Hamilton v. San Antonio Loan & Trust Co. , 272 S.W.2d 384 ( 1954 )

W. O. MURRAY, Chief Justice.

I dissent in part, from the opinion of the majority.

I cannot agree that we should establish an implied trust, either constructive or resulting for the reason the estate here is being administered under the terms of an expressed trust. Where there is an expressed trust in existence and being properly administered there is no occasion for an implied trust. Bogert on Trusts, Vol. 2-A, page 555, § 468. If the trust here be regarded as a resulting trust, then it was created by the judgment of the 73rd District Court dated May 5, 1924, and there is no reason why we should now create another and different resulting trust. We should tell the trustee what his duties are under the existing trust, not create a new trust.

I agree with the application of the so-called Chapal-Otis rule as to the $9,770 received by the trustee as a consideration for the oil and gas lease upon the 97.7 acre tract. This money was received during the lifetime of -the life cestui in consideration of a sale of a part of the mineral estate and therefore should be divided between corpus and income in proportion to "the amount of principal and interest which was due on the note at the time of the foreclosure, described generally as 51% principal and 49% interest. Matter of Chapal’s Will, 269 N.Y. 464,199 N.E. 762, 103 A.L.R. 1268; Matter of Otis’ Will, 276 N.Y. 101, 11 N.E.2d 556, 115 A.L.R. 875.

I have some doubt that the life cestui should be permitted under all the facts to participate in the profit realized by the sale of a part of the oil and gas estate, but I am not dissenting, upon this point. My doubt is based upon the following statement found in Bogert on Trusts, Vol. 4, Part 1, § 820, page 25:

“In rare cases a trustee may foreclose a mortgage, bid in the property ■ himself, hold it for a time and then sell , at a profit after replacing income and capital due and paying expenses. Should such1 a profit go to capital, or to income, or be,-apportioned between ■ . them? Since both capital and income bear the risk of loss on a foreclosure ■ of a trust mortgage, it would seem equitable that they should share gains in proportion to the size of their interests, and some cases have reached this result. But in other instances the profit has been awarded to trust capital, apparently on the theory that accidental increases in the value of trust assets constitute accretions to capital and that the realty held must have advanced in value due to growth of the community, a change in price levels, or similar reason. Cases granting such a profit to ■ the life tenant as income seem unexplainable.” Burnett v. Witschief, 96 N.J.Eq. 71, 126 A. 23; .Equitable Trust Co. v. Swoboda, 113 N.J.Eq, 399, 167 A. 525.

As to the 97.7 acre tract which was on hand and had not -been sold at the time of the death of the life cestui, I think it should be treated as a part of the corpus of the estate. There is no duty on the part of the trustee to account to the life cestui for -any "income from land taken in a mortgage •salvaging operation until the'-land is resold and proceeds1 are received by the trustee. In re Spear’s Estate, 333 Pa. 199, 3 A.2d 789.

Where the life cestui dies before the land is resold there is no income to which the executor of" the life cestui is entitled. In re Spear’s Estate, 333 Pa. 199, 3 A.2d 789.

I feel that judgment should be rendered in keeping with the above principles.