Stephens v. Moore

• Decision Date: 06 April 1923
• Citation: 249 S.W. 601,298 Mo. 215
• Parties: PAUL L. STEPHENS, Appellant, v. JAMES E. MOORE et al
• Court: Missouri Supreme Court

249 S.W. 601

298 Mo. 215

PAUL L. STEPHENS, Appellant, v. JAMES E. MOORE et al

Supreme Court of Missouri, First Division

April 6, 1923

Appeal from Callaway Circuit Court. -- Hon. Ernest S. Gantt, Judge.

Reversed and remanded (with directions).

Atwood Wickersham, Hill, Levis & Chilcott and W. C. Maughs for appellant.

(1) Plaintiff is entitled to the relief prayed for in his bill. (a) Because this is a voluntary trust established solely for the benefit of Paul Stephens. No rights of third parties or next of kin are in any way involved. Being the sole beneficiary of the trust created, the power of attorney not being coupled with any interest, this trust is revocable at the will of Paul Stephens. (b) Because the trust was created under the belief and understanding of Paul Stephens that it was revocable at his will. The overwhelming proof shows that there was never any intention at any time of making an irrevocable trust. (c) Because the evidence shows that the trustee exercised his powers in a harsh and arbitrary manner contrary to the wishes and best interests of Paul Stephens and his actions caused discord in the Stephens family, and involved the estate in useless and expensive litigation. Such a trust is revocable, and upon refusal of the trustee to reconvey to his trustor and beneficiary the property so held a court of equity will end the trust and compel a restitution and accounting. Jamison v. Mo. Valley Trust Co., 207 S.W. 788; Cornwell v. Orton, 126 Mo. 360; Raffel v. Deposit and Trust Co., 100 Md. 141; Russell's Appeal, 75 Pa. St. 269; Garnsey v. Mundy, 24 N.J.Eq. 243; Rick's Appeal, 105 Pa. 528; 26 Ruling Case Law, p. 1208, sec. 49; Ewings v. Wilson, 132 Ind. 233, 19 L. R. A. 767; Mullock v. Mullock, 31 N.J.Eq. 602; Peters v. Peters, 136 Md. 172; Eakle v. Ingram, 142 Cal. 15, 100 Am. St. 99; Sears v. Choate, 146 Mass. 395, 4 Am. St. 320; Aylesworth v. Whitcomb, 12 R. I. 298, 2 A. L. R. 579; Bank v. Fidelity Ins. T. & S. Co., 186 Pa. St. 332, 65 Am. St. 860; Mober v. Hobbs, 2 Younge & C. 327, 15 L. R. A. 80; Dodson v. Ball, 60 Pa. 501, 100 Am. Dec. 586, 15 L. R. A. 80; 39 Cyc. 102; Armour v. Murray, 79 N. J. L. 531; Angle v. Marshall, 55 W.Va. 671; Ball v. Carew, 13 Pick. (6 Mass.) 128. (2) The plea of res judicata, or retraxit, on account of the alleged settlement of the suit instituted to terminate this trust is unavailing, because there was no hearing whatsoever upon the merits or determination of the merits of that case, and was a nonsuit pure and simple, and oral evidence is admissible to show no determination of merits. Rickerson v. City of Mexico, 58 Mo. 61; Ellington v. Crockett, 13 Mo. 72; Wells v. Moore, 49 Mo. 229; 23 Cyc. 1535; 7 Words & Phrases, 629; Schmidt v. Halle, 15 Mo.App. 36; O'Malley v. Musick, 191 Mo.App. 413; Baldwin v. Davidson, 139 Mo. 118; Shoat v. Taylor, 137 Mo. 517; Johnson v. United Rys. Co., 243 Mo. 278; 23 Cyc. 113 et seq. (3) A person sui juris cannot create a spendthrift trust. If defendant's proof is to be relied upon, i. e., that this trust was created for the purpose of defeating creditors, it was void under our statutes. Jamison v. Mo. Valley Trust Co., 207 S.W. 789; Kessler v. Phillips, 189 Mo. 515; Graham v. Moore, 189 S.W. 1188; Bank v. Burns, 199 S.W. 285; Secs. 2275, 2276, R. S. 1919.

