Present: All the Justices 

GEORGE B. LITTLE, TRUSTEE 

 OPINION BY 

v. Record No. 941475 CHIEF JUSTICE HARRY L. CARRICO 

 June 9, 1995 

WILLIAM S. WARD, JR., ET AL. 

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND 

Melvin R. Hughes, Jr., Judge 

 This appeal is from an order removing George B. Little 

(Little) and Robert L. Freed (Freed) as trustees of a trust 

because hostility developed between them. Finding that the trial 

court erred in removing George B. Little, we will reverse. 

 Anne L. Ward (Mrs. Ward) executed the trust agreement on 

December 30, 1976, and funded the trust with shares of stock she 

owned in The Little Oil Company, Incorporated, of Richmond (Little 

Oil). In creating the trust, Mrs. Ward had three purposes in 

mind, (1) to remove the stock from her gross estate in order to 

achieve substantial savings in estate taxes, (2) to provide 

security for her husband, William S. Ward, Sr., one of the trust's 

beneficiaries whose affliction with alcoholism caused serious 

financial problems, and (3) to provide for her children, William 

S. Ward, Jr., and Beverly Lewis Ward, the trust's other 

beneficiaries. 

 Article Seven of the trust agreement is central to the issues 

involved in the case. It provides as follows: 

 This trust is irrevocable and the Grantor does 

hereby expressly relinquish all right, whether acting 

individually or in conjunction with others, to alter, 

amend, revoke, or terminate this Agreement, but the 

Grantor expressly reserves the right to add additional 

property acceptable to the Trustee of any nature 

whatsoever to the principal of this trust. 
 In the trust agreement, Mrs. Ward named Little, a Richmond 

attorney, as trustee. However, in the introductory clause of the 

agreement, Little's name was followed by a blank space for the 

naming of a co-trustee. Blank spaces were provided for the cotrustee's name in two other places in the body of the document, 

and there was an extra signature line and a third notarial 

certificate included at the end. Little explained on the witness 

stand that he provided the blank spaces when he prepared the 

document because Mrs. Ward consistently named two persons in other 

documents he had prepared for her. 

 Little testified further that although he and Mrs. Ward 

discussed the naming of a co-trustee on a number of occasions 

after she executed the agreement and he delayed executing it for 

three months to give her time to name a co-trustee, she finally 

told him he should act as sole trustee, and he signed the 

agreement on March 24, 1977. Mrs. Ward testified, however, that 

she "didn't trust [Little] to be sole trustee" and that when she 

left his office after she executed the trust agreement, she 

understood she had "the ability to fill in that blank." 

 Ten years later, in February 1987, Mrs. Ward telephoned 

Freed, a Richmond attorney who then represented both Mrs. Ward and 

Little Oil, of which she was president. Mrs. Ward told Freed the 

company was preparing to pay its annual dividend, and she 

instructed him to "figure out some way" to avoid sending Little 

the dividends on the stock in the trust, amounting to some $9,000. 

 Freed "got the trust agreement out and focused on the blank 

in the document." He also did some research and found no cases 
either supporting Mrs. Ward's position or prohibiting her from 

appointing a co-trustee. Deciding that Mrs. Ward "had retained 

the right to complete the blank," Freed "advised [Mrs. Ward] of 

the risk of [filling in the blank,] agreed that [he] would serve 

as a co-trustee of the trust, . . . agreed that [he] would accept 

the funds from Little Oil Company," and secured Mrs. Ward's 

agreement to indemnify him.1 However, neither Freed nor Mrs. Ward 

informed Little of Freed's purported appointment as co-trustee. 

 

 1Mrs. Ward never filled in any of the blank spaces in the 

trust agreement. Apparently, Freed was content with her oral 

appointment of him as co-trustee. 

 For more than three years, Freed periodically received checks 

from Little Oil, representing payments of dividends on the stock 

held in the trust. Freed deposited the checks in an account he 

opened as "Escrow Agent" in a local bank but neither notified 

Little of the existence of the account nor reported the sums 

received to the Internal Revenue Service or Virginia tax 

authorities. 

 Finally, on March 23, 1990, realizing he was in "a dilemma 

because [he] had not reported [the dividends and knew Little could 

not have reported them] on any trust income tax return," Freed 

sent bank "summaries" to the certified public accountant Little 

used to prepare tax returns for the trust. Little immediately 

wrote Freed and demanded that he turn the funds over to Little. 

Freed refused the demand. 

