Fortune v. First Trust Co. of St. Paul
| Decision Date | 02 July 1937 |
| Docket Number | No. 30951-74.,30951-74. |
| Citation | 274 N.W. 524,200 Minn. 367 |
| Parties | FORTUNE v. FIRST TRUST CO. OF ST. PAUL et al. |
| Court | Minnesota Supreme Court |
Appeal from District Court, Ramsey County; Richard D. O'Brien, Judge.
Action by John W. Fortune against the First Trust Company of St. Paul and another. From an order denying his alternative motion for amended findings or new trial, plaintiff appeals, and defendants cross-appeal from an order denying their motion for new trial.
Orders affirmed.
Fred L. Doud and Bruce J. Broady, both of St. Paul (Thos. F. Clifford, of Minneapolis, of counsel), for appellant.
John J. Keefe, of St. Paul, for respondent John H. Boemer.
Clapp, Briggs, Gilbert & Macartney, of St. Paul, for respondent First Trust Co. of St. Paul.
When plaintiff rested, defendants did likewise for the "purpose of making a motion for dismissal" of plaintiff's cause, requesting the "privilege of reopening and introducing testimony if the motion is overruled." The court granted the requested privilege, plaintiff not objecting, and defendants then moved "that this action be dismissed on the ground that the evidence does not justify findings or a judgment against either defendant." After hearing arguments of respective counsel the court granted the motion. Later defendants were permitted, over plaintiff's objection, to introduce testimony as to the value of attorneys' services rendered in their behalf in this cause, it being their theory that such were recoverable in this proceeding. The court denied any allowance. Plaintiff was unsuccessful on his motion to vacate the order of dismissal and for an order substituting findings of fact and conclusions of law or for a new trial; and so also were defendants on their motion for findings or for a new trial in respect of their claimed attorneys' fees. By appropriate appeals these orders are here for review.
Plaintiff's cause is based upon alleged negligence on the part of defendants in the management of a trust estate whereof he was both the settlor and cestui que trust. Defendants answered separately, each pleading the general issue, also, as an affirmative defense, that the trust had been terminated pursuant to plaintiff's request and in accordance with the trust agreement, and that they had delivered to plaintiff and he had duly receipted for all the trust property involved in the trust arrangement. The written instruments upon which this defense was based were pleaded in hæc verba, and true copies attached to the answers as exhibits. The only exhibit that need be noted is Exhibit C, which reads:
In his reply plaintiff admitted the execution and delivery of the pleaded exhibits. To avoid their effectiveness (particular reference being had to said Exhibit C), he claimed that it "was executed and deliverered by plaintiff wholly without consideration and is void"; that when he notified defendants of his desire to terminate the trust agreement they prepared a form of notice of termination (Exhibit B) and the release (Exhibit C),
As plaintiff's cause was dismissed for lack of sufficient evidence to sustain his claims, it is necessary that the facts be rather fully stated. He was 42 years of age at time of trial, October, 1935. In May, 1917, he enlisted for war service in our late World War, serving in the navy as a seaman of the second class for some three months, later taking instruction in a radio school conducted by the government. He became a proficient wireless operator, serving in that capacity until discharged from service August 13, 1919. After such discharge he entered and was graduated from the Twin City Business University of St. Paul, having taken courses in "accountancy, English and business law and other allied subjects." His training was later supplemented by further study at the University of Minnesota in "higher accountancy, economics and business law." For a period of 13½ years next preceding the time of trial he had been and then was engaged as a clerk in the delivery section of the St. Paul post office.
Plaintiff's father died testate October 17, 1929, possessed of an estate consisting principally of stocks and bonds. Under the terms of the will plaintiff and his brother shared equally in the property left by him. A few days after the father's death, the two brothers and a long-time family friend and business adviser, defendant Boemer, went to the trust company, and there the father's safety deposit box was opened "and the securities were taken out and enumerated." The trust company was the named executor of the will and in that capacity duly and promptly proceeded with probate thereof so that on July 19, 1930, a final decree was issued vesting in plaintiff and his brother, "in equal shares," the property left by testator. The executor was later discharged. No one now questions the propriety and finality of these proceedings.
Plaintiff requested that the trust company take over the handling of his property so to be received by him from his father's estate, expressing the wish that a living trust be created "so that it would be impossible for me to ever get my hands on the money." He wanted the income only. The trust officer with whom he conferred said this could not be done and that no such relationship was wanted. After some discussion of the subject, it was finally arranged, so plaintiff testified, to have some "outside man to act as trustee and I knew of nobody I could trust or rely on of all my dad's friends or my few friends with the exception of Mr. Boemer, and I asked him if he would care to act as co-trustee and he finally accepted." Accordingly, the trust agreement was executed on October 26, 1929. Under its terms defendants as trustees were invested "with full power to retain any and all investments which may come to them as trustees; shall invest and reinvest all principal sums of money in such stocks, bonds, notes, mortgages or other forms of property as the said trustees jointly may approve without being confined in their selection of investments to those authorized by statute for the investment of trust funds." (Italics supplied.) Plaintiff reserved to himself "the right by and with the consent and approval of the individual trustee hereinbefore named to amend the terms of this trust or to terminate it in toto by instrument in writing duly executed and delivered to the trustees."
After the final decree had been issued and the probate proceedings concluded, to make effective the purposes of the trust, the various stocks and other securities had to be sent to the various corporate enterprises issuing them for suitable transfers and the issuance of new certificates. This was done, and some time in August the trustees became the legal owners of these instruments in their trust capacity. It will thus be seen that all of the securities left by the elder Fortune were transferred to the two sons. As to plaintiff's interests, after the stocks and securities had been divided, the trustees became invested with full authority to proceed with the discharge of their duties pursuant to the agreement made. During the intervening period from the date of the trust agreement until its termination, plaintiff was fully informed of the fact that the original stocks and other securities were being retained. The files contain voluminous correspondence between plaintiff and the trust company. It is replete with requests by plaintiff for money received in the way of dividends. Plaintiff knew when these dividend payments were ordinarily paid, and he was very prompt in getting from the trust company the proceeds as soon as available. During the time this trust was in existence the trust company received and paid to plaintiff all the income (excepting only its lawful charges, which are not in dispute). The income during the seventeen months of the continuance of the trust amounted to $3,005.75. Plaintiff also received the proceeds of certain properties sold at his request. There is no issue made respecting the propriety of these items so no further consideration need be given them.
Plaintiff's theory is that because these stocks were of a somewhat speculative type it became the duty of the trustees at once to convert them into safer securities, and that as a consequence of defendants' failure so to do he should be awarded judgment for the difference in value between what these securities were inventoried and valued at when the trust was created and what they were worth when he received them at the end of the trust period. It is well to note that during the time the estate was in progress of probate there was a shrinkage in value of something like $17,000. There was a further...
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