McAfee v. Thomas , 121 Or. 351 ( 1927 )

This is a suit by the three plaintiffs, as trustees, against George H. Thomas for an accounting as a trustee. The trial court rendered a decree in favor of plaintiffs in the sum of $1,879.30, with interest and costs. Defendant appealed. Since the appeal the administratrix of the defendant, who is now deceased, has been substituted as defendant. George H. Thomas was made a trustee under a clause in the last will and testament of F.A. Litchenthaler, who died March 12, 1906, which reads as follows:

"I give, devise and bequeath to my son George C. Litchenthaler, for his natural life only, all the net income derived from my property, real, personal and mixed, hereby to that end transferring the same to George H. Thomas as trustee for said George C. Lichtenthaler with full power to manage, control and secure an income from said property in any manner he may deem proper paying the same as it accrues, to or for the support and maintenance of my son as he may deem proper paying the same as it accrues, to or for the support and maintenance of my son as he may deem advisable * *" Said will and codicil thereto provides that "Subject to said life estate of my son I give, devise and bequeath my said property, so that the same shall take effect upon his death to" Roger McAfee, Newton McCoy and M.F. Miller, "as trustees to manage, rent, control and regulate as they may deem proper, investing the income and proceeds to the establishment, support and continuance of a non-sectarian Christian Mission to be known," etc.

George C. Litchenthaler, the son, was an epileptic and by reason of his infirmity was utterly unable to support himself and required constant care and attention. His father, prior to his death, had devoted practically his entire attention to the boy. The boy's condition became steadily worse until his death June 26, 1919. The trustees, Roger McAfee, Newton McCoy and M.F. Miller, were executors of the last will of F.M. Litchenthaler, deceased.

Upon the completion of the administration of the estate under the will of F.M. Litchenthaler, the executors turned over to George H. Thomas, as trustee, for the use of George C. Litchenthaler, about March 11, 1907, $2,478.13, of which $2,077.18 was principal and $400.55 was income of the estate, and the executors also turned over to said trustee the management of two old dwelling-houses and a store building, which were then producing a small income of about $41 per month. F.M. Litchenthaler, at the time of his death, had an interest in some mining claims in eastern Oregon from which it was evidently expected there would be considerable income. The defendant trustee received from that source $76.00, as a portion of money paid for an option to purchase.

Thomas was requested by the father of George C. Litchenthaler to take the best of care of his son during his lifetime. During the probate of the estate F.M. Litchenthaler, deceased, Thomas took the son to his own home and kept him as one of the family, for about one year. Afterward he became so violent, by reason of his epileptic attacks, that Thomas was obliged for many years to keep him in an asylum where he could be cared for. The money was kept loaned out by Thomas and the buildings were rented, as far as possible. A sufficient amount of the funds of the estate, to take care of the ward, were applied for that purpose but the income from the buildings became steadily less and the cost of caring for the ward increased. At the termination of the duties of Thomas as trustee, the necessary support of the ward and his necessary funeral expenses had consumed all the money on hand, except $384.77.

Defendant alleges that said ward was the only child of his father, and natural law, equity and humanity demanded that he be given, during his lifetime, what his necessities required, even as would have happened had his father been living.

The defendant alleged that he served as trustee twelve years and three months in the collection and disbursement of the funds, the renting of the house, the payment of taxes, maintaining insurance and repairs, and the numerous other duties demanded in such cases; and that the reasonable value of his services is $6 per month, or $882; that the reasonable value of the board, lodging, care and attention for the ward during the year of probate was $600, of this the executors paid $150; after the death of the ward, for the period of about one year, Thomas, as agent for plaintiff, cared for the real property and his services for that period were worth $60, which was allowed by the trial court.

Defendant alleges that his services in caring for the wants of the ward for twelve years and three months was of the value of $12 per month, or $2,294; that the total value of his services is $3,836, no part of which has been paid, except $150, leaving a balance due of $3,686; that the appellant has on hand, after having paid for the care and expense of said estate and ward, the sum of $384.77, which he is entitled to apply in part payment for the balance of his services, leaving a balance due him of $3,301.23. That on February 23, 1921, he fully accounted to plaintiffs and transferred to them all the real property held by him under the trust. MODIFIED. The trial court held that only the income of the property of the estate of F.M. Litchenthaler, deceased, was subject to the payment of the expenses of the care of the son George C. Litchenthaler, and rendered a decree accordingly, after allowing Thomas, the trustee, $60 for services to plaintiff in making collections and disbursements since the death of George C. Litchenthaler, and another creditor of $15, and the funeral expense of George C. Litchenthaler, $150.

