In re Peck's Estate

• Decision Date: 05 April 1948
• Docket Number: No. 17.,17.
• Citation: 320 Mich. 692,32 N.W.2d 14
• Parties: In re PECK'S ESTATE (two cases).
• Court: Michigan Supreme Court

320 Mich. 692

32 N.W.2d 14

In re PECK'S ESTATE (two cases).

No. 17.

Supreme Court of Michigan.

April 5, 1948.

OPINION TEXT STARTS HERE Appeal to Supreme Court from Circuit Court Kent County; James E. Spier, Judge.

In the matters of the estates of Catharine A. Peck, deceased, and Percy S. Peck, deceased. From a judgment affirming probate court orders denying claims by Joseph Berkson against the estates, claimant appeals.

Affirmed.

Before the Entire Bench.

Shapero & Shapero of Detroit (Willis B. Perkins, Jr., of Grand Rapids, of counsel), for plaintiff.

Harrington, Waer & Cary, of Grand Rapids, for appellees, Percy S. Peck's daughters and Ex'rs of his estate.

Butterfield, Amberg, Law & Buchen, of Grand Rapids, for Michigan Trust Co., Trustee under the Will of Catherine A. Peck, deceased.

SHARPE, Justice.

This case involves two appeals from a judgment of the circuit court affirming orders of the probate court of Kent county, one in the estate of Catherine A. Peck and one in the estate of Percy S. Peck. The appealing party is Joseph Berkson, whose claims were denied in the probate court of Kent county and on appeal to the circuit court of Kent county were again denied.

The facts in these cases, consolidated on appeal, are as follows: Catharine A. Peck died February 21, 1927, leaving a will containing many bequests. The will designated the Michigan Trust Company of Grand Rapids and her nephew Percy S. Peck as co-executors. The residuary estate was divided into two parts and the twelfth paragraph of the will provided that one-half of the residuary estate was devised and bequeathed: ‘to the Michigan Trust Company and Percy S. Peck, in trust, to hold, invest and re-invest the same, with all the powers specified in paragraph second, and to pay the net income thereof to my said nephew, Percy S. Peck, at least as often as quarter-annually in each year, for and during the term of his natural life; and at his death the principal of said fund shall go and be disposed of as he, my said nephew, may, by his last will and testament, appoint; and, in default of such appointment, I give, devise and bequeath the same to his issue;-To Have And To Hold the same to them respectively, and to their respective heirs, representatives and assigns-Forever; and in case no issue of my said nephew Percy shall be living at his death, then to my niece.’

The Michigan Trust Company and Percy S. Peck qualified as trustees under the will. In February 1934, the three children of Percy S. Peck filed suit against him and the Michigan Trust Company, charging diversion of the trust funds. The rights and duties of the two trustees under the will in question were discussed and passed upon by the Michigan Supreme Court in the case of Roberts v. Michigan Trust Company, 273 Mich. 91, 262 N.W. 744.

On June 7, 1935, Percy S. Peck filed a voluntary petition in bankruptcy, in which he listed his interest in the trust in question, and other trusts, as follows: ‘Debtor has interest in certain trust assets as a spendthrift, beneficiary according to the instrument creating the same, but which may not be anticipated and are immune from creditors and not subject to assignment. Value none.’

On January 15, 1937, the trustee in bankruptcy sold at auction for $2,005 to the claimant, Joseph Berkson, who was not a creditor but an outside purchaser the following assets of the bankrupt estate of Percy S. Peck: ‘All of my right, title and interest as Trustee of the Estate of said Bankrupt, and the right, title and interest of the Bankrupt, if any, in a certain Trust created by the Will of Catharine A. Peck, deceased, which Will was duly admitted to Probate in the Probate Court for the County of Kent, under File No. 43101, and all of my right, title and interest as Trustee and the right, title and interest of said Bankrupt, if any, in and to a certain trust created by a Trust Agreement dated June 4th, 1913, between Catharine A. Peck and Thomas M. Peck, running to the Michigan Trust Company as Trustee; without warranty of title, however.’

On December 15, 1942, Percy S. Peck renounced under oath the power of appointment given under the will of Catharine A. Peck, which instrument was filed with the probate court and reads as follows: ‘I, Percy Seaman Peck, do hereby file with the Probate Court of Grand Rapids, Kent county, Michigan, this statement by me made, renouncing and foreswearing all, any and every power of appointment given me by the provision of the will of my deceased aunt, Catharine A. Peck, as it is my understanding and belief, that she, the aforesaid Catharine A. Peck, wished and willed, that all such properties and securities, of any nature whatsoever, held in trust by the Michigan Trust Company, in a Trust Fund, now known as Trust Fund, number four thousand one hundred and eighty-four (4184) pass, at my death, directly and equally to my three daughters, namely Catherine Peck Roberts, Virginia Peck Apted and Florence Peck Watson, all living in Grand Rapids, Michigan or Kent County Michigan. This paper to be held in file for me until my death or until such radical changes in the Federal or State laws, or deaths in my family would deem it advisable that I should withdraw it.’

On September 13, 1944, Percy S. Peck died, leaving a will dated December 21, 1942, which expressly confirmed his renunciation of the power of appointment conferred on him by the provisions of the will of his aunt Catharine A. Peck, and containing the further language: ‘on December 13, 1942 * * *, I legally relinquished, renounced and nullified any such powers as were given me in the above mentioned Will of the said Catharine A. Peck.’

On January 17, 1945, claimant Berkson filed a claim, by means of petition for assignment of residue, in the estate of Catharine A. Peck claiming the corpus of the one half residue of the estate held for the benefit of Percy S. Peck, which at the time of filing final account on December 5, 1944, was inventoried at $393,470.99. Berkson also filed claim in the Percy S. Peck estate to the uncollected income inventoried by the executors of his estate as having come from the estate of Catharine A. Peck, deceased, under paragraph 12 of her will, although never actually paid and still remaining a part of the corpus of the Catharine A. Peck estate, in the sum of $3,908.49.

It is to be noted that the custody and control of the funds of the trust in question remained entirely in The Michigan Trust Company, as co-trustee, and only a nominal bond of $10,000 was required of Percy S. Peck.

The cause came on for trial and at its conclusion the trial court denied recovery on the two claims filed by Joseph Berkson. In an opinion filed, the court said:

‘Looking first to the basic instrument involved, the will of the deceased, we find the clearly expressed intention of a testator to establish a trust from which her nephew Percy Peck would receive the income only for life, and the corpus of the trust would go to his heirs, if any, after his death. With an apparent understanding of her nephew,...