Rowley v. American Trust Co.

• Decision Date: 18 March 1926
• Citation: 144 Va. 375
• Parties: MAUD KENT ROWLEY v. AMERICAN TRUST COMPANY, AND AMERICAN TRUST COMPANY TRUSTEE.
• Court: Virginia Supreme Court

Page 375

144 Va. 375

MAUD KENT ROWLEY v. AMERICAN TRUST COMPANY, AND AMERICAN TRUST COMPANY TRUSTEE.

Supreme Court of Virginia, Richmond.

March 18, 1926.

1. WILLS — Construction — Spendthrift Trusts — Parol Evidence to Show that a Trust was a Spendthrift Trust — Case at Bar. — In the instant case, an action by plaintiff against defendant to recover a sum of money alleged to be due plaintiff as interest on a trustfund of which defendant was trustee, defendant asserted that the trust had been dissolved by an agreement of all the beneficiaries. Plaintiff sought to introduce parol evidence to prove that testatrix intended to create a sort of spendthrift trust for her daughter, the plaintiff. The language of the clause of the will creating the trust was perfectly plain and without ambiguity. The language suggested no element of a spendthrift trust. It gave to the plaintiff in the clearest sort of way a vested life estate with absolute and unfettered control of the income for her life.

Held: That the parol evidence was properly excluded, as in such case no extrinsic evidence was permissible to aid in the construction of the will.

2. TRUSTS AND TRUSTEES — Termination of the Trust — Agreement of Life Tenant and Remaindermen — Transfer of Estate by the Life Tenant to the Remaindermen — Case at Bar. — The owner of an equitable life estate and the remaindermen, all living and sui juris, where there are no restrictions upon alienation whatever in the instrument creating it, can dissolve the trust, and the life tenant can transfer the estate to the remaindermen.

3. TRUSTS AND TRUSTEES — Termination of Trusts — Consent of Court of Chancery. — A trust of a sum of money for life with remainder over on the death of the life tenant may be terminated without the consent of a court of chancery where all the beneficiaries are sui juris and enter into an agreement to terminate the trust and pay over the sum to one of the remaindermen.

4. TRUSTS AND TRUSTEES — Powers of Trustee — What a Court of Equity would Decree. — A trustee may safely do that, without a decree of court, which the court on a case would order or decree him to do.

5. TRUSTS AND TRUSTEES — Conveyance by Beneficiaries — Refusal of Trustee to Convey. — Where the persons entitled to the whole beneficial interest are in esse and sui juris, it is one of the first duties of a trustee to execute such conveyances of the legal estate as the cestuis que trustent shall direct, and the trustee will be visited with costs if he should refuse to convey with no good reason, and the beneficiaries should be driven thereby to file a bill to compel a conveyance.

6. TRUSTS AND TRUSTEES — Right of Purchaser from Beneficiary. — Where the parties in whom the absolute beneficial interest in the property was vested have disposed of the whole of their equitable estate to a purchaser, the purchaser is entitled to require a conveyance of the legal estate from the trustees without the concurrence of the vendors.

7. TRUSTS AND TRUSTEES — Whether Equitable Life Estate is Inalienable. — An equitable life estate is not inalienable. On the contrary, prior to the spendthrift trust act, alienability and liability for debts were inseparable incidents of both legal and equitable life estates.

8. EQUITABLE LIFE ESTATES — Alienation — Liability for Debts. — The rights of alienation and liability for debts are inseparable incidents of a life estate, whether limited by way of trust, or otherwise, except where there is a termination or limitation on seizure by creditors.

9. SEPARATE PROPERTY OF MARRIED WOMEN — Equitable Life Estate of Married Woman Distinguished from Legal and Equitable Life Estate. — The separate equitable estate of a married woman is a creature of equity, controlled by entirely different rules from those governing legal life estates and equitable life estates.

10. TRUSTS AND TRUSTEES — Termination of Trusts — Agreement of the Beneficiary — Case at Bar. — A testatrix bequeathed to a trustee $10,000.00 in trust for her daughter for life with remainder over to two other beneficiaries. The daughter joined with the remaindermen in a solemn contract under seal to terminate the trust, and apparently assigned all her interest to one of the remaindermen, all of which she had the right to do even over the protest and objection of the trustee. The remaindermen lost the $10,000.00.

Held: That the daughter could not maintain her action against the trustee for the income of the fund.

Error to a judgment of the Law and Equity Court of city of Richmond, in a proceeding by motion for a judgment for money. Judgment for defendant. Plaintiff assigns error.

The opinion states the case.

D. C. O'Flaherty, for the plaintiff in error.

Daniel Crinnan and R. L. Montague, for the defendant in error.

