NO. 91-351 

### IN THE SUPREME COURT OF THE STATE OF MONTANA



### IN THE MATTER OF RAYMOND W. GEORGE TRUST, SHIRLEY G. BRAGG, Trustee

APPEAL FROM: District Court of the Sixth Judicial District, In and for the County of Park, The Honorable Byron Robb, Judge presiding.

COUNSEL OF RECORD: For Appellant: Dan Yardley;Yardley & Yardley, ~ivingston, Montana John

### T. Jones;Moulton,Bellingham, Longo & Mather, Billings, Montana. Robert Baldwin; Goetz, Madden & Dunn, Bozeman,Montana. For Respondent: Joseph T. swindlehurst; Huppert & Swindlehurst, Livingston,Montana

Filed: Submitted on Briefs: March 26, 1992 Decided: May 12, 1992JusticeR. C. McDonough delivered the Opinion of the Court. Shirley

### Bragg,

### Trustee of theRaymond

### W. George Trust (Trustee Bragg) appeals from an order of the Sixth Judicial District, 

### Park County. The ~istrictCourt denied Trustee Bragglsmotion to withdraw her previously granted petition for declaration of right and authority to 

### sell real property held in the trust to Double AA Corporation (DoubleAA)

# . The court further ordered that Trustee Bragg proceed with the sale to Double AA and enjoined her from permitting logging operations on the ranch property. Intervenor, JamesW. Sievers (~ievers) 

### ,and TrusteeBragg appeal. We affirm in part and reverse in part. We will address the following issues: 

### I. Did the District Court err by granting Trustee Bragg the right and authority to sell real property held in trust? 

### I. Did the District 

### Court err by ordering Trustee Bragg to proceed with the sale to DoubleAA? 111. Did the District Court err by enjoining Trustee Bragg from permitting any logging to occur on the subject property? In addition to the issues as stated above, there is a motion before the Court to take judicial notice of admissions requested and unanswered in previous litigation involving this trust. We generally will not allow a party, Sievers as intervenor 

### in this case, to introduce additional evidence once a casehasbeenbrought for appeal. Downs v. Smyk (1979), 185 Mont. 16, 604 P.2d 307. In Sm~k, we refused to examine a deposition given in a proceeding previously decided by this 

### Court because the deposition wasextraneous to the record on appeal. Here, the admissionswe are asked to consider were filed in an action 

### inUnited StatesDistrict Courtby Sievers 

### inhis attempt to

remove 

### Bragg as Trustee. The instant case arises from 

### apetition filed by Trustee Bragg in the Sixth Judicial District Court requesting a declaration of right and authority 

### to proceed with sale of trust realproperty toDoubleAA. The requested admissions

were not considered by the trial court in thismatter and will not be considered 

### on appeal, "In 

### equity cases and 

### in matters and proceedings of 

### an equitable nature, the supreme court shall review all questions of fact arising upon the evidence 

### resented in the record..." [emphasis supplied] 53-2-204(5), MCA. Sievers' motion to take judicial notice of the requested admissions is therefore denied. Raymond W. George died in April 1974. His will, probated in the Sixth Judicial District, Park County, created a testamentary 

### trust, the corpusof which includes the real property that is the subject of this action. His widow, Olga George, was named 

### as incomebeneficiary;Raymond'schildrenwerenamed as remaindermen; and

### Maxine George, one ofRaymond'schildren,was named as trustee. Appellant, Shirley Bragg, another of Raymond's children, became successor trustee following Maxine George's death. Maxine

### 's remainder interest in the trust passed at her death to Cleto McPherson, Maxine's husband and sole heir. 

### Leo Ray George, 

### another of Raymond's children, and Cleto McPherson conveyed their remainder interest in the trust, by

### separate deeds, to intervenorJamesW. 

### Sievers. Sievers currently holds a 5/9 

### interestasbeneficiary in the remainderof the trust. Trustee Bragg initiated this action after entering an agreement with DoubleAA Corporationto sell the real propertyheld in thetrust for $l,3OO,OOO,and otherbenefits. Thecourt entered

an order granting Trustee Bragg permission to sell the trust property. Thereafter, Trustee Bragg filed a motion requesting to withdraw her petition and to cancel the sale to Double AA. The DistrictCourtdenied themotion and ordered that the saleproceed. The court further granted Double AA's motion to enjoin logging or any other waste from occurring on the property. TrusteeBragg and Sievers appeal. Despite Trustee Bragglsinitial request for court approval of sale of the subject ranch property, Bragg now contends that such sale is impermissible because it is inconsistent with the testator's intent and against the best interests of the beneficiaries. This actionwas filedpursuant to 972-35-301,MCA, 

### which provides the court equitable jurisdiction, upon application of thetrusteeor any beneficiary, toapprove discretionaryacts of the trustee. The appellants contend that a review of Raymond George's will as a whole reveals that he intended to preserve the ranch unless sale was necessary to maintain the health and maintenance of his widow, Olga. The will, and the trust instrument incorporated therein, expresslyprovidesthetrustee thepower andnecessary authority to sell the real property held in trust. However, the appellantscontend that regardless of any expressed provision granting specificpowers to the trustee, 5 72-34-130(1), MCA, mandates that a trustee:



# . . . shall act in accordance with fiduciary principles and may not act in disregard of the purposes of-the trust. The appellants rely on various references to the trust as "real property", throughout the will, as demonstrating Raymond George's intent to maintain the corpus of the trust as real property. The appellants further rely on Paragraph V (the portion of the will which creates the trust), part b of the will which provides: The Trustee may, in her sole and absolute discretion, invade theprinciple of theTrustand pay somuch thereof as may be necessary, to or for the benefit of my wife, for her health and maintenance, if all other sources of property of my wife shall be exhausted. The above language is argued to limit the sale of property to circumstances where such sale is necessary for the health and continued maintenance of Olga George. Because there is no such necessity in the instant case, it is argued that the sale isbeyond the discretionary powers of the trustee. We agree with the appellants that: The intention of the testator should control the dispositionand the intent shall Itbefound fromall parts of thewill..

