R. C. STEARNS, APPELLANT,
v.
LOUIS A. FRALEIGH, ALBERT E. FRALEIGH, PARRAMORE COGGINS IN RIGHT OF HIS WIFE LILLIE F. COGGINS, AND LILLIE F. COGGINS IN HER OWN RIGHT, ALEXIS M. MICHELSON IN RIGHT OF HIS WIFE ALLIENE MICHELSON, AND ALLIENE MICHELSON, A MINOR UNDER TWENTY-ONE YEARS OF AGE, BY HER NEXT FRIEND WILLIAM S. JORDAN, WILLIAM M. BURTON IN RIGHT OF HIS WIFE EMILY BURTON, AND EMILY BURTON, A MINOR UNDER TWENTY-ONE YEARS OF AGE, BY HER NEXT FRIEND WILLIAM S. JORDAN, APPELLEES

Fla. | 1897-06-01
39 Fla. 603 Florida Supreme Court (1897) Positive Treatment
Cited by 2 cases

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Synopsis

The Florida Supreme Court upheld the validity of a married woman's appointment of her husband as trustee under a power of appointment contained in a trust deed, and affirmed that a purchaser for value without notice obtained good title to the trust property. The decision rejected arguments that the appointment was void due to the trustee's prior acceptance of the trust, the impropriety of appointing a husband trustee, or the failure to obtain the husband's joinder in executing the instrument of appointment.


Holding

The appointment was valid on all grounds challenged. First, a trustee authorized by the trust deed to resign may do so validly, and the wife had authority to appoint a successor. Second, there is no absolute legal rule preventing a husband from serving as trustee for his wife, though a court of equity might decline to appoint him or remove him if appointed. Third, at common law a married woman could exercise a power without her husband's joinder, and no Florida statute had changed this rule as applied to the exercise of powers (as opposed to transfers of property). Fourth, the new trustee acquired sufficient title to convey to a bona fide purchaser for value without notice.


Key Quotes

“where the instrument creating the trust empowers the trustee to resign after acceptance, a resignation in the manner pointed out by such instrument will be valid”

Establishes that a trustee may resign if authorized by the trust instrument, rejecting the absolute rule that trustees cannot resign after acceptance.

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Facts & Procedural History

A trust deed created a trust for the benefit of a married woman (Mrs. Fraleigh) and her children, naming Mr. Love as trustee with authority to resign.…

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Opinion of the Court
Carter, J.:

Carter, J.:

The appellant having failed to argue the fourth error assigned in the petition of appeal, we treat it as abandoned. The principal question involved by the other assignments is, whether the appointment of E.

M. Fraleigh to be trustee, by his wife, under the power of appointment given her by the terms of the trust deed, was a valid act. If so, and the deeds to Hamblin passed title, the appellant being a purchaser for value from him, without notice of any equities claimed by appellees, would obtain a good title. Saunders vs. Richard, 35 Fla. 28, 16 South. Rep.

679. The hearing-in the court below was upon bill and answer, and it will be observed that the answer denied that the sale to Hamblin was for little or no consideration; that the-proceeds of the sale had not been reinvested, and all charges of fraud and conspiracy on the part of appellant to obtain title to the property. The deeds toHamblin expressed a consideration of $700, and, in the absence of actual notice, the appellant could only be charged with constructive notice to the extent of that furnished by the record of the trust deed and of those to Hamblin.

It is insisted by appellees that the appointment of E. M. Fraleigh to be trustee was void, because, first, the trustee, Love, could not, after having accepted the trust, resign or renounce it; second, a married woman can not appoint her husband trustee of a trust created by him for the benefit of herself and children; third, the execution of the instrument of appointment was-not joined in by Mrs. Fraleigh’s husband, nor did she acknowledge its execution separate and apart from her husband.

1. The general rule, that a trustee can not, after-having accepted a trust, resign or renounce it at his-pleasure, contended for by appellees, is unquestionably correct; but it is equally true that where the instrument creating the trust empowers the trustee to-resign after acceptance, a resignation in the manner pointed out by such instrument will be valid. 1 Perry on Trusts, sec. 274; 2 Lewin on Trusts, *646; Tiffany & Bullard on the law of Trusts and Trustees, p.

536. It is not denied that the trust deed authorized Mr.. Love to resign, nor that his resignation was in strict accordance with the authority, but the appellees ask us to construe the written resignation as a refusal to-accept the trust, and it is insisted that Mrs. Fraleigh. had no authority to appoint another trustee, in case of Mr. Love’s refusal to accept the trust, but only in the event of his resignation. The instrument expressly recites the fact that Mr. Love was holding property in trust, and it referred to the trust deed for a description of the property so held, and to its provisions authorizing him to resign. If he was holding the property in trust as declared by this instrument, hé had accepted the trusteeship, and the instrument was what it purported to be — a resignation of the trust, and not a refusal to accept it.

