Hauck v. Second Nat. Bank of Richmond

• Decision Date: 11 September 1972
• Docket Number: No. 771A131,771A131
• Citation: 153 Ind.App. 245,286 N.E.2d 852
• Parties: Helen Elizabeth HAUCK et al., Appellants (Plaintiffs below), v. The SECOND NATIONAL BANK OF RICHMOND, Indiana, et al., Appellees (Defendants below).
• Court: Indiana Appellate Court

Page 852

286 N.E.2d 852

153 Ind.App. 245

Helen Elizabeth HAUCK et al., Appellants (Plaintiffs below), v. The SECOND NATIONAL BANK OF RICHMOND, Indiana, et al Appellees (Defendants below).

No. 771A131.

Court of Appeals of Indiana, Second District.

Sept. 11, 1972.

Rehearing Denied Oct. 17, 1972.

Roy F. Schaeperklaus, Pearce & Schaeperklaus, W. Ray Skirvin, Skirvin & Skirvin, Cincinnati, Ohio, Russell H. Schussler, Harlan, Schussler & Keller, Richmond, for appellants

George R. Reller, Reller, Mendenhall, Kleinknecht & Milligan, Richmond, H. Winston Hathaway and William T. Kerr, Landman, Hathaway, Latimer, Clink & Robb, Muskegon, Mich., for appellees.

BUCHANAN, Presiding Judge.

STATEMENT OF THE CASE AND FACTS--Plaintiffs-Appellants, as beneficiaries under Elizabeth Anderson's Will (Elizabeth's Beneficiaries), appeal from an adverse declaratory judgment construing Item VI and Item VII of Fred S. Anderson's Will and a certain Trust Agreement between Elizabeth Anderson (Elizabeth) and the Second National Bank of Richmond Two causes for a declaratory judgment, one for construction of Items VI and VII of the Will and Codicil of Fred S. Anderson (Cause 3941), and the other for construction of a Trust Agreement dated October 23, 1963 between Elizabeth Anderson and Second National Bank of Richmond (Cause 3942), were filed in the Wayne Circuit Court and consolidated for trial and are so treated on appeal. An Agreed Statement of Facts and extensive Findings of Fact and Conclusions of Law, which are part of these proceedings, are summarized.

as Trustee (Second Bank) in favor of Defendants-Appellees as beneficiaries under the Last Will and Testament and Codicil of Fred S. Anderson (Fred's Beneficiaries).

Fred S. Anderson (Fred) died December 17, 1932, testate, and was survived by his wife, Elizabeth Anderson (Elizabeth), who was appointed Executrix of his estae. He left no descendants.

By the terms of Item VI of Fred's Will, Elizabeth became a life tenant of his residual estate, with any undisposed of property then to redound to the benefit of Fred's sisters, nephew, and nieces (Fred's Beneficiaries).

Pertinent parts of Item VI of Fred's Will carrying out this testamentary scheme are:

'ITEM VI. All the rest, residue, and remainder of my property, both real and personal, and wheresoever situate, I give, devise, and bequeath to my wife, Elizabeth Anderson, for her life, with power in her to use and dispose of the same as her needs may require, and as to such property undisposed of at her death, after the payment of my wife's last sickness and burial, I give, devise, and bequeath, as follows:

(c) All property remaining I give, devise, and bequeath in equal shares, absolutely and in fee simple, to my sister, Mrs. Mabel VanEpps, my nephew, John VanEpps, my niece, Virginia VanEpps, all of Cleveland Heights, Ohio, my sister, Mrs. Georgia Davies, and my nieces, Jean Davies and Winifred Davies, all of Miami, Florida. * * *' (Emphasis supplied.)

Item VII appointed Elizabeth as Executrix to serve without bond and provided that she need not report to any court as to her actions in such capacity and that on her death the Second Bank act as executor. Further, it provided that on her death the Second Bank as executor should sell and convert into money for distribution any property which was not in the form of bonds or securities. ¹

On January 18, 1934, Elizabeth filed her Final Report as Executrix and attached thereto her individual Receipt for securities with an inventory value of $73,879.10 and cash in the amount of $48.77, and a deed to certain real estate in the city of Richmond. The Receipt executed by her was received in evidence. ² Fred's estate was thereafter Elizabeth proceeded to invest and reinvest the property so received until October 23, 1963, when, at the age of 79 and being in ill health, she executed on that date a Trust Agreement (Trust Agreement) with the Second Bank as Trustee. Also on that date the Second Bank accepted the Trust and acknowledged receipt of certain property described in a schedule attached to the Trust Agreement marked Exhibit A (Exhibit A Assets).

closed in 1934 and no proceedings were had with respect thereto until May 3, 1965, when it was reopened with the Second Bank as Administrator d.b.n.

