Estate of Curtis

Full title: ESTATE OF CURTIS: BERGH and another, Trustees, Appellants, vs. CURTIS…

Court: Supreme Court of Wisconsin

Date published: Jul 1, 1948

33 N.W.2d 193 (Wis. 1948)

33 N.W.2d 193

33 N.W.2d 864

Opinion

May 27, 1948. —

July 1, 1948.

APPEAL from a judgment and order of the county court of Dane county: FRED M. EVANS, Judge. Reversed, and cause remanded.

For the appellants there was a brief by Spohn, Ross, Stevens Lamb of Madison, and oral argument by William H. Spohn.

For the respondent there was a brief by Murphy, Armstrong Gavin of Madison, and oral argument by Perry Armstrong and Stephen E. Gavin.

William D. Curtis died December 19, 1935, leaving a will which was duly admitted to probate on the 30th day of December, 1935. The fifth paragraph of the will is as follows:

"I will, give, devise, and bequeath unto my trustees hereinafter named the survivors and survivor of them, and successors or successor, the sum of one hundred thousand dollars ($100,000), in trust nevertheless, to hold and manage the same, and they are hereby authorized to invest and reinvest the said trust fund in their good discretion and according to the provisions of law, so as to make the same productive, and shall pay or cause to be paid to my said wife, Jessie L. Curtis, in case she shall survive me, the net income from said trust fund in at least quarter-yearly instalments during her natural life. If the income from such trust fund shall not be sufficient to maintain and care for my said wife comfortably, then it is my will and wish and I hereby authorize and direct my said trustees or trustee, as the case may be, to pay to her from time to time out of the corpus of the trust estate such additional sums as she may desire and request for her comfort, due consideration being given to her age, condition of health and position in society. Such additional payments shall not exceed twenty-five hundred dollars ($2,500) per annum during her natural life."

At this time Tobin S. Curtis, son of the testator, and Reid M. Bergh, his son-in-law, are the trustees of the trust created by the will.

On February 17, 1947, the widow filed a petition with the court asking for an order of the court directing the trustees to pay to her forthwith from the corpus of said estate the sum of $517.10, representing nonrecurring expenses due to her recent illness, together with such sums of principal as may be needed from time to time to provide her with an income of $450 per month, such disbursements of principal not to exceed $2,500 in any one year, all in accordance with the last will and testament of William D. Curtis.

On May 20, 1947, the trustees filed a reply in which, after making certain admissions and denials, the petitioners alleged:

"The trustees further allege that the petitioner does not have the absolute right to payment of corpus to her under the will of the deceased, that in determining her right to the payment of corpus, her own separate estate and other income must be considered; that under all circumstances she has not shown herself to be entitled to any corpus and that there has been no abuse of discretion on the part of the trustees in failing to make any corpus payment to her."

On April 22, 1947, the court made and filed its opinion in which are found the following recitals:

"When the matter was heard before the court it was agreed by and between the attorneys that there should be a construction of the will, and that any and all other proceedings should be held in abeyance until a decision was made interpreting the last will and testament."

On May 1, 1947, the following judgment was entered:

"It is herewith ordered and adjudged that the will of the said deceased and particularly article fifth thereof be, and the same hereby is construed to grant to the trustees the discretion as to whether or not the income payable to Jessie L. Curtis from the trust estate is sufficient to properly maintain and care for the said Jessie L. Curtis; that the said trustees may, in their discretion, make payments of corpus to the said Jessie L. Curtis, not to exceed, however, the sum of two thousand five hundred dollars ($2,500) per annum."

It was further ordered that the trustees might answer the petition within fifteen days and that any issue raised thereunder be heard at such time as the court may set. Pursuant to this provision of the judgment the reply of the trustees dated May 20th, referred to above, was filed.

No appeal was taken from the judgment entered May 1, 1947.

The matter was brought on for hearing on June 6, 1947. On October 23, 1947, the court filed its opinion. The sixth and seventh paragraphs of the formal findings are as follows:

"6. That it was the desire of the testator that the petitioner be maintained in the manner in which she has been accustomed to living, with due consideration to her welfare after his death and to permit her to continue to reside in the said homestead; that in making the said bequest of $10,000 and the said devise of the said homestead it was the intention of the testator that the petitioner have funds for her own separate use, above and apart from the income that she would receive from the trust estate; that the said deceased did not give consideration to or intend to provide for persons other than the petitioner who might be members of her family.

"7. That the trustees, in exercising their discretion as to the payment of corpus to be made to the said petitioner within the said $2,500 per annum authorized to be paid from corpus, should disregard payment of interest and principal or other expenses in connection with the said mortgage on the said homestead and expenses for repairs or improvements made on the homestead subsequent to the date hereof; that the rental income from the said homestead belongs to the said petitioner in her own right and may be used to provide for such expenses or in such other manner as the petitioner in her discretion deems proper; that the trustees, in exercising their said discretion, should consider the other expenses of the said petitioner, including among others nursing care, medicine and medical care, food for the petitioner and her attendant, if any; heat, real-estate taxes and repairs to date hereof for the said homestead, liability for income taxes, donations customarily made by petitioner and services for her attorney in fact; that the said trustees should provide for such other expenses from the corpus of the trust estate up to the said sum of $2,500 per annum when the income from the trust estate is not sufficient to provide therefor."

