Majority
Headnote
1. Trusts—Removal of Trustee—Jurisdiction.After a careful examination of the pleadings, evidence, and elaborate briefs of counsel, I have reached the following conclusions:
1. The court has jurisdiction of the action. The plaintiffs and the defendant trustees are residents of this state. Mr. E. W. S. Johnston has been duly appointed guardian ad litem of the infant William E. Jones. The complaint states that Mrs. Macñe has refused to become a plaintiff, and is therefore made a defendant. All the parties in interest are before the court, and the court has jurisdiction, if it should see fit to exercise it, to the extent even of compelling the defendant trustees to convey the real estate and personalty, although both are situated in the state of Illinois. It certainly has jurisdiction to compel the resident trustees to account, and to pay over any income which shall come into their hands. That the law is as above stated has been decMed in many cases.
2. The court will not decline to entertain jurisdiction of this action, because to do so would be a gross injustice to the plaintiffs. Several years since the defendant trustees brought an action in the circuit court for Cook county, UL, to obtain a construction of Mrs. McCagg’s will, and to obtain partition. The case is reported under the title of Jones v. Jones, 124 Ill. 254 , 15 N. E. 751 . In that action the defendant trustees claimed that the will and codicil did not establish a trust for the benefit of the children of William Ogden Jones, deceased, but that the one-fifth part of the estate of Mrs. Mc-Cagg which had been held in trust for said William Ogden Jones was given to said trustees absolutely, and free from any trust in favor of the plaintiffs and Mrs. Macfie. The claim on the part of
3. The defendant trustees admit that the decision of the courts of Ulinois was as above stated, but their views and intentions as to the execution of the trust devolved upon them by the will and codicil are set forth at page 65 of the brief of their counsel in the following language:
“We intend to execute it in the following maimer, namely, by retaining all of the corpus in our hands, and investing and reinvesting it, as we think it best not to give any part of the corpus to the children of William Ogden Jones. We intend to pay all or part of the income, as to us seems wisest, to any one of the children to the exclusion of the other two, and to accumulate the balance, or, as to us seems wisest, to pay all or part of it to any two, in equal or unequal shares, to the exclusion of the other, and accumulate the balance; or we intend, as to us seems wisest, to pay all of it or part of it to all three, in equal or unequal shares, and accumulate the balance. For the present, however, we propose to pay all of it to Mrs. Macfie, if it seems wisest.”
In my opinion, this claim as to the manner in which the defendant trustees are entitled to execute the trust reposed in them finds no support whatever either in- the language of the will or codicil, or in the judgments of the courts of Illinois, or in the opinion rendered by Mr. Justice Shope, of the supreme court of that state, or in the general rules which obtain in the courts of Illinois, and in this and other states, for the construction of wills, or in the circumstances surrounding the execution of the will and codicil of Mrs. McCagg. It seems to me that the meaning of the codicil, as to the manner in which the trustees are to use the principal and income of the trust, must be plain enough to any person who really desires to ascertain its meaning, and the courts of Illinois found no difficulty in interpreting it. It plainly declares that the property held in trust, both principal and income, is to be used for the benefit of the three children of William Ogden Jones. The trustees are given a discretion as to the amount of principal and income which shall be used from time to time, but whatever, either of principal or income, is used, must be used for the benefit of the three children equally. This is the plain meaning of the codicil, and in my opinion it cannot be construed in the manner contended for by the counsel for the defendant trustees. It is not necessary, however, to rely upon my own views as to the meaning of the codicil in question, for, as above stated, the question as to the meaning of the codicil has been passed upon by the circuit court of Cook county and the supreme court of the state of Illinois, and the judgment
“On hearing in the circuit court, the court, in fixing the rights of the children of William Ogden Jones, deceased, decreed as follows: And that, under the terms and conditions of said will and the codicil thereto, one equal fifth part of the said estate of Caroline Ogden McCagg, including the real estate owned by her at her decease, and hereafter described, is to be given to the said Caroline Ogden Jones and Frances Ogden Jones jointly, as trustees, for them and the survivor of them to use for the benefit of the said defendants Alexander M. Jones, Julia H. Jones, and William E. Jones, the children of William Ogden Jones, deceased, with power, as such trustees and as such survivor, to use the said one-fifth part or share either wholly for the benefit of said children, in equal parts or shares, or to use the same in such parts or shares for the benefit of said children, respecUvely, as they, the said trustees, or the survivor of them, shall, in their or her discretion, deem desirable.”
