Court Opinion

ID: 9779009
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:32:54.018005+00
Date Added: 2024-06-11T11:23:42.898001
License: Public Domain

Prewitt, Justice
(concurring).
The Chancellor found for Harvey’s and the Court of Appeals reversed, upholding the lease of Cain-Sloan, Incorporated.
The property involved herein is located in the heart of the business district on Church Street in Nashville, and is now occupied by Harvey’s, a department store. Immediately to the East of this property is the department store of Cain-Sloan, and the controversy is between the operators of these two department establishments, the property herein involved being known as the Lebeck Building formerly used by Lebeck Brothers as a department store.
Michael S. Lebeck and his brother, Louis Lebeck, were the owners as equal tenants in common of this Lebeck property. Michael S. Lebeck devised his one-half interest in the property to trustees and directed them to lease the property and pay the net income to certain named life beneficiaries; and upon the death of the life beneficiaries, he provided that the trust should cease “and my said undivided one-half interest in said store pass in fee simple to the heirs in law of my said two sons, per stirpes'. ’ ’
Louis Lebeck devised his interest in the Lebeck property to trustees .and directed his trustees to lease the prop*181erty and pay the net income to certain named life beneficiaries ; and apon the death of the life beneficiaries, he provided that the trust should cease “and my said undivided one-half interest in the store house on Church Street, and my said lot on Broad Street, is to pass in fee simple to the heirs at law of my said three children, per stirpes. ’ ’
Herman Click and Nashville Trust Company, trustees under the Michael S. Lebeck will, and Herman Click and Daniel May, trustees under the Louis Lebeck will, entered into a lease agreement for the Lebeck Building with Cain-Sloan Company, a corporation. This lease is dated May 1,1951, and runs for a term of twenty-five years beginning January 1, 1954. The Cain-Sloan lease contains the following :
“All parties hereto, who sign this lease agreement in a fiduciary capacity, warrant that they are lawfully authorized and empowered to execute this agreement pursuant to the authority vested in them by operation of law or by the instrument or instruments creating the fiduciary relationship. ’ ’
However, even though the above provision was in the Cain-Sloan lease, the parties thereto agreed that the trustees would file .a bill in the Chancery Court of Davidson County to ascertain by a decree of that court whether the trustees had the power to execute the Cain-Sloan lease so it would be binding upon the ultimate remaindermen of the trust estates for the full lease term of twenty-five years should the trusts, or either of them, terminate before the end of the lease term.
The trustees and the competent life beneficiaries filed a bill against Morris Lebeck, a person of unsound mind and a life beneficiary under the Louis Lebeck will; the *182guardian of Morris Lebeck, the ultimate remaindermen of the trust estates, now born, who are minors; and the Cain-Sloan Company, lessee under the Cain-Sloan lease. . The primary purpose of the bill was to secure a decree declaring that the trustees had such authority so that they could bind the ultimate remaindermen of the trust estates, even though the trusts, or either of them, should terminate before the end of the lease term.
The secondary purpose of the bill was that if the court should determine that complainant trustees did not have the authority under the respective wills to execute the lease agreement, then and in that event, the court ratify the lease hereinbefore mentioned as being for the manifest interest and advantage of the life beneficiaiies of the respective testamentary trusts involved, including the ultimate remaindermen in being and those not yet in being.
Guardians ad litem were appointed for the incompetent defendants, and their defense was that the trustees did not have the power to execute the Cain-Sloan lease without court approval so as to bind their incompetent clients. The Cain-Sloan Company has the same theory of the suit that complainants have.
The Harvey Company and the incompetent defendants have the same theory of the suit, that is, that the trustees did not have any such power and authority as they undertook to exercise in the execution of the Cain-Sloan lease.
The testimony of Daniel May, one of the trustees, is as follows:
“NX' — 161 In other words it was your understanding that there was not to be a valid lease for any period of time unless the Court approved the lease?
*183“A. That was my understanding'.
“NX — 162' That’s what you intended when you executed the document?
‘ ‘A. I can see no other reason why I went to Court.
“EX — 163 That’s what you intended?
“A. Yes.”
(Also, see May’s testimony EX' — 137, 138,147, 148)
To the same import is the testimony of Mr. McNeilly, President of the Nashville Trust Company. For instance, on cross-examination, question 158, he stated with reference to submission of the matter to the Chancery Court:
“I don’t know anything about it being left out of the lease, but I know it was contemplated all the time that the lease would be submitted to the Court, Chancery Court, for approval.”
The trustees and the Cain-Sloan Company entered into a “preliminary agreement” on April 26, 1951, preparatory to the execution of the formal lease heretofore mentioned. It should be borne in mind that this preliminary agreement was entered into by the parties several days before the formal lease was executed.
This preliminary agreement provides:
“The lease agreement shall be submitted to, and approved by, the Chancery Court of Davidson County, Tennessee, and this offer is made subject to such confirmation by the Chancery Court of Davidson County, Tennessee.”