The judgment is as follows:

"1. That the petitioner should from time to time fully advise the trustees as to her actual expenses to the end that they may exercise their discretion and perform their duties as provided under the last will and testament of the said deceased.

"2. That the said trustees in the exercise of their discretion should provide for the care and support of the said Jessie L. Curtis [petitioner] in accordance with the will of the said deceased and as hereinbefore provided, giving due consideration to her age, condition of health and position in society, and if the income from the said estate is not sufficient to provide therefor, that the said trustees may pay additional sums to petitioner from corpus, not to exceed, however, the sum of $2,500 per year.

"3. That there has been no abuse of discretion on the part of Tobin S. Curtis and Reid M. Bergh trustees under the last will and testament of the said deceased.

"4. That promptly after January 1, 1948, the petitioner should submit her request for payment from corpus as she deems proper for 1947 supporting the same with an itemized statement of her expenses relied on in support thereof; that the trustees should promptly exercise their discretion with respect thereto; that the court retains jurisdiction hereof in the event the parties are unable to agree with respect thereto as to the corpus payment to January 1, 1948, if any."

On January 21, 1948, the petitioner filed a bill of particulars for the year 1947, which may be summarized as follows:

Food, milk, fuel, medical, medicine, utilities ...... $1,761.70 For repairs ............................ 602.98 For services of practical nurse, attorney in fact, real-estate taxes, state and federal income taxes, donations, payment on mortgage loan ........ 4,297.85 Miscellaneous ....................................... 83.93 --------- Total expenses ...................................... $6,746.46 Income received from trustees during 1947 ........... $3,402.39 --------- Deficiency of trust income for expenses ............. $3,344.07 In response to this bill of particulars the trustees made reply on February 2, 1948, the material part of which is as follows:

"That in the opinion of your respondents the income which the said Jessie L. Curtis received in 1947 was adequate to provide for her care and support in the manner contemplated for her under the last will and testament of the said deceased and for that reason they have elected at this time not to pay any sums of corpus to her."

On February 2, 1948, the trustees appealed from the judgment of December 9, 1947, to this court.

ROSENBERRY, C. J.

The issue presented by the pleadings in this case is whether the income from the trust estate for the year 1947 is sufficient to maintain the petitioner in accordance with the terms of the will. While the proceeding began early in 1947 no conclusion was reached until December 9, 1947, at which time the judgment required the petitioner to advise the trustees as to her actual expenses, which she did, in response to which the trustees filed a declaration alleging that the income which Jessie L. Curtis received in 1947 was adequate to provide for her care and support in the manner contemplated for her under the will.

The court did not decide the issue thus raised. It is apparent that the judgment of December 9, 1947, called for an accounting, the purpose of which was of course to determine the issue made by the pleadings. It was therefore, not in name but in substance, an interlocutory judgment. The will having been construed by the judgment entered May 1, 1947, the only issue remaining for determination was whether the income from the trust estate was sufficient to maintain the petitioner in the manner provided for by the will.

An examination of paragraphs 6 and 7 of the findings of fact discloses that those "findings" do not deal with facts. They are in effect conclusions of law or parts of the judgment and will be so treated in our consideration of the controversy. Tesch v. Industrial Comm. (1930) 200 Wis. 616, 229 N.W. 194.

In view of the fact that the record must be returned to the trial court for a determination of the issue made by the pleadings and the entry of a final judgment we deem it appropriate to discuss some of the matters that will be under consideration upon the hearing.

The judgment entered on May 1, 1947, by which the court determined that the will granted "to the trustees the discretion as to whether or not the income payable to Jessie L. Curtis from the trust estate is sufficient to properly maintain and care for the said Jessie L. Curtis" did little if anything more than repeat the provisions of the will. Taken in connection with the opinion of the court it is clear that the court did not intend thereby to vest the trustees with discretion to alter the standards established by the will. The language of the will is:

"If the income from such trust fund shall not be sufficient to maintain and care for my said wife comfortably, then it is my will and wish and I hereby authorize and direct my said trustees or trustee, as the case may be, to pay to her from time to time out of the corpus of the trust estate such additional sums as she may desire and request for her comfort, due consideration being given to her age, condition of health and position in society. Such payments shall not exceed $2,500."

The will is not happily phrased, but it clearly appears that she is to determine whether she is in need of additional funds and her request is to be granted, due consideration being given to her age, condition of health, and position in society. It is clear that the trustees are not to take charge of her life and determine what additional amount, in their judgment, considering her income from other sources as well as the trust estate, is necessary to enable her to live in comfort. The will in effect makes an appropriation from the trust estate of $2,500 per annum during the natural life of the petitioner. Additional payments are to be made to her therefrom for her comfort, considering her age, condition of health, and position in society, if she so desires. There is no indication in the will that whether additional payments should be made from the corpus was to depend upon the judgment of the trustees as to her necessities, or that in determining the time and amount of payment the trustees were to consider anything but the income from the trust estate. In making their determination the trustees considered her "income" and did not limit their consideration to income from the trust estate. In that respect they were clearly in error. Matter of Martin, 269 N.Y. 305, 199 N.E. 491.

