Davis v. Rossi

• Citation: 34 S.W.2d 8,326 Mo. 911
• Parties: Theresa R. Davis, Administratrix of Estate of Simon D. Rossi, Appellant, v. Victor D. Rossi and Mae R. Haseman
• Decision Date: 20 December 1930
• Court: United States State Supreme Court of Missouri

34 S.W.2d 8

326 Mo. 911

Theresa R. Davis, Administratrix of Estate of Simon D. Rossi, Appellant, v. Victor D. Rossi and Mae R. Haseman

Supreme Court of Missouri

December 20, 1930

Appeal from Circuit Court of City of St. Louis; Hon. M Hartmann, Judge; Opinion filed October 13, 1930: Motion for rehearing filed; motion overruled December 20, 1930.

Affirmed.

Randolph Laughlin for appellant.

(1) There is a total failure of proof. (2) The trust under which respondents claim is void for four reasons, viz: (a) Because not bona fide; (b) Because testamentary in character -- a will masquerading as a deed; (c) Because voluntary and not completely executed; (d) Because in violation of the rule against perpetuities. (3) In determining the effect of a transaction equity sees the substance and ignores the form. It disregards the device of a mere mask, and looks through it to find the real intention of the parties. Harris Banking Co. v. Miller, 190 Mo. 669. (4) This intention must be ascertained from what they did as well as what they said, and their actions are more potent and persuasive than their words. Frank v. Heimann, 302 Mo. 345; In re Estate of Soulard, 141 Mo. 656; State ex rel. v Ellison, 216 S.W. 969; Harding v. Trust Co., 276 Mo. 136; Lane v. Ewing, 31 Mo. 86; Tygard v McComb, 54 Mo.App. 93; Ambrosius v. Ambrosius (2 C C. A.), 239 F. 476; Brown v. Crafts, 98 Me. 40; Matter of Barefield, 177 N.Y. 393; Rambo v Pile, 220 Pa. St. 241; Garrard v. Lauderdale, 2 Russell & Mylne's Rep., 456; Govin v. DeMiranda, 76 Hun, 412, 27 N.Y.S. 1049. (5) The intention of the trustor to pass a present legal title to the trustees, and to divest himself of all dominion and control over the subject of the trust, as well as every other element essential to the establishment of a complete express trust in personal property, must be established and can only be established by "evidence so clear, full and demonstrative as to banish any reasonable doubt." Harding v. Trust Co., 276 Mo. 136; Northrip v. Burge, 255 Mo. 668; Eschen v. Steers (8 C. C. A.), 10 F.2d 741; Barnum v. Reed, 136 Ill. 398; Allen v. Withrow, 110 U.S. 130; Blake v. Life Ins. Co., 209 Fed. (8 C. C. A.) 314; Hemmerich v. Union Sav. Inst., 205 N.Y. 369. (6) The real intention of the grantor, as expressed by his actions, was to retain in himself the absolute control and dominion over his property during his life, to surrender that dominion only at his death, and to defeat the state inheritance tax laws, the statute of wills and the laws of administration. State ex rel. v. Earle, 65 N.J.Eq. 721, 103 Am. St. 790; Brown v. Crafts, 98 Me. 40; Allen West Commission Co. v. Grumbles (8 C. C. A.), 129 F. 287; Cummings v. Bramhall, 120 Mass. 563. (7) Where, as in this case, a deed is intended to take effect and become operative alone upon the death of the grantor, it is testamentary in character and void. Murphy v. Gabbert, 166 Mo. 596; Griffin v. McIntosh, 176 Mo. 392; Aldridge v. Aldridge, 202 Mo. 565; Givens v. Ott, 222 Mo. 395; Terry v. Glover, 235 Mo. 544; Coles v. Belford, 289 Mo. 97. (8) The acts of the