Franz v. Buder

• Decision Date: 09 September 1929
• Docket Number: No. 8460,8461.,8460
• Parties: FRANZ v. BUDER et al. MISSISSIPPI VALLEY TRUST CO. v. SAME.
• Court: U.S. Court of Appeals — Eighth Circuit

34 F.2d 353 (1929)

FRANZ v. BUDER et al.^*

MISSISSIPPI VALLEY TRUST CO. v. SAME.

Nos. 8460, 8461.

Circuit Court of Appeals, Eighth Circuit.

September 9, 1929.

S. Mayner Wallace, of St. Louis, Mo. (Allen McReynolds, of Carthage, Mo., on the brief), for appellant Franz.

S. Mayner Wallace and Samuel H. Liberman, both of St. Louis, Mo. (T. M. Pierce, of St. Louis, Mo., John B. Hollister, of Cincinnati, Ohio, A. Holt Roudebush, of St. Louis, Mo., and Taft, Stettinius & Hollister, of Cincinnati, Ohio, on the brief), for appellant Trust Company.

G. A. Buder, Jr., and Oscar E. Buder, both of St. Louis, Mo. (A. W. Wenger, of St. Louis, Mo., on the brief), for appellees.

Before BOOTH, Circuit Judge, and SANBORN and DEWEY, District Judges.

BOOTH, Circuit Judge.

There are here two appeals from an order denying motions for the removal of trustees appointed under an agreement of trust. The grounds of the motion were: (1) That the trustees had failed to give the bonds ordered by this court for the protection of the interests of certain beneficiaries in the trust estate; (2) that the trustees had failed to render the statement and account of the properties belonging to the trust estate as required by the decree of the court below, affirmed by this court; (3) that the trustees had been guilty of breaches of trust, as disclosed by the record and proceedings in the cause.

The prior history of the litigation relative to this trust estate is found in Franz v. Buder (C. C. A.) 11 F.(2d) 854, 858; Franz v. Franz (C. C. A.) 15 F.(2d) 797; Buder v. Franz (C. C. A.) 27 F.(2d) 101.

The salient facts in said prior history are to be found in the opinion of this court in 27 F.(2d) 101-105, and need not be here repeated.

In the present main suit the plaintiff Ehrhardt W. Franz, appellant here, prayed for a disclosure and accounting by the trustees of the properties in the trust estate; for restraint of the trustees from disposing of certain stock belonging to the trust estate; for an adjudication of his alleged vested remainder interest in the trust estate; for a bond by the trustees for the protection of his remainder interest; and for general relief. The Mississippi Valley Trust Company, one of the defendants in the suit, appellant here, by cross-bill prayed for the same relief on behalf of the estates of two deceased alleged remaindermen.

The decree of the trial court as modified and affirmed by this court found the issues in favor of the appellants here; adjudged that plaintiff had a one-tenth vested remainder interest in the properties in the trust estate derived from the estate of Ehrhardt D. Franz, deceased, and that each of the estates represented by the Mississippi Valley Trust Company had a like interest; adjudged that stock dividends received on those stocks in the trust estate which belonged to the estate of Ehrhardt D. Franz, and in which Sophie Franz, his widow, had a life estate, belonged to the corpus of the trust estate and were not income; directed that the trustees "make and file, within thirty (30) days from the date of this Decree, with the record of this cause in the office of the clerk of this Court, a complete statement under their several oaths, of the present nature, condition, extent, location and value of the properties referred to or described in the trust agreement, of date January 30, 1909, mentioned in the pleadings and evidence in this cause, and, in such statement, render a true account of the said properties"; directed further "that any of said four interests including the interest of plaintiff and the interests represented by the Mississippi Valley Trust Company may, within thirty days after receipt of the mandate by the trial court, file therein a written request for such separate bond in such sum (not exceeding $500,000) as may be stated therein; that, within thirty days after such filing, a separate bond in such sum shall be filed by the trustees, to be approved in all respects by a judge of the trial court; as to all of such four interests not filing such request, a joint and several bond in the sum of $500,000, to be likewise approved."

The mandate of this court was filed in the court below on July 19, 1928. August 16, 1928, plaintiff Ehrhardt W. Franz filed in the court below request for separate bond in the sum of $500,000 for the protection and security of his remainder interest; and on the same day the Mississippi Valley Trust Company filed similar requests for separate bonds in the same amount for the protection and security of the two remainder interests represented by it. August 14, 1928, the trustees filed a statement and account touching the properties and condition of the trust estate. September 4, 1928, plaintiff filed objections to the statement and account filed. September 18, 1928, plaintiff and the Mississippi Valley Trust Company filed motions, similar in character, for the removal of the trustees upon the grounds above stated.

