Merz v. Tower Grove Bank & Trust Co.

• Decision Date: 07 July 1939
• Docket Number: 35769,35770
• Citation: 130 S.W.2d 611,344 Mo. 1150
• Parties: Alice P. Merz (now Alice Szombathy) v. Tower Grove Bank & Trust Company, Appellant; Adolph Merz, Executor of the Estate of Julius M. Merz; Adolph Merz and Jean J. Merz. Alice P. Merz (now Alice Szombathy) v. Tower Grove Bank & Trust Company, Defendant; Adolph Merz, Executor of the Estate of Julius M. Merz; Adolph Merz and Jean J. Merz, Appellants
• Court: Missouri Supreme Court

130 S.W.2d 611

344 Mo. 1150

Alice P. Merz (now Alice Szombathy) v. Tower Grove Bank & Trust Company, Appellant; Adolph Merz, Executor of the Estate of Julius M. Merz; Adolph Merz and Jean J. Merz. Alice P. Merz (now Alice Szombathy) v. Tower Grove Bank & Trust Company, Defendant; Adolph Merz, Executor of the Estate of Julius M. Merz; Adolph Merz and Jean J. Merz, Appellants

Nos. 35769, 35770

Supreme Court of Missouri

July 7, 1939

Appeal from Circuit Court of City of St. Louis; Hon. John W Joynt, Judge.

Affirmed as to cause no. 35770; reversed and remanded (with directions) as to cause no. 35769.

Frank Coffman and Anderson, Gilbert, Wolfort, Allen & Bierman for Adolph Merz and others.

Except for points discussed herein, the questions raised by appellant are considered in the brief of these respondents the appellants in the companion case, No. 35,679, and those matters will not be rediscussed here. Appellant's point that it is entitled to expenses and compensation, regardless of whether the trust is sustained or not, does not apply to the situation in the case at bar. The trust in question here is not invalid because of a mere legal flaw; the document is not before this court for construction. Its invalidity is inherent because not understandingly executed by settlor. It had no vitality from its inception. Appellant induced its execution either by its failure to advise settlor of its real legal effect or its misadvice to him. The document resulted from appellant's act in taking advantage of settlor when it knew he depended upon it for advice. If appellant had advised settlor of the real effect of the trust deed, same would never have been executed. In procuring the document appellant actually engaged in the illegal practice of law. Hence it necessarily follows that the "flaw" or invalidity was of appellant's creation. Its action was not only in violation of Missouri statutes, to-wit, the practice of law, but was a fraud on settlor. Appellant could, therefore, gain nothing by its illegal acts. Under such circumstances there would be no legal principle under which it could recover its expenses in defending the alleged trust. It was, in fact, defending itself. In Cornet v. Cornet, 269 Mo. 298, 190 S.W. 333, on l. c. 311, this court, speaking of when costs may be allowed a trustee in the defense of a suit, said: "This is true if these costs and expenses were incurred by him for the benefit or protection of the fund, and this depends upon the nature of the suit, the object of the parties to its prosecution and defense, and their respective rights as they may be determined by the Court." This court further said on l. c. 313 and 314: "The defendant . . . insisted in his answer that he was acting under both the deed and the will, and is now seeking to make his beneficiary pay the costs which he incurred and the attorney's fees which he paid in making the fight against his own removal for misconduct. It is unnecessary to give further reasons for the conclusion that he will not be permitted to do this."

Dubail, Judge & Winter for Tower Grove Bank & Trust Company.

(1) Heirs and representatives of grantors of fraudulent conveyances cannot question the validity of such conveyances, this right being available only to creditors, and if such conveyance is found in fact to be fraudulent it will be set aside only to the extent necessary to satisfy the claims of those defrauded. Stierlin v. Teschemacher, 333 Mo. 1208, 64 S.W.2d 647; Kerwin v. Kerwin, 204 S.W. 922; McLaughlin v. McLaughlin, 16 Mo. 242; La Rue v. La Rue, 317 Mo. 207, 294 S.W. 723; McFarland v. Bishop, 282 Mo. 534, 222 S.W. 143; Bank of Willow Springs v. Lillibridge, 316 Mo. 968, 293 S.W. 116; Zoll v. Soper, 75 Mo. 460; Looney v. Bartlett, 106 Mo.App. 619, 81 S.W. 481; Rowley v. Rowley, 197 S.W. 152; Davidson v. Dockery, 179 Mo. 687, 78 S.W. 624. (2) The appellate court will not consider a theory of the case not presented to the trial court. No issue of fraud or other inequitable conduct on the part of the respondent trustee is raised by the pleadings or evidence, nor was the case tried below on the theory that such issue was in the case. Insurance Agency Co. v. Blossom, 231 S.W. 636; Cronacher v. Runge, 98 S.W.2d 603; United Film Ad Service, Inc., v. Roach, 197 S.W. 91; Schenkmeyer v. Altheimer, 327 Mo. 666, 37 S.W.2d 944; Kansas City Pub. Serv. Co. v. Ranson, 328 Mo. 524, 41 S.W.2d 169; Pinson v. Jones, 221 S.W. 80; Mangold v. Bacon, 229 Mo. 459, 130 S.W. 23; Dunnigan v. Green, 165 Mo. 98, 65 S.W. 287. (b) The evidence shows affirmatively that the respondent trustee was not guilty of fraud or other inequitable conduct. Bogert, Trusts & Trustees, sec. 233, p. 759; Metropolitan Life Ins. Co. v. Underwood, 301 Mo. 87, 256 S.W. 232. (3) No presumption can be raised against a party not producing evidence not shown to be important or superior to evidence produced and relating to an issue not raised by the pleadings or evidence. Roehl v. Ralph, 84 S.W.2d 405; Citizens Bank of Union v. Hilkemeyer, 325 Mo. 849, 29 S.W.2d 1090; Shidlodelski v. New York C. & St. L. Ry. Co., 333 Mo. 1134, 64 S.W.2d 259; Bahl v. Miles, 6 S.W.2d 661; 1 Wigmore on Evidence, sec. 287, p. 372; Miller v. Fleming, 259 S.W. 139.

