The question argued at the first hearing, and the clause of the deed of trust whose construction it was sought to obtain, are fully set out in the opinion of the court.
Markland, for the trustee, contended that the new trustee had all the powers of the former one, citing 1 Sugden on Powers, 153.
James Tillinghast, for Mrs. Sarah W. Burges, cited Ives
v. Harris, 7 R.I. 416; Shelton v. Homer, 5 Met. 462;Tainter v. Clark, 13 Met. 220; Montgomery v. Milliken, 5 S. M. 151; Hall v. Irwin, 7 Ill. 176; Commonwealth v.Roxbury, 9 Gray 451; Minot v. Prescott, 14 Mass. 496;Stevens Wife v. Winship, 1 Pick. 318; Hill on Trustees, 478-9.
Bliss, for Richard J. Burges, one of the respondents, and a son of Tristam Burges, contended that the income of the trust property was sufficient for the proper maintenance of Mrs. Burges, and that if it should be found that the income was insufficient therefor, the interest of all parties would be promoted by the sale of the unproductive real estate and an investment of the proceeds, so that the income of the fund might be used for the support of Mrs. Burges, leaving the principal unimpaired for her children on the death of their mother.
By deed dated March 13, 1862, Tristam Burges conveyed certain real estate to "Charles S. Bradley, his heirs and assigns," to hold to him, "his heirs and assigns," upon the trusts therein declared, among which are the trusts declared in the words following, to wit: —
"In trust to enter into the possession of said premises, and receive and take the rents, issues, and profits thereof; with full power and authority to the said trustee to cultivate or to lease the same, or any part thereof, from year to year or otherwise, and at or under such yearly or other rent, as to him shall seem reasonable, and generally to manage and order all the affairs and
business of or relating to the said trust premises. And upon further trust, from time to time as and when the said trusteeshall deem it expedient, to sell or mortgage the whole or any part of said trust premises, to lay out and invest the moneys to arise from any sale or mortgage, under the preceding powers, in the name of the said trustee, in good stocks, or mortgages of real estate, or in the erection of suitable buildings on the premises belonging to said trust, or on some part thereof; and from time to time to change, alter, and vary such investments for others of a like nature, at his discretion. And upon further trust, after the payment of all the expenses of or incident to the said trust premises and the management of the same, as aforesaid, together with a reasonable compensation to the said trustee for his services, to pay or apply the residue of the income of said trust premises and the investments aforesaid, to or for the comfortable and honorable maintenance and support of my said wife, for and during her natural life. And in case the said income shall, at any time, prove insufficient for the purposes aforesaid, then the said trustee is hereby authorized and directed to make sale of or to mortgage some portion of or all of the trust property, discharged of the trusts herein contained, and to apply the proceeds arising from such mortgages or sales to the purposes aforesaid."
In 1863 Charles S. Bradley was discharged by this court, on his own application, from the trust, and William M. Bailey was appointed in his place; and thereupon the said Bradley, by deed dated February 2, 1864, released all his interest in said trust estate to said Bailey.
The bill alleges that said Bradley and Bailey have sold portions of said estate in execution of the trust, and that the income of what remains of the estate, after the payment of expenses and taxes, is insufficient for the comfortable and honorable support of the said wife of said Burges, and that for that purpose the trustee is obliged, from time to time, to encroach upon the principal. The bill also alleges that the remaining real estate can be advantageously sold, and that if it is sold and the proceeds are properly invested, a sufficient income can be obtained to prevent or greatly reduce further encroachments on the principal fund, and preserve the same for the other trusts under the deed.
In view of this situation of the trust, we are asked to decide,
for the guidance of the new trustee, whether he succeeded to the powers of sale and reinvestment which were conferred upon the original trustee.
The question is, whether a power given to a trustee to sell the trust estate and reinvest the proceeds, "from time to time, as and when the said trustee shall deem it expedient," is a power which is personal to the trustee, or a power which, as being annexed to the trust itself, would pass therewith to his successor. In Lewin on Trusts, p. 533 (see also p. 712), it is said that it seems that special discretionary or arbitrary powers will not pass to new trustees appointed by the court; Doyley v.Atty. Gen. 2 Eq. Ca. Abr. 194; Fordyce v. Bridges, 2 Phil. 497; Newman v. Warner, 1 Sim. N.S. 457; Cole v. Wade, 16 Ves. 44, 47; Hibbard v. Lambe, Amb. 309; unless they be limited to the trustees for the time being; Bartley v.Bartley, 3 Drew. 384; or be otherwise by fair construction annexed to the office. Byam v. Byam, 19 Beav. 66. The cases cited in illustration of the rule are chiefly cases where the power given was a power to select the beneficiaries of the trust or to apportion the trust estate among them. Undoubtedly a higher degree of personal confidence is implied in the giving of such a power than in the giving of a discretionary power to sell and reinvest, inasmuch as the exercise of the last named power affords less room for the play of personal feeling. But is this such a difference as will warrant a different rule of construction? We think not; for the difference is rather circumstantial than intrinsic. A discretionary power of either kind is liable to abuse, and with the utmost good faith might be differently exercised by different minds; which we presume is the reason why, in the absence of controlling words, such power is held to be personal. The learned counsel who argued in favor of the continuance of the power in the present trustee has not referred to any case in which it is held that among special discretionary powers there are some which are to be construed as official, and others which are to be construed as personal; nor, if such a construction were possible, has he suggested any safe criterion by which we could distinguish the official from the personal, and we do not think any such case can be found, or any such criterion suggested.
