Court Opinion

ID: 3860231
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:48:20.676694+00
Date Added: 2024-06-11T13:35:16.429674
License: Public Domain

Argued April 11, 1923.
The question is whether a trustee who has exercised testamentary authority to pay out of corpus, may arbitrarily charge such payments to income. The trustee complains that the court sustained exceptions to his account of February 3, 1922, and requires him to file a supplemental account charging the corpus with amounts paid to the beneficiary at the rate of $25 a month from July, 1918, to December 1, 1921. In 1918, acting according to the will, he had decided the beneficiary should receive such sums. In his letters sending the checks to the beneficiary's attorney, he designated some of the payments as principal, while others were sent without designation as principal or income; all were paid in circumstances justifying the beneficiary in believing he was receiving part of the principal in addition to income. No notice was given that the trustee had changed his mind and would now charge all those payments to income; that fact may only be inferred from the account. The *Page 44 
dispute is solely between him and the life-beneficiary. Has he shown any legal reason to permit such radical change in the substance, form and effect of his accounting?
The trust was created by will as follows: "The one-third part of my residuary estate hereinbefore bequeathed unto T.J. Irvine, my brother...... I now give, devise and bequeath to my executor hereafter named in trust for said T.J. Irvine; the same to be invested in good securities and the interest to be paid to the said T.J. Irvine by my said executor, either annually or semiannually as can be best done by reason of the investment which shall be made. I also direct, authorize and empower my said executor as trustee for my said brother T.J. Irvine to, from time to time, as his discretion may warrant, to give to my said brother, T.J. Irvine such part or portions of the principal sum of such devise as may be necessary, if necessary, in addition to the interest or income as may be necessary for his comfortable support and maintenance, it being my intention not to limit my executor to payment simply of the interest on this bequest to my brother, but to also if he in his discretion deems it wise and proper to take from time to time such part or parts of the principal and pay it to my brother for his support and maintenance, — any portion of the same remaining at the death of the said T.J. Irvine to be paid to Alice Unruh above named." Alice Unruh is the daughter of T.J. Irvine.
Irvine was 87 years old when the evidence was taken, feeble and decrepit, requiring crutches to move about; he had been a farmer, and, with his son, lived on a farm in which he had a life estate. For some years prior to this suit, there had been disputes concerning the trust, between him and the trustee, an attorney-at-law, — and his grievances had foundation. The income was not paid as the will directed, — in 1917, for example, only $100 was paid, though much more was received. He was obliged to employ counsel to collect the income. It seems the *Page 45 
bulk of the corpus was in an unsecured loan to appellant as executor of his mother's estate, and appellee sued to obtain security. In 1918, he filed a petition, not printed in this record, asking for an allowance from the corpus, and, appellant's brief states, containing "scandalous matter." On June 30, 1918, the parties agreed, among other things, that Irvine should withdraw that petition and appellant should pay to him $25 a month out of the principal of the trust. That proceeding appears to have been at issue until November, 1921, when it was discontinued and the present suit was begun (a) to require the trustee to file an account, (b) to pay the income and (c) "such portion of the corpus ...... as will suitably maintain and support your petitioner as directed by the will......"
Pursuant thereto, on February 3, 1922, an account of receipts of income and payments to Irvine from June, 1916, to February, 1922, was filed, showing an alleged over-payment of income of $199.32 and showing no payment of any part of the principal. Irvine filed exceptions denying the accuracy of the account. That issue was tried in the court below and resulted in the challenged decree. It goes no further than has been stated and relates only to payments out of corpus made prior to December, 1921.
The trustee made no offer to show that he was deceived about the necessities of the beneficiary, in deciding in 1918, that in the light of those necessities, a wise exercise of discretion warranted or required the proposed payments out of principal thereafter actually made; in the absence of such showing there is no case. If, as his counsel now suggests, his decision was influenced by the beneficiary's promise (unperformed) to withdraw the petition of 1918, a sufficient reply is that the beneficiary's necessities were controlling, and as his own decision to pay out of corpus was, and until withdrawn, remained a determination of that fact, its effect may not be nullified by the collateral dispute *Page 46 
concerning the withdrawal of a petition said to contain scandalous matter.
We may add that the record contains evidence to support the conclusion of the court below that during the period under discussion Irvine's necessities were such as to justify the trustee in deciding, and in adhering to the decision, that Irvine should receive the payments made out of corpus.
The appeal is dismissed, costs to be paid out of the corpus of the trust.