grantor, and the inaction of the grantees during the grantor's life, as well as the written declarations of the grantees after his death, manifest a clear intention and understanding on the part of all the parties that the deed was to remain inert and inoperative until the grantor's death. Authorities supra, Point 4. (9) Being void as a deed, the instrument cannot operate as a will, "because not executed in the manner prescribed by law for the execution of a will." Aldridge v. Aldridge, 202 Mo. 565; Eschen v. Steers, 10 F.2d 742; Dunn v. Bank, 109 Mo. 100. (10) The attempted trust was voluntary and not completely executed. (a) The trust deed is a voluntary conveyance unsupported by a valuable consideration. Brannock v. Magoon, 141 Mo.App. 320. (b) A completely executed, voluntary trust will be enforced, but unless completely executed it will not be enforced. Lane v. Ewing, 31 Mo. 75, 83; In re Estate of Soulard, 142 Mo. 660; Harding v. Trust Co., 276 Mo. 136; Knapp v. Publishers, 127 Mo. 77; State ex rel. v. Ellison, 216 S.W. 967; Godard v. Conrad, 125 Mo.App. 174; Young v. Young, 80 N.Y. 437; Barnum v. Reed, 136 Ill. 398; Perry on Trusts (7 Ed.) sec. 100, p. 126. (11) The voluntary trust was not completely executed in that the trustor did not separate the legal title from the equitable title, but retained both in himself. It is essential to the validity of all trusts that these titles be separately vested. Doan v. Ascension Parish, 103 Md. 662, 7 L. R. A. (N. S.) 1119; Bank v. Merriam, 88 Me. 144; Eschen v. Steers (8 C. C. A.), 10 F.2d 741; O'Gorman v. Jolley, 34 S.D. 35; Lewin on Trusts (1 Am. Ed.) 14; Bispham's Equity (5 Ed.) secs. 99, 160. (12) By-law 4 and the restriction against transferring the stock on the books of the company prevented the passing of the legal title to the trustees, and remained vested in the grantor. R. S. 1919, secs. 9743 and 9728; In re Estate of Soulard, 141 Mo. 662; State v. Ellison, 216 S.W. 969. (13) Wherever charter or by-laws provides that the legal title to stock shall be transferred only on the books of the company, a failure to consummate the transfer defeats the operation of a voluntary trust conveyance of the stock. The stock must be actually transferred in fact. Fisher v. Essex Bank, 5 Gray (Mass.) 373; Searle v. Law, 15 Simon's Rep. 99; Dillon v. Coppin, 4 Mylne & Craig, 670; Milroy v. Lord, 4 De Gex (F. & J.) 264; Moore v. Moore, 18 Eq. L. R. 482; Pethybridge v. Burrow, 53 Law Times (N. S.) 9; Ex parte Todd, 19 Q. B. 186; Bridge v. Bridge, 6 Beavan, 321; Weale v. Ollive, 17 Beavan, 253; Beech v. Keep, 18 Beavan, 285; Coningham v. Plunkett, 2 Young & Colyer, 244; Union Bank v. Laird, 2 Wheat. 390; Oxford Turnpike v. Bunnel, 6 Conn. 558; Perry on Trusts (7 Ed.) sec. 100, pp. 126-127. (14) The grantor cannot, by deed to third parties, vest the equitable title in the beneficiaries and retain the legal title in himself. That result can be accomplished only by declaration. A trust by declaration cannot be created from the ruins of an attempted trust by deed. Milroy v. Lord, 4 De Gex (F. & J.) 274; Moore v. Moore, 18 Eq. L. R. 482; Searle v. Law, 15 Simon, 95; Pethybridge v. Burrow, 53 Law Times 9; Bridge v. Bridge, 6 Beavan, 321; Beech v. Keep, 18 Beavan, 285; In re Breton's Estate, 17 Ch. Div. L. R. 416; Price v. Price, 14 Beavan, 603; Jones v. Lock, L. R. 1 Ch. App. 25; Young