Oscar Habenicht, Foristel, Mudd, Blair & Habenicht and Salkey & Jones for Alice P. Merz.

(1) Plaintiff, as the surviving widow of a childless husband, having renounced the will and elected to take her dower, is entitled to one-half of the real and personal estate belonging to the husband at the time of his death, subject to the payment of the husband's debts. Secs. 325, 327, R. S. 1929; Nies v. Stone, 117 S.W.2d 407; Waters v. Herboth, 178 Mo. 166, 77 S.W. 305. (a) The disposition of property by a husband made in contemplation of death, with the intent and design to defeat his widow's marital rights, is a fraud on the widow, and she can recover directly from the transferee the property so fraudulently transferred without the intervention of the personal representative of the deceased husband. A trust of personal property created in contemplation of death and for the purpose of depriving a wife of her statutory interest therein on the grantor's death will be set aside by a court of equity to the extent of that interest as a fraud on the marital rights of the widow. The right of action is in the widow, and not in an heir at law or personal representative of the deceased husband. 1 Restatement of the Law of Trusts, p. 177; In re Bernays' Estate, 126 S.W.2d 209; Kerwin v. Kerwin, 204 S.W. 925; Rice v. Waddill, 168 Mo. 99; Newton v. Newton, 162 Mo. 173; Straat v. O'Neil, 84 Mo. 68; Tucker v. Tucker, 32 Mo. 464, Id., 29 Mo. 350; Stone v. Stone, 18 Mo. 389; Davis v. Davis, 5 Mo. 183; Dyer v. Smith, 62 Mo.App. 606. (2) All the evidence in the case, not only that offered by respondent, but also that offered by all of the defendants below, must be considered in determining whether the decree in favor of respondent is supported by the evidence. 23 C. J., p. 56, sec. 1798; New Orleans etc. Railroad v. Natl. Rice Milling Co., 234 U.S. 80, 58 L.Ed. 1226; Smithers v. Barker, 341 Mo. 1017, 111 S.W.2d 47; Castorina v. Herrmann, 340 Mo. 1026, 104 S.W.2d 297; Young v. Wheelock, 333 Mo. 992, 64 S.W.2d 950; Story v. People's Motorbus, 327 Mo. 719, 37 S.W.2d 898; Anderson v. Davis, 314 Mo. 515, 284 S.W. 439; Stauffer v. Railroad 243 Mo. 305, 147 S.W. 1032; Long v. Binnicker, 228 Mo.App. 193, 63 S.W.2d 831; Kiernan v. Robertson, 116 Mo.App. 56, 92 S.W. 138. (3) A transferee of property fraudulently transferred in contemplation of death by a husband, with intent to defeat his wife's marital rights, has no claim or charge upon the property transferred for expenses and compensation incurred by the transferee in the retention of such property, or for attorneys' fees incurred in attempting to prevent the wife from successfully asserting her marital rights. The wife's rights are absolute under the statutes, and are not subject to diminution for the benefit of the transferee. And where, as here, the decree recognizes the validity of the transfer in trust of one-half of the property transferred, such expenses and compensation, if chargeable at all, may be claimed only against the remainder so held in trust. 65 C. J., p. 727, sec. 590; In re Rogers' Estate, 250 S.W. 576; Bailey v. Buffalo Loan Trust, 108 N.E. 561; Canton Chemical Co. v. Johnson, 101 N.C. 223, 7 S.E. 775.

Dalton, C. Hyde and Bradley, CC., concur.

OPINION

DALTON

This is a suit in equity. There are cross-appeals by certain defendants. Plaintiff (respondent here) as the widow of Julius M. Merz (hereinafter called deceased) seeks to set aside a conveyance in trust made by the deceased to defendant Tower Grove Bank & Trust Company (hereinafter called Trust Company) as being made in fraud of her marital rights and as being testamentary in character and to recover one-half of the assets conveyed thereby.

The Trust Company (appellant here) was made a defendant, both as trustee under the declaration and conveyance in trust, and as one of the executors under the will of the deceased. Appellant Adolph Merz, brother and sole and only heir at law of deceased, was made defendant in his individual capacity, and as one of the executors under the will of deceased, and also as a trustee named in the will of deceased. Each of these defendants filed separate answers in their respective capacities. Appellant Adolph Merz, in one of his answers, included what is referred to as a cross-bill, charging that the conveyance in trust was void in toto. We shall consider this cross-bill later. Other parties defendant included persons interested in the trust estate, among them appellant Jean J. Merz, son of Adolph Merz and nephew of deceased.

The trial court held (1) that the...