Potter v. Winter, 44514

• Decision Date: 13 June 1955
• Docket Number: No. 1,No. 44514,44514,1
• Citation: 280 S.W.2d 27
• Parties: Ida L. POTTER, Plaintiff-Appellant, v. Harrison L. WINTER, Executor of the Estate of M. E. Turner, Deceased; The Guaranty Trust Company of Missouri, a corporation alleged Trustee under a purported Revocable Indenture of Trust of Charles Edward Potter; Rita Potter Trigg: Rita Potter Trigg, alleged Trustee under purported Revocable Indenture of Trust of Charles Edward Potter; Margaret B. McCane; Warren Todd McCane, Jr., a minor; Lidamay Nuderscher; Patricia Ann Nuderscher, a minor; Peggy Lou Trigg, a minor; Joseph Edward Trigg, a minor; Pamela Potter Trigg, a minor; Imperial Council of the Ancient Arabic Order of the Nobles of the Mystic Shrine of North America, a corporation; Shriners Hospital for Crippled Children, of St. Louis, Missouri; John E. Taylor, Attorney-General of the State of Missouri, Defendants-Respondents
• Court: Missouri Supreme Court

Page 27

280 S.W.2d 27

Ida L. POTTER, Plaintiff-Appellant, v. Harrison L. WINTER, Executor of the Estate of M. E. Turner Deceased; The Guaranty Trust Company of Missouri, a corporation alleged Trustee under a purported Revocable Indenture of Trust of Charles Edward Potter; Rita Potter Trigg: Rita Potter Trigg, alleged Trustee under purported Revocable Indenture of Trust of Charles Edward Potter Margaret B. McCane; Warren Todd McCane, Jr., a minor Lidamay Nuderscher; Patricia Ann Nuderscher, a minor; Peggy Lou Trigg, a minor; Joseph Edward Trigg, a minor; Pamela Potter Trigg, a minor; Imperial Council of the Ancient Arabic Order of the Nobles of the Mystic Shrine of North America, a corporation; Shriners Hospital for Crippled Children, of St. Louis, Missouri; John E. Taylor Attorney-General of the State of Missouri, Defendants-Respondents.

No. 44514.

Supreme Court of Missouri, Division No. 1.

June 13, 1955.

Cox, Cox & Cox, Harvey B. Cox, William A. Moffitt, Jr., St. Louis, for plaintiff-appellant.

Selden Blumenfeld, Blumenfeld & Abrams, St. Louis, for defendant-respondent Rita Potter Trigg, individually and as cotrustee, and for Trigg minors.

Orville Richardson, Hullverson & Richardson, St. Louis, for defendants-respondents Harrison L. Winter, executor of the estate of M. E. Turner, deceased, and the Guaranty Trust Co. of Missouri, individually and as co-trustee.

VAN OSDOL, Commissioner.

This is an appeal from a judgment for defendants and an order dismissing plaintiff's petition in her action in equity to set aside a revocable inter vivos trust created by plaintiff's husband, Charles Edward Potter, now deceased. The resolving of the contentions of the parties, plaintiff and defendants, will affect the ultimate devolution to contingent beneficial property interests of value in excess of $7,500. This court has appellate jurisdiction of the case on the ground of the 'amount in dispute'. Const. Art. V, Sec. 3, V.A.M.S.

It is contended by plaintiff-appellant, widow of Charles Edward Potter, settlor, that the trust instrument executed by him is invalid, null and void. It is contended there was no valid delivery of any of the assets or corpus of the alleged trust during the lifetime of the settlor with the intention of relinquishing his sole ownership; the instrument of trust contained provisions which violate the rule against perpetuities; the instrument was testamentary in character and was not executed in accordance with the Statute of Wills; and the instrument was in legal fraud of plaintiff's rights as the wife and widow.

Charles Edward Potter died October 11, 1948. At the time of his death he was seventy-nine years of age and in ill health. He had been the founder of the Potter Electric Signal & Manufacturing Company, a corporation, and for many years and until his death was president of the Company. For some time prior to July 9, 1948, Mr. Potter had owned and held, either in his own name or through nominees, all of the common stock and substantially all of the preferred stock of the Company.

Plaintiff, Ida L. Potter, and Mr. Potter were married September 19, 1944, and lived together as man and wife until Mr. Potter's death. No children were born to the marriage.

Mr. Potter had been formerly married to Adda Lee Potter, who died August 12, 1944. To this former marriage there was one child born--Rita Potter, who married Dr. Joseph F. Trigg. Three children, now minors--Peggy Lou Trigg, Joseph Edward Trigg, and Pamela Potter Trigg--were born to the marriage of Rita and Dr. Trigg. Plaintiff also had been formerly married. She had two children by her former husband--Margaret, who married Warren T. McCane and who has one child, Warren Todd McCane, Jr., a minor; and Lidamay, who married Frank B. Nuderscher and has one child, Patricia Ann Nuderscher, a minor. The child and grandchildren of grantor and the children and grandchildren of plaintiff were made parties defendant, the infant defendants being represented by guardians ad litem. Harrison L. Winter has been substituted as a party defendant for M. E. Turner, now deceased, originally a party defendant. The Guaranty Trust Company, designated in the trust indenture to become a cotrustee upon the death of Mr. Potter, and other interested parties were made defendants.