It seems to me impossible to construe the language above quoted as meaning that the trustees have any such discretion as, according to the above statement of their counsel, is claimed by them. The opinion of Mr. Justice Shope, of the supreme court of Illinois, shows that he did not consider that the trustees have any such discretion as they claim to have. In the course of his opinion, after quoting the language of the codicil, he said:
“This language precludes the idea of an intention to make an absolute gift of such share to the daughters. The share was to be used by them for the benefit of the children. The purpose for which the daughters are to take is definitely fixed by the language employed. It is for the use of the children of a deceased son. * It is apparent, we think, that this fifth share was, by the will and codicil, placed in the hands of the daughters in trust, to be used by them for the benefit of the children of the deceased son. * * * Much stress is laid upon the words ‘wholly or in such parts as they (the trustees), or the survivor of them, in their or her discretion, shall deem desirable,’ etc. It is evident, we think, that the testatrix had in contemplation—one son already having died—that there might be the death of others before her decease, and intended making a provision that would apply in that event to the shares of each of such sons. As to the children of William, they being minors, the daughters, as their trustees, might apply this share wholly at once for their benefit, or in such part as they might deem most beneficial to them. The trustees were made the judges of what use of the estate was most for their benefit. Undoubtedly, if they deem it most desirable, they had discretion to invest the funds in their hands for the use and benefit of the cestuis que trustent, or to provide for their support and education, expending such sums therefor as to them might seem desirable.”
The question which the circuit court and the supreme court had before them was whether the codicil established a valid trust, and, if so, what was the nature of that trust; but neither in the decree of the circuit court, which was affirmed by the supreme court, nor in the opinion of the supreme court, is there one solitary expression which tends to support the claim of the defendant trustees as to the manner in which they are empowered to execute the trust in question. On the contrary, the decree of the circuit court, which was affirmed, and the opinion of Mr. Justice Shope, plainly show that both courts considered that the property was held in trust for the equal benefit of the three children; and it seems to me that the
“If the testatrix had intended no provision for the benefit of the children of her deceased son, there was no necessity for revoking the sixth clause of the will, or of changing the fourth. The precise result contended for by appellants would have occurred if the codicil had not been made, so far as the effect upon the children of the deceased son is concerned. The will and the codicil are to be construed together in the light of the circumstances surrounding the estate and the testatrix at the time they were severally made. As before stated, it is to be presumed that, in making the change in her will in respect to her grandchildren, she designed and intended to change the disposition of her estate as to them, and understood and intended that the language employed by her should have its legitimate and recognized effect' in producing that result.”
It is incredible to me that the testatrix, while making this codicil for the express purpose of providing for the three children of her deceased son, should have intended to so discriminate between them as to put it in the power of the trustees to use the one-fifth of her estate given to them in trust, principal and interest, for the sole benefit of one of said three grandchildren, to the entire exclusion of the other two, and I do not believe that the language of the codicil ought to be, or can be, so construed. The trustees, as above stated, undoubtedly have a discretion as to how much of the principal and income shall be used from time to time, but whatever amount is used, whether of principal or income, must be divided equally between the three children.
