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District Court of Appeal, Fourth District, California.

DUNBAR et al. v. ANDERSON et al., and three other cases.*

Civ. 1613.

Decided: February 07, 1936

George L. Hampton, of Los Angeles, for appellant Riley and others. Joseph L. Lewinson, Morris E. Cohn, and Erwin P. Werner, all of Los Angeles, and J. W. Falkner, of El Monte, for appellant Redfield and others. Walter F. Haas, H. C. Johnston, Stanley F. Maurseth, G. E. Kerrin, and Haight, Trippett & Syvertson, all of Los Angeles, for respondents.

This is an action for declaratory relief brought by the trustees of a common-law trust for the purpose of establishing the meaning and intent of the declaration of trust upon which the association was founded.

The Bell View Oil Syndicate, which will hereinafter be referred to as the syndicate, was organized on January 20, 1922, for the purpose of drilling for oil on a town lot in Santa Fé Springs consisting of about onethird of an acre. The declaration of trust which was signed on that day by the five organizers appointed the signers thereof as trustees with the power to fill any vacancies. One of these trustees resigned shortly thereafter and the plaintiff Morris took his place. Two of the trustees died in 1925 and, without filling the vacancies, the three plaintiffs have continued to administer the affairs of the trust.

The declaration of trust, after providing that the trust estate should consist of 5,000 units of the par value of $100 each, provided that 1,000 of these units should be given to H. W. McFarlane, one of the original trustees, in consideration of the transfer to the trust estate of a lease on this town lot. It was then provided that the trustees were to sell such additional units as might be necessary to provide funds for carrying out the objects of the trust, subject to the approval of the commissioner of corporations. The lease was transferred to the trust by McFarlane and 1,000 units were issued to him. In order to secure funds with which to drill for oil, the trustees sold units of beneficial interest in this trust, and at the time of the trial of this action there were outstanding such units of the par value of $300,000, of which the three plaintiffs owned nearly one-fifth. The venture was highly successful and, at the time of the trial, more than $5,000,000 had been received for oil produced from this lot and the dividends paid to the unit holders averaged 64 per cent. a year on the par value of the units.

A number of suits were brought against the trustees by various unit holders, and finally this action was brought by the trustees for the purpose of having an adjudication as to the meaning and intent of the declaration of trust and as to their rights under this instrument. The complaint sets out all of the claims that had theretofore been raised by any unit holders with regard to the manner in which the trust had been administered, with a statement of the trustees' contentions with respect thereto. Cross-complaints were filed by certain of the unit holders alleging that the trustees had taken secret profits, that they had wasted funds of the trust in wildcat operations, that they had taken compensation as trustees to which they were not entitled, that in various other respects they had been guilty of mismanagement of the trust, and praying for their removal as such trustees. The trial court found in all respects in favor of the plaintiff trustees and this appeal followed.

The first point raised is that the units issued to McFarlane in exchange for the lease were divided among the five original trustees and constituted a secret profit which, under the law, must be returned to the trust estate, together with all income therefrom. It is argued that the original trustees planned the organization of this syndicate before they secured the lease in question, that they became trustees from that moment, and that anything done by them thereafter must accrue to the benefit of all subsequent unit holders since there was no disclosure of the facts.

The appellants rely upon Burbank v. Dennis, 101 Cal. 90, 35 P. 444, and Victor Oil Co. v. Drum, 184 Cal. 226, 193 P. 243. In the first of these cases, the promoters of a corporation falsely represented to the proposed stockholders that they were conveying lands to the corporation at cost, when in fact they turned in the land at an increased price and took the resulting profit out of the cash paid by purchasers of stock. In the second case, one of the promoters concealed the facts that he was making a profit from a similar transaction and that he was one of the organizers of the corporation. It was there held that after starting such an enterprise one of the organizers thereof could not purchase property and sell it to the company at an advance in price in the absence of a full disclosure of the facts. It was further held that this duty if disclosure was owed to those persons who were induced to come into the enterprise and that, in that case, a subscription agreement which was signed by subsequent purchasers of stock failed to make such a disclosure.