We shall paraphrase and, in some instances, quote the language of the trust indenture, a document of thirty-six type-written pages, in order to state such terms of the instrument as we deem pertinent to a review of this case. However, we shall not completely set out or make a technical analysis of all of the dispositive language of the instrument, nor shall we precisely point out the cast or devolution of any particular interest upon death of any particular income taker.

The trust instrument, entitled 'Revocable Indenture of Trust of Charles Edward Potter,' recited that for the sum of one dollar and for other valuable consideration paid to and received by the party of the first part, Charles Edward Potter (referred to as the 'grantor' in the trust instrument, and sometimes herein) 'has assigned, transferred, and delivered and does hereby assign, transfer, and deliver to Charles Edward Potter and M. E. Turner and their successors in office as Trustees, certain property which is described in a separate list marked 'Exhibit A' hereto attached and made a part hereof, which said property shall constitute a separate trust estate to be administered as hereinafter provided, and certain property which is described in a separate list marked 'Exhibit B' hereto attached and made a part hereof, which said property shall constitute a separate trust estate to be administered as hereinafter provided.' (Exhibits 'A' and 'B' each listed 150 shares of preferred stock and 279 shares of common stock of Potter Electric Signal & Manufacturing Company. Supplemental Exhibits 'A' and 'B' certified by Mr. Potter to have been delivered to Charles Edward Potter and M. E. Turner, trustees, on August 14, 1948, each listed an undivided one-half interest in four insurance policies; Supplemental Exhibit 'A' also listed $8,108.22 in cash and Supplemental Exhibit 'B' listed $6,706.12. On the face of each of the four Exhibits was the acknowledgment of the receipt of 'the above described property' by the trustees, Charles E. Potter and M. E. Turner).

By Item One of the indenture, it was provided that the entire net income of the trust estate should until the death of the grantor be paid to him or to his order at such times and in such amounts as he might request or in such amounts as the trustees might deem advisable and proper. The trustees were also authorized to encroach on the corpus to such extent as the trustees might deem advisable to provide for any expenses arising from illness, infirmity or disability of the grantor, or for his comfort and welfare.

By Item Two it was provided that upon the death of the grantor the trustees might in their discretion, but were not required to, spend any part or all of the income and corpus of the trust to pay the expenses of the last illness or funeral of the grantor; pay any part or all of the taxes levied on his property or estate, and to satisfy any of his debts.

By Item Three, plaintiff, grantor's wife, after grantor's death, was to receive the net income from the property as listed in Exhibit 'A' for life. The trustees were also authorized to give plaintiff the net income from the property as listed in Exhibit 'B' in such amounts of the net income as 'when added to the income, which to the knowledge of the Trustees shall be available for Ida L. Potter from other source or sources' as would 'in the opinion of the Trustees provide her the necessary funds to pay the expenses occasioned by her illness, infirmity or disability, either mental or physical, or in order that she may live in a manner which in the opinion of the Trustees shall be consistent with her accustomed standard of living. In deciding on the amount of income to be paid to or applied for the benefit of Ida L. Potter as above provided, the Trustees shall consider Ida L. Potter as the primary beneficiary of such income. The net income from the trust property described in 'Exhibit B' which shall not be paid to or use(d) and applied for the benefit of Ida L. Potter, as above provided, may, in the discretion of the Trustees, be paid to and/or used and applied for the benefit of Grantor's daughter, Rita Potter Trigg, or her children in such amounts and at such time or times, respectively, as when added to the income which to the knowledge of the Trustees shall be available for each of said persons from other sources, will, in the opinion of the Trustees provide each of said persons the necessary funds to pay for his or her education or to pay the expenses occasioned by his or her illness, infirmity or disability either mental or physical, or in order that he or she may live in a manner which in the opinion of the Trustees shall be consistent with his or her accustomed standard of living.' Were it to appear to the satisfaction of the trustees that grantor's wife might be in need of funds in excess of net income to pay expenses of illness, infirmity or disability or in order to live in a manner which in the opinion of the trustees is consistent with her accustomed standard of living, the trustees were authorized to 'relieve in whole or in part such need' by encroaching upon the principal of the trust estate. In this connection, the trustees were to give primary consideration to the wife's welfare rather than to the conservation of the trust estate. On the death of plaintiff, all of the property, principal and accumulated income, constituting the trust corpus as designated under Exhibit 'A' could be disposed of 'free of this trust as Ida L. Potter may direct and appoint in and by her' will, but in the event of a total or partial failure to exercise the power of appointment, then 'the unappointed' property should at...