Mercantile Trust Co. Nat. Ass'n v. Jaeger

• Citation: 457 S.W.2d 727
• Decision Date: 03 August 1970
• Docket Number: No. 54395,54395
• Parties: MERCANTILE TRUST COMPANY NATIONAL ASSOCIATION and Mary Anne O'Brien as Co-Trustees Under the Last Will and Testament of Jacob L. Babler, Deceased, Plaintiffs-Respondents, v. Joseph JAEGER, Jr., Director of Parks of the State of Missouri, Conn C. Winfrey, Member and Chairman of the Missouri State Park Board, Charles Tye Evans, Robert M. Wolpers, Carter V. Blanton, Hubert E. Lay, and Gerald B. Rowan, Members of the Missouri State Park Board, William E. Robinson, Treasurer of the State of Missouri, John C. Danforth, Attorney General of the State of Missouri, Defendants-Appellants. STATE of Missouri ex rel. Mohn C. DANFORTH, STATE of Missouri ex rel. John C. DANFORTH, v. MERCANTILE TRUST COMPANY NATIONAL ASSOCIATION, a Corporation, and Mary Anne O'Brien, Co-Trustees of the Testamentary Trust Under the Will of Jacob L. Babler, Deceased, Defendants-Respondents.
• Court: United States State Supreme Court of Missouri

Page 727

457 S.W.2d 727

MERCANTILE TRUST COMPANY NATIONAL ASSOCIATION and Mary Anne

O'Brien as Co-Trustees Under the Last Will and Testament of Jacob L. Babler, Deceased, Plaintiffs-Respondents, v. Joseph JAEGER, Jr., Director of Parks of the State of

Missouri, Conn C. Winfrey, Member and Chairman of the

Missouri State Park Board, Charles Tye Evans, Robert M.

Wolpers, Carter V. Blanton, Hubert E. Lay, and Gerald B.

Rowan, Members of the Missouri State Park Board, William E.

Robinson, Treasurer of the State of Missouri, John C.

Danforth, Attorney General of the State of Missouri,

Defendants-Appellants.

STATE of Missouri ex rel. Mohn C. DANFORTH, STATE of Missouri ex rel. John C. DANFORTH, v. MERCANTILE TRUST COMPANY NATIONAL ASSOCIATION, a

Corporation, and Mary Anne O'Brien, Co-Trustees of

the Testamentary Trust Under the Will of

Jacob L. Babler, Deceased,

Defendants-Respondents.

No. 54395.

Supreme Court of Missouri, En Banc.

Aug. 3, 1970.

Rehearings Denied Sept. 14, 1970.

Thompson, Mitchell, Douglas, Neill & Guerri, James M. Douglas, William G. Guerri, Richard W. Metz, Lawrence E. Young, St. Louis, for respondent, Mercantile Trust Company National Association.

John Grossman, St. Louis, for respondent Mary Anne O'Brien.

Aubuchon & Walsh, Eugene P. Walsh, St. Louis, for Joseph Jaeger, Jr., Director of Parks of the State of Missouri; Conn C. Winfrey, Member and Chairman of the Missouri State Park Board; Charles Tye Evans, Robert M. Wolpers, Carter V. Blanton Hubert E. Lay and Gerald B. Rowan, Members of the Missouri State Park Board.

John C. Danforth, Atty. Gen., of Missouri, Louren R. Wood, Asst. Atty. Gen., of Missouri, Jefferson City, for William H. Robinson, Treasurer of the State of Missouri, and John C. Danforth, Attorney General of the State of Missouri.

HOLMAN, Judge.

At the termination of the testamentary trust established by the will of Jacob L. Babler, deceased, a dispute arose between the co-trustees of the trust estate and the Attorney General, representing the State of Missouri (beneficiary of the trust), with respect to the amount of compensation due the trustees. On July 7, 1966, the trustees filed a declaratory judgment suit seeking an adjudication of the disputed question, and later the same day the Attorney General filed a similar suit for the same purpose. The cases were consolidated and tried with the result that a judgment was entered specifying that the trustees were entitled to $190,730 additional compensation. Attorneys fees and expenses were also allowed in the total sum of $26,173.52. The appropriate representatives of the State of Missouri have duly appealed.

This appeal was originally heard in Division One where an opinion was adopted but the case was subsequently transferred to Court en Banc because of the dissent of one of the judges. Additional briefs were filed and the cause was re-argued and resubmitted. The Division opinion failed of adoption en Banc and the cause was assigned to the undersigned. Portions of the statement of facts in the aforementioned opinion are here adopted without the use of quotation marks.

The will of Jacob L. Babler, after providing for the payment of his debts, funeral expenses, etc., and for numerous specific bequests, left the remainder of his estate to two individuals, his brother Henry and one Richard J. Weidert, in trust for the use and benefit of the Dr. Edmund A. Babler Memorial State Park in St. Louis County. The trustees were given broad investment and managerial powers in handling the trust estate.

