In re Lowe's Estate

• Decision Date: 11 July 1942
• Docket Number: 35615.
• Citation: 155 Kan. 679,127 P.2d 512
• Parties: In re LOWE'S ESTATE. v. LOWE et al. JOHNSON COUNTY NAT. BANK & TRUST CO.
• Court: Kansas Supreme Court

127 P.2d 512

155 Kan. 679

In re LOWE'S ESTATE.

JOHNSON COUNTY NAT. BANK & TRUST CO. v. LOWE et al.

No. 35615.

Supreme Court of Kansas

July 11, 1942

Rehearing Denied Sept. 14, 1942.

Syllabus by the Court.

Under provision of Probate Code that no foreign corporation should be appointed or authorized to act as a fiduciary in the state, a foreign corporation would not be permitted to serve as testamentary trustee of residuary estate consisting of cash and liquid assets of a deceased Kansas resident whose will, which was probated in the state, specifically designated a foreign corporation as testamentary trustee. Gen.St.Supp.1941, 59-1a02(2), 59-1701.

The express wishes of a testator may be overruled when sound discretion of the court prompts it to hold that conservation of the estate or interest of beneficiaries so requires.

Where there is a conflict between a testator's intention and positive rules of law, the latter must prevail.

By section 131 of the Kansas Probate Code, G.S.1941 Supp 59-1701, a foreign corporation can not serve as testamentary trustee of the residuary estate of a testator who died a resident of Kansas and whose will has been duly probated in this state.

Appeal from District Court, Johnson County; Garfield A. Roberds Judge.

Roy B Thomson, of Kansas City, Mo. (John W. Breyfogle, Jr., of Olathe, and Arthur Mag and A. Eugene Grossman, Jr., both of Kansas City, Mo., on the brief), for appellant.

E. S McAnany, of Kansas City, and Robert B. Fizzell, of Kansas City, Mo. (Murray H. Hodges, of Olathe, Thomas M. Van Cleave and Willard L. Phillips, both of Kansas City, and Justin D. Bowersock and John F. Rhodes, both of Kansas City, Mo., on the brief), for appellees.

O. L. O'Brien, Walter L. McVey, and John F. O'Brien, all of Independence, Marlin S. Casey, Robert T. Price, and William M. Mills, Jr., all of Topeka, and Walker F. Means, of Hiawatha, amici curiae.

DAWSON Chief Justice.

This appeal is concerned with the effect of G.S.1941 Supp. 59-1701, being section 131 of the Probate Code of 1939, upon the authority of a foreign corporation to act as testamentary trustee of a trust created by the will of a resident of this state.

The late George C. Lowe, a resident of Johnson county, died on April 12, 1940. He was a man of considerable means, and although he had his home in Johnson county his long business career had been conducted in Kansas City, Missouri, just across the Kansas-Missouri state line.

Lowe's will was probated in Johnson county. It had been executed on November 15, 1939, some four and a half months after the new Probate Code took effect. The testator's home residence in Johnson county, Kansas, and its furnishings and purely personal effects were devised to his widow. In an elaborate trust instrument suitable provision was made for her support and maintenance. His three daughters were likewise provided for, and a half brother and his family were also remembered. His daughter Georgia C. Lowe was named sole executrix without bond. With these details we shall have no serious concern. The legal question which gave rise to this lawsuit grows out of two paragraphs of the testator's will which deal with the designation of the testamentary trustee, the first of which reads, in part, thus: "4. I give, devise and bequeath all of the rest, residue and remainder of my property and estate of whatever character, whether real, personal or mixed, and wherever situated, unto Union National Bank in Kansas City, a corporation, of Kansas City, Missouri, its successor or successors, as Trustee, to have and to hold the same in trust, with the powers and authority and subject to the terms, conditions and provisions hereinafter set forth."

This paragraph continues for six pages of instructions as to the duties and powers of the trustee but these may need no attention.

The next paragraph of the will of present concern reads: "6. I desire and direct, and it is my will and intention, that the trust estates created in this, my last will and testament, shall have their situs solely and exclusively in the State of Missouri and that said trusts be administered by the Trustee in said State and in accordance with the laws of said State, and I direct my Executrix herein named to deliver the assets comprising the trust estate or estates to my Trustee, Union National Bank in Kansas City, or its successor, at its office in Kansas City, Missouri. I relieve and release my Trustee from the duty or necessity of filing any and all inventories and accountings with any court, including the Probate Court in which this, my last will and testament, is admitted to probate."