4. The counsel of the defendant trustees claims that the exercise of the discretion vested in them by the codicil cannot be interfered with or controlled by the courts, but I regard this position as wholly untenable. The defendant trustees profess great anxiety that their rights, in all respects, shall be determined according to the laws of the state of Illinois, and not according to those of the state of New York. It is well, therefore, to refer to what Mr. Justice Shope,
“The share thus set apart was not to he paid over to the daughters absolutely, or for their own benefit, but for the use designated by the donor in the creation of a trust. The daughters, as trustees of this share, are not invested with discretion to withhold the trust fund absolutely from the cestuis que trustent. The fund is not theirs in equity, and they cannot make it so by a refusal or neglect to exercise the discretion vested in them. Their discretion as trustees of this fund is subject to the control of the courts of equity, and cannot be arbitrarily exercised, so as to deprive the beneficiaries of all benefit of the fund. * * -•= But it is unnecessary to discuss this branch of the subject, as the decree of the court does not seek to interfere with the discretion vested in the appellants, or direct the manner of its exercise. When that discretion is abused, if it ever is, will be time for a court of equity to interfere.”
Many pages of the brief of the learned counsel of the defendant trustees are occupied with quotations from decisions in cases where it has been held that courts of equity would not interfere with the exercise of the discretion vested in trustees. These cases, although cited on behalf of the defendant trustees, are the very best authorities that could be cited on behalf of the plaintiffs, for in every case it is expressly stated, or it is to be fairly implied from the language used, that the rule invoked on behalf of the defendant trustees has no application in cases where trustees either abuse the discretion vested in them, or act in bad faith.
5. I have carefully examined the evidence in this case, and I feel constrained to say that in my opinion it is abundantly proven that the defendant trustees have not only abused the discretion vested in them by the testatrix, but that they have also acted in bad faith, in withholding all income from the plaintiffs. With regard to the plaintiff Alexander McK. Jones, it appears that all income has been withheld from him for a number of years because he married contrary to the wishes of the trustees. His account of the matter is somewhat different from that given by Miss Caroline Ogden Jones in her deposition. He testified in open court that he consulted his aunt in reference to his proposed marriage, and that she consented to it, and said that she would do whatever she could for him, but that afterwards, and when he had become engaged to the lady whom he afterwards married, the aunt forbade the marriage; that under the circumstances, feeling himself in honor bound to carry out his contract of marriage, he accordingly was married to the lady of his choice. Miss Jones testified in her deposition that she never consented to the marriage, but that she forbade it at the outset, because of his youth and certain mental and physical infirmities, and told Alexander that if he did marry she would withhold all income from him, and that, the marriage having taken place, she did afterwards withhold all income from him, and for the reason that he had married contrary to her wishes. She does not testify that the lady in question was not an entirely proper person for said Alexander to marry, if he married at all, and the appearance of said lady upon the witness stand satisfied me that no just exception to her person or character could be taken. The appearance of said Alexander, also, upon the witness stand, taken in connection with
6. The next question is as to what power the court possesses in this regard, and upon this point I am compelled to differ with the learned counsel for the plaintiffs, whose contention that the court has the power to compel the trustees to convey the entire trust property to the plaintiffs and Mrs. Macfie seems to me to be wholly untenable. As above stated, the property consists in part of real estate situated in the state of Illinois, and in part of personal property which is also held in that state. Counsel for the plaintiffs claims that the fee of said real estate and the title to such personalty are vested in the three children of William Ogden Jones.This view, however, is contrary to the plain meaning of the codicil and the decision of the courts of Illinois. The codicil provides, among other things, that upon the death of William Ogden Jones, the father of the plaintiffs and Mrs. Macfie, the trustees named in •the will shall give the part or share set apart for the use and benefit of the said deceased son to the defendant trustees, to be used for
“Both the daughters taking this share in trust for the children of the deceased son William are living, and it is unnecessary to discuss or decide whether they hold as joint tenants or not. It is enough that they took no beneficial interest therein, but simply held the same in trust for the defendants, children of their deceased brother William. It may, however, be added that, as the survivor is required to use this share for the use and benefit of the children indicated, it is manifest that it was to be kept intact for such use, for if each of the trustees took an equal part the survivor would be unable, or might be, to use the whole for the benefit of the cestuis que trustent.”
