Buder v. Franz

• Decision Date: 16 May 1928
• Docket Number: 7906,7911.,7904,No. 7903,7903
• Citation: 27 F.2d 101
• Parties: BUDER et al. v. FRANZ et al., and three other cases.
• Court: U.S. Court of Appeals — Eighth Circuit

27 F.2d 101 (1928)

BUDER et al. v. FRANZ et al., and three other cases.

Nos. 7903, 7904, 7906, 7911.

Circuit Court of Appeals, Eighth Circuit.

May 16, 1928.

Oscar E. Buder and G. A. Buder, Jr., both of St. Louis, Mo. (A. W. Wenger and E. E. Schowengerdt, both of St. Louis, Mo., on the brief), for Gustavus A. Buder and others.

S. Mayner Wallace, of St. Louis, Mo. (Allen McReynolds, of Carthage, Mo., on the brief), for Ehrhardt W. Franz.

T. M. Pierce, of St. Louis, Mo. (Samuel H. Liberman, of St. Louis, Mo., John B. Hollister, of Cincinnati, Ohio, and A. Holt Roudebush, of St. Louis, Mo., on the brief), for Mississippi Valley Trust Co.

Earl F. Nelson, of St. Louis, Mo. (Wilfley, Williams, McIntyre & Nelson, of St. Louis, Mo., on the brief), for Earl F. Nelson.

Before STONE and VAN VALKENBURGH, Circuit Judges, and PHILLIPS, District Judge.

STONE, Circuit Judge.

This litigation has been before this court three times — once, on questions of jurisdiction and parties (11 F.2d 854); once, on questions of practice and procedure, involving the modification of the order of this court on the above appeal (11 F.2d 854, 858); once, on an ancillary bill to protect and preserve the jurisdiction of the trial court (15 F.2d 797). The first trial was upon the merits but, as the decree thereon was a dismissal of the bill for lack of necessary and indispensable parties, there was no determination of the merits. On that appeal our No. 7019, 11 F.(2d) 854, counsel argued various points on the merits but, as this court thought that necessary and indispensable parties were lacking, it did not examine the merits except so far as to answer the questions as to parties and jurisdiction. On the return to the trial court, the bill was amended bringing in all interested parties and the second trial and decree were upon the merits. Generally speaking, the result of that decree was to grant the relief sought in the bill and by the interveners. From that result, the main appeal herein is taken. There are cross-appeals on costs and concerning the bonds required to be given under the decree.

I. The Main Appeal.

These appellants argue their assignments under five headings. There is no material conflict in the evidence. The issues are as to the legal effect of the evidence. For an understanding of these issues an outline will be given of the material evidence with such further detailed statement, in connection with each issue, as may be necessary to develop the situation.

Prior to February 11, 1898, Ehrhardt D. Franz died testate in St. Louis, Mo., leaving an estate consisting (besides household goods and a small amount of cash) of (1) an undetermined interest in bonds, inventoried at $2,543.50; (2) bonds, inventoried at $24,750; (3) shares in various corporations, valued at $55,185; (4) notes, inventoried at $14,307.50; (5) insurance, inventoried at $1,000; (6) thirteen pieces of real estate. The residuary portion of his will was as follows:

"The rest, residue and remainder of my estate, whether real, personal or mixed property, I give, bequeath and devise unto my beloved wife Sophie Franz, for and during the period of her natural life.

"After the termination of the life estate of my wife, I give, bequeath and devise the remainder in equal shares, share and share alike, unto my children, Minna, Johanna, Ehrhardt, Ernest, Amanda, Gustav, Walter, Otto, Henrietta and Adelheide, and unto their heirs and assigns forever."

The estate was administered; the executrix discharged on March 10, 1900; and the residuary assets turned over to the wife (Sophie Franz) who was then 59 years old.

Among the assets of the estate turned over to Sophie Franz (in 1898) were 210 shares of the American Arithmometer Company. Thereafter, that company declared stock dividends of a like amount and, still later, the Burroughs Adding Machine Company acquired the assets and business of the Arithmometer Company and exchanged 4,200 of its shares for the above 420 shares in the Arithmometer Company. All of this took place by 1905.