In Belote v. White, 2 Head (Tenn.), 703, a power given to
three trustees or any two of them or the survivor, to sell the whole or any part of the trust estate, and to vest and revest the proceeds, and to manage the whole in any way they might think would promote the interest and comfort of the beneficiary, was held to be a discretionary power which would not pass to a new trustee appointed by the court.
In Tainter v. Clark, 13 Met. 220, a testator empowered his executor "to sell and convey such of my property as in his judgment will best promote the interest of all concerned" for certain purposes declared in the will. The executor named declined to act.
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The question argued at the first hearing, and the clause of the deed of trust whose construction it was sought to obtain, are fully set out in the opinion of the court.
Markland, for the trustee, contended that the new trustee had all the powers of the former one, citing 1 Sugden on Powers, 153.
James Tillinghast, for Mrs. Sarah W. Burges, cited Ives
v. Harris, 7 R.I. 416; Shelton v. Homer, 5 Met. 462;Tainter v. Clark, 13 Met. 220; Montgomery v. Milliken, 5 S. M. 151; Hall v. Irwin, 7 Ill. 176; Commonwealth v.Roxbury, 9 Gray 451; Minot v. Prescott, 14 Mass. 496;Stevens Wife v. Winship, 1 Pick. 318; Hill on Trustees, 478-9.
Bliss, for Richard J. Burges, one of the respondents, and a son of Tristam Burges, contended that the income of the trust property was sufficient for the proper maintenance of Mrs. Burges, and that if it should be found that the income was insufficient therefor, the interest of all parties would be promoted by the sale of the unproductive real estate and an investment of the proceeds, so that the income of the fund might be used for the support of Mrs. Burges, leaving the principal unimpaired for her children on the death of their mother.
By deed dated March 13, 1862, Tristam Burges conveyed certain real estate to "Charles S. Bradley, his heirs and assigns," to hold to him, "his heirs and assigns," upon the trusts therein declared, among which are the trusts declared in the words following, to wit: —
"In trust to enter into the possession of said premises, and receive and take the rents, issues, and profits thereof; with full power and authority to the said trustee to cultivate or to lease the same, or any part thereof, from year to year or otherwise, and at or under such yearly or other rent, as to him shall seem reasonable, and generally to manage and order all the affairs and
business of or relating to the said trust premises. And upon further trust, from time to time as and when the said trusteeshall deem it expedient, to sell or mortgage the whole or any part of said trust premises, to lay out and invest the moneys to arise from any sale or mortgage, under the preceding powers, in the name of the said trustee, in good stocks, or mortgages of real estate, or in the erection of suitable buildings on the premises belonging to said trust, or on some part thereof; and from time to time to change, alter, and vary such investments for others of a like nature, at his discretion. And upon further trust, after the payment of all the expenses of or incident to the said trust premises and the management of the same, as aforesaid, together with a reasonable compensation to the said trustee for his services, to pay or apply the residue of the income of said trust premises and the investments aforesaid, to or for the comfortable and honorable maintenance and support of my said wife, for and during her natural life. And in case the said income shall, at any time, prove insufficient for the purposes aforesaid, then the said trustee is hereby authorized and directed to make sale of or to mortgage some portion of or all of the trust property, discharged of the trusts herein contained, and to apply the proceeds arising from such mortgages or sales to the purposes aforesaid."
In 1863 Charles S. Bradley was discharged by this court, on his own application, from the trust, and William M. Bailey was appointed in his place; and thereupon the said Bradley, by deed dated February 2, 1864, released all his interest in said trust estate to said Bailey.
