Case Name: Mangan, Respondent, vs. Shea and another, Administrator, Appellants
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1914-11-17
Citations: 158 Wis. 619
Docket Number: 
Parties: Mangan, Respondent, vs. Shea and another, Administrator, Appellants.
Judges: 
Reporter: Wisconsin Reports
Volume: 158
Pages: 619–626

Head Matter:
Mangan, Respondent, vs. Shea and another, Administrator, Appellants.
October 28
November 17, 1914.
Mortgage of supposed interest of heir: Subsequent discovery of will: Payment from income of property held in trust: Equity: Circuit and county courts.
1. In the mutual belief that defendant S. had a vested interest in certain land as an heir of his deceased sister, plaintiff lent money to S., and S. gave his note therefor and a mortgage of his supposed interest in the land. Afterwards a will was discovered by which the sister left all her property to a trustee, to be converted into money and invested; and the income of the greater part thereof was to be paid by the trustee to S. There was nothing in the will to prevent S. from alienating his right to such income. In an action to charge the property in the possession of the trustee with a lien to satisfy the debt of S. to plaintiff, it is held that a court of equity may do justice between the parties, and if, as alleged, the loan was made to supply S. with the necessaries of life, which the testatrix evidently contemplated should be provided by the income of her estate, payment of the loan out of such income may be directed.
2. An equitable action in such case was properly brought in the circuit court, where complete relief could be awarded, although the trustee derived his authority from the county court.
Appeal from orders of the circuit court for Milwaukee county: W. J". Tuefee, Circuit Judge.
Affirmed.
This is an action against the defendant Jerry J. Shea and the Wisconsin Trust Company, as executor and trustee of the will of Kate Shea, deceased, to charge the property in the possession of such trustee with a lien to satisfy the demands of the plaintiff against Jerry J. Shea, and to foreclose a mortgage given by Jerry J. Shea on his interest in the lands of Kate Shea, deceased, to secure payment of $350 according to the condition of a promissory note, and for such other relief as may seem equitable.
Upon the death of one Kate Shea no original will made by her could be found, but on March 8, 1912, an unsigned carbon copy of what purported to be her last will was presented to the county court of Milwaukee county for probate by one P. H. Kearns, the father and guardian of Mary Kearns and four other children mentioned in said supposed will as residuary legatees. This copy was rejected by the court and Mr. Wilde was appointed administrator of the estate of the deceased. The deceased left as heirs at law Jerry J. Shea and Michael J. Shea, brothers, one sister, five minor children of a deceased sister, and Margaret Shea, daughter of a deceased brother. The deceased left property valued at $4,000. In February, 1913, the plaintiff loaned Jerry J. Shea $350, taking his note therefor and a mortgage as security from said Jerry J. Shea covering all of his right, title, and interest as an heir at law in and to the real estate owned by Kate Shea, deceased.
Later the original will of the deceased was found and admitted to probate on January 23, 1914. Cornelius Sullivan, named as executor, qualified on January 26th. After directing the payment of debts and naming Cornelius Sullivan as executor and trustee the will devised and bequeathed all of the property owned by her to Sullivan, with the request that he convert the same into money or interest-bearing certificates as soon as practical and hold it in trust for the following purposes:
“(A) To pay to Calvary cemetery the sum of two hundred dollars ($200), the income of which is to be rrsed for the perpetual care of the cemetery lot of my family. ,
“(B) Two hundred dollars ($200) is to be expended by my said trustee for funeral expenses of my brother Michael Shea.
“(C) The remainder of my estate is to be invested by my said trustee, and the income thereof from time to time paid to my beloved brother, Jerry J. Shea. In the event that my brother, Jerry J. Shea, becomes ill or is otherwise in great need, my said trustee may pay to him from time to time such part of the principal of my estate as in his judgment he -deems wise and necessary.
“(D) After the death of my brother, Jerry J. Shea, and after the sum of two hundred dollars ($200) has been paid to Calvary cemetery, and the sum of two hundred ($200) set aside for the funeral expenses of my brother, Michael Shea, I direct that all the rest, residue and remainder of my estate be divided equally among Mary Kearns, Ellen Kearns, Henry Kearns, Teddie Kearns and Thomas Kearns.”
