Krause v. Jeannette Inv. Co.

• Decision Date: 12 August 1933
• Docket Number: 30821
• Citation: 62 S.W.2d 890,333 Mo. 509
• Parties: Ernest J. Krause, Jr., Appellant, v. Jeannette Investment Company, a Corporation, Charles M. Huttig, R. D. Musser, E. L. McColm and Laura Musser McColm
• Court: Missouri Supreme Court

62 S.W.2d 890

333 Mo. 509

Ernest J. Krause, Jr., Appellant, v. Jeannette Investment Company, a Corporation, Charles M. Huttig, R. D. Musser, E. L. McColm and Laura Musser McColm

No. 30821

Supreme Court of Missouri

August 12, 1933

Appeal from Circuit Court of St. Louis County; Hon. Julius R Nolte, Judge.

Affirmed.

Marion C. Early, A. E. L. Gardner and Ivon Lodge for appellant.

(1) The trust instrument signed by Annie E. Huttig January 29, 1919 contemporaneously with the execution of her last will containing a trust with the same provisions never became effective. (a) The trust and will constituted but one instrument and, being testamentary in character, was subject to revocation or modification by the maker at any time prior to her death. 40 Cyc. 1421; Hughes v. Bent, 118 Ky 609; Chestnut Street Bank v. Fidelity Insurance Trust, 186 Pa. St. 333. (b) Since Annie E. Huttig was not the sole trustee, the mere signing of the trust agreement was ineffectual until the property had been delivered to the trustee and a separate fund created. 39 Cyc., pp. 55, 56; Perry on Trusts (7 Ed.), pp. 96, 97; Mize v. Bates Bank, 60 Mo.App. 358; Citizens Bank v. McKenna, 168 Mo.App. 254; State ex rel. K. C. Seminary v. Ellison, 216 S.W. 967; Loring v. Loring, 170 Mass. 328; Ry. Co. v. Railway Co., 254 U.S. 196. (2) Annie E. Huttig never intended to exclude her daughter's husband from inheriting this property. The "polar star" in arriving at the construction of a trust instrument is the intention of the settlor. Technical construction will not be adopted in order to defeat the plain intent of the one who created the trust. In trusts pertaining to personal property, the word "heirs" will be construed to include a husband or wife of the beneficiary where that construction best meets the probable intent of the settlor. Burr v. Burr, 163 Mo.App. 395; Waddle v. Frazier, 245 Mo. 391; Matlock v. Klem, 190 S.W. 410; R. S. 1929, sec. 324; In re Cupples Estate v. Koeln, 190 S.W. 556.

Jones, Hocker, Sullivan & Gladney for respondents.

(1) The plaintiff cannot avoid his release without restoring the consideration. Metropolitan Paving Co. v. Investment Co., 309 Mo. 654; Rice v. Railway Co., 187 S.W. 17; McCoy v. Construction Co., 216 S.W. 771; Althoff v. Transit Co., 204 Mo. 170. (2) Fraud must be proven by clear and convincing evidence. Jones v. Nichols, 280 Mo. 653; Allen Estate v. Boeke, 300 Mo. 575; Gettings v. Gifford, 292 Mo. 678. (3) The finding of the trial court will not be disturbed except for cogent reasons. Hobbs v. Hicks, 8 S.W.2d 966; Creamer v. Bevert, 214 Mo. 473; Jones v. Thomas, 218 Mo. 508. (4) The trust instrument of January, 1919, was a present immediate transfer and no part of Mrs. Huttig's will. Christ v. Kuehne, 172 Mo. 124; O'Day v. Meadows, 194 Mo. 620; Sims v. Brown, 252 Mo. 63; Priest v. McFarland, 262 Mo. 238; Melvin v. Hoffman, 290 Mo. 496; Tillman v. Carthage, 297 Mo. 74; Owens v. Wait, 304 Mo. 304; 13 C. J. 529. (5) The trust instrument of February 20, 1919, was inoperative because the prior one was irrevocable. Lawrence v. Lawrence, 24 Mo. 271; Ewing v. Shannahan, 113 Mo. 196; Harding v. Trust Co., 276 Mo. 142; Stephens v. Moore, 298 Mo. 226; Frank v. Heimann, 302 Mo. 345; Newton v. Rebenack, 90 Mo.App. 657. (6) The donee under a power of appointment takes directly under the donor of the power. Armor v. Frey, 253 Mo. 473; Chanler v. Kelsey, 205 U.S. 473; 49 C. J. 1305. (7) The plaintiff was not an heir at law of his deceased wife and had no interest in Mrs. Huttig's estate. Will's Guardian v. Moore, 16 Mo. 481; Wright v. Platt, 17 Mo. 46; Jarboe v. Hey, 122 Mo. 347; Graham v. Moore, 189 S.W. 1186; Waddle v. Frazier, 245 Mo. 401; Morse v. Ballou, 112 Me. 557, s. c. 90 A. 1092; Rose v. Rambo, 82 So. 149.

