Opinion
No. 4844.
Argued September 8, 1960.
Decided October 28, 1960.
1. Decrees of the probate court allowing the accounts of a trustee and entered in proceedings in which the beneficiary, an insane person of whom the trustee was also guardian, was represented only by the trustee himself, with no guardian ad litem, are voidable for good cause shown at the instance of the beneficiary acting through a later appointed guardian.
2. However, the fact that accounts of a trustee for an insane beneficiary were allowed without representation by the latter of a guardian ad litem did not require that they be reopened for the reason that the trustee did not expend the entire income for the benefit of the beneficiary where will authorized the trustee in his discretion not only to use and expend the funds but also to hold the same and provided for disposition of the remainder to others and there was no evidence that the beneficiary did not receive the "pleasure, comfort and support" to which she was entitled under the will.
CERTIFICATION, of questions of law to the Supreme Court by the probate court of Belknap County (Stafford, J.), pursuant to RSA 547:30. The parties to the litigation submitted the following statement of facts:
"Albert G. Folsom died testate in 1907. By the terms of his Will one-quarter of his estate was left to his widow, Imogene F. Folsom and one-fourth was left to his daughter, Alberta F. Folsom.
"George P. Munsey, now deceased, was appointed Guardian of the daughter, Alberta F. Folsom, an insane person, on March 17, 1925, by the Probate Court for Belknap County. On that date the guardianship estate inventoried at $60,694.93.
"The said George P. Munsey was also appointed Trustee for the said Alberta F. Folsom on January 15, 1927, of certain estate left to her by her mother, Imogene F. Cooke. The trust estate inventoried at $48,677.91.
"The 12th clause of the Will of Imogene F. Cooke reads as follows:
"`To George P. Munsey of Laconia, New Hampshire, I give all the rest, residue and remainder of my estate, wherever found and of whatever nature, the same to be held in trust for the benefit of my daughter Alberta during her natural life, the said Trustee having the right to invest, reinvest, buy, sell or exchange such portions of said estate as may seem best to him, and to hold, use, employ and expend the same for the benefit of my said daughter in such manner and at such times as he shall deem proper, using either income or principal for the pleasure, comfort and support of my said daughter.'
"Periodic accounts were filed by said Trustee from the date of his appointment until his death in 1954, but a Guardian ad Litem was never appointed to represent the ward's interest.
"During the period 1925 to 1954, inclusive, George P. Munsey as Guardian of Alberta F. Folsom paid from the guardianship funds the sum of approximately $90,000 for the benefit of said ward, and the said George P. Munsey as Trustee under the Will of Imogene Cooke, during said period expended the sum of $13,500, some of which was paid to George P. Munsey, Guardian, for the benefit of said Alberta F. Folsom, and some of which was paid to Alberta F. Folsom.
"George P. Munsey died on the 17th day of October, 1954, and his son, the defendant Everett D. Munsey, was appointed successor Trustee on November 22, 1954. At that time the trust estate amounted to $87,513.18.
"The plaintiff, Charles C. Rogers, was appointed Guardian of Alberta F. Folsom to succeed the late George P. Munsey on the third day of November, 1954. At that time the assets in the hands of the guardian amounted to $113,413.33.
"George P. Munsey was Treasurer of the Laconia Home for the Aged during the period 1925 to 1947, and he was President of said Home from 1947 to the date of his death in 1954."
Harold E. Wescott and Peter V. Millham (Mr. Millham orally), for the plaintiff.
Nighswander, Lord Bownes and William T. Krasnow (Mr. Krasnow orally), for the defendant.
Normandin Normandin and Thomas P. Cheney (Mr. Cheney orally), for the defendant, The Laconia Home for the Aged.
Ernest R. D'Amours, Director, Register of Charitable Trusts, pro se.
