Mulberger v. Beurhaus

78 N.W. 402, 102 Wis. 1, 1899 Wisc. LEXIS 20

• Court: Wisconsin Supreme Court
• Decided: January 31, 1899
• Status: Published

Opinion

Marshall, J.

Appellants contend that respondent had no right to take the appeal from the county court to the circuit court, and that the latter erred in not dismissing it on appellants’ motion. The statute (sec. 4031, B. S. 1878) is referred to, giving the right of appeal in such oases only to the party aggrieved, and numerous cases are cited to the effect that only a person having a substantial or pecuniary interest in the matter is a party aggrieved within the meaning of the statute. It is unnecessary to discuss that.question .at any considerable length. It is sufficient to refer to the reasoning in many cases recently decided by this court as to the right of a taxpayer to enforce the cause of action of a public corporation of which be is a member when its officers neglect or refuse to perform their duty. Quaw v. Paff, 98 Wis. 586; Frederick v. Douglas Co. 96 Wis. 411; Land, L. & L. Co. v. McIntyre, 100 Wis. 245, 258; Rice v. Milwaukee, 100 Wis. 516; Webster v. Douglas Co. post, p. 181.

The direct injury to be remedied where the taxpayer intervenes and sets the judicial machinery in motion for that purpose, is not personal and direct to himself, but to the corporation. The question is, Are the members of the corporation as a whole aggrieved? If so, rather than that justice .shall fail, the court will take jurisdiction of the subject of controversy at the instance of a taxpayer. The fact that the threatened injury or the wrong done is to the corporation, and that its governing body or officers, who should move in the matter, neglect or refuse to do so, creates a necessity for some other way to remedy the mischief, and in that situation the circumstance of a person being a taxpayer and interested in the protection of its rights is a sufficient test of his competency to challenge the threatened wrong, or wrong actually done, in a court of justice. That jurisdiction of the court is the most powerful and effective force to prevent and redress wrongs to public corporations when their officers squander public money or improperly surrender or violate public rights, either corruptly or ignorantly. There is no other way to successfully and efficiently meet that situation. In such cases, where officers neglect to do their duty, the wrong need not by any means go unredressed so long as there is a single taxpayer with courage and publie spirit enough to set the judicial machinery in motion. He may stand in court in place of the unfaithful public officials. The court, in him, will recognize the interests of the corporation as a whole, and, with the evidence produced before it calling for action, by its decree compel the performance of duty by all within its reach.

No man or set of men can wrong a public corporation in Wisconsin and defy its members, by means of sustaining such relations with the individuals of its governing body as to deter them from properly protecting the public rights, or their failing to do it from any other cause. Such has been found to be. the situation in some states at some times, as indicated in Land, L. & L. Co. v. McIntyre, supra, but not here. The subject is not governed by any statute, or necessarily by precedent. As said in the case cited, the power of a court of equity, which is the jurisdiction invoked by the taxpayer, is broad enough to fit all situations where, to effect justice, a remedy is required. While it is guided by precedents, it is not governed by them, but may meet new situations as they arise, so that, in the race between it and wrong doing by public servants in the handling of the financial affairs of the municipality, the way is open and the means ample to secure the prevalence of justice over wrong.

It will not be questioned-but that the city of Watertown could have appealed from the action of the county court. That being the case, the taxpayer, within all the decisions of this court, had a sufficient interest in maintaining the corporate rights to enable him to intervene and take the appeal when the corporation would not proceed in the proper way to protect its rights.

The remaining question to be determined is, Did the trial court rightly decide that the entire expenditures made by the trustees upon the trust property were chargeable to tb© income therefrom ? That must be answered in the affirmative, and independently of whether the decision was strictly right as to the expenditures being all for repairs strictly so called or not. As to that, however, we see .no reason for disturbing the decision of. the trial court. The will clearly indicates that the entire estate received from the testator was intended by him ultimately to be conveyed to the city of Watertown for the purposes indicated therein. It devoted' the income to the payment of all repairs on the buildings, and said that all of the property which came to the possession of the trustees shall at the end be conveyed to the city. There is no special power given to do anything to the buildings except to keep them in repair. As a general rule, unless such special power be expressly given to trustees, they cannot exercise it at all. Perry, Trusts, § 526; Lewin,. Trusts, *576; Beach, Trusts, § 626, and cases cited to text in each. Beach states the rule thus: “Subject to certain modifications it is the rule that where real estate is conveyed to trustees in trust for a tenant for life, with remainder over, the trustees have no power to raise money out of the eorpits of the estate for the purpose of making substantial and permanent repairs, either on the buildings or on the land. Such expenses, if incurred, will be a charge on the interest of the tenant for life.” Nairn v. Marjoribanks, 3 Russ. 582, is instanced to support the text, where Lord EldoN said that, even if the master should report that it would be for the benefit of all parties interested that improvements should be made, he would not confirm the report.