 Meanwhile, on December 23, 1986, Mrs. Ward and the three 

beneficiaries of the trust, with Freed as their counsel, filed a 
petition against Little, as trustee, alleging that, due to recent 

changes in federal and state tax laws, the shareholders of Little 

Oil had resolved that the company "should elect [Subchapter] S 

Corporation status pursuant to the provisions of the Internal 

Revenue Code on or before December 31, 1986." The petition 

alleged further that Little had refused to terminate the trust, to 

distribute the shares of the corporation to the beneficiaries, or 

to resign as trustee and appoint a successor trustee so the 

corporation could elect Subchapter S status before December 31, 

1986. 

 The petition prayed that the court order Little to distribute 

to the beneficiaries the shares he held in trust, order that the 

trust be terminated, or order Little to resign as trustee and 

appoint Freed as successor trustee. Little filed a response 

denying that his refusal was without good cause. He also offered 

to resign as trustee in favor of "any corporate fiduciary in the 

City of Richmond," provided his successor concurred with his 

position that the trust should not be terminated because there 

were contingent beneficiaries who could not be ascertained until 

the occurrence of future events.2

 The Subchapter S issue became moot for reasons unrelated to 

the questions involved in the present case. However, the petition 

 

 2On appeal, Little stresses the point that because there were 

contingent beneficiaries who could not be ascertained until the 

occurrence of future events, it was his duty to resist the efforts 

to terminate the trust. His opponents deny there is any substance 

to the point. In view of the disposition we make of the case 

infra, we need not decide the point. 
filed by Mrs. Ward and the beneficiaries was not dismissed, and 

negotiations continued for several years concerning a successor to 

Little as trustee. Then, on July 26, 1990, after Little learned 

of the "Escrow Agent" account into which Freed had been depositing 

dividends accruing on the stock held in the trust, Little filed a 

cross-bill against Freed and his law firm seeking judgment "in an 

amount equal to the total dividends diverted . . . together with 

appropriate interest and an additional sum equal to the total of 

all penalties and interest payable to the United States Government 

and the Commonwealth of Virginia."3

 A consent order allowed the 

filing of the cross-bill. 

 Freed and his law firm filed an answer to the cross-bill on 

April 23, 1991. From this answer, Little learned for the first 

time of Freed's purported appointment as co-trustee. By order 

entered August 23, 1993, the case was continued, and Freed and his 

law firm were permitted to withdraw as counsel for the 

beneficiaries of the trust.4

 With leave of court, the beneficiaries, with new counsel, 

filed an amended petition on October 12, 1993. This petition 

sought the removal of both Little and Freed as trustees "due to 

 

 3At time of trial, the funds in Freed's "Escrow Agent" account 

amounted to "about $29,000." 

 4About this time, an incident occurred which caused friction 

between Little on the one hand and Mrs. Ward and the beneficiaries 

on the other. In a letter dated May 18, 1993, Mrs. Ward and the 

beneficiaries requested that Little pay hospital bills totalling 

some $14,000 that had been incurred for the hospitalization of 

William S. Ward, Sr. Little refused the request, taking the 

position that Mrs. Ward was responsible for the bills of her 

spouse. 
irreconcilable disagreements and conflict between the cotrustees." 

 After a hearing, in an order entered May 26, 1994, the trial 

court found that "because of the existence of the hostility and 

friction" between Little and the settlor and beneficiaries and 

between Little and Freed, "the best interests of the trust would 

be served by the removal of . . . Little and . . . Freed as 

trustees." The order removed Little and Freed, appointed The 

Tredegar Trust Company as the sole trustee, and dismissed Little's 

cross-bill. We awarded Little this appeal. 

 William S. Ward, Sr., one of the trust's beneficiaries, died 

in December, 1993. Freed, his law firm, and the surviving 

beneficiaries, William S. Ward, Jr., and Beverly Lewis Ward, have 

filed a joint brief and will be referred to hereinafter, 

collectively, as Ward.5 

 The initial question to be decided is whether Freed was 

validly appointed as co-trustee. In resolving this question, the 

crucial consideration is whether Mrs. Ward validly reserved the 

power to name a co-trustee. 

 On this point, the trial court noted in a letter opinion that 

"[t]he settlor, by terms of the trust instrument, may reserve to 

herself the power to modify or alter the trust with reference to 

the details of administration of the trust." In its order of May 

 

 5Anne L. Ward is not a party to this appeal, but she signed a 

statement at the end of the appellees' brief in opposition to the 

granting of an appeal that she agreed with the argument of 

appellees' counsel. 
26, 1994, the court stated that "the terms of the trust . . . 

permitted . . . Anne L. Ward, to preserve the power to appoint a 

second trustee to the trust instrument" and that Mrs. Ward 

"accomplished [this] by . . . appointing Robert L. Freed as cotrustee."6

 However, the court did not specify any term of the trust 

agreement that reserved the power to name a co-trustee and, 

indeed, the instrument contains no such term. Apparently, the 

court considered that Mrs. Ward's stated intent to name a cotrustee, coupled with the presence of blank spaces in the trust 

agreement, constituted a reservation of the power to name a cotrustee. 

