author: Summers, C. J.

text:
    Winder et al., Exrs., v. Scholey et al., Trustees.

      Legacy made under promise of transfer by legatee — Legatee may be declared trustee ex maleficio — Trust may be established by parol evidence — Declarations of testator, etc. — Joint legacy— Promise made by one admissible against all legatees, when— Bequest to members of lodge — Legatees prevented from converting property to own use, when — Action to have trust declared — Not barred in six years — Wills.
    1. Where a testator is induced to make an apparently absolute legacy, by a promise, express or implied, on the part of the legatee that he will transfer the legacy to another, although no express trust is created and although the legatee at the time of the promise intended no fraud, a court of equity may interfere to prevent a wrong, and declare the legatee a trustee ex maleficio for the protection of the testator’s intended beneficiary.
    2 A trust in an absolute legacy may be established by parol evidence, and the contemporaneous declarations of the testator, and subsequent declarations of the legatee, that the bequest was made for the benefit of a third person upon the promise of the legatee to hold it in trust, are admissible for that purpose.
    3. Where such legacy is a joint legacy, the trust may be established as to all of the legatees by proof that the promise was made by one in behalf of all, and the subsequent declarations of either of the legatees are admissible against all.

      4. Where a testator, desiring to leave his property to his lodge, was advised by his lawyer that he could not do so directly but that he could will it to three members of the lodge in whom he had confidence that they would do with it what he delegated to them to do, namely, to turn it over to the lodge, and he does so bequeath it to the three upon the promise of one made in behalf of all that they will transfer it to the lodge, equity may interfere to prevent the legatees from converting the property to their own use and will declare them trustees ex maleficio.

    5. An action to have such legatees declared trustees ex maleficio is not an action upon a contract not in writing, either express or implied, and as such barred in six years by the statute of limitations.
    (No. 12047
    Decided December 20, 1910.)
    Error to the Circuit Court of Montgomery county.
    The facts are,stated in the opinion.

      Messrs. Carr, A llaman, Kennedy & Retter and1 Messrs. McMahon & McMahon, for plaintiffs in error.
    The statute of wills requires that all such dispositions of property be made in writing, signed at the end and duly witnessed. Certain oral dispositions of personalty are provided for, but they do not bear upon this case.
    On the other hand, a will cannot be reformed, except it contains the data for reformation within its own limits. And then rather under rules of construction than of equity. It cannot be set aside except upon the usual well-known grounds. It cannot be revoked except in the manner prescribed by law. Kent v. Mahaffey, 10 Ohio St., 204.
    Equity, from its abhorrence of fraud, has established a principle in recognition of trusts ex malificio, which prevents one who fraudulently procures a deed or device from deriving any benefit from his conduct. 3 Pomeroy’s Equity Jur, Sections 1054, 1055, 1056; Bispham’s Equity, Sections 91, 218.
    Assuming that the mere silence of Smart, when Kern said to the testator in his presence that the will would be all right, if he had confidence that the legatees would carry out his wishes, amounted to an implied contract to turn over the money, the failure to carry out such contract does not constitute a fraud. If it did, the statute could be constantly evaded.
    This is expressly decided in Ohio in cases where parol trusts were attempted to be engrafted upon deeds. Watson v. Erb, 33 Ohio St., 35; Crabill v. Marsh, 38 Ohio St., 351; Wheeler v. Reynolds, 66 N. Y., 227.
    These cases in Ohio are .supported by numerous decisions elsewhere in the United States: Dunphy v. Ryan, 116 U. S., 491; Lantry v. Lantry, 51 Ill., 458; Grove v. Kase, 195 Pa. St., 329; Williams v. Williams, 180 Ill., 364; Parrish v. Parrish, 33 Ore., 486; Sprinkle v. Hayworth, 26 Gratt., 384; Cassels v. Finn, 122 Ga., 33; Gregory v. Bowlsby, 115 Ia., 328.
    And in England the same doctrine is laid down. McCormick v. Grogan, 4 Eng. & Ir. App. Cas., 82.
    Therefore, we conclude that it is not sufficient to establish the fact that Smart made a promise, by his implied silence, to receive the bequest in trust. Something more must be shown. Something to show that at that time the fraudulent intent was in his mind, connected with some act inducing the bequest, or preventing the testator from making a different disposition of his property. These points are directly decided in a very full opinion in Orth v. Orth, 145 Ind., 184.
    If the bequest had been procured by Smart by some fraudulent practice, the argument might be made' that no one could take and keep a benefit under the transaction, as a mere volunteer. But we must here bear in mind the distinction between a will and a contract, and also the theory upon which such trusts ex maleficio are declared.
    And as wills are mere voluntary affairs, the provisions of which are not amenable in a court of equity, bequests made under the grossest errors of fact or of law must stand, unless they can be overthrown by an attack upon the entire will. In re Boyes, 26 Ch. Div. (1884), 531; McCormick v. Grogan, 4 Eng. & Ir. App. Cas., 82; In re Stead, (1900) 1 Ch. Div., 237; Rowbotham v. Dunnett, L. R., 8 Ch. Div., 430; Bryan v. Bigelow, 77 Conn., 604.
    In the same connection we now consider the proposition that the court erred in admitting as evidence against each and all of the defendants, separate alleged individual admissions made after the death of the testator, in the absence of the others. This testimony was all excepted to, and finally ruled upon as admissible against all. The courts below relied upon the case of Matter of O’Hara, 95 N. Y., 403. But that was a case of “joint tenancy,” as shown both by the opinion and the syllabus. Joint tenants hold by a very different title than that of tenants in common. One important incident in joint tenancy is the right of survivorship, which may ripen into the sole ownership if all his- joint tenants die. 4 Kent’s Commentaries, 358. There is no such thing in Ohio as a joint tenancy, although there are joint interests. Sergeant v. Steinberger, 2 Ohio, 306; Bank v. Wallace, 45 Ohio St., 165.
    Each interest unless joint stands upon its own bottom.
    One tenant in common, even though claiming under the same instrument, cannot bind his co-tenant. Thompson v. Thompson, 13 Ohio St., 356.
    In this case the admissions of a legatee or devisee to impeach the will were held inadmissible as to any defendant; and the distinction between a common interest and a joint interest recognized.
    The following cases outside of Ohio, in cases exactly similar to our own, support our contention, and they bear directly upon the previous questions discussed. Wallgrave v. Tebbs, 2 K. & J., 313; Tee v. Ferris, 2 K. & J., 357; Rowbotham v. Dunnett, L. R., 8 Ch. Div., 430; Powell v. Yearanee, 73 N. J. Eq., 117, 67 Atl. Rep., 892.
    We have no direct ruling in this court upon the exact question involved. But we assume that the court will hold, as it has repeatedly held, where parties have attempted to engraft a trust upon a deed absolute upon its face, that the evidence must show the existence of a trust beyond a reasonable doubt. Russell v. Bruer, 64 Ohio St., 1.

      And this proposition, will not be disputed, viz.: that where such a rule of evidence exists the court will look into the evidence to see if it has been observed, although the court does not usually pass on the weight of the evidence. Ford v. Osborne, 45 Ohio St., 1.
    Concerning the plea of the statute of limitations of six years. This was not a continuing and subsisting trust. By a public proceeding they divested themselves of the property as trustees, and turned ' it over to themselves as absolute owners. Final settlement was made in February, 1899. Larwill v. Burke, 19 C. C., 477; Section 6200, Revised Statutes; Douglas v. Corry, 46 Ohio St., 349; Yearly v. Long, 40 Ohio St., 27; Webster v. Bible Co., 50 Ohio St., 1.

      Messrs. Gottschall & Turner, for defendants in error.
    The petition sets forth an express trust en-grafted upon an absolute bequest; that such a trust will be enforced is shown by the following authorities selected from a large number of similar cases. McLellan v. McLean, 38 Tenn. (2 Head), 684; Shields et al. v. McAuley et al., 37 Fed. Rep., 302; Hooker v. Axford et al., 33 Mich., 453; Williams v. Vreeland; 29 N. J. Eq., 417; Towles v. Burton, 24 Am. Dec., 409; Jones v. McKee, 3 Pa. St., 496; McKee v. Jones, 6 Pa. St., 425; Socher’s Appeal, 104 Pa. St., 609.
    The cases we have cited on our first point amply support our view of the law on this question of fraud. In addition thereto we cite the following:
      Moss v. Cooper, 1 J. & H., 352; In re Fleetwood, 15 Ch. Div., 608; Curdy v. Berton, 79 Cal., 420; Ransdel v. Moore, 153 Ind., 393.
    It is failure to execute the trust that is the fraud. Our own supreme court has announced the same doctrine in the case oh Mathews v. Leaman, 24 Ohio St., 615. See also Wallgrave v. Tebbs, 2 K. & J., 313; Tee v. Ferris, 2 K. & J., 357, which holds positively that mere silence when objects are made known, creates a trust.
    Smart here, not only “stood by” but acted as the intermediary between O’Kell and Kern, carrying the instructions back and forth. In re Stead, (1900) 1 Ch. Div., 237; Rowbotham v. Dunnett, 8 L. R., Ch. Div., 430; Powell v. Yearance, 67 Atl. Rep., 892.
    A man’s mind is judged by his acts. The failure to deliver this property to the lodge bespeaks the fraudulent intent. Pollard v. McKenney et al., 96 N. W. Rep., 679; Larmon v. Knight, 140 Ill., 232; Dowd v. Tucker, 41 Conn., 197.
    Promise, express or implied, by one, binds all. Wallgrave v. Tebbs, 2 K. & J., 313.
    The decision of Lord Turner in Russell v. lack-son, 10 Hare, 204, clearly announces the doctrine that where the “gift was made upon the» assent and consequent undertaking of one only of the devisees ‘in trust,’ ” “the other devisee could not take the estate ‘beneficially.’ ” This was both real and personal property. Tee v. Ferris, 2 K. & J., 357.
    It was not essential that all be present when the will was made and the trust defined — nor that an express promise by all — or any — of the defendants be proven. Courts proceed with equity and common sense in dealing with gross frauds of this nature. Matter of O’Hara, 95 N. Y., 403.
    The question again came before the New York court of last resort, in a case of unusual importance. Amherst College v. Ritch, 151 N. Y., 282.
    This was a joint bequest. There is no severance of it. The words “share and share alike,” or “to be divided equally between them,” or other apt words denoting division, are not used.
    There is no “tenure” as to personal property. Persons can be joint owners, but not joint tenants of personalty. And there is no decision in Ohio holding there cannot be a joint bequest under our law. 1 Schouler on Personal Property, Sections 156, 157, 158.
    The distinction as to the character of bequests is shown by two South Carolina cases. In Sealy v. Laurens, 1 Desaus., 137, the language “to be equally divided between them,” and in Bunch v. Hurst, 3 Desaus., 273, the language “share and share alike,” was held to create ownership in common. On the other hand, in Herbemont’s Exrs. v. Thomas, Cheves Eq., 21, a fund was divided into ten parts, six separately bequeathed to six separate persons, and the “remaining four-tenths to my four nieces,” naming them;-held, this was a joint bequest. Moss v. Cooper, 1 J. & H., 352; In re Fleetwood, L. R., 15 Ch. Div., 608; Hooker v. Axford, 33 Mich., 453.
    In this case, it would be just as much a fraud for Williams and Winder to appropriate this property, coming to them in this bequest made at the joint suggestion of Kern and Smart, as it is for Smart to appropriate it.
    The admissions were all made in the course of and in furtherance of a conspiracy to defraud the lodge out of this money. The competency of statements of conspirators made during the conspiracy is well settled. Miller v. Barber, 66 N Y., 558; Jack v. Life Assn., 51 C. C. A., 36.
    The bequest in this case was a joint bequest, not several, and the defendants had a joint interest as executors, a joint derivative interest from the executors, and a joint interest as legatees under the will. McMillan v. McDill, 110 Ill., 47; Armstrong v. Farrar, 8 Mo., 627; Hurst v. Robinson; 13 Mo., 82; Black v. Lamb, 12 N. J. Eq., 108; McDonald v. Carson, 95 N. Car., 377; Irby v. Brigham, 28 Tenn. (9 Humph.), 750; Hardy v. McLeon, 5 Tex., 211; Rotan v. Nichols, 22 Ark., 244; 1 Greenleaf on Evidence, Section 174; Jones on Evidence, Section 253.
    The obligation of the defendants in this case was a joint obligation. It is well settled that an admission made by one of two or more co-obligors binds all. Bound v. Lathrop, 4 Conn., 336; Lowe v. Boteler, 4 Har. McH. (Md.), 346; Martin v. Root, 17 Mass., 222; Howard v. Cobb, 12 Fed. Cas., 6755; Bacon v. Green, 36 Fla., 325; Barrick v. Austin, 21 Barb., 241.
    This was an express trust — continuing and subsisting- — and cognizable only in a court of equity. Until disavowed, the statute does not run. Section 4974, Revised Statutes.
    In Paschall v. Hinderer, 28 Ohio St., 568, the question presented to the court was very similar to the question presented in the case at bar. Piatt v. Longworth’s Devisees, 27 Ohio St., 159; Carpenter v. Canal Co., 35 Ohio St., 307.
    To start the statute, there must be “an unmistakable disclaimer of the trust known to a beneficiary competent to sue.” Veasie v. McGugin, 40 Ohio St., 365; Key v. Hughes’ Exrs., 32 W. Va., 184.
    It was an express trust — not within a statute as to constructive trusts. Berry v. Sawyer, 19 Fed. Rep., 286.
    If it should be considered as a trust ex maleñcio, when did such a trust arise? As stated in Mathews v. Leaman, 24 Ohio St., 623, “the attempted denial of the confidence is such a fraud as will convert the purchaser into a trustee ex maleñcio.”

    Courts of equity, in the exclusive jurisdiction, act — not in obedience to — but merely in analogy to, statutes of limitation. Longworth v. Hunt ct al., 11 Ohio St., 194; Paschall v. Hinderer, 28 Ohio St., 568; Webster v. Bible Society, 50 Ohio St., 1.
    Where the statute would cover a fraud, equity will not apply it. In such cases the door has always been held open. Michaud v. Girod, 4 How., 560.
   Summers, C. J.

John O’Kell, an old bachelor, had been for many years a member of Miami Lodge at Dayton, Ohio; he had been a daily visitor at the rooms of the lodge and had spent most of his time there and considered it his home. Fie became sick, and having no heir's of his body and his relatives all being in good circumstances, he desired to will his property to the lodge. In November, 1898, he requested the plaintiff in error, A. Ferris Smart, who was one of the trustees of the lodge, to write his will. Smart persuaded him to have it done by a lawyer, and by direction of O’Kell, went to a lawyer and requested him to draft a will giving the property to the lodge. The lawyer learning that O’Kell probably would not live a year, under the mistaken notion that in that event the bequest would be void under the charitable bequests statute, on that ground advised that O’Kell make an immediate transfer of his property to the lodge. Smart communicated the lawyer’s advice to O’Kell, and later returned to the lawyer with the statement that O’Kell was unwilling to make an immediate transfer, as he might get well and need the property. The lawyer then suggested that what O’Kell wished might be effected by his making a will giving the property to two or three members of the lodge whom he would trust to give it to the lodge. Smart again went to consult O’Kell and returned to the lawyer and stated that his advice would be acted upon, and gave him three names, his own and those of John H. Winder and Lewis P. Williams, the other plaintiffs in error. A will was immediately drafted by the lawyer and executed by O’Kell, giving all of his property to the three persons named, and naming them as executors. In December O’Kell died, his will was probated, the three friends were appointed executors, and in January, 1899, they filed their first and final account showing that they had received more than five thousand dollars and had something more than four thousand dollars for distribution. At different times shortly after O’Kell’s death the executors, severally and to different- members of the lodge, made statements of the purport that O’Kell had given his property to them for the lodge, and that it would be turned over after the time had expired in which his heirs could contest the will. Nothing ever was turned over and in 1906 this action was commenced to recover from the defendants the fund on hand for' distribution together with interest.

The common pleas court found for the lodge, and on error in the circuit court its judgment was affirmed.

Counsel for defendant say that there is no reported case in Ohio, in which a trust has been engrafted on a will by parol, and contend that a beneficiary under a will can be declared a trustee ex maleficio only when the testator was influenced by the legatee’s actual intentional fraud.

Pomeroy on Equity, Section 1054, is cited as follows: “There are a few cases which seem to hold that a trust will arise under these circumstances from a mere verbal promise of the devisee or legatee to hold the property for the benefit of another person. This position is clearly opposed to settled principle. The only ground upon which such a trust can be rested, and is rested by the overwhelming weight of authority, is actual intentional fraud.”

In a note to this section, in the second edition of that work, it is said, “A majority of the recent decisions do not insist on an actual fraudulent intention on the part of the legatee or devisee as necessary to the creation of a trust of this nature.”

It is conceded that in cases of actual intentional fraud equity will raise a trust, notwithstanding the statute of frauds or the statute of wills. In equity what difference can there be whether the fraudulent intention existed at the time the testator acted or not until it was time for the devisee toi act? In either case the testator acted upon the faith that the devisee would keep his promise; ‘the result of his refusal or failure to do so is the same in either case and equally fraudulent.

The earlier cases are cases in which the devisee .■or legatee had a fraudulent intention at the time the promise was made, but by the weight of authority, in this country, if not also in England, it is well settled that it is immaterial when the intention was formed.

An examination of a great many cases shows that the law is well stated in the opinion of Vann, J., in the case of The Trustees of Amherst College et al. v. Rich et al., 151 N. Y., 282-323, [1897] as follows: “While a testator may make a gift to a legatee solely for the purpose of enabling him, if he sees fit, to dispose of it in a particular way, still, if there is no promise by him, either express or implied, to so dispose of it, and the matter is left wholly to his will and discretion, no secret trust is created, and he may, if he chooses, apply the legacy to his own use. When it clearly appears that no trust was intended, even if it is equally clear that the testator expected that the gift would be applied in accordance with his known wishes, the legatee, if he has made no promise, and none has been made in his behalf, takes an absolute title and can do what he pleases with the gift. Whatever moral obligation there may be, no legal obligation rests upon him. On the other hand, if the testator is induced either to make a will or not to change one after it is made, by a promise, express or implied, on the part of a legatee that he will devote his legacy to a certain lawful purpose, a secret trust is created, and equity will compel him to apply property thus obtained in accordance with his promise. (O’Hara v. Dudley, 95 N. Y., 403; Brown v. Lynch, 1 Paige, 147; Dowd v. Tucker, 41 Conn., 197; De Laurencel v. DeBoom, 48 Cal., 581; Browne v. Browne, 1 H. & J., 430;. Church v. Ruland, 64, Pa. St., 422; Towles v. Burton, 24 Am. Dec., 409; McLellan v. McLean, 2 Head, 684; Russell v. Jackson, 10 Hare, 204; Thynn v. Thynn, 1 Vern., 296; Reech v. Kennegal, 1 Ves. Sr., 124; Wallgrave v. Tebbs, 2 K. & J., 321; McCormick v., Grogan, L. R. [4 Eng. & Ir. App.], 82). The trust springs from the intention of the testator and the promise of the legatee. The same rule applies to heirs and next of kin who induce their ancestor or relative not to make a will by promising, in case his- property falls to them through intestacy, to dispose of it, or a part of it, in the manner indicated by him. (Williams v. Fitch, 18 N. Y., 546; Grant v. Bradstreet, 87 Me., 583; Gilpatrick v. Glidden, 81 Me., 137.) The rule is founded on the principle that the legacy would hot have been given, or intestacy allowed to ensue, unless the promise had been made and, hence, the person promising is bound in equity to-keep it, as to violate it would be fraud. While a promise is essential it need hot be expressly made; for active cooperation or silent acquiescence may have the same effect as an express promise. If a legatee knows what the testator expects of him, and having an opportunity to speak, says nothing, it may be equivalent to a promise, provided the testator acts upon it. Whenever it appears that the testator was prevented from action by the action or silence of- a legatee, who knew the facts in time to act or speak, he will not be permitted to apply the legacy to his own use when that would defeat the expectations of the testator. As was said by this court in the O’Hara case {supra): ‘It matters little that McCue did not make in words a formal' and express promise. Everything that he said and everything that he did was full of that interpretation. When the testatrix was told that the legal effect of the will was such that the legatees could divert the fund to their own use, which was a statement of their power, she was told also that she would only have their honor and conscience on which to rely, and answered that she could trust them, which was an assertion of their duty. Where in such cases the legatee even by silent acquiescence encourages the testatrix to make a bequest to him, to be by him applied for the benefit of others, it has all the force and effect of an express promise.’ The trust does not act directly upon the will by modifying the gift, for the law requires wills to be wholly in writing, but it acts upon the gift itself as it reaches-the possession of the legatee, or as soon as he is entitled to receive it. The theory is that the will has full effect by passing an absolute legacy to the legatee,' and that then equity, in order to defeat fraud, raises a trust in favor of those intended to be benefited by the testator and compels the legatee, as a trustee ex maleficio, to turn over the gift to them; The law, not the will, fastens the trust upon the fund by requiring the legatee to act in accordance with the instructions of the testator and his own promise. Neither the Statute of Frauds nor the Statute of Wills, applies, because the will takes effect as written and proved, but to promote justice and prevent wrong the courts compel the legatee to dispose of his gift in accordance with equity and good conscience. As was well said in Wallgrave v. Tebbs (supra) :