The plaintiff, guardian of Alberta F. Folsom, filed a petition in the probate court seeking to reopen twenty-three accounts filed by the deceased trustee, George P. Munsey, under the will of Imogene F. Cooke from the date of his appointment in 1927 to the date of his death in 1954. The petition seeks a decree by the court ordering the successor trustee, Everett D. Munsey, to reimburse the plaintiff, as guardian of the life beneficiary, from the trust estate "such sum as is reasonable toward the support" of the life beneficiary during that period from 1927 to 1954. The first question transferred by the probate court is: "May the petitioner re-open any of the accounts of the late George P. Munsey, as Trustee, for the purpose stated in the petition?"
It is argued that the deceased trustee's accounts should be reopened because no guardian ad litem was appointed when they were allowed by the probate court. The decrees allowing the accounts were entered in proceedings in which the beneficiary was represented only by the trustee accountant himself, who was also her legal guardian. The circumstances placed upon him the burden of providing for disinterested representation on her behalf in the accounting proceedings, if the decrees were to be binding upon her as final judgments. Indian Head Bank v. Theriault, 96 N.H. 23, 28. Such representation would have been provided by the appointment of a guardian ad litem (RSA 462:1), an appointment which the exercise of reasonable discretion required. Hollis v. Tilton, 90 N.H. 119, 120. See Estate of Charters, 46 Cal.2d 227, 235-236. Fratcher, Powers and Duties of Guardians of Property, 45 Iowa L. Rev. 264, 297, 335 (1960). Because no such appointment was made, the decrees are voidable for good cause shown at the instance of the beneficiary acting through her present guardian. Note, Guardians Ad Litem, 45 Iowa L. Rev. 376, 381 (1960). See also, Bogert, Trusts Trustees, s. 973, p. 344.
The power of the probate court to reopen a fiduciary's account for good cause is not disputed. Knight v. Hollings, 73 N.H. 495; Indian Head Bank v. Theriault, 96 N.H. 23; Massachusetts Bonding Co. v. Keefe, 100 N.H. 361. The pending petition however presents no cause for such reopening. The contention is made that the trustee was under a duty to expend the entire income of the trust for the benefit of the testatrix's daughter (Haynes v. Carr, 70 N.H. 463) and that he was lacking in authority to accumulate any income. The will however fails to support this contention. The trustee was given the "right" not only to "use" and "expend" the fund, but also to "hold . . . the same." Cf. Haynes v. Carr, 70 N.H. 463. That the language of the will manifested an intention that the trustee should be free to accumulate income, as well as to retain 'the principal, in his discretion is confirmed by other provisions of the will, bequeathing to other legatees at the daughter's death "whatever remains of said estate." Kimball v. Bible Society, 65 N.H. 139, 152. See Amoskeag Trust Co. v. Haskell, 96 N.H. 89.
We conclude that the life beneficiary was entitled to receive only so much of the income or principal as the trustee in the reasonable exercise of his discretion should determine. Fraud or misrepresentation is not alleged in the petition and there is nothing in the record to indicate that Alberta has not received the "pleasure, comfort and support" to which she was entitled under her mother's will. The fact that the fiduciary expended for Alberta $90,000 from the guardianship funds and $13,500 from the trust funds is not indicative of mistake, bad judgment or abuse of discretion. See Burnett v. Williams, 323 Mass. 517. The mother's will in its 12th clause providing the trust for Alberta gave the trustee discretion to use "either income or principal" for her benefit. In the absence of need for the purposes stated by the will, the trustee was under no absolute duty to expend any part of the trust fund while other funds of the guardianship were available and ample. Amoskeag Trust Co. v. Wentworth, 99 N.H. 346. It is reasonable to conclude that the trust fund was intended to be used for Alberta as a protective fund to assure her the "pleasure, comfort and support" that her physical and mental condition warranted. Her mother was aware that her daughter had other funds and if they were insufficient the trust fund would supply the deficiency. We can find no basis in the record to charge the trustee with mistake or failure to exercise his discretion reasonably as trustee. Munsey v. Laconia Home, 103 N.H. 42, decided this day. It follows that the petition presents no occasion for reopening the several accounts of the trustee.
On the record before us, the answer to the first question transferred is "no." Other questions transferred are sufficiently answered by what has previously been said, and by the decision in the companion case of Munsey v. Laconia Home, supra, decided this day.
Remanded.
All concurred.