Coffman v. Gates

85 S.W. 657, 110 Mo. App. 475, 1905 Mo. App. LEXIS 62

• Court: Missouri Court of Appeals
• Decided: February 21, 1905
• Status: Published

Opinion

BLAND, P. J.

(after stating the facts). — Francis X. Barada, trustee, as stated above, was a party to the partition suit, to the judgment and order of sale and the order of distribution. He made no objection to any of the proceedings and made no claim to any portion of the money arising from the sale and if it be conceded that he was a necessary party to the partition suit, he is not interested in the order of distribution, and this (the distribution of the proceeds of the sale) being the only question brought up on the appeal for adjudication, we see no reason for delaying the case for the purpose of having a new trustee of the estate appointed and made a party to the appeal. James O. Ghio, Mary Harbaugh, Andrew Barada and Marie Layton are the only parties contesting the order of distribution and for this reason are the only necessary parties to a complete determination of all the issues brought up by the appeal. James O. Ghio, by virtue of the trustee’s deed conveying the lands to him, took an undivided one-third interest therein in fee and held the remaining two-thirds as trustee for the residuary beneficiaries of his father’s will without power of sale. The purpose of both the grantor and grantee was to give James O. Ghio an undivided one-third interest- in the lands, and to incorporate the other undivided two-thirds in the body of the assets of the estate of John B. Ghio, to be held in trust, however, for the benefit of Mary Barada and Mary Cummiskey. The respondents claim that by decree of June 3, 1893, of the circuit court, appellant was removed as trustee in this deed and Francis X. Barada substituted trustee in his stead. The decree appointed Barada trustee under the will and ordered that he should ‘ ‘ become and stand possessed and clothed with all the estate, interest, rights and powers, and be subject to and charged with all the duties, liabilities and obligations in respect of the trust estate hereinabove designated and described, as trustee for, under and in conformity with the provisions of the last will and testament of John B. Ghio, deceased.” It is further provided by the decree that the trustees appointed by the will should deliver to Barada all the personal property of the estate and “also surrender the charge of the real estate aforesaid (described in the decree) unto said Barada,” and that upon making such surrender of real estate and delivery of personal property, the trustees under the will should “be and remain fully, finally and forever discharged and acquitted of and from any and all liabilities on account of any and all matters, affairs and things whatsoever touching, growing out of, or concerning said trust or the administration or conduct thereof.” As a part of the real estate of the estate of John B. Grhio, the decree specifically mentions and describes the land known as the ‘ ‘ Grates farm, ’ ’ in St. Louis county, Missouri, and correctly refers to the deed made by William Booth, trustee, to James C. Grhio, as of date May 30, 1889, and recorded in the records of said county in Book 40, p. 513.

After reciting apt provisions of the will of John B. Grhio, the loan of the ten thousand dollars to Grates and that the same was a part of the trust fund, the taking of the deed of trust to secure the loan, the default of payment, the sale under the deed of trust by the trustee and the purchase by James C. Grhio, the deed reads:

“Now,- therefore, this deed witnesseth, that the said James C. Grhio is to have and hold said described property in the following manner: One-third undivided to himself and his heirs forever, to be disposed of as he sees fit. One-third undivided to the use of said Mary Barada and her children, and one-third undivided to the use of Mary O. Cummiskey as provided for in the will of said Grhio, as part of the residue or personalty of his estate, said last .undivided two-thirds being subject to sale and conveyance only by the trustees under said will as hereinafter provided for, and further provided that as it may become necessary and expedient in the opinion of the trustees under the said will of Grhio to sell the undivided one-third of Mary Barada and her children, and .the undivided one-third of said Mary O. Cummiskey, in said described real estate, for the purpose of once more rendering the same into money as it was in their hands when they made the said loan of $10,000 to said Gates, or so far as two-thirds of the same are concerned, that they, the said trustees, shall have full power and authority at any time hereafter to sell, dispose of and convey the said undivided two-thirds of Barada and Cummiskey in said real estate, or any part thereof, either in the amount of land or undivided interest for any sum or sums they may see fit, and the purchaser or purchasers, at said sale or sales shall take a fee simple title absolute as far as said two-thirds are concerned to said real estate or any part thereof, either in quantity of land or amount of interest on receiving said trustees’ deed therefor, free and clear of any trusts whatsoever. ’ ’ ■

By this deed the interest of the legatees (except Elizabeth Ghio) under the Ghio will, in and to the lands representing a part of the trust estate was distributed in accordance with the terms of the will. James C. Ghio took title in fee to an undivided one-third and held title to the remaining two-thirds as trustee for Mary Barada and her children and Mary O. Cummiskey; his title as trustee to be divested by sale, and conveyance to be made at any time by the trustees named in the will, he being one of them at that time. The deed, in effect, partitioned the lands between the parties in interest, one-third absolutely and two-thirds in trust which trust might be executed at any time by sale to be made by the trustees named in the will, the legal title to the whole being vested in James C. Ghio. There are no apt words in the decree appointing Barada trustee to divest title to the Gates land out of James C. Ghio.- There is no clause or terms in the decree divesting title out of Ghio and investing Barada therewith; in the absence of such words indicating an intention to divest and invest title the decree cannot have that effect. [McKinney v. Settles, 31 Mo. 541; Washburn on Beal Property, sec. 2087.] And we do not think the decree has any other effect in respect to these lands than to substitute Barada as trustee for the purpose of making sale according to the provisions of the deed. This seems to have been the view of the trial court as the interlocutory decree (unappealed from) found that James C. Ghio held one-third of the lands as trustee for Mary Barada and her children and one-third as trustee for the children of Mary Cummiskey.

