Meigs v. Frietzsche

DRAPER, J.

This is an appeal by one beneficiary of a testamentary trust from an order settling and approving a trustee’s account, and overruling exceptions thereto. George Tourny died March 21, 1933, leaving a will which distributed the residue of his estate, after specific bequests, to J. Bicknell Tourny and Albert Frietzsehe, in trust. Decree of final distribution, dated August 29, 1934, distributed the property to the named trustees, and provided:

“In case either the said J. Bicknell Tourny or the said Albert Frietzsehe is at any time unable or unwilling to act as trustee of the said trusts, Adolph Rosenthal ... is hereby appointed as substitute trustee to act as trustee of the said trusts in the place and stead of such trustee who is unable or unwilling to act. If at any time two of the said three persons are unable or unwilling to act, the remaining one shall act as sole trustee.”

The trustees accepted the trust and undertook the discharge of their duties, continuing as joint trustees until the death of J. Bicknell Tourny October 11, 1950. On May 19, 1951, Frietzsehe filed “Fifteenth Annual Report and Account of Surviving Trustee.” This report recited the death of the co-trustee, and prayed for settlement of the account and for an order “finding and decreeing that said J. Bicknell Tourny having died, petitioner is the sole surviving trustee. . . .’’The probate court, by order dated June 5, 1951, found that notice of hearing “was given in all respects as required by law,” that the account was correct, and that Frietzsehe “now is the sole surviving trustee.” Thereafter, Frietzsehe filed three further annual accounts, each as “surviving trustee,” and each was approved by the court.

Shares of The San Francisco Bank were the principal asset of the trust. In June, 1954, Transamerica Corporation offered to purchase all outstanding shares of The San Francisco Bank at a price fixed in the offer. Frietzsehe discussed this offer with appellant who, according to a later letter from her attorney, “would not either agree or disagree” that the stocks should be sold. In September, 1954, Frietzsehe, as trustee, sold 75 per cent of the trust holding pursuant to this offer.

[504]

Appellant first complained to Frietzsche about this sale in December, 1954. Frietzsche died July 15, 1955. His executrix filed an account of his trusteeship March 23, 1956. This account recited the above sale. Appellant excepted to the account upon the ground that Frietzsche was not the sole surviving trustee, since Adolph Rosenthal, the substitute trustee named in the will, is still alive. Rosenthal, on August 10, 1955, filed his declination to act as trustee. The principal attack was upon the sale of the bank stock. The exceptions were disallowed and the account was settled and approved. The court found that Frietzsche had at all times acted in the highest good faith and for the best interest of the trust estate; that the sale was in the best interest of the trust estate; that Rosenthal never accepted the trust and that his qualifications to serve as trustee never were determined; that Frietszsche was, by the order of May 19, 1951, determined to be the sole surviving trustee; that from the death of J. Bicknell Tourny, October 11, 1950, to the death of Frietzsche, July 15, 1955, Frietzsche acted as sole surviving trustee with the “knowledge, acquiescence and approval” of appellant and all other persons interested in the trust.