children named as the beneficiaries of said trust. But in case any of my children, after my decease, die without issue prior to attaining majority, then the share or interest from my estate to such deceased child shall immediately vest in and become the property in equal shares of my remaining children, but shall remain subject to said trust and in the control and supervision thereof.

(6) My husband, George H. Hale, shall have no interest in my estate as distributive share or otherwise, except the powers and duties conferred upon him by the terms of this will.

(7) I appoint my husband, George H. Hale, to execute the terms and provisions of this will.

(8) I direct that in the performance and execution of the whole or any portion of the trust provided, and in the execution of the terms and provisions of this will, and in the performance of any obligation or duty herein imposed, the said George H Hale, shall for each and all be relieved and exempt from giving bond."

Hale acted for a short time as special administrator, and after the will had been admitted to probate as trustee, and in each capacity the business was carried on as before. On the 21st day of October, 1900, he executed his note as trustee to the Washington National Bank for $ 5,000, and a mortgage on the property in controversy to secure payment of the same. By way of cross-petition in an action to foreclose a certain mortgage executed by A. C. Hale in her lifetime, the bank demanded the foreclosure of this mortgage. The answer of the children, as well as of Hale, put in issue his authority under the terms of the will to incumber the property. Decrees of foreclosure were rendered in the main action, and the real estate sold thereunder, leaving a balance of only $ 144.85, which was, by order of the court, deposited with the clerk to await the final determination of the issues raised by the cross-petition and answers thereto. Judgment was entered against George H. Hale as prayed, but he was held to have exceeded his authority as trustee in executing the mortgage, and, upon his surrendering all claim to the surplus as trustee, it was ordered to be paid to his children. The Washington National Bank appeals.

Reversed.

H. & W. Scofield, for appellant.

H. M. Eicher, for appellee.

OPINION

LADD, J.

The deceased had been engaged in the business of buying, storing shipping, and selling grain. Her husband had conducted this business as her agent. Her will provided for no legacies, and postponed the distribution of the estate to the beneficiaries until the trustee's death. By its terms she bequeathed and devised her entire estate, real and personal, to him as trustee during life, for their three children, with the direction that he immediately take and retain possession. "Said trustee shall, * * * during the entire term of said trust, continue my business interests and the investment of my entire property, including the management and control of the same, and all business transactions pertaining thereto, as he may see fit, for the financial interests of my said children." The profits of the business were to be added to the trust estate, and held subject to like conditions. Save for fraud or inexcusable mismanagement, no report to the court was to be exacted, and he was relieved from filing bonds. The trustee carried on the testator's business the same as prior to her death, and in connection therewith, deposited money with the cross-petitioner, drew checks and the like, precisely as before, save that he did so as trustee...