Tipton, J. Ellison, P. J., concurs; Leedy, J., not sitting.

OPINION

TIPTON

The appellant sued the respondents claiming that his deceased wife, Jeanette Huttig Krause, died owning some property given to her by Annie E. Huttig, her mother, during her lifetime, and, also, under her mother's will. Appellant married Jeanette Huttig Krause on the 20th day of July, 1920, and they lived together until her death on the 3d day of January, 1922. In the year 1914, Annie E. Huttig caused to be organized the Jeannette Investment Company and transferred a portion of her estate to this corporation. At that time one share each was put in the name of A. J. Siegel, her business adviser; the late Eugene H. Angert, her legal adviser; R. D. Musser, her brother; and E. L. McColm, her brother-in-law. The remaining 146 shares were issued to herself. She and these men made up the board of directors, and the shares issued to these men were indorsed and returned to her. She had two children, Jeanette and Charles. When Jeanette, the eldest of the two children, attained her majority, the share that had been issued to Mr. Angert was transferred to her, and she took his place on the board of directors. She, also, indorsed her qualifying share and returned it to her mother. Mr. Musser lived in the State of Minnesota and Mr. McColm lived in Iowa. Mrs. Huttig lived in the city of St. Louis where Mr. Siegel lived. On January 29, 1919, Mrs. Huttig transferred two certificates of fifty shares each of the capital stock of this corporation to herself and A. J. Siegel, as trustees, and she executed a declaration of trust; which declaration recited that Mrs. Huttig had "this day transferred and delivered" to herself and Mr. Siegel the one hundred shares of stock. Among other things in the trust declaration, it was recited that in the event of Mr. Siegel's death, Mrs. Huttig should appoint his successor. In the case of her own death, the trust was to devolve upon the respondents, Siegel, Musser, McColm and Laura Musser McColm, Mrs. Huttig's sister. The trust was to continue with the survivors of these so long as there were three in number, with provisions of filling any vacancies in the trusteeship so as to keep the number up to three. On the same date, Mrs. Huttig executed her last will and testament. She left the residue of her estate in trust with the above named persons who were the same trustees under the declaration of trust. The pertinent parts of the trust declaration and the trust created by the will, which are identical except that paragraph 4 is omitted in the will, are as follows:

"Second. The trustees shall apply such portion of the income derived from the trust estate as they, in their sole discretion, deem best for the benefit, support and education of each of said children until he or she arrives at the age of thirty (30) years; and they may, likewise in their sole discretion, pay to each child the whole or any part of the income derived from his or her share of said trust estate until he or she arrives at said age. When each of said children reaches the age of thirty (30) years, the trustees shall pay, transfer and deliver to such child his or her one-half share of the principal and accumulated income of said trust estate, whereupon the trust as to such child shall cease and determine.

"Third. In the event of the death of either or both of said children before receiving his or her part of said trust estate, the trustees shall hold or dispose of said share of the trust estate belonging to such deceased child or children in the manner directed by his or/and her last will and testament. In the event of the death of either child prior to attaining the age of thirty (30) years, leaving no last will and testament, the trustees shall pay over, transfer and deliver the share of or interest in the trust estate belonging to such deceased child to his or her bodily heirs born in lawful wedlock; and if there be no such bodily heirs, then to the heirs at law of such deceased child or children; provided, however, that if either of said children, before reaching the age of thirty (30) years, becomes entitled to receive the whole or a part of the share of the trust estate of his sister or her brother as the heir at law of such deceased sister or brother, then said share shall be held by the trustees for such child, under the terms and provisions of this trust agreement, until he or she reaches the age of thirty (30) years.

"Fourth. The Trustees may, in their discretion, advance to either child, or to both children, any part of the principal of said trust estate."

On February 20, 1919, Mrs. Huttig executed another declaration of trust in exactly the same language as the one of January 29, 1919. except that instead of one hundred shares of the Jeannette Investment Company being placed at trust, there were only sixty shares. The certificates issued with the prior declaration were canceled, and a new certificate of forty shares was put back in the name of Mrs. Huttig, and certificates of the sixty shares were placed in the names of the trustees. In November, 1919, Mrs. Huttig died and as previously stated under her last will and testament a trust estate was created, the terms of which were identical with the trust estate created under the declarations of trust of January and February of 1919. On January 3, 1922, Jeanette died under the age of thirty. She died childless and had not adopted a child or children, and left no will except a tentative will which was not executed.

During the married life of Jeanette Krause she received checks regularly from the Jeannette Investment Company. As the business was handled by Mr. Siegel, he caused dividends to be declared by the Jeannette Investment Company at irregular intervals to offset these advances that had been made to the two children. In 1922, appellant employed his brother-in-law Leighton Shields, to investigate as to whether or not he was entitled to inherit anything from his deceased wife. After some...