Frank v. Heimann

• Decision Date: 11 February 1924
• Docket Number: 23477
• Parties: MELBA FRANK v. MORRIS A. HEIMANN, Appellant
• Court: Missouri Supreme Court

258 S.W. 1000

302 Mo. 334

MELBA FRANK v. MORRIS A. HEIMANN, Appellant

No. 23477

Supreme Court of Missouri

February 11, 1924

Appeal from St. Louis City Circuit Court; Hon. William H Killoran, Judge.

Reversed.

Morris Tucker and Clifford B. Allen for appellant.

(1) The mere deposit in a bank of his own money in the depositor's name as trustee for another does not create an irrevocable trust, but one revocable at will. 39 Cyc. 67; In re Totten, 179 N.Y. 112; Brabrook v. Boston Bank, 104 Mass. 228; Jenkins v. Baker, 72 N.Y.S. 546; Beaver v. Beaver, 117 N.Y. 421; In the matter of Barefield, 177 N.Y.S. 392; Taylor v Henry, 48 Md. 550; In re Began Estate, 183 N.Y.S. 941; Thomas v. Newberg Savings Bank, 130 N.Y.S. 810; Rush v. Brooklyn Savings Bank, 119 N.Y.S. 726; Rambo v. Pile, 220 Pa. St. 235; Cunningham v. Davenport, 147 N.Y. 43. Courts of Equity will always look with suspicion on voluntary trusts without power of revocation. Bispham on Principles of Trusts (9 Ed.) p. 128; Perry on Trusts (6 Ed.) footnote, pp. 132 133, 134; Wollaston v. Tribe, L. R. 9 Eq. 44; Coutts v. Acworth, L. R. 8 Eq. 558; Hall v. Hall, L. R. 14 Eq. 365; In Rick's Appeal, 105 Pa. 537; Sims v. Brown, 252 Mo. 68; Guernsey v. Mundy, 24 N.J.Eq. 243; Nichols v. Emery, 109 Cal. 323. (2) The question in this class of cases is not whether the preponderance of competent evidence shows that the alleged trust was executed, but it is whether that fact is established by evidence so clear, certain, complete and convincing as to remove all reasonable doubt on the subject. Watson v. Payne, 143 Mo.App. 721; Pitts v. Weakley, 155 Mo. 135; Johnson v. Quarles, 46 Mo. 426; Forrester v. Scoville, 51 Mo. 268; Ringo v. Richardson, 53 Mo. 394; Shaw v. Shaw, 86 Mo. 594; Northrip v. Burge, 255 Mo. 674; Ferguson v. Robinson, 258 Mo. 113; Mulock v. Mulock, 156 Mo. 431; Crowley v. Crowley, 131 Mo.App. 181; Mead v. Robertson, 131 Mo.App. 196; Hartley v. Nicolson, 19 L. R. Eq. 233. (3) Equity does not lend assistance to voluntary disposition of property while they are yet executory. Pennell v. Ennis, 126 Mo.App. 360. The distinction between executed and executory trusts rests upon the manner in which the trust is declared. Where the limitations of a trust are fully and perfectly declared, it is regarded as an executed trust. Where the limitations are imperfectly declared and the intent of the creator is expressed in general terms, the manner in which the intent is to be called into effect substantially in the discretion of the trustee, the trust is an executory trust. Taylor v. Welch, 168 Mo.App. 232; 28 Am. & Eng. Enc. Law (2 Ed.) 865; Harding v. Union Trust Co., 207 S.W. 68; Citizens Bank v. McKenna, 168 Mo.App. 254. (4) A gift in the form of a trust always involves the intention of the donor. There arises, first, the question whether the trust is tentative or irrevocable, and if it is found irrevocable, there follows the further question as to the term of the trust. Hemmerich v. Dime Savings Institution, 205 N.Y. 350; In Rick's Appeal, 155 Pa. 537; Simms v. Brown, 252 Mo. 68; Guernsey v. Mundy, 24 N.J.Eq. 243; Perry on Trusts and Trustees (6 Ed.), par. 104, and footnote 3 on p. 130; Nichols v. Emery, 119 Cal. 323; Lewin on Trusts, pars. 75, 76; Ambrosius v. Ambrosius, 239 F. 474.

Watts, Gentry & Lee for respondent.

Appellant created and executed a valid, irrevocable trust in favor of respondent, constituting himself her trustee. Mize v. Bank, 60 Mo.App. 364; Watson v. Payne, 143 Mo.App. 721; Taylor v. Welch, 168 Mo.App. 223; Bank v. McKenna, 168 Mo.App. 254; In re Estate of Soulard, 141 Mo. 660; Harris Banking Co. v. Miller, 190 Mo. 640; Northrip v. Burge, 255 Mo. 641; Harding v. Union Trust Co., 276 Mo. 136. The cases cited under 1 of appellant's "Points and Authorities" have no application to the facts in this case, because no unequivocal act was shown in any of them.

