First Nat. Bank of Chicago v. Whitlock

• Decision Date: 06 November 1945
• Docket Number: Gen. No. 42964.
• Citation: 63 N.E.2d 659,327 Ill.App. 127
• Parties: FIRST NAT. BANK OF CHICAGO v. WHITLOCK et al. WHITLOCK v. WILSON et al.
• Court: United States Appellate Court of Illinois

327 Ill.App. 127

63 N.E.2d 659

FIRST NAT. BANK OF CHICAGO

v.WHITLOCK et al.

WHITLOCK

v.WILSON et al.

Gen. No. 42964.

Appellate Court of Illinois, First District, Second Division.

Nov. 6, 1945.

Appeal from Circuit Court, Cook County; Walter J. LaBuy, Judge.

Suit by the First National Bank of Chicago, a national banking association of the United States, as successor trustee under the will of William A. Whitlock, deceased, against Bettina T. Whitlock and others for instructions by the court as to plaintiff's duty as trustee, wherein Bettina T. Whitlock cross-complained against Elizabeth Whitlock Wilson and others. From a decree dismissing the amended cross-complaint, Bettina T. Whitlock appeals.

Affirmed.John W. Dorgan and Edward R. Newmann, both of Chicago (Ode L. Rankin, of Chicago, of counsel), for appellant.

Wilson & McIlvaine, of Chicago (Clay Judson and Sidney K. Jackson, both of Chicago, of counsel), for appellees.

SULLIVAN, Justice.

This appeal by Bettina T. Whitlock seeks to reverse a decree, which dismissed her amended cross complaint for want of equity.

The First National Bank of Chicago (hereinafter for convenience sometimes referred to as the Bank), a successor trustee under the will of William A. Whitlock, deceased, filed its complaint on January 13, 1942, against its co-trustee, Bettina T. Whitlock, and all the beneficiaries under said will alleging in part that Bettina T. Whitlock, individually, the testator's widow and one of the beneficiaries under a trust created by his will, claimed payments out of the principal or corpus of such trust. The complaint requested the court's instructions as to plaintiff's duty as trustee in view of a decree theretofore entered on December 14, 1934.

Bettina T. Whitlock filed an answer and an affirmative defense. Elizabeth Whitlock Wilson, the testator's daughter and one of the beneficiaries under the aforesaid testamentary trust, filed motions to dismiss the bank's complaint and to dismiss the affirmative defense of Bettina T. Whitlock. The other beneficiaries filed an answer to the bank's complaint.

The motions to dismiss of Elizabeth Whitlock Wilson were sustained on November 23, 1942. The bank elected to stand upon and abide by its complaint and same was thereupon dismissed. The bank has not appealed from or otherwise questioned such order of dismissal.

Pursuant to leave granted, Bettina T. Whitlock filed a cross complaint on January 7, 1943, to which the bank was not made a party and it filed no pleading thereto. Motions to dismiss the cross complaint were filed but before such motions were heard Mrs. Whitlock filed an amended cross complaint. Motions to dismiss the amended cross complaint were filed by Elizabeth Whitlock Wilson and the other beneficiaries. These motions were sustained and Bettina T. Whitlock electing to abide by her amended cross complaint, same was dismissed for want of equity on June 21, 1943. It was from this final order of dismissal that this appeal was taken.

For a proper understanding of the issues presented herein it is necessary to set forth somewhat fully the salient facts concerning this controversy since its inception, as they appear from the allegations of the amended cross complaint of Bettina T. Whitlock.

William A. Whitlock died May 3, 1928, leaving a last will and testament dated August 5, 1927, which was admitted to probate in the Probate court of Cook county on June 22, 1929.

That portion of his will involved herein is as follows:

‘Fifth: I give, devise and bequeath all the rest and residue of my estate, real, personal and mixed and wheresoever situate to Bettina T. Whitlock and the Union Trust Company, of Chicago, Illinois, its successor and successors in trust, as Trustees, in trust and upon the terms, trust and conditions hereinafter set out:

‘A. For and during the life of my wife, Bettina T. Whitlock, the Trustees shall pay to her the net income from said residue estate and I expressly authorize the Trustees, in addition to said payments to be made of such income to said Bettina T. Whitlock, to make appointment of and to pay said Bettina T. Whitlock out of the principal from which such income is derived, and in diminution of such principal, such amounts not to exceed in any one year the amount of five per cent (5%) of the amount of such principal as valued by the Trustees at the beginning of such year, as said Trustees shall be of the opinion should be paid and applied to meet any emergency such as illness, or the due care, maintenance and comfort of said Bettina T. Whitlock, the joint judgment of the Trustees to be conclusive in each instance as to the existence of any emergency as occasion for such payment.

