
67 S.E.2d 639 (1951)
234 N.C. 463
WOODARD et al.
v.
MORDECAI et al.
No. 456.
Supreme Court of North Carolina.
November 21, 1951.
*643 Bunn & Arendell and Harris & Poe, Raleigh, and Taylor & Allen, Goldsboro, for plaintiffs, appellants.
Fuller, Reade, Umstead & Fuller, Durham, for defendant, W. G. Mordecai, cotrustee, appellee.
Brassfield & Maupin, Raleigh, for defendant, Moses W. Woodard, Jr., appellee.
T. Lacy Williams, Raleigh, for defendants, Moses W. Woodard III, Mary White Woodard McDonald, and Nancy Elizabeth Woodard, appellees.
*644 ERVIN, Justice.
The plaintiffs make these assertions by their assignments of error:
1. That the judge did not observe the provisions of G.S. § 1-185, specifying that "Upon trial of an issue of fact by the court, its decision shall be given in writing, and shall contain a statement of the facts found, and the conclusions of law separately."
2. That the judge committed prejudicial error in admitting certain testimony tendered by the defendants.
These objections will be considered in their numerical order.
The contention of the plaintiffs that the judge did not comply with G.S. § 1-185 is epitomized in their brief in this fashion: "An examination of the judgment fails to disclose any separate finding of facts, or any finding of material facts."
This contention presents these problems: (1) What does G.S. § 1-185 require of the judge? (2) What are the material facts in this litigation? The first problem necessitates a construction of the statute; and the second involves a consideration of the rules under which courts require trustees to exercise powers granted by trust instruments.
Where a jury trial is waived by the parties to a civil action, the judge who tries the case is required by G.S. § 1-185 to do three things in writing: (1) To find the facts on all issues of fact joined on the pleadings; (2) to declare the conclusions of law arising upon the facts found; and (3) to enter judgment accordingly. Dailey v. Washington Nat. Insurance Co., 208 N.C. 817, 182 S.E. 332; Shore v. Norfolk Nat. Bank, 207 N.C. 798, 178 S.E. 572. In addition, he must state his findings of fact and conclusions of law separately. Foushee v. Pattershall, 67 N.C. 453. The judge complies with this last requirement if he separates the findings and the conclusions in such a manner as to render them distinguishable, no matter how the separation is effected. 64 C.J., Trial, § 1091.
There are two kinds of facts: Ultimate facts, and evidentiary facts. Ultimate facts are the final facts required to establish the plaintiff's cause of action or the defendant's defense; and evidentiary facts are those subsidiary facts required to prove the ultimate facts. Long v. Love, 230 N.C. 535, 53 S.E.2d 661; Brown v. Hall, 226 N.C. 732, 40 S.E.2d 412; Hawkins v. Moss, 222 N.C. 95, 21 S.E.2d 873. G.S. § 1-185 requires the trial judge to find and state the ultimate facts only. Eley v. Atlantic Coast Line R. R., 165 N.C. 78, 80 S.E. 1064; Bloss v. Rahilly, 16 Cal.2d 70, 104 P.2d 1049; McCarty v. Sauer, 64 Idaho 748, 136 P.2d 742; Blake v. Gunderson, 46 S.D. 642, 195 N.W. 653; Sandall v. Hoskins, 104 Utah 50, 137 P.2d 819; Gerue v. Medford Bridge Co., 205 Wis. 68, 236 N.W. 528; 64 C.J., Trial, § 1099.
The powers of a trustee are either mandatory or discretionary. A power is mandatory when it authorizes and commands the trustee to perform some positive act. Brummett v. Hewes, 311 Mass. 142, 40 N.E.2d 251; In re Carr's Estate, 176 Misc. 571, 28 N.Y.S.2d 12, 15. A power is discretionary when the trustee may either exercise it or refrain from exercising it, Welch v. Wachovin Bank & Trust Co., 226 N.C. 357, 38 S.E.2d 197, Bennett v. Norton, 171 Pa. 221, 32 A. 1112; or when the time, or manner, or extent of its exercise is left to his discretion. Doe ex dem. Gosson v. Ladd, 77 Ala. 223; City of San Antonio v. Zogheib, Tex.Civ.App., 70 S.W.2d 333.