“ ‘Where a person knowing that a testator, in making a disposition in his favor, intends it to be applied for purposes other than his own benefit, either expressly promises or by silence implies that he will carry the testator’s intention into effect, and the property is left to him upon the faith of that promise or undertaking, it is in effect' a case of trust, and in such a case the court will not allow the devisee to set up the Statute of Frauds^- or rather the Statute of Wills, by which the Statute of Frauds is now in this respect superseded— and for the reason that the devisee by his conduct has induced the testator to leave him the property; and, as Lord Justice Turner says in Russell v. Jackson, no one can doubt that if the devisee had stated that he would not carry into effect the intentions of the testator, the disposition in his favor would not have been found in the will. But in this the court does., not violate the spirit of the statute, but for the same end, namely, prevention of fraud, engrafts the trust on the devise by admitting evidence, which the statute would in terms exclude, in order to prevent a party from applying property to a purpose foreign to that for which-he undertook to hold it.’ ”

In the above case, as well as in the earlier case, O’Hara et al. v. Dudley et al., 95 N. Y., 403, which in its facts bears a striking resemblance to the instant case, there was no fraud on the part of the devisees or legatees in procuring the will, but, it was held, that by reason of the act of the testator and the promise of the devisee or legatee the law fastens upon the devisee or legatee a trust which equity, in case of his refusal to perform, will enforce on the ground of fraud. In the latter .case the testatrix, by her will, gave the bulk of her estate to three persons, who were her lawyer, her doctor and her priest, absolutely as tenants in common. It was not intended by her to give to them any beneficial interest, but her design was to devote the property to certain charitable purposes; this she was advised could not be done by an express provision in her will, but only by such an absolute gift to individuals, to whose honor she could confide the execution of her purpose. It was held that the gift could not be sustained as an absolute one to the persons named, as this would be a fraud upon the testatrix. In that case it was expressly found by the trial judge that the devisee practiced no fraud. In the opinion by Finch, J., it is said: (413) “Equity acts in such case not because of a trust declared by the testator, but because of the- fraud of the legatee. For him not to carry out the promise by which alone he procured the devise and bequest, is to perpetrate a fraud upon the devisor which equity will not endure.” Cases are cited and he then continues, “In the last of these cases (Williams v. Fitch, 18 N. Y., 546), the making of a bequest to the plaintiff was prevented by an agreement of the father, who was next of kin, to hold in trust for the plaintiff and the English cases were cited with approval and the trust enforced. All along the line of discussion it was steadily claimed that a plain and unambiguous devise in^ a will could not be modified or cut down by extrinsic matter lying in parol, or unattested papers, and that the statute of frauds and that of wills excluded the evidence; and all along the line it was steadily answered that the devise was untouched, that it was not at all modified, that the property passed under it, but the law dealt with the holder for his fraud, and out of the facts raised a trust, ex maleficio, instead of resting upon one as created by the testator. The character of the fraud which justifies the equitable interference is well described in Glass v. Flulbert (102 Mass., 40, 3 Am. Rep., 418). It was said to consist ‘in the attempt to take advantage of that which has been done in performance or upon the faith of the agreement while repudiating its obligation under cover of the statute.’ ” These cases are followed and approved in Ahrens v. Jones, 169 N. Y., 555, 88 Am. St. Rep., 620 (1902), where jt is held, “Where a deed is executed for the purpose of effecting a distribution of the grantor’s property, upon the express promise of the grantee to pay certain sums to others, though no express trust - is created, a court of equity may interpose to prevent a wrong, and declare. the grantee a trustee ex maleficio for the protection of the grantor’s intended beneficiaries.”

In Ransdel et al. v. Moore et al., 153 Ind., 393, it is expressly held that an actual fraudulent intention on the part of the grantee or devisee is not necessary to the creation of a trust of this nature. In the opinion in that case the cases are reviewed, and many, if not all, of the cases, both English and American are cited, and it is said by Monks, C. J., (408) : “An actual fraudulent intention on the part of the heir or devisee is not necessary to the creation of a trust of this nature. The great weight of authority in England, and in this country, in such a case is that after the death of the testator or intestate; equity will convert the devisee or heir into a trustee, whether when he gave his assent he intended fraud or not; the final refusal of himself, if living, or if dead, of his heirs or devisees, to execute such trust, having the effect to consummate the fraud.” To the same effect is Gilpatrick v. Glidden, 81 Me., 137, where the cases are also reviewed.

In McCormick v. Grogan, 4 Eng. & Ir. App., 82, (1880), the Lord Chancellor (Lord Hatherly) and Lord Westbury do seem to rest the jurisdiction of equity upon the ground of personal fraud in’ procuring the instrument, but later as well as earlier English cases to the contrary are cited in Ransdel v. Moore, supra, as well as many American cases, and what was said by Lord Westbury is here explained, as it is also in Gilpatrick v. Glidden, supra, and by Hall, vice-chancellor, in In re Fleetwood, 15 Ch., 594 [1880], where many cases are reviewed. In Cassels v. Finn, 122 Ga., 33, 106 Am. St. Rep., 91, it is held that failure to perform a verbal promise cannot make the promisor a trustee ex maleñcio in the absence of actual fraud, but in the note to that case, by the learned editor of the American State Reports, it is said that that case could not have been carefully considered, and that it is opposed to all the cases cited in the note and in contravention of correct and sound equitable principle.

Next it is contended that Winder and Williams made no promise and that the court erred in rendering judgment against them. In Russell v. Jackson, 10 Hare, 204, where the bequest was to William Jackson and Thomas Aston Jackson, the vice-chancellor, Turner, said: “But whether Thomas Aston Jackson was present or not, the evidence is, I think, clear that the gift would not have been made to him but for the promise given by William Jackson that the intentions of the testator should be carried into effect; and I fully agree to the principles laid down in Huguenin v. Baseley (14 Ves., 289), followed in many other cases, that no person can claim an interest under a fraud committed by another. However innocent the party may be, if the original transaction is tainted with fraud, that taint runs through the derivative interest, and prevents any party from claiming under it.” In Moss v. Cooper, 1 J. & H., 352 (1861), Vice-Chancellor Sir W. Page Wood, said, (367) : “The only material distinction between a will made on the faith of a previous promise, and a will followed by a promise, is this:' If, on the faith of a promise by A., a gift is made in favor of A. and B., the promise is fastened on to the gift to both, for B. cannot profit by A.’s fraud. But if the will is first made in favor of A. and B., and the secret trust is then communicated only to A., the gift will be fixed with a trust with respect to A., but not so as regards B, ; because in this case the gift to B. is not obtained by the procurement of A., and is not tainted with any fraud in procuring the execution of the will. That is the sole distinction between the case of a will made on the faith of a promise, and that of a will followed by a subsequent promise.” In In re Stead, 1 Ch., 237 (1900), it is said by Farwell, J., (241): “If A. induces B. either to make, or to leave unrevoked, a will leaving property to A. and C. as tenants in common, by expressly promising, or tacitly consenting, that he and C. will carry out the testator’s wishes, and C. knows nothing of the matter until after A.’s death, A. is bound, but C. is not bound (Tee v. Ferris, 2 K. & J., 357) ; the reason stated being, that to hold otherwise would enable one beneficiary to deprive the rest of their benefits by setting up a secret trust. If, however, the gift were to A. and C. as joint tenants, the authorities have established a distinction between those cases in which the will is made on the faith of an antecedent promise by A. and those in which the will is left unrevoked on the faith of a subsequent promise. In the former case, the trust binds both A. and C. (Russell v. Jackson, 10 Hare, 204; Jones v. Badley, L. R. 3 Ch., 362), the reason stated being that no person can claim an interest under a fraud committed by another; .in the latter case A. and not C. .is bound (Burney v. Macdonald, 15 Sim., 6, and Moss v. Cooper, 1 J. & H., 352), the reason stated being that the gift is not tainted with any fraud in procuring the execution of the will. Personally I am. unable to see any .difference between a gift' -made on the faith of an antecedent promise and a gift left unrevoked on the faith of a subsequent promise to carry out ' the testator’s wishes.” There is no joint tenancy in this state and the distinction made in the English cases cannot be made here. The reason for the distinction would apply here only in cases of separate devises or bequests. In the present case the bequest is a joint bequest of all the testator’s property to the three persons named.. It was all intended for the lodge and made to the three .upon the promise of one that they would give it to the lodge. The question was considered in the two New York cases already referred to, in one of which there was a joint tenancy and in the other a tenancy in common. In The Trustees of Amherst College et al. v. Ritch et al., 151 N. Y., 282, 327, it is said by Vann, J.: “The intention of. the testator being thus clear, the secret trust was completed by the promise made by or on behalf of the residuary legatees. As the gift was to them as tenants in common, a promise that bound all was necessary in order to include each of the three shares. That Mr. Ritch and Mr. Vaughan duly promised appears so conclusively from their conduct, letters and' statements to the testator, that we do not regard any further expression of our views upon the subject as necessary.. It is, however, strenuously urged that Mr. Bulkley made no promise, and hence that the secret trust did not extend to his share of the gift.. If he were the only residuary legatee the question would be more serious, but he was not. The trial court found that Messrs. Ritch and Vaughan promised for themselves and for Mr. Bulkley, and the evidence plainly warrants this conclusion. The General Term, in its opinion, went farther and declared that there was an understanding between Mr. Bulkley and the testator to the same effect, but the evidence to sustain this conclusion is meager, although we do not hold it was insufficient. Assuming, however, that Mr. Bulkley made no promise, still we think that he was bound, under the circumstances, by the promise made in his behalf, and that he cannot profit by the action of his co-tenants in making the promise for him, as that would be a fraud. He was not a purchaser; he furnished no consideration; there was no contract for his benefit; he was in the attitude of accepting a gift pure and simple, but that gift was made in reliance upon a promise given in his behalf. Can he violate the promise and fairly take that which came to him solely on account of the promise, even if it was not made or authorized by him? We think not, because his title came through the promise, and by accepting the gift he ratified the promise. He must repudiate . the gift or accept the responsibility. While the cases are not uniform, the weight of authority sustains this conclusion. (Hooker v. Axford, 33 Mich., 453; Moss v. Cooper, 1 J. & H., 367; Tee v. Ferris, 2 K. & J., 357; In re King’s Éstate, L. R. [21 Ir.], 273; O’Kara v. Dudley, supra.) In the case last cited this court said: 'So far, then, as McCue is concerned, he stands in the attitude of having procured and induced the testatrix to make a devise or bequest to himself and his associates by asserting its necessity, and promising faithfully to carry out the charitable purposes for which it was made, and whether his associates knew or promised, or did not, makes .no difference where the' devise is to them as joint tenants, and all must get their rights through the result accomplished by one.’ Although the devise in that case was to joint tenants,' the principle that 'all must get their rights through the result accomplished by one’ is broad and equitable, and should not be limited to the technicality of a joint tenancy as distinguished from a tenancy in common, where, as in this case, the promise was made by two in behalf of themselves and another, and a devise thus obtained to the three. This rule prevents fraud, which is the primary object of the courts in enforcing secret trusts, while any other would promote fraud. We thus reach the conclusion that there was a secret trust that bound all of the residuary legatees.”

