Jarvis v. Boatmen's Nat. Bank of St. Louis, 54788

• Decision Date: 13 March 1972
• Docket Number: No. 54788,No. 1,54788,1
• Citation: 478 S.W.2d 266
• Parties: L. H. JARVIS et al., Appellants, v. The BOATMEN'S NATIONAL BANK OF ST. LOUIS, a National Banking Association, Respondent
• Court: Missouri Supreme Court

Page 266

478 S.W.2d 266

L. H. JARVIS et al., Appellants, v. The BOATMEN'S NATIONAL BANK OF ST. LOUIS, a National Banking

Association, Respondent.

No. 54788.

Supreme Court of Missouri, Division No. 1.

March 13, 1972.

Motions for Rehearing and to Transfer to Court En Banc

Denied April 10, 1972.

John L. Anderson, Anderson, Anderson & Brooking, Hillsboro, for appellants.

Lewis, Rice, Tucker, Allen & Chubb, Robert S. Allen, Charles C. Allen, Jr., St. Louis, for respondent.

BARDGETT, Judge.

This is a suit in equity in which plaintiffs, the residuary and partial income beneficiaries of a testamentary trust, seek to surcharge defendant-respondent Boatmen's National Bank of St. Louis, as trustee, in the amount of $230,067.00 in favor of the trust. Plaintiffs-appellants charge the trustee in three counts. Counts I and II seek the surcharge and differ only in that Count I alleges misconduct and breach of trust and Count II alleges negligence, unskillfulness and lack of proper care and diligence. Count III incorporates Counts I and II and seeks the removal of the Trustee.

At the conclusion of all the evidence, the Court made extensive findings of fact and conclusions of law and entered its decree found in favor of defendant and against plaintiffs on all three counts; dismissed plaintiffs' petition with prejudice, and, on application of defendant, awarded defendant attorneys' fees against the principal of the Mary B. Eversole trust, as well as a sum for the necessary expenses in the case to be paid out of the said trust. Following an unavailing motion for new trial plaintiffs appeal.

We have jurisdiction because the amount in dispute exceeds $15,000.00, which was the jurisdictional criteria at the time this appeal was taken. Art. V, § 3, Const.Mo. 1945, V.A.M.S.

The event which forms the basis of this suit was the sale by defendant Trustee of the interests in real estate which were held by the Trustee as part of the assets of the testamentary trust of Mary B. Eversole, to one Edward T. Eversole for $19,933.00 on October 24, 1962. Plaintiffs' position, inter alia, is that the price obtained for the property was wholly and grossly inadequate and that the inadequacy was due to misconduct, breach of trust or negligence on the part of the Trustee.

Mary B. Eversole (hereafter Mary) died testate on April 28, 1962, in Potosi, Washington County, Missouri. Her will, which been prepared by one Gordon Jacques and executed by Mary on January 31, 1941, was admitted to probate in Washington County Probate Court.

Clause II of the Will left all Mary's household furniture, autos, clothing, jewelry and articles of personal use to Edward T. Eversole, if he survived her, and, if not, the described property became part of the residue. Edward did survive Mary.

Clause III created a testamentary trust, the corpus of which consisted of all Mary's real and personal property not bequeathed in Clause I. Gordon Jacques was first named executor and trustee. He declined to serve as did another person for reasons not here relevant, and Boatmen's National Bank, also designated in the will, accepted and became the sole executor and trustee.

Paragraph 1 of the terms and conditions of the trust provides:

'I direct the Trustee to convert all real estate coming into his hands as Trustee into cash by sale thereof as soon as a buyer or buyers can be found and upon such terms and conditions as the Trustee may in his judgment deem satisfactory.'

Paragraph 2, inter alia, directed the Trustee to invest and reinvest the proceeds of the estate in such stocks, common, and preferred, bonds, notes and securities as he may approve. Paragraph 3 directed the Trustee to hold the trust property for the benefit of the beneficiaries and to apply so much of the net income and principal as was necessary to make designated annual payments to named beneficiaries. Four individuals were named as income beneficiaries, each to receive stated annual sums varying from $100.00 to $300.00. The fifth income beneficiary was the First Presbyterian Church of Potosi, Missouri, and the annual payment was designated to be $300.00 until the death of the last of the individual beneficiaries. The trust terminates on the death of the last individual income beneficiary, and, upon termination, the Trustee is directed to pay in distribution of the corpus to seven named persons sums $1,000.00 or $2,000.00. One of the seven residuary beneficiaries is Nancy Wallace Eversole. After making payment to the seven named persons the entire remainder is to be paid to the First Presbyterian Church of Potosi, Missouri.

Clause VII, after providing that no bond be required of the Trustee, provides:

'No person or Corporation acting as Trustee or Co-Trustee shall at any time be held liable for a mistake of law or fact or of both law and fact, error of judgment nor for any loss coming to said Trust Estate or to any Beneficiary under this will or to any other person except through actual fraud or willful misconduct on the part of the Trustee to be charged.'

Shortly after April 28, 1962, the date of Mary's death, Gordon Jacques went to Boatmen's and spoke to Clifford Shandy, an assistant trust officer. Jacques told Shandy of the will and testamentary trust and requested that Boatmen's undertake the executorship and trusteeship under the will. After some internal conferences at the Bank, Boatmen's agreed to so serve and Shandy was put in charge of the probate administration. Shandy asked Jacques to tell him the name of some person who would be familiar with Mary's family and her affairs and Jacques suggested Judge Edward T. Eversole. Shandy spoke to Edward Eversole about the need for two appraisers in connection with the inventory and appraisement and asked Edward Eversole to suggest names. He suggested George Wallace and Jesse Essmeyer. Shandy arranged to meet with Judge Eversole, Wallace, Jesse Essmeyer and others at Mary's house at 228 E. High Street, Potosi, on May 9, 1962. They met there and undertook to inventory her personal effects and searched for other assets. On July 12, 1962, the inventory and appraisement were filed and approved by John Eversole who was Judge of the Probate Court of Washington County.

The personalty that became part of the trust consisted of cash, stocks, bonds and notes and was inventoried at the 'market or appraised value' as of April 28, 1962 at a total of $244,284.77. The real estate interests that became a part of the trust appear in the inventory and appraisement as follows:

'REAL ESTATE

An undivided 5/6 interest in real property described as follows:

Parcel

(1) 'Lots Nos. 1 through 7, Spanish Grant No. 1851, Twp. 37, NR 2 E. Subject to easements and right-of-ways of record, and comprising approximately 380 acres.'

Assessed Value of 5/6 int.--$8,233--Carried at $1.00 (See Trust Agreement No. 1, dated December 13, 1951, and recorded in Book 102, Page 226 and 227 in County Recorder's Office).

Real property situate in the County of Washington, State of Missouri, described as follows:

(2) 'Lots 8, 9 and 10 in Old Village Mine of Breton--Less 100 front feet on High Street off of Lot 10--by a depth of 106 feet--

And the South Part of Section 11, Twp. 37--NR 2 E. lying South of the Missouri Pacific RR Tracks numbered and known as 228 East High Street, Potosi, Missouri.'

Assessed Value--$4,810--Carried at $1.00.

(3) 'Lots Nos. 28 and 29 of Spanish Grant 430, Twp. 37--NR 2 E. less Railroad right-of-way, and comprising approximately 213.45 acres.'

Assessed Value--$5,000--Carried at $1.00.

An undivided 1/2 interest in real property described as follows:

Parcel

(4) 'South part of Lot 11, Spanish Grant 430, Twp. 37, NR 2 E. and comprising approximately 41.40 acres.'

Assessed Value of 1/2 int.--$295--Carried at $1.00.

(5) 'East half of West Frac. half of SE 1/4--Sec. 27, Twp. 38, NR 2 E., and comprising approximately 17.50 acres.'

Assessed Value of 1/2 int.--$75--Carried at $1.00.

(6) 'East half SW 1/4--Sec. 26, Twp. 38--NR 2 E. and comprising approximately 80 acres.'

Assessed Value of 1/2 int.--$180--Carried at $1.00.

(7) 'East half of Lots 1 and 2 of the NE 1/4 and NW 1/4 of SE 1/4 of Sec. 2--Twp. 36--NR 2 E. and comprising approximately 127 acres.'

Assessed Value of 1/2 int.--$160--Carried at $1.00.

(8) 'W half of SE 1/4 of Sec. 12--Twp. 36--NR 2 E. and comprising approximately 80 acres.'

Assessed Value of 1/2 int.--$105--Carried at $1.00.

(9) 'SW 1/4 of NE 1/4 and NW 1/4 of SE 1/4 and SE 1/4 of NW 1/4, Sec. 31--Twp. 37--NR 2 E. and comprising approximately 120 acres.'

Assessed Value of 1/2 int.--$220--Carried at $1.00.

(10) 'SE 1/4 of SE 1/4 of Sec. 34--Twp. 37--NR 2 E. and comprising approximately 40 acres.'

Assessed Value of 1/2 int. $90--Carried at $1.00.

(11) 'South half of SE 1/4, Sec. 13--Twp. 37--NR 3 E., and comprising approximately 80 acres.'

Assessed Value of 1/2 int.--$400--Carried at $1.00.

(12) 'Lots 1 and 2, Block 4, Dunklin & Fissells Addition to Potosi, Missouri.'

Assessed Value of 1/2 int. $375--Carried at $1.00. (See Trust Agreement No. 2 recorded in Book 102, Page 55 in County Recorder's Office)'

(Parcel figures appearing to the left of the property description are ours and will be used for reference infra.)

The recapitulation in the inventory and appraisement shows no carried value on the real estate and the April 28, 1962 market or appraised value as 'undetermined.' The 'assessed value' shown totals $19,943.00.

In July, 1962, Judge Eversole told Shandy that he would be making an offer to buy all the real property in Mary's estate and certain stock. Shandy testified that there were no discussions concerning value or price at that time nor at any time prior to the filing of the inventory and appraisement on July 12, 1962.

On July 19, 1962, Judge Eversole wrote two letters to Shandy. In one of the letters (Plaintiffs' Ex. 2) he offered to pay $19,943.00 for all interest of the estate in all real estate listed in the inventory. In the other letter (Pl...