2. It is argued by appellees that the appointment of E.

M. Fraleigh as trustee of a trust created by him for his wife and children, would defeat the object of the trust, and his acceptance would amount to a revocation thereof, and we are referred to the case of Robinson vs. Executors of Dart, Dud. Eq. 128, and to the cases of Richards vs. Chambers, 10 Ves. 580; Magwood & Patterson vs. Johnston, 1 Hill Chy. 228, and Ewing vs. Smith, 3 Desaus. Eq. 417, S. C. 5 Am. Dec. 557, cited therein, as sustaining this proposition. The two last cases have no reference to the question under consideration. The case of Richards vs. Chambers, 10 Ves. 580, as quoted in the first named case, would go far towards sustaining the contention of appellees, but a reference to the official report of the case shows that it sustains the contrary view. There, the property, by a marriage settlement, was secured to the sole and separate use of the wife for life, and if she survived her husband, to her absolutely, but if she died before her husband, it was to go to such persons as she by will or deed might appoint, and in default of appointment, to her executors or administrators. The husband and wife by petition applied to have a pare of the trust property then in court transferred to them, the wife having executed an appointment in favor of the husband and expressed a desire upon an examination de bene esse, that the petition be-granted. The court said : “The wife having a separate estate for life, might, according to the doctrine of many cases, part with that life interest. She might also execute an appointment in favor of Tier husband, or of any person, which appointment in the event of her death in his life would be a valid and effectual disposition of the property. But the question is, whether the contingent interest, which.the wife while sui juris, has secured to herself in the event of her surviving her husband, can through the interposition of this court, be given up by her while in a state of coverture.” The question in that case was as to a contingent interest, over which the wife had no power of appointment by contract, and the proposition was distinctly recognized that she could exercise a power of appointment even in favor of her husband. In Robinson vs. Executors of Dart, Dud. Eq. 128, application was made to a court of equity to appoint a husband trustee for his wife. The court declined to appoint him, or to direct that the wife's separate property be turned over to him, holding not that he was incompetent or disqualified, but that he was an improper person to whom to commit the trusteeship. The reasons advanced by the court were, that if appointed he would be constantly tempted to use the-authority and influence of a husband to assume the disposal of the x>roperty to his own uses, and induce-his wife’s acquiescence, and that a court of equity should not place a wife in such a situation that she might be compelled to go into equity to call her hus band to account for breeches of his duty as trustee. To the same effect, see Boykin vs. Ciples, 2 Hill Chy. 200, S. C. 29 Am. Dec. 67; Ex parte Hunter, Rice Eq. 293; Dean vs. Lanford, 9 Rich. Eq.

423. In none of the cases referred to by appellees was any question involved as to whether under a power to appoint new trustees, a married woman could appoint her husband; nor was it held that a husband was incompetent or disqualified to be trustee for his wife. There-is a very clear and obvious distinction between the incompetency, and the unfitness, of a person for the position of trustee; and between the power of an individual to select a trustee, and the duty of a court in appointing one. Forster vs. Abraham, L. R. 17 Equity Cases, 351. The general rule is that any person may be-appointed a trustee who is capable of confideiice, of holding real and personal property, and of executing the trust. 3 Kerr on Real Property, sec. 1728; 1 Perry on Trusts, sec. 39; Tiffany and Bullard on the law of Trusts and Trustees, 325. It is not denied that the husband in this case was capable of everything required by tbe general definition, and that he was in fact a competent trustee for his childremmder the same deed; then why not for his wife? In equity he has been frequently held to be a trustee for his wife, and prior to and recent statutes regulating married women’s property, in all cases where real estate was conveyed direct to the wife during coverture for her sole and separate use, exclusive of her husband, he was in equity deemed a trustee for the wife, and as such held the legal title. 2 Story’s Eq. Jur. sec, 1380; 1 Bishop on Married Women, sec. 800; Porter vs. Bank of Rutland, 19 Vt. 410; Bennett vs. Davis, 2 P. Wms. 316; Conway vs. Hale, 4 Hayw. 1, S. C. 9 Am. Dec. 748; Walker vs. Walker, 9 Wall.

743. And where an estate was given to or engaged to be held by a husband for the use of his wife, the husband was thereby constituted a trustee for the separate use of the wife. Darley vs. Darley, 3 Atk. 398; McLean vs. Longlands, 5 Ves. 71; Rich vs. Cockell, 9 Ves. 369; Walter vs. Hodge, 2 Swanst. 92; 2 Story’s Eq. Jur.

1372. While a court of equity, perhaps, would never have appointed Mr. Fraleigh to be trustee of the trust created by him for his wife and children, and would probably have removed him from the position upon proper application after he was appointed, yet there is no absolute rule of law rendering him incompetent to act in that capacity if appointed by authority of the instrument creating the trust, or in any other legal manner. 1 Perry on Trusts, sec. 59; 1 Lewin on Trusts; *41. Neither did the appointment of Mr. Fraleigh, and his acceptance thereof, revoke the trust deed. On the contrary, his acceptance bound him to execute the trust according to its terms; and he was invested with the same power, and subject to the same responsibilities, as other trustees, and the wife was entitled to the same protection in equity as any other cestui que trust. 1 Bishop on Married Women, sec. 801; Walker vs. Walker, 9 Wall. 743; 2 Story’s Eq. Jur. sec. 1380; Tweedy vs. Urquhart, 30 Ga.