The appellants rely upon the following facts as bringing this case within the rules laid down in the cases just referred to: On January 10, 1922, the five persons who later became the original trustees in this syndicate signed a written agreement setting forth that they were desirous of forming a syndicate for the purpose of acquiring an oil lease from H. W. McFarlane, one of the five, covering this lot in Santa Fé Springs; that it was essential to this plan to secure a lease of the property; that they authorized McFarlane to take the lease in his own name for the purpose of transferring it to a syndicate to be organized; that such a syndicate should be capitalized on a unit basis with 5000 units of $100 par value each; that the parties to this agreement should constitute the trustees; that each party thereto would subscribe for 10 units at $100 each when the syndicate was organized; that 1,000 of these units should be taken as promotion stock for and in consideration of the lease; that a portion of the 1,000 shares should be given as a bonus to the first purchasers of units in the syndicate; and that 20 units out of the 1,000 should be given to certain persons named for services already rendered. On January 12, 1922, McFarlane secured a written lease, providing that the lessor should receive onethird of all oil produced and should receive, within fifteen days, $4,000 in cash to be treated as an advance on his first royalty. This $4,000 was later paid out of the proceeds of the sale of units, each trustee paying in $1,000 for ten units in accordance with their agreement. It should also be observed that, in accordance with the agreement, 245 of the units exchanged for the lease were given as bonuses to the first purchasers of units and the remaining 755 of these units were divided among the five trustees.

The controlling question is whether there was such a disclosure of the essential facts to subsequent purchasers of units as is required by the rule laid down in the cases above referred to. Certain other facts have a bearing on this question. The respondent Horton spent three months looking over the Santa Fé Springs field in search of a lease which he might develop. He found the property in question, and before associating himself with any one else he agreed with the owner of the land on the terms of the lease. He then selected the persons who became the other trustees to assist him in raising funds with which to develop the property. The agreement of January 10, 1922, the securing of a written lease, and the organization of the syndicate followed. For convenience the lease was taken in the name of McFarlane and transferred by him to the syndicate. The agreement of January 10, 1922, was kept at all times in the office of the syndicate in a file marked “Trust Papers,” was always available, was handed with the other papers to an auditor examining the records of the syndicate on behalf of certain unit holders, and was produced at the trial.

A permit to issue and sell units was obtained from the commissioner of corporations, copies of the declaration of trust and the lease being attached to the application therefor. The application set forth that McFarlane, as owner of the lease, was to transfer it to the syndicate, in exchange for 1,000 units, subject to the approval of the commissioner, and that each of the applicants had subscribed for 10 units and had paid $1,000 into the treasury, out of which it was proposed to pay the $4,000 called for by the lease. Permission was asked for the issuance of 1,000 units to McFarlane in exchange for the lease and for the sale of other units to be sold so as to net 80 per cent. of the selling price. The commissioner was also asked to approve the plan of using a portion of the units to be issued to McFarlane for the purpose of giving a 50 per cent. bonus in units on the first 300 units actually sold and a 25 per cent. bonus on the next 300 units sold. A permit was issued, reciting the general facts outlined in the application, and granting permission to sell units as requested and to issue 1,000 units to McFarlane in exchange for the lease, describing the same and giving the book and page where it was recorded. The permit further provided that these units should be placed in escrow and not released until the further order of the commissioner, and that a copy of the permit be delivered to each prospective purchaser of units. The McFarlane units were placed in escrow and were later released and divided among the five trustees, after a showing as to the amount already paid to other investors. The certificates of beneficial interest issued to purchasers contained a reference to the declaration of trust, with a statement that it was recorded in the office of the county recorder of Los Angeles county, and each purchaser signed a written acknowledgment that he had received and read a copy of the permit. Other permits were later issued with relation to which similar facts appear.

Assuming that these persons were acting as trustees from the date of their original agreement, January 10, 1922, we think the evidence sustains the court's finding that there was a sufficient disclosure of the material facts to subsequent unit holders, and that it cannot be said that secret profits were taken which must be returned to the trust estate. Garretson v. Pacific Crude Oil Co., 146 Cal. 184, 79 P. 838. The original trustees acquired the lease before this syndicate was organized and before any other unit holder acquired any interest therein. While they agreed upon the general plan to be followed before acquiring a written lease, they had sought out and discovered the property and come to an understanding with the owner thereof before entering into the agreement of January 10, 1922. The lease was on record, its exact terms were set forth in the declaration of trust, and both were furnished to the corporation commissioner. The permit fully referred to both instruments and clearly set forth what McFarlane, one of the trustees, was to receive. So far as subsequent unit holders were concerned, the material fact was that such a consideration was to be paid. This being well understood and agreed to, a subsequent unit holder was in no way injured by the fact that the consideration he was willing to pay in order to acquire an interest in the lease was to be divided with the other organizers of the syndicate. Victor Oil Co. v. Drum, supra.