Simultaneously with the execution of the lease to Cain-Sloan Company on May 1,1951, a “collateral agreement” was executed by the parties, which provides in part as follows:
“(b) It is understood that there is a legal question as to whether or not the lease will be binding *184upon the remaindermen under the will of Louis Le-beck if Ira Mendel should predecease Morris Lebeck, and upon the remaindermen under the will of Michael S. Lebeck if Morton Lebeck should die before the termination of the lease. Under these circumstances it is agreed that the trustees, together with Ira Mendel and Morton Lebeck, will apply to a court of competent jurisdiction for a determination as to whether or not the trustees have authority to make said lease for twenty-five years, to be binding upon all parties, even if the trusts, or one of them, should terminate prior to the termination of the lease (unless Morris Lebeck shall have died before such determination, in which event it will be necessary to apply only as to the other half interest), and that said application will be made soon enough to afford ample time for such determination before the entry of Cain-Sloan into possession.
‘ ‘ The trustees and Morton Lebeck and Ira Mendel will have prepared and filed a bill, satisfactory to them, seeking approval of the lease agreement by a court of competent jurisdiction, which bill will seek, among other things, a determination that the trustees had the authority to execute the lease agreement, and that the lease agreement is advantageous and should be approved, and a declaration of the rights, status, and liabilities of the parties.”
So then it appears that the trustees and the parties interested fully understood that the proposed lease, or the lease 'to Cain-Sloan, would be subject to Chancery Court approval.
It should be noted, and this seems to be determinative of the question, that in the “collateral agreement” just *185quoted from that “the trustees and Morton Lebeck and Ira Mendel will have prepared and filed a hill, satisfactory to them, seeking approval of 'the lease agreement by a court of competent jurisdiction, which hill will seek, among other things, a determination that the trustees had the authority to execute the lease agreement, and that the lease agreement is advantageous and should be approved * * *”
So it is evident that the parties to the ‘ ‘ collateral agreement” not only submitted to the court the question of their power and authority to execute the lease agreement with Cain-Sloan, but whether the lease agreement would be advantageous and should be approved.
To have the court determine whether the lease agreement was advantageous to the parties (minors and incompetents) is tantamount to determining whether the lease was to the manifest interest and advantage of those under disability, and the parties by their own agreement have made the question of interest and advantage a determinative question to be submitted for decision by the court.
It is a cardinal principle of a construction of wills, deeds, leases and contracts that the entire instrument will be looked to and examined to determine the intention of the parties. McCord v. Ransom, 185 Tenn. 677, 207 S. W. (2d) 581, and cases therein cited.
There appears no doubt that the question of whether the lease executed to Cain-Sloan was for the advantage of those under disability was one of the primary objects of the bill, and the parties cannot be heard to say now that the primary question was one of power of authority and thus limit the inquiry.
“While the law of judicial estoppel is ordinarily *186applied to one who has made oath to a state of facts in a former judicial proceeding which in a later proceeding he undertakes to contradict, yet it is frequently applied, where no oath is involved, to one who undertakes to maintain inconsistent positions in a judicial proceeding.” Stamper v. Venable, 117 Tenn. 557, 97 S. W. 812; Stearns Coal & Lumber Co. v. Jamestown R. Co., 141 Tenn. 203, 206, 208 S. W. 334.
It requires no citation of authority to show that the Chancery Court has plenary and broad jurisdiction to watch over and care for the interests of minors and incompetents. When the Chancery Court has jurisdiction for one purpose it will take jurisdiction for all purposes. After the Chancery Court obtains jurisdiction of a suit for the purpose of granting some distinctive equitable relief, if the circumstances of the case permit, and all the parties in interest are brought before it, it will determine the entire controversy and award full and final relief so as to do complete justice to all the litigants and so as to bring all possible litigation over the subject matter within the compass of one judicial determination. G-ibson’s Suits in Chancery, 4th Ed., Secs. 36,. 38.
Once the jurisdiction of the Chancery Court has been invoked to obtain a judicial construction of a trust instrument and directions as to the trustee’s conduct, because of doubt as to the true meaning and intent of provisions of the instrument creating the trust, or as to the particular course which the trustees should pursue, the trustees must faithfully obey any directions which the court gives. Only in this way would he be relieved of personal liability, and a refusal or neglect to obey may *187render the trustee liable to summary punishment. Pomeroy’s Equity Jurisprudence, Yol. 4, p. 179, Sec. 1064.
Under the trust agreement and the facts of the case, it appears that the trusts would terminate before the expiration of the lease, and any lease beyond its duration is void. Bogert on Trusts and Trustees, Yol. 4, Sec. 790-791, 54 Amer. Jur., Sec. 473.
In Bogert on Trusts and Trustees, Yol. 4, Sec. 790, it was said:
“Nevertheless, the trustee may be in doubt as to the precise extent of his authority or as to the soundness of his judgment to grant a lease that may extend many years beyond the termination of the trust. To protect the trust and for his own protection, it is the duty of the trustee to consult the Court before making such a lease. ’ ’
This course should have been followed in the instant case, especially where the trustees themselves testified that ithey understood that any lease would have to be approved by the Chancery Court.
Once this case was in the Chancery Court, and that Court took jurisdiction, minors and incompetents being involved, the Chancellor considered the case with an eye to the best interests of those under disabilities, and it seems by a comparison of the offers of the two opposing parties that the Chancellor was correct in coming to the conclusion that the offer of Harvey’s was for the manifest interest and advantage of those under disabilities, and we think he was correct in his decree in ordering the trustees to accept the proposition of Harvey’s rather than the Cain-Sloan Company.
It results that the decree of the Court of Appeals should be reversed and that of the Chancellor affirmed.