The note and mortgage executed to the plaintiff became due February 25, 1914. This action was originally commenced against Jerry J. Shea and Cornelius H. Sullivan, as executor and trustee. At that time Sullivan had not come into possession of any of the property of the estate. Martin E. Wilde had not rendered his final account as administrator and was in possession thereof. Wilde was made a party defendant upon application of the plaintiff. March 30, 1914, Sullivan died and the Wisconsin Trust Company was appointed administrator with the will annexed. On May 23d an order was entered bringing in'the Wisconsin Trust Company as a party defendant.
The defendants filed separate demurrers to the amended complaint, setting up as grounds (1) defect of parties defendant by omission of Mary Kearns, Ellen Kearns, Henry Kearns,’ Teddie Kearns, and Thomas Kearns, designated as residuary legatees under the last will and testament of Kate Shea, deceased, and (2) that the amended complaint does. not state facts sufficient to constitute a cause of action.
The circuit court overruled the demurrers of the defendants and gave the defendants leave to answer the complaint, on payment of the sum of $10.
This appeal is from the orders overruling the demurrers-to the complaint and the order bringing in the Wisconsin-Trust Company, administrator with the will annexed, as a party defendant.
Eor the appellants the cause was submitted on the brief of Lorenz & Lorenz, attorneys for the Wisconsin Trust Company as administrator.
For the respondent there was a brief by Douglas J. Man-gan, attorney, and Schmitz, Wild & Gross, of counsel, and oral argument by Mr. Mangan and Mr. Robert Wild.

Opinion:
Siebeckee, J.
The appellants concede that the complaint states.a good cause of action against Jerry J. Shea for the recovery of a money judgment for the $350 with interest due the plaintiff, and hence the general demurrer was properly overruled on that ground under sec. 2649a, Stats. 1913. Nor is the exception to the order overruling the demurrer that there is a defect of parties defendant now urged before this court. The appellants, however, insist that the appeal from the order overruling the demurrer of the defendant the Wisconsin Trust Company raises the vital question in this litigation, namely, "Can the creditor of one beneficially interested in an estate or trust maintain an action against an executor or trustee to control his conduct as to the payment or application of moneys in the hands of such executor or trustee belonging to the estate of his testator ?" This proposition of the appellants in the light of the facts alleged does not include all the inquiries presented in this case. The complaint alleges the giving of the note and mortgage by the defendant Jerry J. Shea; that he actually received this-amount of money from the plaintiff at the time of the execution of the note; that the note is now due and remains wholly unpaid. It also appears from the allegation that the parties to the note believed that Jarry J. Shea had a vested interest in the real estate of Kate Shea, deceased, and that he obtained the loan from the plaintiff on the agreement that his interest in the decedent's estate was to be conveyed to the plaintiff by mortgage to secure payment of the loan. This mortgage so obtained by the plaintiff, under the circumstances, wholly fails of its purpose because the decedent by her will bequeaths all of her property to a trustee, directing him to convert it all into interest-hearing securities, pay two bequests of $200 each as directed, and dispose of the residue as follows:
"The remainder of my estate is to be invested by my said trustee, and the income thereof from time to time paid to my beloved brother, Jerry J. Shea. In the event that my said brother, Jerry J. Shea, becomes ill or is otherwise in great need, my said trustee may pay to him from time to time such part of the' principal of my estate as in his judgment he deems wise and necessary."
After the death of J erry the will directs that the rest, residue, and remainder of her estate is to be equally divided among Mary, Ellen, Henry, Teddie, and Thomas Kearns. It is obvious that Jerry J. Shea had no interest in his deceased sister's real estate which he could mortgage. Under the facts and circumstances alleged the plaintiff secured no rights under the mortgage by way of a lien on the real estate owned by Kate Shea, deceased, and hence it is of no value as a security to plaintiff for the repayment of the $350 loaned by him to J erry. Under the facts alleged the plaintiff has no grounds for a reformation of the mortgage, nor has he a right to have the mortgage declared a mortgage lien on the property described therein nor on the proceeds realized therefrom on a sale thereof. Obviously the mortgage cannot be made the basis of any relief to the plaintiff. The action has been properly commenced for recovery by the plaintiff of the $350 he loaned to Jerry J. Shea. It is alleged that these parties were misled into negotiating this loan by reason of a mutual mistake as to Jerry's interest in the real estate described therein, due to the fact that the will of Kate Shea, deceased, was not found until after the loan had been made; and it may be shown that the loan to Jerry J. Shea was made to supply him with the necessaries of life, which the decedent evidently contemplated the income of her estate should provide him, and that J erry1 s interest in this estate was intended to be used to secure payment thereof. Tbe conditions and circumstances impose pressing equitable considerations ,to have tbe court retain tbe case and exercise its equitable powers to afford tbe plaintiff sucb equitable relief as tbe facts and circumstances of tbe case will demand.