January 30, 1909, Sophie Franz executed a trust agreement with G. A. Franz (one of the sons) and G. A. Buder (who had been counsel for the deceased, the estate, and later, of Mrs. Franz). This instrument conveyed from her to Franz and Buder, as trustees:

"All her right, title and interest of every kind and nature of, in and to the following described stocks, bonds, notes, mortgages, deeds of trust, obligations, securities, and assets now held, owned and controlled by her in her own right as her absolute property, or as life tenant under the last will and testament of E. D. Franz, deceased, to which reference is hereby made, or whether held, owned or controlled in either one or both of said capacities and more particularly described as follows, to wit: * * *

"3. Forty-two hundred (4200) shares of the capital stock of the Burroughs Adding Machine Company, evidenced by certificate No. ______, issued to Sophie Franz, said certificate including and embracing two hundred ten (210) shares of the capital stock of the American Arithmometer Company of St. Louis, Missouri, of the par value of one hundred dollars ($100.00), per share, inventoried as part of the estate of E. D. Franz, deceased; the said American Arithmometer Company having changed its name to Burroughs Adding Machine Company, and being now located in the city of Detroit, Michigan, reference being hereby made to the inventory of the estate of the said E. D. Franz, deceased. * * *

"7. Any and all other assets, securities, bonds, stocks, notes, mortgages, deeds of trust, collaterals, commercial paper, or other obligations received, acquired, held or owned by the undersigned, under and by virtue of the last will and testament of Ehrhardt D. Franz, deceased, dated August 9th, 1897, and duly filed and admitted to probate in the probate court of the city of St. Louis, Missouri, said court having jurisdiction of said estate, said will appearing of record in the recorder's office, of said city of St. Louis, Missouri, in Book No. 1441, page 443, to which said last will and testament reference is hereby made, and the same by such reference for all necessary purposes made part thereof."

The powers of the trustees were to collect and recover:

"All profits, and income, dividends, interest, earnings, and principal of the said stocks * * * or other assets, * * * and shall have and are hereby given and granted full power and authority, so far as is possible under the will and testament of said Ehrhardt D. Franz, deceased, to sell, assign, exchange, transfer, convey, mortgage, pledge, incumber, or otherwise dispose of any or all of the said stocks, bonds, notes, obligations, mortgages, deeds of trust, collaterals, and securities, and the principal and proceeds thereof to them hereby transferred, assigned, conveyed and delivered, whenever in their judgment they deem it proper to do so, upon such terms, conditions, and provisions as they may deem best and for the best interests of the trust estate of the undersigned hereby created.

"In case of such conveyance, transfer, assignment, exchange, or other disposal of any of the assets, or any part of the assets, to them hereby conveyed, assigned, transferred, and delivered, they shall have and are hereby granted full power, right, and authority, and are hereby empowered, directed and authorized to invest and reinvest the proceeds of any such sale, transfer, or exchange, including principal, in such manner and in such form and securities as they may deem proper and for the best interests of said party of the first part and the trust estate hereby created."

Also they were empowered:

"To expend, disburse, retain, and pay out of said trust estate and funds, any and all assessments, charges and taxes, whether general or special, attorneys' fees, outlays, compensation, charges and costs of administration, necessary, incident or essential to and for the care, protection, preservation, administration, management and distribution of the assets hereby conveyed or hereafter acquired and are authorized and empowered to make, create, and pay all necessary debts, expenses and outlays for repairs, betterments, or improvements, which they may deem necessary or proper for the protection, preservation, improvement, sale or transfer of any and all real estate of which they may become owners as such trustees, whether acquired by foreclosure or otherwise, and are authorized and empowered to make any and all such other payments, outlays, and expenditures as they may deem necessary, expedient or proper for the protection of such real estate and the assets of such trust estate."

Certain disbursements to Mrs. Franz and to the children (or their heirs) were provided for as follows: $4,000 annually "shall" be paid to Mrs. Franz "providing the income, rents, earnings, and profits of the estate which they may hold and securities hereby conveyed, admit of such payments being made," with the power, in named emergencies, to "in their discretion increase said quarterly payment to her to such an amount, and for such time and upon such terms and conditions as they may deem best and proper"; after these payments to Mrs. Franz, the trustees "may pay" $625.00 quarterly to each of the ten children (or the heirs thereof) but:

"In the event the earnings, income, rents, receipts and profits received by said trustees are not sufficient to admit of such payment quarterly to each of the distributees above named and cannot be conveniently made, then the said trustees, after so making payment to said Sophie Franz, of one thousand dollars ($1,000.00) quarterly, or such other sum as they may deem necessary as aforesaid may pay to each of the said distributees such sum as they may deem proper, but in no event and under no circumstances shall the said payment encroach upon or impair the principal and assets of the trust estate hereby created."

The instrument provided, also, that semiannual...