Columbia Union Nat. Bank and Trust Co. v. Bundschu

• Court: Missouri Court of Appeals
• Writing for the Court: SHANGLER
• Citation: Columbia Union Nat. Bank and Trust Co. v. Bundschu, 641 S.W.2d 864 (Mo. App. 1982)
• Decision Date: 26 October 1982
• Docket Number: No. WD,WD
• Parties: COLUMBIA UNION NATIONAL BANK and TRUST COMPANY, Co-Trustee and Sole Executor of the Estate of Henry A. Bundschu, Deceased, Plaintiff, v. Albert J. BUNDSCHU, Pauline B. Brady, Charles C. Bundschu, Jr., William B. Bundschu, Ellen Whitman Lancaster, Leslie Ransom, Billie Jean Childers, Charles C. Childers, Martin Kent Childers, John Tilson, Charles W. Brady, Anna Brady Sakurai, Louise Brady Collins, and Bundschu Estate Company (Referred to as the Bundschu Heirs), Defendants, Thomas J. Alexander, Defendant, William B. Bundschu, Defendant-Appellant, James A. Tilson, Defendant-Appellant, Rockhurst College, Defendant-Respondent, Avila College, College of St. Theresa of Kansas City, Missouri, Defendant- Respondent, The Catholic Diocese of Kansas City-St. Joseph, the Reverend John J. Sullivan, D.D., Bishop of Kansas City-St. Joseph and John Schmeideler, Superintendent of Schools, The Catholic Diocese of Kansas City-St. Joseph, Defendants- Respondents, Robert Ishmael, Robert V. Burgess, Donna M. Burgess, Donald V. Underwood, Bernard J. Paprocki and Beverly Paprocki (Referred to as the Ishmael Group), Defendants-Respondents, John D. Ashcroft, Missouri Attorney General, Defendant. 32992.

Page 864

641 S.W.2d 864

COLUMBIA UNION NATIONAL BANK and TRUST COMPANY, Co-Trustee and Sole Executor of the Estate of Henry A Bundschu, Deceased, Plaintiff, v. Albert J. BUNDSCHU, Pauline B. Brady, Charles C. Bundschu Jr., William B. Bundschu, Ellen Whitman Lancaster, Leslie Ransom, Billie Jean Childers, Charles C. Childers, Martin Kent Childers, John Tilson, Charles W. Brady, Anna Brady Sakurai, Louise Brady Collins, and Bundschu Estate Company (Referred to as the Bundschu Heirs), Defendants Thomas J. Alexander, Defendant William B. Bundschu, Defendant-Appellant, James A. Tilson, Defendant-Appellant, Rockhurst College, Defendant-Respondent, Avila College, College of St. Theresa of Kansas City, Missouri, Defendant- Respondent, The Catholic Diocese of Kansas City-St. Joseph, the Reverend John J. Sullivan, D.D., Bishop of Kansas City-St. Joseph and John Schmeideler, Superintendent of Schools, The Catholic Diocese of Kansas City-St. Joseph, Defendants- Respondents, Robert Ishmael, Robert V. Burgess, Donna M. Burgess, Donald V. Underwood, Bernard J. Paprocki and Beverly Paprocki (Referred to as the Ishmael Group), Defendants-Respondents, John D. Ashcroft, Missouri Attorney General, Defendant.

No. WD 32992.

Missouri Court of Appeals, Western District.

Oct. 26, 1982.

William B. Bundschu, pro se.

William D. Cosgrove, Kansas City, for Tilson.

James Tierney, Lathrop, Koontz, Righter, Clagett & Norquist, Kansas City, for Catholic Diocese of K.C.-St. Joe., Rev. Sullivan and John Schmeideler.

Norman P. Gordon, Thomas Lasley, Gordon & Gordon, Kansas City, for Avila College.

Richard W. Miller, Kevin E. Glynn, Weldon H. Fannen, Miller & Glynn, Kansas City, for Rockhurst College.

C. John Forge, Independence, for Robert Ishmael, et al.

Before SHANGLER, P.J., and PRITCHARD and DIXON, JJ.

SHANGLER, Presiding Judge.

The appeal is from a judgment of the probate court to approve a compromise settlement among the beneficiaries of a trust in disagreement as to the construction of the trust provisions entered under §§ 473.084 and 473.085 [Laws of 1980 effective January 1, 1981]. The successor cotrustee James A. Tilson and heir William B. Bundschu alone contest the judicial sanction of the settlement. The cotrustee contends that the continuation of the trust as constituted remains necessary to carry out a material purpose of the trustor and that the termination of the trust by agreement and decree thwarts that manifest intention. The heir Bundschu contends that the trust never became operative, but if it did, the termination of the trust by the settlement agreement was invalid because a material purpose of the trustor remains unaccomplished. The beneficiaries contend the cotrustee and heir Bundschu are not aggrieved by the judgment, do not stand to appeal, and move dismissal of the appeals.

The trust, a component of the will of Henry A. Bundschu, former Bankruptcy Judge, was established by a first codicil executed on January 29, 1976. That instrument set aside the remainder of the residuary estate as a separate fund, designated The Bundschu Trust in memory of the parents of the testator. The testator died on May 4, 1978, and the will was admitted to probate together with the first and second codicils as the last testament of Henry A. Bundschu.

