Mason v. Jones — 4 Sarat. Ch. Sent. 623

Majority

p. 623

James Mason v. Jones and others, Executors, &c., of John Mason.

May 19, 20, 21 ;

June 29, 1847.

Headnote

A testator having eight children, by his will divided his estate into eight equal parts, one of which he gave to his executors in trust, to hold, manage and dispose of, as in the will directed. Out of the income, they were to pay the testator’s son J., an annuity of $2500 for life, and accumulate the surplus for his children, &c.; With “full discretionary povier to the trustees, and the survivors and survivor of them, to increasi the annuity during his life time.” Shortly after the death of the testator, the trustees increased J.’s annuity to the full amount of the income of the eighth of the estate ; and subsequently they reduced it to the $2500.

Held, that the trustees had no power to reduce the annuity, either from the amount as fixed by the will, or from the amount as increased by them.

All the parties in being, presumptively entitled to the surplus of the annuity beyond the sum fixed in the will, are necessary parties to a suit brought to compel the payment of the increased annuity.

A power conferred on trustees to increase an annuity, does not imply any authority to diminish it to its original standard.

An increase of the annuity, made intentionally, though in the belief that the increase was revocable, cannot be recalled.

The devisee of an annuity, which had been increased under a power in the will, to equal the income of the share of the estate which he would have inherited as heir, if there had been no will; filed a bill to set aside the will as violating the provisions of law against perpetuities. The will was sustained by the assistant vice-chancellor, and the heir appealed. Pending the appeal, he filed a bill against the trustees of the will, to compel the payment of the increased annuity. Held, that he was not obliged to elect between the latter suit and his appeal in the former.

After the making of the decree in September, 1845, dismissing the bill filed to set aside the will of John Mason, on the ground of the illegality of the trusts of the will, as reported in Mason v. Masopls Executors, (2 Sand. Oh. R. 432;) the complainant, James Mason, appealed from the decree to the chancellor, and that appeal was still undetermined in May, 1847.^[1]

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In November, 1845, James Mason filed the bill in this cause, against the executors and trustees of the will, to compel them to pay to him the income of one-eighth of his father’s estate, as and for his annuity under the will; they having refused to pay him more than $2500 a year, ever since March, 1840. The defendants answered, insisting on various defences, which are stated in their points and in the opinion of the court; and the cause was brought to a hearing on the bill and answer.

Reference is made to vol. 2d, page 433, for the will of the testator. It is sufficient to say here, that he left an estate of more than a million of dollars, which he devised in equal eighth parts. The par| in which James Mason had an interest, was given to the executors in trust, with various powers and directions. They were to 'pay him an annuity of $2500, and the surplus of the income of the eighth was to be accumulated for the benefit of his minor children, and until he should have children, it was to be divided between the five daughters of the testator, or their families. The will contained this clause; “ And I do hereby give to the before named trustees and the survivors and survivor of them, full discretionary power to increase the said" annuities respectively, during the life times of my said daughter, Helen Alston, and my said three sons, John Mason, Junior, James Mason and Henry Mason, but not after their respective deaths.” The executors and trustees of the will were three sons-in-law and two daughters of the testator. The daughters did not prove the will, or act as trustees.

The testator died September 26th, 1839. On the 7th of April 1840, the executors addressed a note to James Mason, to the effect that they had concluded to pay him in lieu of his annuity for the first six months, the full net income of one eighth of the estate during that period. They paid the same to him accordingly on the 26th of May, 1840 ; but ever since that period, they have refused to pay him more than at the rate of $2500, annually, which was not more than one third of the net yearly income of the eighth of the estate. James Mason was married

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before his father’s death, his wife was living, but he had never had any children. The trustees in their answer denied that it was their intention in April, 1840, to make a permanent increase of the annuity, or to exercise fully the power conferred on them in that behalf by the will.

It appeared that in the progress of the suit of Mason v. Mason's Executors, the complainant petitioned the vice-chancellor, in that suit, to have the executors directed to pay his enlarged annuity, which petition was denied. (3 Edw. Ch. R. 497.) The fact that they paid the increased annuity to the extent of the income, was stated by the executors in their answer in the suit to set aside the will.

James J. Ring, for the complainant.

I. The trust in question is an express trust of one eighth of the whole estate, to receive and apply the rents and profits for the benefit of the complainant, who is the only cestui que trust named or intended by the testator. The direction to pay $2500, per annum, is a limitation of the powers of the trustees, and not of the rights of the complainant, and the disposition of the surplus, is contingent upon the full execution of the trust already enacted. (Mason v. Mason's Executors, 2 Sand. Ch. R. 432; Gott v. Cook, 7 Paige, 536.)