Some exceptions to the extreme rule stated are found in some modern decisions, in cases where the control of the-property given to the trustees was of such a nature as to include by implication power to incur expenses for permanent improvements, or where it was necessary to make such improvements in order to preserve the property and make it tenantable, and there was do other way, of raising the necessary money to do it; but no case can be found sanctioning' improvements to property at the expense of the remainder-man where power to do so is not given by the instrument creating the trust, either expressly or impliedly, or where the income from the property is ample to meet all such expenditures. In Peirce v. Burroughs, 58 N. H. 302, the general rule is stated thus: “ The preservation of the capital without expense to the remainderman is as much his right, as the use of the property without payment of rent is the right of the tenant for life; the measure of the latter is the net income for life.” Cogswell v. Cogswell, 2 Edw. Ch. 231, is a further good illustration of the rigorous adherence to that rule by courts of equity. There a portion of the trust property consisted of buildings in such a condition as to yield but very little income, and the court said that did not justify the making of permanent improvements at the expense of the trust property, the testator having given no directions in that regard in his will. That applies very clearly to the will before us. The testator indicated clearly, as before stated, that the buildings on the property were to be put in repair, and kept in repair, out of the income till the expiration of the life interest of the wife and son, and then that the property, unimpaired as it came to the trustees, except as to character of investments changed under the terms of the will not material to this discussion, should be conveyed to the city of Watertown. There is no power in the trustees to change the plain scheme of the will, no power in the court to authorize any such change, and no power in the city of Watertown to vary it in any manner. As the testator’s scheme was worked out and inscribed in the will, so must it be. The trustees must carry out that to the letter, and at the end the city of Watertown must take the estate for the purposes indicated in the will, or reject it.

It follows, as the learned trial court decided, that the agreement made by the council of the city of Watertown for the reimbursement of the trustees'out of the trust estate for expenditures made by them upon the property, was ultra vvres and totally so, and, as said before, without regard to whether such expenditures were in part for permanent improvements, strictly so called, though we are inclined to say, as did the trial court, that they were all repairs within the language of the will expressly directing the application of the income of the property, so far as necessary, to the payment of all expenditures necessary to keep such buildings in a proper state of repair. That certainly includes all reasonable charges necessary to make the structures desirable as rentable property.

There is no other question that requires consideration. Some suggestion was made on the argument as to the right of the parties to have costs and counsel fees out of the estate, and as to directions for the court below to make a proper allowance for such counsel fees. It is considered that the subject of taxable costs, strictly so called, in a case like this, is wholly regulated by statute. The court below has discretionary power to allow or withhold costs as justice seems to require. If .allowed against the trustees they are payable out of the trust fund unless the court otherwise directs because of bad faith on the part of such trustees. R. S. 18J8, sec. 2932. That applies to all courts and to the reasonable counsel fees of the trustees as well as taxable costs, the latter meaning costs taxed according to the statutory fee bill. In this connection, as to the appeal to this court, we are unable to say that the appellant trustees have been guilty of such bad faith as should subject them, personally, to the- expenses of such appeal. Their costs and expenses here, therefore, will be paid from the trust fund, but from that part represented by the income. Whether their expenses, including counsel fees of the litigation below, shall be likewise paid, is a matter that will be left to the court that shall further superintend the administration of the trust.

In regard to granting counsel fees to the respondent, or giving directions to the lower court to do so, payable out of the trust fund, that is quite another question. There is no statute authorizing such a proceeding and no precedent for it in this court. The counsel fees of trustees, acting in good faith, and costs taxed against them as well, were always payable out of the trust fund, because of the injustice of making them bear the expense, personally, of matters done honestly, in a representative capacity. But it is considered that counsel fees to others that may be interested in the trust fund are not recoverable, either from the trustees personally or out of such fund. That was 'the rule in chancery before the Code, and there is no statute changing it, nor any precedent varying the old practice. Rose v. Rose B. Asso. 28 N. Y. 184; Downing v. Marshall, 37 N. Y. 380; Devin v. Patchin, 26 N. Y. 441; Lee v. Lee, 39 Barb. 172; Parsons, Costs, 132. There are cases in this court for the construction of wills, and contests as to the validity of wills, where a different rule has been adopted, which we need not review here. It does not apply to this case.

An examination of respondent’s brief satisfies us that there is much unnecessary matter in it. Costs for that we limit to $35.

By the Court.— The judgment, of the circuit court is affirmed, costs to be taxed and paid as indicated.

BaRdebN, J., took no part.