The second point raised is that the trustees should be compelled to return certain commissions they paid themselves on the sale of units. Each of the original trustees sold units on which they retained the 20 per cent. commission allowed under the terms of the permit. The court found that these trustees were licensed brokers, that these sales of units were made by them in their individual capacity and not as trustees, that the commissions were legally paid, and that the trustees were not required by the declaration of trust to make such sales as trustees thereof and without compensation.

The trust agreement made it the duty of the trustees to issue and sell such units as might be necessary to provide funds to carry out the objects of the trust. Each of the trustees collected a salary of $150 a month covering the time he was selling these units. Each was acting as a trustee not only for the syndicate as it then was, but also for subsequent unit holders. As such trustees they were without authority to act for the syndicate in a contract with themselves. Since all were involved in the transaction, there remained no authorized persons to make such an agreement with them. We think these commissions were illegally taken and should be returned to the trust estate. Pasadena Mercantile Finance Corporation v. De Besa, 122 Cal.App. 575, 10 P. (2d) 492. Only two of the original trustees are involved in this action, and the record shows that respondent Horton received $3,280 as such commissions and the respondent Dunbar received $8,985. The respondents point out that the trustees gave a portion of the commissions which they received to parties to whom they sold units. We cannot see that this affects the situation since these buyers of units were not authorized to receive such commissions and since the trustees had no right to give away something to which they were not entitled.

It is contended that the trustees secured an amendment to the trust agreement by false representations and that the amendment is invalid. The trust agreement provided that it might be amended with the consent of two-thirds of the unit holders. In 1925, it was so amended as to permit the trustees to build up a reserve fund and to invest in new ventures aside from the original lease. It is argued that a letter which the trustees sent out asking consent to this amendment gave certain reasons therefor, whereas their testimony discloses other reasons. It is also argued that this letter was fraudulent because it contained a dividend check for 10 per cent, which was calculated to put the unit holders in a mellow frame of mind, and because it falsely stated that the trust estate had lost valuable opportunities, and held out the hope that other lucrative properties in the Santa Fé Springs field might be obtained if the trustees were permitted to build up a reserve which might be used for that purpose. More than twothirds of the unit holders consented in writing to this amendment and the trial court found against the appellants on all allegations of fraud with respect to this transaction. The evidence fully sustains these findings and we find nothing therein which would have sustained a finding to the contrary.

It is next contended that the trustees exceeded their powers by investing portions of the trust funds in leases and properties other than in the Santa Fé Springs field. It is claimed that the trustees spent approximately $400,000 in an effort to develop oil on some fifteen leases or projects outside of that field, without success except for one in the Signal Hill field which was only moderately successful. This entire project was started for the purpose of discovering and developing oil wells and, after a considerable measure of success had been obtained, the unit holders amended the trust agreement for the specific purpose of authorizing and enabling the trustees to extend their operations and attempt to develop and produce oil on other properties. The fact that most of the later ventures were not successful in no way indicates that the trustees exceeded the authority thus given in attempting to carry out the wishes of the unit holders. The appellants argue that the trustees were only authorized “to develop * * * oil properties,” that most of the new projects failed to produce oil, and that therefore they were not developing oil properties and were acting in excess of their power. The trustees made a full and complete report of all of these transactions to the successive annual meetings of unit holders, the trust agreement was amended to permit them to do just such things, and the entire circumstances, as shown by the evidence, do not support the narrow construction now sought to be placed upon the power granted.

Some contention is made that the trustees improperly accumulated a large reserve and that the original provision that 90 per cent. of the income should be paid out in dividends must be taken as showing the real intention of the parties. We are unable to follow this line of reasoning in view of the amendment adopted and the subsequent conduct of all of the parties.

Another clause of the trust agreement, after providing that the trustees should have power to drill for, develop, and remove petroleum and kindred substances from the real property described therein or from any other property which might be acquired by the trustees, contained the following: “said trustees are hereby vested with the sole power and discretion to discern what will constitute principal and what will constitute gross income therefrom and net income available for payment or distribution under the terms of this trust, provided, however, that not to exceed ten (10) per cent. of all moneys received by the trustees shall be used to defray office expenses, officers' salaries and all overhead expenses.” The appellants maintain that the limit thus provided means 10 per cent. of the net income and not of the gross income. It is also contended that the trustees in their annual accounts failed to list items as overhead which properly come within that designation. While we think the clause referred to was intended to fix the limitation at 10 per cent. of the gross income neither of these points require further consideration under the view we take of the next point raised.