It is further contended that the court erred in admitting the separate admissions of the several defendants, made after the death of the testator and not in the hearing of each other. A trust in an absolute devise may be established by parol evidence of contemporaneous declarations of the testator and subsequent declaration of the devisee in possession, that the devise was made for the benefit of a third person upon the devisee’s suggestion and promise to hold it in trust. After such evidence of the devisee's active or passive agency in procuring the devise, he will be declared a trustee ex maleficio and the trust will be enforced against him. See cases cited in the note to Cassels v. Finn, supra, 106 Am. St. Rep., 91-99. In Harvey v. Gardner, 41 Ohio St., 642, it is held that in this state it is competent to prove an express trust in land by parol evidence, and that the contemporaneous declarations of the creator of the trust ' are admissible in evidence, and further that the acceptance of the trust may be presumed from acts of the grantee at or subsequent to the time of the grant. See also Russell et al. v. Bruer et al., 64 Ohio St., 1; 1 Jarman on Wills, 390. In Church v. Ruland, 64 Pa. St., 432-442, it is said: “Indeed it is not easy to see how such a trust ever could be made out except by parol evidence, and if this is not competent a statute made to prevent frauds would become a most potent instrument whereby to give them success. That this doctrine is applied to cases arising under wills where a person procures a devise to be made in his favor on the distinct declaration or promise that he will hold the land in trust either in whole or in part for another may be seen in the cases. It is not affected by the statutory provisions on the subject of wills. The proof offered is not of any alteration, revocation or cancellation, which must be evidenced in a particular manner. It gives full effect to the will and every word of it, and to the conclusiveness of the probate, where it is conclusive. It fastens upon the conscience of the party, having thus procured a will, and then fraudulently refusing or neglecting to fulfill the promise on the faith of which it was executed, a trust or confidence, which a court of equity will enforce by compelling a conveyance when the proper time for it has arrived.”

It is next contended that the action was barred by the six years’ statute of limitations. The six years’ statute bars an action upon a contract not in writing, either express or implied. This is not an action upon a contract. It is an action for relief on the ground of fraud. Such actions are barred within four years, but it is expressly provided that the cause of action in such case shall not be deemed to have accrued until the discovery of the fraud, and it is not suggested that the lodge discovered the fraud more than four years before the commencement of the action.

It is next contended that the trial court disregarded the rule laid down in Russell et al. v. Bruer et al., supra, that “the declaration of such trust must be contemporaneous with the deed, and the evidence beyond a reasonable doubt as to the existence of the trust, and must be clear, certain, and conclusive as to its terms and conditions.” Without reviewing the evidence we deem it sufficient to say that it does not leave a reasonable doubt that the testator intended to give his property to the lodge, that he was induced to will it to the defendants by the advice of the lawyer upon the promise of Smart that he and the other legatees would give it to the lodge. The lawyer so testifies and his testimony was corroborated in many ways, and no reason is apparent why the testator should give his property to the defendants, and they suggest none; and there is evidence that each of them, immediately after the testator’s death and before avarice had found time to suggest that they divide the estate between themselves, admitted that it was intended for the lodge. The -terms and conditions are clear, certain and conclusive. There are none, excepting that it was to be turned over to the lodge. We reaffirm the rule and also the statement in Collins et al. v. Hope et al., 20 Ohio, 493, that in such cases, courts will act with the extremest caution.

Judgment affirmed.

Grew, Spear, Davis and Price, JJ., concur.


source: Caselaw Access Project

license: Public Domain

text:
    The Leavitt & Milroy Company v. Rosenberg Brothers & Company.

      Motion for discharge of attachment — May be made before judgment — Although bond given — Affidavit for attachment — Must negative exceptions, when — Cannot be made before attorney as notary public — Levy cannot be upheld by amendment of affidavit —Sections 5562, 5545 and 5521, Revised Statutes.

    1. A defendant at any time before judgment under Section 5562, Revised Statutes, may move for a discharge of an attachment under which his property has been taken, although he has previously given bond for its discharge under Section 5545, Revised Statutes.
    2. In an affidavit for attachment under paragraph one of Section 5521, Revised Statutes, it is necessary to negative the exceptions in that paragraph.
    3. An affidavit in attachment cannot be made before a notary public who is the attorney for one of the parties in the action.

      4. The levy of an order of attachment, based upon an insufficient affidavit, cannot be upheld by an amendment of the affidavit.
    (No. 12254
    Decided December 20, 1910.)
    Error to the Circuit Court of Mahoning county.
    The facts are stated in the opinion.

      Mr. W. W. Zimmerman, for plaintiff in error.
    Was the attachment discharged by giving the bond under Section 5545?
    The statute reads (Major premise): “If the defendant * * * cause an undertaking to be executed * * * the attachment shall be discharged.”
    Minor premise: The defendant did cause such undertaking to be executed.
    Conclusion: The attachment was discharged.
    This syllogism is impregnable.
    We do not overlook Section 5562, which says that “the defendant may, at any time before judgment * * * move to discharge an attachment.”
    This, of course, refers to an attachment which has not been discharged.
    What power can discharge an attachment which has already been discharged? With just as much reason could we speak of exploding a shell which has already been exploded. Bank v. Mixter, 124 U. S., 721; Rachelman v. Skinner, 46 Minn., 196; Austin v. Burgett, 10 Ia., 302; Ferguson v. Glidewell, 2 S. W. Rep., 711; Fox v. Mackenzie, 47 N. W. Rep., 386; McLaughlin v. Wheeler, 1 S. Dak., 497; Endress v. Ent, 18 Kan., 236; Dierolf
      v. Winterfield, 24 Wis., 143; Wyman v. Hallock, 4 S. Dak., 469; Wolf v. Cook, 40 Fed. Rep., 432; Morrison v. Alphin, 23 Ark., 136; Lumber Co. v. Raymond, 76 Ia., 225; Bromly v. Vinson, 9 Ky. Law Rep., 401; Paddock v. Matthews. 3 Mich., 18; Wharton v. Conger, 17 Miss., 510; Fenner v. Boutte, 72 Miss., 271; Brack v. McMahan, 61 Tex., 1.
    Must an affidavit for attachment on the ground of non-residence of a corporation, include an allegation that the non-resident corporation has not complied with the provisions of 91 O. L., 272, and 91 O. L., 355?
    The part of Section 5521 containing the words “except as provided * * * 148d,” is a “proviso.”
    A “proviso” in^a statute is generally intended to restrain the enacting clause; to except something which would otherwise have been within it. Anderson’s Dictionary of Law, 841; Minis v. United States, 15 Pet., 423.
    If the exceptions in a statute are in the enacting clause, and not in the proviso, they must be negatived, or in some way it must be shown that the case does not fall within them. But exceptions in the proviso need not be negatived. 1 Bates’ Pleading, Practice & Forms (1908 ed.), 225, and cases there cited.
    The plaintiff was not therefore bound to negative, in its affidavit, the “proviso” of Section 5521.
    Is an affida\dt in attachment taken before a notary who is attorney for plaintiff, void?
    Section 5264 provides that “an affidavit * * * may be made before any persons authorized to take depositions.”