CHICHESTER, J., delivered the opinion of the court.

This is an action instituted by Maud Kent Rowley in the Law and Equity Court of the city of Richmond, against American Trust Company and American Trust Company, trustee, to recover $1,200 with interest thereon, alleged to be due plaintiff as interest on a trust fund of $10,000, which defendant is alleged to have held in trust, as will hereinafter appear, for the benefit of plaintiff during her lifetime.

There was a trial by jury and a verdict and judgment for the defendant. From that judgment a writ of error was allowed to this court.

The pertinent facts are as follows: By her will, bearing date March 6, 1918, and admitted to probate July 8, 1920, Alice Leavitt Kent, mother of the plaintiff, by the fifth clause of her will provided as follows:

"I give and bequeath to the American Trust Company of Richmond, Virginia, the sum of ten thousand dollars ($10,000.00) in trust to invest and reinvest said sum and to pay all the net income therefrom semiannually to my daughter, Maud Kent Rowley, for life, and upon her death to divide the principal of said ten thousand dollars ($10,000.00) equally between my daughter, Alice Tinsley Hall, and my grandson, Charles Edward Dickinson, or to pay over said ten thousand dollars ($10,000.00) to the survivor."

By the sixth clause of her will the testatrix gave all the residue of her estate to Maud Kent Rowley absolutely.

The American Trust Company, hereinafter referred to as defendant company, was made executor of the will, as well as trustee under the fifth clause thereof, and as trustee invested the $10,000 and paid Maud Kent Rowley, hereinafter referred to as plaintiff the interest until November, 1922, when plaintiff, her sister, Alice Tinsley Hall, and Charles E. Dickinson, the remaindermen in fee under the fifth clause of the will, addressed and delivered to the defendant company the following paper:

"In Re Estate of Alice Leavitt Kent, deceased.

"To American Trust Company, as executor and trustee of the last will and testatment of Alice Leavitt Kent, deceased, which was proven in the Chancery Court of the city of Richmond, Virginia, on July 8, 1920.

"We, the undersigned, Alice Tinsley Hall, Maud Kent Rowley, and Charles Edward Dickinson, legatees named in said will, do hereby inform you as follows with regard to the trust established by the fifth clause of said will, whereby the sum of $10,000.00 was directed to be paid to American Trust Company, as trustee, to pay the net income from said fund to Maud Kent Rowley for life, and at her death to pay and deliver the said fund to Alice Tinsley Hall and Charles Edward Dickinson, or the survivor of them, viz:

"We have agreed and do hereby agree to dissolve the said trust and to turn over the whole of the trust funds in your hands held by you under said trusts to Charles Edward Dickinson, and we therefore do hereby authorize and direct you to pay, transfer, and deliver to said Charles Edward Dickinson, the entire amount of the securities held by you for the trusts aforesaid, and we do hereby each of us covenant and agree with you that the receipt of said Charles Edward Dickinson for said trust funds shall be a valid and sufficient receipt to you therefor, and a release to you of all liability to any of us on account of the $10,000.00 legacy named in the fifth clause of said will.

"Witness our hands and seals on this 15th day of November, 1922, at Richmond, Va.

"ALICE TINSLEY HALL, (Seal)

"MAUD KENT ROWLEY, (Seal)

"CHARLES E. DICKINSON, (Seal)."

This paper was signed by the parties, sealed and acknowledged before a notary public, and on the following day Charles Edward Dickinson, as provided in the writing, executed and delivered to the defendant company his receipt as follows:

"November 16, 1922.

"Received of American Trust Company, executor and trustee of the will of Alice Leavitt Kent, deceased, full and complete payment and settlement of the $10,000.00 trust fund mentioned in this agreement and I do hereby release said executor and trustee from all liability thereunder.

"CHARLES EDWARD DICKINSON."

The sum of $10,000.00 was paid over to Dickinson accordingly, and was used by him in an enterprise in which he was interested. The business failed and the $10,000.00 was lost.

The action instituted by the plaintiff is to recover of the defendant company, as trustee, interest on this fund since the execution of the paper of November 15, 1922.

All the parties, beneficiaries under the fifth clause of the will, as will be observed, signed this paper, and all were sui juris at the time.

It will be noted that the clearly expressed objects of the paper were to dissolve the trust created by the fifth clause of the will of Alice Leavitt Kent, and to authorize the payment of the $10,000 over to Charles Edward Dickinson. The plaintiff now contends that the trust was not legally dissolved and that she could not legally assign or dispose of the equitable life estate bequeathed her under the fifth clause of her mother's will, and that the defendant company, trustee, is liable to her for interest on the $10,000 during her lifetime.

There are two assignments of...