The questions in this case are first in regard to the authority of the trustee to expend the principal of the funds of the estate of F.M. Litchenthaler for the support of the son George C. Litchenthaler, and in regard to the compensation of George H. Thomas as trustee.

An account was rendered by Thomas to the present trustees, the plaintiffs, of all the items of receipts and expenditures as trustee for George C. Litchenthaler. The correctness of the items is not questioned, except as indicated. Parents are bound to maintain their children, when poor and unable to work to maintain themselves: Section 9763, Or. L. It is clear from the provisions of the will that the testator intended to provide for the care and maintenance of his invalid son during his lifetime. The difficulty arises on account of the estimate of the income of his property. If the conditions had remained substantially as the testator contemplated them, there would have been no question as to a proper and literal execution of his will.

The surrounding conditions were such that the houses were not desirable except for paying small rents. The mines did not pan out richly and it became impossible for the trustee who was given "full power to manage, control and secure an income from said property in any manner he may deem proper" for the support of the son to pay for the same from the income.

According to the provisions of the will, if from the mines, or any source, an income of the estate had been obtained largely in excess of the requirements for the care of the son, the surplus of such income would have gone to the plaintiffs as trustees. This indicates there was no real difference in the mind of the testator between a dollar of the principal and a dollar of the income of the funds of the estate. All the court can do is to make a substantial approximation to the scheme which the testator announced in his will, in order to carry out the real intent of the testator. See Wikle v. Woolley, 81 Ga. 106 (7 S.E. 210).

We are not blazing a new trial in the matter, although the like cases are not numerous. In the case of McGill v. Young,75 N.H. 133, 134 (71 A. 637), we read as follows:

"Although the testator says in the clause of his will in which the provision for the support of his son appears, that the trustee shall support him out of the net income of the estate, it is highly improbable it was intended to limit the trustee to that fund and to forbid him to use the principal if at any time the income should be insufficient for the purpose." * *

It will be noticed that the testator did not devise and bequeath all of his property to the plaintiff trustees but devised and bequeathed his property "subject to said life estate of my son." Taking the whole instrument together, although the testator directs the support of his son from the income, it is not probable that he intended to limit the trustee to that fund and forbid him to use the principal, if at any time the income was insufficient for the purpose. On the other hand, an intent to care for the son, as he was unable to care for himself, is indicated by the will. There was, however, a limitation contained in the codicil to the will which affects the property devised and bequeathed to the plaintiff trustees, which restriction was to take effect upon the death of the son. The second clause of the codicil provides "the said trustees shall not sell or mortgage any of my real or personal property in the City of Portland, Oregon." There is no such restriction found in the will as to the authority of George H. Thomas trustee for George C. Litchenthaler.

In endeavoring to construe a will so as to ascertain the intention of the testator, the courts will, as far as possible, put themselves in the position of the testator by taking into consideration the circumstances surrounding him at the time of the execution of the will. The court should consider the condition of his family and estate, his affection for the legatees, his social relations, etc.: 30 Am. Eng. Ency. of Law, p. 666.

Where the conditions of the estate changed from what the testator had in contemplation, and the income was no longer sufficient to care for the purposes designated in the trust, the court will so change the terms of the will as to effect as nearly as possible the intention of the testator: 30 Am. Eng. Ency. of Law (2 ed.), p. 667.

In cases of extreme urgency the court will allow maintenance for the infant out of the capital fund, even when inconsistent with the disposition made by the testator: Woerner, Am. Law of Adm. (3 ed.), pp. 1581, 1582.

As to the compensation of trustee, as a general principle trustees are entitled to a reasonable compensation for their time, trouble and skill in managing the fund usually payable out of the income, but in many cases it is payable out of the principal, the matter being more or less in the discretion of the court: 2 Perry on Trusts, § 918; 26 R.C.L. 1392; 28 Am. Eng. Ency. of Law (2 ed.), p. 1014.

In the case at bar the testimony indicates that it was reasonably worth five or six dollars per month for caring for the real property, collecting rents, etc., but the real estate has been turned over by Thomas to the plaintiffs, who are the present trustees and the title thereto should not be encumbered with the compensation of the trustee. The defendant should have made an application to the court for a construction of the will and obtained permission to expend the principal in caring for the ward before disbursing the funds.

George H. Thomas, the trustee, will therefore be allowed a small commission for his services, amounting to the balance of cash on hand, $384.77, and the account of Thomas as trustee will be squared and approved. The decree of the court will be changed accordingly. MODIFIED.

BURNETT, C.J., and BROWN and BELT, JJ., concur.