      ■ The attorney for plaintiff, being a notary, was authorized to take depositions.
    ■ The 'statute does not say “authorized to take depositions in the particular case in which the affidavit is to be used.”
    To undertake to place such a construction on it is, indeed, strained.
    Should plaintiff have been given leave to amend ?
    The court refused leave to amend.
    Section 5114, Revised Statutes, gives authority, broad in scope, to “amend any pleading, process or proceeding.”
    We think this leave should have been given, in furtherance of justice, Garner v. White, 23 Ohio St., 192; 1 Bates' Pleading, Practice & Forms (1908 ed.), 682.

      Messrs. Kline, Tolles & Morley, for defendant in error.
    The affidavit in attachment is jurisdictional, and unless the proper affidavit is filed no authority to issue the order of attachment arises, and all subsequent proceedings thereunder are void. It must set forth the general grounds mentioned in Section 5522, Revised Statutes, one of which is that there must be set forth at least one of the grounds of attachment mentioned in Section 5521. Not all foreign corporations are subject to attachment under the laws of the state of Ohio.
    Under the provisions of the acts mentioned in Subdivision 1 of Section 5521, many foreign corporations are exempt from the operation of the attachment laws of the state, so that the mere statement or allegation in the affidavit that the defendant is a foreign corporation is not a sufficient statement for a ground of attachment against it. The affidavit must go farther and show that it is not one of the excepted classes named in Subdivision 1 of Section 5521. Thatcher v. Powell, 6 Wheat., 119; Manley v. Headley, 10 Kans., 88; Kerr v. Smith, 5 B. Mon., 552; Calk v. Chiles, 9 Dana, 265; Capehart v. Dowery, 10 W. Va., 130; McGown v. Sprague, 23 Ala., 524; Paine v. Mooreland, 15 Ohio, 442; Endel v. Leibrock, 33 Ohio St., 254; Pope v. Insurance Co., 24 Ohio St., 481; Manufacturing Co. v. Mill Co., 11 C. C., N. S., 479; Cook v. Engine Works, 19 C. C., 732.
    Is an affidavit in attachment sworn to before the notary who is attorney for the plaintiff void?
    The affidavits in this case are both sworn to before William W. Zimmerman, who was and is attorney and counsel for the plaintiff in error in this action. We maintain that this renders the affidavit entirely void and the attachment issued thereon likewise void. Sections 5264 and 5271, Revised Statutes; Ward v. Ward, 20 C. C., 136.
    The same question was decided the same way by the circuit court of Hamilton county, affirmed by the supreme court, in L. P. Hazen & Co. v. The Brown Ketcham Iron Co., 11 C. C., N. S., 48, 81 Ohio St., 511.
    After the levying of the attachment in this action a bond was given by the defendant in error, under Section 5545, Revised Statutes, and it is claimed by the plaintiff in error that the giving of this bond deprived the defendant in error of the right to file a motion and have the attachment discharged under Section 5562, Revised Statutes. This question has been determined a number of times in the state of Ohio in the following cases: Eagan v. Lumsden & McGovern, 2 Dis., 168; Saxton v. Plymire, 3 C. C., 209; Ross v. Tailoring Co., 7 C. C., 51; Myers v. Smith, 29 Ohio St., 120; Manufacturing Co. v. Mzik, 3 C. C., N. S., 125.
    The exact question has been determined in the case of The William Edwards Co. v. Goldstein, 80 Ohio St., 303.
    It will thus be seen that the language of Section 6513 of the Justices’ Code, and Section 5545 is identical, and a bond given under the one has precisely the same effect as though it were given under the other.
    The plaintiff iii error also complains of the action of the court in refusing him permission to amend his affidavit.
    What the defendant really asked of the court was that he be permitted to amend his affidavit so that it might relate back and validate the order of attachment which had been previously issued. This the court held he could not do, as decided in Pope v. Insurance Co., 24 Ohio St., 481.
    The plaintiff did not ask the privilege of filing a new perfect affidavit, with a view of issuing a new writ of attachment. That he had an undoubted right to do and the court did not refuse him such privilege. Indeed, he could have filed such an affidavit without applying to the court for leave. .Inasmuch as - the writ of attachment already issued was a nullity, the court was without power to grant him leave to amend the affidavit so as to give such writ validity. This is clearly decided in the insurance company case, 24 Ohio St., supra. The action of the court, therefore, in refusing him leave to amend, was not error.
   Summers, C. J.

The plaintiff in error filed a petition in the court of common pleas of Mahoning county against the defendant to recover damages for a breach of contract.' At the same time the plaintiff filed an affidavit for attachment and garnishee process. Each affidavit stated as ground for attachment that the defendant was a foreign corporation. Neither affidavit nor the petition negatived the exceptions as to foreign corporations in Section 5521, Revised Statutes, and each affidavit was sworn to before a notary public, who was also the attorney for the plaintiff. The defendant, within a day or two after the levy of the order of attachment gave bond under Section 5545, Revised Statutes, and obtained possession of its property. Subsequently the defendant, without entering its appearance, filed a motion to discharge the attachments on the ground that the affidavits were defective in failing to negative the exceptions, and on the ground that the affidavits were not authorized to be made before a notary who was the plaintiff’s attorney. When the motion came on for hearing the plaintiff applied for leave to amend its affidavit in attachment, said amendments to operate as of- the dates of the original affidavits, by adding to that part of said affidavits which states the ground's of attachment as the non-residence of the defendant corporation the words “and has not filed with the secretary of the state of Ohio, the statement required or provided by Section 148c, Revised Statutes of Ohio, nor procured from the secretary of the state of Ohio, the certificate required or provided by Section 148d, Revised Statutes of Ohio, nor complied with the provisions of either or both of said sections.” This application was overruled and on hearing of the motion to discharge it was granted and the attachment was discharged.

On error the judgment was affirmed in the circuit court and error is prosecuted in this court.

The first contention on the part of plaintiff is that the giving of the bond discharged the attachment and waived any defect in the affidavit. Section 5545, Revised Statutes, reads as follows: “If the defendant, or other person on his behalf, at any time before judgment, cause an undertaking to be executed to the plaintiff, by sufficient surety resident in the county, to be approved by the court, in double the amount of the plaintiff’s claim as stated in his affidavit, to the effect that the defendant shall perform the judgment of the court, the attachment shall be discharged, and restitution made of any property taken under it, or the proceeds thereof; and such undertaking shall also discharge the liability of a garnishee in the action, for any property of the defendant in his hands; provided that, when plaintiff’s claim is for causing death or a personal injury by a negligent or wrongful act, the undertaking required shall be in such amount as shall be fixed by the court where the action is pending, or a judge thereof, if application is made in vacation.” This contention is decided against the plaintiff in The William Edwards Company v. Goldstein, 80 Ohio St., 303, in which case proceedings in attachment before a justice of the peace were under consideration. It was there pointed out that the provisions of Sections 5529 and 5545 were like the provisions relating to the justice of the peace. And it was there held that the defendant may, at any time before judgment, move for the discharge of the attachment, although he has previously given bond for its discharge under Section 6513. And this court, since the decision in that case, has ruled that the giving of a discharge bond under Section 5545, Revised Statutes, does not deprive the defendant of the right at any time before judgment to move for and obtain a discharge of the attachment under Section 5562, Revised Statutes. It was so held in The Brown & Ketcham Iron Co. v. L. P. Hazen & Co., 11 C. C., N. S., 48, and that judgment was affirmed by this court without opinion in 81 Ohio State, 511, on authority of the case in 80 Ohio State, supra.

Next it is contended that it was not necessary to negative the exceptions in Section 5521, Revised Statutes. That section reads: “That in a civil action for the recovery of money the plaintiff may, at or after the commencement thereof, have an attachment against the property of the defendant upon the grounds herein stated.

“1. When the defendant, or one of several defendants, is a foreign corporation, except' as provided by an act entitled ‘An act to further supplement Section 148 of the Revised Statutes/ passed May 16, 1894 (91 O. L., 272), and except as provided by an act entitled 'An act to amend Section 1 of an act,' etc., passed May 19, 1894 (91 O. L., 355) (Sections 148c, 148d) ; or á nonresident of this state.”

It will be observed that the section does not provide for an attachment against all foreign corporations, but only against those that do not come within the exceptions. The proceedings in attachment are statutory remedies, and it is too well settled to need the citation of authorities that where a statute confers a right or gives a remedy unknown to the common law that the party asserting the right, or availing himself of the remedy, must in his pleadings bring himself or his case, clearly within the statute. The statute does not provide for an attachment against all foreign corporations, but only on those that do not come within the exceptions, so that it -is necessary to negative the exceptions in order that it may appear that the fact that the corporation is a foreign corporation is a ground of attachment.

It is -further contended that an affidavit in attachment may be made before a notary public who is the attorney for the plaintiff. Section 5264, Revised Statutes, provides that an affidavit may be made before any person authorized to take depositions. Section 5271, Revised Statutes, provides that the officer before whom depositions are taken must not be a relative or attorney of either party, or otherwise interested in the event of the action or proceeding. Section 5107, Revised Statutes, provides that the affidavit verifying the pleading may be made before any person authorized to administer oaths, whether an attorney in the case or not. An affidavit is a written declaration under oath, made without notice to the adverse party, and in view of the very important purposes for which it may be used it would seem that it is just as important that the officer before whom it is made should be disinterested as it is in the taking of a deposition for which notice is required. This was the sole ground of objection to the affidavit in the case last above cited, and the affirmance of the judgment of the circuit court necessarily raised that question.

Lastly it is contended that the court erred in refusing leave to amend the affidavit. A sufficient affidavit is essential to jurisdiction in a proceeding in- attachment. In Lessee of Paine v. Mooreland, 15 Ohio, 435, it is held that the court acquires jurisdiction in attachment, by the issuing of process, predicated upon the requisite affidavit, and the attaching of the property. In Pope et al. v. The Hibernia Insurance Co., 24 Ohio St., 481, the attachment was based upon the ground of non-residence. The affidavit was defective in that it failed to show that the cause of action is one arising upon contract, judgment or decree. An order of attachment issued and the insurance company was garnisheed. After the service of the writ the plaintiff by leave of court amended the affidavit to show the omitted fact, but a new writ of attachment was not issued. It was held: “Jurisdiction of a' defendant cannot be acquired by proceedings in attachment, on the ground of his non-residence in the state, when the petition in the case, and the affidavit for attachment, fail to show that the cause of action is one arising upon contract, judgment or decree. Jurisdiction cannot be acquired in such case, by amendment of the petition and affidavit, showing a causé of action arising upon contract, without the issuance of an attachment after the amendment.”

