Cozad v. . Johnson

Hoke, J., after stating the case: There is doubt if the issuable facts in this case have been authoritatively determined. We find nowhere in the record as now presented any consent of parties that the court should try the cause, and unless this is made to appear, and in the way prescribed by statute, the issues raised by the pleadings, under our Constitution and system of procedure, must be decided by the jury. Hockoday v. Lawrence, 156 N. C., 319; Hahn v. Brinson, 133 N. C., 8; Wilson v. Bynum, 92 N. C., 718. The objection suggested, however, is not open to plaintiff, as the court has found the issuable and controlling facts to be as they are alleged by him in his complaint, and, considering the cause in that aspect, our decisions hold that the instrument on which plaintiff bases his cause of action is an option, properly exercisable by payment or tender of the purchase price within the specified time, and that, in case of a valid and binding agreement, the remedy by specific performance is a recognized mode of relief. Ward v. Albertson, 165 N. C., 218; Winders v. Kenan, 161 N. C., 628. But, pretermitting the question whether the option is not void by reason of indefiniteness as to the price to be paid, authority here and elsewhere is to the effect further that a trustee with power of sale for -the benefit of creditors or other beneficiaries, except by order of court or unless otherwise ■ provided by the instrument under which he acts, *643 may not grant an option for a protracted and indeterminate period and thereby deprive himself of the right in the meantime to do what the best interest of the.estate may require. His selection for the position imports, or should import, some measure of confidence in his judgment and discretion, and in the proper performance of his duty he should keep himself in a position to exercise this judgment and discretion at the time the sale is made, and not by these unilateral contracts extend a proposition of that kind into the indefinite future and refer its decision to another, that is, the holder of the option. This was held with us in the case of executors with power of sale in Trogden v. Williams, 144 N. C., 192, and the position is recognized as sound in other cases. In re Armory Board, 60 N. Y. Supp., p. 882; Oceanic Steam Navigation Co. v. Sutherberry, 16 Chan. Div., 236, L. R., 1880-81; Clay v. Rufford, 5 DeG. and Sm., 768, English Reprints, vol. 64, pp. 1337 and 1342. These cases referred to with approval in 1 Lewin on Trusts, p. 426; 2 Perry on Trusts, sec. 764. In Lewin on Trusts the author succinctly states the position and the reason for it as follows: “And executors and administrators, equally with trustees, cannot bind the trust estate by a proviso in a lease that the lessee shall during the term have an option of purchasing the property at a fixed price, for it is the duty of trustees to exercise their discretion at the time of sale as to whether the terms are, in the circumstances as then existing, beneficial to the cestuis que trustent"; and the same principle is stated by Vice Chancellor Parker in Clay v. Rufford as follows: “In my opinion, such a contract cannot be entered into by the managing body under the powers contained in this deed. The deed contains a simple trust of sale, and I take it to be too clear for argument that the trustee cannot enter into a contract of this kind, binding those who succeed him in the trust to sell at a future time at a price now fixed, without exercising any judgment whether the thing is beneficial or not at the time,” meaning the time of sale. It may be that an option given for a short and definite period according to customary methods and with a view of promoting in effect a present and advantageous sale would not necessarily be disapproved, but, under the principles just stated, these instruments, under which plaintiff claims the right to enforce specific performance, given by a former trustee and professing to bind him to make sale of the property at the election of the obligee at the termination of an uncertain and protracted litigation, extending, as a matter of fact, from 1909 to 1915, may not be upheld against him as trustee or his successor in office, the present defendant. On the facts, therefore, as alleged in plaintiff’s complaint and found by his Honor to be true, there should have been judgment denying the special relief as sought by plaintiff. While we are of *644 opinion that these alleged options are not binding agreements, we must not be understood as holding that the plaintiff is to lose the sums he has expended in ascertaining the amount of land, etc., and in the litigation required to clear the title, including reasonable attorney’s fees, paid to this end. These outlays may not be recovered under the contract. In fact, there is express stipulation therein that they are to be borne by plaintiff. But, as reasonable and necessary expenditures in the care of the trust estate and in furtherance of its interest, they may be reimbursed to plaintiff and allowed as valid vouchers in the proper administration of the trust. This opinion will be certified, that judgment may be entered declaring the options to be invalid; that the advancements made by plaintiff in the interest of the estate, including the cost of litigation adjudged against the trustee by any competent court, and also reasonable attorney’s fees paid or due by plaintiff in furtherance of litigation, shall be ascertained and the same declared a valid charge against the trust estate, to be paid before distribution had among creditors and claimants. That the present trustee proceed to sell the property at public or private sale, as may be for the best interest of the estate and of the beneficiaries, and shall apply the proceeds to the reimbursement of plaintiff of the amount shown to be due him, including the cost of the present proceedings down to the time of entering this decree below, and shall make disposition of the remainder as directed and required by the terms of the decree under which he holds the property. The cause will be retained and proceeded with in the court below in accordance with this opinion and until the trust estate .has been finally administered. Reversed.