Court Opinion

ID: 3728609
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:57:04.62109+00
Date Added: 2024-06-11T09:37:23.952916
License: Public Domain

I respectfully dissent.
As explained in detail below, R. C. 5303.21 was never intended to apply generally to all estates in trust; it has a narrow and specific purpose, and the broad, unlimited interpretation *Page 61 
given the section by my brothers will play havoc with the law of trusts.
Our earlier decision in State, ex rel. Ehmann, v.Schneider (1946), 78 Ohio App. 27, did not consider the point at issue herein because it was not raised in that case. The question there was whether the Probate Court had jurisdiction over a testamentary trust to the exclusion of the Court of Common Pleas. I find it impossible to determine from the reported decision whether the trust in that case was one to which R. C. 5303.21 would apply, using the interpretation set forth, infra.
In the case sub judice, the Court of Common Pleas did not have subject matter jurisdiction to dispose of the case under R. C. 5303.21. Although no objection was made about subject matter jurisdiction in the court below or in this court, I believe that we should consider this jurisdictional defect sua sponte. SeeWellston v. Morgan (1898), 59 Ohio St. 147.
I would reverse the judgment below, but I would remand the case for further proceedings to determine whether this action may be maintained as a declaratory judgment action under R. C. Chapter 2721. As hereinafter set forth, appellee alleges, in the alternative, that the trustee abused his discretion in refusing to sell. Whether this question belongs exclusively in the Probate Division of the Court of Common Pleas, under R. C.2101.24, is a matter I would not decide on this record.
The purpose of R. C. 5303.21 is suggested by its title, "Sale of entailed and other estates." That purpose is to provide a procedure for the immediate sale and transfer of real estate where such sale and transfer would otherwise be prevented by future interest encumbrances. Such an encumbered estate might be an estate tail, a life estate, a qualified or conditional fee or other determinable interest. Briefly, the statute's genesis is based upon the public policy against restraints on alienation. Modern conveyancing does not often include the creation of such future interest encumbrances. Examples include a grant by deed or will to A for life, remainder to B; or to A, the heirs of his body and assigns forever; or to A so long as he lives in Ohio, remainder over to B, his heirs and assigns forever. These are legal life estates or legal fees in tail or conditional fees. They tie up the title of the property for a period of indefinite duration, and they are not *Page 62 
favored. In fact, the grant of an estate in tail has been converted by statute into an estate in tail in the first donee and an absolute estate in fee simple in his issue, thus eliminating the old reversion to the heirs of the original donor upon failure of issue, except where the first donee in tail dies without issue. R. C. 2131.08(A).
R. C. 5303.21 et seq. provide a method whereby the person in possession of such a limited estate, or any person claiming under him, can petition the Court of Common Pleas for a sale of the real estate; and, if the statutory guidelines are met (benefit to the present holder and no substantial injury to the others in expectancy or succession), the court may order the property sold. The proceeds will be disposed of as required in the original document creating the estate, but the statutes set forth provisions for investment of those proceeds and the appointment of trustees responsible to the court for that investment and for the management and distribution of the "estate." R. C. 5303.21 through R. C. 5303.30. A similar procedure has been available since 1859. See Nimmons v.Westfall (1877), 33 Ohio St. 213; Oyler v. Scanlan (1877),33 Ohio St. 308. Cf. Pollock v. Speidel (1867), 17 Ohio St. 439. Prior to the general statute, disentailment of lands was provided by special statutes. Carroll v. Lessee of Olmsted
(1847), 16 Ohio 251. R. C. 5303.21 et seq. set forth a detailed statutory scheme for the preservation, in substance, of the future interest even though the original land may have been sold.
The error below was that the statutory scheme was applied to an equitable life estate held in trust; however, under my interpretation of the legislative purpose of R. C. 5303.21, the statute was never intended to apply to the trust sub judice. The error was induced by the provision in R. C. 5303.21 for an action to sell property "* * * by the trustee or beneficiaries, if the estate is held in trust * * *." I maintain that any suit by trustees or beneficiaries must be limited to real estate titles held in trust so as to be inalienable for periods of indefinite duration. For instance, the grantor of an intervivos trust, or the testator in his will, might give land to T to hold in trust for A for life, expressly without power of sale during A's life, remainder over to others. Such a title falls within the class of titles intended to be subject to judicial sale under the statutory scheme. *Page 63 
The correct interpretation is that the legislature did not mean to extend the scope of R. C. 5303.21 to cover any and all trusts in which an equitable life estate or other conditional, qualified or determinable equitable interest is created. To do so would enlarge the statutory scheme far beyond its original purpose and subvert the traditional flexibility of the trust as a means of making future dispositions of property without tying up title for an indefinite period.
One of the valued rights of a property owner, long maintained under the law of trusts, is to repose his entire confidence in a trustee to hold, manage and distribute property for the benefit of others, and to define the trustee's duties and obligations. The grantor may give the trustee any guidelines for the grantor's purposes within a wide area of approved delegation, the dimensions of which have been established over the centuries. He may, for instance, give the trustee broad discretion to sell property and to invest the proceeds, broad enough to allow the trustee to do anything that might be done by an individual owner, without reference to statutory limitations, such as the necessity of a suit for authority to sell or a legal list of investments or periodic reports to a court.
None of this flexibility is available to such a trustee who is deemed subject to R. C. 5303.21 et seq. He will lose his discretion about when, to whom, or how to sell the real estate, because the court will make those decisions. The original grant of discretion will be absolutely and finally destroyed. The grantor's provisions concerning the investment of proceeds and private reports will also be tossed aside. Public reports will have to be made in contravention to the grantor's provision for private reports only.
If R. C. 5303.21 is extended so as to apply to all trusts containing a life estate or other qualified interest, irrespective of the alienability of legal title by the trustee, the law of trusts will suffer a disastrous blow. I conclude that the legislature did not intend to wreak such havoc by enacting R. C. 5303.21.
At the same time, the statute can and should apply to trusts in which the sale and transfer of real estate is denied for periods of indefinite duration, i.e., those in which the trustee is given no power of sale or is prohibited from selling the real estate. First National Bank v. Wilder (1966), 8 Ohio Misc. 43; *Page 64 Mendenhall v. Leyland (1936), 6 Ohio Opinions 47; Prysi v. Prysi
(1936), 6 Ohio Opinions 259.
A beneficiary who is aggrieved by the actions of a trustee (on the one side), or a trustee who is impeded by directions that are either too restrictive or too ambiguous to allow the trust purposes to be accomplished (on the other side), has a number of alternative remedies available. I need not make an exhaustive list of these alternatives and only suggest their range by mentioning the following: a will construction suit under R. C.2107.46 or 2721.05; a suit for mismanagement of a testamentary trust under R. C. 2101.24(D) or 2109.49; or a suit for instructions under the equitable jurisdiction of the court. The question of whether a trustee has abused the discretion granted in the original instrument may be tested in court by traditional procedures less drastic than destroying the original grant of wide discretion and substituting therefor the court's judgment.
In the instant case, the appellee sought a review of the trustee's conduct because she alleged an abuse of discretion in her complaint and asked for rectification of that abuse. This allegation raises entirely different issues than those considered by the majority in its misapplication of R. C. 5303.21. Accordingly, the cause should be remanded for consideration of the issue of abuse of discretion and for consideration of other alternative remedies.
The single assignment of error has merit, in my opinion, insofar as it claims that the judgment below was contrary to law, because the trial court did not have jurisdiction for its final order under R. C. 5303.21. I would reverse that judgment and remand this cause for further proceedings. *Page 65