While the will does not require the petitioner to account to the trustees for the disposition of the income from the estate, the trustees are certainly entitled to some information in regard to her situation in order to determine whether the income from the trust estate is sufficient to maintain the petitioner in accordance with the terms of the will. The suggestion of the trial court in that respect indicates a proper method. While the discretion conferred upon the trustees by the will is not broad, consideration for its exercise is to be found in Restatement, 1 Trusts, pp. 479, 480, sec. 187, comment d.

It is considered that the trial court correctly held that the trustees should disregard payment of interest and principal or other expenses in connection with the mortgage executed by the petitioner upon the homestead. It is also considered that the items necessarily expended for current repairs and necessary improvements in order to make it comfortable for the use of the petitioner should be taken into account. The trial court correctly held that the trustees should consider necessary expenses for nursing care, medicine, medical care, food for the petitioner and her attendant, if any, heat, real-estate taxes, and repairs. She is to be supported in comfort, not on the verge of need.

The will makes no provision for the, payment of taxes assessed against the petitioner personally. It is clear, however, that the testator intended that his widow should continue to reside in their home and one of the necessary provisions therefor is the payment of taxes assessed against the homestead, which should also be considered by the trustees. As to these items the will imposes upon the trustees a duty. They are expenditures necessary to provide for the maintenance of the petitioner in comfort.

If upon the final hearing it should appear that the income from the trust estate for the year 1947 is not sufficient to provide for the petitioner, the year having nearly expired before the interlocutory judgment was entered, the final judgment should be for the payment in addition to income from the trust estate of such sums from the corpus for the year 1947 as may be found to be necessary to discharge the liabilities of the petitioner for an additional sum not exceeding $2,500. The trustees having failed to exercise a proper discretion under the facts of this case, the matter should be determined finally in this proceeding.

In order to carry out the wishes of the testator satisfactorily it is necessary for the petitioner and the trustees to co-operate. When demand is made upon the trustees such demand should be accompanied, as already stated, by the statement of the petitioner's wishes in regard to the matter. If they are reasonable and do not exceed the limitation provided in the will payment should be made at such times and in such amounts as the trustee shall determine.

By the Court. — The judgment appealed from is reversed, and the cause is remanded to the trial court for further proceedings.

Martin, J., took no part.

The following opinion was filed September 14, 1948:

ROSENBERRY, C. J. (on motion for rehearing).

Appellants move for rehearing and ask for a clarification of the opinion and propound the following question: Which of three possible authorities is the proper one to determine whether the incomes of the trust estate are sufficient to support the petitioner in the manner outlined in the will, that is: (a) The petitioner herself, (b) the trustees, or (c) the court?

The will provides:

"If the income from such trust fund shall not be sufficient to maintain and care for my said wife comfortably, then it is my will and wish and I hereby authorize and direct my said trustees or trustee, as the case may be, to pay to her from time to time out of the corpus of the trust estate such additional sums as she may desire and request for her comfort, due consideration being given to her age, condition of health and position in society."

It is considered that this provision, taken in connection with what is said in the opinion, makes it plain that the initiative is with the beneficiary. She is to have such additional sums as she may desire and request for her comfort. If she makes a request for such a contribution from the trust estate it is the duty of the trustees to comply with it, providing such request does not exceed the limitation provided in the will. As was said in the opinion, she should make the request and the trustees should grant it if within the provisions of the will as construed.

Appellants again urge upon our attention Matter of Martin, 269 N.Y. 305, 308, 199 N.E. 491. The will in that case directed the trustees to pay the named beneficiary the net income "and such part of the principal thereof as she may require for her care, support and comfort, during her natural life." Upon the basis of a prior determination of the lower court not appealed from, the word "require" was construed to mean "need or necessity." There is a wide and clear distinction between the language of the will in this case and, the language of the will in the Martin Case. If we should accept the definition of the word "require" given by the court of appeals, which we would hesitate to do, the Martin Case would not be applicable.

Webster defines "desire" as follows: "To long for; to wish for earnestly; to covet; to hope for." To give what the beneficiary may hope or wish for certainly is a much more ample and generous gift than one based upon need or necessity. If the petitioner should make a request for money to distribute to her friends and relatives that would seem to be clearly a request for something beyond the means to make her comfortable. If she makes a request for items properly related to her comfort under the terms of the will as construed, as has already been said, it is the duty of the trustees to grant it when and as made. As was said in the opinion, the satisfactory administration of the trust created by this will requires the friendly co-operation of the trustees and the beneficiary. If the trustees refuse a proper request made by the beneficiary the matter will be for the court in a proper proceeding.

By the Court. — Motion for rehearing denied. It is further ordered that the costs of this case be paid out of the corpus of the estate, including disbursements and reasonable attorneys' fee for counsel on each side, the amount of the same to be fixed by the trial court.