Stephens v. Moore

• Decision Date: 05 March 1923
• Docket Number: No. 23285.,23285.
• Citation: 298 Mo. 215,249 S.W. 601
• Parties: STEPHENS v. MOORE et al.
• Court: Missouri Supreme Court

249 S.W. 601

298 Mo. 215

STEPHENS v. MOORE et al.

No. 23285.

Supreme Court of Missouri, Division No. 1.

March 5, 1923.

Motion for Rehearing Overruled April 6, 1923.

Appeal from Circuit Court, Callaway County; Ernest S. Gantt, Judge.

Action by Paul M. Stephens against James E. Moore and others. Judgment for defendants, and plaintiff appeals. Reversed, with directions.

Atwood, Wickersham, Hill, Levis & Chilcott, of Kansas City, and W. C. Maughs, of Fulton, for appellant.

R. D. Rodgers, of Mexico, Mo., Baker & Baker, of Fulton, and McBaine & Clark, of Columbia, for respondents.

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 7, Stephens died in 1904, possessed of a considerable estate. Ho 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, subnormal 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 his twenty-first birthday, and on the morning of that day, July 20, 1918, the deed was duly signed and acknowledged by him, and the property thereby conveyed was transferred and delivered by his curator directly to the trustee. The material portions of the deed were as follows:

"Know all men by' these presents that I, Paul M. Stephens, of Callaway county, Missouri, for and in consideration of the sum of one dollar to me in hand paid, and of the covenants and conditions hereinafter mentioned and to be. faithfully performed and carried out, do hereby grant, bargain, assign, transfer and set over to James E. Moore, of Callaway county, Missouri, all of my right, title and interest in and to the following: [Here follows a description of the property.]

"To have and to hold the real estate and personal property aforesaid for my sole use and benefit, upon the following terms and conditions, to wit:

* * * * * * *

"Third. That the said James 3. Moore, al my trustee, shall nave complete control, supervision, and management of my said property, both real and personal, and that it shall be his duty at all times to keep said lands rented on the best terms obtainable, to reliable and trustworthy tenants, and to see that same are cultivated and used in a husbandlike manner, to the end that the same shall not deteriorate in value or be wasted by improper or improvident cultivation; to keep up the fences, buildings, and other improvements thereon; to keep the buildings reasonably insured, and pay all taxes thereon as they become due; to keep all of my said moneys and other personal estate hereby conveyed or hereinafter inherited or acquired safely and securely invested; Cc pay all taxes thereon, and, not less than once each year, pay over to me the net proceeds from my said lands and personal estate and property up to the date of such payments.

"Fourth. That if at any time I shall desire to live upon and cultivate for my own use a portion of my said lands, that I shall be permitted to do so by my said trustee without accounting to him for rent; but provided that my said trustee shall at all times have the right to retain the control and management of a sufficient part or portion of said lands to insure a sufficient income to him for the payment of the yearly taxes and insurance on and upkeep of buildings and other improvements.

"Fifth. That during the existence or continuance of this trust I shall have no power or authority to convey, alienate, or incumber said trust property, or any part thereof, or to anticipate or assign, mortgage, or incumber in advance my yearly income or rent therefrom, and that so long that this trust continues or exists the title to all of the property hereby conveyed, and the "annual income thereof (until actually paid over to me), shall be and remain absolutely in the said trustee or his successor in office.

* * * * * * *

"Seventh. That the said James 3. Moore, as trustee as aforesaid, shall give bond in such sum as may be fixed by the circuit court of Callaway county for the faithful discharge of his duties as such trustee, and that he shall make yearly report and settlement with the said circuit court of his affairs and business as such trustee and as he may be from time to time directed and required by said court.

"Eighth. In the event said trustee shall die or shall refuse or neglect to act, or for any misfeasance or malfeasance, his successor shall be appointed by the said circuit court of Callaway county, and shall substitute a trustee, upon the giving of such bond as may be required by said circuit court, who shall succeed to all the rights and duties of said original trustee.

"Ninth. Said trustee or his successor or successors in office shall be allowed such reasonable compensation yearly for services as may be fixed and determined from year to year by the said circuit court.

* * * * * * *

"Eleventh. "Upon my death this trust shall terminate and the trust shall pass to and vest in my legal heirs, or as may be directed in my will."

In the following January Paul Stephens, through his attorney, filed suit in the circuit court for Callaway county against the trustee, Moore, to have the deed of trust annulled and set aside. The grounds upon which plaintiff in that suit sought to have the deed set aside were: (1) There was no consideration for the execution of the instrument; (2) plaintiff did not understand the nature and legal effect of the deed, in that he thought he was simply constituting the said James E. Moore his manager and adviser; and (3) the deed was not the free and voluntary act of the Plaintiff, but was obtained by the undue influence of his mother and stepfather. In due time Moore, the defendant in said action, filed answer to the petition. Thereafter, while the suit was thus pending, a conference was had at which were present Paul Stephens, his mother, stepfather, and attorney, and the trustee, Moore, and his attorneys. The conference resulted in an agreement between Stephens and Moore which was reduced to writing, signed by them, and filed in the case. The portions of the stipulation pertinent to the questions here involved are as follows:

"Whereas the party of the first part, Paul Stephens, has decided to dismiss his suit against the party of the second part, James E. Moore, trustee, and whereas the said Paul Stephens and the said James E. Moore, trustee, have decided to amend the terms and conditions of the trust of the 20th day of July, 1918, and to reaffirm and ratify the terms of said trust, to this end this agreement is made and entered into:

"First. It is agreed that the said Paul Stephens shall have the privilege at any time after the expiration of ten (10) years from this date to apply to the circuit court of Callaway county, Missouri, to terminate said trust, and that said trust shall be terminated upon such application, provided the said court is satisfied that the said Paul Stephens is capable of conserving his property and estate and of prudently managing his affairs, but also provided that, in case an application is made and is denied and rejected by the said circuit court, then another application shall not be made for a further period of ten (10) years. And further applications shall not be made oftener than every ten (10) years.

* * * * * * *

"Fourth. It is agreed that the terms and provisions of said original trust agreement shall stand except as herein modified."

Pursuant to the stipulation, the circuit court for Callaway county entered judgment, which, so far as material here, was as follows:

"The court having seen and heard read the agreement aforesaid, and having heard evidence on the condition of the estate of said Paul M. Stephens in the hands and control of said James E. Moore, trustee, and being satisfied that it is for the best interests of the estate and the aforesaid Paul M. Stephens, the plaintiff herein, to have the litigation involved in this suit settled upon the terms and conditions contained in said agreement, it is therefore ordered by the court that said...