In the present case it was sought not only to amend the affidavits, but also to nunc pro tunc the amendment so as to vivify the void writ. This, of course, could not be done. Moreover, if the amendment had been made, still the affidavits would have been fatally defective on the ground that they were made before the attorney.

The judgment is affirmed.

Judgment affirmed.

Crew, Spear, Davis, Shauck and Price, JJ., concur.


text:
    State of Ohio v. Pierson.

      A county recorder cannot be- indicted — '-For receiving interest on public money, when — Section 6841, Revised Statutes.

      A county recorder cannot be indicted, under Section 6841, Revised Statutes, for embezzlement in converting to his own use interest received by him on deposits of public money.
    (No. 12418
    Decided December 20, 1910.)
    Exceptions to the decision of the Court of Common Pleas of Franklin county.

      A statement of the case is found in the opinion.

      Messrs. Webber; McCoy, King & Game, for plaintiff in error.

      Messrs. Huggins, Huggins, Johnson & Hoover, for defendant in error.
   Summers, C. J.

The defendant was recorder of Franklin county in the year 1909, and was indicted for the embezzlement of $66.00 received by him as interest, and converted to his own use, on public money that he had deposited in bank. The court of common pleas sustained a demurrer to the indictment and the county prosecutor by bill of exceptions, questions the correctness of the ruling.

Section 6841, Revised Statutes, is as follows: “Whoever being charged with the collection, receipt, safe-keeping, transfer or disbursement of the public money or bequest, or any part thereof, belonging to the state, or to any county, township, municipal corporation, board of education, cemetery association or company in this state, converts to his own use, or to the use of any other person, body corporate, association or party whatever, in any way whatever, or uses by way of investment in any kind of security, stock, loan, property, land or merchandise, or in any other manner or form whatever, or loans with or without interest to any company, corporation, association or individual, or, except as hereinafter provided, deposits with any company, corporation or individual any portion of the public money or any other funds, property, bonds, securities, assets or effects of any kind received,' controlled or held by him for safe-keeping or in trust for a specific purpose, transfer or disbursement, or in any other way or manner, or for any other purpose, shall be deemed guilty of embezzlement of so much of the money or other property thus converted, used; invested, loaned, deposited or paid out, and shall be imprisoned in the penitentiary not more than twenty-one years nor less than one year, and fined in double the amount of money or other property embezzled, which fine shall operate as a judgment at law on all of the estate of the party sentenced, and be enforced to collection by execution or other process for the use only of the owner of the property or effects so embezzled, and such fine shall only be released or entered as satisfied by the party in interest as aforesaid. Provided, however, nothing in this act shall be so construed as to make it unlawful for the treasurer of any township, municipal corporation, board of education or cemetery association, to deposit any portion of such public money with any person, firm, company or corporation organized and doing a banking business under the banking laws of the state of Ohio, or the banking laws of the United States. Provided, further, the deposit of any such funds in any such bank shall in no wise release any such treasurer from liability for any loss which may occur thereby.”

It is conceded that by Section 1296-11, Revised Statutes, the money deposited was public money and the court of common pleas ruled, under the statutory provision in that section as to what fees, costs, etc., shall be held as public moneys belonging to the county, that interest on such funds is not public money within the meaning of Section 6841.

In Eshelby v. The Cincinnati Board of Education, 66 Ohio St., 71, it is held that, “The treasurer of a school district who, under favor of the proviso of Section 6841, Revised Statutes, deposits its funds in a bank which allows interest on the average balance of the deposit is required to account to the school district for such interest,” and hence it is contended that interest is embraced within the words “public money” as used in Section 6841. That was a civil action to recover the' interest, and it was held that the interest might be recovered on the ground that the treasurer did not own the money on deposit; that it belonged to the public; that he was merely the custodian of the money, and that the increment follows the principal. It does not necessarily follow, however, from the fact that interest may be recovered in a civil action, that it is public money within the meaning of those words as used in a statute making it a crime to embezzle public money.

The indictment seems to have been drawn upon the assumption that it was the duty of the officer to deposit the public money at interest ’ in bank, and to pay the principal and interest into the county treasury quarterly, for it is expressly so charged in the indictment. But attention to the statute discloses that it is made embezzlement for the officer to loan the public lhoney with or without interest, or to deposit it. However, it is contended that this charge in the indictment may be disregarded for the indictment still charges that the defendant received the interest and converted it to his own- use. It is true that it is so charged, and it may be that the charge in the indictment that it was the duty of the officer to make the deposit may be disregarded, and it is perhaps immaterial whether that was the reason that the officer was indicted for converting the interest and not for depositing the money in bank.

. We do not think that interest is within the purview of the statute, for in the contemplation of the law-makers .there never would be any interest. There could be none unless an officer was guilty of an act made embezzlement by the statute, and so there could be no necessity for making the conversion of interest embezzlement. The purpose of the original legislation is set out in The State of Ohio v. Newton, 26 Ohio St., 265. Briefly, it was to safeguard the public money by keeping it in the custody of the public officer and not to secure for the public any profit or interest he might receive from the use of it.

Exceptions overruled.

Crew, Spear, Davis, Si-iauck and Price, JTJ., concur.


author: Shauck, J.

text:
    In the Matter of the Disbarment of Charles A. Thatcher.

      Application for reinstatement of disbarred attorney — Promotion of right administration of justice — Sole question — -Respondent found guilty of unprofessional conduct — Involving moral turpitude.

    1. On an application for reinstatement by one who has been removed from the bar, the sole question to be determined is whether the granting of his application would probably be pro-motive of the right administration of justice.
    2. Whether the hearing be in an original proceeding to remove from the bar, or upon an application for reinstatement, it involves no consideration respecting the punishment of the re- • spondent since his exclusion merely annuls an extraordinary privilege originally conferred in reliance upon his possession of good character, and leaves him in the full enjoyment of all the rights of citizenship.
    3. This court has found the respondent guilty of a specification which in substance was that, for the purpose of procuring for himself a large sum of money, disproportionate to legitimate fees for services as an attorney, he caused suit to be brought on notes which had been paid and which he knew had been paid; and procured a reputable attorney who did not know that said notes had been satisfied to bring the action thereon and verify the petition, and such finding by the court establishes the charge that he was guilty of unprofessional conduct involving moral turpitude.
    (No. 11650
    Decided December 20, 1910.)
    Motion to reinstate.
    Charles A. Thatcher having been removed from the bar of the state by the order of this court made in June, 1909, now moves for his reinstatement to all the rights ,and privileges of an attorney and counselor at law in all the courts of the state. As grounds therefor he alleges “that since the said decree was entered respondent has endeavored to fully and faithfully follow and comply with said order and without reservation or equivocation here fully submits to the, language, spirit and effect of the said decree and with the full assurances that the errors therein found will be hereafter consistently avoided.” He also alleges with some detail that since the filing of the original charges against him he has been put to large expense in making his defense thereto, that he has sustained serious loss in the interruption of his legal business, and that there are pending in the state and federal courts many causes whose prosecution he had undertaken, and that unless he'is permitted to attend to them, his clients will be subjected to expense and loss. His motion concludes with the allegation “that up to the date of the filing of this application, including the time of the disbarment so far passed, respondent’s suspension from the practice of his profession has amounted practically to the period of a year or more, and.he' submits that this consideration, together with his loss of money and business incident to these proceedings are penalties sufficient for the adequate prevention and punishment of the errors found against him and a sufficient vindication of the law of the land and the judgment of this honorable court.”

      Mr'. E. B. King; Mr. John J. Sullivan and Mr. R. P. Cary, for respondent.
   Shauck, J.

The original case for the disbarment of the respondent is very fully reported in 80 Ohio State, 492 to 675. The report gives the charges upon which he was heard, a sufficient statement of the evidence relating thereto, the conclusions of fact to which the evidence led and the considerations which were regarded as requiring the order of disbarment. If the respondent had been dealt with for a single act of wrong-doing, inconsistent with a life of general rectitude, perhaps an order for his suspension for a definite term would have been thought sufficient to serve as a corrective to him, and to maintain the required standard of professional ethics. But a reference to the original case will disclose that he was found guilty of numerous acts of grave impropriety and of long perseverance in a course of reprehensible conduct. An order of suspension would have afforded him opportunity, during its operation, to insist upon the propriety of his own ethical standards as against those prescribed by the court, and, upon its expiration, to resume practice without any acceptance of the standard fixed by the judgment of the court. Having been removed from the bar, he may in accordance with what we conceive to be correct practice file a written motion expressly accepting the judgment of the court as to ethical requirements, and offering such reasons as he may have for the conclusion that his reinstatement is justified by the considerations upon which a select few of the masses of the citizens óf the state are permitted to enter and remain at the bar to participate in the high function of administering justice. Although the terms of his motion accepting the judgment of the court as to the -impropriety of the conduct for which he was removed mark him as a man who is not easily carried away with enthusiasm, we accept, them,- as-sufficient for the present case.

