CASES

ARGUED AND DETERMINED

IN THE

UNITED STATES CIRCUIT COURTS OF APPEALS AND THE CIRCUIT AND DISTRICT COURTS.

CANFIELD et al. v. CANFIELD.

(Circuit Court of Appeals, Sixth Circuit. October 7, 1902.)

No. 1,043.

1. WILLS RULES OF CONSTRUCTION.

The construction of a will being for the purpose of ascertaining the intention of the testator, the language used must be read in the light of the circumstances of the particular case.

2. SAME-PRESUMPTION AGAINST PARTIAL INTESTACY.

A testator, having his attention upon his entire estate, will not be presumed, in the absence of a clear expression to the contrary, to die intestate as to any part of it.

8. SAME

TESTAMENTARY TRUST-VESTING OF ESTATE IN BENEFICIARY.

A testator, who was a young man, unmarried, and possessed of a considerable estate, had no near relatives except a younger brother, not then of age, who had become somewhat dissipated. After making minor bequests, he devised and bequeathed all the residue of his estate to an uncle "in trust for the use and benefit of my brother." The will provided that the uncle should control and manage the property, paying to the testator's brother such sums from time to time as he should deem best, until the latter became of age, when, if "my said uncle shall think it best, in his judgment and discretion, to pay over and deliver to my said brother all my bequests to my brother, * * * I hereby authorize and direct him to do so." If the uncle did not then think it best to turn over the property, he was to continue to manage and control it until such time as, in his judgment and discretion, he should “deem it prudent and proper to put the same under the management and control of my said brother." No provision was made for disposition of the property in the contingency of its not being turned over to the testator's brother. Held that, reading the will in the light of the existing circumstances, it was clearly the intention of the testator to vest the estate in his brother, subject to the right of the trustee, under the discretion given, to withhold the use and enjoyment of it, and that on the death of the brother the property, which had not been turned over to him, vested in his heirs, and did not revert to the estate of the testator.

4. SAME EFFECT OF STATUTE ON CONSTRUCTION.

2 Comp. Laws Mich. 1871, §§ 4129, 4131, which provide that a trust estate shall vest in the trustee, leaving to the beneficiary only the right to enforce the trust, and that the estate and interest not included in the trust on the termination thereof vest in the person creating the same, 118 F.-1

or his heirs, cannot operate to enlarge the estate in a trustee under a testamentary trust beyond that intended by the testator, as determined from a proper construction of the will itself.

5. JURISDICTION OF PROBATE COURTS-MICHIGAN STATUTES-SETTLEMENT OF TRUST ESTATES.

The jurisdiction conferred on the probate courts by the statutes of Michigan to settle estates, and distribute the funds thereof in the hands of an executor, does not extend to the settlement of the accounts of trustee under a will, and the distribution of the trust fund on the termination of the trust, which jurisdiction belongs to a court of chancery; and where an executor paid all the debts and specific bequests of his testator, leaving in his hands only the residuary estate, of which he was made trustee under the will, but neglected for many years, and until after the death of the cestui que trust, to settle his accounts as executor when he filed his report, including therein the trust property, a decree of the probate court made thereon, distributing the trust property and funds as, Troperty: of the estate, is void as against an heir of the cestui, que trust: who. was the real owner of the property, but who, although known to the executor, was not made a party to the proceedings, and whose rights were not considered or adjudicated.

6. TRUST

ACCOUNTING BY TRUSTEE-INTEREST.

A trustee, not shown to have wasted the estate or to have derived a profit therefrom, should be charged only with simple interest at the legal rate on funds remaining in his hands from time to time uninvested.

7. SAME-LIABILITY OF TRUSTEE FOR CONVERSION-UNAUTHORIZED CONVEYANCE OF REAL ESTATE.

Where a trustee under a will undertook to convey real estate to which he had no title, as appeared from the will and proceedings thereon. which were matters of record, but it did not appear that he acted fraudulently, having made the conveyances without receiving any payment therefor, pursuant to a decree of distribution made by the probate court, which was, however, void as against the real owner for want of jurisdiction, he should not be charged, in favor of such owner, with the value of the real estate, as for a conversion, unless it should be determined in litigation instituted for the purpose that the lands are not recoverable.

B. JUDGMENT-ALLOWANCE BY PROBATE COURT TO EXECUTOR-Collateral

REVIEW.

An allowance of a lump sum made by a probate court to an executor and trustee under a will as compensation for his services rendered in both capacities cannot be set aside in a collateral proceeding, although the court was without jurisdiction to allow compensation for the services as trustee.

Cross-Appeals from the Circuit Court of the United States for the Western District of Michigan.