II. Under this trust, the complainant is entitled to receive the whole rents and profits,unless the discretionary power vested in the trustees be exercised by them to withhold the surplus over $2500, for some good reasons connected with the welfare of the complainant. In default of the exercise of this power, or if exercised from improper motives or insufficient reasons, the court will decree the payment of the whole income to the complainant. (1 Ves. Jr. 311; 14 ibid. 434; 1 Mylne & K. 4; 8 Ves. 570; 6 Simons, 524 . 2 Ves. Jr. 632 ; 1 Rev. Stat. 723, § 60 ; 724, $ 70; 727, § 96, 97; Gott v. Cook, 7 Paige, 522; Bryan v. Knickerbacker, before the chancellor.)

III. There is no pretence by the trustees, that they have exercised their discretionary power to withhold the surplus over $2500, per annum, for any good reason connected with the welfare of the complainant. On the contrary, they admit that on the 26th day of May, 1840, they paid the whole income of

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one eighth to the complainant, and have physically withheld the surplus over $2500, per annum ever since, without the pretence of any reason whatever, except their arbitrary power.

IY. If the right of the complainant under the will, be limited to his annuity of $2500, per annum, the trustees by their first payment on the 26th May, 1840, by their note addressed to thé complainant, and by their answer in chancery, have fully enlarged his annuity to the extent of one eighth of the whole income. No power is given by the will, and none has been reserved by the trustees, to revoke this enlargement. Co. Litt. 144 ; Toml. Law Dict. 76 ; 2 Bl. Comm. 41; 1 Story’s Eq. Jur. § 171t 172, and 169 ; 1 R. S. 727, § 124; Sugd. on Powers, 245, 272; 1 Eq. Cas. Abr. 342.

Y. The pendency of a suit in which the validity of the will in question may be further litigated, cannot protect the defendants from the power of this court to compel them as trustees, to perform their duty. The will has been declared valid by a competent court, and the defendants are acting under the will as trustees, and are estopped from denying their responsibility. If the will should at any time be set aside, all payments made by the trustees, would be deemed to have been made to the complainant, in respect of his interests as heir at law.

YI. The orders set up in defendants answer, as a bar to this suit, have no application to this question. They were made in a suit in which the validity of the will, and of the authority of the defendants as trustees, was denied and litigated, and the court had no jurisdiction of the question as to their duties.

YII. The wives of the trustees, and the children of Henry Mason, are not necessary parties to the suit. They are residuary legatees, and have no interest in the specific relief sought in this suit. They have contingent and remote interests, and are fully represented by the trustees. (1 Ves. Jr. 311; 1 Turn. &. Russ. 348 ; Calvert on Parties, 11 to 13.)

In reply, Mr. Ring referred to 1 Chance on Powers, 177, 287; 4 Kent’s Comm. 337; and in reference to the necessary parties, to 3 Madd. R. 10 ; Story’s Eq. Pl. § 140, 142; 1 Vern. 261; 5 Beavan, 293; 1 Ves. & B. 550; Wigram on Disc. 75.

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M. S. Bidwell and D. Lord, for the defendants.

1. The various exceptions to the bill-, which are contained in the answer, are all well taken. 1. It is not alleged or pretended in the bill that John Mason died intestate. But, it is not averred that he made a will, or that the paper which is annexed to the bill was his last will: the statement that probate of a will was granted, is insufficient, even as to the personalty, and still more as to the realty. (Nesbitt v. Brown, Dev. Eq. Rep. 31; Lube’s Eq. Plead. 258, n. 1.) The allegation in the answer that there was a will, cannot cure this defect; especially as it is noticed and insisted upon in the answer, for the complainant must set up in his bill, a sufficient case to entitle him to relief. (Story’s Eq. Pl. 257, 264 ; Herron v. Cunningham,, 1 Iredell’s Eq. Rep. 376 ; Knox v. Smith, 4 How. U. S. Rep. 298; Jackson v. Ashton, 11 Pet. Rep. 229 .) And this case must be stated positively, and not equivocally, or in the alternative. (Story’s Eq. Pl. § 244; 3 Beavan, 284.) The complainant should, either, have averred explicitly that he died intestate, or he should have alleged that he left a will, and should have set it forth. (Story’s Eq. Pl. §. 241, 256, 257.)

2. The filing of the former bill, is a bar to this suit;' especially while the appeal on it is pending. The complainant cannot proceed with both suits at once. (1 Russ. & M. 418.)

