Stephenson v. Norris

The following opinion was filed March 20, 1906: "Winslow, J. The guardian ad litem of Daniel Wells Norris assigned three errors, vjz.: (1) That the complaint does-not state a cause of action; (2) that the circuit court should not have assumed jurisdiction, inasmuch as the settlement of' the estate was proceeding in the county court; and (3) that compensation for the various guardians ad litem should not have been ordered to be paid out of the body of the estate. The first two of these contentions will now be considered, and the third will be taken up at the close of this opinion. The plenary jurisdiction which the circuit court possesses,, as the legitimate successor of the ancient court of chancery,. — 254 — •over actions for tbe construction of wills, especially where trust powers are involved, is so well established that it is not open to doubt or discussion. Heiss v. Murphey, 40 Wis. 276; S. C. 43 Wis. 45; Miller v. Drone, 100 Wis. 1, 3, 15 N. W. 413. Nor in such cases is it necessary that there should be •an actual litigation begun or contest pending to justify the •court in entertaining the action. A trustee is entitled to the protection of the court in the execution of his trusts, and, when real and serious doubts confront him as to his duty, is •entitled to the advice of the court to guide him. This court has said that in such a case “it is not the mere right, it is almost the duty, of the executor tO' take the opinion of the court upon the construction of the will and the validity of the disposition which it purports to make of the testator’s property.” Heiss v. Murphey, 43 Wis. 45. See, also, 28 Am. & Eng. Ency. of Law (2d ed.) 1050, 1051, and cases cited in note 8. The complaint and will before us amply demonstrate that doubts might well be entertained as tO' the construction of a number of clauses of this long and involved will, and completely justify the course of the executors and trustees in asking for judicial guidance in the performance of their onerous ■and delicate duties. Nor can it be said that this is one of the cases where the •circuit court should refuse to entertain the action because the ■questions involved will eventually arise for consideration in the county court. This court has said that nothing short of an express statute will make the jurisdiction of the county •court exclusive in such cases. Miller v. Drama, supra; Burnham v. Norton, 100 Wis. 8, 75 N. W. 304. Ch. 163, Laws of 1905, passed after the present suit had been begun, gave formal and express recognition to the power of the county •court to construe wills in a proceeding brought solely for that purpose; but it did not purport to abridge the already existing power of the circuit court to do that same 'thing. We — 255 — have no difficulty, therefore, in bolding that the present action was well brought in the circuit court. Passing to the questions of construction raised by the appeals, we find the most serious and comprehensive, question to be that involving the extent of the discretion given to the executors and trustees under items 8 to 14 of the will. As will be seen by reference to these items, they are practically synonymous in- their terms, so far as this question is involved. They all give certain shares of the estate in trust to the executors, directing them upon the happening of a certain event, such as the death of a certain beneficiary, or upon the termination of the period of trust, to pay to> the lawful descendants of a specified beneficiary a certain portion of the estate, “giving to each of said descendants such portion thereof as my said trustees shall deem best.” The respondents contend, and the court held in effect, that under the powers granted by these items the executors and trustees were permitted, in the exercise of a sound discretion, but without wilfulness or favor, or caprice or arbitrary action, to apportion the sums so given among the beneficiaries either in equal portions or in unequal portions, or by giving the whole to one or more to the entire exclusion of the other or others. Certain of the appellants contend, however, that from a consideration of the whole will it is evident that the testator contemplated that each beneficiary of a class, under items 8 to 14, should receive an equal portion, unless it should be withheld by the trustees by reason of lack of good habits, unworthiness, or incapacity under item 15 of the will. This contention certainly calls for careful examination of the whole will and a comprehension of the testator’s entire scheme. There can be little or no doubt as to the general character of that scheme. The testator was a man of great wealth. He evidently viewed his estate as a great business enterprise, an entity which he desired should be kept substantially intact for many years after his death. He there — 256 — fore placed it in the hands of trusted persons with the most full and carefully specified powers, for the benefit, ultimately, of his father’s descendants. His desire that it should remain an entity, presumably as a great corporation, with the beneficiaries as stockholders, is very apparent. The duration of the trusteeship as contemplated might be well towards a century. Many of the ultimate beneficiaries were yet to be born, and of their character or abilities he could know nothing, and so, in order to conserve the property, save it from dissipation by unknown beneficiaries, and insure its enjoyment by the members of his father’s family, with due regard to their various needs and abilities, he evidently intended to vest unusually broad and comprehensive powers in his trustees and their successors. Eliminating from consideration, for the moment, the provisions of item 15, and viewing items 8 to 14, inclusive, as if they stood alone in the will, it seems that there could be little doubt as to the testator’s intent. The words “giving to each such portion as my said trustees shall deem best,” which are so industriously and carefully used so many times, do not mean “giving to each an equal portion,” nor can they be made to mean that by any rule of construction of which we are aware. They are simple words of well-understood meaning, and are neither technical nor occult. They can be made no simpler or plainer by definition or construction. One might as well attempt “to gild refined gold or paint the lily.” Our statute governing the construction of powers relating to real property (sec. 2126, Stats. 