Hargraves v. Hargraves

686 S.W.2d 816, 14 Ark. App. 230, 1985 Ark. App. LEXIS 1897
CourtCourt of Appeals of Arkansas
DecidedApril 3, 1985
DocketCA 83-465
StatusPublished
Cited by2 cases

This text of 686 S.W.2d 816 (Hargraves v. Hargraves) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hargraves v. Hargraves, 686 S.W.2d 816, 14 Ark. App. 230, 1985 Ark. App. LEXIS 1897 (Ark. Ct. App. 1985).

Opinions

Melvin Mayfield, Judge.

D. T. Hargraves, Sr., died in June of 1982. He was survived by his wife, Mary Blanche Hargraves, and their two sons, D. T. Hargraves, Jr., and Richard H. Hargraves. He left a will that makes certain specific legacies and devises and then creates two trusts. One trust is given that share of the decedent’s residuary estate that will ensure the maximum marital deduction allowed for Federal Estate Tax purposes. His widow is named as the sole beneficiary of this trust with the right to dispose of its assets in her lifetime or by will. The residue of this trust, and the residue of the estate, passes to the second trust. This trust makes income provisions to the widow for her life and, upon her death, the assets go equally to the two sons. D. T. Hargraves, Jr., is nominated as executor of the estate and as trustee of both trusts. If he is not able or willing to serve, the will designates the other son, Richard, to serve as executor and trustee.

On June 18,1982, the will was admitted to probate and D. T. Hargraves, Jr., was appointed executor. Subsequently Richard Hargraves filed a petition in the probate court seeking to remove his brother as executor. After a hearing, an order was entered on November 12, 1982, granting the petition and appointing Richard as executor in succession. A few days later, Richard and his mother filed a petition in chancery court asking for an order “dismissing and disqualifying” D. T. Hargraves, Jr., as trustee of the two trusts and asking that Richard be named trustee in succession. After a hearing on this petition, D. T., Jr., was enjoined and removed from serving as trustee and Richard was appointed trustee in succession. This is an appeal from that order. There is no appeal from the order of the probate court removing D. T., Jr., as executor and appointing Richard executor in succession.

The first point raised on appeal is that the chancery court erred in admitting the transcript of the proceedings in probate court into evidence in the chancery court hearing. The appellees point out that the only objection to the introduction of this transcript was to its relevancy. They say that the issue in probate was the misconduct of the executor, D. T. Hargraves, Jr., in the handling of the assets of the estate and that this is relevant in the chancery court hearing on the question of whether the same person should be trustee of the same assets. Appellees cite II Scott, The Law of Trusts, § 107 at 841 (3d ed. 1967), which states:

Where a person is both executor and trustee, and he is guilty of such misconduct as executor as to cause his removal as executor, ordinarily he will be removed also as trustee, even though the two offices are not inseparably connected. . . . Where the same person is executor and trustee, evidence of his misconduct as executor is admissible in a suit to remove him as trustee.

Scott cites Wylie v. Bushnell, 115 N.E. 618 (Ill. 1917), in support of the last sentence of the above quote. That case held that in a hearing to remove Wylie as trustee, reports that he had filed as executor were admissible to contradict or impeach the reports he filed as trustee. While the statement from Scott seems broader than the case cited for its support, a case directly in point has relied upon the statement for its holding. See In re Marshall’s Will, 65 N.E.2d 523 (Ohio Ct. App. 1946). At any event, we find no error in the trial court’s holding that the evidence of misconduct by D. T. Hargraves, Jr., as executor was relevant in the hearing to remove him as trustee.

Appellant’s second point is that the chancery court did not have jurisdiction to enjoin or remove him from acting as trustee since the trusts were not in being at the time of the court’s order. We think the answer to that contention is found in appellees’ quotation from Bogert, The Law of Trusts and Trustees § 526 (rev. 2d ed. 1978) as follows:

In some cases the question has arisen as to when removal proceedings may be brought, for example, when it is sought to remove a trustee for unfitness before he has taken any action in the affairs of the trust. The criterion in such a case seems to be that the trust must be in existence as an established legal relationship, but whether acceptance has been signified or performance of duties begun is immaterial. (Emphasis added.)

The appellant’s contention is founded on a statément in the concluding paragraph of the opinion in Alexander v. First National Bank of Ft. Smith, 278 Ark. 406, 411, 646 S.W.2d 684 (1983), where the court says, “Here, the residuary trust does not come into existence until the estate is closed. Until then no trust is created and jurisdiction remains in probate.” The appellees explain this statement by pointing out that the issue to which it was directed was the validity of the order of the probate court awarding attorney’s fees. Appellees are arguing, as we understand it, that the court in Alexander was answering the objection that only chancery court had jurisdiction to allow fees for services relating to the residuary trust by saying that the fee involved was allowed for services performed for the bank as executor; that there was money paid to the bank as a result of those services; and that the fee was allowed by the probate court for services to the estate, not to the residuary trust which would receive no funds until the death of the widow.

Appellees’ suggestion as to the meaning of the statement from Alexander is reasonable and does not conflict with the above statement from Bogert that a trustee may be removed if the trust is in existence as an established legal relationship. Scott indicates agreement with Bogert as to the existence of a trust by stating:

A trust can be created although the parties do not know precisely what the subject of the trust is, if it can be ascertained from circumstances existing at the time of the creation of the trust. Thus a trust created by will of the residue of the testator’s estate is of course valid although the amount of the residue cannot be ascertained until the amount of his assets and of his liabilities has been determined.

I Scott, The Law of Trusts % 76 at 685 (3ded. 1967). We think the chancery court had jurisdiction to make the order enjoining or removing appellant as trustee.

Appellant’s third point is that, if the court had jurisdiction, it erred in appointing his brother, Richard, as trustee in succession, but should have exercised its discretion to appoint an independent trustee. The chancellor’s letter opinion, which enjoined and removed appellant from serving as trustee, contains the following findings:

It would serve no useful purpose to review the evidence. It simply is not in the best interest of the beneficiaries for the trustee to continue. Clearly, there is longstanding ill-will and hostility between the brothers. The trustee’s relationship with his mother is lamentable. Considering all these matters together (conflict of interest, reluctance to include assets of the decedent in the Inventory, malfeasance in office), the Court determines that the trustee must be removed.

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Bluebook (online)
686 S.W.2d 816, 14 Ark. App. 230, 1985 Ark. App. LEXIS 1897, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hargraves-v-hargraves-arkctapp-1985.