3. The decisions of the vice-chancellor on the petitions of the complainant, are conclusive against the complainant, both as a bar to this suit, and as an authoritative and judicial opinion on the question of law involved in this case. (Murray v. Graham, 6 Paige, 624; Hoffman v. Livingston, 1 J. C. R. 211; Ray v. Converse, 3 Edw. Rep. 478 ; and 3 ibid. 497 , Mason v. Jones.)

4. The persons named in the answer, as legatees of the surplus of the annuity, are necessary parties, and the bill is fatally defective in omitting them. (Hill on Trustees, 545 ; Lewin on Trusts, 609 ; Story’s Eq. Pl. § 207; Lube on Eq. Pl. 30, 31; Calvert on Part. 2, 51, 210, 212, 218, 219; Cole v. Moore, Moor’s Rep. 806)

For these reasons, if there were no other, the bill should b®

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dismissed ; and dismissed with costs, as the objections were distinctly slated in the answer.

II. But, if these objections did not exist, the bill must be dismissed, on the ground of a want of equity in the case presented on the pleadings.

1. The complainant has no rights, except what he takes under the will.

He had no right to any part of the testator’s estate ; what was given to him was a mere boon.

2. The testator had a right to give the trustees a discretionary power, to increase the annual allowances to his sons respectively ; and this power he has given to them.

3. This trust necessarily involves the exercise of discretion' on the part of the trustees. They must, therefore, from the very nature of the trust, if they ever do exercise the power, intend to exercise it; in other words, it cannot be lawfully executed unintentionally. It would be a solecism to say that they, in the exercise of their discretion, had done an act, which they never intended to do and never thought of doing. (1 Sug. on Powers, 443, pl. 18 ; Farmer v. Martin, 2 Simons, 502.)

4. The power need not be exercised at one time only, but maybe exercised at different times. (Harvey v. Harvey, cited 2 Burr. 1144; 1 Sug. on Powers, 357, 370, pl. 30.)

5. The trustees cannot divest themselves of their trust; they cannot alienate; they cannot delegate, release or waive the trust; they are bound to perform it, with fidelity to the testator’s intentions and wishes; they must exercise their discretion. No express consent, and afortiori, no technical, or constructive, or implied consent or admission in favor of the complainant, can be a substitute for the exercise of this discretion.

6. The letter of 7th April, 1840, and the first payment, severally, did not purport to be, and were not by them intended to be, an exercise of this discretion. The time had not arrived to pay the annuity when the letter was written.

7. They have not, by any subsequent act, increased the- annuity. to the complainant. The statement in their former answer, quoted in the complainant’s bill, did not purport to be, and

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was not intended to be, such an increase; if it had not been increased by some other act, that statement did not, per se, constitute such increase.

Nor did it operate by way of admission, or estoppel, to prevent them from showing the truth, viz. that they had not increased the annuity, except uppn that one occasion ; for, in the first place, the language itself of that part of the answer, imports nothing more; the language is, that they have “ hitherto” increased it, which certainly does not imply, but on the contrary excludes the idea, that they had increased it for all time to. come. And, secondly, such estoppels are always odious and not favored even at law, much less in equity; except where ,. persons, in reliance upon them, have lost or parted with some property, rights or advantages; which is not the case here. And, thirdly, estoppels, to be binding, must be mutual, which this clearly was not. And fourthly, these trustees could not, by estoppel or otherwise, divest themselves of their discretion, or do an act to the prejudice of those, who under the will, are presumptively entitled to the surplus. (1 Pow. on Dev. 235 ; Coke Litt. 237 a, 265 b, 44 b; Ram on Assets, 84 ; 1 Sug. on Powers, 222, 340, pi. 17.) And, fifthly, it is expressly alleged in the answer by the defendants under oath, that they have not permanently or legally enlarged or increased the annuity to the complainant, which allegation must be considered to be true, not only because no replication has been filed, but also because it is responsive to the bill.

III. The case, therefere, stated in the bill, namely, that the trustees increased the complainant’s annuity to the one-eighth part of the income, is not made out; and the bill must be dismissed with costs.

IV. The question, whether the court can control the. trustees in the exercise of the discretionary power given to them by the will, does not arise in this case. If it did, it would be easy to show that the court does not possess, but disclaims such jurisdiction.

If it were, however, within its jurisdiction, the bill does not present a case, much less is a case proved by the answer, for its

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exercise. (Hill on Trustees, 66, 70, 488, 486, 489, 493, 495 ; Weller v. Weller, cited 2 Mod. Rep. 160; 1 Sugd. on Pow. 342 ; 2 ibid. 190, 191.)

