Title: Merchants National Bank of Mobile v. Cowley
Citation: 89 So. 2d 616
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: May 10, 1956

89 So. 2d 616 (1956)
The MERCHANTS NATIONAL BANK OF MOBILE, As Trustee,
v.
Loyd COWLEY and Lucille Sutton, As Executors, et al.
1 Div. 588.

Supreme Court of Alabama.
May 10, 1956.
Rehearing Denied October 4, 1956.
*617 Vickers &amp; Thornton, Mobile, for appellant.
Sidney J. Gray, Mobile, for appellees.
GOODWYN, Justice.
This is an appeal by the Merchants National Bank of Mobile, as trustee, from a final decree rendered by the Circuit Court of Mobile County, in equity, in a declaratory judgment proceeding brought by said Bank, as trustee, against Loyd Cowley and Lucille Sutton, as executors of the will of Norma S. Cowley, deceased, Loyd Cowley, Janeillen Cowley and Rosemary Cowley (the younger).
The questions presented are:
I. Whether the property and assets devised and bequeathed to Norma S. Cowley by the will of her father, Lee E. Sutton, deceased, passed, on her death, to the beneficiaries named in a trust agreement originally entered into by Norma S. Cowley and said Bank, as trustee, on June 15, 1949, and amended on December 10th and 13th, 1949, and "restated" on March 13, 1952, and amended on November 24, 1952, or to the residuary devisees and legatees named in her will dated December 13, 1949, as modified by a codicil on May 3, 1952. The trial court held the residuary devisees and legatees under the will to be entitled to the property, which action appellant assigns as error.
II. Whether said Bank, as trustee, should be required to pay any part of the fee of the guardian ad litem appointed by the court to represent Janeillen Cowley and *618 Rosemary Cowley (the younger), minor beneficiaries under the will of Norma S. Cowley, deceased. The trial court decreed that "the costs and expenses of this proceeding, including a reasonable fee for the guardian ad litem for the minors Janeillen Cowley and Rosemary Cowley, the younger, be * * * taxed one-half against the Merchants National Bank of Mobile, as trustee, and one-half against the estate of Norma S. Cowley, deceased." Appellant assigns as error the taxing against it of one-half of the guardian ad litem's fee.
On June 15, 1949, Norma S. Cowley executed a trust agreement with the Merchants National Bank of Mobile naming the Bank as trustee and creating a living trust providing for payments to the grantor so long as she may live or "until the trust shall have been revoked or the corpus shall have been consumed; as hereinafter provided for", and naming beneficiaries of the trust on her death. The trust agreement makes provision for the placing of additional property in the corpus of the trust fund, under and subject to the terms of the trust agreement. The trust agreement also contains the following provisions:
Attached to the trust agreement, and made a part thereof, is a schedule and receipt, denominated Schedule "A" and identified by the signatures of the parties, which lists the items of property delivered to and to be held and administered by the Bank under the trust agreement. This list consists only of personal property.
On September 28, 1949, Lee E. Sutton, the father of Norma S. Cowley, died leaving a last will and testament which was duly probated in the Probate Court of Mobile County, by the terms of which he devised and bequeathed certain real and personal property to Norma S. Cowley.
On December 10, 1949, Norma S. Cowley executed the following instrument:
On December 13, 1949, Norma S. Cowley and the Bank executed an amendment to the trust indenture making changes in tractional shares of the trust estate to go to certain of the beneficiaries. (Article V of the trust indenture provides for disposition of the remaining net corpus of the trust estate upon the grantor's death. Clause (a) of Article V provides for distribution of fractional shares to certain named beneficiaries. The amendment is of Clause (a).)
Also on December 13, 1949, Norma S. Cowley executed her last will and testament, containing the following residuary clause:
On March 13, 1952, Norma S. Cowley and the Bank entered into an agreement reciting the following:
On May 3, 1952, Norma S. Cowley executed a codicil to her will of December 13, 1949, by which she revoked and cancelled Item III thereof and substituted in its place the following:
On November 24, 1952, an amendment of the restated trust agreement was executed by the grantor and the Bank. This amendment recites the following:
Norma S. Cowley died on January 5, 1953, and her last will and testament and codicil thereto were duly admitted to probate in the Probate Court of Mobile County.