‘B. Upon the death of my wife, the said Bettina T. Whitlock, the surviving trustee shall transfer to my daughter, the said Elizabeth C. Whitlock [now Elizabeth Whitlock Wilson], one-half of the principal and undistributed net income of said residuary estate free from all trusts hereunder.

‘C. The surviving Trustee shall pay semi-annually the net income from the remaining one-half of said residuary estate to my brother, the said Harry O. Whitlock, for and during his life and upon the death of said Harry O. Whitlock the surviving Trustee shall divide said remaining one-half of my residuary estate into as many shares as there are children of said Harry O. Whitlock surviving him, and shall transfer one of such shares to each of said children.’

The trustees accepted the foregoing trust created by the will and after the trust fund had been established by the executors proceeded to administer said trust. On April 29, 1931, a complaint was filed in the Circuit court (Case No. B-219401) by the two trustees (Bettina T. Whitlock and the First Union Trust and Savings Bank, which corporate trustee had been succeeded by the First National Bank of Chicago) for the construction of Paragraph Fifth-A of the will, heretofore set forth, and of certain other provisions thereof, which latter provisions are not involved in the instant proceeding.

In case No. B-219401 Bettina T. Whitlock, individually, filed a petition claiming that she was entitled to receive 5% of the then principal of the trust fund for the year 1932, which amounted to $4,820.94, and asked that the court authorize and direct the trustees to make immediate payment of that sum to her. The other beneficiaries of the trust, all of whom were remaindermen, responded to said petition and objected to the payment to Bettina T. Whitlock of the $4,820.94 requested by her for the year 1932, principally on the ground that no emergency existed as contemplated by the will to authorize such payment and that, if she were paid that amount, it would constitute waste of the assets of the corpus of the trust. Thereafter on August 2, 1932 a release was executed By Bettina T. Whitlock which recited that the consideration therefor was the avoidance of further litigation and costs, the withdrawal of the objections of the remaindermen to the payment to her of $4,820.94 out of the principal of the trust fund for the year 1932 and the payment to her of said sum. The release then declared that ‘there is a bona fide dispute as to the existence of any emergency at this time to occasion such payment’ and stated that she ‘does hereby release, surrender, relinquish and disclaim any and all rights or claims which she may now have or might in the future arise in her behalf against the said principal of said trust fund.’ The right of Bettina T. Whitlock to the net income of the trust fund during her lifetime was expressly declared not to be modified or affected by the release.

Pursuant to and predicated upon said release an order was entered by Judge Thomas J. Lynch on August 4, 1932, authorizing the payment of said sum of $4,820.94 to Bettina T. Whitlock out of the principal of the trust fund. The trustees complied with this order and paid said amount to her.

Thereafter case No. B-219401 remained dormant until Bettina T. Whitlock, individually, filed a cross complaint therein in 1934 in which she alleged that the aforesaid release was obtained from her by duress; that it was void for want of consideration; and that she had no interest in the principal of the trust which she could release. Her cross complaint concluded with the prayer that the trustees be directed to pay her 5% of the principal of the trust for the year 1934. Answers were filed by the other beneficiaries denying the allegations of her cross complaint and alleging that there had been a valid settlement and release of her right to any further payments out of the principal of the trust fund. While the issues made up by her cross complaint and the answers thereto remained pending and undetermined by the trial court, a stipulation was entered into by Bettina T. Whitlock and all of the other beneficiaries of the trust and filed on December 14, 1934. This stipulation was incorporated in and made part of a consent decree entered on the same day by Judge John Prystalski.

This decree states ‘that for the purpose of a complete settlement of these proceedings' the parties (other than the trustees) ‘have entered into a stipulation filed this day in open court.’ The stipulation describes the pleadings and contentions of the various parties and sets forth the release executed by Bettina T. Whitlock on August 2, 1932, and the order of Judge Thomas J. Lynch of August 4, 1932. It recites that the parties thereto, ‘to prevent the waste of the assets' of the trust and ‘to enter into an amicable settlement of differences,’ agree that a final order and decree, ‘completely disposing of said litigation may be entered at this time, that the parties hereto de hereby waive and release any and all errors which may occur in the entering of said order, and do hereby waive any and all right of appeal therefrom.’ The stipulation further recites that the release of August 2, 1932, was the free and voluntary act of Bettina T. Whitlock; that the other...