In Item Fifteen, after reciting that he had deeded several hundred acres of land to the state as a public park and after expressing the purpose and use of the trust (to assist the state in maintaining, beautifying, further developing, and perhaps enlarging the park), testator continued as follows:

'After paying compensation to themselves as herein provided, and all other charges and expenses incident to the administration of the trust estate, the Trustees, or the survivor of them, are hereby authorized to use and expend all or any part of the 'net' income and revenue derived from said trust estate and not to exceed seven percent (7%) of the annual book value of the then corpus of said trust estate, for such general improvements, or projects of a recreational nature in the 'DR. EDMUND A. BABLER MEMORIAL STATE PARK,' as in the opinion and discretion of the Trustees, or the survivor of them, seems advisable under the then existing circumstances; it being understood, however, that any net earnings not used and expended for the purposes aforesaid, during the current year, shall, at the end of the year, be added to and become a part of the corpus of the trust estate. Should the Trustees, or the survivor of them, not withdraw and expend the full seven percent (7%) of the corpus of the trust estate in any year, then the unused portion of said seven percent (7%) for that year shall be cumulative and may be used the following, or any subsequent year or years.'

Item Sixteen provided:

'This trust shall continue and endure for twenty (20) years, from and after the date of my death. On the twentieth anniversary, or as soon thereafter as practical, following the date of my death, I direct that the trust herein created shall cease and terminate, and the entire remainder of the trust estate then in the hands of my trustees, or the survivor of them, both corpus and unused income and revenue, shall forthwith on receipt thereof, be paid over, transferred and conveyed to the then Treasurer or Acting Treasurer of The State of Missouri, to be used and expended under his supervision by the then State Park Authority, exclusively for the maintenance, beautification, further development and possible enlargement of the 'DR. EDMUND A. BABLER MEMORIAL STATE PARK.''

Item Seventeen provided:

'I direct that during the administration of my estate in the Probate Court, and during the duration of the trust herein created, the trustees shall not engage the services of anyone in any way related to them, or the survivor of them.

'The Trustees shall receive as compensation for their services hereunder, seven percent (7%) of all disbursements of income and corpus made by them, to be divided equally between them. Should the services of either, or both Trustees be terminated during the course of any year, by death, resignation or incapacity, such retiring Trustee shall receive a pro-rata part of that year's compensation, based on the months of service rendered, it being understood that a fractional month shall be considered as a full month.'

Provisions were made for the substitution of trustees in case of failure to act, incapacity, death, or resignation, and for alternate trustees. Mr. Weidert declined to act and the corporate trustee took his place. During the course of the administration Henry J. Babler died and Mary Anne O'Brien was substituted in his place. Item Twenty-Five designated Mr. Babler and Mr. Weidert, the named trustees, as executors and fixed as compensation for their services as executors 'a fee of two percent (2%), instead of the regular statutory fee of five percent (5%) on all personal property and on money arising from the sale of real estate. Inasmuch as the Executors herein appointed are also named Trustees of the trust fund herein created, I feel that the two percent (2%) herein authorized as Executors' fees, is fair and reasonable.'

The will was executed in July 1942. Testator died on May 31, 1945. The first regular analysis of the assets of the trust (in 1948) revealed a valuation of $760,000. At termination of the trust on May 31, 1965, the value of the trust estate, corpus, and unexpended income was $2,724,714.27. During the course of the 20-year administration approximately $800,000 was expended from income and principal for park purposes. A part of that sum was taken from corpus. The exact percentage was not shown. The average yearly gross income of the estate was $38,000. The average market value of the entire trust during the 20-year period was $1,396,000. During the 20-year period the trustees took commissions, from time to time, in the sum of 7% of the expenditures, totaling $56,066.54, of which Mercantile received $28,033.27 and the individual co-trustees received $28,033.27. After May 31, 1965, the trustees credited themselves with commissions in the sum of $95,365 each, or a total of $190,730. Commissions paid by the trustees to themselves or reserved thus totaled $123,398.27 each.

Testator, a lawyer by profession, did not practice law. He devoted his time to his philanthropies, investments, and private business affairs. He prepared his own documents, deeds, notes, leases, etc. over a period of many years. Meticulous in the preparation of his will, he caused a lawyer of his acquaintance to conduct research on various phases of the problems involved, consulted at length with the lawyer, and had him submit proposed drafts of various provisions of the document. The preparation of the will took several months. During that time he counseled with at least a dozen outstanding persons, including a circuit judge, the state attorney general, several lawyers of wide experience, experts in the field of wills and trusts, and a number of distinguished conservationists, including the Secretary of the Interior, the Director of the National Park Service, and the head of the State Park Board. The preliminary drafts numbered four before testator was satisfied with the final draft. He personally dictated the will, including the punctuation. He carefully chose his trustees from persons in whom he had special confidence, and in detailed fashion provided for successor or alternative trustees in various contingencies. He took pains to limit the type of securities in which the trustees were permitted to invest and cautiously provided that loans on real estate not exceed in amount 50% of the cash value of the security. He prohibited the trustees from...