Bradbury v. Birchmore

Morton, J. The object of the deed of trust from Richards was that the defendants should erect upon the land thereby conveyed to them a rectory for the use of Christ Church in Hyde Park, and that after its completion it should be conveyed to the rector, wardens and vestry of said church. The defendants do not deny that it is their duty to convey the premises to the plaintiffs, but they claim that before doing so they are entitled to be paid or indemnified for all expenses and liabilities incurred by them in the execution of the trust. The plaintiffs claim that the defendants have expended more than they were authorized by the trust deed to expend, and ought not to be allowed for such excess as a charge upon the estate. The deed authorizes the trustees to execute a mortgage of the premises for three thousand dollars, “ to be applied to erect and finish the buildings on the premises, or in aid of such erection,” but it does not limit the trustees to this amount, as the cost of the buildings, nor provide that they shall not create other liens or incumbrances. On the contrary, it is clear that all the parties understood that more than three thousand dollars would necessarily be expended by the trustees, and that other liens and incumbrances might be placed upon the premises. The deed accordingly carefully provides, that after the buildings are erected they are to be conveyed to the rector, wardens, and vestry, subject “ to said mortgage, if subsisting, and subject to all incumbrances, liens, and mortgages thereon;” that no personal liability shall be incurred by the trustees by reason of executing such mortgage; and that “they are not to be subjected personally to any cost or expense, but all costs and expenses are to be — 580 — chargeable upon said estate.” It was clearly the purpose of the donor and of the trustees, that the expenses of building the rectory, in excess of three thousand dollars, should be a charge upon the estate, and we are of opinion that the trustees have an equitable lien for such amount as is due to them for all the expenses reasonably incurred in executing their trust. The master, to whom the case was referred for the purpose of determining the facts, has found that the expenditures and disbursements claimed by the defendants were made in good faith, and that they have acted with reasonable prudence. It follows that such expenditures, so far as they have not been paid to the trustees, ought to be allowed them as a charge upon the trust estate. For the same reasons the debts incurred by the trustees in erecting the buildings, being unpaid, and having been incurred in good faith and in the exercise of reasonable prudence, should be allowed them. The second mortgage was given to Tilson as trustee for the sole purpose of securing these debts. The master has not passed upon the question of the validity of this mortgage, and we do not understand that this question is of practical importance in this case. If it is void the trustees have an equitable lien upon the estate for the same amount for the debts incurred by them in executing this trust. The only other question presented upon the facts found by the master, is as to the claim of the plaintiffs that the trustees in settling their account should be charged with a reasonable rent of the rectory after the defendant Birchmore resigned the rectorship. He resigned in May, 1872, and continued to occupy the premises until February 15, 1873. He thus directly received a benefit from the estate, with the knowledge and assent of his co-trustee, and we think they are chargeable for the amount found by the master as the fair rent for this time. It is the same in substance as if the trustees had received rents from the trust estate from a third person, which upon familiar principles would belong to the cestui que trust. But a majority of the court are of opinion that the further claim of the plaintiffs, that the trustees should be charged a reasonable rent for the premises after Birch-more left them, ought not under the circumstances of this case — 581 — to be allowed. For this time no rents were received, and neither trustee received any benefit from the estate. The premises were designed solely for the use of the rector of the church, and it was not any part of the purposes of the trust that the trustees should lease them to others. It is doubtful if they had the power to lease them. It is true that if they had done so and received rents they would be chargeable therewith, but they were not guilty of negligence in not doing so. Nor are they chargeable upon the ground that they refused to convey to the church and thus deprived them of the use of the rectory, to which they were entitled. The master finds that after a new rector was settled over the parish, the trustees were requested to permit him to occupy the premises, “ but that the trustees refused to deliver up the premises to be so occupied except upon payment or security of the debts incurred by them in the execution of the trust.” They offered to make a conveyance upon such payment or security, but the parish declined to comply with the condition. The trustees, as they had an equitable lien upon the estate, were entitled to insist upon this condition, and cannot be held guilty of any negligent or wrongful act in refusing to convey or to yield the possession of the premises until they were paid or secured. The facts reported by the master as to the proceedings before the board of reference appointed under the general canons of the Episcopal Church, have no bearing upon this case. One of the defendants was not a party to those proceedings, and the board did not attempt to adjudicate upon the subject matter of this suit. Their award provided only that the defendant Birch-more should resign his office as rector, and that the parish should pay him his salary, but contained no provisions as to the conveyance of the rectory or the accounts between the parish and the trustees. The result of the- whole case is, that the trustees are to be allowed the expenditures made and the liabilities incurred by them as found by the master, and are to be charged with the amount found by the master as the fair rent of the rectory while occupied by the defendant Birchmore after his resignation; the plaintiffs are to pay or indemnify the defendants for the balance of expenditures and liabilities incurred by them in executing the — 582 — trust, and thereupon the defendants are to convey the trust e& tote to the plaintiffs. A hearing may be had, if necessary, before a single justice to settle the form and details of the decree. Decree accordingly.