1898) provides that “when the terms of a power import that the estate or fund is to be distributed between the persons so designated in such manner or proportions as the trustee of the power may think proper the trustee may allot the whole to any one or more of such persons in exclusion of the others.” While it is probable that the property disposed of under this will should be considered as personal property, under the rule of equitable conversion, this — 257 — legislative construction, of a similar power over real estate is certainly of significance. But, of course, tfie natural and plain significance of words in one portion of a will may be changed and controlled by other provisions contained in the same will, if it appears from the .whole will that such change or control was intended by the testator, and so we pass to the consideration of item 15 and other subsequent clauses. Before considering them, however, it is certainly significant to note that nowhere in items 8 to 14 is it expressly or impliedly indicated that the discretion to apportion, so plainly given by those items, is to be referred to or governed by the provisions of item 15. That item will be found at length in the statement of the case, and hence it will only be necessary here to state its substance, so far as material to this question. It provides in effect that if any beneficiary shall, in the opinion of the trustees, not be of good habits, or of sufficient capacity to properly use and care for the property coming to him, or not likely to so use it, then the trustees are empowered to withhold from him his portion of the estate or income, and pay him only such portion as to the trustees seems -advisable, or themselves expend it for the beneficiary’s benefit, provided that if the beneficiary becomes worthy, in the opinion of the trustees, then the fact of his previous unworthiness shall not prevent his sharing in subsequent distributions of principal or income. The item further provides that- its provisions are to govern in all. cases; that all the provisions of the will, including items 8 to 14, are to be subject to the changes authorized to be made by the trustees under this item on account of unworthiness, lack of capacity, or good habits, but that except as provided in this item in case of unworthiness or incapacity, and except -as to the bequests under the ninth item, the trustees are desired, in exercising the discretion given them by this will, to make payment or transfers to a parent during his lifetime in preference to his issue (this not being mandatory, but merely expressed as a wish which — 258 — may aid the trustees in carrying out the discretion given them) ; that, in case of the death of any beneficiary before the time of his coming into enjoyment of his bequest, his lawful descendants shall take his share, subject to such changes as the trustees are authorized to make under any provision of the will. The contention is that, taking item 15 in connection with items 8 to 14, inclusive, it is apparent that the testator intended his beneficiaries in the same class to share equally, unless the trustees should, for unworthiness or incapacity, withhold all or a part of the share of a beneficiary under item 15 ; in other words, that the only discretion to withhold or diminish a share is the discretion conferred by item 15. We have not been able to agree with this contention. Under this construction the words “giving to- each such portion thereof as my executors shall deem best,” so carefully repeated in items 8 to 14, become absolutely unnecessary and meaningless, because the discretion vested in the trustees by item 15 is expressly made applicable to all items of the will. But, aside from this, item 15 by its very terms recognizes another and different discretion from the discretion to withhold because of incapacity or unworthiness. It says that except in cases of unworthiness or incapacity, and except as to the bequests in the ninth item, the trustees are desired, in “exercising the discretion given to them by this will,” to prefer living parents to their children. Here a discretion is spoken of and recognized by the testator himself, as given by the will, which is not the discretion conferred by item 15. To what does this language refer ? Indeed, to what can it refer, except to the general discretion to apportion as the executors deem best given by items 8 to 14 ? We have searched in vain for any answer to this question. The preference of parents over children is not to be based on habits,- unworthiness, or incapacity, but the testator desires his executors to make such a preference in exercising the discretion given them by the will. — 259 — Again, in the second codicil the testator suggests to' his trustees that, in regard to the bequest to Susan W. Parker in the fourteenth item of the will, her age and infirmities be taken into consideration, and that the amount given her be no larger than reasonably necessary, in the opinion of the trustees, to afford her comfortable support for life, "relying upon ihe discretion” given to the trustees in said matter to do what they shall think best. The testator further suggests that, in fixing the amount to be paid to Sarah E. Matthews under the same item, an increased sum be given her on account of the greater number of her children