The court will always compel the trustee to exercise a mandatory power. Albright v. Albright, 91 N.C. 220. It is otherwise, however, with respect to a discretionary power. The court will not undertake to control the trustee with respect to the exercise of a discretionary power, except to prevent an abuse by him of his discretion. The trustee abuses his discretion in exercising or failing to exercise a discretionary power if he acts dishonestly, or if he acts with an improper even though not a dishonest motive, or if he fails to use his judgment, or if he acts beyond the bounds of a reasonable judgment. The American Law Institute's Restatement of the Law of Trusts, section 187; Carter v. Young, 193 N.C. 678, 137 S.E. 875; 65 C.J., Trusts, § 539.
The will expressly authorizes the successor trustees to exercise all the powers conferred *645 by it upon the original trustees. The power to convey parts of the trust corpus to the widow and children of the testator free from the trust is clearly discretionary. The trustees are permitted to make such conveyances, but they are not required to do so. The plaintiffs recognize the discretionary nature of the power. They predicate their causes of action on the theory that the court must compel the individual trustee to join the corporate trustee in conveying parts of the trust corpus to them free from the trust to prevent an abuse by the individual trustee of the discretion reposed in him. Properly interpreted, their complaints allege that in refusing to exercise his discretionary power in their favor the individual trustee abuses his discretion in these respects: (1) That he acts with an improper motive, to wit, prejudice; and (2) that he fails to use his judgment, i. e., he bases his refusal upon an arbitrary decision or whim rather than upon a consideration of the relevant circumstances.
When his written decision is read aright, it appears that the trial judge found and stated these things: (1) That the individual trustee has not abused his discretion or acted arbitrarily in respect to the matters mentioned in the complaints, but, on the contrary, has "acted * * * with discretion, reasonableness, and good judgment"; (2) that the conclusion reached by the individual trustee, on his disagreement with the corporate trustee, i. e., that the trustees ought not to convey one-third of the trust corpus to each of the plaintiffs at this time, is "the correct one * * * and is consistent with the intentions of the trustor, Moses W. Woodard"; and (3) "That it is not necessary nor best for the welfare of the plaintiffs nor either of them, nor to their best interest, nor consistent with the welfare of the family and the estate of the trustor, Moses W. Woodard, that a one-third part of the corpus of the * * * trust estate be * * * distributed to each of" the plaintiffs.
We are confronted at this point by the question whether these statements of the judge are ultimate facts or legal conclusions. Ultimate facts are those found in that vaguely defined area lying between evidential facts on the one side and conclusions of law on the other. Christmas v. Cowden, 44 N.M. 517, 105 P.2d 484; Scott v. Cismadi, 80 Ohio App. 39, 74 N.E.2d 563. In consequence, the line of demarcation between ultimate facts and legal conclusions is not easily drawn. 54 C.J., Trial, § 1151. An ultimate fact is the final resulting effect which is reached by processes of logical reasoning from the evidentiary facts. Rhode v. Bartholomew, 94 Cal.App.2d 272, 210 P.2d 768; Citizens Securities & Investment Co. v. Dennis, 236 Ill.App. 307; Mining Securities Co. v. Wall, 99 Mont. 596, 45 P.2d 302; Christmas v. Cowden, supra; Oregon Home Builders v. Montgomery Inv. Co., 94 Or. 349, 184 P. 487. Whether a statement is an ultimate fact or a conclusion of law depends upon whether it is reached by natural reasoning or by an application of fixed rules of law. Maltz v. Jackoway-Katz Cap. Co., 336 Mo. 1000, 82 S.E.2d 909; Tesch v. Industrial Commission, 200 Wis. 616, 229 N.W. 194.
When the statements of the judge are measured by this test, it is manifest that they constitute findings of ultimate facts, i. e., the final facts on which the rights of the parties are to be legally determined. They settle all the material issues of fact raised by the pleadings. In addition, they warrant the readily distinguishable conclusion of law "that the plaintiffs do not have the right to require a division of the corpus of the trust estate * * * as requested and demanded by them," and the judgment denying the plaintiffs the relief sought by them. These things being true, the judge complied with all the requirements of G. S. § 1-185.