It is true that the codicil does not, in terms, state what disposition is to be made after the death of the surviving trustee, nor does it. in terms, provide what shall become of the property in case of the death of one or more of the children. The failure of the codicil to expressly declare what shall become of the property in these two events does not affect the fact that at the present time the title-of the real and personal property is vested in the defendant trustees, upon certain trusts and with certain powers, and that the plaintiffs and Mrs. Macfie have no present right to have the property conveyed to them. The question as to the final disposition of the property upon the death of the surviving trustee, and as to what shall become of it in case of the death of one or more children, will not, I imagine, prove to be questions of difficulty, when they shall arise; but they are not involved in the present inquiry, and I express no-opinion in regard to them, but leave them for future determination, when they shall arise.
7. It does not follow, however, that the court is powerless to redress what I regard as a wrong done to the plaintiffs. It -undoubtedly has the power to order a reference for the purpose—first, of taking an accounting of the acts of the trustees in relation of the trust property, and of ascertaining how much income they have received and how much they have paid out, and how much they have on hand; and, secondly, of ascertaining how much of the income or principal, or of both, is necessary for the suitable support of the plaintiffs. Upon the coming in of the report of the referee, the court will also have the power, if it sees fit, under the prayer of the complaint for further relief, to remove the trustees, and appoint others in their stead, and to direct payment of such amount as shall be necessary for the support of the plaintiffs, or it may leave the present trustees in office, and compel them to make payment of such amount. Moreover, as the trastees admit that they have on hand many thousand dollars of unapplied income, and as it does not require any further testimony to satisfy me that it is absolutely necessary that the plaintiffs should receive something at once for-
8. As plaintiffs’ findings are not all drawn in accordance with this opinion, their counsel may submit further findings if they see fit, or, if they do not desire to do so, they can so notify me, and 1 will then dispose of the case upon the findings already submitted.
9. Some of the testimony given by Charles H. Holt under the commission which was put in evidence seems to me to be immaterial, and some of it seems to me to be incompetent; but in view of the disposition which, as indicated in the foregoing opinion, I think should be made of the case, I .have concluded to overrule the objections of plaintiffs’ counsel to the 8th, 9th, 10th, 11th, 12th, 14th, 15th, and 16th interrogatories which were administered to said Holt, and to deny the motion to strike out the several answers thereto. The record will indicate that plaintiffs’ counsel has an exception to each of such rulings. Ordered accordingly.
On Motion by Trustees to Vacate Judgment.
This is a motion made by the defendant trustees to vacate the judgment heretofore entered.
1. It is claimed that this motion should be granted because said trustees were removed entirely on ex parte proceedings, without being given a day in court, and without being permitted to offer any evidence in justification of their acts. I am wholly unable to understand upon what ground this claim is made by the counsel for the defendant trustees. The complaint in this case did not charge that the defendant trustees had appropriated any of the trust funds to their own use, but it did charge gross misconduct on their part, in refusing, for frivolous reasons, to pay over to the plaintiffs any portion of the principal of the trust funds in their hands, or the interest received by them thereon. The prayer of the complaint was that the said trustees should be compelled to pay over to the plaintiffs and the defendant Mrs. Macfie the whole of such trust fund. This was not, in terms, a prayer for the "removal of the defendant trustees, but it was equivalent to such a prayer; for, if the defendant trustees had been compelled by the court to turn over the whole fund to the plaintiffs and the defendant Mrs. Macfie, they would have been, in effect, removed from their position as trustees, for there would have been no further functions for them to perform as such trustees. The case was brought on for hearing at the regular special term, and testimony was taken upon both sides. The deposition of the defendant Miss Caroline Ogden Jones was read in evidence, in which she went into an elaborate statement of her conduct as such trustee, and sought to justify all that had been done and not done by her and her sister in the execution and nonexecution of the trust. Very elaborate briefs were submitted on both sides. The brief of the counsel for such trustees, according to my recollection, covered between 60 and 70 pages of printed matter, and in that brief he not only claimed that the court had no jurisdiction of the action, but that, if it had jurisdiction, it should decline
2. It is claimed that the judgment should be vacated because the action was not to bring about the removal of the trustees, but simply one to compel them to perform a trust. This claim has been fully answered in what has been hereinbefore stated. Although the •complaint did not, in terms, pray for the removal of the trustees, it did allege misconduct on their part, in refusing to pay to the plaintiffs any portion of the principal or income, and did pray that the court should compel them to turn over the whole fund, principal and interest, to the plaintiffs and the defendant Mrs. Macfie. This was certainly equivalent to a prayer for their removal, because, if such relief had been granted, they would have no further functions to discharge as trustees, and under the prayer for further relief, while the court held that the plaintiffs could not have the property turned over to themselves and Mrs. Macfie, it also held that it could remove the trustees, and appoint others in their places, who would honestly and fairly execute the trust created by the will of the testatrix.
