NO. 91-351
IN THE SUPREME COURT OF THE STATE OF MONTANA
IN THE MATTER OF
RAYMOND W. GEORGE TRUST,
SHIRLEY G. BRAGG, Trustee
APPEAL FROM: District Court of the Sixth Judicial District,
In and for the County of Park,
The Honorable Byron Robb, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Dan Yardley; Yardley & Yardley, ~ivingston, Montana
John T. Jones; Moulton, Bellingham, Longo & Mather,
Billings, Montana.
Robert Baldwin; Goetz, Madden & Dunn,
Bozeman, Montana.
For Respondent:
Joseph T. swindlehurst; Huppert & Swindlehurst,
Livingston, Montana
Submitted on Briefs: March 26, 1992
Decided: May 12, 1992
Filed:
Justice R. C. McDonough delivered the Opinion of the Court.
Shirley Bragg, Trustee of the Raymond W. George Trust (Trustee
Bragg) appeals from an order of the Sixth Judicial District, Park
County. The ~istrict Court denied Trustee Braggls motion to
withdraw her previously granted petition for declaration of right
and authority to sell real property held in the trust to Double AA
Corporation (Double AA) . The court further ordered that Trustee
Bragg proceed with the sale to Double AA and enjoined her from
permitting logging operations on the ranch property. Intervenor,
,
James W. Sievers (~ievers) and Trustee Bragg appeal. We affirm in
part and reverse in part.
We will address the following issues:
I. Did the District Court err by granting Trustee Bragg the
right and authority to sell real property held in trust?
I . Did the District Court err by ordering Trustee Bragg to
proceed with the sale to Double AA?
111. Did the District Court err by enjoining Trustee Bragg
from permitting any logging to occur on the subject property?
In addition to the issues as stated above, there is a motion
before the Court to take judicial notice of admissions requested
and unanswered in previous litigation involving this trust. We
generally will not allow a party, Sievers as intervenor in this
case, to introduce additional evidence once a case has been brought
for appeal. Downs v. Smyk (1979), 185 Mont. 16, 604 P.2d 307. In
S m ~ k ,w e refused to examine a deposition given in a proceeding
previously decided by this Court because the deposition was
extraneous to the record on appeal.
Here, the admissions we are asked to consider were filed in an
action in United States District Court by Sievers in his attempt to
remove Bragg as Trustee. The instant case arises from a petition
filed by Trustee Bragg in the Sixth Judicial District Court
requesting a declaration of right and authority to proceed with
sale of trust real property to Double AA. The requested admissions
were not considered by the trial court in this matter and will not
be considered on appeal, "In equity cases and in matters and
proceedings of an equitable nature, the supreme court shall review
all questions of fact arising upon the evidence resented in the
record..." [emphasis supplied] 53-2-204(5), MCA. Sievers' motion
to take judicial notice of the requested admissions is therefore
denied.
Raymond W. George died in April 1974. His will, probated in
the Sixth Judicial District, Park County, created a testamentary
trust, the corpus of which includes the real property that is the
subject of this action. His widow, Olga George, was named as
income beneficiary; Raymond's children were named as remaindermen;
and Maxine George, one of Raymond's children, was named as trustee.
Appellant, Shirley Bragg, another of Raymond's children, became
successor trustee following Maxine George's death. Maxine ' s
remainder interest in the trust passed at her death to Cleto
McPherson, Maxine's husband and sole heir.
Leo Ray George, another of Raymond's children, and Cleto
McPherson conveyed their remainder interest in the trust, by
separate deeds, to intervenor James W. Sievers. Sievers currently
holds a 5/9 interest as beneficiary in the remainder of the trust.
Trustee Bragg initiated this action after entering an
agreement with Double AA Corporation to sell the real property held
in the trust for $l,3OO,OOO, and other benefits. The court entered
an order granting Trustee Bragg permission to sell the trust
property. Thereafter, Trustee Bragg filed a motion requesting to
withdraw her petition and to cancel the sale to Double AA. The
District Court denied the motion and ordered that the sale proceed.
The court further granted Double AA's motion to enjoin logging or
any other waste from occurring on the property. Trustee Bragg and
Sievers appeal.
Despite Trustee Braggls initial request for court approval of
sale of the subject ranch property, Bragg now contends that such
sale is impermissible because it is inconsistent with the
testator's intent and against the best interests of the
beneficiaries. This action was filed pursuant to 972-35-301, MCA,
which provides the court equitable jurisdiction, upon application
of the trustee or any beneficiary, to approve discretionary acts of
the trustee. The appellants contend that a review of Raymond
George's will as a whole reveals that he intended to preserve the
ranch unless sale was necessary to maintain the health and
maintenance of his widow, Olga.
The will, and the trust instrument incorporated therein,
expressly provides the trustee the power and necessary authority to
sell the real property held in trust. However, the appellants
contend that regardless of any expressed provision granting
specific powers to the trustee, 5 72-34-130(1), MCA, mandates that
a trustee:
... shall act in accordance with fiduciary principles
and may not act in disregard of the purposes of-the
trust.
The appellants rely on various references to the trust as "real
property", throughout the will, as demonstrating Raymond George's
intent to maintain the corpus of the trust as real property. The
appellants further rely on Paragraph V (the portion of the will
which creates the trust), part b of the will which provides:
The Trustee may, in her sole and absolute discretion,
invade the principle of the Trust and pay so much thereof
as may be necessary, to or for the benefit of my wife,
for her health and maintenance, if all other sources of
property of my wife shall be exhausted.