446. In this latter case, by an antenuptial settlement between Ephriatn Tweedy and Isabella Hadley, made in contemplation of marriage, certain personal property was conveyed to a trustee for the sole use of Isabella, “separate from and whollyfree from the control of her intended husband, or any future husband,” with a provision authorizing Isabella to appoint any other person trustee in the place of the one named in the deed, should he die or resign. The trus tee having resigned, Isabella, then the wife of Tweedy, appointed her husband trustee, in accordance with the power contained in the deed. The court held that there was nothing in the relation of husband and wife, nor in the clause of the settlement in quotation above depriving the wife of the right to appoint her husband trustee, under the power reserved in the settlement, and then his appointment was valid.

3. At common law a married woman could, without the concurrence of her husband, execute a power, whether the power was given to her while sole or married (4 Kent’s Com. *324; Gridley vs. Wynant, 23 How. 500; Gridley vs. Westbrook, 23 How. 503; Armstrong vs. Kerns, 61 Md. 364; Thompson vs. Murray, 2 Hill Chy. 204, S. C. 29 Am. Dec. 68; Barnes vs. Irvin, 2 Dallas, 199, S. C. 1 Am. Dec. 278); and she could in such cases execute the power in favor of her husband. Wood vs. Wood L. R. 10 Equity Cases, 220; Taylor vs. Eatman, 92 N. C. 601; 3 Kerr on Real Property, secs. 1857, 1859; Richards vs. Chambers, 10 Ves.

580. As the appointment of a trustee in this case was the exercise of a mere power, and at common law a married woman could exercise such power without the assent of her husband, it only remains to be seen whether this rule of the common law had been changed by any statute of this State, at the time of the execution of the power in question in this case. We are very clearly of the opinion that it had not. The statute in force at that time requiring the joinder of the husband and a separate acknowledgment of the wife were applicable only to transfers and conveyances of the wife’s propeo'ty. Sec. 1 act of February 4, 1835; sec. 4 act of March 6, 1845. The designation of a person to act ns trustee and hold the legal title to property, of which she was a beneficiary, was not a transfer by her of the-trust property or any interest therein. Her appointment conferred no title upon her husband in the trust-property. His title, powers and duties were derived from and determined by the original trust deed; not from her appointment. Her power to appoint possessed none of the elements of an estate. Norfleet vs. Hawkins, 93 N. C. 392; 4 Kent’s Com. 337; Patterson vs. Lawrence, 83 Ga. 703, 10 S.

E. Rep. 355; Schley vs. McCeney, 36 Md. 266; 3 Kerr on Real Property, secs. 1850, 1851; Cranston vs. Crane, 97 Mass. 459, S. C. 93 Am. Dec. 106.

4. It is also insisted that the substituted trustee acquired no title to the property which he could convey, without a deed from the retiring trustee. The trust deed authorized the named trustee to resign. He did resign, and thereupon ceased to be trustee. Mrs. Fraleigh was authorized to choose and appoint another. She did so, and thereupon E.

M. Fraleigh, by the express language of the trust deed, took the trusteeship, subject to the trust in the deed limited. Even if the trust property was not by the language of the trust deed effectually transferred to the new trustee upon his appointment, without a formal conveyance from Mr. Love, yet by his appointment Mr. Fraleigh became the rightful trustee, and as such could unquestionably have maintained actions against Mr. Love for conveyances and possession of the trust property. Noble vs. Meymott, 14 Beav. 471; 2 Lewin on Trusts, *650. If the language of the trust deed was insufficient to vest title to the trust property in Mr. Fraleigh, but was sufficient to constitute him a trustee upon Mrs. Fraleigh’s appointment, then the legal title remained in Mr. Love as a naked trust, and upon the execution of the power of sale contained in the trust deed by the new trustee, the title passed to the purchaser, at least so far as the cestui que trust were concerned, by force of the terms of the trust deed granting power to sell, and by the' deed of the new trustee executed under that power. National Webster Bank vs. Eldridge, 115 Mass. 424.

The decree of the Circuit Court, except the paragraph appointing D. McMillan as trustee, is reversed, with directions to dismiss the bill and amended bill as against the appellant; in other respects the decree is affirmed.


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  • …emoved. Though she may in a sense appoint a trustee or agent in the management of her estate, she cannot appoint an agent in the conventional sense whose acts shall bind her personally. Porter v. Taylor, 64 Pla. 100, 59 So. 400; Stearns v. Fraleigh, 39 Fla. 603, 23 So. 18, 39 L. R. A. 705. While an infant may become a member of a partnership* his contract, being ex-ecutory, is voidable at his election. In the absence of due ratification he is not personally liable upon an executory contract. Jennings v. S…

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