Cannon v. Birmingham Trust & Savings Co.

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 318 The chief contentions of the appellant, Mrs. Rose Johns Cannon, are (1) that under a proper construction of the "July agreement" she is entitled to retain all of the income from the trust estate, and is not limited to $100 per month; (2) that in any event, under the express terms of the agreement, the trustee is required to pay the entire trust income, as collected, over to her as beneficiary, leaving it to her to discharge her personal obligation to account for the excess above $100 per month; (3) that, whether she is entitled to receive such income personally or not, she is in any event entitled to receive it, in the capacity of administratrix, as assets of the Johns' estate; and (4) that she, as administratrix, is a necessary party to the proceeding.

1. After providing that, if the dividends accruing in any month during the life of Mrs. Johns should exceed $100, the excess should be by her paid over to L. W. Johns, and that, if such dividends accruing in any month should be less than $100, then the deficiency should be paid by him to her, and that any and all such deficiencies should be secured by a lien on certain described real estate, the instrument further declares:

"Settlements of such excesses or deficiencies to be made in annual periods during the natural life of the party of the second part [Mrs. Johns], and such excesses or deficiencies to offset each other; the intent of this provision being that the party of the second part shall have during her natural life a fixed income of not less than $100 per month during that term, and not in excess of that sum, out of the dividends of such stock primarily." (Italics supplied.)

We do not see how language could express an intention more clearly and unmistakably. Certainly, impartial minds cannot differ upon the conclusion that Mrs. Johns was thereby limited to an income of $100 per month, and that the primary purpose of the trust agreement was to give her exactly that amount, — no more and no less. Nor does an examination of the entire instrument discover any provision which is in any way or degree contradictory of that purpose.

This provision was intended, with equal clearness and certainty, to fix the income of Mrs. Johns during her lifetime, and not during the lifetime of her husband, as ingeniously argued by counsel. It is true that monthly excesses of the stipulated amount, if any, are required to be paid by her to "the party of the first part," her husband, in annual adjustments; but these annual adjustments are to be made duringthe lifetime of Mrs. Johns, and not during their joint lives merely. Unquestionably, the excess over Mrs. Johns' fixed income was a trust fund in her hands. It was not discharged of the trust by the death of L. W. Johns, but survived as an obligation due to his estate, as do all such money obligations.

2. Appellant's second contention is that, pursuant to the strict letter of the trust agreement, she is personally entitled, even in this equitable proceeding, to receive all the dividends collected by the trustee, including the excess above her fixed income, whatever its ultimate ownership and disposition might be.

This contention, though technically plausible, is wholly without merit. The primary purpose of the trust was to assure to Mrs. Johns a stipulated income during her life. For that purpose, and that alone, she was made the recipient of all the dividends collected by the trustee. The duty of the trustee to pay them over to her, and her corresponding right to receive them as collected, looked merely to the satisfaction of her income claims; and while, in any controversy between the trustee and the beneficiary only, the latter's right would be enforced, yet, in a court of equity which is dealing with the trust as a whole, with jurisdiction of the estate, and of the fund, and of all the parties interested, the court will administer the fund according to the purpose of the trust. That purpose clearly was to return to the donor, L. W. Johns, or contingently to his estate or heirs, the entire excess of the dividends above $100 per month. It would be a vain and idle ceremony, under the circumstances here existing, to place that excess in the hands of Mrs. Johns Cannon, in order that she may distribute it to those entitled, or pretend to pay it to herself, as administratrix, to await the further orders of the court.

3. It would be equally vain and useless to require the trustee to pay the fund to the administratrix, and then order her to make the distribution as such representative. If she had the fund in her hands as administratrix, the court would have the unquestionable right to order its distribution to the heirs exactly as has been done, as an administrative process; the estate being before the court for that purpose. If a specific reason need be found for the direct action decreed by the court, it would seem that the antagonistic interest of Mrs. Johns Cannon, *Page 319 to the estate she represents and to the heirs, would be sufficient.

The fact that there are some debts incurred by the administratrix, as the representative of the estate, is not an obstacle to such a distribution, since, under the order and decree of the court, the future excess income from the trust property will be available for their satisfaction if her claim should be allowed on final settlement of the estate.

4. It was, of course, necessary for the estate to be represented in this proceeding, which is ancillary to its administration; but the statute (Code, 1923, § 6057) makes it the duty of the court, in any proceeding where the personal representative is interested adversely to the estate, to appoint an administrator ad litem. In this case such an administrator was properly appointed, and was made a party to the petition. The estate was therefore properly represented, and no one can complain of the fact that Mrs. Johns Cannon was not made a party, as administratrix of the estate.

Our conclusion is that the decree of the circuit court is free from error, and should be affirmed.

Affirmed.

ANDERSON, C. J., and THOMAS and BOULDIN, JJ., concur.