R. D. Rodgers, Baker & Baker and McBaine & Clark for respondent.

(1) The trust agreement made is not revocable at will of the appellant. There is no question of the right of appellant's creditors in this case. This is a suit by appellant to avoid the trust. There is no rule of law that prevents a person to convey his property to a trustee and providing that the trustee shall pay over to him the income therefrom. 24 R. C. L. 355, sec. 6; 39 Cyc. 36; 2 Black on Rescission of Contracts and Written Instruments, p. 929, sec. 359; Ewing v. Shannahan, 113 Mo. 188; Sims v. Brown, 252 Mo. 58; Jamison v. Trust Co., 207 S.W. 788; McFarland v. Bishop, 222 S.W. 143; Sec. 2275, R. S. 1919; Melvin v. Hoffman, 235 S.W. 107. (2) Appellant executed the deed of trust to protect his property. He realized his personal inefficiency to look after his property, and executed the deed of trust for the purpose of insuring to himself the income therefrom during his life. He executed the deed without fraud or undue influence and cannot revoke the same at will, since the deed of trust does not contain a power of revocation at will. Chanfrau v. Alexander, 185 F. 537; Brown v. Mercantile Trust Co., 40 A. 256; Wilson v. Anderson, 40 A. 1096; Taylor v. Buttrick, 165 Mass. 547, 52 Am. St. 530; Neal v. Black, 117 Pa. 83, 34 L. R. A. 707; Carroll v. Smith, 59 A. 131; Dayton v. Stewart, 59 A. 281; Toker v. Toker, 3 Ddg. J. & S. 491; Rodgers v. Rodgers, 55 A. 450; Beard v. Beard, 173 Ky. R. 139; Downs v. Security Trust Co., 194 S.W. 1041. (3) The cases relied upon by appellant for revocation of deed of trust, are cases where the court interfered on account of fraud or undue influence practiced upon the settlor, or where the suit was instituted by creditors of the settlor, or where the deed of trust was executed by mistake, or was testamentary in its nature. These cases are not in point to support the argument that a deed of trust not containing a power of revocation is nevertheless revocable at will. Refell v. Deposit & Transit Co., 100 Md. 141; Ewing v. Wilson, 132 Ind. 223, 19 L. R. A. 767, note; Bank v. Fidelity Trust & Deposit Co., 186 Pa. St. 333; Jamison v. Trust Co., 207 S.W. 788; Rick's Appeal, 105 Pa. 528; 15 L. R. A. 78, note; 39 Cyc. 102; Matthews v. Thompson, 186 Mass. 14, 104 Am. St. 550, 66 L. R. A. 421; 26 R. C. L. p. 1208, sec. 50 and p. 1211, sec. 53; Keyes v. Carleton, 141 Mass. 45, 55 Am. Rep. 446; Petition of Thurston, 154 Mass. 596, 26 Am. St. 278. (4) The deed of trust, as amended by the agreement of March 1, 1919, and incorporated in the judgment entered in the first case filed to set aside this deed of trust, provides means for the revocation of the deed of trust and rebuts the idea that the power of revocation was inadvertently or mistakenly omitted. (5) The judgment entered in the first case of Stephens v. Moore is res adjudicata of the issues involved in this suit. A judgment in that case was entered upon an agreement duly entered into by the parties, which agreement was fully set out in the judgment. It effectually disposes of all the issues involved and estops the plaintiff from maintaining this action. Michoud v. Garrard, 4 Howe 503; Myllius v. Smith, 53 W.Va. 173; Gawtry v. Adams, 10 Mo.App. 29; Melvin v. Hoffman, 235 S.W. 107. (6) The judgment in the first case was entered upon an agreement by consent of the parties, and it has often been held that a judgment so entered is as binding upon the parties as if entered after a contested hearing upon the merits. Short v. Taylor, 137 Mo. 517; Casler v. Chase, 160 Mo. 425; Robinson v. Seay, 175 Mo.App. 713; Jones v. Hubbard, 193 Mo. 147; Lewis v. Railroad, 107 Ark. 41; Pelton v. Mott, 11 Vt. 148, 34 Am. Dec. 678; Turner v. Fleming, 45 L. R. A. (N. S.) 265; Glasner v. Weisberg, 43 Mo.App. 214; McCord v. Martin, 191 P. 89; Robinson v. Railroad, 150 Pa. 636 (Kan.) ; 1 Black on Judgments (2 Ed.) sec. 15; Tompkinson v. Willits Mfg. Co., 23 F. 895; McCreery v. Fuller, 63 Cal. 30; Townsdin v. Shrader, 39 Kan. 286; United States v. Parker, 120 U.S. 93, 30 L.Ed. 601; Doan v. Bush, 198 S.W. 261; 15 R. C. L. p. 643, sec. 86; Schmidt v. Oregon Gold Mining Co., 28 Ore. 9, 52 Am. St. 759; Goodman v. Griffith, 155 Mo.App. 585; Denegre v. Walker, 214 Ill. 113, 105 Am. St. 98. (7) The manner of the trustee in handling the estate of his ward is not in issue here but, if it is, the testimony shows that the estate has been well and properly handled.

OPINION

RAGLAND, J.

This is an action in equity to enforce the revocation of a voluntary trust and compel a reconveyance of the trust property.

Alexander F. Stephens died in 1904 possessed of a considerable estate; he left surviving him a widow, Laura Stephens, and three sons, John, Frank and Paul. Paul, the plaintiff in the present action, was six or seven years of age at the time of his father's death, being the youngest of the three boys. His mother, upon due appointment, acted as his curator until her marriage to one Newcomer. After that event Newcomer became the curator, and as such had the management and control of his ward's estate until the latter reached his majority.

During all of his childhood Paul's health had been frail and for that reason he had received but meager schooling. One witness gave it as his opinion that the young man was, and always had been, sub-normal in mentality, but his mother and the other members of the family testified to the contrary. At the time of the trial the ailments of his childhood had about disappeared, but premonitory symptoms of tuberculosis having manifested themselves he had taken up residence in New Mexico. The change had proven beneficial and his health was improving.

Paul's brothers, Frank and John, each lost his inheritance by waste or mismanagement soon after it came into his hands. For that reason Mrs. Newcomer became very solicitous as Paul approached his majority lest he should suffer a like misfortune. She thereupon sought counsel as to means that might be employed to protect her son's estate against his own possible improvidence, or lack of capacity. After several conferences with her legal adviser, at all of which Paul was present, it was decided that a conveyance of the property in trust would be the most satisfactory means that could be devised for accomplishing the purposes the mother had in view. Accordingly a deed of trust conveying the boy's property, approximately $ 30,000 worth of real estate and $ 10,000 in notes and bonds, was prepared two or three days in advance of...