Ragland, J. All concur, except Woodson, J., who dissents.

OPINION

RAGLAND

This is a suit in equity to enforce what is claimed to be an executed voluntary trust in personal property. The petition alleges:

"That she (plaintiff) is the only child of defendant; that on or about the 21st day of June, 1905, plaintiff being then a minor, defendant declared his intention to create and execute a trust in her favor and for her benefit, and in pursuance of such intention and as the beginning and nucleus of said trust deposited in the State National Bank of the City of St. Louis the sum of $ 392.49 in the name of 'Morris A. Heimann, Trustee for Melba Heimann;' that said 'Melba Heimann' is the plaintiff herein and daughter as aforesaid of defendant; that by said deposit defendant created and executed a valid, irrevocable trust for the use and benefit of and in favor of plaintiff, and declared and constituted himself her trustee of said trust; that thereafter and weekly, with few exceptions, beginning June 24, 1905, and ending March 14, 1914, defendant deposited or caused to be deposited the sum of $ 25 each week to the credit of said account opened as aforesaid by him in said bank on the 21st day of June, 1905, and continuously thereafter kept in the name aforesaid, to-wit, 'Morris A. Heimann, Trustee for Melba Heimann;' that in addition to said deposits there was credited to said trust funds and account by said bank from time to time interest on said deposit; that each and every deposit made as aforesaid was made by the defendant as a deposit on account of said trust, and did constitute and become a part of the trust fund, and interest thereon accruing and credited by the said bank as aforesaid became and constituted a part of said trust fund; that the aggregate amount of said deposits made as aforesaid, with the interest thereon credited as aforesaid by said bank, amounted on March 14, 1914, on which date the last of said deposits was made, to a sum in excess of $ 12,000, the exact amount of which plaintiff is unable to state, not having in her possession or under her control the necessary information by which the exact amount can be ascertained.

"Plaintiff further states that in entire disregard and in breach and violation of his duties as trustee as aforesaid of said executed and irrevocable trust, of which defendant declared himself trustee as aforesaid, defendant did from time to time wrongfully convert to his own use all of said trust fund so created as aforesaid except the sum of $ 1.44, which still remains in said bank to the credit of said trust fund and has failed and refused to account for or pay over to plaintiff any part of said trust fund so converted by him to his own use."

The prayer is for an accounting and for judgment for the total amount deposited to the credit of the alleged trust fund. It is further alleged that certain real estate described in the petition "was purchased and paid for in part by defendant with money wrongfully converted by him out of said trust fund," and it is sought to impress such real estate with a lien to the extent of the funds so used.

The answer is a general denial and a plea of the fiveyear Statute of Limitation.

With respect to the general situation of the parties and the principal facts out of which the controversy grows, there is but little, if any, dispute. In 1905 and prior thereto, the defendant, under the name of the M. A. Heimann Manufacturing Company, was engaged in the manufacture of show window fixtures, in the city of St. Louis. His wife, Lilly Heimann, was actively assisting him in his business, giving especial attention to the financial end of it. He kept an account with the State National Bank in the name of M. A. Heimann Manufacturing Company in which he deposited the funds employed in the operation of the factory. But such funds as could be withdrawn from the business from time to time, as earnings or savings, were deposited in the same bank in the name of Lilly Heimann.

Mrs. Heimann died in 1905. At the time of her death the balance in the bank to the credit of "Lilly Heimann" was $ 392.49. Shortly afterward the defendant opened an account in the same bank in the name of "Morris A. Heimann, Trustee for Melba Heimann," and transferred to it the balance standing in the name of Lilly Heimann. Melba was his only child; she was then ten years of age.

After the death of his wife defendant continued his manufacturing business as theretofore, and as theretofore kept his factory account with the State National Bank in the name of the M. A. Heimann Manufacturing Company. An employee named Judlin was the manager and bookkeeper in charge of the factory. As such he handled the funds of the business, made the deposits in bank and drew checks against the account of the M. A. Heimann Manufacturing Company. When defendant, in 1905, started the account at the bank in the name of Morris A. Heimann, Trustee for Melba Heimann, he instructed Judlin to thereafter deposit $ 25 a week in that account. These deposits continued to be made until the defendant sold his factory in 1914. Upon the death of her mother, defendant placed his daughter in Forest Park University, where she remained for three terms. In 1908 she went to live with his sister. During the time she was in school he expended between $ 1100 and $ 1200 for her tuitution and maintenance; afterward and until she was married, in 1913, he gave her an allowance of $ 75 a month. In addition to the allowance he paid from time to time debts incurred by her for clothing on charge accounts at various stores. He drew for his own use $ 35 a week. All of their living expenses, both for himself and his daughter, seem to have been paid from the funds of the M. A. Heimann Manufacturing Company as distinguished from those deposited to the credit of "Morris A. Heimann, Trustee," etc.

Defendant did not permit his employees...