In express terms, the Bundschu Trust [Article IV, p B of the first codicil] provides:

"B. The Trustees shall set aside the remainder of my residuary estate as a separate trust, which shall be designated 'The Bundschu Trust' in memory of my parents, Anton J. Bundschu and Anna Ott Bundschu. Such Trust shall be held administered and distributed under the following terms and conditions:

"1. The Bundschu Trust shall be held and administered for the primary benefit of the St. Mary Catholic Diocesan High School in Independence, Missouri. At the time of writing this First Codicil to my will, a new building to house said high school is under construction. The provisions contained herein for the benefit of said high school and its students is contingent upon said building being named the 'Bundschu Catholic High School' or some equivilent [sic] name containing the word Bundschu.

"2. If, at the time The Bundschu Trust comes into existence, there is still an outstanding balance due for the construction of the new building housing said high school described in subparagraph 1 above, then the Co-Trustees shall pay off and discharge said debt from the principal of this trust.

"3. Thereafter and during the time The Bundschu Trust shall be in existence, the Co-Trustees shall pay over and distribute any part or all of the net income from the trust estate to the Superintendent of Schools of the Catholic Diocese of Kansas City-St. Joseph, Missouri for the sole purpose of providing scholarships to students attending said high school. Scholarships shall be awarded on the basis of scholastic achievement and need. The amount of net income to be devoted to such scholarships each year shall be in the sole discretion of the Co-Trustees. Any such net income not used for scholarships in any given year shall be paid over in equal shares to Rockhurst College and Avila College, both of Kansas City, Missouri, to be used for the general operations of said colleges.

"4. During the time The Bundschu Trust shall be in existence the Co-Trustees in their sole discretion may invade the principal of the trust estate for the purpose of paying for capital improvements to the building then used to house the St. Mary Catholic Diocesan High School. Such invasions of principal may be made to the extent of exhausting the trust estate, should that be necessary to [sic] desirable in the sole opinion of the Co-Trustees.

"5. Should the St. Mary Catholic Diocesan High School cease to exist for any reason after the creation of the Bundschu Trust, this trust shall then terminate and the then principal and undistributed income, if any, shall be paid over and distributed in equal shares to Rockhurst College and Avila College, to be used for the general operation of said Colleges.

"6. Should the new building housing the St. Mary Catholic Diocesan High School not be named in honor of my family as provided in subparagraph B.1. of this Article within sixty (60) days after the creation of The Bundschu Trust, or should said high school cease to exist prior to my death, the provisions contained herein for the benefit of said high school and its students shall be void. In such event, this trust shall terminate and the Co-Trustees shall pay over and distribute the then principal and accummulated [sic] income of the trust, free from trust, to Rockhurst College and Avila College, both of Kansas City, Missouri. The funds paid over and distributed to said colleges shall be used by each institution in the construction of one or more buildings at said colleges, which are to be dedicated to the memory of my mother, Anna Ott Bundschu." [emphasis added]

The essential trust terms constitute the St. Mary Catholic Diocesan High School as primary beneficiary and designates the benefits to issue if the new building then under construction to house the high school be named Bundschu Catholic High School [or some equivalent] within sixty days after the death. In default of that contingency, or if the Diocesan high school cease to exist, then the trust terminates and Rockhurst College and Avila College receive the principal and accumulated income of the fund free from trust. The structure under construction was, within sixty days of the death, named St. Mary High School Bundschu Memorial Building. [The parties stipulate the designation was both timely and equivalent within the sense of the codicil.] The benefit to the high school under the trust is the distribution of any or all of the net income from the estate to the Superintendent of Schools of the Catholic Diocese of Kansas City-St. Joseph for scholarships to the school to students on the basis of academic achievement and need. The cotrustees are granted the sole discretion to determine the income for distribution for scholarships and any unused income is directed for payment to Rockhurst College and Avila College. The trust directs also that the cotrustees use the principal to liquidate any outstanding balance due for the construction of the new building to house the high school.

In fact [despite the premise of the Bundschu Trust that "[a]t the time of writing this First Codicil to my Will, a new building to house said high school is under construction"] there was not then [January 29, 1976] or even later a new construction for St. Mary Catholic Diocesan High School. Rather, the St. Mary parish grade school, which abutted the high school, was relocated and then renovated as an integer of the diocesan high school.

In short time after the Bundschu death, cotrustees Alexander, Tilson and Columbia Union National Bank conferred with representatives of the Diocese [owner and operator of the St. Mary Catholic High School, Rockhurst College and Avila College], to advise them [as legal advisor to the testator and draftsman of the will] that the intent of the trust as to St. Mary Catholic Diocesan High School was to pay the debt for the renovation or acquisition of the new high school building. The cotrustee Alexander requested also that Rockhurst and Avila consider that the claims of the Diocese for capital improvements to the high school be within the discretion of the trustees to pay. Rockhurst and Avila would consent to neither. Rockhurst and Avila insisted that the new building under construction terminology of the Bundschu Trust meant a newly constructed high school building, and not a renovated old grade school acquired for the high school purpose. They contended also that the Bundschu designation to a new high school structure was a condition to trust benefits for the high school and students, and in default of a new high school construction, the trust terminated and resulted in a giftover of...