Y. The complainant has no reason to complain of injustice or hardship, in being limited to an annuity of $2500. He had no right to any thing, except as the testator, of his bounty, saw fit to make a gift to him. It is evident the testator did not think it best that he should receive more than that sum, unless there should be some special reason for a larger allowance.

That he was in debt at the testator’s death, and that, (notwithstanding the large sum allowed him at the end of the first six months,) he has become still more deeply involved in pecuniary embarrassments, although he has had a clear annual income of $2500, and the possession of a farm, has had no children to support and no business engagements to meet, are facts which fully justify the apprehensions of the testator and his precautions; and which prove that the trustees could not properly, or without a violation of the testator’s probable intentions, under such circumstances, have increased again the complainant’s annuity.

have given to this case a careful examination, but want of time prevents me from expressing my views at length on this occasion.

As to the fact of the increase of the annuity to the extent of one-eighth part of the income of the estate of John Mason, the answer of these defendants in the former suit is conclusive.

Their statement now, that they did not thereby intend to make a permanent increase, or to exhaust their power in the premises, can neither alter the fact, nor diminish its consequences. They intended to increase the annuity, and probably they supposed they might diminish it the next year, and increase it again at pleasure. If they have, in this respect, mistaken the law, it cannot affect the increase thus intentionally made.

In regard to the nature of the power conferred upon the trustees, I agree with their counsel, that in its exercise they had an uncontrollable discretion. But I do not think that they could

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exercise it, by reducing as well as increasing the annual allowance.

In the first place, the testator has given to them no such power in express terms. If such were his design, I cannot but believe, that in a will so carefully framed as this is, there would have been a provision that the trustees might, from time to time, diminish as well as increase the annuities, keeping the minimum at $2500.

There is nothing in the nature of the power conferred, which requires the court, in construing the will, to declare that the trustees may, when and as they see fit, reduce the annual allowance after they have once increased it. So far from that, I think the court should refuse, except on a strictly necessary implication, to hold that the testator ever intended to place his son • under such a humiliating vassalage to his brothers-in-law. Especially, when by indulging some freak of ill-will or spleen, and reducing the annual allowance, the income of the trustees themselves would be increased. Not that I have any idea that the gentlemen acting as trustees in this case, would harbor any such feeling or motive ; but the provision which permits such a result, must be considered in arriving at the intent of the testator.

- My learned predecessor’s opinion in Mason v. Jones, 3 Edw; Ch. R. 497, was referred to as in point. The report shows that the question was not necessarily presented there; and my distinct recollection of the reliance placed upon that case by the defendants, as being decisive that the question could not be presented in the suit of Mason v. Jones, when it was before me at the final hearing, (reported as Mason v. Mason's Executors, 2 Sand. Ch. R. 432, 477,) satisfies me that it should be esteemed as no more than an obiter opinion on the question now involved. Thus viewing it, I am entirely at liberty to be governed by my clear conviction, that the power conferred by the will of Mr. Mason, does not authorize the trustees to reduce the annuities after they have once been enlarged.

Some points of minor importance were presented by the defendants counsel:

First. It is said the complainant has not admitted that there was any will in existence. As to this, I think it suffices that he

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sets forth the probate of such a will, under which he shows the trustees hold the property and administer the trusts. (See Fitzherbert v. Fitzherbert, 4 Bro. C. C. 231.)

Next, it is objected that he must elect between this suit, and Mason v. Jones, before cited, in which he sought to avoid the whole will. That suit was decided against him before this one was commenced, and his appealing from the decree, does not as yet disturb the decision that the will is in all respects valid. Another reason why it is not a case for an election of remedies, is that the complainant, if wrong in the former suit, is entitled to all which the will gives to him, and which he asks here ; and if right in that suit, he is entitled to one-eighth of the estate, both income and capital, which includes all that he asks in this bill.

Lastly, as to parties. If the defendants were correct in their ■ idea, that the will enabled them to reduce the allowance to #2500 a year, then the surplus net income of the complainant’s .eighth of the estate, belongs to several persons now in being, (and in certain contingencies may belong to others named in the answer,) who are not parties to the suit. Without advert-' ing to the latter class, there are several of the former who have vested interests in this surplus income, in case the complainant is not entitled to the whole of it. They are therefore directly interested to resist his claim: and as the trust fund consists in part of real estate, there is no doubt that they are necessary parties to the suit.

It is a proper case to permit the complainant to make them parties, and he may have leave to file a supplemental bill for that purpose, on paying the costs of the hearing.