A. J. Dovel and Benton Hanchett, for appellants.

Jackson B. Kemper, for appellee.

Before LURTON and DAY, Circuit Judges, and SWAN, District Judge.

DAY, Circuit Judge. This was a bill for an accounting against John Canfield, who died pending the action, for moneys and property alleged to be in his hands as trustee of Edward W. Canfield, deceased, belonging to Hattie H. Canfield, the complainant. The case

15. Probate jurisdiction, see note to Quarries Co. v. Thomlinson, 36 C. C. A. 276.

turns principally on the proper construction to be given the will of Henry R. Canfield, who died at Racine, Wis., September 3, 1871. The will was probated in the probate court of Manistee county, Mich., where the deceased had left very considerable property interests. After giving $5,000 to his aunt Clara E. Marsh, $1,000 to Cyrus W. Babcock, a friend, his interest in his father's homestead to his stepmother for life, and a watch to his brother in case he had none, the testator, in the sixth clause of his will, disposes of all the rest of his estate as follows (sixth):

"All the rest and residue of my estate, real and personal, I give and bequeath to my uncle, John Canfield, in trust for the use and benefit of my brother, Edward W. Canfield, and leave the management and control of the property hereby given under the sixth bequest of this, my last will and testament, to my said uncle, John Canfield, in trust for the use and benefit of my brother, Edward W. Canfield, according to the best judgment and discretion of my said uncle, John Canfield, and that my said uncle shall pay to my said brother such sums of money from time to time as my said uncle shall, in his judgment and discretion, deem best; and also, when my said brother shall arrive at his majority (that is, shall arrive at the age of twentyone years), and my said uncle shall think it best, in his judgment and discretion, to pay over and deliver to my said brother all my bequests to my brother, Edward W. Canfield, I hereby authorize and direct him to do so. But it is expressly my will and earnest desire that my said uncle will exercise a sound discretion and judgment in paying over any money or conveying to my said brother any real estate to my said brother, under the sixth bequest of this my last will and testament, and expressly request my said uncle not to do so until my said brother shall, in his (my said uncle's) discretion and judgment, be satisfied that my said brother will manage and make prudent use of the same. And in case my said brother, Edward W. Canfield, shall become dissipated, or in any manner and from any cause, in the judgment and discretion of my said uncle, John Canfield, unfit to hold, control, or manage any of the property, real or personal, lying and bequeathed, under the sixth provision of this my last will and testament, in trust to my said uncle, John Canfield, for the use and benefit of my said brother, Edward, then I do authorize and direct my said uncle, John Canfield, to hold, manage, and control all the real and personal estate given and bequeathed under the sixth provision of this, my last will and testament, till such time as, in the judgment and discretion of my said uncle, John Canfield, may deem it prudent and proper to put the same under the management and control of my said brother, Edward W. Canfield, and not till then."

The testator, Henry R. Canfield, and Edward W. Canfield were the sons of Edmund Canfield and nephews of John Canfield. Edmund died in the year 1871. He left a considerable estate to Henry R. and Edward W. Canfield. Henry R. survived his father only about 6 months. Henry R. was 22 or 23 years old at the time of his death, and Edward W. was about 18 or 19 years of age. Henry's property consisted of real estate in Manistee, Mich., Chicago, Ill., and Elmira, N. Y., about $20,000 in notes, and a quarter interest in Canfield's Wrecking & Towing Line of Manistee. Edward W. Canfield was a young man of dissipated habits, subject to sprees. He became of age in the spring of 1873. John Canfield did not then turn over the estate to him. In fact, he never did so, but gave Edward sums of money from time to time. Edward did not reform, but continued dissipated until his death, which occurred in Idaho in 1893. On September 21, 1871, the will of Henry R. Canfield was probated in the probate court of Manistee county, Mich. This will was admitted to

