Lancaster County Bank v. Marshel

• Decision Date: 10 January 1936
• Docket Number: 29382
• Citation: 264 N.W. 470,130 Neb. 141
• Parties: LANCASTER COUNTY BANK, APPELLANT, v. DEEM MARSHEL ET AL., APPELLEES
• Court: Nebraska Supreme Court

264 N.W. 470

130 Neb. 141

LANCASTER COUNTY BANK, APPELLANT, v. DEEM MARSHEL ET AL., APPELLEES

No. 29382

Supreme Court of Nebraska

January 10, 1936

APPEAL from the district court for Lancaster county: ELLWOOD B CHAPPELL, JUDGE. Affirmed.

AFFIRMED.

Syllabus by the Court.

1. No particular form of words is necessary to create restrictions rendering the interest of a beneficiary of a testamentary trust inalienable and placing the same beyond the reach of his creditors, nor is it necessary that the restrictions be expressed directly in the testamentary language employed. They may be implied if that intention can be clearly ascertained from the whole will, in connection with the surrounding circumstances.

2. Courts look at all the provisions of a will and the circumstances under which it was made, including the condition of the beneficiary, and, if an intent to restrict the beneficiary's interest in property devised so that he may not alienate it nor his creditors seize it, is reasonably plain from a consideration of all of such features, courts will give effect to that intent.

3. The fact of placing property by will in the hands of a trustee, under the facts and circumstances of this case, evidences an intent on the part of the testator to put it beyond the power of the beneficiary to alienate or his creditors to seize.

4. " It is firmly established, both by English and American courts, that a trustee is bound to perform faithfully the duties relating to his trust, and that in doing so he cannot allow his own interests to interfere. If he unites his personal and representative capacities, he confuses transactions which the law requires him to keep separate and distinct. If he attempts to acquire an individual interest in the subject- matter of his trust or agency, he creates a temptation to serve himself at the expense of the beneficiary or principal, and enters a realm where his secret purposes with reference to trust property or interests may escape judicial scrutiny. To prevent evil consequences from growing out of the advantages which his position gives him, it will be presumed that what he does in relation to the interests or property involved in the trust or agency is done in a representative capacity." Nebraska Power Co. v. Koenig, 93 Neb. 68, 139 N.W. 839.

5. When an act or agreement of the parties disappoints the purpose of the settlor by divesting a trust property or trust income from the purpose indicated by the will establishing the trust, especially where the trustee participates therein or receives personal financial benefits therefrom or by reason thereof, such act or agreement is void ab initio.

6. So long as the trustee, either expressly or by implication, has imposed upon him some affirmative and substantial duty to perform or useful purpose to subserve, or discretion to exercise with respect to the control, protection, management, or disposition of the trust property, or to protect the estate for a given time or until the death of some person, in this state (in the absence of a statute of uses) the trust remains an active trust.

Appeal from District Court, Lancaster County; Chappell, Judge.

Action by the Lancaster County Bank against Deem Marshel and Anna Marie Marshel, his wife, wherein second-named defendant filed a cross-petition. From an adverse judgment, plaintiff appeals.

Affirmed.

Fred C. Foster and R. M. Charters, for appellant.

Lee Basye, contra.

Heard before GOSS, C. J., ROSE, EBERLY, DAY, PAINE and CARTER, JJ.

OPINION

EBERLY, J.

This is an action to foreclose a real estate mortgage upon what is alleged in the petition to be a life interest, and which is described as "The use and possession of and the rents and profits accruing from (described real estate) during the natural life of said Anna Marie Marshel; it being the intention to convey all of the interest that Anna Marie Marshel acquired in and to (described real estate) under the will of John Olson, deceased, which will was duly admitted to probate in the county court of Lancaster county, Nebraska, on January 14, 1921."

Plaintiff's petition was in ordinary form. It set forth copies of the notes for which this mortgage purports to be given, alleged a default on part of the mortgagors, and prayed for foreclosure and sale.

