Wemme v. First Church of Christ, Scientist, of Portland

• Decision Date: 07 July 1925
• Citation: 115 Or. 281,237 P. 674
• Parties: WEMME ET AL. v. FIRST CHURCH OF CHRIST, SCIENTIST, OF PORTLAND, ET AL.
• Court: Oregon Supreme Court

237 P. 674

115 Or. 281

WEMME ET AL. v. FIRST CHURCH OF CHRIST, SCIENTIST, OF PORTLAND, ET AL.

Supreme Court of Oregon

July 7, 1925

In Banc.

Appeal from Circuit Court, Multnomah County; Harry H. Belt, Judge.

Action by August Wemme and others against the First Church of Christ, Scientist, of Portland, and others. Decree for plaintiffs, and defendants appeal, with crossappeal by the E Henry Wemme Endowment Fund of Portland and others. Reversed and rendered.

This is an appeal from a decree based upon an accounting made by the original trustees of the E. Henry Wemme Endowment Fund. A history of the case is found in Wemme v. First Church of Christ, Scientist, et al., 110 Or. 179, 219 P. 618, 223 P. 250. The opinion of this court, allowing attorney's fees to the attorneys for the plaintiffs, is reported in 111 Or. 386, 227 P. 277. In this appeal the attorneys for the churches challenge the jurisdiction of the court to have entertained the issues raised by the Attorney General of the state. The churches also appeal from that part of the decree denying to them the amount they have paid as attorney's fees and expenses of the litigation, and also denying to their attorney, Guy C. H. Corliss, an additional sum of $7,500. The new trustees of the fund involved, appointed by the circuit judge upon the mandate of this court, appeal from that part of the decree allowing credit to the churches and the original trustees the amount of the expenditures in what is designated the "Clackamas property."

Martin L. Pipes and Guy C. H. Corliss, both of Portland, for appellants.

E. V Littlefield, of Portland, for respondents and cross-appellants.

John S. Coke and John W. Kaste, both of Portland for respondents and cross-appellants, new trustees.

COSHOW J. (after stating the facts as above).

The Attorney General of the state was made a party by order of the circuit court. He appeared in the case by a duly appointed assistant. His theory of the case was upheld by this court. It is now too late, in our judgment, to question his authority so to do. We do not deem it necessary to enter into the discussion, so ably presented by the learned attorneys for the churches, as to whether or not the constitutional amendment revising the judicial department of the state, and adopted by the people in 1910, amended section 17 of article 7 of the original Constitution, providing for prosecuting attorneys. The court had jurisdiction of the subject-matter. If an error was committed in making the Attorney General a party, instead of the prosecuting attorney of Multnomah county, the court would not be thereby deprived of the jurisdiction of the subject-matter.

The learned circuit judge disallowed the items in the account of the original trustees for attorney's fees and expenses of the litigation, because he understood the opinion of this court, reported in 110 Or. 179, 219 P. 618, 223 P. 250, so directed. In this we believe the learned judge misconstrued our former opinion.

The matter of the attorney's fees paid by the original trustees of the fund was not at that time involved in the litigation. That issue did not, and could not, arise in the issues presented to this court in the former appeal. That issue could only arise upon an accounting between the original trustees and the new trustees. It was before the circuit court for the first time upon that accounting, and is before this court for the first time upon this appeal. It is very clear, therefore, that this court did not have under consideration the question of the expenses of the litigation, including attorney's fees, incurred by the original trustees of the Wemme Fund, when it rendered its former decree and handed down its opinion.

This proceeding was instituted by the heirs at law of the late E Henry Wemme, for the purpose of destroying the charitable fund and of recovering for themselves the property constituting that fund. It was both the duty and the right of the original trustees to defend the fund against that attack. The attorneys for the new trustees conceded the principle relied upon by the churches for the right to retain from the fund the amount expended by them in this litigation. In their brief they use this language. "Now, it is well settled by all authorities that a trust must bear the expenses of its administration; and, when a trust is attacked, it is the duty of the trustees to defend and to that end and purpose to employ counsel; and the reasonable expenses and fees of counsel are charged against the fund or trust. If the churches, as the trustees or directors of this fund, had employed Judge Corliss to defend the trust, to preserve it as a legal trust, as a charitable trust, and he had done so, then we concede that his compensation should be paid out of the fund."

That this is a correct statement of the principle of the law is supported by the following authorities: 39 Cyc. 339, 342; 2 Perry on Trusts (6th Ed.) §§ 747, 910; Bissell v. Butterworth, 97 Conn. 605, 118 A. 54; Mead v. Sherwin, 275 Pa. 146, 118 A. 731.

The new trustees base their sole contention on the assertion that the original trustees were not defending the trust, but were waging a contest in the interest of the churches. In our opinion this assertion is not supported by the facts. The only ground for that assertion is the change of the beneficiaries of the trust and the claim that the trust fund was the property of the churches. The churches and the original trustees have uniformly declared, in the most solemn documents in the record of this proceeding, that they considered the fund a sacred trust. It is true that they claim that the property belongs to the churches absolutely. This claim is based upon the advice of eminent counsel, and was sustained by four of the circuit judges for Multnomah county. United with this claim in every instance the original trustees and the churches asserted their intention to treat the fund as a sacred trust. Not one dollar of the fund was converted to the use of the churches or any of them. The fund has been kept intact. The acts of the original trustees are in strict harmony with their expressed intention to treat the fund as a trust.

The fact that the original trustees were mistaken in the construction of the will does not and ought not deprive them of the right to be reimbursed in defending the trust. It is morally certain if they had not vigorously defended the fund that it would have been dissipated, the intent of the testator would have been diverted, and the fund distributed to the heirs of the testator. It was by the defenses made by the original trustees that the fund has been preserved and the benevolent purpose of the testator is being consummated.

This proceeding was started for the purpose of recovering for the heirs the fund devoted to the trust. That purpose was apparent until this court rendered its former decree herein. In page 157 of the brief of the attorneys for the heirs, in the original appeal to this court, is found this language:

"If there was a trust over, and the argument of the Attorney General does not prevail, then the gift over was too broad to be executed as a

...