Bradshaw v. Lucas

Mr. Presiding Justice Graves delivered the opinion of the court. Andrew J. Bradshaw, deceased, during* his lifetime, by certain deeds and a declaration of trust, created a spendthrift trust in favor of his son, "William C. Bradshaw, of which Oscar J. Lucas was made trustee. By the terms of the trust so created, the said Lucas was to have possession of certain real estate and receive the rents and profits therefrom “and to pay over the same to the said William O. Bradshaw in such manner as the said Oscar J. Lucas shall deem most efficient and to the best interests of the said William O. Bradshaw.” After the death of Andrew J. Bradshaw, William C. Bradshaw was adjudged to be a distracted person and, in consequence of such disability, incapable of managing and caring for his property and effects, and Leslie W. Benson was appointed as his conservator, and he thereupon qualified as such. Thereafter the said conservator filed a bill in the Circuit Court of Macon county in the name of his ward, making the said trustee, Oscar J. Lucas, defendant, in which he prays for an accounting by the said Lucas of the said trust fund; a construction of the trust; that the said Lucas be required to give a bond as such trustee, and that a portion of the rents arising from said trust estate be paid over to the conservator and that the said trust be thereafter executed under the supervision and direction of the court. Although Lucas, the trustee, had in the meantime removed from the State of Illinois, he answered the bill and such proceedings were had in the case that on April 6, 1917, a decree was entered by the agreement between the said trustee and the said con- • servator in which the said trustee was ordered to lease the trust property and collect the rents; that he first pay the taxes annually levied' against the trust estate; that he keep the buildings on the estate insured and in repair; that he retain 5 per cent of the moneys collected by him for his compensation; that he next pay to Benson, the conservator, ,to be used for the support and maintenance of the said ward, under the direction of the court, the sum of $1,800 per annum, and that he loan the balance of such fund; that the trustee give bonds in the sum of $15,000, and that he make annual reports to the court of all moneys collected and paid out by him as such'trustee. On April 27, 1917, William O. Bradshaw, by one J. T. Whitney, filed a petition in his own name in which he asks the court to appoint, a guardian ad litem or next friend to represent him, and prays that the decree entered on April ,6th be so modified as to require the said trustee to pay directly to the said petitioner such sums as in the judgment of the court upon a full hearing are sufficient and ample for his support and maintenance. To this petition the conservator filed his answer in which, among other things, he avers affirmatively that the petitioner has been adjudged to be a distracted person; that he has been appointed conservator for him and that he is still acting as such; that the trust in question was created before the said cestuis que trust petitioner was adjudged to be a distracted person, that since the said trust was created the said trustee Lucas had removed from the State; that the said petitioner is a person of unsound mind who, by reason thereof, is incapable of having any correct knowledge of the value of money; that he has squandered and wasted such money as has been given him for candy and intoxicating liquors and with lewd women. No replication to this answer was filed by or for the petitioner, but the court, on the motion of petitioner, set the cause down for hearing on the petition and answer and entered a decree without proof, finding that the averments in the petition were true, although some of such averments were directly denied by the answer; and without any findings as to the affirmative facts averred in the answer of the conservator, the court finds that the equities are with the petitioner and orders that the former decree be modified as prayed in the petition and directs the said Lucas, as such trustee, to turn over to the petitioner such sums at such times and in such manner as the said Lucas shall deem most efficient and to the best interests of the said petitioner, and as part of said decree and without any prayer therefor except the prayer for general relief, the court enjoihed the conservator from asserting or demanding any rights or interests as such conservator in or to said trust fund or the income therefrom. In all other respects the original decree remains unchanged. This appeal is prosecuted by Benson, the conservator. Appellee contends that the disposition of the income from the trust fund was wholly within the discretion of Lucas, the trustee, and that the court was ■without power to require him to make any particular disposition of it, and was without power to require him to pay it, or any part of it, over to Benson, the conservator of William O. Bradshaw, the ward and cestuis que trust. When Andrew