Howard v. Anglo-California Trust Co.

This is an appeal from a judgment in favor of the defendants.

Charles Webb Howard, in the course of the management of his accumulated properties, caused to be created, prior to the year 1903, a corporation known as the Howard Investment Company, with a capital stock of 5,000 shares, of which he retained the ownership of 4,995. In the month of October, 1903, the said Charles Webb Howard caused to be transferred to Central Trust Company of San Francisco his said 4,995 shares of the capital stock of the Howard Investment Company for certain trust purposes, among which was the requirement that out of the net dividends declared upon such shares of stock and collected by said trustee the latter was to pay, after the death of said Charles Webb Howard, certain sums of money to certain designated beneficiaries, among whom was the plaintiff in this action, who was to receive the sum of $250 per month from such source. The trust direction as to said plaintiff contained the following proviso: .“Provided that such payments to said Frederick Paxson Howard personally and while living shall be and constitute, when received by him, a waiver of all compensation for any and all services which, as an officer or otherwise, he personally may, from time to time, render to said Howard Investment Co.” It was further provided by said trust that upon the termination of the trust the said shares of stock

Charles Webb Howard died in 1908. Shortly thereafter a dividend was declared upon said stock, out of which the trustee was enabled to make one payment of $250 to the plaintiff, but litigation immediately arising over the validity and subject of the trust no further dividends were declared or paid to plaintiff.

In the month of October, 1908, the Howard Investment Company adopted the following resolution: “Whereas, F. P. Howard, the President of this company, has been devoting his time to the affairs of the company, and for such time and attention no compensation has been paid him, Now, therefore, be it resolved that the said F. P. Howard, as president of this company, be paid a salary of $250 per month, commencing the 1st day of October, 1908, and be it further resolved that the Central Trust Company of California be notified that the said F. P. Howard is receiving a salary of $250 per month for services rendered to the company, and that from and after October 1st, 1908, any dividends which may be due him under that certain trust agreement made and executed by the late Charles Webb Howard be retained in accordance with the provisions made therein by which should said F. P. Howard receive a salary for services rendered, said salary should be in lieu of dividends that he might receive from the said Central Trust Company under the aforesaid trust agreement.”

At the time of the adoption of this resolution the plaintiff was president of the Howard Investment Company, and prior to its passage was made familiar with its terms. The evident, if not expressed, purpose of the resolution was to provide the plaintiff with an income of $250 during the time at least that the shares of the Howard Investment Company were so tied up in litigation that no dividends were being declared or paid to the trustee which could in turn by it be paid over to the plaintiff under the terms of the trust. The plaintiff accepted and acted upon the terms of the foregoing resolution, continuing to perform the duties of president of the Howard Investment Company and regularly receiving the

The sole question presented upon this appeal is as to whether the plaintiff, having accepted the salary as president of the Howard Investment Company under the terms and conditions specified in the resolution providing for the payment of such salary, must be held to have thereby waived his right to receive and recover the aggregate amount which would otherwise have been payable to him by the trustee under the terms of the trust.

We are of the opinion that the trial court rightly resolved this question in favor of the respondents. It is true that under the peculiar wording of the proviso in the trust instrument above set forth, the plaintiff cannot be held to have waived any right which he might otherwise have to receive compensation for his services as an officer of the Howard Investment Company until such time as he had actually received the payments coming to him as a beneficiary of said trust; and had the Howard Investment Company voted to pay and paid the plaintiff said salary during the period when he was not receiving the monthly payments due him as such beneficiary, without the limitations attending the allowance and receipt of such salary in the foregoing resolution, the plaintiff’s right of recovery in this action would have been unassailable. But such was not the case; and while it is true that the original trustee and the individual respondents herein were not parties to the contract contained in the resolution providing for the payment of a salary to plaintiff as president of the Howard Investment Company, yet the interrelation of the parties was such that said resolution cannot

For the foregoing reasons the judgment is affirmed.

Lennon, P. J., and Kerrigan, 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 August 20, 1917.