The motions came on for hearing October 1, 1928, and were partially heard on that date. It appeared that no bonds had been filed by the trustees pursuant to the requests. Bonds were, however, offered by the trustees at the hearing, and testimony was taken in their behalf relative to the delay. The court held that the delay was not due to any intent or recalcitrancy on the part of the trustees, but was due to an honest mistake between counsel relative to certain negotiations with a bonding company which had been suggested as surety. The court excused the delay; and the form of the proffered bonds not being satisfactory, the hearing was continued until October 20, 1928. The parties failed to agree on the form of the bonds during the interim; and the court finally directed certain changes to be made in the form proffered by the trustees, and the bonds were accordingly executed. They were approved and filed October 20, 1928.

At the hearing on October 20, 1928, the objections which had been filed September 4, 1928, to the statement and account as filed by the trustees, were called to the attention of the court and introduced in evidence. The objections were as follows:

"1. The trust estate held by said Trustees is confused in the statement thereof with the Estate of E. D. Franz, deceased.

"2. There is no showing of Plaintiff's remainder interest in the moneys, to-wit, $826,875.00 derived by said Trustees at the time of the redemption of the preferred stock of Burroughs Adding Machine Company.

"3. Said statement contains no information respecting the alleged purchase by Sophie Franz of the various stocks and bonds bequeathed by the will of E. D. Franz, deceased.

"4. A long period of time prior to January 30, 1909, at which time said Trustees came into possession of the properties referred to in this cause, is improperly referred to and included, within said statement.

"5. Various gifts by Sophie Franz to plaintiff are improperly treated in said statement as alleged loans or advancements by her to him.

"6. Divers matters and things, not required by said decree, are improperly included within the said statement.

"7. There is no showing, by said statement, of interest received by, or chargeable to, said Trustees.

"8. There is no showing by said statement of any counsel fees, commissions, or other expenses paid or received by said Trustees.

"9. Said statement is otherwise uncertain, indefinite and incomplete."

At the same hearing the other grounds alleged for the removal of the trustees were also called to the attention of the court.

November 20, 1928, the court filed the following order:

"Now on this day, the Court having considered the motion of plaintiff, as well as separate motions of defendant, Mississippi Valley Trust Company (1) as administrator of the estate of Ernest H. Franz, deceased and (2) as administrator of the estate of Walter G. Franz, deceased, for removal of trustees, etc., being fully advised in the premises, doth Order that such motions be, and the same are hereby overruled."

The present appeals followed.

At the hearing of the present appeals the clerk of this court presented a paper which had been filed on the day set for the hearing, and which purported to be a dismissal of the appeal by Ehrhardt W. Franz. His counsel disclaimed any knowledge of the execution or filing of the paper, though he did not question its authenticity. Under these circumstances we feel constrained to give effect to the dismissal; and accordingly the appeal of the Mississippi Valley Trust Company, which involves, however, the same questions, will alone be considered.

At the outset we are met by the contention of appellees that the order of November 20, 1928, denying the motion to remove the trustees, is not a final order and therefore not appealable. We think this contention cannot be sustained. This court has already taken cognizance of the trust, and potential control of the trust estate. It is inherent in the powers of a court of equity to remove a trustee for breach of trust or other good cause shown. May v. May, 167 U. S. 310, 17 S. Ct. 824, 42 L. Ed. 179. Appeals from orders of removal have been frequently entertained. May v. May, supra; McPherson v. Cox, 96 U. S. 404, 27 L. Ed. 746; McDonald v. O'Donnell, 56 App. D. C. 31, 8 F.(2d) 792, 45 A. L. R. 328; Williams v. Nichols, 47 Ark. 254, 1 S. W. 243. As also have appeals from orders denying removal. In re Price's Estate, 209 Pa. 210, 58 A. 280; Gartside v. Gartside, 113 Mo. 348, 20 S. W. 669; Dailey v. Wight, 94 Md. 269, 51 A. 38; Warren v. Burnham, 125 App. Div. 169, 109 N. Y. S. 202. We turn to the merits.

As to the first ground urged for removal, delay in furnishing the bonds ordered in the decree, and in furnishing them finally in improper form, little need be said. The trial court held that the delay was not intentional, but due to an honest misunderstanding between counsel. There was substantial evidence to sustain such holding. It will therefore not be disturbed. The provision...