Ringrose v. Gleadall

The action, brought to cancel a deed made by one George Lewis to the defendant Josephine Y. Gleadall and to quiet plaintiff’s title as against both defendants, resulted in a judgment for the latter in accordance with their answer and eross-eomplaint. There is no controversy as to

We deem it unnecessary to notice all the questions discussed by counsel, as, beyond doubt, the vital and decisive point as to the termination of the trust must be resolved so as to render impossible a decision in favor of appellant.

Of course, it is elementary and axiomatic that we must look to the instrument creating the trust to determine the nature, extent and object of said trust. (Civ. Code, secs. 2253, 2258, 2267; Tyler v. Granger, 48 Cal. 259 ; Good v. Montgomery, 119 Cal. 557 , [ 63 Am. St. Rep. 145 , 51 Pac. 681 ]; Keating v. Smith, 154 Cal. 191 , [ 97 Pac. 300 ].) Neither will it be disputed that, where there is a written instrument creating a trust, to determine the intent of the trustor and the scope of the trust we must apply the familiar rules for the interpretation of contracts found in title III of the Civil Code.

It is also a reasonable requirement, and is the law, that if the language of the trust be ambiguous or uncertain, it will be construed, if possible, in favor of the beneficiary and against the trustee. Or, as it has been expressed in Sprague v. Edwards, 48 Cal. 247 : “In general, doubtful clauses in a deed are construed most strongly against the grantor and as favorably to the grantee as the language will permit. The same rule holds good as between a trustee of an express trust, having no interest in the trust fund, and the cestui que trust. In such cases doubtful clauses in the instrument creating the trust are construed strictly as against the trustee acting under a power, and most favorably to the beneficiary under the trust.”

As found in the decree of distributidn, this is the language of the first trust in controversy here: “It is further ordered, adjudged and decreed that all that tract of land [describing it] be and the same is hereby distributed in accordance with the terms of the will of said deceased in severalty to Rhody Ringrose, as trustee, in trust for George Lewis and Margaret Lewis, wife of George Lewis, ‘to sell and dispose of and to invest the proceeds in such manner’ as George Lewis and said

In Sears v. Choate, 146 Mass. 395 , [ 4 Am. St. Rep. 320 , 15 N. E. 786 ], there was a bill in equity to terminate a trust created for the benefit of the plaintiff by the will of his father, providing that “all such parts of the income of my estate which may be necessary for the support and education of my son, I order to be used for that purpose and when he shall be twenty-one years old, I direct that four thousand dollars be paid to him annually; when he shall be twenty-five years old, six thousand dollars per annum; and ten thousand dollars when he shall be thirty years old.” When the plaintiff reached the age of twenty-one, in 1875, all the property then in the hands of the trustees not required to pay the plaintiff the annuity bequeathed to him by the will was ordered, in a suit, to be paid to him as his own absolute property. Referring to this statement in a former opinion that “it is conceded by all parties that in order to carry out the plain intention of the testator to secure to his son an honorable support during his life, not exposed to the risks of his improvi

The purpose of the original trust, therefore, having been accomplished, the estate of the trustee would be terminated and he would hold nothing more than the bare legal title for the beneficiaries. (Civ. Code, sec. 871; Pomeroy’s Equity Jurisprudence, sec. 1065; Perry on Trusts, sec. 520.)

The same result must flow from the construction and operation of the said agreements of the trustee and beneficiaries. One of these agreements, designated as “Exhibit A” in the complaint, is the contract of separation, and states that it is made between George Lewis, party of the first part, and Margaret Lewis, wife of George Lewis, party of the second part. At the end of the agreement, in addition to the signatures of the parties thereto, appear the name of Thos. B. Phelby, Jr., signed as a witness, and the name of Rhody Ringrose, although for what purpose or in what capacity Ringrose signed the agreement does not appear. It is contended, therefore, by appellant “that the mere signing of his name at the end of the agreement, which states distinctly the names of the parties thereto, did not thereby make him a party to such agreement. (Lancaster v. Roberts, 144 Ill. 213 , [ 33 N. E. 27 ] ; Blackman v. Davis, 128 Mass. 538 ; Evans v. Conklin, 71 Hun, 536 , [ 24 N. Y. Supp. 1081 ].) Appellant seems, though, to have forgotten his stipulation at the trial that: “On the twenty-first day of August, 1905, said George Lewis and Margaret Lewis, his wife, and Rhody Ringrose entered into

The proper view is, undoubtedly, that by agreement of all the parties in interest the original trust, as we have called it, was superseded by this said contract of August 21st. . But it is clear as anything can be that the powers of. the trustee are not enlarged. In fact, the trust is plainly not active but what is designated as a simple or dry trust. “In such case, the cestui que trust is entitled to the actual possession and enjoyment of the property, and to dispose of it, or to call upon

We think there can be no doubt that Josephine V. Gleadall, as the grantee of George Lewis, the beneficial owner of the property, has proceeded in accordance with law to enforce a conveyance to her. (O’Connor v. Irvine, 74 Cal. 435 , [ 16 Pac. 236 ]; King v. Noble, 136 Cal. 153 , [ 68 Pac. 579 ]; White v. Costigan, 138 Cal. 569 , [ 72 Pac. 178 ].)

