Harrity v. Continental-Equitable Title & Trust Co.

Opinion by

Mr. Justice Walling,

This bill was filed by beneficiaries to restrain the sale of real estate by a trustee. In 1902 the late William P. Harrity and others, known as the Haverford Road Tract Syndicate, entered into a written agreement creating a trust and constituting the Equitable Trust Company, of Philadelphia, now the Continental-Equitable Title & Trust Company, trustee, whereby the syndicate agreed to and did supply the trustee with funds to purchase a ninety-eight acre tract of land, located near the City of Philadelphia, which, the trustee having accepted the trust, was bought accordingly. The agreement stipulates : “That the said trustee shall hold the said tract of land as trustee for the purpose of making sale of the same and dividing the net proceeds of said sale or sales, less all proper charges and expenses, among the members of the said syndicate, in the proportion of their respective interests as registered upon the books of the said trustee”; also, pending sale, authorizing the trustee to rent the same or any part thereof upon such terms as it might deem best, and further providing that: “For the purpose of converting the said tract of land into money, the trustee shall from time to time sell the said tract of land in whole or in parts, at either public or private sale, for such purposes, at such price or prices and upon such terms and conditions as it, the trustee, shall deem best, free and discharged of all trusts and limitations whatsoever, without any liability on the part of any purchaser or purchasers to see to the application of the purchase money.” The agreement further provides that the members of the syndicate shall have no title or interest in the land but only in its proceeds after sale, and contains a later provision that: “Any difference or dispute which may arise in connection with the management of the business of the said syndicate shall be settled and determined by a majority in interest, not in default as aforesaid of said syndicate, and the decision of said majority shall be final and binding upon each and all the parties hereto.” In 1923 the trustee entered into a written contract with its codefendant, George Williams, to sell the tract of land to him for $215,000, on which he paid $10,000. Meantime, Harrity had died and his widow, Rose M. Harrity, together with the Girard Trust Company, had become trustees under his will, and John A. Kelley, another member of the syndicate, had also died and his widow, Martha A. Kelley, John A. Kelley, Jr., and the Girard Trust Company had become trustees under his will. The Harrity estate and the Kelley estate were entitled to seventeen thirty-thirds of the proceeds of the syndicate property. In other words, they constituted a majority of the syndicate in interest. The Girard Trust Company, as a trustee of the two estates, approved of the proposed sale to Williams, but no other trustee of either estate was consulted or consented thereto. Upon learning of the proposed sale, the nonconsenting trustees of both estates filed this bill to prevent its consummation; wherein is averred neither fraud nor inadequacy of price, but merely that “they [the plaintiffs] verily believe that the said property should not be sold at this time, for the price mentioned in the said contract.” On demurrer the trial court dismissed the bill, hence this appeal by plaintiffs.

The duty of renting and selling the property and dividing the proceeds, devolved upon the trustee; it was therefore an active trust: Whiteley’s Est., 273 Pa. 364; Deniston v. Deniston, 263 Pa. 224; Henderson’s Est., 258 Pa. 510; Mooney’s Est., 205 Pa. 418. The primary object of the trust was the sale of the property and by the express and specific provisions of the trust agreement above quoted, the power to sell was vested in the trustee and made subject to its discretion. This special provision was not destroyed by the later general clause, also quoted, that disputes as to the management of the syndicate should be determined by a majority in interest. A contract must be so construed, if possible, as to give effect to all of its provisions: Vulcanite Paving Co. v. Phila., 239 Pa. 524; Thompson v. Craft, 238 Pa. 125; McMillin v. Titus, 222 Pa. 500; Knickerbocker Tr. Co. v. Ryan, 227 Pa. 245. In the last case, Mr. Justice Mestrezat, for the court, says: “It is a rule of universal application that in construing a contract each and every part of it must be taken into consideration and giren effect if possible, and that the intention of the parties must be ascertained from the entire instrument.” This was properly done here by the trial court in holding that the power of sale remained in the trustee and that the provision as to the management of the business of the syndicate had reference to other matters than the sale of the property, pertinently saying: “Since the two clauses involved seem to be mutually contradictory if applicable to the same subject-matter, and since a court should so construe a written agreement if possible as to reconcile all of its component parts, the conclusion would seem proper that by the word ‘business’ is not meant the sale of the land but rather such incidental matters as may result from holding land for an uncertain number of years. Thus there may be questions as to making improvements, laying out the land in building lots, opening streets, possible litigation with governmental authorities or with neighboring owners, employment of caretakers or others, and the like.” The management of the business of a syndicate does not necessarily mean a sale of its real estate, especially where the matter of sale has already been provided for in the same instrument. It cannot be assumed that the parties in such apt language gave a power of sale, in fact created the trust largely for that purpose, and then immediately struck it down. An interpretation will not be given to one part of a contract which will annul another part of it or produce absurd results (Tustin v. Phila. & R. C. & I. Co., 250 Pa. 425), nor can a clear provision in a written instrument be overcome by one that is doubtful: Yost v. Insurance Co., 179 Pa. 381, 385; Sheetz’s App., 82 Pa. 213. We say struck it down, for if the management clause applies to the sale of the property, then all power and discretion is transferred from the trustee to the majority in interest of the syndicate, and the former would have no discretion even to refuse to sell on request of the latter.

Moreover, treating the clauses as irreconcilable, the general provision as to management must give way to the special provision as to sale, under the rule that, where there is a repugnancy, a general provision in a contract must give way to a special one covering the same ground: Keiser v. Reading S. R. Est. Co., 43 Pa. Superior Ct. 130; Elliott on Contracts, vol. 8 (Supplement), section 1515, p. 242; English v. Shelby, 116 Ark. 212, 172 S. W. 817. It is analogous to the rule that written provisions in a contract overcome such as are printed. See 6 R. C. L. pp. 847, 848, also Heistand v. Meyer, 150 Pa. 501. There is another general rule, not necessary to invoke here, that the later of two totally repugnant clauses in a deed or contract must give way to the earlier: Straus & Sons v. Wanamaker, 175 Pa. 213; 6 R. C. L. p. 847.

The mere fact that the defendant trustee sought the approval of the Girard Trust Company before contracting to sell, is no proof that the parties construed the agreement as requiring the consent of the beneficiaries to a sale of the property.

It is not necessary to consider the other questions called to our attention.

The decree is affirmed and appeal dismissed at the costs of appellants.