# . construed in relation to each other

# . ..to form one consistent whole." Estate of Evans (1985), 217 Mont. 89, 94,704 P.2d 35, quoting In the Matter of the Estate of Erdahl (1981), 630 P.2d 230, 231, 38 St-Rep. 978, 980. However, we do not agree with the conclusion that Trustee Bragg would be acting beyond her discretion by exercising her power of sale of the property.Paragraph V, part b, quoted above, does not limit the trustee'sauthority to sell theproperty. Thewords of limitation relied on by the appellants 

### refer specifically 

### to invasion of 

### the corpus of the trust. There is no indication that Trustee Bragg intends to invade the corpusof the trust,her request ismerely to change the character of the trust investment from land to cash. The powers exercisable by the trustee include the discretion to sell the ranch or any other asset held by the trust. 

### Numerous provisions 

### of the 

### trust instrument provide clear support for sale of the real property. For example, section r of I1PowersExercisable By Trusteenprovides the trustee thepower: To sell publicly or privately, for cash or on time, without an order of the court, upon such terms and conditionsas toher shall seembest, anyproperty, real or personal, included in the estate

# ... Thebulk of the trust Iestate', as intended and created by Raymond George, is theranch property. There is no doubt that the 

### trustee

was authorized to sell the ranch consistent with her fiduciary duties. 

### We conclude

### thatTrustee

### Bragg had the rightand authority to sellthe ranch and theDistrict Court 

### is affirmed on thispoint. The District Court noted, in its original order, two issues necessary for resolution of the action filed by Trustee Bragg; whether or not Trustee Bragg 

### has the legal authority to sell the ranch (addressed above) and whether 

### or not the proposed sale to Double AA 

### is fair and equitable. The ~istrict Court found Double AA1soffer of $1,300,000,and other benefits, to be very fair and reasonable. This finding is supported by the evidence, 

### is not clearly erroneous, and 

### is therefore affirmed. 6We turn now to whether or not the District Court erred by ordering Bragg toproceed with the sale to Double

### AA. During the proceedings, the District Court specifically noted in an order that:It does not appear to the court at this point that this action on the petition to approve sale of the trust property isthepropervehicletodeterminethemerits of any claim of Double AA against the trustee and other interested persons for specific performance, breach of contract, or damages. Later, the District Court, in an effort to avoid further litigation,did in fact order specific performance of the sale. Rule 54(c) M.R.Civ.P., allows the court to grant relief to which a party is entitled even if such relief was not demanded in theparty's pleading. However, the courtmay not grant relief not specifically requested when the facts and issues necessary to support such relief have not been tried and proven at trial. smith

v. Zepp (1977), 173 Mont. 358, 567 P.2d 923. Long ago we stated that the court could grant "any relief to which theplaintiffs are entitled upon the allegations of the complaint and the 

### roof introduced at trial1'. [emphasis supplied], Merk v. Bowery Mining Co. (1904), 31 Mont. 298, 78 P. 519. This is neither a proceeding for specific performance nor an action to litigate the rightsbetween the trust and DoubleAA. No opportunity was ever provided to the parties to present evidence relative to the enforcement of the agreement. Thevalidity of the contract between the trust and Double AA and any rights of the parties resulting from the contract were not the subject of the litigation. The evidencepresented only regarded the fairnessand 7reasonableness of Double AA1soffer and the agreement that the parties entered. Whether or not any or all of the conditions of that agreement have been met such that specific performance is appropriate is beyond the scope of both the pleading and proof introduced. DoubleAA contends the court's order to proceed with the sale to Double AA was a proper exercise of its equitable supervisory authority over the internal affairs of the trust. Section 72-35- 301, MCA. 

### However, it remains that 

### any relief provided by the court must be based on evidence presented before the court. 

### The equitablequestion of specificperformance was not properly raised and litigated. Therefore, we conclude that the District Court's order to proceed with the sale

### was in error and the District Court is reversed on thispoint. The final issue for 

### our review 

### is whether or not the court erred by enjoining logging operations on the ranch. On May 29, 1991, DoubleAA applied for

### an order restrainingTrustee Bragg from logging trust property. The motion 

### was granted June 5, 1991. No hearing has ever been held regarding the injunction. Section 27-19-314, MCA, provides that an injunction issued without 

### a hearing is 

### a temporary restraining order. 

### By law, 

### a temporary restraining order expires in 10 days. 

### Section 27-19- 316(4), MCA. The District Court in its order and accompanying memorandum statedthat 

### itwas granting the injunction regardlessof whether the order strictly complies with the injunction statutes. We conclude that theDistrict Court acted beyond itsdiscretionandcontrary to the statutory mandates regarding injunctive relief. Therefore, we reverse the court and dissolve the injunction. The District Court is affirmed inpart and reversed 

### in part.