The question presented, in the final analysis, is whether Norma S. Cowley's interest in her father's estate is a part of the property subject to distribution under the terms of her restated trust indenture, as amended, or is a part of her general estate and, as such, distributable to the beneficiaries named in her last will and testament, as changed by her codicil.
The position taken by the Bank is that the original trust agreement, as amended, was not revoked by the restated agreement and that hence Mrs. Cowley's interest in her father's estate was not withdrawn from the trust; this for the reason that the method for revocation or withdrawal, as prescribed in the original trust indenture, was not followed. It is further insisted that the restated trust agreement shows on its face that the grantor did not revoke the original trust agreement, as amended; that the original trust agreement and the restated trust agreement are not clear and unambiguous on their faces and that, therefore, parol testimony was admissible to determine the grantor's intention. Over appellee's objection testimony was offered of two attorneys who attended to Mrs. Cowley's affairs and who drew the several instruments here involved. Their testimony was to the effect that Mrs. Cowley had no intention of withdrawing her interest in her father's estate from the operation of the trust agreement.
The position taken by appellees is that the original trust agreement was revoked by the restated agreement and that the restated agreement, as amended, constituted the entire trust agreement; that when the restated agreement was executed the legal and equitable title to the property held by the Bank, as trustee, under the original *622 trust agreement, as amended, and left out of the restated agreement, merged in Mrs. Cowley and that the trust was thereby terminated as to that property. It is further insisted that the restated trust agreement is clear and unambiguous and that parol testimony as to the grantor's intention should not be considered.
The trial court held that the trust agreement executed on March 13, 1952, as amended, constituted the full and complete agreement between the parties and that the "prior trust agreement" entered into on June 15, 1949, as added to and amended, was effectively revoked by the 1952 agreement. It was further held that the 1952 agreement is not of ambiguous or doubtful import; that none of the property or assets which Norma S. Cowley received or would be entitled to receive under the will of her father was subject to the 1952 trust agreement; and that such property and assets passed under the residuary clause of Mrs. Cowley's will and codicil thereto. We find no error in so holding.
There seems to be no question that the settlor of a trust, "if he desires to do so, and expresses his intention in the trust instrument or in other appropriate way, * * * may retain in himself a power to change the terms of the trust in general or in one or more particular ways specified, as with regard to the names and shares of the cestuis, the personnel of the trusteeship, or the property to be subject to the trust. * * * So likewise the settlor may by express provision vest in himself a power to revoke or cancel the trust at will, or on the happening of a certain contingency." Bogert, Trusts and Trustees, Vol. 4, Part 2, § 994, pp. 441, 442.
It is further established as a general proposition that where the settlor reserves a power to revoke the trust in a particular manner, he can revoke it only in that manner. Thus if he reserves power to revoke by a notice in writing to the trustee, he cannot revoke without such notice. Scott on Trusts, Vol. 3, § 330.8, p. 1805; Bogert, Trusts and Trustees, Vol. 4, Part 2, § 996, p. 459; 89 C.J.S., Trusts, § 89, p. 913. But it has been held, and with good reason, that a provision for notice in writing to the trustee is for the benefit of the trustee and may be waived by the trustee. Wade v. McKeown, 193 Okl. 415, 145 P.2d 951, 954; Miller v. Exchange National Bank, 183 Okl. 114, 80 P.2d 209; St. Louis Union Trust Co. v. Dudley, Mo.App., 162 S.W.2d 290, 293, 295; Security Trust Co. v. Spruance, 20 Del.Ch. 195, 174 A. 285, 288; Annotation 131 A.L.R. 468, 469; Scott on Trusts, Vol. 3, § 330.8, n. 1, Cumulative Pocket Supplement; 89 C.J.S., Trusts, § 91, p. 919. And our view is that the requirement of notice in the 1949 trust agreement was for the benefit of the trustee Bank which it waived by entering into the 1952 agreement. It is further our view that the execution of the 1952 agreement constituted an effective revocation of the 1949 agreement, as amended.
