Court Opinion

ID: 8199565
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:23:15.926556+00
Date Added: 2024-06-11T16:40:52.512503
License: Public Domain

Fowler, J.
{dissenting). I do not disagree with what is said in the opinion of the court about trusts created by will being administered by the trustee named in the will in the state where the trust property is situated, according to the laws of that state and under the supervision of the courts of that state having jurisdiction of the administration of such trusts, when the testator so intends, after the trustee has rightfully assumed his duties as trustee. But all this to my mind is beside the instant case. A trustee under a will is not administering the trust as trustee while the trust property is in the hands of the executor. If the same person is both executor and trustee, he is administering the trust property as executor and not as trustee until he has been discharged as executor. One appointed as executor remains executor until he is discharged as such, and while he remains executor he must account as executor to the court that appointed him. The Pennsylvania Trust Company, named both as executor and trustee in the will that created the trust involved, upon whose bond as executor the respondent Surety Company is surety, was appointed executor by the county court of Washburn county. It was never discharged as executor, and it therefore remained executor up to the time it was cited by that court to account as executor. This is the established law of this state, and it has been very recently so declared. McWilliams v. Gough, 116 Wis. 576, 93 N. W. 550; Karel v. Pereles, 161 Wis. 598, 155 N. W. 152; Estate of Thompson, 212 Wis. 172, 248 N. W. 167. Under the McWilliams Case, supra, where a person named by a will as both executor and trustee is appointed by the. court as executor and later, on presentation of an account as executor, denominated his final account, the account is approved and the trust property is by the terms of the order of the court assigned to him as trustee, as is the case here, his duties as trustee do not begin until his duties.as executor are termi*119nated, and his. duties as executor are not terminated until he has qualified by filing a bond as trustee and is discharged as executor. This follows, although the title to the trust property has passed to the trustee. In the McWilliams Case the trust property wás real estate, and the title thereto passed to the trustee by the will. That the title so passed was held not to empower the named trustee to handle it as trustee until he was relieved from his duty to handle it and account for it as executor by act of the court discharging him from that duty. Thus the order of the county court, that by its terms assigned the trust property in the instant case to the Pennsylvania Trust Company as trustee, did not empower it to handle it as trustee until it was discharged as executor. In the McWilliams Case the executor was never discharged as such, and the person named as executor and trustee under the will never became empowered to act as trustee at all. Such was the situation in the Karel Case, supra. In the Thompson Case the person appointed as executor and named in the will as trustee, although his final account, so called, as executor was approved and he was formally appointed as trustee, remained executor for ten years, and was administering the trust property as executor for that period until he qualified as trustee by giving bond as trustee, after which time he was administering the trust as trustee. While he remained as executor his bond as executor bound the bondsman thereon.
It may be argued that the rule in the cases cited, that one named as both executor and trustee cannot be deemed to be acting as trustee until he is discharged as executor, rests on the fact of failure to file a bond as trustee. In the Thompson Case, supra, it is stated, page 180, that liability as executor continues until the executor gives bond as trustee and is discharged as executor, and page 182, that one named as both executor and trustee cannot discharge himself as execu*120tor merely by giving and filing a receipt as trustee. With less reason can he so discharge himself, as here, merely by heading his account upon his books as trustee instead of as executor. The fact back of the ruling, the fact that rendered the appointment as trustee nonoperative and prevented assumption of duty as trustee, was that the executor did not become discharged as executor until he had qualified as trustee. The ultimate fact that held him as executor was that he was not discharged as executor. That one named both executor and trustee under a will remains accountable as executor until the court has entered an order discharging him as executor, either expressly or by language plainly indicating intent and understanding that he stands discharged as executor, is held in Newcomb v. Williams, 50 Mass. 525; Scheffer’s Estate, 58 Minn. 29, 59 N. W. 956; Higgins’ Estate, 15 Mont. 474, 39 Pac. 506; In re Roach’s Estate, 50 Or. 179, 92 Pac 118. There was no- order of discharge by the county court in the instant case, or anything to indicate that the court intended or understood that the defendant should stand discharged as executor until he had informed the court of the transfer of the trust estate in accordance with the order entered upon the approval of the account and given a bond as trustee. Both the named trustee and the respondent bondsman understood that liability as executor continued. This is evidenced by the fact that the named trustee continued to pay premiums to the bondsman to' keep the executor’s bond in force up to the time the trust property was transferred to its successor. Thus neither of them considered that the named trustee was discharged as executor. When neither of them so understood it cannot be presumed that the county court so understood.
