Ancil G. Ramey, Esq.
Thomas Persinger, Esq.
Robert A. Wilson, Jr., Esq. Charleston, West Virginia
Steptoe & Johnson Attorney for the Appellees
Charleston, West Virginia
Attorneys for the Appellant
JUSTICE MAYNARD delivered the Opinion of the Court.
1. The paramount principle in construing or giving effect to a trust is that the intention of the settlor prevails, unless it is contrary to some positive rule of law or principle of public policy. Syllabus Point 1, Hemphill v. Aukamp, 164 W.Va. 368, 264 S.E.2d 163 (1980).
2. A statute should be so read and applied as to make it accord with the spirit, purposes, and objects of the general system of law of which it is intended to form a part; it being presumed that the legislators who drafted and passed it were familiar with all existing law applicable to the subject-matter, whether constitutional, statutory, or common, and intended the statute to harmonize completely with the same and aid in the effectuation of the general purpose and design thereof, if its terms are consistent therewith. Syllabus Point 5, State v. Snyder, 64 W.Va. 659, 63 S.E. 385 (1908).
3. A court of equity will not allow a valid and existing trust to fail for want of a trustee. Syllabus Point 2, Tildesley Coal Co. v. American Fuel Corp., 130 W.Va. 720, 45 S.E.2d 750 (1947).
4. The purpose of W.Va. Code § 44-14-1 (1992) is to provide, in the absence of applicable language in the trust instrument, for the appointment of a replacement trustee or trustees where such an appointment is required to prevent the failure of the trust.
5. W.Va. Code § 44-14-3 (1992) provides that if there is more than one trustee of a trust, and one or more of the trustees cease to serve as trustee for any of the reasons enumerated therein, the remaining trustee or trustees may execute the trust, subject to the two exceptions stated.
6. The phrase [unless] some other trustee be appointed for the purpose pursuant to the provisions of this article in W.Va. Code § 44-14-3 (1992) specifically refers to the provisions of W.Va. Code § 44-14-1 (1992) for the appointment of a replacement trustee or trustees in order to prevent the failure of the trust.
7. The trial [judge] is vested with a wide discretion in determining awards . . . of . . . court costs and counsel fees; and the trial [judge's] determination of such matters will not be disturbed upon appeal to this Court unless it clearly appears that he has abused his discretion. Syllabus Point 3, in part, Bond v. Bond, 144 W.Va. 478, 109 S.E.2d 16 (1959).
The appellant, Philip Bond, the co-trustee of a testamentary trust, appeals the
April 5, 2002, order of the Circuit Court of Kanawha County that granted summary judgment
to the appellees, Marshall Bond, Jr., Antoinette Bond Thomas, Antoinette Bond Morrison,
and J. Christopher Thomas, and appointed two successor co-trustees to administer the
testamentary trust in addition to the appellant. For the reasons set forth below, we reverse
The appellees filed a declaratory judgment action in order to make the co-
trustee substitutions. Appellant Philip Bond, the remaining co-trustee, objected to the
substitutions. After a hearing, the circuit court granted summary judgment on behalf of the
appellees. Specifically, the circuit court ordered in relevant part:
(i) The resignation of Marshall Bond, Jr., as a Co- Trustee of the Marshall Bond Trust is hereby accepted and said Marshall Bond, Jr. is hereby released and discharged from all duties, obligations, and liability as a Co-Trustee of the Trust, and Antoinette Bond Morrison is hereby appointed as a successor Co-Trustee of the Marshall Bond Trust with full authority and power to act as a Co-Trustee of the Trust;
(ii) The resignation of Antoinette Bond Thomas as a Co-Trustee of the Marshall Bond Trust is hereby accepted and said Antoinette Bond Thomas is hereby released and discharged from all duties, obligations, and liability as a Co- Trustee of the Trust, and J. Christopher Thomas is hereby appointed as a successor Co-Trustee of the Marshall Bond Trust with full authority and power to act as a Co-Trustee of the Trust; said Antoinette Bond Morrison and J. Christopher Thomas to serve as Co-Trustees with Philip Bond, who will remain and serve as a Co-Trustee of the Trust[.] (See footnote 2)
* * *
(vi) The costs (including filing fees, service of process fees, publication fees, photocopying expenses and postage expenses) of Plaintiffs and Defendant Philip Bond shall be reimbursed from, and paid out of, the Marshall Bond Trust; provided, however[,] that each party shall bear their respective attorney's fees. (Footnotes added.)
The appellant, Philip Bond, now appeals this order.
We review the circuit court's grant of summary judgment de novo. See Syllabus Point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994) (A circuit court's entry of summary judgment is reviewed de novo.).