J. Bradshaw created this spendthrift trust, he undertook to provide for the proper maintenance of his son, William.0. Bradshaw, from the income of certain property without placing it in his power to squander the property from which the income was derived. To effectuate that purpose he provided that Lucas, the trustee named, should have possession of the trust property and receive the rents therefrom and other income accruing thereon ‘ ‘ and to pay over the same to William C. Bradshaw in such manner as the said Osear J. Lucas shall deem most efficient and to the best interests of the said William C. Bradshaw.” By the terms of that declaration of trust, Lucas was to pay over to William C. Bradshaw in all events all of the rents and income from the trust estate. While it is there provided that the heirs of the body of William C. or his next of kin shall, at his death, have the trust estate, there is no provision or suggestion anywhere that an accumulation of the income from the trust estate was contemplated as a possibility. The only discretion he was given in the matter was as to the manner of its payment, which was to be such as Lucas should deem most efficient for the best interest of William C. That discretion is not an arbitrary one, but is one that must be so exercised as to carry out the purpose of the trust, which clearly does not contemplate an accumulation of the income from year to year in the hands of .Lucas; or, in other words, the clear purpose of Andrew J. Bradshaw in creating this trust was that William O. Bradshaw should annually have all the net income from the trust estate. The construction given this clause by the Circuit Court was correct, in so far as it held that such rents and income were chargeable with the payment of taxes, insurance and repairs on the trust estate, and the compensation of the trustee. In other words, it was only the net rents and income that it was intended should be paid to William O. It is also true that the payments were by the terms of the trust to be made to William C. and not to any one for him or for his use. At the time that trust was created and the powers and duties of the trustee were defined, Andrew J., while not considering William C. to be a suitable person to have the control of the whole trust estate, did consider him capable of handling and entitled to have and manage the entire net rents and income from such estate. After the death of Andrew J., William C. was adjudged to be a distracted person, and in consequence of such disability incapable of managing and caring for his property and effects, and appellant was duly appointed his conservator, and qualified as such. From the time a person is adjudged to be distracted and incapable of caring for his property and effects, until, if ever, he is adjudged to be restored, he has no more legal power to act for himself than as if he were dead. A contract made, or release or receipt given, by him has no legal significance. Chapter 86, sec. 14, Eev. St. (J. & A. ft 7298). Persons who during that time have business transactions in which he is concerned must deal with him through his conservator. Chapter 86, sec. 5, Eev. St. (J. &. A. 7289). What is to be paid to him must be paid to his conservator. Chapter 86, sec. 5, Eev. St:, and what is paid to the conservator is in law paid to the ward in person and is not paid to some one else for his use, as would be true if the same were paid to his creditors.'- The fact that a person is unfortunate to the extent of losing his ability to manage, handle and care for his property and effects in no way interferes with his right to have the income from trust property that has been set aside to supply him with'either necessities, comforts or luxuries so applied. His disability tends to increase rather than to decrease his needs. The Circuit Court erred in decreeing that Lucas, the trustee, should pay any portion of the income from the trust estate directly to William C. Bradshaw in person, and in enjoining the said conservator from asserting or demanding any interest in the income. The first decree, all but one clause of which still stands as a part of the decree appealed from, recites that the facts material to the trial of the issues had been agreed upon in a writing which was on file in the ease, and that the findings of fact in that decree were based on that writing. Those findings of fact have not been challenged by either of the parties to this suit. We therefore assume that they are correct. On that assumption the court should have ordered the trustee to pay annually to Leslie W. Benson, the conservator for William C. Bradshaw, during the life of the said ward, all of the net income from the trust estate at such times during each year in such manner as the said Lucas, in the exercise of a sound judgment, shall deem most efficient and to the best interest of the said William C. Bradshaw. The decree appealed from is therefore reversed and the cause is remanded for further proceedings not inconsistent with this opinion. Reversed cmd remanded.