Neff v. Cleveland Trust Co.

35 Ohio Law. Abs. 1, 21 Ohio Op. 461, 1941 Ohio Misc. LEXIS 283
CourtCuyahoga County Common Pleas Court
DecidedOctober 20, 1941
DocketNo 506975
StatusPublished

This text of 35 Ohio Law. Abs. 1 (Neff v. Cleveland Trust Co.) is published on Counsel Stack Legal Research, covering Cuyahoga County Common Pleas Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Neff v. Cleveland Trust Co., 35 Ohio Law. Abs. 1, 21 Ohio Op. 461, 1941 Ohio Misc. LEXIS 283 (Ohio Super. Ct. 1941).

Opinion

OPINION

By McNAMEE, J.

This is an action for a declaratory judgment brought by the plaintiffs, who are all the beneficiaries in being of certain trust estates created by the last will and testament of Charles H. Yeager, deceased. Defendant corporation is the trustee nominated and appointed in said' will to administer the trust. The testator died a resident of Pennsylvania where his estate was administered. His executors, pursuant' to the directions of the will, transferred the trust estate to the defendant corporate trustee whose place of business is located in this county. The trust res being located here to be administered in this jurisdiction, this court has authority to entertain the application for a declaratory judgment. This action is authorized by the provisions 'of Subsection (b) and (c) of §12102-4 GC, which provide in effect that any person interested as or through a fiduciary may have a declaration of rights or direction to the trustee in respect to any question arising in the administration of the trust.

The sum of approximately 8100,000 has been delivered to the defendant corporate trustee pursuant to the terms [2]*2of the will, and has been invested from time to time in securities of the class designated and described in §10506-41 GC. Defendant trustee now has about $40,000 in cash available for investment. The plaintiffs herein seeking a higher return on the income of the estate, and asserting that the defendant corporate trustee is not restricted by law to investments of the class specified in §10506-41 GC, have. requested the defendant to invest said trust funds in the class of securities designated in the Banking Act, more particularly those securities which are enumerated and specified in §§710-111, 710-112, 710-140, 710-164 to 710-166 GC, inclusive. The instrument creating the trust does not confer upon the trustee any discretion or authority to invest in securities not authorized by law. The trustee therefore has refused the request of the beneficiaries until its authority to comply therewith has been determined by a court of competent jurisdiction. Plaintiffs pray this Court to determine that defendant has authority as a corporate fiduciary to invest said trust funds in the securities described in the foregoing sections of the Banking Act. Defendant in its answer prays the direction and instructions of the Court and asks that the rights of all beneficiaries of the estate be protected in any order made herein.

The first paragraph of §10508-41 GC, reads:

“Except as may be otherwise provided by law or by the instrument creating the trust, a fiduciary having funds belonging to the trust which are to be •invested may invest them in the following : ”

. The balance of this section describes and enumerates the approved securities and contains a proviso which prohibits an administrator or executor from investing funds belonging to an estate except with the approval of the Court, or where the will or other instrument creating the trust. permits, .and a further provision which grants additional investment authority to a guardian, with approval of the court to invest in real estate located within the State of Ohio under certain circumstances. The entire section is too lengthy to be conveniently incorporated in full m this memorandum.

It is the claim of plaintiffs that the words “EXCEPT AS MAY BE OTHERWISE PROVIDED BY LAW” appearing in the opening sentence of §10506-41 GC, have the effect of including as proper investments py trust companies acting as fiduciaries, those securities enumerated in the sections of the Banking Act hereinabove referred to, as well as the securities specifically designated in §10506-41 GC. Defendant does not disagree with this contention, but on the contrary urges its adoption by the Court as the correct interpretation of the language in question. While there is no real dispute between the parties it is important that the existing doubt and uncertainty as to the investment authority of corporate fiduciaries be resolved by a determination of the Court.

[3]*3[2]*2Plaintiffs make a strong case for the view urged by them. Sec. 10506-41 GC, in its original form was adopted as a part of the new Probate Code which became effective January 1, 1932. The legislative history of this section discloses that when it was introduced in the Ohio Senate the opening sentence read “Except as otherwise provided by the instrument creating the trust”. Upon the suggestion of a representative of the corporate fiduciaries of Ohio the Senate Com.mittee in charge of the Bill amended this proviso by the insertion of the words “law” and “or”. As thus amended the proviso was adopted in its present form. It was suggested to the committee that the ,amendment would have the effect of granting to corporate fiduciaries the broad investment powers of trustees under the Banking Act in addition to the powers granted fiduciaries under §10506-41 GC. It appears also that at the time this amendment was under consideration by the Committee one of the chief ’opponents against extending greater investment authority to cor[3]*3porate fiduciaries knew and understood that the amendment was designed to achieve that result. Several other members of the Legislative Committee and of the Committee of the Ohio Bar sponsoring the legislation, whose views have been made known to the Court, likewise understood this to be the effect of the amendment. These views of the various committee members have been submitted to the Court in the form of written statements signed by them, or copies of letters written by them at the time this legislation was under consideration. These written statements have not been received by the Court as establishing evidentiary facts in this case, but have been considered as being helpful to a correct determination of the effect of the language of the proviso. The authorities in this State support the view that the Court may resort to committee reports and statements made in legislative debate as “aids to construction” (37 O. Jur. 703). Although the written statements of the members of the legislative and bar committees do not fall precisely within the category of committee reports or statements made in legislative debate, the Court is of the opinion that on principles similar to those which sanction the reception of the latter, consideration of these statements is fully warranted. That legislative leaders and members of sponsoring bar committees understood the language in question to have the effect claimed for it by plaintiffs, is a fact not to be dismissed lightly in arriving at the intent of the Legislature. While ■these statements are to be accorded great weight they are not conclusive of legislative intent. The intention of the Legislature is expressed in the act adopted and is the will of the majority of the members of both houses and the Court is required to resort to other “aids to construction” in an effort to determine whether the legislative intent as expressed in the Act is compatible with the understanding and intent of some of its members.

The new Probate Code is a model of clarity and preciseness of language. It represents a painstaking, thorough and skillful effort to achieve definiteness and certainty of statement in statutory law. Exceptions, exemptions and provisos generally are stated in apt, clear and unmistakable language. In the chapter dealing with fiduciaries of which §10503-41 GC, is a part, the definition of a “fiduciary” is stated in the following terms:

“Sec. 10506-1.

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Bluebook (online)
35 Ohio Law. Abs. 1, 21 Ohio Op. 461, 1941 Ohio Misc. LEXIS 283, Counsel Stack Legal Research, https://law.counselstack.com/opinion/neff-v-cleveland-trust-co-ohctcomplcuyaho-1941.