To the petition, defendant Anna Marie Marshel filed a separate answer and cross-petition. Her answer admitted the signing of the notes and mortgage, alleged want of consideration, and denied every allegation contained in the petition which was not so admitted; alleged that she owned no life interest in the real estate mortgaged; that such real estate constituted a spendthrift trust created under the terms of the last will and testament of her father, John Olson, deceased; and set forth a copy of such will. In her cross-petition, forming a part of the issues, there were set forth at length allegations which may be briefly recapitulated as follows: That the will created a spendthrift trust as to the lands described in plaintiff's petition, and because of this fact the real estate described in plaintiff's petition, as well as defendant's rights therein, are inalienable and not subject to the demands of the creditors of Mrs. Marshel; that Charles J. Warner and Carl E. Berg duly qualified as executors and trustees thereof, and since continue in that capacity; that the trust so created by the will is an active trust; that Charles J. Warner is now, and at all times covered by the petition has been, the president of the plaintiff bank, and that because of the fiduciary relation created and existing between said Warner and this defendant by the terms of the will of John Olson, and the duties imposed thereby, the mortgage and notes in suit herein are voidable, and that defendant elects to annul the same. The defendant thereupon prayed that the notes and mortgage in suit be canceled, and that she be given general relief and her costs. To this pleading the plaintiff bank filed a reply which was, in substance, a general denial.

On the issues thus formed, a trial was had, and at the conclusion thereof the district court found, in substance, for the defendants and against the plaintiff; found that the will of John Olson created an active spendthrift trust, of which Anna Marie Marshel was a beneficiary, and that her interests therein were inalienable and not subject to the claims of plaintiff; also that Charles J. Warner was the duly appointed executor and trustee nominated by such will, and he duly qualified, and since has continued as such; that because of the fiduciary relations and duties created by the Olson will, added to the fact that said Warner was at all times, and now is, the president of plaintiff bank and a stockholder therein, the instruments in suit are wholly void. Thereupon the trial court, as to defendant Anna Marie Marshel, canceled the notes and mortgage in suit, and denied foreclosure of the mortgage set forth in plaintiff's petition. Plaintiff then filed its motion for a new trial, which was overruled, and from such ruling it appealed to this court.

The record reflects the following facts: That John Olson was the father of the defendant Anna Marie Marshel, and in his lifetime was the owner in fee simple of the lands described in plaintiff's petition. At his death he left a last will which was duly admitted to probate in the county court of Lancaster county, Nebraska, on January 14, 1921. The provisions of this will, so far as material here, are as follows:

"I give and devise the following described real property, to wit: The Northwest Quarter (NW 1/4) of Section Twenty-three (23); the South Half of the Northeast Quarter (S 1/ 2 NE 1/4) of Section Fourteen (14) and the North Half of the Southeast Quarter (N 1/ 2 SE 1/4) of Section Fourteen (14), all in Township Eleven (11) North, Range Eight (8), east of the Sixth Principal Meridian in Lancaster county, Nebraska, to Carl Berg and Charley Warner as trustees, upon the following trusts and conditions:

"My daughter, Anna Marie Marshel, shall have the use and possession of, or the rents and profits accruing from, the said Northwest Quarter (NW 1/4) of Section Twenty-three (23) Township Eleven (11), Range Eight (8), for and during her natural life, she to pay for said use and possession, or out of the rents and profits therefrom, all taxes levied thereon.

"My daughter, Elizabeth Christina Hatten, shall have the use and possession of, or the rents and profits accruing from, the said South Half of the Northeast Quarter (S 1/ 2 NE 1/4) and the North Half of the Southeast Quarter (N 1/ 2 SE 1/4) of Section Fourteen (14), Township Eleven (11), Range Eight (8), for and during her natural life, she to pay for said use and possession, or out of the rents and profits therefrom, all taxes levied thereon.

"Upon the death of my daughter, Anna Marie Marshel, if she leaves a child or children or any issue of any deceased child or children her surviving, then and in that event, I give and devise to said child or children or to the issue of any deceased child or children, by representation, the Northwest Quarter (NW 1/4) of Section Twenty-three (23), Township Eleven (11), Range Eight (8), hereinbefore described, share and share alike, in fee simple.

"If my said daughter, Anna Marie Marshel, dies without leaving any child or children or issue of any deceased child or children her surviving, then my daughter, Elizabeth Christina Hatten, if she survives my daughter, Anna Marie Marshel shall have the use and possession of, or the rents and profits from, said premises for and during her natural life, and, upon her death, I give and devise said premises to such her child or children or issue of any her deceased child or children, by representation, as...