What questions does his motion require us to determine? Certainly not the question' suggested by its concluding paragraph. So - often and so clearly have courts pointed out that in proceedings of this character the punishment of the offending lawyer is neither involved nor considered that repetition is not necessary. It would perhaps be unavailing to prevent appeals for sympathy upon that ground in future cases. The respondent and all who give attention to this inquiry must be fully aware that during the entire term of his disbarment he has been in the full and uninterrupted enjoyment of all the inherent rights of citizenship. Nor can there be presented for determination here any theological question respecting the remission of sin or the facility with which it may be achieved. The general question now presented has been presented twice already. It was presented when the respondent was admitted to the bar and again when the order of his disbarment was entered. That general question is, will the public interest in the orderly and impartial administration of justice be conserved by his participation therein in the capacity of an attorney and counselor at law? In a few jurisdictions the requirement of learning in members of the bar is remitted, but wherever there is civilization one is required to have such character as is believed to warrant the expectation that his own interests will be held subordinate to those of his clients and of the public, that neither his zeal for victory nor his love of gain will compensate him for wrong to an adversary or for a deception practiced upon the court or for any perversion of justice, and that he will in all respects aid judges in meeting the authorized expectation that they will “administer justice without respect to persons and without fear or favor.” When the respondent was admitted to the bar he was believed to be of that character. When it appeared that he was not he was removed. Is there good reason to believe that since the order of his disbarment was made, eighteen months ago, there have gone on in his character such reforming and regenerating processes as should restore the confidence upon which he was originally admitted? The question calls for attention to the character of his offenses, though it does not require that they be again stated in detail. He procured the bringing of a suit upon a cause of action which he knew had been fully discharged, and this he did by inducing a reputable member of the bar, .who was not aware of the baseless character of the claim to prepare and sign the 'petition and make the required affidavit thereto. His motive for this was a stipulated compensation so large as to mark him as a mere tradesman in the ranks of an honorable profession. He persevered through years, and in many cases in baiting judges by procuring affidavits of prejudice for which there was neither foundation nor appearance of it. He scandalized the administration of justice by appealing from judgments rendered in the orderly course of procedure to crowds summoned by blare of trumpet to street corners and vacant lots where by false speeches, pamphlets and cartoons he heaped contempt and ridicule upon judicial proceedings which were-con-: ducted with fairness and propriety, and which were perhaps even free from error. This he did when he had many case's pending in the courts in which he had contracts for contingent fees and a large financial interest in the judgments to be rendered in them. Notwithstanding our finding on the third, sixth, ninth and twelfth specifications our credence has been invited to the claim that this course was not pursued to affect pending cases, or to impress the public with the understanding that cases in which he was retained must be tried by rules more favorable than those applied in other cases; but that it was done to give expression to his yearning as a citizen for the elevation of the judiciary and to perform his duty to aid judges in administering justice without fear! He maligned one of the common pleas judges of his county as a “political judge,” and when brought to account for so doing, instead of frankly confessing the falsehood, he attempted a justification of his imputation by bringing witnesses into our presence to testify that the judge named and his associates, acting together, had appointed competent jury commissioners, giving such, and only such, attention to their political affiliation as would show compliance with the statute which required the selections to be made from both political parties. Character building does not appear to be an instantaneous process, and conduct thus briefly outlined came as the fruition of more than twenty years of the professional life he lived. Common observation forbids the assumption that virtues develop more rapidly than vices. It was observation upon persistency in wrong-doing by those who are accústómed to it that suggested to the prophet- the unchangeable colors of the leopard’s spots.

But we are not left to conjecture with respect to the effect of discipline upon the character and conduct of the respondent. The filing of the original charges against him' called upon us to act without fear or favor, and suppressing all emotional and sentimental promptings, to exercise impartially our best judgment respecting them, knowing that nothing which is required by the orderly and fearless administration of justice could be unjust to him, and that any action adverse to him would be unjust if not so required. During their pendency, numerous letters were received by members of the court appealing to sympathy in his behalf. Some of these were accompanied, some followed, by letters of apology and explanation, the explanation being that he had solicited the letters. Even since his counsel argued and submitted the motion we are now considering,'he has approached this court with the suggestion,'made personally to one of its members, that by an early disposition of the case, we might avert unfavorable comment upon the court by a political convention. The motion asks us to decide that he should be permitted to exercise important functions in the administration of justice at a time when it is within familiar observation that, even according to the standards which are maintained in athletic contests, an offending player is expelled from the field for baiting the umpire.

In August, 1907, the .American Bar Association, having a membership in nearly, if not quite all, the states of the Union, adopted canons of professional ethics and suggested an oath of admission consistent with' them. In July, 1909, within a month after the order of disbarment in the present case, the canons and the oath were unanimously adopted by the Bar Association of this state. Pursuant to the unanimous recommendation of that association the oath of admission has been adopted by this court. Both the canons and the oath may be found in the reports of the various associations by which they have been adopted. In neither canons nor oath is there addition to. the implied obligations of an attorney as they have been understood for generations by the honorable and the right-minded who appreciate the importance of the lawyer’s function. If may be interesting to those who care to pursue the subject further to contrast the clearly and correctly expressed statement of the lawyer’s duty as presented in the code and oath with the conduct of the respondent as more fully detailed in the original report of his case. We appreciate and commend the high purposes of our brethren of the bar in the promulgation of the code and oath, and we shall be guilty of a palpable dereliction from duty if, upon any occasion, we fail to uphold the standards of professional duty which they suggest. Finding no reason to believe that the public interests will be conserved by the respondent’s participation in the administration of justice we overrule his motion.

Motion overruled.

Summers, C. J., Crew, Spear, Davis and Price, JJ., concur.


author: Donai-iue, J.

text:
    Willis v. Holcomb, Trustee, et al.

      Testamentary trust fund invested in mortgage — Foreclosure—Purchase of property ' by trustee — Amount of sale exceeds original trust fund — Incumbent upon trustee to sequester amount of original fund — Any surplus then remaining adheres to original trust fund — Not credited as proceeds to cestui que trust— Rights of latter — Duties of trustee.

    1. If a trustee of a testamentary trust invests the trust fund according to the direction of the will of the testator, and without his fault the trust fund is imperiled by reason of want of bidders at a foreclosure sale of the property mortgaged to secure the fund, and for the purpose of protecting the fund, he purchases the property at sheriff’s sale, taking the title to the same in his own name as trustee, and the cestui que trust then being under no legal disability to act for himself, without protest on his part, enters into the possession of the land and uses and occupies it, or accepts from the trustee the rents or revenues thereof in lieu of the interest earnings on the trust fund had the same been continued at interest, such cestui que trust is estopped by his conduct from questioning the right or the authority of the trustee to make such purchase, and from demanding from him an accounting of an amount equal to the interest such fund would have earned during the time he so occupies the land or accepts the rents and revenues therefrom.
    2. Where such purchase has been made and it afterward appears that the trust fund is not in peril of diminution by reason of the land selling for a lesser sum than the amount thereof, it is the right of the cestui que trust to require the trustee to sell the land and reinvest the proceeds thereof according to the terms and provisions of the will creating' such trust, and upon failure of the 'trustee to do this after demand made therefor a court of competent jurisdiction may compel him to do so.
    3. Out of the proceeds of the sale of such land the original trust fund must be first sequestered and no part thereof can be used for the purpose of paying any amount or installment of interest due the cestui que trust, but if there is any such interest due the cestui que trust that he has not estopped himself from demanding, then such amount must be paid him out of the surplus of the proceeds of the sale after first deducting an amount equal to the original trust fund, and any surplus then remaining of the proceeds after such payment must be added to the original trust fund, the sum of which will constitute a new trust fund to be invested and distributed according to the terms of the trust.
    (No. 11522
    Decided February 14, 1911.)
    Error to the Circuit Court of Fayette county.
    On the 16th day of August, 1888, James M. Willis died testate. Item ninth of the first codicil to his will is as follows: “All the balance and residue of my estate I give and bequeath to my three children, namely, William R. Willis, James W. Willis and Laura B. Willis, as follows: One-third part thereof to my son, William R. Willis, one-third part thereof to my daughter, Laura B. Willis, the remaining one-third part I will and direct my executors hereinafter named, whom I now name and appoint trustees for that purpose, to invest in good first mortgage real estate securities in Fayette county, Ohio, and pay the net annual proceeds thereof to my son, James W. Willis, for and during his natural life. * * * At the death of my son, James W. Willis, the principal of said money so devised to said trustees for the use of said James W. Willis I devise to the heirs of the body of my son, James W. .Willis, if he should have issue of his body, but if he should die without issue then in that case I will and devise said sum to the heirs of the body of my said son, William R. Willis, and my daughter, Laura B. Willis, one-half to each, but if my said daughter should die without issue then I devise the whole of said sum to the heirs of the body of my son, William R. Willis.”
    William R. Willis died Januarjr 10, 1890, leaving Madison Willis and Elsie G. Willis-Hopkins, his only children and heirs at law. Laura B. Willis has since married and her present name is Laura B. Jones. William R. Willis and Mills Gardner were appointed as executor and administrator with the will annexed, respectively, and trustees of the testamentary trust created by said will. Part of the estate of said testator was .a promissory note given by Chauncey Holland, dated June 12, 1885, for the principal sum of $5,940, with interest at eight per cent., payable in one year and secured by a mortgage on real estate, and this note was by the administrators assigned to themselves as trustees of said testamentary trust for the benefit of James W. Willis. On the 7th day of September, 1889, no payments having been made and said note then being of the value of seven thousand dollars, said Holland executed a new note and mortgage to said trustees for said sum of seven thousand dollars, payable in five years at seven per cent, interest. No account was filed by said trustees up to the time of the death of William R. Willis, to-wit, January 10, 1890. On the 13th day of September, 1890, said Holland, having failed to pay the interest then due, Mills Gardner, a surviving trustee brought action to foreclose said mortgage, the amount at that time being $7,542, of which amount $1,042.95 was the accumulated interest on the original investment. July 7, 1891, Holland paid to Gardner, trustee, $976.06, and in August, 1892, he again paid $314,03. On February 7, 1894, there was due upon said mortgage indebtedness $7,775, and said land was, on said date, sold for the purpose of satisfying the judgment therefor. It failing to attract other bidders who' were willing to pay the amount of such indebtedness and cost, Mills Gardner, trustee, for the protection of said fund, purchased said land, and on July 25, 1894, the sale being confirmed the sheriff was ordered to convey and did convey the title to said real estate to said trustee. On April 10, 1895, J. W. Roebuck was appointed in the place of Mills Gardner as trustee. After his death B. M. Holcomb was, on the 9th day of January, 1897, appointed such trustee, and he is still acting in that capacity. The title to said land is still in said trustee, and it has now largely increased in value. The trustee has never made any sale thereof or any further attempt to reinvest said fund. These facts are gathered from the petition, to which a demurrer was filed, and, therefore, for the purposes of this case are taken to be true.
    On the first day of September, 1906, James W. Willis filed in the common pleas court of Fayette county a petition reciting the foregoing facts, and further averring that he is the beneficiary of the trust created by the will of James M. Willis; that the defendant, B. M. Holcomb, is the trustee of the testamentary trust created by said will; that said real estate so purchased by the trustee has largely increased in value; that the trustee refuses to sell the same and invest the proceeds according to the direction contained in said will “in good first mortgage real estate securities in Fayette county, Ohio,” and prays that said real estate may be ordered sold, and that there be paid first to the trustee $6,499.48, which plaintiff claims to be the present true amount of the trust fund; that said trustee be directed to invest the same according' to the directions contained in item nine of the first codicil to said will, and that the balance of the proceeds of such sale, after the payment of the costs of this proceeding be ordered paid to this plaintiff as the net proceeds of said trust fund, and for all other and further proper relief. To this petition the defendant, Holcomb, as trustee, filed an answer admitting all of the averments of plaintiffs petition to be true and asking the instruction and direction of the court with reference to said trust. The defendants, J. Madison Willis and Elsie Flopkins, filed a general demurrer to the plaintiff’s petition, which general demurrer the common pleas court overruled, and the said defendants not desiring to plead further, a decree was entered by the court of common pleas ordering the sale of said property by the trustee and reserving all questions as to distribution of the proceeds thereof. An appeal was taken from this decree to the circuit court, and that court sustained the demurrer to the plaintiff’s petition, and entered a final judgment dismissing the action at the cost of the plaintiff, and this proceeding in error is now prosecuted in this court to reverse that judgment.

