State v. Underwood, 2082

CourtUnited States State Supreme Court of Wyoming
Citation86 P.2d 707,54 Wyo. 1
Docket Number2083,2082,2084
Decision Date24 January 1939

[Copyrighted Material Omitted]

APPEAL from the District Court, Converse County, HARRY P. ILSLEY Judge.

Action by the State against J. C. Underwood, trustee of John E Higgins Estate Trust, Harry Devine, Jr., the Town of Glenrock, and William Burgess, County Treasurer of Converse County, for a declaratory judgment determining matters arising under the will of John E. Higgins, deceased. From the judgment, plaintiff and defendants, Devine and Underwood appeal separately, the appeals having been consolidated in the Supreme Court.


For the plaintiff in each case, there was a brief by Ray E. Lee, Attorney General; T. F. Shea, Deputy Attorney General; and William C. Snow, Assistant Attorney General of Cheyenne, and oral argument by Mr. Shea.

The brief filed on behalf of the defendant Harry Devine, Jr. contains a full statement of the facts and we adopt that statement for the purpose of presenting our argument of the case, but we may add additional statements in the course of our argument, which we deem necessary. The court erred in making, rendering and entering Declaration No. 2, for the reason that said declaration declares the title of the property involved to be vested in J. C. Underwood, Trustee, which finding is against and contrary to the evidence and is against and contrary to law. Testator's will bequeaths his property to the State of Wyoming, without instruction or condition. The testator does not create a trust. He requests the state to create a trust, to be in effect not less than fifty years. Testator names certain relatives whom he wishes to be beneficiaries. The Probate Court distributed to and vested in the State of Wyoming full and absolute title of the estate property. This decree is dated November 7, 1929. Thereafter litigation arose with reference to the holding of the estate and another decree was rendered on December 31, 1932. While this decree purports to create a trust, we do not believe it can be construed to divest the State of Wyoming of the title it received under testator's will and the original decree of distribution. The court erred in rendering and entering Declaration No. 3, to the effect that the trustee is vested with title to the property of the estate, with full authority to convey title. The trustee appointed by the court cannot hold title to the property and therefore cannot convey title. Specifications of error numbered 3, 4 and 5 are to the effect that Declarations numbered 6, 7 and 8 are contrary to the evidence and contrary to law. The substance of these findings is that the property of the Higgins estate is subject to general taxation, and that Harry Devine, Jr. is entitled to interest at the legal rate on past due annuities, and that the annuity allowed to him is a charge against the corpus of the trust property, if the income therefrom is insufficient to pay the annuity, and that the trustee may in such case sell sufficient of the corpus to pay the annuity. If the title to the property passed to the state it is not subject to taxation. The right of Harry Devine, Jr. to receive an annuity of $ 1,000.00 from the income for a period of fifty years, subsequent to the death of testator, if Devine shall live that long and shall not lead a discreditable life, is quite clear. The equity granted to Devine is mandatory and must be paid from the income of the property, but this does not vest authority in the court to take the title away from the State and vest it in a trustee, with power to sell the corpus for the purpose of paying the annuity. The will directs the payment of annuities from the income of the estate. Words in a will expressing a desire on the part of the testator are merely advisory or precatory in character--they cannot control the action of the court in matters within its discretion. 69 C. J. 78, Sec. 1132. The desire expressed in the will that a trust be created is directed to the beneficiary of testator's will, and not to the executors or to any trustee, and is not mandatory. A fee will not be qualified by words merely precatory, as where the testator expresses a general desire respecting the disposition of the property. 69 C. J. 445, Sec. 1506. We do not believe that the provisions of the will relating to the creation of a trust are to be construed as mandatory. There are no conditions in the will which operate to defeat the title of the State to the property bequeathed, if the state should not do what the testator requests. Rudolph v. Bennett, 168 N.W. 753. We do not believe that the court in dealing with the estate has heretofore considered the will of the deceased in the proper sense or given it the proper meaning and construction. If the will created a trust and required the payment of the annuities therein provided throughout the period of not less than 50 years, if the beneficiaries should live so long, where would the court obtain jurisdiction to authorize a settlement with the beneficiaries? A settlement has been made with all beneficiaries except Harry Devine, Jr. The Wyoming Legislature by the enactment of Chapter 76, Laws of 1931 created a Board of Wills and Trusts with certain other powers. If the will of John E. Higgins created a trust, how could the Legislature bestow upon a Board authority to destroy that trust by making a cash settlement with certain claimants? We think the title of the property vested in the state and that the corpus of he property is not subject to the payment of the one annuity, and that the property is not subject to taxation. The will provides that the annuities are to be paid from income. This should control. 65 C. J. 860-938. We think the weight of authority is against the payment of interest upon annuities. 3 C. J. 211.

