Nat'l Bank of Ionia v. Houck

• Decision Date: 02 March 1932
• Docket Number: No. 10.,10.
• Citation: 241 N.W. 228,257 Mich. 456
• Parties: NATIONAL BANK OF IONIA v. HOUCK et al.
• Court: Michigan Supreme Court

257 Mich. 456

241 N.W. 228

NATIONAL BANK OF IONIA

v.HOUCK et al.

No. 10.

Supreme Court of Michigan.

March 2, 1932.

Appeal from Circuit Court, Ionia County, in Chancery; Royal A. Hawley, Judge.

Bill by the National Bank of Ionia, as successor in trust to William F. Sandell, trustee, against Nell M. Houck and another. From a decree for defendants, plaintiff appeals.

Affirmed.

Argued before the Entire Bench.

Glenn D. Mathews, of Ionia, for appellant.

Frank C. Miller and Eldered & Gemuend, all of Ionia, for appellees.

FEAD, J.

This is a bill to pursue a trust fund. In November, 1904, Mary Sandell conveyed all her property, recited as worth over $20,000, to her only child, William F. Sandell, in trust. In general, the trust instrument provided that the mother have all the net income during her lifetime; that, if William's wife, Martha, survived her, William and Martha should have the income and so much of the principal as was needed for their use, for life; and, on the death of both Mary and Martha, the whole estate ‘shall immediately vest and become the sole and absolute property of the said William F. Sandell, and his assigns, for his personal use and support during his life, with full right to dispose of any or the entire estate, both real and personal, should he so desire for his support and use.’

The instrument made substantially a like provision for Martha in case she survived the others. It also provided for devolution upon the nieces and nephews of Martha and Mary. ‘Should the parties hereto not use during their lives all of the estate all that remains after the death of all of them shall be divided as follows. * * *’ It gave William full control of the property, required him to keep accounts, and provided that he ‘shall not be held responsible personally for any loss incurred by bad investment or otherwise except when wilful and deliberate misappropriation thereof.’

Martha died in 1911, Mary in 1915, and William, at the age of 67, on March 1, 1927. At the time of William's death, the estate held 188 pieces of real estate, 13 mortgages, 64 land contracts, aggregating over $50,000, bonds of about $13,000, and stocks of $25,000, thus requiring considerable office work to handle.

William was a private banker, but the bank failed in 1922 and a receiver was appointed. He was also interested in an insurance agency. In 1924, defendant, Mrs. Houck, was employed to manage the agency. She also did work for the bank receiver and for Mr. Sandell in connection with the trust estate. In 1925, the insurance agency was sold to Mrs. Houck and Nell G. Steele. Mr. Sandell continued to conduct his trust and private business in the same building, and Mrs. Houck did work for him.

In March 1926, the Lapham building nearby was for sale. Sandell suggested that Mrs. Houck buy it, and offered to furnish the money. The purchase was made, the title conveyed to Mrs. Houck by deed dated March 27th, and her ownership was noted in the local papers and well known. Out of trust funds, Sandell paid the purchase price of $3,750 and sums for repairs, which brought the total to $6,231.13.

April 26th Mrs. Houck executed a quitclaim deed to Sandell as trustee, which she destroyed immediately after his death. Books of the estate contain a pencil memorandum of the deed, but the testimony does not show that it was...