Innis v. Flint

BROWN, J. In March, 1896, Julia A. R. Flint, then a resident of St. Paul, duly made and executed her last will and testament, by which she devised and bequeathed to her husband, should he survive her, all and singular her property, real, personal and mixed, and in the event that he did not survive her she gave her property to the persons named in her will in trust for the following purposes: “1. To properly maintain and educate my daughter, Ferna Clarissa Flint, giving her plain living and the best educational advantages. “2. To properly provide for the comfort of my mother, Marie C. Rockwood, during her natural life, if she shall need anything more than she already has. “3. To use all income remaining, after providing as above for my daughter and my mother, to pay the indebtedness on my estate.” The further provision was made that if the estate was free from debt on the twenty-sixth birthday of her daughter, or if her daughter should die before that date, and on the death of her mother, the “trusteeship shall cease,” if her debts were then paid, and the remainder of the property divided equally between Alexander DeWitt Flint, her husband’s son by a former wife, and the trustees of Hamline University. Mrs. Flint died in 1904. Fler daughter preceded her to the grave; but Mrs. Rockwood, the mother, survived and was living when the testatrix died. The will was duly admitted to probate. One of the persons named in the will for the trust thereby created was commissioned as trustee, and he qualified and entered upon the discharge of his duties. The estate was duly administered by the probate court, all debts presented and allowed by that court paid, and a final decree of distribution [346] entered on March 24,1905, assigning the estate, after the death of Mrs. Rockwood, in accordance with the terms of the will. Mrs. Rockwood died in January, 1907. The trustee thereafter made application to the court below for the allowance of his account and for an order authorizing the sale of certain of the effects in his hands as trustee. Upon the hearing of this application, Alexander Flint, residuary legatee under the will, appeared in opposition, filed objections to the account, and demanded that the trust be terminated and the remainder of the property in,the trustee’s possession divided as directed by the will and final decree of the probate court. This the trustee opposed on the ground that the trust had not terminated, because an indebtedness of the testatrix had not been paid; and he insisted that his authority as trustee be continued until it had been paid and discharged. The court below sustained the contention of the trustee, settled his account, and denied the prayer for the termination of the trust and distribution of the estate. From this Order, Flint appealed. ’ The only question presented by the assignments of error is whether the court below erred in denying the prayer of the appellant for a termination of the trust and a division of the property. We are not concerned with questions affecting the validity of the will or the trust thereby created. All questions of that nature were conclusively settled by the final decree of the probate court. Greenwood v. Murray, 26 Minn. 259, 2 N. W. 945. The will provided that the trust should cease and terminate on the twenty-sixth birthday of testatrix’s daughter, March 7, 1912, if the estate was then free from debt, and, if the estate was not then free from debt that it should cease so soon as the debts were paid after that date. The facts leading to this branch of the case are as follows: During her lifetime the testatrix acquired title to lot 5, block 2, Hopkins’ addition to St. Paul, subject to a mortgage then existing against it for $14,000. Thereafter, to obtain an extension of time of payment, she expressly assumed and agreed to pay that debt. The trial court held that this was an indebtedness against her estate,' and, inasmuch as it had not been paid, the trust must continue. It is probable that the learned trial court was in error in so holding. The reference in the will to a termination of the trust when the debts of the testatrix had been paid, prop [347] erly construed, had reference to such debts as were presented to the probate court and were allowable and payable in the administration proceedings, and to none other. The mortgage indebtedness was never presented to that court, and no claim has ever been made against her estate for its payment. The estate was fully administered and brought to a close by the final decree entered in accordance with the will, and the right to present the mortgage indebtedness as a claim against the estate has thus been foreclosed and lost forever. Jorgenson v. Larson, 85 Minn. 134, 88 N. W. 439; Clark v. Gates, 84 Minn. 381, 87 N. W. 941; Gilman v. Maxwell, 79 Minn. 377, 82 N. W. 669. So that after the final decree of the probate court the mortgagee had no claim which he could enforce against the general estate of testatrix, except the specific property covered by the mortgage; and, if the situation ended here, we should have no difficulty in holding that the trust should be brought to a close and the property divided. But subsequent to the final decree the trustee, acting under the authority of the district court, the court having jurisdiction of the trust, took up the existing mortgage upon this particular property with funds raised by the execution of another mortgage to another person for $15,000. This new mortgage covered the same property and has never been paid. It was executed .by the trustee as such, and the indebtedness secured and represented thereby became a charge upon all the trust property in his possession and control, precisely as all expenses and indebtedness incurred in the management and preservation of the property of the trust became a legitimate charge against the whole estate. 28 Am. & Eng. Enc. (2d Ed.) 942; Gisborn v. Charter Oak Life Ins. Co., 142 U. S. 326, 12 Sup. Ct. 277, 35 L. Ed. 1029; Guild v. Walter, 182 Mass. 225, 65 N. E. 68. And though the estate of the testatrix may have been discharged, the trust estate in the hands of the trustee remained liable for the payment of the debt, and a division of the property cannot be made while it remains outstanding. The indebtedness, though secured upon specific property, binds the entire estate, and the holder thereof cannot be deprived of his rights, at least without a hearing — and no notice was given him of this hearing — by an assignment and transfer of the property to the remainderman before payment is made. It follows, therefore, that the trust cannot be terminated by [348] judgment of the court until this indebtedness has been paid, and the or■der appealed from must be affirmed. We discover no reason, however, why the trustee might not, in prop■er proceedings, be required to close up the trust by disposing of property sufficient to pay the mortgage, for there seems no valid reason for •continuing it for the mere purpose of paying interest upon this particular claim; or it might be terminated, by order of the court, upon some •amicable agreement between the mortgagee and the remaindermen. Order affirmed.