Virginia Trust Co. v. Buford

• Decision Date: 08 November 1920
• Docket Number: 21198
• Citation: 86 So. 356,123 Miss. 572
• Court: Mississippi Supreme Court
• Parties: VIRGINIA TRUST CO. ET AL. v. BUFORD ET AL

86 So. 356

123 Miss. 572

VIRGINIA TRUST CO. ET AL. v. BUFORD ET AL

No. 21198

Supreme Court of Mississippi

November 8, 1920

October 1920

1 WILLS. Ineffectual as instrument of title until probated.

A will is ineffectual as an instrument of title to land therein devised until probated in the jurisdiction within which the land lies, and until so probated the title when called in question must be determined as if the testator had died intestate.

2 TRUSTS. Right of successor to original trustee to exercise powers conferred on trustee by instrument creating trust.

If a power conferred by an instrument creating a trust is annexed to the office of trustee, it may be exercised by any successor to the original trustee; but, if conferred on the original trustee not rations officii but because of confidence of the donor in him, it can be exercised by the original trustee only.

3. TRUSTS, When a power is prima facie based on personal confidence.

A power conferred by an instrument creating a trust on the trustee therein named, the exercise of which is not necessary for the execution of the trust, appears prima facie to be based on personal confidence in such trustee.

4 POWERS. Power coupled, with an interest passes to trustee's successor unless donor reposed confidence in donee.

A power coupled with an interest passes to and can be exercised by a successor to the original donee unless it is of such character as to indicate that it was given because of the confidence of the donor in the donee.

HON. G E. WILLIAMS, Chancellor.

APPEAL from chancery court of Tallahatchie county, HON. G. E. WILLIAMS, Chancellor.

Suit by T. C. Buford and others against the Virginia Trust Company and others. Demurrer to the bill overruled, and defendants appeal. Affirmed and remanded, with leave to appellants to answer within thirty days after the filing of the mandate in the court below.

Affirmed and remanded. Overruled.

Ward & Ward, for appellants.

It seems to be a well-established rule of construction by the courts of the country that powers that are considered to be purely discretionary, or naked, or collateral can be exercised only by the designated donees in the will in person and acting jointly. On the other hand it is just as well established a rule of construction that those powers which are coupled with an interest or annexed to the office of trustee will pass with the trust to the successors or survivors of the original trustees and can be exercised by them.

In this case the issue is clearly and distinctly raised by the pleadings as to whether or not the power to sell the real estate in controversy in the original trustees named in the will of John D. Ragland is personal to the trustees named in the trust instrument or whether it is a power coupled with an interest or annexed to the office and passes to the substituted trustee upon the death of the former.

If the power of sale given to the trustees named in the will of the testator, John D. Ragland, was a personal or discretionary one, the execution of which is dependent on their judgment or discretion, and which is granted by reason of personal confidence reposed in them by the testator, then the sale made by the Virginia Trust Company to Catoe is void, but where, even though the execution of the power granted may require an exercise of discretion in its execution, the intent of the testator as evidenced by the will is that the power might be exercised by a substituted trustee, it may be so executed and did not expire upon the death of the original trustees. 12 Ruling Case Law, section 20, page 789.

In determining as to which rule of law governs in this case the court should seek to determine the intention of the testator not only from the words of the will but from all the circumstances which tend to show his intention. See 2 Perry on Trusts, section 505.

The power given the trustee under the terms of the will was not a mere naked or discretionary one, but was a power coupled with an interest which survived for the purpose of effecting the object of the power. Wilson v. Snow, 228 U. S.W. 271 (Law Ed. 807); Peter v. Beverly, 10 Peter, 532 (Law Ed. Vol. 9) 522; Taylor v. Benhah, 5 How. 233, 12 Law Ed. 130; Pom. Eq. Jur. (3 Ed.), section 1011; Loring v. Marsh, 73 U.S. 802; 21 Ruling Case Law, 787, sections 17, 18, 19 & 21; A. E. Ency. of Law (1 Ed.) 988. Every power given to trustees which enables them to deal with, manage, control, rent, lease out and distribute the proceeds of rents, is prima facie given then ex officio as an incident to the office and where a power of sale is given under these circumstances, that power survives the death of the original trustee or trustees and can be exercised by substitute trustees. Godfrey v. Huchins, 28 R. I. 517; Luquire v. Lee, 121 Ga. 624; French v. Northern Trust Co., 197 Ill 30; Cutter v. Burroughs, 100 Me. 379; Matter v. Wilkin, 183 N.Y. 104; Button v. Hwmmes, 86 N.Y.S. 829; Willis v. Alvey, 69 S.W. 1035; Osborn v. Gordon, 86 Wis. 92.