Exhibit A attached to the Trust Agreement was titled 'Schedule of Property Transferred.' It listed in four columns a detailed description of the items included. They (Exhibit A Assets) consisted of various government and corporate and personal obligations, securities, and insurance contracts. Each item was described by serial number, date of acquisition, and the par value, cost or number of shares. Among other stocks listed therein was a certificate for 50 shares of the common stock of General Electric Company dated April 18, 1933, and a certificate for 61 shares of the common stock of Goodyear Tire & Rubber Company dated April 26, 1933. These two certificates are collectively herein referred to as 'the 1933 Certificates.' All other Exhibit A Assets were dated subsequent to January 18, 1934, at which time Elizabeth acknowledged receiving the original assets from Fred's estate.

Of the 137 items constituting Exhibit A Assets, only these two certificates, i.e., the 1933 Certificates, were dated prior to January 18, 1934, and they involved only a small fraction of the total number of shares listed in the Exhibit A Assets. However, there was also listed additional share certificates of these two stocks for 100 shares of General Electric stock and additional share certificates for 1439 shares of Goodyear Tire & Rubber Company stock. Including the 1933 Certificates, this made a total of 150 shares of General Electric Company stock and 1500 shares of Goodyear Tire & Rubber Company stock, which had a combined market value of $90,000.00 and were collectively referred to by the trial court as the 'Non-Life Assets.' We shall refer to them in the same manner.

The Second Bank in its brief concedes that evidence was admitted from these two corporations indicating that no purchases were made of these two stocks (General Electric Company and Goodyear Tire & Rubber Company) after January 18, 1934, and it can be assumed 'the balance of these two holdings came from stock splits and stock dividends on these original certificates.' Thus there is a total of 28 stock certificates of 137 listed in the Exhibit A Assets which comprise the Non-Life Assets, 26 of which were dated like all Exhibit A Assets subsequent to January 18, 1934, leaving only the two 1933 Certificates dated prior thereto.

Evidence was admitted showing that neither Mr. Verlis A. Monroe, a Trust Officer of Second Bank who accepted the Trust on its behalf, nor Mr. Will Reller acting as attorney for Elizabeth in preparation of The stated purpose of Elizabeth in creating the Trust was to carry out the dispositive plan of Fred's Will so that Fred's Beneficiaries as remaindermen would receive what they were entitled to pursuant to Item VI of Fred's Will. Having had sole direction and control of the property originally receipted for by her on January 18, 1934 under the terms of Fred's Will, the Trust recognizes this fact and recites that 'all of such property, real and personal, originally passing to me has been disposed of and the proceeds thereof invested and reinvested by me, a schedule of all of said property as now existing being attached hereto marked 'Exhibit A'.' (Emphasis supplied.)

the Trust Instrument, personally checked Exhibit A Assets to determine whether the assets therein listed were in fact assets traceable to Fred's estate [153 Ind.App. 252] in which Elizabeth had a life estate and for which she receipted on January 18, 1934.

Other recitals in the Trust Agreement set out Item IV and Item VII of Fred's Will verbatim; that Elizabeth delivered to herself as widow 'certain mortgage bonds, shares of stock and cash * * * and a Deed * * * (emphasis supplied); and expressed her desire because of age and ill health to be relieved of 'the administration of said property in said life estate' in favor of the Second Bank as Trustee.

The terms of the Trust Agreement then provided that 'all of the property described on said Exhibit A attached hereto, together with any accruals thereto and dividends and income therefrom,' be held by the Second Bank until Elizabeth's death and at that time the property to be distributed according to Item VI of Fred's Will.

Other pertinent extracts of the Trust Agreement are:

'TRUST AGREEMENT

WHEREAS, Fred S. Anderson who died December 17, 1932, by his will dated January 10, 1931, and Codicil thereto dated June 16, 1932, which were duly probated in the Wayne Circuit Court at Richmond, Indiana, on December 21, 1932, provided as follows:

ITEM VI.--(repeated verbatim from Fred's Will)

and,

WHEREAS, by Item VII of said will it was provided as follows:

ITEM VII.--(repeated verbatim from Fred's Will)

and,

WHEREAS, I the undersigned, Elizabeth Anderson, in making my final settlement as Executrix of said estate, delivered to myself as widow of said decedent, certain mortgage bonds, shares of stock and cash of the inventoried value of Seventy-three Thousand Nine Hundred Twenty-seven Dollars and Eighty-seven Cents ($73,927.87) and a Deed for a parcel of real estate at the Northeast corner of South Eleventh and 'I' Streets, in the City of Richmond, Indiana, being a parcel of land One Hundred Four Feet (104) by One Hundred Sixty-five Feet (165) in Lot No. Fourteen (14) of certain out lots laid out by Ezekiel L. Cleaver, all as shown in my final report as said Executrix dated January 18, 1934, and approved by said court, all of which property passed to me as decedent's widow for my lifetime with power in me to use and dispose of the same as provided for in decedent's will, and,

WHEREAS, all of such property, real and personal, originally passing to me has been disposed of and the proceeds thereof invested and...