The bill alleges that said Bradley and Bailey have sold portions of said estate in execution of the trust, and that the income of what remains of the estate, after the payment of expenses and taxes, is insufficient for the comfortable and honorable support of the said wife of said Burges, and that for that purpose the trustee is obliged, from time to time, to encroach upon the principal. The bill also alleges that the remaining real estate can be advantageously sold, and that if it is sold and the proceeds are properly invested, a sufficient income can be obtained to prevent or greatly reduce further encroachments on the principal fund, and preserve the same for the other trusts under the deed.
In view of this situation of the trust, we are asked to decide,
for the guidance of the new trustee, whether he succeeded to the powers of sale and reinvestment which were conferred upon the original trustee.
The question is, whether a power given to a trustee to sell the trust estate and reinvest the proceeds, "from time to time, as and when the said trustee shall deem it expedient," is a power which is personal to the trustee, or a power which, as being annexed to the trust itself, would pass therewith to his successor. In Lewin on Trusts, p. 533 (see also p. 712), it is said that it seems that special discretionary or arbitrary powers will not pass to new trustees appointed by the court; Doyley v.Atty. Gen. 2 Eq. Ca. Abr. 194; Fordyce v. Bridges, 2 Phil. 497; Newman v. Warner, 1 Sim. N.S. 457; Cole v. Wade, 16 Ves. 44, 47; Hibbard v. Lambe, Amb. 309; unless they be limited to the trustees for the time being; Bartley v.Bartley, 3 Drew. 384; or be otherwise by fair construction annexed to the office. Byam v. Byam, 19 Beav. 66. The cases cited in illustration of the rule are chiefly cases where the power given was a power to select the beneficiaries of the trust or to apportion the trust estate among them. Undoubtedly a higher degree of personal confidence is implied in the giving of such a power than in the giving of a discretionary power to sell and reinvest, inasmuch as the exercise of the last named power affords less room for the play of personal feeling. But is this such a difference as will warrant a different rule of construction? We think not; for the difference is rather circumstantial than intrinsic. A discretionary power of either kind is liable to abuse, and with the utmost good faith might be differently exercised by different minds; which we presume is the reason why, in the absence of controlling words, such power is held to be personal. The learned counsel who argued in favor of the continuance of the power in the present trustee has not referred to any case in which it is held that among special discretionary powers there are some which are to be construed as official, and others which are to be construed as personal; nor, if such a construction were possible, has he suggested any safe criterion by which we could distinguish the official from the personal, and we do not think any such case can be found, or any such criterion suggested.
In Belote v. White, 2 Head (Tenn.), 703, a power given to
three trustees or any two of them or the survivor, to sell the whole or any part of the trust estate, and to vest and revest the proceeds, and to manage the whole in any way they might think would promote the interest and comfort of the beneficiary, was held to be a discretionary power which would not pass to a new trustee appointed by the court.
In Tainter v. Clark, 13 Met. 220, a testator empowered his executor "to sell and convey such of my property as in his judgment will best promote the interest of all concerned" for certain purposes declared in the will. The executor named declined to act. The administrator with the will annexed sold by virtue of the power, and the sale was declared void by the Supreme Court of Massachusetts, their opinion being, although they also gave another reason for their decision, that the power given implied a personal confidence. See Ives v. Harris,7 R.I. 413, and Hill on Trustees, 211, 472, 495.
We think the power given to the trustee in the case at bar was a special discretionary power, and that such a power, in the absence of words denoting a contrary intent, does not devolve upon a new trustee appointed by the court.
It is contended that an intent on the part of the author of the trust, that the power should pass with the estate, may be inferred from the fact that the estate is granted to the trustee named, his heirs and assigns, to hold the same to himself, his heirs and assigns, upon the trusts therein declared. We do not think, however, that the use of the word "assigns," in the connection in which it is used, can properly be held to denote such an intent. If the power had been expressed to be exercisable by the trustee named, his heirs and assigns, when he or they should think it expedient, then indeed there would be no difficulty in holding it to have passed; Cole v. Wade, 16 Ves. 45; but unhappily for the argument, while the estate is granted to the trustee, his heirs and assigns, the power is given to be exercised only at the discretion of "the said trustee." In order that the power might still continue available we should have to construe the words, "the said trustee," to mean the trustee for the time being, which we do not think we could do consistently with the precedents.
We regret that we do not find in the trust deed any words to enable us to decide in favor of the existence of a power, which
could in this particular case, we doubt not, be exercised very much to the advantage of all the cestuis que trust; but we feel constrained by the weight of authority to hold that it became extinct upon the resignation of the trustee to whom it was especially confided.
Upon the other questions submitted to us in this case we deem it unnecessary to express an opinion, for, even if the trustee is entitled to instruction from the court in the matters covered by them, no exigency is disclosed which calls for such instruction at present.
After the rendition of the foregoing opinion, the case was reargued as above stated.