3. It is also objected that this court has no power to remove a trustee created by the will of a citizen of a foreign state, never proved in this state. It is true, as claimed by counsel, that the courts of this state cannot remove, or exercise disciplinary control over, a foreign executor. The rule, however, is otherwise as to trustees appointed by a will which has been proved in another state, who reside in this state. Thus the doctrine is laid down in Perry on Trusts, and is fully supported by the cases there cited.
4. It is objected that the New York supreme court has no power to remove the defendants, because such power is given by statute, and is expressly limited to the cases covered by the statute, and that the case at bar is not one of them. The answer to this proposition is that the defendant trustees were not removed under and pursuant
5. The judgment herein was duly and regularly entered, after a trial at the special term, and the remedy of the defendant trustees, if they feel aggrieved thereby, is not by a motion of this character, but by an appeal from the judgment.
6. The motion should in all respects be denied, without costs. The order will be settled on notice.
On Motion by Defendant Macfie to Vacate Judgment.
This is a motion made by the defendant Mrs. Macfie to vacate the judgment heretofore entered herein. The general objections to such judgment made by the counsel for Mrs. Mac-fie have been answered in a memorandum filed herewith upon the motion made on behalf of the defendant trustees to vacate such judgment, and it is unnecessary to repeat what is stated in that memorandum. The counsel of the defendant Mrs. Macfie makes a further objection to the persons who have been appointed trustees in place of the original trustees. No suggestion whatever is made against the personal character or ability to discharge the trust of either of such new trustees, nor is any suggestion made that the bond of $250,000, which they have been- required to give, is not amply sufficient to protect the interests of all the cestuis que trustent. It is objected, however, that such new trustees are not friendly to Mrs. Macfie; but, after examining all the papers which have been submitted on this motion, I am satisfied that this objection has no. foundation, and is not made in good faith. It appears that Dr. L. White, since the commencement of this action, has acted as the physician of Mrs. Macfie, and has been and is now on friendly terms with her. I am also satisfied that Mr. Johnston has no personal ill will against Mrs. Macfie, and has heretofore been upon friendly terms with her, and that he can and will act with entire impartiality as between her and the plaintiffs. It is, moreover, impossible for me to see how the new trastees, if they were so disposed, could do any injustice to Mrs. Macfie. The judgment entered herein adjudicates that each of the plaintiffs and Mrs. Macfie have equal rights to the trust fund, both principal and interest, and that, while the trustees have a certain discretion as to the amount which they will pay over to the cestuis que trustent from time to time, whatever sum, either of principal or interest, is paid over, must be divided equally between the plaintiffs and Mrs. Macfie. The new trustees, therefore, cannot, if they were so disposed, under the terms of the judgment, discriminate in any way against Mrs. Macfie, and I see no reason why either of them should be removed. The motion will be denied, without costs, and the order will be settled on notice. Motion denied, without costs.