One of the main contentions is that the respondents took large amounts as compensation for themselves, which were unreasonable and not justified by the terms of the trust agreement or by the work done, and after they had already fixed their compensation in lesser amounts.

The trust agreement provides that the trustees shall elect a president, vice president and secretary, and that they shall have authority to appoint such other officers and agents as they deem necessary. It then provides as follows: “The trustees shall fix the compensation of any and all officers and agents whom they may appoint or employ, and are likewise authorized to pay to themselves such compensation for their own service as they may deem reasonable, but in no event shall said total compensation exceed the ten (10) per cent limitation herein set forth in this contract.” The limitation here referred to is the one above quoted, and concerning which the respondents alleged in their complaint: “that said declaration of trust in truth and in fact provides that said trustees are entitled to retain the balance of said 10 per cent after paying office expenses, officers' salaries and all overhead expenses as herein defined as compensation for their services as such trustees.”

On April 7, 1922, the board adopted a resolution reciting that whereas the duties of respondent Horton, as secretary, had so increased that it would be unfair for him to continue his services without compensation, and whereas the board had power to fix the salary of its officers, it was ordered that the said Horton be employed as secretary for a period of five years at a salary of $350 per month, payable monthly, and that he should devote his entire time and attention to the business of the syndicate. Horton devoted his entire time to the syndicate thereafter and was paid that amount monthly until August, 1929. On April 22, 1924, the trustees voted themselves $150 per month from January 20, 1922, to April 20, 1924, “in consideration of the time given by each of the trustees to the affairs of the syndicate, and of the value of the services rendered.” This amount was paid to each of the five trustees in addition to the other amounts paid to Horton. Beginning on August 8, 1929, Horton was raised to $500 a month and respondent Dunbar was paid $350 per month. Beginning with January, 1932, respondent Morris was given a salary of $100 a month, the resolution reciting “that it is necessary for trustee Morris to attend more regularly, to called meetings than usual, and whereas, it is the decision of the board of trustees that trustee Morris is entitled to an additional remuneration for his extra attendance.” In addition to any salaries thus fixed, beginning with December, 1924, and at intervals thereafter, the trustees took out large amounts as claimed compensation, each taking the same amount. Two trustees died in 1925 and the vacancies were not filled but the respondents continued to divide among themselves approximately the entire balance of 10 per cent. of the moneys received after deducting other office expenses and overhead. Up to the end of 1933, they had drawn as compensation, including monthly salaries, a total of $433,963, of which Horton received $174,163, Dunbar $138,500, and Morris $121,250. During the same period they had declared dividends of $1,882,000, of which they had themselves received approximately onefifth. During certain years the compensation drawn by these respondents greatly exceeded the dividends paid to other unit holders. For instance, during 1929 the three respondents received as compensation alone $91,750, during 1930, $95,700, and during 1931, $56,700, while during each of these years only $50,000 was paid to all other unit holders. It further appears that the respondents, during the entire period, intended to take as compensation all that remained of 10 per cent. of the gross income, after paying other office expenses and other overhead, although they left a small amount to cover any possible error in computation. All amounts taken as compensation by the trustees were reported in their annual accounts merely as “overhead” expenses, without being set forth as compensation to them.

With respect to the matter of compensation the trial court found as follows:

“That it is true that said plaintiff trustees at all times during the life of said trust, have drawn as compensation sums constituting less than the balance remaining of the 10 per cent of all moneys received by said syndicate during the life of said trust, set apart thereunder for the payment of all overhead expenses, including compensation of trustees for their services as such trustees, * * * and it is true that said plaintiff trustees have the right to set aside and accumulate the balance remaining of said 10 per cent, or any balance of said 10 per cent remaining in the future, after deducting therefrom office expenses, officers' salaries, all overhead expenses and trustees' compensation for the payment of trustees' compensation in the future and during the life of said trust, and while such trustees continue to render services to said trust, and that during the life of said trust the unit holders thereof have no right to the distribution thereof, and that the plaintiff trustees have the right to draw thereon for their compensation as and when said plaintiff trustees in their discretion deem that they have earned or are earning more compensation than the then present receipts of said syndicate would enable them to pay under the 10 per cent clause. * * * That it is not true that the plaintiff trustees have taken and/or appropriated any sum or sums of money to their own use, or to the use of any of them, save and except such sums as authorized by them under said declaration of trust to be taken for their compensation, which compensation was, in the exercise of a sound discretion of said trustees, a reasonable and proper charge for the services rendered by them and each of them to said trust, and it is not true that any sum or sums of money taken as compensation by the plaintiff trustees, or any of them, was in excess of the amount permitted and/or authorized by the declaration of trust and amendments thereto, and it is not true that any sums so taken were and/or are in excess of the reasonable value of the services rendered by such plaintiff trustees, and each of them, to said Bell View Oil Syndicate, the trust estate, and the unit holders thereof. * * *