It is axiomatic that [t]he paramount principle in construing or giving effect
to a trust is that the intention of the settlor prevails, unless it is contrary to some positive rule
of law or principle of public policy. Syllabus Point 1, Hemphill v. Aukamp,164 W.Va. 368,
264 S.E.2d 163 (1980).
Effect must be given to valid terms of a trust as to the mode and manner of the substitution, and succession of trustees in the administration of the trust and such terms must be carefully followed. In this regard, the power to appoint trustees is to be strictly construed, although a construction is to be avoided which will constitute a highly improbable intent. . . . In short, if a trust instrument prescribes a procedure for dealing with a vacancy in trustees, the court should generally defer to this procedure and follow the desires of the settlors absent a showing that to do so would frustrate the purposes of the trust or be detrimental to the interests of the beneficiaries. Where, however, the terms of the trust are silent in the matter, the substitution and succession of trustees must be governed by statutory or case law.
76 Am. Jur. 2d, Trusts § 262 (1992) (footnotes omitted). Accordingly, we now look to the applicable provision of the settlor's will to determine his intent.
The provision in question provides:
Upon the death, disability, resignation or refusal to serve of any of the aforesaid Trustees, the remaining Trustees or Trustee shall have all the rights, powers and duties hereunder, with like effect as if named the sole Trustees or Trustee hereunder. As long as three Trustees are acting, the view of the majority of them shall prevail in the event they differ on any question.
The circuit court made two findings with regard to this provision. First, the court found, in effect, that, because this provision does not expressly provide that the survivors or survivor of the original three co-trustees shall have all the rights, powers and duties as if named the sole trustee or trustees, the settlor's intent was that three trustees be maintained. After a careful analysis of the language of this provision, we respectfully disagree.
It is clear from the language of the will that the settlor recognized and anticipated that one or more of the named co-trustees may cease to act as trustee due to death, disability, resignation or refusal to serve. Despite recognizing such a possibility, however, the settlor made no provision for replacing the named trustee or trustees who became unable to fulfill their obligations. Instead, he specifically provided that the remaining Trustees or Trustee shall have all the rights, powers and duties hereunder, with like effect as if named the sole Trustees or Trustee hereunder. This language plainly indicates that no new trustees are to replace those named in the trust. By providing that, as named trustees ceased to act, those remaining were to continue to serve the trust, the settlor clearly expressed his desire that the number of trustees be allowed to diminish without the appointment of new trustees.
The circuit court and the appellees place great weight on the fact that the settlor did not use the express terms survivors or survivor to manifest his intent that surviving original trustees be permitted to manage the trust. We find this to be without significance. The settlor simply used the word remaining instead of surviving to describe the original trustee or trustees who were to continue to serve after the departure of one or more co- trustees. That the word remaining is an alternate term for surviving is recognized in W.Va. Code § 44-14-4 (1992), which provides that the surviving or remaining trustee, who has power to execute any trust or the remainder of any trust . . . shall be vested with all the estates, rights and powers, and charged with all the duties and responsibilities, of the trustee or trustees named in the trust instrument. (Emphasis added.).
Second, the circuit court found that, by providing that [a]s long as three
Trustees are acting, the view of the majority of them shall prevail in the event they differ on
any question, the settlor did not intend to limit the trustees to the three original trustees
named in his will. Again, we disagree. Instead, we believe that this provision simply
indicates the method by which the settlor intended that the three original co-trustees were to
resolve differences of opinion in the decision-making process. We further find that the
phrase as long as three Trustees are acting plainly indicates the settlor's recognition and
anticipation that there may come a time when less than three trustees are acting.
Accordingly, we find that the circuit court erred in holding that the settlor intended that three
trustees be maintained to manage his trust.
This Court has held that,
A statute should be so read and applied as to make it accord with the spirit, purposes, and objects of the general system of law of which it is intended to form a part; it being presumed that the legislators who drafted and passed it were familiar with all existing law applicable to the subject matter, whether constitutional, statutory, or common, and intended the statute to harmonize completely with the same and aid in the effectuation of the general purpose and design thereof, if its terms are consistent therewith.
Syllabus Point 5, State v. Snyder, 64 W.Va. 659, 63 S.E. 385 (1908). The construction of W.Va. Code § 44-14-1(a) urged on us by the appellees conflicts with existing statutory and common law applicable to the same subject matter. First, the appellees' construction conflicts with the general rule that the intent of the settlor should prevail. Under the appellees' reading of this code section, the settlor's intent could be frustrated merely on a motion of any party interested and at the discretion of the circuit court. We simply do not believe that the Legislature so intended.
Also, the appellees' construction is not consistent with the principle stated in
the Restatement of the Law of Trusts (Third), which says:
If several persons are named as trustees and one of them dies, declines to serve or resigns, is removed, or is or becomes incapable of acting as trustee, a replacement trustee is required only if the settlor manifested an intention, or it is conducive to proper administration or purposes of the trust, that the number of trustees should be maintained. Otherwise, the remaining trustee or trustees are entitled to administer the trust.
