Opinion
September 12, 1956 —
October 9, 1956.
APPEAL from an order of the county court of Sauk county: ROBERT H. GOLLMAR, Judge. Affirmed.
For the appellant there was a brief and oral argument by George T. Doherty of La Crosse.
For the respondents there was a brief by Langer Cross of Baraboo, and oral argument by Clyde C. Cross.
Proceeding instituted by George A. Horkan to require Glen Horkan and Agnes Horkan, executors of the last will of James W. Horkan, deceased, to show cause why a certain legacy bequeathed to George A. Horkan should not be paid to him together with interest at the rate of five per cent computed thereon.
James W. Horkan died testate May 4, 1945. Under date of May 23, 1941, he had executed his last will, which will was admitted to probate by the county court of Sauk county on June 12, 1945. Such will bequeathed $100 for Masses for the repose of the souls of the testator and his deceased wife, bequeathed a legacy of $6,500 to his son George A. Horkan (hereinafter referred to as "George"), and directed that the residue be divided in equal shares among testator's six children, including George. The clause of the will under which the $6,500 legacy was bequeathed to George read as follows:
"I give, devise and bequeath to my son George A. Horkan the sum of Sixty-five Hundred ($6,500) Dollars; however; said sum shall remain in the custody of my son Glen Horkan, and my daughter Agnes Horkan, coexecutor and executrix, they to pay to the said George A. Horkan such amounts of interest and principal as they may deem fit."
Under date of February 5, 1947, the final decree was entered in the probate proceedings. Such decree assigned the residue of the personal estate, and the sum of $6,500 to George subject to the following proviso:
". . . however, said sum shall remain in the custody of Glen Horkan and Agnes Horkan, executors; they to pay to the said George A. Horkan such amounts of interest and principal as they may deem fit, — all in accordance with the terms and provisions of the will of deceased."
The instant proceedings were instituted by George under date of January 4, 1956. A hearing was had and testimony taken.
Such testimony disclosed: The executors had previously paid to George $4,000 of principal and some interest of such bequest, leaving a balance due of $2,500 principal and accumulated interest. The executors had deposited said legacy in bank savings accounts, where it drew two per cent interest, in order that the executors would have liquid funds with which to make payments from time to time to the legatee George had a long history of financial irresponsibility prior to the death of his father. Numerous judgments had been entered against him, and his father on such occasions had come to George's financial assistance. It was this financial irresponsibility on the part of George which had caused the father to provide in his will that the $6,500 was to be held by the executors and paid out together with interest at such times as the executors saw fit.
Under date of February 11, 1956, the trial court entered an order providing as follows: The court determined that a trust had been created by the testator for the benefit of George, with Glen Horkan and Agnes Horkan as trustees; that upon Glen and Agnes qualifying as trustees by furnishing bond in the sum of $3,000 a further order be entered appointing them as such trustees; and that the trustees be required to file an inventory of the trust estate within thirty days from the date of the order appointing them. Such order of February 11, 1956, further denied George's application that the trustees be surcharged with five per cent interest on the unpaid balance of the principal of the trust, and held that they were only required to account for the interest that had been actually received by them on the bank savings accounts in which the trust funds had been invested.
George A. Horkan has appealed to this court from said order of February 11, 1956.
Appellant George A. Horkan advances the following contentions on this appeal:
(1) The final decree entered in his father's estate assigned the sum of $6,500 outright to him, and the language of the proviso immediately following such outright assignment is meaningless and void;
(2) The trial court had no jurisdiction to rewrite a portion of the final decree so as now to find the creation of a trust;
(3) If resort can be had to the will in construing the final decree, then the will made an absolute bequest of $6,500 to George and any subsequent qualifying language in the bequest was vague and inconsistent and must be disregarded; and
(4) The delay of the executors in paying the balance of the legacy subjects them to legal interest from November 28, 1947.
In passing upon the appellant's petition it was necessary for the trial court to construe that portion of the final decree covering the assignment of the $6,500 legacy because of the words " all in accordance with the terms and provisions of the will of deceased" appearing in the clause in question in the final decree. In so doing it was proper for the trial court to resort to the terms of the will itself in construing such clause. Will of Dolph (1951), 260 Wis. 291, 296, 50 N.W.2d 448, and Will of Greiling (1953), 264 Wis. 146, 149, 59 N.W.2d 241. Furthermore, in interpreting the language employed by the testator in the clause of the will whereby the $6,500 was bequeathed to George it was proper for the learned trial court to take testimony of the surrounding circumstances existing at the time testator drafted his will. This testimony clearly disclosed George's financial irresponsibility and the desire of testator to protect George by not having the $6,500 paid outright to him at one time, but leaving it to the discretion of the brother and sister named as executors as to when and in what amounts such legacy with interest should be paid to George. In our opinion in the recent case of Estate of James, ante, pp. 50, 54, 76 N.W.2d 553, we stated:
"Courts, including our own, have held many times that where reasonably necessary to carry out the intention of a testator devises and bequests may be considered to be in trust even when there is no express language in the will providing therefor. Estate of Cobeen, 270 Wis. 545, 72 N.W.2d 324; Will of Smith, 176 Wis. 494, 186 N.W. 180."
We think the instant case is a proper one for application of the above-enunciated principle and, therefore, the trial court properly determined that testator's intention would be best carried out by construing the will as having bequeathed the $6,500 in trust. Furthermore, as pointed out by the trial court in its memorandum opinion, executors should not be permitted to hold an estate open for an indefinite period of time. While in some situations it may be necessary that the closing of an estate be delayed on the part of the executors, this is not such a situation. Here it can be avoided through the instrumentality of a trust with the executors qualifying as the trustees.
The qualifying language of the will immediately following the bequest of the $6,500 to George, and likewise the qualifying language of the clause immediately following the assignment of the $6,500 legacy to George, is not inconsistent with George acquiring a vested interest in such legacy. There is no question but that the interest acquired by George under the bequest is a vested one subject to no contingency, time of payment being only postponed. For a court to disregard such qualifying language of both the will and the final decree would fly in the teeth of the manifest intention of testator to restrict the time of payment to the discretion of the brother and sister named as executors.
We, therefore, conclude that the trial court properly concluded that a trust was created by the will with respect to the $6,500 bequest to George.
This leaves as the only remaining point to be considered the application to surcharge the executors with the payment of interest at the legal rate of five per cent on the unpaid balance of the legacy computed from the date of the final decree.
The principal of the legacy was deposited in bank savings accounts which are eligible for the investment of trust funds, and the circumstances justified the respondents in keeping the money in a bank savings account instead of investing in securities with a higher yield. The reason advanced by appellant for such surcharge is the alleged unwarranted delay of the executors in making payment of such balance. However, the determination that a trust was created giving the executors such discretion to withhold payment until such times as they deemed advisable in the interests of George to pay such balance of the legacy, makes untenable the reason advanced by appellant for penalizing the executors by requiring payment of legal interest.
Sec. 320.01 (4), Stats.
By the Court. — Order affirmed.