“That it is not true that said trustees have fixed the amount of their compensation as such trustees by having fixed the salary of the president, Hooper C. Dunbar, one of the trustees, at $350.00 per month, and the salary of the secretary-treasurer, C. C. Horton, one of the trustees, at first at $350.00 per month and thereafter at $500.00 per month, and the salary of the third trustee, G. B. Morris, as vice-president, at $100.00 per month, but it is true that said salaries of the president, Hooper C. Dunbar, at $350.00 per month, and the salary of the secretarytreasurer, C. C. Horton, at first at $350.00 per month and thereafter at $500.00 per month, and the salary of the third trustee, G. B. Morris, as vice-president, at $100.00 per month, were fixed in such amounts among the trustees alone for extraordinary services rendered said trust as such officers as aforesaid, and in equalizing their total compensation and the drawing thereof as between themselves, and it is true that the fixing of said amounts did not fix and were not intended to fix the amount to be drawn by said trustees in full of their compensation as such trustees.

“That it is true that said trustees, under the terms and provisions of said declaration of trust and the amendments thereto, were and are entitled to pay and at all times during the life of said trust did pay to themselves as trustees, and may continue to pay to themselves as trustees, such compensation as they and they alone, having due regard to the services by them rendered as such trustees, should deem reasonable for the services so rendered and to be rendered to said trust estate, said Bell View Oil Syndicate and the unit holders thereof, provided said total withdrawal of trustees' compensation and office expense, officers' salaries and all overhead expenses, as hereinafter defined, did not, do not, and will not in the future exceed in the aggregate 10 per cent of all moneys of Bell View Oil Syndicate and said trust estate received by such trustees.”

It is apparent from the findings that the court adopted the theory set forth in respondents' complaint, that they were entitled to take as compensation all that remained of 10 per cent. of the gross income after paying other overhead expenses. It appears from the respondents' testimony that it was no mere coincidence that their idea of the value of their services corresponded exactly with the available balance of this fund. Horton testified: “We employed the interpretation that we were entitled to draw or entitled to use for overhead expenses, including our compensation, 10 per cent of all moneys received; no exceptions.” Dunbar testified that the salaries were taken as a preferential “before there would be any trustee compensation,” that they considered these salaries a preferential salary “on detail work, as distinguished from executive or trustee activity.” He further testified: “The trustees made a withdrawal upon the basis of considering 10 per cent of what had been received, less all overhead expenses * * * there was available a certain amount for compensation.” “In exercising our discretion we took into consideration, primarily, that it was available; and secondarily, that we had absolutely earned it, or we would not have considered taking it; that it was coming to us for the services we had rendered * * * the clause in the indenture providing if we had any income we could take up to ten per cent of it and set it aside and pay all overhead expenses out of it, and then draw from the remainder what we deemed reasonable for our services.” “I figured that this was a deal of all that I could produce. If I could increase the income of the trust, I could increase my own income in direct proportion–the more income I could make for the trust, the more income would be available to me as long as it was reasonable, as I considered it reasonable.” “We never made any withdrawal or consent to any withdrawal of salary by any of the other trustees without the understanding or belief that we were entitled to the balance of the 10 per cent regardless of the services that had been rendered in the past.” In response to a question from the court as to whether he would consider himself entitled to share in withdrawals by the other trustees in the event he had been in Europe for a year and had performed no services at all for the trust, Dunbar replied that he would feel that such withdrawals belonged to the board of trustees provided they deemed it reasonable and whether the other trustees retained it all or gave him a portion of it was a matter of arrangement between themselves. In response to a question from the court as to the basis on which the trustees fixed their compensation Morris testified: “By first determining the amount that was available, setting aside 10 per cent of all of the overhead items and we adjusted the balance between ourselves with a certain amount to Mr. Dunbar and later another amount to myself. Then the balance was treated as compensation.” He further testified that when this balance was ascertained they deemed it reasonable, and that “I felt it was more or less like a commission basis that the part of the 10 per cent that we were entitled to that we had earned that under the contract, under the trust.” When asked whether, if he had been in Europe for a year and had rendered no service at all and on his return found there was $30,000 in this fund, he would have felt entitled to onethird of it, he replied: “I would consider that the other two trustees were entitled to the full amount and if they wanted to make an adjustment with me they could do so.”