In due course the executrix filed her final account and applied for an order of distribution of the assets in her hands, which included the sum of $165,023.62 in cash and liquid assets, and which constituted the trust fund created under paragraphs 4 and 6 of the testator's will.

On October 13, 1941, the probate court made its order of final distribution which in part reads:

"After due consideration of the arguments presented and briefs filed by counsel with this court on behalf of the executrix concerning the qualifications of the Union National Bank of Kansas City, Missouri, as trustee in this estate, the court being fully advised in the premises finds:

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"6. That the said will designates Union National Bank in Kansas City as trustee of the residuum of said estate; that said bank is a corporation organized and existing as a national bank and has its banking house and principal place of business in Kansas City, in the state of Missouri and without the state of Kansas and is not located in this state; that said bank is neither a bank or other corporation organized under the laws of and having its principal place of business in this state nor a national bank located in this state; that said bank is neither qualified under the laws of this state to receive said trust estate constituting the residuum of this estate from the executrix nor to administer said trust estate because it is a national bank not located in this state as aforesaid; that the testator has by his will indicated his wish that a corporate fiduciary receive and administer the trust estate created by said will and that by reason of the disqualification of the trustee named, the duty devolves upon this court to designate a trustee qualified to act in order that said trust shall not fail.

"7. That The Johnson County National Bank and Trust Company is a national bank located in this county and state, with power to act as trustee and in other fiduciary capacities and is in all respects authorized to act as trustee herein after filing the bond herein required and making the affidavit required by law.

"8. That distribution of the remaining assets of the estate of George C. Lowe, deceased, be made as follows, to-wit:

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"To the Johnson County National Bank and Trust Company, all the rest and remainder of the said estate, as Trustee, to have and to hold the same in trust with the powers and authority subject to the terms, conditions and provisions of said will."

Then followed the formal order designating and appointing the Johnson County National Bank and Trust Company to receive and administer the trust estate under the terms of the testator's will, and directing the executrix to deliver to it all the remaining assets of the estate in her hands.

This order of the probate court was promptly appealed to the district court and the matter was promptly heard and decided in that court, which held--

"Tt the deceased intended to create and did create a trust estate of said residuary assets having its situs and to be administered in and under the laws of the state of Missouri; that Section 131 of the Kansas Probate Code (Section 59-1701, G.S.1941 Supp.) merely prohibits a non-resident corporation from acting as trustee in the state of Kansas and does not prohibit a resident decedent of Kansas from making a bequest of personal property to a non-resident corporate trustee to be administered by such trustee at its place of business outside the state of Kansas; that the Probate Court of Johnson County, Kansas, in its order, judgment, decree and decision made and entered in said court in the matter of the estate of George C. Lowe, deceased, on October 13, 1941, erred in disqualifying said Union National Bank in Kansas City from acting as Trustee of said trust estate and erred further in appointing The Johnson County National Bank and Trust Company as trustee of said trust estate and in ordering and directing the executrix of said estate to make distribution of the residuary assets of said estate to said The Johnson County National Bank and Trust Company as such trustee; that Section 131 of the Kansas Probate Code has no application to the facts in this case and that the will, wishes, intention and desires of George C. Lowe, deceased, as expressed by his said last will and testament should be given full force and effect."

The district court set aside the order of the probate court, and held the Union National Bank of Kansas City, Missouri, was qualified to receive the residuary assets of the Lowe estate and directed the executrix to deliver them to it in accordance with the testator's will.

Hence this appeal.

The importance of the legal question involved has called forth exhaustive briefs by counsel for appellant and appellees, and we have been favored with briefs by various amici curiae, one of whom was a member of the legislature in the session of 1939 and served on the committee of the House of Representatives which had charge of the bill which constitutes the present Kansas Probate Code (G.S.1941 Supp. 59-1a01, Laws 1939, ch. 180; G.S. 1941 Supp. 59-1a01 et seq.)

The pertinent...