 If this was the basis of the trial court's finding of a 

reservation of power, then the finding was in error for it is in 

contravention of Article Seven of the trust agreement. 

Restatement (Second) of Trusts § 331 (1959). Article Seven 

provides that the trust is irrevocable and prohibits any 

alteration or amendment of the agreement save to add additional 

property acceptable to the trustee. 

 Commenting on Article Seven, the trial court said in its 

letter opinion that the purpose of the Article was to prohibit "a 

change of purpose or object of the trust" and not to prevent the 

addition of a co-trustee as Mrs. Ward intended, which "did not 

 

 6On brief, Ward adopts the trial court's rationale in arguing 

that Mrs. Ward reserved the power to name a co-trustee. 

 
change the substantive provisions of the trust" but "merely 

relate[d] to its administration."7 There is nothing in the 

language of Article Seven, however, that permits so restrictive an 

application of its terms. Rather, the language is all 

encompassing, prohibitive of any alteration or amendment of the 

agreement, substantive or administrative. 

 When Little signed the trust agreement after it had been 

executed by Mrs. Ward and she had funded it with the Little Oil 

stock, the agreement became complete, its terms became fixed as 

they were then spelled out, and the trust became operative. One 

of the terms becoming fixed as then spelled out was that the trust 

would be administered by only one trustee, namely, Little, despite 

the fact that blank spaces remained in the trust agreement; once 

the trust became operative, the blank spaces became surplusage 

and, thereafter, should have been ignored.8

 Another of the terms becoming fixed as then spelled out was 

the prohibition against any alteration or amendment of the trust 

agreement. With the terms thus fixed, any filling in of blanks to 

name a co-trustee clearly would have been an alteration or 

 

 7Ward adopts the trial court's rationale in arguing that Mrs. 

Ward's appointment of a co-trustee did not violate Article Seven. 

 8Ward makes the additional argument that the presence of 

blanks in the trust agreement "where one would expect a named 

trustee" rendered the instrument ambiguous and, hence, the trial 

court properly determined that Mrs. Ward intended that the trust 

be administered jointly by two trustees. We will agree that Mrs. 

Ward had the described intent, but the fact she had such an intent 

is beside the point. The question is whether Mrs. Ward acted 

pursuant to a power reserved in the trust agreement to carry out 

her intent. And, as indicated in the text, infra, she did not act 

pursuant to any such power. 
amendment of the trust instrument in violation of Article Seven. 

See Restatement (Second) of Trusts § 331 cmt. b (1959). 

 In our opinion, Mrs. Ward did not validly reserve the power 

to appoint a co-trustee and, hence, Freed was not validly 

appointed.9 It follows that, while friction between co-trustees 

may be a valid ground for removal, May v. May, 167 U.S. 310, 320-

21 (1897), Freed never became a co-trustee, and, consequently, any 

hostility or friction that developed between him and Little could 

not constitute good cause for the removal of Little. 

 Nor could the friction that existed between Little and Mrs. 

Ward and the beneficiaries serve as good cause for removing 

Little. In the first place, the sole basis alleged in the 

beneficiaries' amended petition for removal of Little was the 

"irreconcilable disagreements and conflict between the cotrustees"; therefore, friction between Little and Mrs. Ward and 

the beneficiaries was not available to the trial court as a ground 

for removing Little. Ted Lansing Supply Co. v. Royal Aluminum & 

Constr. Corp., 221 Va. 1139, 1141, 277 S.E.2d 228, 229 (1981) (no 

court can base its judgment upon facts not alleged or upon a right 

not pleaded). Furthermore, in Virginia, "[f]riction between the 

trustee and the beneficiary is not in itself sufficient ground for 

removal [of the trustee]." Willson v. Kable, 177 Va. 668, 676, 15 

 

 9Little has been concerned throughout this case that if Mrs. 

Ward is held to have reserved the power to name a co-trustee, 

there is danger that the assets of the trust would be included in 

her gross estate with an accompanying increase in estate taxes in 

excess of $300,000. Ward says there is no basis for Little's 

concern. Because we hold that the trial court erred in finding a 

reservation of power, this issue is moot. 
S.E.2d 56, 59 (1941). 

 Accordingly, we will affirm the judgment of the trial court 

to the extent that it removed Freed as trustee but reverse it to 

the extent that it removed Little as trustee and named a new 

trustee in his place. We will dismiss with prejudice the amended 

petition insofar as it sought removal of Little as trustee and 

enter final judgment in favor of Little. We will reverse the 

dismissal of Little's cross-bill, reinstate the cross-bill, and 

remand the case for further proceedings consistent with the views 

expressed in this opinion. 

Affirmed in part,

reversed in part,

 and remanded.