Thomas v. First Nat. Bank of Chicago

• Court: Appellate Court of Illinois
• Writing for the Court: LINN
• Citation: Thomas v. First Nat. Bank of Chicago, 479 N.E.2d 1014, 134 Ill.App.3d 192, 89 Ill.Dec. 8 (Ill. App. 1985)
• Decision Date: 30 May 1985
• Docket Number: No. 83-2708,83-2708
• Parties: , 89 Ill.Dec. 8 LaVerne Ann THOMAS, individually, and Edwin C. Thomas III and Robert C. Thomas, individually and as co-executors of the Estate of Edwin C. Thomas, deceased, Plaintiffs-Appellants, v. The FIRST NATIONAL BANK OF CHICAGO, Defendant-Appellee, A. LaVerne Thomas, Defendant-Appellee and Cross Appellant.

Page 1014

479 N.E.2d 1014

134 Ill.App.3d 192, 89 Ill.Dec. 8

LaVerne Ann THOMAS, individually, and Edwin C. Thomas III and Robert C. Thomas, individually and as co-executors of the Estate of Edwin C Thomas, deceased, Plaintiffs-Appellants, v. The FIRST NATIONAL BANK OF CHICAGO, Defendant-Appellee A. LaVerne Thomas, Defendant-Appellee and Cross Appellant.

No. 83-2708.

Appellate Court of Illinois First District, Fourth Division.

May 30, 1985.

Rehearing Denied July 15, 1985.

Winston & Strawn, Chicago (Calvin Sawyier, of counsel,) for plaintiffs-appellants.

Sidley & Austin, Chicago (James J. Carroll and Edna Selan Epstein, of counsel,) for defendant-appellee and cross-appellant, A. LaVerne Thomas and defendant-appellee, The First Nat. Bank of Chicago.

LINN, Justice:

Plaintiffs Edwin C. Thomas III (Edwin) and Robert C. Thomas (Robert), individually and as co-executors of the estate of Edwin C. Thomas (Mr. Thomas), deceased, and LaVerne Ann Thomas (LaVerne) (hereinafter collectively the Thomas children) filed a two-count complaint against their mother, A. LaVerne Thomas (Mrs. Thomas) and First National Bank of Chicago ( FNB ) in the Cook County circuit court. Plaintiffs sought a declaratory judgment of the family members' interests in the property of Mr. and Mrs. Thomas pursuant to the terms of a joint and mutual will which Mr. and Mrs. Thomas had executed. The lawsuit further requested an accounting of Mrs. Thomas' use of the property both in the past and in the future.

Mrs. Thomas answered the complaint and counterclaimed against Robert for money owed on a promissory note on which she alleged Robert's payments were in default. FNB filed a motion to be dismissed as a party defendant, which the trial court granted. Thereafter Mrs. Thomas motioned the court for summary judgment in her favor. The Thomas children disputed her entitlement to such judgment; they did not, however, file a counter-motion for summary judgment on their own behalf. The trial court granted Mrs. Thomas' motion on both the children's complaint and her counterclaim against Robert.

With regard to the joint and mutual will and the interests of the family members thereunder, the trial court held, inter alia, that Mrs. Thomas had full power to sell, convey, invest, and reinvest all property. Although the trial court further found that Mrs. Thomas had no present duty to account, she was nevertheless ordered to furnish to the Thomas children an annual report of investments which she had placed in a self-declaration of trust with FNB.

The Thomas children now appeal from the trial court's judgments; Mrs. Thomas cross-appeals. They raise the following questions for our review:

1. Whether Mrs. Thomas' interest in the property, in view of the joint and mutual will, was limited to a life estate interest with no power of sale of the property involved;

2. Whether Mrs. Thomas had a present duty to account to the Thomas children on her management or disposition of the property, and if so, to what extent she was obligated to do so;

3. Whether the FNB was properly dismissed as a party defendant to the cause;

4. Whether Robert's statements in his verified answer that the promissory note he executed to his mother was conditionally delivered to her, and that the condition had not yet occurred so that the debt had not yet become due, was sufficient to present a genuine issue of material fact in consequence of which the summary judgment was erroneously entered in favor of Mrs. Thomas on her counterclaim.

We find that:

1. The Thomas children waived any argument on appeal that Mrs. Thomas' life estate interest did not include the power of sale of the property because they agreed before the trial court that the scope of Mrs. Thomas' interest and power of disposition over the property in question was governed by Moline National Bank v. Flemming (1980), 91 Ill.App.3d 398, 46 Ill.Dec. 883 414 N.E.2d 936, which applies where a life estate tenant is given power of sale.