§ 34(2) cmt. d (2003). This principle is codified in W.Va. Code § 44-14-3 (1992) which specifically provides that a remaining trustee or trustees may execute a trust subject to the two stated exceptions. For these reasons, we believe that the appellees have misconstrued W.Va. Code § 44-14-1.
Having determined what W.Va. Code § 44-14-1 does not mean, we now
proceed to determine what it does mean. In Place v. Buckley, 126 W.Va. 926, 929, 30 S.E.2d
743, 745 (1944), this Court described it as a remedial statute prescribing a much simplified
summary proceeding by way of notice and motion as a means . . . for the filling of an existing
vacancy in a trusteeship[.] The Court explained,
[W.Va. Code § 44-14-1] is not for the purpose of trying controverted questions, either legal or equitable, but is for the purpose of filling a vacant or dormant fiduciary position under a prima facie showing of right. If there is a prima facie showing of the trust's creation, its continued existence cannot be controverted. The movant, having made a prima facie showing, the appointment of a trustee adjudicates nothing more.
Place, 126 W.Va. at 930, 30 S.E.2d at 746.
W.Va. Code § 44-14-1 also has been discussed in connection with our
traditional rule that [a] court of equity will not allow a valid and existing trust to fail for
want of a trustee. Syllabus Point 2, Tildesley Coal Co. v. American Fuel Corp., 130 W.Va.
720, 45 S.E.2d 750 (1947). In Pollock v. House & Hermann, 84 W.Va. 421, 100 S.E. 275
(1919), the circuit court substituted a trustee in lieu of the sole original trustee who died. In
its discussion of the substitution, this Court stated:
Apparently this substitution stands upon the authority of [W.Va. Code § 44-14-1][.] . . .
The will of the decedent doubtless answers the description of the instrument embodied in the statute and falls within the scope of its provisions to the same extent as if it was a deed. But, whether this construction is a fair deduction from the language used or not, equity will not permit a trust to fail for want of a trustee, and in the absence of a provision in the creative instrument, whatever its character may be, a court of equity will substitute another trustee in his stead whenever necessary to carry into full fruition the purpose intended by the donor. Whelan v. Reilly, 3 W.Va. 597. So that, if a will appoints a trustee for infants and he dies, equity will substitute another in his stead, even without authorization by the will itself. Dunscomb v. Dunscomb (Va.) 2 Hen. & M. 11.
Pollock, 84 W.Va. at 423-24, 100 S.E. at 276-77. Finally, 19 Michie's Jurisprudence, Trusts and Trustees, § 77 (1991) discusses the rule that [e]quity will not allow a trust to fail for want of a trustee. Included in this discussion is the assertion that West Virginia has a statute that specifically provide[s] for the appointment of substituted trustees where required[,]
which cites W.Va. Code § 44-14-1.
In sum, this Court has called W.Va. Code § 44-14-1 a remedial statute;
described its purpose as the filling of a dormant fiduciary position under a prima facie
showing of right; and where the sole trustee died, intimated that a circuit court may fill a trust
vacancy pursuant to either W.Va. Code § 44-14-1 or the rule that equity will not permit a
trust to fail for want of a trustee. Also, the commentators in Michie's Jurisprudence
understand W.Va. Code § 44-14-1 specifically to provide for the appointment of replacement
trustees where required. Accordingly, we conclude that the purpose of W.Va. Code § 44-14-
1 is to provide, in the absence of applicable language in the trust instrument, for the
appointment of a replacement trustee or trustees where such an appointment is required to
prevent the failure of the trust. This construction of W.Va. Code § 44-14-1 is in harmony
with our common law rule favoring the settlor's intent as well as other statutes of the same
In the instant case, express language in the settlor's will provides for the
management of the trust if one or more co-trustees resign. In addition, the appointment of
replacement trustees was not required to prevent the failure of the trust. Therefore, we find
that W.Va. Code § 44-14-1 has no applicability to the instant facts.
According to the appellees, this second exception is an explicit reference to the
overriding authority of a circuit court to appoint a successor trustee. We disagree. The
phrase pursuant to the provisions of this article refers, of course, to article 14 of chapter
44 of the Code. A survey of article 14 indicates that the only section of the article to which
this exception could refer is W.Va. Code § 44-14-1.
(See footnote 3)
We already have determined above that
W.Va. Code § 44-14-1 applies to circumstances where a trustee is required to be appointed
in order to prevent the failure of the trust.