When a power given by a testator is ministerial in its nature and one which is given to a trustee to carry out the trust properly, such as a power of sale for the purpose of changing investments, the courts incline to hold that it is attached to the office of trustee and is intended to continue as long as the trust, however extensive may have been the discretion given. Kinnard v. Bernard, 98 Md. 513; Safe Deposit & Tr. Co. v. Sutro, 75 Md. 361; Doge v. Dodge, 109 Md. 164; Lahy v. Cortright, 132 N.Y. 450; Reeves v. Tappan, 21 S. C.; Dick v. Hard, 48 S.C. 516; Bradford v. Monks, 132 Mass. 405; Myers v. McCullough, 71 N.Y.S. 520; Boutelle v. City Savings Bank, 17 R. I. 781; Wilson v. Snow, 228 U.S. 271; Peter v. Beverly, 10 Pet. 532 (Law Ed.).

In many states of the Union, statutes have been enacted which provide that an administrator with the will annexed shall have the same powers as are granted in the will to the executor. Among those states are Mississippi (see Sandefer v. Grantham, 62 Miss. 412; Coehea v. Johnson, 69 Miss. 46 So. 40), and Virginia (see Brown v. Armstead, 6 Rand, 594; Mosby v. Mosby, 9 Gratt. 584).

It is alleged in the amended bill by the appellees that the trustee, the Virginia Trust Company, had sold the lands in controversy and was about to invest the proceeds of same in bonds and would do so if not restrained by the courts from so doing in violation of the terms of the will.

Admitting that the investment of the proceeds of the sale of the lands in bonds would be in violation of the provisions of the will, we contend that the courts of this state have no jurisdiction of this matter. It is shown by the allegation of the bill and amended bills that the testator lived in the state of Virginia at the time of his death; that the will has not been probated in the state of Mississippi; that the trustee, the Virginia Trust Company resides at Richmond, in the state of Virginia and that he was appointed substitute trustee under the will at Petersburg, in said state.

A trustee appointed by a court of equity is particularly within its control and subject to its decrees, to the exclusion of other courts. A court of equity has no jurisdiction over a trustee who resides in another state where the trust was created, 39 Cyc. 315, section 4; Penn v. Brewer, 12 Gill & J. (Md.) 113; Snyder v. Snyder, 1 Md. Ch. 295; Lines v. Lines, 142 Pa. St. 149; Lines v. Line, 24 Am. St. Rep. 487; 2 Perry on Trusts, page 1298, sec. 786 A.; 39 Cyc. 358. 28 A. & Eng. Ency. of Law (2 Ed.) 1102; Dillard v. Dillard, 97 Va. 434. If no direction is given in the will as to the mode of sale, the donee or trustee, may select his mode. Buckingham v. Wassen, 54 Miss. 533.

When a power of investment of proceeds of sale exists under the terms of a will, the acceptance of a mortgage on the property sold is a proper exercise of the trustee's discretion. McLenegan v. Yeiser, 115. Wis. 304; Leggett v. Hunter, 19 N.Y. 445; Rogers v. Jones, 13 Texas (Civ. App.) 435.

It is the contention of the appellees, as shown by the pleadings in the case, that the sale made by the appellant, The Virginia Trust Company to E. V. Catoe, was void, because the sale was made for the purpose of reinvestment of the proceeds in bonds and not in lands as provided for in the will.

No duty rests upon the purchaser, E. V. Catoe, regarding the reinvestment of the proceeds of the sale, in the case presented by the pleadings here. Whitfield v. Burke, 86 Miss. 435; Whitfield v. Burke, 38 So. 550, and authorities cited in the opinion of the court.

We respectfully submit that the demurrer should have been sustained and the bill dismissed.

R. H. & J. H. Thompson, and Fulton Thompson, for appellant.

The second amended bill does not, as we can find, refer to the subject of the probation of the will in this state. The charges of the original and first amended bill and the failure of the second amended bill to charge that the will had been probated in this state warrant the conclusion that the bill under which complainants claim the land had not been probated in Mississippi, certainly that it was not probated in this state before beginning of this suit.

"Before a will can be admitted in evidence, in support of title to property therein bequeathed, it must be regularly probated in the jurisdiction where the property is situated." Wells v. Wells, 35 Miss. 636; Fatheree v. Lawrence, 30 Miss. 416.

"A will made and admitted to probate in a foreign state or in one of the states of this confederacy (Union) is not sufficient to pass the title to land situated in another state, unless the will be admitted to probate in the latter jurisdiction, according to its laws." Crusoe v Butler, 36 Miss. 150, and authorities cited at end of first...