This brings us to the assignments of error based on the admission of testimony presented by the defendants.
On May 25, 1950, Elizabeth G. Woodard wrote a letter to the trustees, charging, in substance, that her life had been marred and her health injured by "court battling." The plaintiffs introduced this letter in evidence at the trial to support allegations of the widow's complaint that she had been deprived of "strength, pleasure, happiness, and enjoyment * * * by *646 being involved in trials and law suits" with persons serving as trustees of the estate of her husband, and that a conveyance of onethird of the trust corpus to her was necessary to free her from "court struggles" and to restore her peace of mind. This being so, the court rightly received in evidence the judicial record showing that in 1931 the plaintiff, Elizabeth G. Woodard, unsuccessfully applied to the superior court of Wake County in a former action for a decree compelling the Raleigh Savings Bank & Trust Company, the then trustee, to transfer a portion of the trust corpus to her. The record tended to rebut the implications of the widow's charge that she had been harassed by much vexatious litigation instituted by the trustees. The exception to the admission of the judicial record would be unavailing to plaintiffs, however, even if its contents were incompetent; for virtually the same evidence was elicited by defendants without objection from plaintiffs on the cross examination of Bessie W. Campbell, who testified at the trial. Davis v. Davis, 228 N.C. 48, 44 S.E.2d 478; Merchant v. Lassiter, 224 N.C. 343, 30 S.E.2d 217.
When he decided not to exercise the discretionary power in favor of the plaintiffs, the individual trustee addressed a letter to Thomas G. Chapman, the trust officer of the corporate trustee, setting forth in detail the motives and reasons for his decision. He did not mail or deliver the letter to Chapman but retained it and identified it at the trial. The judge received the letter in evidence over the exception of the plaintiffs. He did not err in so doing. The allegations of the complaint that the individual trustee acted arbitrarily and with an improper motive when he rejected the demand of the plaintiffs put the state of mind of the individual trustee at that time directly in issue. As a consequence, the letter was competent under the rule that "Where the existence of a particular mental state in a particular individual is a relevant fact, his declarations which indicate the existence or nonexistence of such state are admitted as circumstantial evidence, even though the declarant himself may be available as a witness." 31 C.J.S., Evidence, § 255. See, also, in this connection: In re Carson's Estate, 184 Cal. 437, 194 P. 5, 17 A.L.R. 239; Wigmore on Evidence (2d Ed.), section 1729; Stansbury: North Carolina Evidence, section 255. The letter was also admissible to corroborate the sworn testimony of the individual trustee at the trial to the same effect. State v. Noland, 204 N.C. 329, 168 S.E. 412; Sanford Real Estate, Loan & Insurance Co. v. Gavin, 187 N.C. 14, 120 S.E. 820.
Chapman, the trust officer of the corporate trustee, was not a witness at the trial. The individual trustee testified that he and Chapman interviewed both of the plaintiffs relative to their demand for parts of the trust corpus; that he thereafter suggested to Chapman that they ought to consult Moses W. Woodard, Jr., the other beneficiary, and ascertain his opinion on the subject; and that Chapman thereupon stated that "he couldn't do it" because "it might complicate matters." The plaintiffs took an exception to the receipt of the extrajudicial statement of Chapman, which appears to be incompetent hearsay. Nevertheless, its receipt was not prejudicial to plaintiffs on the present record. The litigation involved the conduct of the individual trustee, and not that of the corporate trustee or its trust officer. Consequently, the statement of Chapman was immaterial and did not affect the decision of the able and experienced judge who tried the issues of fact. Young v. Stewart, 191 N.C. 297, 131 S.E. 735; In re Rawlings' Will, 170 N.C. 58, 86 S.E. 794.
It is noted, in closing, that the judgment is not to be construed to preclude the trustees from exercising the discretionary power in the future if they jointly conclude that its exercise is "necessary or best for the welfare of the cestui que trust, and consistent with the welfare of * * * (the) family and estate" of the testator.
For the reasons given, the judgment is affirmed.