      Mr. W. C. Tansy and Messrs. Pugh & Pugh, for plaintiff in error.
    Courts of equity have been very strict in holding trustees within the limits of the power conferred upon them. Cleveland v. Bank, 16 Ohio St., 236; Shank v. Dewitt, 44 Ohio St., 237.
    The trustees were commanded, by the testator, to pay to the plaintiff in error, during his natural life, “the net annual proceeds of the trust fund invested in good first mortgage real estate securities,” but not a cent of net proceeds from the $5,940 has ever been paid to the plaintiff in error.
    That the cestui que trust, the plaintiff in error, is entitled to redress against such a breach of trust duty is so obvious that the citation of authorities would seem superfluous. 1 Perry on Trusts (6 ed.), Sec. 462.
    The doctrine that a trustee cannot go beyond the line of duty prescribed by either the will or deed or law, and make changes of trust property from money to lands, or lands to money, was established a long time ago; it was also settled then, that when the trustee invests money in lands, without authority, the cestui que trust could elect to accept the land, or, refuse the land and demand his money, that being the form in which the trust fund was required to be kept. Harrison v. Harrison, 2 Atk., 121, 26 Eng. Rep. Re., 476.
    Plaintiff in error in this case at bar invokes the application of the principle of this decision. He asks that the land in which the trustees have kept the trust fund beyond the time for which they had authority to do so shall be sold, and that the balance for which the land shall sell shall be paid to the plaintiff in error, as representing the accretion from the enhancement of the value of the land.
    The land, before this action was brought, increased in value $4,563.42. Who is entitled to that increase? This court decided the question in a case where the trustee had authority to make a purchase, and there was a loss or gain in the value of the securities purchased. Devenney v. Devenney, 74 Ohio St., 96.
    In the case at bar the surviving trustee probably had authority to buy the real estate, as he expressed it, to “save the debt,” but he clearly had no other right and power. The accretion of the trust fund, by reason of the enhancement of the value of the real estate after that, belonged to the income. Park’s Estate, 173 Pa. St., 190, 33 Atl. Rep., 884.
    If the land has increased in value since it was bought by the trustee, that increase is part of the “net proceeds,” part of the income and profits. The term “proceeds,” has been judicially defined as the equivalent of income. Where a will was construed,, which devised property to trustees, and directed them to distribute the proceeds in a defined manner, the term “proceeds” was defined to mean income. Roberts’s Appeal, 92 Pa. St., 407. The term “net proceeds,” in a case where a note was sent to an attorney for collection, with instructions to collect it and remit the proceeds, was defined to mean the amount remitted after deducting fees. Manufacturing Co. v. Winnett, 91 N. W. Rep., 514.

      Mr. Joseph H. Harper; Mr. George H. Jones and Mr. H. Jones, for defendants in error.
    Where the interest of a trust fund was payable as income to a life beneficiary, and the securities in which the fund had been invested were sold at a profit, it was deemed error to credit the profit to the income account, as it was a gain to the principal, to which it should be added, to go eventually to the one entitled to receive the corpus. In re Lawrence’s Estate, 7 N. Y. Supp., 332.
    As between the life tenant and the remainderman the premium on certain gold coin belonging to the testator’s estate is part of the corpus and not the income. Van Blarcom v. Dager, 31 N. J. Eq., 783.
    A leading case on this subject, marking clearly just what must be treated as income on a trust fund and what as principal, is the case of Van Doren v. Olden, 19 N. J. Eq., 176; Green v. Smith, 17 R. I., 28.
    Counsel for plaintiff in error rely practically upon the case of In re Park’s Estate, 173 Pa. St., 190. If counsel had also presented to the court the case of Graham’s Estate, 198 Pa. St., 216, decided some five years later than In re Park’s, and cited and approved by this court in Devenney v. Devenney, 74 Ohio St., 102, they would probably not be so insistent that their contention is sound.
    This latter ease in 198 Pa. St., is on all fours with the case at bar, as the bequest is to the “net annual proceeds” thereof.

      The case of Devenney v. Devenney, supra, recognizes the doctrine announced in the Graham Estate case, and adopted by a large majority of the courts of last resort.
    It was decided in Van Vleck v. Lounsbery, 34 Hun, 569, that where an executor purchased mortgaged premises on the foreclosure of their mortgage, and afterwards, sold the property at a profit of $1,300, the profit belonged to the principal of the estate.
    In In re New York Life Ins. & Trust Co., 53 N. Y. Supp., 382, may be found a clear statement of the general rule as to the increase of the corpus. Gray v. Darlington, 15 Wall., 63; and in Accounting of Gerry, 103 N. Y., 445, is a discussion of and announcement of the principle we are urging.
    In In re Lawrence’s Estate, 26 N. Y. St. Rep., 238, and Townsend v. Trust Co., 3 Redf. (N. Y.), 220, it is decided that where the value of real or personal estate held as an investment advances from natural causes, such increase is principal and goes to the remainderman. And the case of In re Vedder, 40 N. Y. St. Rep., 119, holds the same doctrine. 2 Perry on Trusts (6 ed.), Sec. 545; Cogswell v. Cogswell, 2 Edw. Ch., 231.
   Donai-iue, J.

Conceding for the purpose of the discussion of the questions involved in this record, that a trustee may purchase the mortgaged property for the protection of the trust fund, yet this departure from the terms and direction of the trust cannot longer obtain than absolutely necessary to serve the original purpose, and when that has been accomplished it becomes the duty of the trustee, upon the demand of the cestui que trust to make sale of the real estate so purchased and to invest the funds arising therefrom in manner and form as directed by the will of the testator. It is not the privilege of the trustee, or of the remainderman, to substitute his judgment as to the manner of investing the funds in the place of the judgment of the donor of the trust property and the fact that in their opinion it is more advantageous to keep this money invested in real estate that is likely to continue to enhance in value is of no importance whatever. The express provisions of the will are absolute and must guide the trustee in the administration of this trust. It is insisted in the brief of counsel that the beneficiary of this trust, James W. Willis, has been in possession of this land and receiving profits therefrom largely in excess of the interest earnings of the fund, but that does not appear in this petition, and if it did it would not be important except as to the question of distribution and the accounting by the trustee, for if the beneficiary of this trust has accepted and enjoyed the benefits of the land in lieu of the interest that he would have received from the fund, then for so long a time as he has accepted the same he could not be permitted to claim that in addition thereto he must have a further amount equal to what the fund would have earned had it been at interest. The acceptance of the use, or the rents and revenues, of this land would estop him from demanding interest upon the primary trust fund for and during the time he so used the land or accepted the rents and reveques therefrom. However, when it appears that this primary fund is not in peril of diminution by a resale of the land, it is certainly his right to compel the trustee to proceed according to the terms of the trust.

If during the time the trustee has held the legal title to this land this plaintiff, who is the beneficiary of the trust, has used and occupied the land •and taken unto himself all the benefits of the ownership thereof, he is not in position to question the right of the trustee to make the purchase, but he is entitled to receive any interest earned by this trust, or any interest that the primary fund would have earned had it been kept invested according to the terms o‘f the will up until the time he estopped himself from claiming the same by accepting the rents and revenues, or the use of this land if he ever did accept the same. If the facts pleaded in this petition are true, and this demurrer admits the truth of the same, this cestui que trust is entitled, nothing else appearing, to have this land sold, and from the proceeds arising therefrom must be taken first, an amount equal to the original trust fund. The beneficiary of the trust would then be entitled to receive out of any surplus over that amount, any earnings thereof that he has not, in-the manner above stated, estopped himself from .claiming, and any surplus still remaining from the proceeds of such sale must be added to the original trust fund forming a new principal, or new trust fund, that must be invested for his benefit as directed by the will, and at his death that fund will be paid to the person or persons designated in the will.

This court is dealing now only with the facts presented in the plaintiff’s.petition, and is perhaps going further than the necessities of this case require, yet not further than necessary to effect a speedy determination of the rights of the parties.

The circuit court erred in sustaining the demurrer to the petition, and for that • error the judgment of the circuit court is reversed and remanded to the circuit court with instructions to overrule the demurrer.

Judgment reversed.

Spear, C. J., Davis, Shauck, Price and Johnson, JJ., concur.