Court Opinion

ID: 9445810
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:38:29.12663+00
Date Added: 2024-06-11T17:30:24.764136
License: Public Domain

PRETTYMAN, Circuit Judge.
This appeal is a sequel to the appeal in Walsh v. National Savings and Trust Company, decided by this court in 1956.1 The action was one for instructions brought by trustees under a trust. Our present appellant, Mary W. Walsh, contended that the trust had terminated and that she was entitled to the full corpus of the trust. Contingent remainder beneficiaries of the trust contended that the trust estate remained in existence and, under the terms of the trust, was to remain in existence until twenty years after the death of Mary W. Walsh, so long as any lineal descendant of the trustor should survive, Mary W. Walsh receiving the income for life. This court agreed with the latter contention. Thereafter the appellee remaindermen moved the District Court for an order allowing compensation from the trust for their attorneys. That court granted the motion in part, holding in a memorandum that the contingent remainder-*782men were the defenders of the life of the trust and that they bore the entire burden of the defense of the life of the trust. The court was of the opinion that under the general principle that a trust estate should bear the expenses of its administration the trust estate in the case at bar should bear the expense of reasonable counsel fees for the successful defenders of the life of the trust. This appeal followed.
We are of opinion that the view of the District Court was reasonable. The action was in substance an effort on the part of Mary W. Walsh to terminate the trust. The remaindermen who defended the trust acted not only in their own behalf but in behalf of any then-unborn lineal descendant of the trustor. So the contest was not purely a contest between two parties as to which should receive the corpus of the trust. Under the circumstances it is an equitable conclusion that the corpus of the trust should bear the costs incurred for its preservation.
In an opinion dealing with a fund created for' other members of a class solely through the operation of stare deeisis, Mr. Justice Frankfurter stated:
“Plainly the foundation for the historic practice of granting reimbursement for the costs of litigation other than the conventional taxable costs is part of the original authority of the chancellor to do equity in a particular situation. * * * As in much else that pertains to equitable jurisdiction, individualization in the exercise of a discretionary power will alone retain equity as a living system and save it from sterility.”2
 These equitable principles are applicable in suits which involve the construction of trusts.3 An attorney who creates, increases, preserves or protects a trust fund, with an accompanying benefit to all who are entitled to participate in the trust, is entitled to receive his fee from the corpus of the trust.4 On the other hand it is also true that a litigious party or one who seeks a construction in bad faith is not entitled to costs out of the corpus.5 Between these extremes lies the large body of cases which call into play the chancellor’s discretion as to whether or not some or all of the costs of litigation should be charged to the corpus of the trust. The case at bar is in this area.
We adhere to our decisions in Caine v. Payne, Abbott, Puller & Myers v. Peyser, and Thomas v. Peyser,6 holding merely that in the circumstances of the case at bar the award of attorneys’ fees out of the trust corpus was within the equitable powers of the District Court.
Affirmed.

. 97 U.S.App.D.C. 337, 231 F.2d 496.

. Sprague v. Ticonic Bank, 307 U.S. 161, 166-167, 59 S.Ct. 777, 83 L.Ed. 1184 (1939).

. In re Atwood’s Trust, 227 Minn. 495, 35 N.W.2d 736, 9 A.L.R.2d 1126 (1949). See, in particular, Annot., 9 A.L.R.2d 1132, at 1184-1189.

. Caine v. Payne, 89 U.S.App.D.C. 260, 191 E.2d 482 (1951); Abbott, Puller & Myers v. Peyser, 75 U.S.App.D.C. 162, 124 E.2d 524 (1941); Thomas v. Peyser, 73 App.D.C. 155, 118 F.2d 369 (1941).

. In re Atwood’s Trust, supra note 3; Cleveland v. Second Nat. Bank & Trust Co., 149 F.2d 466 (6th Cir.1945), certiorari denied, 326 U.S. 775, 66 S.Ct. 231, 90 L.Ed. 468 (1945).

. All supra note 4.