It is conceded that the law of this state is as above stated as applied to trust property located within the state, but it is claimed that as the instant property was located in Pennsyl*121vania, and the court found that it was the intent of the testator that the trust be administered in Pennsylvania and according to the laws thereof, that the rule stated does not here apply.
With this I do not agree. Notwithstanding that the court found that no bond is required in Pennsylvania of a trustee under a will (I doubt the correctness of this finding for it appears that the successor trustee was in fact required to and did give a bond in Pennsylvania), this did not disempower the county court from requiring that the defendant give a bond to account as trustee before it would relieve him from liability to account as executor. Even though a will provides that an executor or trustee be not required to give a bond, the court may require that a bond be given. It is the common practice in Milwaukee county to require a bond of trustee in such cases, as has appeared from numerous cases from that court that have come to this court for review. It has been expressly so held as to an executor. Schnorenberg v. Schnorenberg, 150 Wis. 537, 137 N. W. 752. The provision of a will that a trustee be relieved from giving bond can be no more potent than like provision as to an executor, and the provision of the law of the state wherein trust property is located that a trustee under a will need not give a bond before acting as trustee in that state can be no' more potent to deprive the court probating the will to require a bond before it will discharge him from accounting as executor than is the provision of a will. Upon reason a court probating a will has power and jurisdiction to require a bond from a trustee under the will who is also executor of the will for the protection of the beneficiaries of the trust residént in the state of the court of probate before it will discharge him as executor, even though the trust estate be outside that state. The court has jurisdiction of the executor although he be a nonresident and the estate be located in the state of his resi*122dence. The question is not one of executing a trust created by will according to the law of the state of which the trustee is a resident and the trust_estate is situated, but of acting for the protection of citizens of this state by requiring a bond as trustee before the court will relieve the executor from accounting as .executor. 'That the law of the foreign state permits a trustee to act without giving a bond affords more reason for the court to require one to be given before it will discharge him as executor. The bond in such case should not require the trust estate to be administered according to the law of Wisconsin under the circumstances here present, but if deemed necessary for the protection of citizen beneficiaries the court has power and should require a bond to be given requiring administration as trustee according to law. I find no cases either way upon the proposition that the probate court has power to require a bond of a trustee under the circumstances present, but where bonds of executors named in a will are not required, as in England and some states, the court is held to have power to require bonds from them for the protection of persons interested in the estate whenever it deems a bond necessary for their protection. See 2 Woer-ner, Law of Administration, p. 831 et seq., and cases cited. If a court may require a bond of an executor when not required by statute, it may require one of a trustee when not so required. A bond was required by the Pennsylvania orphans’ court from the successor trustee, even though, if as counsel testified, it is not required by statute. While the powers of the probate courts of this state are limited by statute, the provisions of our statute, sec. 253.03, that the jurisdiction of county courts in probate extends “to all matters relating to the settlement of the estate” of deceased persons and “to all cases of trusts and trust powers created by will admitted to probate” therein, are ample to empower the court to require a bond as trustee from an executor named *123as both executor and trustee before it will discharge him as executor, even though the trust is to be administered outside, the state.
There is no injustice in this case in holding the respondent surety on the executor’s bond. For several years it received a premium for continuing the bond in force. The consideration for these premiums was the agreement of the bondsman that the named trustee would perform its duties as executor. By executing the bond it assumed responsibility for the administration of the trust property by the executor as executor.' It should not be heard to say that the named trustee was not functioning as executor when for a consideration it agreed that it was so functioning and guaranteed it would perform its duty as executor.
I think that the court, instead of ruling that the named trustee was not bound to account as executor, should have held it bound so to account, and considered its account on the merits. What those merits are I have not considered. My dissent is based solely upon the proposition that the named trustee was never discharged as executor and was subject to account as executor until it was so discharged.
A motion for a rehearing was denied, without costs, on March 15, 1938.