In the final analysis, the only purpose to be served by the notice in writing would have been to evidence the settlor's intention to revoke, a power expressly reserved to her in the trust instrument. And this power rested with her alone, the only contingency being the provision for thirty days' written notice to the trustee. Obviously, it seems to us, this notice was for the benefit of the trustee to give it the right, if it should elect so to do, to postpone revocation of the trust for a maximum period of thirty days. Being for its benefit there seems no reason why it could not waive the requirement. In Miller v. Exchange National Bank, supra, it was held that a requirement of thirty days' written notice to the trustee and the payment of a $25 fee were solely for the benefit of the trustee and could be waived. As there stated [183 Okl. 114, 80 P.2d 211]:
It seems to us that the language of the 1952 agreement clearly shows that it was considered by the parties as superseding the prior existing agreement. We see no way of avoiding the effect of the following recitals in the 1952 agreement:
How can we say that this 1952 agreement is but an amendment of the 1949 agreement, as amended? The 1952 agreement is in itself a complete entity. Although it gives powers previously given and imposes duties previously imposed, it embodies all the terms and conditions of a new trust.
To effectuate a revocation it was not essential to recite in the later instrument that the prior instrument of trust was thereby "revoked". From Restatement, Trusts, § 330, Comment i, p. 993, is the following:
From the same authority, § 345, Comment a, p. 1070, is the following:
See, also, Bogert, Trusts and Trustees, Vol. 4, Part 2, § 996, pp. 463, 466; Capron v. Luchars, 110 N.J.Eq. 338, 160 A. 83, affirmed 112 N.J.Eq. 373, 164 A. 447; 54 Am. Jur., Trusts, § 73, p. 76; 89 C.J.S., Trusts, § 88, p. 908.
From 54 Am.Jur., Trusts, § 73, p. 76, supra, is the following:
The following is from 89 C.J.S., Trusts, § 88, p. 908, supra:
A further insistence by appellant is that the 1952 agreement is not clear and unambiguous, thus making parol evidence admissible to show that Mrs. Cowley did not intend to withdraw the interest in her father's estate from the operation of the 1952 agreement. The ambiguity insisted upon is that the "documents" are not clear in that they make contradictory statements. In its brief appellant says:
In other words, appellant urges on us this: The first deed of trust deals with the Sutton assets. The second does not deal with these assets. Therefore, the second deed is ambiguous. We are unable to follow this argument. As stated in Birmingham Trust &amp; Savings Co. v. Cannon, 204 Ala. 336, 342, 85 So. 768, 773:
See, also, Ingalls v. Ingalls, 256 Ala. 321, 330, 54 So. 2d 296; Hawkins v. Tanner, 243 Ala. 641, 646, 11 So. 2d 351; Hoglan v. Moore, 219 Ala. 497, 501, 122 So. 824; McGhee v. Alexander, 104 Ala. 116, 121, 16 So. 148. In 32 C.J.S., Evidence, § 960, pp. 903-904, the rule is stated as follows:
Patently, it seems to us, the 1952 agreement is clear and unambiguous. Being so, oral testimony varying its terms cannot be considered.
II.
We come now to appellant's contention that it should not have been taxed with one-half of the fee allowed the guardian ad litem which was included in the costs, *625 one-half of the costs being taxed against the appellant and one-half against Mrs. Cowley's estate. Under the provisions of Code 1940, Tit. 7, § 180, guardian ad litem fees are to be taxed as a part of the costs. Since this is a declaratory judgment proceeding, the apportionment of costs is subject to the provisions of Code 1940, Tit. 7, § 165, as follows:
Also applicable is Equity Rule 112, Code 1940, Tit. 7, Appendix, which, in pertinent part, is as follows:
In referring to Equity Rule 112, supra, it was stated in Dozier v. Payne, 244 Ala. 476, 477, 14 So. 2d 376, 377, as follows:
In Thompson v. Bryant, 251 Ala. 566, 569, 38 So. 2d 590, 593, it is stated as follows:
We cannot say that there was an improper exercise of discretion by the trial court in taxing the costs equally against each trust estate. Furthermore, the usual rule is to tax the costs in favor of the prevailing party, Dozier v. Payne, supra; Martin v. Carroll, 259 Ala. 670, 675, 68 So. 2d 721, which, if applied to this case, would have called for taxing all of the costs against appellant. We see no basis for complaint by appellant in being taxed with only one-half of the costs.
It follows from what we have said that the decree of the trial court is due to be affirmed. So ordered.
Affirmed.
LIVINGSTON, C. J., and SIMPSON and SPANN, JJ., concur.