There is evidence in the record tending to show that James C. Ghio and Barada acted in conjunction in the employment of counsel and in the conduct of the defense of the ejectment suit, and Barada testified that he notified all the parties in interest of the pendency of the suit. There is no evidence, however, that they were consulted about the employment of counsel or the conduct of the defense to the suit or that they or anyone of them ever expressedly assented to any of the steps taken in the defense. On the other hand, there is no evidence that they ever interposed any objections to the counsel employed by Ghio and Barada or to the conduct of the defense. For the reason they did not expressly assent to the employment of the counsel or to the defense of the suit, it is contended they are not bound to contribute toward the expense of the litigation. That the defense was made in good faith is not controverted. That James C. Ghio held one-third of the lands in fee and the remaining two-thirds as trustee for the respondents is an adjudicated fact in this identical case. Now, while we think it was the duty of Barada, as trustee of the estate, to pay some attention to the defense of the ejectment suit, which the evidence shows he did, the position of James C. Ghio, as part owner, and trustee of the remaining part, made it imperative on him to protect the interest of the cestui que trust. Having done this in good faith, should the respondents share their reasonable portion of the expense, is the question presented for solution. It is well to note in this connection that the evidence shows the respondents received two-thirds of all the rents that accrued during the life of the lease to the Seiberts, most of which accrued pending the ejectment suit. The claim of appellant for contribution is an equitable one set forth in his answer and cross-bill. The jurisdiction of the circuit court in partition proceedings to equitably adjust the claims of the parties in interest is settled by the cases of Holloway v. Holloway, 97 Mo. 628, 11 S. W. 233; Real Estate Sav. Inst. v. Collonious, 63 Mo. 290; Pratt v. Clark, 57 Mo. 189; Stewart v. Caldwell, 54 Mo. 536, and Spitts v. Wells, 18 Mo. 468. And we think the rights of appellant and respondents to the fund arising from the sale of the land ought to be adjudicated on equitable principles.

In Trustees v. Greenough, 105 U. S. 527, it is said: “One jointly interested with others in a common fund, who, in good faith, maintains the necessary litigation to save it from waste and secure its proper application, is entitled in equity to the reimbursement of his costs as between solicitor and client, either out of the fund itself, or by proportionate contributions from those who receive the benefit of the litigation.” This case was followed in Central Railroad & Banking Company v. Pettus, 113 U. S. 116.

Pomeroy, in his work on J urisprudence, at section 1085, says: “The trustee is entitled to be allowed, as against the estate and the beneficiary, for all his proper expenses out of pocket, which include all payments expressly authorized by the instrument of trust, all reasonable expenses in carrying out the direction of the trust, and, in the absence of any such directions, all expenses reasonably necessary for the security, protection, and preservation of the trust property, or for the prevention of a failure of the trust. He is also indemnified in respect of all personal liabilities incurred by himself for any of these purposes.”

Perry on Trusts (5 Ed.), sec. 485, says: “A trustee may reimburse himself for money advanced in good faith, for the benefit of the cestui que trust, or for the protection of the property, or for his own protection in the management of the trust.”

In Downing v. Marshall, 37 N. Y. 380, it is said: “So far as trustees incur expense in managing trust property, they are entitled to be reimbursed from the trust fund. Reasonable attorney’s and counsel fees connected with the management of the business of the trust, will be allowed as a part of the expenses.”

When the ejectment suit was brought, James C. Ghio had the alternative to let judgment go by default and lose the property or. to defend the suit in his own behalf and on behalf of the cestui que trust. He judiciously chose to make a defense. . To make a defense, employment of counsel was indispensable and when the judgment went against the defendant in the circuit court, to avoid an ouster of the tenants, it was necessary to give a supersedeas bond pending appeal to the Supreme Court. The counsel employed by him earned and were entitled to their fees. Rents and profits accumulated pending the appeal had to be paid. These counsel fees and rents and profits James C. Ghio was obliged to pay. He paid for himself and for the other parties interested in the lands, and on both principle and authority, it seems to us, that having thus paid out his own money to protect the trust fund or property as well as his own interest, he had a right to look to the trust property for a proportionate reimbursement, that is, for reimbursement of two-thirds of the amount he was out. But the distributive shares <jf the respondents in the fund are insufficient to meet this demand and appellant asks not only for the whole of the trust fund represented by the distributive shares of respondents arising from the partition sale but for personal judgments against the respective respondents for balances over and above each of their distributive shares. In the absence of any agreement, express or implied, to reimburse appellant, we do not think that he is entitled in this proceeding to look to the cestui que trust individually for reimbursement but is confined to tbe trust property.

Tbe judgment is reversed and the cause remanded to be proceeded with as herein indicated.

All concur.