Northern Trust Co. v. Thompson

245 Ill. App. 20, 1927 Ill. App. LEXIS 201
CourtAppellate Court of Illinois
DecidedJune 14, 1927
DocketGen. No. 31,473
StatusPublished
Cited by3 cases

This text of 245 Ill. App. 20 (Northern Trust Co. v. Thompson) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northern Trust Co. v. Thompson, 245 Ill. App. 20, 1927 Ill. App. LEXIS 201 (Ill. Ct. App. 1927).

Opinion

Mr. Presiding Justice G-ridley

delivered the opinion of the court.

As grounds for a reversal of the decree, counsel for Condict and Lucy Smith here contend, as they strenuously urged before the chancellor, (1) that complainant, as trustee, under a proper interpretation of said trust indenture of July 7, 1892, has no'power, express or implied, to execute the compromise agreement of December 16, 1925; (2) that, if such power in the trustee be lacking, a court of chancery is not justified, over the objections of adult beneficiaries of the trust, in so modifying and enlarging the terms of the trust instrument as to approve and confirm said compromise agreement, especially where the evidence does not disclose any necessity for such modification or enlargement in order to preserve the trust estate from destruction or to carry out the main intentions of its creator; and (3) that the compromise agreement, as drafted, is not beneficial to the trust estate.

As to the first contention. In 26 R. C. L. 1372, § 232, it is said: “It is an elementary principle in the law of trusts that in the execution of a trust, the trustee is bound to comply strictly with the directions contained in the trust instrument, defining the extent and limits of his authority, and the nature of his powers and duties.” In 3 Pomeroy’s Eq. Juris. (4th Ed.), § 1062, it is said: “The trust itself, whatever it be, constitutes the charter of the trustee’s powers and duties; from it he derives the rule of his conduct; it prescribes the extent and limits of his authority; it furnishes the measure of his obligations.” In 2 Perry on Trusts (6th Ed.), § 475, it is said: “In a court of Imu, the trustee is the absolute owner of the estate, and he can exercise all the powers of ownership; * * * but in equity the cestui que trust is the owner, and the question in equity is, how far the trustee can act without exceeding his powers, and rendering himself responsible to the cestui que trust. * * * In trusts of a more particular and active kind, the general power of the trustee is limited to the exact performance of the duty imposed upon him. The duty and power given in such trusts must be strictly performed.” By the trust indenture Mrs. Haskell conveyed to complainant, as trustee, the real estate (excepting the building thereon) and said 99-year lease of March 18, 1889, and empowered the trustee “to have and to hold” both, with all privileges and appurtenances, upon certain mentioned express trusts, viz, (1) to collect the rents of the property, at the times and in the manner provided in the lease, and, after deducting the trustee’s reasonable charges and expenses, to pay over the same as specified, and (2), at the termination of the trust as specified “to sell and convey the said real estate and leasehold interest” for the best price the same will bring in cash, and, after deducting the trustee’s reasonable charges and expenses, to divide and distribute the proceeds of the sale as specified. It is also provided, in two separate clauses at the end of the instrument, that “in the performance of the trusts hereunder, the trustee shall be held only to fair and reasonable diligence and discretion” ; and that, if for any reason the said lease “should become forfeited or at an end,” then cmd in that case the trustee “shall have and is hereby given full power to manage, improve, control, lease, protect and care for” the trust estate and property, “according to its best judgment and discretion” but for the purposes and trusts provided for. Counsel for the trustee contended before the chancellor, and here contend, that, because of the language of these two clauses when read in connection with the other provisions, the trustee had at least the implied power to make with Thompson the compromise agreement. The chancellor Evidently agreed with the contention for, in delivering his oral opinion (contained in the transcript), he said in part, after quoting from the second of said separate clauses: “Of course, it may be said that under the ordinary rules of construction that' power is limited to — does not come into being until the contingency in question happens. But it occurs to me that the settlor had full knowledge of the fact that a forfeiture of the lease might occur, even within one year of the date of the execution of the instrument. If she was willing to give those large powers to the Trustee, in that event then it must have been her intention that the Trustee should have those general powers, at all events. I think that from that provision of the agreement the Trustee has an implied power to do these very things, because there is no reason for making the powers broader in the event of a termination of the lease, because that presents the same situation as it was at the outset.” We cannot agree with the contention of counsel for the trustee, or with the reasoning or conclusion of the chancellor in this regard. Inasmuch as by the trust indenture the said lease is made a part of the subject matter of the trust, and as the trustee is empowered “to have and to hold” the real estate and said lease until the termination of the trust and then to sell and convey the same, and as the trustee is directed and given full power (if the lease “should become forfeited or at an end”) to do the things mentioned according to its discretion, we think that it was the intention of Mrs. Haskell that such discretionary power in the trustee to do such things was to be exercised only in the event that the lease should become forfeited or at an end (neither of which contingencies have happened). And we think that the giving to the trustee of such discretionary power, only in such event, excludes the idea that Mrs. Haskell intended to grant to the trustee any discretionary power to amend, change or modify said lease, so long as it remained, in force (which the evidence shows was the case when the present bill was filed). And we think that the provision in the first of the two separate clauses (viz, that, in the performance of the trust, “the Trustee shall be held only to fair and reasonable diligence and discretion”) was intended only to be a limitation on the possible liability of the trustee, while acting as such within the limits of the powers. conferred upon it by the instrument. And we cannot believe that it was Mrs. Haskell’s intention, by the use of the words of said clause, to extend or alter the trustee’s power, granted by the other clauses of the instrument, so as to give it discretionary power to modify or change the lease (expressly made a part of the subject matter of the trust) and to make with Thompson such an agreement as the one in question, which the court refers to as a “supplemental or sublease.” It is well-settled law that “a deed should be so construed if possible as to give force to all its provisions.” (Walton v. Follansbee, 131 Ill. 147, 158.)

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Bluebook (online)
245 Ill. App. 20, 1927 Ill. App. LEXIS 201, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northern-trust-co-v-thompson-illappct-1927.