v. Young, 80 N.Y. 437; Pennell v. Ennis, 126 Mo.App. 355; Eschen v. Steers (8 C. C. A.), 10 F.2d 743. (15) The blank indorsement on the back of the stock certificates cannot be deemed a declaration of trust, because not so intended. Norway Bank v. Merriam, 88 Me. 144; Young v. Young, 80 N.Y. 437; Loring v. Hildreth, 170 Mass. 331; Ward v. Hazelton, 137 N.Y. 215, 21 L. R. A. 693; Clay v. Layton, 134 Mich. 317; O'Gorman v. Jolley, 34 S.D. 26. (16) The trust deed was inoperative to transfer any equitable interest to the beneficiaries for the further reason that the reservation by the grantor to himself of every beneficial interest in the stock chained the whole of the equitable title to himself and left no particle of it free to pass. Matthews v. Hoagland, 48 N.J.Eq. 488; Fisher v. Essex Bank, 5 Gray (Mass.) 373; Basket v. Hassell, 107 U.S. 602. (17) A voluntary trust by deed to third parties is an equitable gift inter vivos, and requires for its validity the same essentials necessary to create an ordinary gift at law. Thornton on Gifts and Advancements, p. 420; 26 R. C. L. 1192; Savings Institution v. Hathorn, 88 Me. 122; Bank v. Merriam, 88 Me. 144; In re Hoyt's Estate, 149 N.Y.S. 91; Green v. Tulane, 52 N.J.Eq. 169; Brannock v. Magoon, 141 Mo.App. 316; In re Estate of Soulard, 141 Mo. 659; Dunn v. Bank, 109 Mo. 98; Barnum v. Reed, 136 Ill. 398. (18) A voluntary trust by deed to third parties differs from a voluntary trust by declaration, and is precisely like a gift inter vivos, in that it requires for its validity three indispensable elements (two of which are lacking in this case) viz., intention, execution and delivery. Peoples Bank v. Webb, 21 R. I. 218. (19) There must be a bona-fide intention on the part of the grantor to absolutely and irrevocably divest himself of the legal title, to vest it in the trustees, and to do it now, in praesenti, at the very time he undertakes to make the trust. In re Estate of Soulard, 141 Mo. 662; Allen West Commission Co. v. Grumbles, 129 F. 290; Tygard v. McComb, 54 Mo.App. 85; Keyl v. Westerhaus, 42 Mo.App. 49; State v. Ellison (Div. 1), 216 S.W. 968; Frank v. Heimann, 302 Mo. 345; Godard v. Conrad, 125 Mo.App. 175; Coles v. Belford, 289 Mo. 106; Green v. Tulane, 152 N.J.Eq. 169; Thornton on Gifts and Advancements, 419, 420. (20) If the intention of the trustor was: (a) In case of a trust by deed, to postpone surrendering full control and dominion over the legal title until his death; (b) In case of a trust by declaration, to postpone surrendering full control and dominion over the equitable title until his death; the trust is testamentary in character, and is void for that reason (unless attested as a will). In re Estate of Soulard, 141 Mo. 664; Dunn v. Bank, 109 Mo. 99; Baskett v. Hassell, 106 U.S. 614; Godard v. Conrad, 125 Mo.App. 175; Harding v. Trust Co., 276 Mo. 136; Tygard v. McComb, 54 Mo.App. 93; Keyl v. Westerhaus, 42 Mo.App. 49; Bailey v. Orange Hospital, 102 A. (N. J. Eq.) 7; Sterling v. Wilkinson, 83 Va. 797; Stevenson v. Earle, 65 N.J.Eq. 721, 103 Am. St. 790; Murphy v. Gabbert, 166 Mo. 596; Griffin v. McIntosh, 176 Mo. 392; Aldridge v. Aldridge, 202 Mo. 565; Givens v. Ott, 222 Mo. 395; Coles v. Belford, 289 Mo. 97. (21) In the case of a trust by declaration, the trustor, retaining the legal title in himself, must intend to divest himself of all...