Ellis v. Ellis

DESMOND, J.,

pro tem.

The appellants in this case, J. S. Ellis and George M. Ellis, are respectively father and brother of the plaintiff, who obtained a judgment terminating a trust in which all three were interested as cash contributors.

[294]

The judgment ordered sold a sufficient amount of the

res,

practically all real estate, to pay plaintiff the sum to which he was found entitled and imposed a lien upon the property in favor of plaintiff pending payment of said sum. The money judgment runs against the father J. S. Ellis in person and as trustee.

Appellants claim that no sufficient ground existed for termination of the trust; that the order to sell was inequitable as being detrimental to the interest of George, as truly a beneficiary as plaintiff; that the personal judgment against the father cannot stand, since as trustee he was not in default; finally, that the only proper judgment would be a sale and a final balance to be distributed as the interests appear. The case is before us on the judgment roll and the briefs disclose little disagreement as to facts. The two brothers, in their twenties, each contributed $4,000, which they had saved, to a fund which their father increased by adding $13,500 of his own money. The purpose of the sons turning their money over to their father was for him to loan it at high interest rates. The first investment, except for a few small loans that brought in $85 income, was in a $3,500 mortgage October 22, 1927; the second, a $17,500 mortgage January 27, 1928. It will be noted that these two investments, $21,000 in amount, absorbed all the money contributed by the three parties except $500. A building and loan certificate valued at the time of trial at $150 had also been acquired and that certificate, with the two parcels of real estate upon which the loans had been made, constituted the entire trust property affected by the judgment. The real estate had been taken in by foreclosure and each parcel is free and clear of encumbrances.

In terminating the trust, the court found “that the duration of said trust was left to the option of the parties and the ability of the trustee to invest the funds at the high rates of interest”. By reason of default under the mortgages and ensuing foreclosure and purchase by trustee at the sales, the money of the trust was no longer invested in loans at a high rate of interest, but in real estate, nor does it appear that there was any opportunity to so invest it; therefore, one of the principal objects of the trust was impossible of fulfillment. The court said in its findings on this point: