Court Opinion

ID: 8517273
Source: CourtListenerOpinion
Date Created: 2022-11-23 08:52:25.214947+00
Date Added: 2024-06-11T16:51:21.486426
License: Public Domain

On Re-Hearing.
Upon re-hearing after I had decided the ease in a former opinion, upon application of counsel for the plaintiffs, a reargument was had, particularly upon the fourth proposition in the brief of counsel for plaintiffs, to-wit:
That if the will created a contingent estate as claimed by defendants, then Mrs. Agerter as trustee for that interest was clothed with a legal title, with power to sell or otherwise dispose of the property. It was claimed by .counsel for the plaintiffs •that if the interest of the. remaindermen was contingent during the life of Mrs. Agerter to be distributed at her death according to the statute of descent and distribution, there was during the life of Mrs. Agerter a trust; that she became the trustee during her lifetime of the estate and that her administrator would succeed to that trust upon her death, and that the trust would terminate only upon final distribution by her successor in the trust in accordance with the laws governing the distribution of intestate estates. It was further claimed that as such trustee, Mrs. Agerter was empowered by the law to sell the stocks involved in this case and that although she sold them without an order from any court, yet if she acted in good faith and with discretion, no person could be injuriously affected, and that her action would be valid and binding upon the remainder-men. This contention -tfms argued with a great deal of ability *522and.-force in oral argument, in addition to the statement of it-made in the brief of counsel formerly submitted. I have considered the contention with much care, but am not able to reach the conclusion that it is correct in this ease.
I am of opinion that-'Mrs. Agerter was entitled to the possession of the stock during her lifetime, and might be said to have held it in some sense -as a trustee for the contingent remainder-men, yet that she was not a trustee with general power to dispose of the estate of the remaindermen in any way that she might see fit. I do not mean to say-that she could not under any circumstances, have made- any disposition of the .stocks in her hands, nor that it would have been necessary under all circumstances to the validity of the disposition that it should have been made by an order of the court. She might under some circumstances have disposed' of it without an order of court, acting in good faith and with discretion and in the interest of the remaindermen as well as of- Lerself, She did dispose of the stock in the old company, the Lima Machine Works, exchanging it for stock in the new company, the - Lima Loeomot'ive & Machine Company, the old company going out of business and the stock in the new company being the only thing of value held by her for herself and the remaindermen, and she did that in good faith and with discretion,, and it can not-now be disturbed. It would not now be practicable or possible-to undo and set aside that exchange of stock. She might, if she had seen fit to do' so,, have sold the stock in. the old company outright for cash, and after the sale so made and after conditions had changed the sale, fairly made in the interest of herself and- the remaindermen, would be upheld, and especially would it necessarily be upheld when nothing else could be done under existing circumstances. But.I am not able to see that the contract into which she entered with the plaintiffs and which is involved in this case, can be regarded as a sale or disposal of the stock in such manner as I have described and as might be upheld under the -circumstances. When Mrs. Agerter made the exchange of stock, the stock in the new company became a part of the estata which she was entitled to hold, and''-from which she was entitled to receive- an income during hér lifetime. She did not *523undertake to sell it in her lifetime. She had not received the stock from the plaintiffs, but from the new corporation in exchange for the stock which she had held in the old corporation. If she had received the stock from the plaintiffs themselves, for considerations, making the contract in all respects binding between herself and the plaintiffs, the remaindermen might now be bound by such contract and all its terms; but without having received the stock of the new corporation from the plaintiffs she entered into a contract with them, they being also stockholders in the new corporation, by which she attempted to give them an option to purchase after her death the stock held by her for life, with the remainder to contingent remaindermen at her death, at a price which might be, and turned out to be, much less than the value of the stock at her death. I'think it clear that she undertook to bind the remaindermen after her death to permit the plaintiffs at their option to take the stock in which she should have ceased to have any interest by reason of her death, at its par value. It was this that I think was beyond her power.
Counsel for plaintiffs in argument, with much force and abih, ity, urged that if the stock had been held during the lifetime of Mrs. Agerter by some other person, as, for instance, the Union Savings Bank &'Trust Company, for the benefit of Mrs. Agerter during her life, to be distributed at her death according to the statute of descent and distribution, such trustee could ■have sold the stock in her. lifetime, binding the remaindermen, and that if it could have done that, it could have given an option for the sale of it at a fixed price after her death, which would in like manner bind the remaindermen.
With this contention I am not able to agree. Although such trustee might, under some circumstances, acting in good faith and with discretion, have sold the stock so as to bind the remaindermen, I can not think that it would have been in the power of such trustee, to have given such option so as to bind the remaindermen after the death of the life tenant, and when the're would have been nothing else to do but for the trustee to distribute the estate. The estate would have become the property of the remaindermen at the death of the life tenant, with- no *524other power in the trustee but the power to distribute it. The giving of the option was not a sale. It did not bind the plaintiffs to purchase. If this stock was not worth par, it is not likely that they would purchase. It was giving the plaintiffs an option to purchase the stock after the title in the remainder-men had become vested, regardless of their interest. The.case supposed by counsel, and it is so stated by him, assumes that the distribution of the estate after the death of the life tenant would be made by the trustee, and in. like manner it is claimed by him that in the present case, Mrs. Agerter being the trustee, the distribution should be made by the administrator of her estate.
With this contention also I am compelled to disagree. T think it clear that the remaindermen take not by descent from Mrs. Agerter, but by the terms of the will of Frederick Agerter. deceased, to such persons as should then be the legal distributees of his estate — the estate left by him — and if the remaindermen were contingent, the distribution must be made by an administrator de bonis non of the estate of Frederick Agerter, deceased. To be sure, the remaindermen are not designated by name or class in his will, but it is by his will that Mrs. Agerter took the life estate for her own lifetime, and by his will that at her death it was .to be distributed according to the laws of descent and distribution to the then proper persons; that is, that his estate was to be so distributed.
I think these distinctions between the case as it is and the contentions of counsel which I have stated, must be correct. If so, my former holding that it was not in the power of the life tenant to make a contract for the exercise of an option by the plaintiffs after her death, and after her interest had ceased, which would bind the remaindermen of the estate of Frederick Agerter, deceased, would seem to be correct. ■