In a letter opinion dated June 5, 1998, the chancellor recognized that, as an exception to the "American Rule" that attorney's fees and costs generally are not recoverable by a prevailing litigant, a trustee who is required to defend in his capacity as trustee "without his own fault" is entitled to be reimbursed for attorney's fees and expenses incurred in the litigation. Willson v. Whitehead, 181 Va. 960, 965, 27 S.E.2d 213, 216 (1943). The chancellor, relying on Willson, accepted the trustees' argument that because "there is no trust fund within the control of the court but, rather, the trust is non-liquid realty," the burden of reimbursing the trustees should fall on the cestuis que trust, i.e., the beneficiaries who sued the trustees, personally.

The Beneficiaries challenge both the basis for and the amount of the award. Citing Willson v. Whitehead, 181 Va. 960, 965, 27 S.E.2d 213, 216 (1943), the Beneficiaries assert that a trustee is entitled to attorney's fees only if the litigation was initiated "without his own fault." Here, the Beneficiaries assert, the basis for the litigation was the Trustee's action in granting the purchase option, and therefore the Trustee is not entitled to attorney's fees.

As stated above, $36,450 was charged against the estate for services rendered by Grasty's counsel in defending him in the two removal suits. Grasty relies on Willson v. Whitehead, 181 Va. 960, 27 S.E.2d 213 (1943) where this Court held that Willson, a trustee, was entitled to his costs, out of the estate, expended in defending himself in a removal suit. This Court cited authority for the proposition that if an attempt to remove a trustee fails, it is proper to order payment of costs out of the trust estate.

In Yeager v. Yeager, 155 Kan. 734, 129 P.2d 242, 243, the court said: "Our forthright decisions, * * * have held that any action whose plain and essential purpose is to get rid of a will — to effect a result contrary to the obvious intent of the testator — is an action `to contest' the will." In Willson v. Whitehead, 181 Va. 960, 27 S.E.2d 213, it was held that trustees must defend all suits against them with respect to the subject of the trust. In Tuttle v. Union Bank and Trust Co., 112 Mont. 568, 119 P.2d 884, 139 A.L.R. 127, the court held it is the duty of a trustee reasonably to defend any suit which will affect the trust estate, regardless of whether the trustee has any personal pecuniary interest in the outcome thereof.

He resisted an attempt to wrest the administration of the trust from one selected by the testator and to place it in strange hands. . . . Plainly, such services, if paid for by the trustee personally, would justify reimbursement on his accounting before the surrogate. See also Willson v. Whitehead, 181 Va. 960, 27 S.E.2d 213, 216 (1943). In Weidlich v. Comley, 267 F.2d 133, 134 (2d Cir. 1959), Judge Learned Hand applied Jessup:

The district court, on remand, may however, determine within its sound discretion whether under Virginia law Mrs. Blackwelder is entitled to nominal compensation as trustee of this naked trust and to recover any actual expense that may have been incurred by her. See Va. Code § 26-30; Wilson v. Whitehead, 181 Va. 960, 27 S.E.2d 213, 216 (1943); Patterson v. Old Dominion Trust Co., 156 Va. 763, 159 S.E. 168 (1931); Harrison v. Manson, 95 Va. 593, 29 S.E. 420 (1898). In making this determination, the court should take into account that Mrs. Blackwelder has maintained unjustifiably, that she had beneficial title to the trust property.

As trustee, Cooper had a duty to defend the suit. See Willson v. Whitehead, 181 Va. 960, 966, 27 S.E.2d 213, 216 (1943). When a trustee has a good faith basis for defending a suit, the attorney's fees and costs incurred should be charged to the trust estate.

[7-8] We must also decide whether the co-trustees can obtain reimbursement from the trust estate, or from Wiglesworth's interest therein, for the attorney's fees which the co-trustees incurred in this litigation. Although a trustee is entitled to reimbursement from the trust for reasonable attorney's fees expended in protecting the trust, Cohn v. Central Nat. Bank, 191 Va. 12, 23, 60 S.E.2d 30, 35 (1950); Willson v. Whitehead, 181 Va. 960, 965, 27 S.E.2d 213, 216 (1943), a trustee should not receive such reimbursement when he caused the litigation. See Clare v. Grasty, 213 Va. 165, 172, 191 S.E.2d 184, 189 (1972); 3A. Scott, The Law of Trusts Sections 188.4, 188.6 (4th ed. 1988) [hereinafter A. Scott]. "[I]f the [co-trustees] negligently permitted a third person [Wiglesworth] to obtain possession of the trust property, the expenses of the litigation that resulted must be borne by the [co-trustees] personally."

Therefore, since Pearson's services were rendered for the benefit of the estates, his defense against unfounded grievance charges was a cost incident to the common benefit of the estates. Also persuasive is the case of Willson v. Whitehead, 181 Va. 960, 27 S.E.2d 213 (1943), where the Virginia Court held that a trustee could recover his expenses where he is subjected to an unwarranted and groundless attack. In Willson, the attack was an unfounded removal attempt and the court allowed the trustee to recover the costs from the estate of defending himself in the removal suit.

IV. The Court was correct in authorizing payment of attorney fees and auditor fees out of corpus. Beckett v. Howorth, supra; Willison v. Whitehead, 181 Va. 960, 27 S.E.2d 213; 90 C.J.S., Trusts, Sec. 284 p. 399. V. The Court was correct in authorizing investment of the life insurance policy.