Rose v. S. Mich. Nat. Bank, 158.

• Decision Date: 05 October 1931
• Docket Number: No. 158.,158.
• Parties: ROSE et al. v. SOUTHERN MICHIGAN NAT. BANK et al.
• Court: Michigan Supreme Court

255 Mich. 275

238 N.W. 284

ROSE et al.

v.SOUTHERN MICHIGAN NAT. BANK et al.

No. 158.

Supreme Court of Michigan.

Oct. 5, 1931.

Appeal from Circuit Court, Branch County, in Chancery; Blaine W. Hatch, Judge.

Proceeding by Bertha Rose and others against the Southern Michigan National Bank, executor and trustee under the will of Lester E. Rose, deceased, to contest the will. From a decree approving a compromise agreement of plaintiff and others and ordering execution thereof by defendant and Stanley E. Weage, guardian ad litem, they appeal.

Reversed, and petition for approval of agreement dismissed.

Argued before the Entire Bench. Charles U. Champion and H. H. Palmer, both of Coldwater (Hal H. Smith, of Detroit, of counsel), for appellant Southern Michigan Nat. Bank.

Frederick B. Brown, of Detroit, for plaintiffs-appellees.

W. Glenn Cowell, of Coldwater, for defendants-appellees.

Stanley E. Weage, of Coldwater, guardian ad litem, in pro. per.

McDONALD, J.

Lester E. Rose died leaving a will in which he devised the major portion of a large estate in trust. The Southern Michigan National Bank was named executor and trustee. The plaintiffs who are all of the direct heirs contested the will. After a prolonged trial in the circuit court, it was sustained by a directed verdict. An appeal was taken, and after the bill of exceptions was settled and signed a compromise agreement was entered into by all of the direct and collateral heirs. The executor and trustee did not join in the settlement. Pursuant to Act No. 249, Public Acts of 1921, sections 15581-15584, C. L. 1929, the agreement was submitted to the circuit court. It was there approved and ordered to be executed by the executor and trustee and by Stanley E. Weage, who had been appointed guardian ad litem of future contingent interests. From the decree entered the trustee and the guardian ad litem have appealed.

The record presents the following questions:

1. Does the statute empower the court to direct an executor and trustee named in the will to execute a compromise agreement made without their consent and against their protest?

It is argued by the defendants that the trustee and executor are necessary parties to such an agreement and unless it is signed by them at the time of its submission of the court is without jurisdiction to approve it. The question is new in this state. For a great many years Massachusetts has had a statute authorizing the compromise and settlement of questions arising in the administration of estates, and on numerous occasions the courts of that state have been called upon to interpret its various provisions. One of these cases cited and relied on by the defendants in Ellis v. Hunt, 228 Mass. 39, 116 N. E. 956. In that case, quoting from the syllabus, it is held: ‘The court has no jurisdiction under R. L. c. 148, § 15, to authorize an executor to adjust by compromise a controversy concerning a will by an agreement to which trustees to whom property is devised and bequeathed by the will are not parties.’

The value of that case as authority on the question under consideration depends upon the similarity of the Massachusetts and Michigan statutes. They are not identical. They are not closely similar. The Massachusetts statute, General Laws for 1921, vol. 2, pp. 2211 and 2212, §§ 13, 14, and 15, of chapter 204, contemplates that the compromise shall be made by executor or trustee. It expressly provides that they shall be parties to the agreement and clearly requires that they sign it before its submission to the court for approval.

The Michigan statute contains no such language. It provides that the agreement shall be executed ‘by all competent persons, * * * having estates, interests or claims, legal or equitable, which will or may be limited or diminished in either extent or value by such compromise, settlement or adjustment if consummated.’ Section 15582. The statute is here speaking of the form of agreement which is to be presented to the court not only for approval but for the authorization of its execution by the executor and trustee. It must be signed by all those whose interests may be limited or diminished by the agreement if consummated. It may be conceded that unless the agreement is so signed the court has no jurisdiction to approve it or to authorize its execution by others. But an executor or trustee has no such interest in the estate as will or may be limited or diminished by the agreement if consummated. Therefore, under our statute, their signatures are not required in advance of its submission to the court. When approved by the court as just and reasonable, the agreement is made complete by due execution by the executor and trustee. From the plain language of our statute it is quite clear that, though the executor and trustee are necessary parties to the agreement, they are not required to execute it before its approval by the court. The Southern National Bank has no beneficial interest in the estate and is a necessary party only because of its legal title as trustee. In a proper case the court has power to compel a trustee to execute a compromise agreement.

2. Has the court power to approve this settlement agreement which terminates the trust created by the will?

That an equity court has the power under our statute to modify a trust or in some circumstances to extinguish it entirely with or without the consent of the trustee, there can be no doubt. There are some trusts which cannot be terminated until their objects and purposes have been accomplished. We think the trust created by the will of Lester E. Rose belongs to that class. It gives the major portion of a large estate to the Southern Michigan National Bank of Coldwater in trust for the following purposes: ‘Item second: I will and direct that my said trustee shall, semi-annually, pay over to my son, Stephen C. Rose, the net income of all of my estate, or such portion of such income as my trustee may deem best, for the care, support, recreation and maintenance of my said son, Stephen C. Rose, for and during the term of his natural life, and I further will and direct that the provision herein made and income provided, for the care, support, recreation and maintenance of my said son, Stephen C. Rose, shall in no way be liable for any debts which he may have contracted or may hereafter contract, and I will and direct that my said trustee shall, in case my son shall not...