For the defendant and appellant, Harry Devine, Jr., there was a brief and oral arguments by C. R. Ellery and A. G. McClintock of Cheyenne.

The District Court of Converse County was without jurisdiction of the so-called Higgins Estate trust. Nothing in the decision of this court in Bond et al. v. State, 45 Wyo. 133 directed the District Court of Converse County to assume jurisdiction of the administration of said trust. Article XVIII, Sec. 2, Wyoming Constitution. The annuity provided for Harry Devine, Jr. was a charge upon the estate property. Lands granted to the State come within the control of the Board of Land Commissioners. Article XVIII, Sec. 3, Wyoming Constitution. The Legislature intended that Sec. 103-503 should apply to the Higgins Estate. The Bond case was commenced before the enactment of Section 103-503, R. S. It was there held that the state should administer the property as a trust until the Devine annuity was satisfied. The District Court of Converse County had no jurisdiction in the premises. Janin v. Logan (Ky.) 273 S.W. 531; Hoover v. Roberts (Kan.) 58 P.2d 83; Dean v Brown (Ky.) 88 S.W.2d 298; Simplex Paper Corporation v. Standard Box Co. (Mo.) 97 S.W.2d 862-878; Abernethy v. Burns (N. C.) 188 S.E. 97; 1 Freeman on Judgments, p. 688; Church v. Quiner, 224 P. 1073; Reed v. Woodman of the World (Mont.) 22 P.2d 819; Spears v. State (Ala.) 160 So. 727; In re Walker's Will (N. Y.) 32 N.E. 633. Title to the Higgins estate having passed to the State of Wyomnig, it was exempt from state, county and municipal taxes. Bixby v. Security-First Nat. Bank of Los Angeles, 60 Pac. (2) 860; Whittingham v. Trust Co. (Calif.) 4 P.2d 142; In re Ingram's Estate (Calif.) 285 P. 365; Lyons v. Field, 175 A. 11-13; Rickert v. Wardell (Minn.) 170 N.W. 915; Harvey v. Security Trust Company (Mich.) 218 N.W. 679. The state through its officers holds and administers the property as a trust fund. Bond v. State, 16 P.2d 53. The distinction between a will and a decree of distribution which imposes a charge by virtue of which a court of equity sets up a trust is illustrated by the following authorities: 13 A. & E. Enc. of Law 109; Lang v. Everling, 23 N.Y.S. 329, Trusts and Trustees, Bogert, Vol. 1, Sec. 31; Restatement of the Law of Trusts, Sec. 10, p. 32. In Wyoming, property must be listed and taxed in the name of the owner. Hecht v. Boughton, 2 Wyo. 385; Olds v. Little Horse Creek Cattle Co., 140 P. 1004. Where the legal title to property is in the county, it is not taxable. Aberg v. Moe (Wis.) 224 N.W. 132. Article XV, Sec. 12, Wyoming Constitution; Sec. 112-102, W. R. S. 1931; Church of the Holy Faith v. Tax Commission, 48 P.2d 777; La Mesa Irr. Dist. v. Hornbeck, 8 P.2d 1031; Otter Tail Power Co. v. Degnan, 252 N.W. 619. Egan Independent Consol. School Dist. v. Minnehaha, 270 N.W. 527-529 (S. D.); 2 Cooley on Taxation 4th Ed. 1336; Security Savings and Trust Company, 53 P.2d 33; Trustees of Gate City Guard v. Atlanta (Ga.) 39 S.W. 394. In the present case the Harry Devine annuity is an equitable lien and does not operate to divest the state of its legal title to the property. Boal v. Metropolitan Museum of Art, 298 F. 894-908; Evan v. Weigel (Wis.) 233 N.W. 569; Hall v. Curd et al., 181 N.E. 168-170; Langan Realty Co. v. Dixon, 191 N.W. 444; State v. Watkins, 121 N.W. 390, 391; Trust Co. v. Lane County, 53 P.2d 33. The suit being one for a declaration of the rights of the parties, the costs are paid out of the trust estate. Redfield on Wills (3d Ed.) 493; Jollife v. East et al., 3 Bros. C. C. 25; Barrington v. Tristan, 6 Ver. Jur. 345; Studholme v. Hodgson et al., 24 Eng. Rep. 1074; Drew v. Wakefield, 54 Maine 291; 15 C. J. 20; Norton v. Jordan, 196 N.E. 475; Strauss v. Strauss, 12 N.E.2d 701-703; American Nat. Bank v. Meadors et al. (Tenn.) 36 S.W.2d 86; Bacon v. Central Bank & Trust Corporation (Ga.) 168 S.E. 776; Trautz v. Lemp, 72 S.W.2d 104; Evans v. Adams, 185 S.E. 57; Sawyer v. Baldwin (Mass.) 20 Pick....

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