in comparison to that of the other descendants of Sarah J. Parker, and again says that he .relies upon the exercise of the discretion given to said trustees. These various references to the discretion given to the trustees are entirely unexplainable upon any other basis than upon the basis that they possess a discretion entirely apart from the discretion to withhold upon the ground of unworthiness or incapacity under item 15. They refer to a general discretion; just such a discretion as results from the natural meaning of the words used in items 8 to 14. So referring them, they are harmonious and intelligible; otherwise they show lack of comprehension of the meaning of the will. So we reach the conclusion that under items 8 to 14, inclusive, there was given to the executors and trustees a broad discretion to apportion the sums given to a class among its members entirely distinct from the discretion to withhold for unfitness or unworthiness under item 15, and that this discretion authorizes them to apportion equally or unequally, or to •cut off one or more entirely and give the whole to the others. This is_ a very broad discretion and a very delicate one. It is not to be exercised arbitrarily, nor through whim or caprice, for this is not discretion. It must be a sound legal discretion, its conclusions must be based upon the application of the principles of right and justice to the facts, and the facts to be considered must be facts justly and legitimately bearing upon the — 260 — comparative claims of the parties for recognition, as recipients of the testator’s bounty. The testator has himself suggested' that there should be a preference given to living parents over their children, and that age, infirmities, and number of dependents are also entitled to be considered. Probably there-may be other facts entitled to be considered by the trustees,, but it is dangerous to attempt to lay down rules in advance.. It is enough to say that there must be real and substantial differences of situation germane to the subject and calling for difference in treatment in order to justify discrimination in amount. Among beneficiaries whose circumstances are substantially the same there can he no just discrimination, for discrimination in such a situation would be merely arbitrary and capricious. The twenty-sixth item of the will directs that all notes and obligations held by the testator at his death, upon which any beneficiary, or the husband, wife, or issue of any beneficiary, should be indebted or liable to the testator, if not collected before the division of the estate into- parts, should, for the purpose of such division, b© appraised at the full amount of principal and interest unpaid and owing at the time of the death, including all obligations barred by the statute of limitations,, and requests that the trustees, in making division of the estate into parts, assign said obligations to the parts or shares, respectively, of such beneficiaries, and provides that, in case the share of a beneficiary is less than the indebtedness so assignable to such share, the excess of indebtedness shall constitute a portion of the estate and be distributed among the remaining shares, as the executors shall deem best, “it being my intention hereby to provide more fully for the equitable division of my estate into eighty-one shares or parts, so that no one of my said relatives, or the husband or wife or issue of any such relative who shall be benefited by my said will, shall obtain an advantage over any other person by reason of any advancement or assistance I may have, before my death, ren — 261 — dered to sucb relative or to tbe husband or wife or issue of the ■same, and wbicb advancement or assistance shall be evidenced by any such unpaid note, bond, contract, agreement, or obligation unpaid and beld by me at the time of my death.” It appears by the complaint that William A. Dickson, who, as one of the descendants of Marcia E. Dickson, is a beneficiary under the thirteenth item of the will (together with his children), was indebted to the.deceased for borrowed money in a large sum, represented by promissory notes, and that Dickson obtained a discharge in bankruptcy January 8, 1900, prior to the death of the testator. The claim is now made that by reason of this discharge the debt of Dickson has been extinguished and cannot be considered as a debt or obligation to be assigned to and charged up against him and his children under the provisions of the twenty-sixth item. This question was submitted to the court by the eleventh interrogatory, and answered by the court to the contrary of said contention, and we think rightly. The intention of the testator under this item is very plain. He wished any unpaid loans or advancements made by him to any beneficiary to be computed as a part of his bequest to .such beneficiary, or the husband, wife, or children of such beneficiary, whether outlawed or not. It is true that a discharge in bankruptcy not only bars the remedy, but operates to extinguish the obligation, if- properly pleaded and proven; but it does not pay the debt nor relieve the debtor from his moral obligation, nor does it wholly extinguish the cause of action for all purposes. Bank of Commerce v. Elliott, 109 Wis. 648, 85 N. W. 417. By the last clause of item 26 the intent of the testator is specifically declared to be to' provide for an equitable distribution of his estate, so that no person shall obtain advantage of another by reason of any such advancement or assistance evidenced by a note or obligation unpaid and held by the testator at the time of his death. The debts of Dickson were unpaid, and the testator held the obligations therefor at the time of — 262 — bis death, so they come strictly within the words of the will. It is probable that the same result would be arrived at had there been no such clause. In re Fussell's Estate (Iowa) 105 N. W. 503. By the answer to the twelfth question the court held that in assigning these notes and obligations they should be appraised at the full amount of the principal and interest unpaid thereon at the time of the testator’s death, and this holding was plainly right under the terms of the will. By the thirteenth question the court was asked whether the trustees were authorized to withhold from William A. Dickson and his descendants so much of the income and principal otherwise passing to them, from time to time, as would equal the full amount of principal and interest unpaid from time to time upon said Dickson’s unpaid obligations held by the testator, and distribute the amount so withheld among the other beneficiaries under said item 13, and the court answered that they were so authorized in their discretion. This holding is complained of, but we think without cause. If such were not the holding, then manifestly the other descendants of Marcia E. Dickson would suffer, and the descendants of William A. Dickson would obtain an advantage over them in the distribution of the estate by reason of the indebtedness of their ancestor, a result which is contrary to the plainly expressed wish of the testator. Substantially the same questions were propounded (except as to the effect of a discharge in bankruptcy) as to the indebtedness of Charles Gr. Pratt and John M. W. Pratt, descendants of Hannah A. Pratt, who as such descendants were beneficiaries under the eleventh item of the will, and were answered in the same way. For the reasons given above these answers must also be held correct. We now come to the question of the correctness of the allowances to the various guardians ad litem payable out of the estate at large, raised by the guardian of Daniel Wells Norris. The argument in favor of these allowances is, in substance, — 263 — that the minors have been necessarily brought into court, not npon their own volition, but simply for the purpose of securing an authoritative and binding construction of the will for the benefit of the whole estate, and that the reasonable fees of their guardians, in performing their duty to their wards and to the court, are substantially a part of the necessary expenses of the administration of the estate. The case of Ford v. Ford, 88 Wis. 122, 59 N. W. 464, is relied upon to sustain the lulling of the trial court, and it is only fair to the trial court and to counsel to say that it does sustain the ruling. That case followed a series of cases brought for the construction of wills, and which are reviewed in the case of In re Donges’s Estate, 103 Wis. 497, 79 N. W. 786, in which this court had, without serious examination of the question, directed that allowances be made by the county court out of the estate to the respective parties for counsel fees. In the Donges Oase the question was brought sharply to the attention of the court, and it was held, after full consideration, that the habit of ordering the payment of counsel fees, other than the executor’s, in such cases where the parties are sui juris, was without authority of law and should be stopped. Since the decision of that case this court has followed the rule there laid down, nor does the change in the law made by ch. 397, Laws of 1901, with reference to allowances for counsel fees in applications for probate of wills, affect actions for construction of wills. Kronshage v. Varrell, 127 Wis. 597, 107 N. W. 342. The Donges Oase, however, was a case of actual adverse litigation by parties who were sui juris, and hence'is not necessarily controlling upon the present situation, where minors have been brought into court by the executors simply as a necessary incident in the course of their effort to obtain direction as to their duties. The argument in favor of the allowance of reasonable pay for guardians ad litem in such a case, out of the body of the estate, especially where, as here:, the interests of the minors are problematical and distant, is certainly quite — 264 — persuasive. Plowever, the question, does not seem to be an open one. In Tyson v. Richardson, 103 Wis. 397, 79 N. W. 439, which was originally an action to quiet title under a trust deed to which certain infants were necessary defendants (Tyson v. Tyson, 96 Wis. 59, 71 N. W. 94), it was distinctly held that, while an allowance should be made to the- guardian ad litem, such allowance should be made payable only out of the infant’s property under the control of the court, giving a lien thereon if necessary, following the rule laid down by New York authorities on that subject. Union Ins. Co. v. Van Renssellaer, 4 Paige, Ch. 85, and authorities cited at page 401 of 103 Wis. (79 N. W. 439). This rule having been definitely adopted, we do not deem it wise to change it. If hardship thereby results to a guardian who has acted under the order of the court, it must be accepted with the reflection that he has faithfully performed that which is in substance a public service, and has assisted the court in the administration of justice, as, by his high calling, he is at times bound to do, though there be no suitable financial return. We see no impropriety or error in remitting the question of the allowance to be made to the executors and trustees for services of their counsel to the county court, which has charge of the administration of the estate. By the Gourt. — The judgment is modified by striking out the provision making the sums allowed to the guardians ad litem payable ou.t of the trust estate at large, and inserting a provision that the sums allowed be paid out of and made a lien upon the respective interests in the estate to which said minors are entitled, and as SO' modified the judgment is affirmed, without costs to any party, except that the costs of printing of all the parties, and the fees of the clerk of this court, shall be taxed and paid out of the estate.