(See footnote 4)
Accordingly, we hold that the clause [unless]
some other trustee be appointed for the purpose pursuant to the provisions of this article in
W.Va. Code § 44-14-3 refers specifically to the provisions in W.Va. Code § 44-14-1 for the
appointment of a replacement trustee or trustees in order to prevent the failure of the trust.
We now apply W.Va. Code § 44-14-3 to the facts before us.
Initially, we find that upon the resignations of Marshall Bond, Jr. and Antoinette Bond Thomas as co-trustees, W.Va. Code § 44-14-3 provides that the appellant, as the remaining trustee, was to execute the trust. The first exception to this rule, unless the instrument creating the trust directs otherwise, is not applicable because the language of the settlor's will contains the same provisions as W.Va. Code § 44-14-3 for the management of the trust by the remaining trustee. The second exception, [unless] some other trustee be appointed for the purpose pursuant to the provisions of this article, is not applicable because it was not necessary to appoint a trustee to prevent the failure of the trust as provided for in W.Va. Code § 44-14-1. Therefore, we find that the circuit court erred in appointing replacement co-trustees to manage the Bond trust in violation of both the settlor's intent, as set forth in his will, and the provisions of W.Va. Code § 44-14-3. Accordingly, we reverse the judgment of the circuit court.
The traditional rule governing awards of attorney fees says that each litigant bears his or her own attorney's fees absent a contrary rule of court or express statutory or contractual authority for reimbursement except when the losing party has acted in bad faith, vexatiously, wantonly or for oppressive reasons. Syllabus Point 9, in part, Helmick v. Potomac Edison Co., 185 W.Va. 269, 406 S.E.2d 700 (1991). However, one exception to this rule is that a trustee may be reimbursed for attorney fees out of the trust corpus in certain circumstances. In Rogerson v. Wheeling Dollar Sav. & Trust Co., 159 W.Va. 376, 383, 222 S.E.2d 816, 822 (1976), this Court affirmed the payment of all attorney fees from the corpus of the trust assets where the will specifically provided:
In the event of litigation arising, affecting . . . the interpretation and/or construction of this, my last will and testament, or in the event of doubt on the part of my said Trustees as to the interpretation . . . of this trust, they shall have the right to employ counsel of their selection, and to defray their and counsel's reasonable expenses, if any, and any court costs or other expenses imposed upon them in connection therewith, charging the same against the principal of the trust fund.
This Court explained:
A trustee is not compelled to act at his peril in the administration of the trust. He is entitled to the instructions of the court as a protection and the trustee can properly pay out of the trust estate the costs incurred in the application to the court for instructions, if he acted reasonably in making application to the court. Scott on Trusts (3rd Ed.), § 259. Moreover, the testator envisaged such an eventuality when he included the provision in his will . . . for such payment of legal expenses.
Wheeling Dollar, 159 W.Va. 384, 222 S.E.2d at 822. In addition, commentators have observed that,
the courts which have considered the propriety . . . of awarding attorney's fees from the trust estate in actions between cotrustees have considered such factors as who ultimately benefitted from the action, which party was successful in the action, the necessity of resolving the dispute through litigation, and the fault, if any, of the party seeking to have his fees paid from the trust estate, with the ultimate decision being primarily left to the discretion of the trial judge.
Lee R. Russ, J.D., Award of Attorneys' Fees Out of Trust Estate in Action by Trustee Against Co-Trustee, 24 A.L.R.4th 624 § 2 (1983).
Applying these principles to this case, we first note that, as in Wheeling Dollar,
the settlor specifically provided in his will for the payment of attorney fees from the trust
corpus. According to this provision, [t]he Trustees shall have the right to defend any attack
upon the trust or any provision thereof, and to employ counsel in that behalf, and to pay any
and all expenses of such defense out of the income or the corpus of the trust estate. In this
case, the appellant was required to defend a challenge to a provision in the will when the
appellees filed suit seeking the appointment of replacement co-trustees. Also, as a result of
our decision herein, the appellant has successfully defended the appellees' suit. Finally, the
appellant was not at all at fault in bringing the suit below. Therefore, this Court finds that
the circuit court abused its discretion in failing to award to the appellant's counsel reasonable
attorney fees to be paid from the trust corpus. Further, the appellant is to be reimbursed any
such fees heretofore advanced by him, said fees to be paid from the trust corpus.
As a final matter, we note that during oral argument the appellant's counsel
informed this Court that the appellant does not object to permitting the appellees and original
co-trustees, Marshall Bond, Jr. and Antoinette Bond Thomas, to rescind their resignations
so that they may resume their duties and responsibilities as co-trustees of the Bond trust along
with the appellant. In accord with the desires of the appellant, we clarify that nothing in this
opinion should be construed as prohibiting Marshall Bond, Jr. and Antoinette Bond Thomas
from rescinding their resignations and resuming their co-trustee duties.
Reversed and Remanded.