Opinion
06-20-1908
SWIFT v. CRAIGHEAD.
Bleakly & Stockwell, for complainant. S. Cameron Hinkle, for defendant.
Bill by Mary L. Swift against Robert D. Craighead, Jr., individually and as executor of the will of Mary A. Sloan, deceased.
Heard on bill and plea. Plea overruled.
Complainant's bill seeks an accounting, and defendant has pleaded certain facts as a bar to the rights asserted by complainant. The plea of defendant has been set down for hearing to determine its sufficiency. The bill avers that William J. Sloan, a resident of St. Paul, Minn., died intestate in that city March 17, 1880, leaving him surviving his widow, Mary A. Sloan, and his daughter, complainant herein, who is also the daughter of the widow; that by the intestate laws of Minnesota the daughter and her mother became entitled to certain personal property owned by decedent at his death, the daughter becoming entitled to two-thirds thereof and her mother (the widow) to the remaining one-third; that in order to carry out what they understood to be the wish of decedent the daughter and her mother mutually agreed to adopt a course whereby the widow should become the holder of the legal title of all of the personal property for her life, and assume its management and control during her lifetime, and pay one-third of the income to the daughter, and retain for her own use the remaining two-thirds of the income, and at her death the absolute title to the entire personal property should vest in the daughter; that in order to carry into effect the purpose above stated, and without consideration, the daughter executed, under date of April 28, 1880, an assignment to her mother of her rights in the personal estate, and in the assignment so executed expressly authorized the probate court to make a decree of distribution of all of the personal estate to her mother, and under date of May 27, 1880, a decree of distribution was accordingly so made, and on the same date a formal written agreement was executed by the daughter and mother, in which agreement the trust was specifically defined. A copy of the agreement defining the trust is annexed to the bill. After a recitation of all of the facts hereinabove set forth, the agreement declares that the mother holds the personal property covered by the decree of distribution "as trustee, and not otherwise, and for the following uses and trusts, and according to the following conditions." The uses, trusts, and conditions are then enumerated in the written agreement, and may be abbreviated as follows: (1) The trusteeship to continue during the life of the mother and to terminate at her death. (2) The property to be held by the mother as trustee for the joint benefit of the mother and the daughter and her heirs. (3) The trustee is empowered to invest and reinvest according to her bestjudgment, subject, alone, to the control of a court of competent jurisdiction. (4) The trustee to report to the daughter when demand is made. (5) The trustee to annually deduct expenses of the trusteeship and pay one-third of the net income to the daughter and retain for herself two-thirds. All reinvestments to become subject to the trust. (0) Upon the death of the mother the trusteeship shall terminate, and all of the property shall vest absolutely in the daughter. The bill then avers that the mother of complainant died April 10, 1907, without having fully accounted for the income pursuant to the requirements of her trust, and that defendant has wrongfully taken possession of the corpus of the property which was subject to the trust, and prays for an accounting and an injunction to prevent defendant from disposing of the property.
Defendant has pleaded in bar: (1) The decree of the probate court already referred to. (2) A will of the mother of complainant, wherein the property in question is bequeathed to defendant in trust. (3) A certain instrument in writing, executed by complainant and her mother, under date of May 18, 1904, which agreement, after stating the parties, is as follows: "That the said parties to this agreement, in consideration of the sum of $1 each to the other paid, the receipt whereof is hereby acknowledged, do hereby revoke and annul the agreement in writing by them entered into in the state of Minnesota on the 27th day of May, 1880." The agreement here referred to is the agreement which defines the trust, a copy of which is annexed to the bill.
Bleakly & Stockwell, for complainant.
S. Cameron Hinkle, for defendant.
BEAMING, V. C. (after stating the facts as above). The issues presented are necessarily controlled by an accurate ascertainment of the intention of the parties to the agreement of May 18, 1904, which is pleaded in bar. It is contended by defendant that the words "do hereby revoke and annul the agreement in writing by them entered Into in the state of Minnesota on the 27th day of May, 1880," are operative to discharge the trust only, and that these words do not and cannot operate to discharge the effect of the decree of distribution, which by its terms vested the absolute title to the property in the mother, and hence, with the trust discharged, the mother again became the absolute owner. I am unable to reach that conclusion. In determining the sufficiency of a plea in equity, the averments of the bill are to be accepted as true. The bill asserts that the assignment from the daughter to the mother of the daughter's two-thirds of the property was made without consideration and as one of the several steps necessary to carry out the general plan. The decree of distribution, which vested the legal title of the entire property in the mother, was based on the assignment, and was procured as another step in consummation of the general plan. It seems manifest, therefore, that the assignment, the decree of distribution which was based upon it, and the declaration of trust immediately following the decree, must at this time be regarded as necessary parts of one transaction. By that transaction, treated as a whole, the daughter surrendered the present right to two-thirds of the corpus of the property, and received in lieu thereof a right to one-third of the income from the property during her mother's lifetime, with a right to the entire property at her mother's death. On the other hand, the mother received two-thirds of the income from the property for life, in lieu of the surrender of a present right to one-third of the corpus of the property. The averments of the bill and the recitations contained in the trust agreement fully disclose that the trusteeship assumed by the mother was but one part of one transaction containing the three component parts referred to. Under these conditions the parties subsequently agreed to "revoke and annul" the agreement which declared the trust, without using other language to disclose their purpose. Had the trust been a voluntary or gratuitous trust, which had been declared by the mother in favor of the daughter touching property theretofore owned by the mother, and in which the daughter had at no time enjoyed rights other than those conferred by the trust agreement, perhaps it might be reasonably assumed that the parties intended to annul the trusteeship and thus restore the legal and equitable estate to the trustor; but where, as here, the trust agreement was but a part of one entire transaction, which had operated to transfer a legal title from the daughter to the mother and to substitute an equitable title in the daughter in lieu thereof, I am convinced that it cannot, in the absence of other evidence, be properly assumed that the parties intended by the language used to revoke only a part of and not the entire transaction. The language used, literally understood, revokes and annuls only the written agreement which declares the trust, and with the trust alone annulled the title would be in the mother under the decree of distribution; but when the language so used is considered in connection with the averments of the bill I am unable to give it that conclusive force. I am impressed that upon the entire record it must be held to have been the intention of the mother and daughter to restore their respective rights in the property as they existed at the death of the intestate under whom they held.
But, even should the agreement be given the force contended for by defendant, complainant is, under the averments of the bill, entitled to an accounting for the period prior to the execution of the agreement in question. The plea must therefore, in either view, be overruled.