Court Opinion

ID: 9768743
Source: CourtListenerOpinion
Date Created: 2023-08-29 13:46:44.732557+00
Date Added: 2024-06-11T07:30:44.158624
License: Public Domain

George Rose Smith, Justice. James W. Dunlap, at his death in 1957, was a resident of Faulkner county, where Ms will was probated. Two-tbirds of bis estate, consisting of lands in WMte and Faulkner counties, was left to tbe appellant as trustee, with directions that he pay $150 a month to the appellee, Dunlap’s widow, during her lifetime, with remainder to other beneficiaries. The will provided that in the event of “unusual economic inflation, it is my desire that the Chancery Court shall have authority to adjust the amount of income. . . to he turned over monthly to Nina P. Dunlap.” In 1967 Mrs. Dunlap filed this proceeding in the Faulkner Chancery Court, asserting that as a result of inflation her payments should he increased to $300 a month. The trustee, who resides in Lonoke county and was served with a summons in Pulaski county, questioned the venue and also defended the case on its merits. After a hearing the chancellor held (a) that he had jurisdiction, because Dunlap’s estate had been administered in Faulkner county, (b) that the payments should be increased to $200, and (c) that the trustee should file in the Faulkner Chancery Court proceeding a copy of the will and an inventory of the trust property and should thereafter submit annual accountings for the court’s approval. By direct appeal the trustee questions all three rulings; by cross appeal Mrs. Dunlap insists that her payments should be fixed at $300 a month. (a) We do not agree with the chancellor’s conclusion that the venue was properly laid in Faulkner county. Yenue is governed by statute. This is not a local action within Ark. Stat. Ann. § 27-601 (Repl. 1962), because it does not involve the title to the trust realty. Nor is there any statutory basis for holding that merely because the trust was created by a will probated in the Faulkner Probate Court some ten years earlier, the Faulkner Chancery Court thereby inherited jurisdiction of tMs suit. The chancery court and the probate court are separate tribunals, each having its own jurisdiction. Ark. Const., Amendment 24; Lewis v. Smith, 198 Ark. 244, 129 S. W. 2d 229 (1939). Neither court derives its jurisdiction from the other. If the testator had expressed a desire that the Faulkner Chancery Court should have authority to adjust the trust income, it might he said that the appellant agreed to that venue by accepting the appointment as trustee. But the testator referred merely to “the Chancery Court.” Some other chancery court might have proved to be the right forum — if, for example, all the interested persons were residents of another county. By elimination we conclude that this proceeding is a transitory action that should have been brought in the county where the defendant trustee resided or was summoned. Ark. Stat. Ann. § 27-613. With respect, however, to this particular case, as distinguished from others that ,may arise later on, we agree with the appellee’s contention that the trustee waived his objection to the venue. He first appeared specially to file a motion to quash the service, which was overruled. He then filed an answer in which he attempted to preserve his special appearance. The trouble is that he included this request for affirmative relief: ‘ ‘ Defendant further pleads by way of his answer that his fees as trustee should be made current and the court should fix a reasonable attorney’s fee to be paid from the trust estate as costs in defending this action.” In Federal Land Bank of St. Louis v. Gladish, 176 Ark. 267, 2 S. W. 2d 696 (1928), we explained why a demand for affirmative relief enters one’s appearance: “But one cannot come into court, assert a claim, ask the court for affirmative relief, and then, when there is an adverse judgment, claim that the court had no jurisdiction over his person. If this could be done, the appellant would have the opportunity and advantage of prosecuting its claim and, in case it recovered judgment, it could collect and at the same time take no chances of a judgment against itself.” In that case we were referring to jurisdiction of the person, which is what is involved here. A defeat of venue goes to jurisdiction of the person and therefore may be waived. Gland-O-Lac Co. v. Greekmore, 280 Ark. 919, 327 S. W. 2d 558 (1959). That is manifestly the right view, there being no sound reason why a defendant should not be at liberty to enter his appearance and try the case in a county other than the one designated by the venue laws. The point is not argued, but we have not overlooked the possibility that in some situations a defendant might, as a practical matter, be compelled to ask affirmative relief to avoid the risk of losing his rights under the statute that makes the assertion of a counterclaim mandatory. Ark. Stat. Ann. § 27-1121; Shrieves v. Yarbrough, 220 Ark. 256, 247 S. W. 2d 193 (1952). We do not reach that question here, because the trustee’s request that his fees be made current was not a proper counterclaim against the life beneficiary of the trust. Such a request involves primarily the trust property, as the beneficiaries are not personally liable for expenses of the trust. Restatement, Trusts (2d), § 249 (1959). The beneficiaries of the remainder interest in the trust should have been brought into the case if the trustee’s compensation was to be determined and paid from the trust assets. Hence, for want of all proper parties, the trustee’s failure to ask that his fees be fixed in this proceeding would not have precluded him from seeking that relief at a later date. It is therefore evident that the filing of the appellant’s request for affirmative relief was not mandatory under the counterclaim statute. (Even though the request was later withdrawn, it was effective as an entry of the trustee’s appearance.) (b) The extent to which economic inflation called for an increase in the monthly payments to the testator’s widow was a question of fact in the court below. The trustee relied upon the Government’s cost-of-living figures to show that the increase had been only 18.1% since the testator’s death. The appellee’s proof would have supported much greater liberality in the award. Much of her testimony, however, went to show that, disregarding her other sources of income, she is unable to live on less than $300 a month. That is not the test, the issue being the extent to which economic inflation demands an increase in the monthly allowance. On conflicting proof we cannot say that the chancellor’s decision was against the weight of the evidence. (c) The chancellor, on his own initiative, decided to supervise the administration of the trust from now on. Had the trustee requested such supervision of his stewardship, the court’s action would have been proper. Restatement, supra, % 260. But no such request was made. Judicial supervision of a trust unavoidably involves added expense in court costs and attorneys’ fees. In the absence of a direction by the creator of the trust that it be so supervised and of any peculiar facts suggesting the desirability of such judicial scrutiny, we are of the,opinion that the issue should not be raised by the court on its own motion, however desirable the court may think that course to be. True, the appellee now asks that the court’s directive be upheld, but she did not establish even a hint of misconduct on the trustee’s part that might call for an annual accounting’ in the chancery coiurt. We are of the opinion that the decree should be modified to delete the directive that in effect domesticates the trust in Faulkner county. As so modified the decree is affirmed. Fogleman AND Byed, JJ., dissent.