Estate of Stambaugh , 135 Pa. 585 ( 1890 )

Opinion,

Mb. Chief Justice Paxson :

We are of opinion that the will of Philip Stambaugh created an active trust in favor of his son Moses. The language of this portion of said will is as follows:

“ And from the other aforesaid divided share of my estate all the just debts and claims that I have and hold against my son Moses Stambaugh are to be subtracted from the same, and the balance thereof is to be placed in the hands of Henry Shaffer, of Jackson township, whom I hereby appoint trustee for to hold the said sum for my son Moses Stambaugh; the said Henry Shaffer is to pay the interest yearly accruing from the same to my son Moses Stambaugh after deducting taxes and necessary expenses, and after the death of my son Moses Stambaugh I bequeath the principal to the heirs of my son Moses Stambaugh, share and share alike.”

We think it manifest from this will that the testator intended (a) to sever the product from the fund producing it, and that he wished the former only to be paid to his son during his life; and (5) after his death the principal to go to his children. By the words “ heirs ” he evidently meant “ children.” It was urged, however, that this was a mere dry trust; that there is nothing upon the face of the will to indicate an intent to create a spendthrift trust, and that, as the fund was given to Moses and Ms heirs, there is no purpose for which the trust should be kept alive, and that it is executed in Moses.

It is settled by a line of authority that a trust to invest money, collect the interest, and pay over the same to a cestui que trust during life, with remainder over after his death, creates an active trust, and vests the legal title in the trustee during the life of the cestui que trust: Girard L. Ins. Co. v. Chambers, 46 Pa. 485. Cases to the same point might be cited by the score. It was urged that there was no authority given in this will to invest the fund. It is true there is no such direction in terms, but the duty to do so arises by necessary implication from the order to pay over the interest. How could interest be earned or paid over, without an investment of the principal ? The legal effect of the will is precisely the same as if it Had formally directed the trustee to invest the fund from time to time, and pay over the net income to Moses during his life. A neglect to do so on the part of the trustee would have rendered him liable to a surcharge in his accounts. There is nothing in this position.

Is this a spendthrift trust ? It may be admitted that it lacks some of the usual provisions of such a paper, notably the absence of any clause protecting the income from attachment, etc. If, however, we can gather from the will itself, and from the light of the circumstances surrounding the testator at the time he made it, that his intent was to create a spendthrift trust, such intent ought not to be defeated because his conveyancer blundered. That he was an ignorant man appears from his signature, which was by mark only; that the conveyancer did not possess more than the average skill of a country justice of the peace, the will itself abundantly shows. When we come to examine this will, we find that as to several of the legatees, children of deceased sons, the legacies are given absolutely. This is so even as to the females, whose shares a testator is more likely to place in trust than those of male legatees. But When it comes to the shares of his two sons, Nathaniel and Moses, he places their shares in trust, in precisely the same terms. We have no concern with Nathaniel’s share, and it is referred to incidentally in ascertaining the intent of the testator. The latter had certainly some object in creating this trust for Moses. What was it? We do not think the answer difiicult. The mere fact of the gift only of the income, and the interposition of a trustee, implies distrust as to his son. There was reason for it. Upon the face of the will it appears that Moses was indebted to his father, for it directs that “ all the just ctebts-and claims that I have and hold against my son Moses Stambaugh ” shall be deducted from his share before it is placed in trust. Had the testator had confidence in his son financially, it is not likely he would have given this direction. The key to it is found wdien we turn to the evidence, where it appears that Moses Stambaugh failed and made an assignment fórthe benefit of his creditors a few months before the testator made his will. This throws a flood of light upon his intentions. He was providing for an insolvent son; and, in view of the circumstances surrounding him at the time, who can doubt that he intended this as a spendthrift trust ? This intent is not to be set aside because it is not clearly expressed by his scrivener. It is said, however, that we must search only for the intent of a testator within the four corners of the will. This is true, but, when we come to consider the will and interpret its meaning, we must do so in the light of all the circumstances by which the testator was surrounded when he made it,- and by which he was probably influenced. It was said by Justice Sharswood, in Postlethwaite’s App., 68 Pa. 477: “ It has been long and well settled, and indeed it is a principle so consonant to reason that the only wonder is that it should ever have been questioned, that all the surrounding circumstances of a testator—his family, the amount and character of his property—may and ought to be taken into consideration in giving a construction to the provisions of his will.”

Regarding it, then, as plain that this testator intended to create a spendthrift trust for his son Moses, we have the additional fact that he certainly did create an active trust. The income only was to be paid to his son, “ after deducting taxes and necessary expenses.” The legal title was in the trustee, and therefore the legal and equitable title could not coalesce under the rule in Shelley’s Case. Under such circumstances, it requires neither argument nor authority to show that the trustee had no right to pay over any portion of the corpus of the estate to his cestui que trust. That was not what the testator directed him to do; and, as he procured no order from the court, having jurisdiction of his account, to make such payment, it follows necessarily that such disposition of the trust estate was unlawfully and improvidently made. It was at his own risk, and in direct violation of the trust. The release of the' life-tenant does not bind him; the release of the alleged remainder-men does not protect the trustee. Non constat that the releasors will be the remainder-men at the death of Moses Stambaugh. If the trustee suffers by this ruling, it is the result of his own folly. He was entitled to procure competent legal advice, and pay for it out of the trust fund. Moreover, he could have been protected by an application to the court. The law does not deal harshly with trustees. It affords them every facility to ascertain and follow the proper legal path in the administration of their trusts. When they unlawfully part with the trust funds committed to their care, they cannot justly complain if they are held responsible.

It is to be observed that no question arises as to creditors. As between the trustee and his cestui que trust, we must give this will the effect of a spendthrift trust.

The decree is reversed, at the costs of the appellees ; and it is ordered that the record be remitted to the court below to have the account restated in accordance with this opinion.