It appears that J erry J. Shea, under tbe will of Kate Sbea, bas a beneficial interest in tbe trust created by ber will. Tbe provisions of tbe will clearly direct tbe trustee to convert tbe real estate and personal property into money and invest tbe same in interest-bearing securities. Under these circumstances tbe corpus of tbe trust will be treated as one of personalty. Harrington v. Pier, 105 Wis. 485, 82 N. W. 345; Becker v. Chester, 115 Wis. 90, 91 N. W. 87, 650. It is also well recognized that a cestui que trust, entitled to tbe absolute payment of tbe income of personal property held in trust for him, may sell and transfer bis right to sucb income unless prevented from doing so by tbe conditions of tbe trust. Williams v. Smith, 117 Wis. 142, 93 N. W. 464; Lamberton v. Pereles, 87 Wis. 449, 58 N. W. 776. There is nothing in tbe terms and provisions of tbe will imposing any restriction or limitation on J erry to prevent him from alienating bis right to sucb income. Under tbe circumstances as •alleged a court of equity may deal with the situation presented in a manner that will do justice between tbe parties. If after issue is joined it appears to the court that justice requires that plaintiff should receive payment of bis loan to Jerry J. Shea out of bis beneficial interest in this trust, then tbe court can exercise its equitable powers to accomplish this end. In Williams v. Smith, supra, tbe court referred to tbe powers of a court of equity in sucb cases and declared:
"It is competent for a court of equity, acting upon tbe debtor personally, to compel him to make sucb transfer, or, in lieu thereof, to effectuate that result by its decree. Sucb transfer can be as complete and of as full effect as any the debtor could make, to vest in tbe assignee complete ownership and right to demand payment from tbe trustees, and tc hold them to liability in case they disregard his rights after proper notification and demand."
We are of the opinion that the case presented demands that the court look into the facts and circumstances of the making of the loan by the plaintiff to J erry J. Shea, and if the court finds, under the facts as they existed at the time the money was loaned, that a court of equity would have deemed them a good ground to make the loan to supply JerryJs needs as contemplated by the will, and that payment therefor should have been charged upon the income of the trust, then the court can compel a transfer of so much of the income as will be required to pay the debt. Of course the matter is one of equity, and the court must be satisfied that justice and good conscience require that such relief be granted. The right of courts to direct the application of the beneficial interest of a cestui que trust in proper cases is recognized in sec. 2091, Stats. 1913.
The appellants contend that the Wisconsin Trust Company as trustee cannot be dealt with in this matter by the circuit court, since the executor and trustee derives its authority from the county court, and relies on the authority of Williams v. Smith, supra. It suffices to point out that in this very case the circuit court's action was sustained where the executor and trustee were appointed by the county court as in this case. The court there held that a creditor of a cestui que trust had no right to maintain a creditor's suit or prosecute supplementary proceedings in circuit court against the executor and trustee to control the payment or application of moneys in their hands under authority from the county court; but it was also held that a creditor could proceed in equity in the circuit court against the debtor personally and compel satisfaction out of the income of the trust. The following cases sustain the practice of resorting to an equitable proceeding in the circuit court in such cases where its powers are required to award parties adequate and complete re lief: Lamberton v. Pereles, 87 Wis. 449, 58 N. W. 776; Willis v. Fox, 25 Wis. 646; Meyer v. Garthwaite, 92 Wis. 571, 66 N. W. 704; Hawley v. Tesch, 72 Wis. 299, 39 N. W. 483.
Giving the allegations of the complaint a liberal construction they are sufficient to entitle plaintiff to relief if the evidence adduced upon the trial sustains them in the respects indicated in the opinion.
By the Court. — The orders appealed from are affirmed.