Newlin v. Newlin

52 N.E.2d 503, 114 Ind. App. 574, 1944 Ind. App. LEXIS 187
Indiana Court of Appeals·Decided January 19, 1944·No. No. 17,093.·Published·Cited by 7 cases

Opinion

Draper, J.

One Allen Newlin died a resident of Illinois, leaving large holdings of real estate and personal property there and in this State, all of which he undertook to dispose of by a will establishing a testamentary trust. His son, the appellant, Carl A. Newlin, was appointed executor in Illinois and thereafter, apparently to obviate defects in the execution of the will, the beneficiaries under it, who were all the heirs of the deceased, executed, their spouses joining, a certain agreement and deed of trust to Carl A. Newlin, as trustee, whereby all of said property, real and personal, was conveyed to him in trust with broad powers, for the use and benefit of all the heirs of Allen Newlin, including himself. This instrument substantially embraced the trust provisions of the will, and the trustee was therein charged among other things, with the duty of paying from the assets of the trust estate, any indebtedness thereof.

The appellee held two unpaid notes executed by the deceased, but on Carl A. Newlin’s promise to pay them, filed no claim against the decedent’s estate. He paid $950.00 on the notes in installments, but then refused further payment, and this action on the notes and to attach certain personal property in Sullivan County, Indiana, followed.

The pleadings are voluminous and it will be unnecessary to set them out. The court found the facts specially, stated conclusions of law favorably to appellee, *578 rendered a money judgment against all appellants, and sustained the attachment.

While the appellee does not confess any error, she is content if the judgment against Carl A. Newlin, as trustee of the Allen Newlin estate, should be sustained, and we shall, therefore, consider only the validity of the judgment against him as such, without consideration of the validity of the judgment against him individually or against the other appellants.

It appears from the findings that Allen Newlin, at the time of his death, was indebted to appellee on account of the notes and at the time of trial they were past due and with the exception of the $950.00, unpaid. The court found as a fact the execution of the will and of the agreement and deed of trust, each of which by its terms required the trustee to pay the indebtedness from the assets of the estate, and which trust the trustee in writing accepted and agreed to carry out. That Carl A. Newlin, as trustee, promised to pay the notes in consideration of appellee’s agreement to file no claim against the estate of Allen Newlin, deceased, and that the Allen Newlin trust was an operating trust, actively engaged in general farming and buying and selling cattle and stock in the' State of Indiana. That Carl A. Newlin, as trustee of the Allen Newlin estate, owned the property attached and that the appellee and all other parties interested in the trust, all of whom have appeared to this action, were nonresidents of the State of Indiana. All other creditors have been paid from the proceeds of the trust. In the view that we take of the case it is not necessary to consider the other findings.

On the facts found, the court stated as its conclusions of law (1) that the law is with the appellee and that she is entitled to recover the sum of $2,424.22, (2) that *579 each of the appellants is personally liable for the amount, (3) that the appellants were and are the owners of the corn attached and (4) that- appellee recover from the appellants her costs.

The appellants first assert error in overruling their demurrers to each paragraph of the complaint, but it will be unnecessary for us to determine their sufficiency, for the facts found are within the issues, and a correct statement or declaration of the law; may be made upon the facts found, and will cure any error in ruling on the demurrers, if such there was. Woodward v. Mitchell (1895), 140 Ind. 406, 39 N. E. 437; Smith, Trustee, v. Wells Mfg. Co. (1897), 148 Ind. 333, 46 N. E. 1000.

It makes no great difference whether the trust be regarded as having been created by the will of the testator or by transfer inter vivos, but assuming, as the parties apparently have, that the agreement and deed of trust was necessary and that its execution, and acceptance by the trustee, effectuated the trust, we are of the opinion that it did not, so far as appellee was concerned, amount to a contract for the benefit of the appellee as a third party beneficiary, but created a trust relationship not only as between the trustee and the heirs of the deceased, but also as between the trustee and the appellee, for by the agreement the trustee did not assume a personal liability to the appellee in consideration of the transfer of the property, but on the contrary was required to pay the indebtedness from the assets of the trust estate. See American Law Institute, Restatement Law of Trusts, § 14. Moreover whether the appellee became a creditor of the trust, or a beneficiary under it, is a question of the intention of the grantors, and we believe that the instrument itself reveals that it was intendeed to ac *580 complish the result above mentioned. Restatement Trusts, § 33 Oh. The appellee manifested her willingness to accept the benefits of the trust when she accepted the trustee’s assurances of payment, and neglected to file her claim against the decedent’s estate.

No discretion was vested in the trustee with respect to the payment of the debts owed by' the deceased. Given assets for-the purpose, he was required to pay them immediately and unconditionally, and that being true, the appellee as a beneficiary had the right to maintain an action at law to collect, American Law Institute, Restatement Law of Trusts, § 198.; Cavanagh et al. v. O’Connor et al. (1920), 189 Iowa 171, 176 N. W. 881, regardless of the existence of equitable remedies.

Free access — add to your briefcase to read the full text and ask questions with AI

Newlin v. Newlin, 52 N.E.2d 503, 114 Ind. App. 574, 1944 Ind. App. LEXIS 187 (Ind. Ct. App. 1944).

52 N.E.2d 503 (Newlin v. Newlin) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related