The cases cited by appellant possess distinctive features that warrant the judgment in each, but there is nothing in any of them opposed to the finding of the trial court herein.

In Hayes v. Applegate, 101 Ky. 22 , [ 39 S. W. 436 ], the question was whether “a valid marketable title in fee simple” was held by- the grantee of a deed executed by the trustee of a trust, whose terms are set out in the opinion. It seems that the property was the subject of a reinvestment by the trustee, and it was contended that by the first sale and investment of the proceeds the power of the trustee was spent. But the court properly held that the evident purpose of the trust was to make the estate of the beneficiary productive, and it was said that “the provision that the proceeds of sale, as well as any property purchased therewith, should be held ‘under the same trust as herein created’ must be held to continue the power of sale and reinvestment so as to keep the trust estate productive. ’ ’

In re Trelease, 49 Misc. Rep. 318 , [ 96 N. Y. Supp. 318 ], involved the construction of a bequest to the testator’s wife of certain property, “the money to be invested in bond and mortgage or in other property, and she shall have the income thereof and she shall have the right to use the principal as she may need it.” The disputed point was whether she took

In Dudley v. People’s Trust Co., 57 Misc. Rep. 230 , [ 107 N. Y. Supp. 930 ], the deed of trust “empowered the trustees on the death of the grantor to divide the trust fund into equal parts and hold such parts in trust for the grantor’s children, giving each of them during his life the income from a single part, and providing that, on the death of each of such children who might survive the grantor, the principal of his share should he transferred as such child might appoint by will, and in default of such appointment to his legal representatives.” The court simply followed the plain language of the trust and held that it was intended that the trustee should hold each part during the life of the beneficiary, and that only after the latter’s death should his share go to his devisee or his legal representatives.

The question in Hart’s Estate, 203 Pa. 480 , [ 53 Atl. 364 ], was whether the trustees were liable for loss en account of an unwise investment. It was contended that the terms of the trust left the matter entirely to their discretion, as they were authorized “To sell any part thereof and to invest the proceeds in such other securities as may in their judgment be best.” The court, however, applied the rule that “where a trustee neither exercises common skill, common prudence nor common caution, and is either guilty of supine negligence in being ignorant of facts which ordinary intelligence would have disclosed to him, or if known, in not exercising his best judgment upon them, and a loss results, he will be surcharged.”

A similar question was involved in Gray v. Lynch and McDonald, 8 Gill (Md.), 419. It was held that the trustees exercised a fair discretion and acted in good faith, and therefore were not liable for loss. Another disputed point decided was that where a testator devised, to three trustees, by name, certain property in trust, to sell and convert it into money, and invest the proceeds in some safe and profitable stock, which they were to hold in trust for the sole and separate use of the testator’s two daughters during their lives

In Scottish-American Mortgage Co. v. Massie, 94 Tex. 339 , [ 60 S. W. 544 ], it was said that “The purpose of the construction of written instruments is to ascertain the intention of the parties to them, and when this intention is ascertained it must be given effect.” Noting the peculiar terms of the trust, it was held that the effect of the words, “use at his discretion,” “invest,” “handle,” “proceeds,” “profits,” “increase,” “reinvest increase of profits,” in an instrument by which a wife made her husband a trustee for the benefit of her children was to authorize him to sell and reinvest after having once invested the trust fund for their benefit.

The decision in Wirth v. Wirth, 183 Mass. 527 , [ 67 N. E. 657 ], is grounded upon the principles of equity and public policy. The action was brought to compel a trustee to transfer a liquor business in specie to two beneficiaries, one of whom was a minor. It was held that, “if.it were assumed that the plaintiffs had a right to have the trust terminated, and if it also were assumed that there might be circumstances which would justify a court of equity in compelling an executor or administrator with the will annexed to turn over in specie to the residuary legatees all the property belonging to such a business, the fact that one of the beneficiaries was a minor, who could not conduct the business legally in person or by his guardian, was a sufficient reason for refusing the decree prayed for.”

In the Matter of Wilkin, 183 N. Y. 104 , [ 75 N. E. 1105 ], it was held that “A bequest of a specified sum of money to an executor ‘to be by him invested and to be paid, together with the income thereof’ to a son of the testator, ‘or to his wife or children, at such times, in such sums and in such manner as such executor may deem best for the interest’ of such son, creates a valid trust of personal property, covering both principal and interest of the fund, and authorizes the executor, in the exercise of his sound discretion, in good faith, to pay over the whole or any part of the principal of the fund to the testator’s son, or his wife or children, at such times, in such sums and in such manner as such executor may deem best for the interest of that son.”

The judgment is affirmed.

Chipman, P. J., and Hart, J., concurred.

A petition to have the cause heard in the supreme court, after judgment in the district .court of appeal, was denied by the supreme court on February 14, 1912.-