The above language is argued to limit the sale of property to
circumstances where such sale is necessary for the health and
continued maintenance of Olga George. Because there is no such
necessity in the instant case, it is argued that the sale is beyond
the discretionary powers of the trustee.
We agree with the appellants that:
The intention of the testator should control the
disposition and the intent shall Itbefound from all parts
.
of the will.. construed in relation to each other ...to
form one consistent whole."
Estate of Evans (1985), 217 Mont. 89, 94, 704 P.2d 35, quoting In
the Matter of the Estate of Erdahl (1981), 630 P.2d 230, 231, 38
St-Rep. 978, 980. However, we do not agree with the conclusion
that Trustee Bragg would be acting beyond her discretion by
exercising her power of sale of the property.
Paragraph V, part b, quoted above, does not limit the
trustee's authority to sell the property. The words of limitation
relied on by the appellants refer specifically to invasion of the
corpus of the trust. There is no indication that Trustee Bragg
intends to invade the corpus of the trust, her request is merely to
change the character of the trust investment from land to cash.
The powers exercisable by the trustee include the discretion to
sell the ranch or any other asset held by the trust.
Numerous provisions of the trust instrument provide clear
support for sale of the real property. For example, section r of
I1PowersExercisable By Trusteen provides the trustee t h e power:
To sell publicly or privately, for cash or on time,
without an order of the court, upon s u c h terms and
conditions as to her shall seem best, any property, real
or personal, included in the estate ...
The bulk of the trust Iestate', as intended and created by Raymond
George, is t h e ranch p r o p e r t y . There is no doubt that t h e trustee
was authorized to sell the ranch consistent with her fiduciary
duties. We conclude that Trustee Bragg had the right and authority
to sell the ranch and the District Court is affirmed on this point.
The District Court noted, in its original order, two issues
necessary for resolution of the action filed by Trustee Bragg;
whether or not Trustee Bragg has the legal authority to sell the
ranch (addressed above) and whether or not t h e proposed sale to
Double AA is fair and equitable. The ~istrictCourt found Double
AA1s offer of $1,300,000, and other benefits, to be very fair and
reasonable. This finding is supported by the evidence, is not
clearly erroneous, and is therefore affirmed.
6
We turn now to whether or not the District Court erred by
ordering Bragg to proceed with the sale to Double AA. During the
proceedings, the District Court specifically noted in an order
that:
It does not appear to the court at this point that this
action on the petition to approve sale of the trust
property is the proper vehicle to determine the merits of
any claim of Double AA against the trustee and other
interested persons for specific performance, breach of
contract, or damages.
Later, the District Court, in an effort to avoid further
litigation, did in fact order specific performance of the sale.
Rule 54(c) M.R.Civ.P., allows the court to grant relief to
which a party is entitled even if such relief was not demanded in
the party's pleading. However, the court may not grant relief not
specifically requested when the facts and issues necessary to
support such relief have not been tried and proven at trial. smith
v. Zepp (1977), 173 Mont. 358, 567 P.2d 923. Long ago we stated
that the court could grant "any relief to which the plaintiffs are
entitled upon the allegations of the complaint and the roof
introduced at trial1'. [emphasis supplied], Merk v. Bowery Mining
Co. (1904), 31 Mont. 298, 78 P. 519.
This is neither a proceeding for specific performance nor an
action to litigate the rights between the trust and Double AA. No
opportunity was ever provided to the parties to present evidence
relative to the enforcement of the agreement. The validity of the
contract between the trust and Double AA and any rights of the
parties resulting from the contract were not the subject of the
litigation. The evidence presented only regarded the fairness and
7
reasonableness of Double AA1s offer and the agreement that the
parties entered. Whether or not any or all of the conditions of
that agreement have been met such that specific performance is
appropriate is beyond the scope of both the pleading and proof
introduced.
Double AA contends the court's order to proceed with the sale
to Double AA was a proper exercise of its equitable supervisory
authority over the internal affairs of the trust. Section 72-35-
301, MCA. However, it remains that any relief provided by the
court must be based on evidence presented before the court. The
equitable question of specific performance was not properly raised
and litigated. Therefore, we conclude that the District Court's
order to proceed with the sale was in error and the District Court
is reversed on this point.
The final issue for our review is whether or not the court
erred by enjoining logging operations on the ranch. On May 29,
1991, Double AA applied for an order restraining Trustee Bragg from
logging trust property. The motion was granted June 5, 1991. No
hearing has ever been held regarding the injunction.
Section 27-19-314, MCA, provides that an injunction issued
without a hearing is a temporary restraining order. By law, a
temporary restraining order expires in 10 days. Section 27-19-
316(4), MCA. The District Court in its order and accompanying
memorandum stated that it was granting the injunction regardless of
whether the order strictly complies with the injunction statutes.
We conclude that the District Court acted beyond its discretion and
c o n t r a r y to the statutory mandates regarding i n j u n c t i v e relief.
Therefore, w reverse the court and d i s s o l v e the injunction.
e
The D i s t r i c t C o u r t i s a f f i r m e d i n part and reversed in p a r t .