It seems apparent that the case was tried upon the theory that these three trustees were entitled to take as compensation whatever remained of the 10 per cent. after paying other overhead expenses, and that this theory was adopted by the trial court. While the court made an incidental finding that the amounts taken as compensation did not exceed the reasonable value of the services rendered, we find no evidence to support that finding. While there was some evidence as to the amount of service rendered by the trustees and that they deemed the amount taken as reasonable in view of their services, no attempt was made to show the exact amount of time put in by the trustees and no evidence at all to show the reasonable value of the services actually rendered.

In our opinion, the interpretation given to the trust agreement by the respondents and the trial court cannot be sustained. The trustees had no contractual right to all that remained of the 10 per cent. after paying other overhead expenses. While they were given the right to fix their compensation, subject to the limitation that all overhead expense should not exceed 10 per cent., the entire matter was subject to the general rules of equity and the compensation fixed must have been reasonable and governed in amount by the value of the services rendered.

The trust agreement provided that the trustees should elect certain officers from among their number, that they might appoint other officers, and that they might fix the compensation of the appointed officers and likewise fix their own compensation. No power was given to fix a compensation for themselves as elected officers apart from their general services as trustees. We find no justification in the terms of the trust agreement for the taking of a double salary or compensation, one for detail work as an elected officer and the other for general executive services as a trustee. The trustees fixed their salaries as between themselves in proportion to the time each was giving to the work of the trust. In so doing they were carrying out the power given them to fix their own compensation. When a salary is paid for full-time service, such service certainly cannot be said to have been considered as having a reasonable value in excess of the amount fixed. Whether such a salary called for full time or only part time service it governed during the time it prevailed, subject only to being reduced by a court if it was unreasonable. Having thus fixed their compensation, these trustees were without power to withdraw additional amounts, under a theory of contractual right, during the time such salaries were fixed and paid, as to each trustee. Assuming that two of the trustees are entitled to some compensation during the time when they received no salary, the amount and value of the services rendered by them during such periods should be gone into before such compensation is fixed by a court of equity. In our opinion, this case should be retried and the respondents required to return to the trust estate the amounts found to have been wrongfully taken as compensation after a trial in which that matter is adequately presented and considered, and after fixing a reasonable compensation for any trustee covering any period during which the value of his services has not been fixed.

The last point raised is that the respondent trustees were guilty of such fraud in settling a prior action brought against them as necessitates their removal. An action was brought against the respondents by one Penn, raising most of the claims which are involved in the present action. That action was tried, and the judge entered a minute order finding in favor of the trustees on all points except with respect to the matter of the compensation taken by them. On that point he found against them and ordered that judgment be entered against them in the sum of $247,500. Before findings were made and formal judgment entered the attorneys for all parties to that action entered into a compromise agreement under which that action was dismissed. These three trustees agreed to pay $25,000 to Penn's attorneys for attorney fees and costs, some $6,000 of which was paid by the trustees personally, the rest to be paid after a successful termination of this action. It was further agreed that the trustees would bring an action for declaratory relief, raising the question of compensation and all other claims that had been made against them by any of the unit holders, and for the purpose of obtaining an adjudication as to the meaning of the trust agreement on all disputed points. This action followed immediately. The former judgment had not become final and, in any event, applied only to the parties thereto and left unsettled the claims of many other unit holders. There is much to be said in favor of having the entire controversy between the various parties settled in one action in an orderly manner. This plan having been agreed upon, and at once carried into execution, it does not conclusively appear that the trustees were actuated by fraudulent motives. After a full hearing on this point, the trial court found in favor of the respondents and we see no reason for setting aside that finding.

The judgment is reversed, and the cause remanded for a new trial and for further action not inconsistent with the views herein expressed.

BARNARD, Presiding Justice.

We concur: MARKS, J.; JENNINGS, J.

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