probate, and letters issued to John Canfield, as executor, on October 16, 1871. On December 18, 1871, John Canfield filed the inventory of the estate. No accounts were filed or other proceedings had until the filing of the petition for an order of distribution of the estate on October 10, 1893. On January 27, 1884, Edward W. Canfield married Hattie H. Canfield, the complainant. This marriage took place in Milwaukee, Wis., where the parties resided for a short time, removing thence to Kansas City, Mo. The complainant shortly afterwards returned to Milwaukee, where Edward promised to join his wife, but in fact never did so. John Canfield knew of this marriage, and sent at least one check payable in whole, or jointly with her husband, Edward, to the complainant. After Edward's death, and on the 10th day of October, 1893, John Canfield filed his petition in the probate court of Manistee county, Mich., setting forth, in substance, that he had paid the specific legacies mentioned in Henry's will; that' the funeral expenses and debts of the deceased had been paid; that the residue of the estate had been devised to the petitioner in trust; that, in the exercise of the discretion conferred in the will, he did not pay over the residue of the estate to Edward, but had paid out certain sums for his use and benefit; that there remained in his hands $31,283.05, and certain unsold real estate in Manistee and Chicago. Hattie H. Canfield was not made a party to this proceeding, or her possible interest in the estate, as the widow of Edward, in any manner referred to. The petition averred that upon Edward's death all the property and estate remaining in the hands of the petitioner, undisposed of, by the provisions of chapter 214 of Howell's Annotated Statutes of Michigan, reverted to the heirs or next of kin of Henry R. Canfield, deceased, who are entitled to the same. It is further averred that all of said estate, real and personal, came to Henry R. Canfield through his father, Edmund Canfield, and that the following named persons, as the petitioner is informed and believes, are the sole next of kin, and entitled to share in the residue of said estate equally, to wit: Maria D. Smith, of the age of 70 years, Clara E. Marsh, of the age of 68 years, paternal aunts, and petitioner, paternal uncle, of the age of 63 years, of Manistee, Mich. The petitioner prays an allowance for services; that a day may be fixed for hearing of the petition and accounting, and notice given to all persons interested, as the court shall direct and the law require. The court is asked to adjudicate who are the next of kin of Henry R. Canfield, entitled to said estate, real and personal, and the share of each person, and that the residue of the estate may duly be assigned to Maria D. Smith, Clara E. Marsh, and the petitioner, in equal portions. Thereupon the probate court made an order requiring the petitioner to give notice to the persons interested in the estate of the pendency of said account, and the hearing thereof, by publication for four weeks in the Manistee Advocate, a newspaper printed and circulated in said county, which order was duly published. On November 13, 1893, an order was entered in the probate court finding that the property remaining in the hands of petitioner reverted to the heirs or next of kin of the deceased, who were found to be said Maria D. Smith and Clara E. Marsh, aunts, and petitioner, uncle, of said Henry, next of kin, and entitled to share.

in said residue of said estate equally. Ten thousand dollars was allowed as compensation to said John Canfield as executor and trustee, and he was directed to distribute such residue equally among said Clara E. Marsh, Maria D. Smith, and John Canfield. Afterward, on February 7, 1894, John Canfield filed a report showing that he had distributed the property pursuant to such order, and made deeds for the real estate. John Canfield subsequently turned over his share of the estate, including his compensation, to Maria D. Smith and Clara E. Marsh. Hattie H. Canfield had no notice of these proceedings until May, 1896. Upon trial the circuit court found the complainant entitled to the property remaining in the hands of John Canfield which belonged to Edward W. under the sixth clause of the will, and to all the property of Edward W. which came into his hands from any source, belonging to Edward W. in his lifetime; that the proceedings in the probate court of Manistee county, Mich., were, after Edward's death, null and void as to the complainant. An account was decreed, and reference made to a master for that purpose. After an account before the master, a final decree was entered in the circuit court adjudging John Canfield not to be entitled to any compensation as trustee or executor, "by reason of not giving actual notice to the plaintiff of his application in the probate court in the matter of the estate of Henry R. Canfield, deceased, for an order of distribution of said estate; thereby attempting to convert said estate to his own use, and deprive the plaintiff thereof." John Canfield's estate (he having died pending the suit) is charged with simple interest at the legal rate in Michigan on amounts remaining in his hands from time to time uninvested for the trust estate up to January 16, 1894, when he is found to have converted said estate to his own use, and a decree bearing interest from that date was rendered against his estate. From this decree both parties appealed, raising the questions which we shall proceed to consider.

The purpose of construction is to ascertain the intention of the testator, as expressed in his will, and, if possible, to carry that intention into effect. Precedents are numerous, and, as usual in such cases, many are cited on either side of the controversy. The construction of a will, however, depends upon the language used, read in the light of the circumstances of the particular case. No two wills are alike, and the situation of each testator, as to persons and property, is peculiarly his own. We are to ascertain, if possible, from the language used, what Henry R. Canfield intended in framing the sixth clause of his will. He had a considerable estate. Before reaching the sixth clause, we find him making minor bequests to relatives. He then comes to deal with the major portion of his estate in the residuary clause. Here he has in mind provision for his brother, Edward W., and gives the property to his uncle, John Canfield, "in trust for the use and benefit of my brother." This is the first and leading purpose of the testator,-to dedicate the property to the use and benefit of Edward. In view of the fact that Edward, although then a very young man, had fallen into practices and habits of dissipation, which, if persisted in, would render him unfit to control and manage property, the estate is not to be turned over to Edward, except in such sums as the