2. Mrs. Thomas had no present duty to account to her children on her management or disposition of any of the estate property, since the affidavits presented by the parties raised no genuine issue of material fact and further showed no fraud or malfeasance of the power granted to Mrs. Thomas under the will;

3. The trial court properly dismissed FNB as a party defendant, since Mrs. Thomas had no present duty to account;

4. Robert's statements in his verified answer presented no genuine issue of material fact to show conditional delivery of the note, as an oral statement regarding such delivery is inadmissible under the parol evidence rule.

Accordingly, we affirm that portion of the trial court's order setting forth Mrs. Thomas' interest in and power over the property; we reverse that portion of the order which obligated her to account to her children for the investments held in a self-declaration of trust with FNB; we affirm without discussion the trial court's order which granted FNB'S motion to dismiss; and we affirm the portion of the trial court's order which granted Mrs. Thomas' motion for summary judgment upon her counterclaim against Robert.

BACKGROUND:

The record establishes the following background information which stands undisputed between the parties. ¹ Mr. and Mrs. Thomas were married in 1935. Three children were born of the marriage, each of whom is a plaintiff in this cause. In 1982 when this action was commenced, Edwin was 41 years old; Robert was 40; and LaVerne Ann was 38. Mrs. Thomas was 63 years old.

Mrs. Thomas and her husband executed their "Last Will and Testament" on March 14, 1964. The text of this document specifically referred to the will as being "joint and mutual." Mr. and Mrs. Thomas subsequently executed a codicil to this will on July 8, 1973, by which Edwin and Robert were named co-executors of the estate and were granted certain powers not pertinent here. The codicil otherwise republished the 1964 will.

The will provided in relevant part:

"First: In consideration of our love and affection for each other and of a mutual understanding between us that all property belonging to us jointly or to either of us is to pass to the survivor of us and upon the death of such survivor all such property is to pass pursuant to the provisions hereof, we make this our joint and mutual Will. We do hereby mutually agree that during the remainder of our joint lifetimes neither of us may alter or revoke this our last Will without the consent of the other and, upon the death of the first of us to die, the survivor may in no event alter or revoke this our Will.

Second: On the death of each of us our Executor shall pay out of the principal of the estate of the one of us so dying all debts, funeral expenses, and costs of administration. Our Executor shall also pay out of the principal of such estate all estate, inheritance, transfer, and succession taxes, including any interest and penalties thereon, which may be assessed in any way by reason of such death, without seeking reimbursement from or charging any person for any part of such taxes so paid.

Third: Upon the death of the first of us to die each of us gives and bequeaths all the residue of our respective estates and property, real and personal, wherever situated, to the survivor of us; provided, however, that said survivor survives for thirty days. And if no survivor as herein provided, then our separate estates shall go to our children as provided in paragraph Fourth.

Fourth: Upon the death of the survivor of us, each of us gives and bequeaths all the residue of our respective estates and property, real and personal, wherever situated, as follows:

In equal shares to our children, Edwin C. Thomas III, Robert C. Thomas and LaVerne Ann Thomas, and to the heirs of their bodies begotten, and in the case of the death of either of them at any time leaving no heirs of their bodies begotten, then to the survivor or survivors of them. Any child or children of a deceased child of ours shall take such share only as their parent would have taken if living."

Mr. Thomas died on July 30, 1979 and the will was admitted to probate. No argument is raised by any party regarding the propriety of the probate action, which was still pending at the time this cause commenced.

The Thomas children filed their two-count complaint for declaratory judgment and relief ancillary thereto against FNB and Mrs. Thomas on January 4, 1982. Both counts of the complaint sought identical relief:

(1) a declaratory judgment stating that Mrs. Thomas "has only a life estate in the property [of herself and Mr. Thomas by virtue of the will] and is subject to the duties of a life tenant to account for the property and not to waste, mismanage or dissipate the property";

(2) as ancillary to the declaratory judgment and in aid thereof, an order to the effect that:

(a) "any transfer by either [Mrs. Thomas or FNB] of any part of the property is unlawful if it affects adversely the interests of those persons whom [Mr. Thomas] provided should have the property after the death of [Mrs. Thomas]";

(b) "[Mrs. Thomas and FNB] account to [the Thomas children], both for the past and in the future, for the property, the income therefrom and the need, if any, to sell or exchange any of the property in order to provide [Mrs. Thomas] with appropriate support and maintenance and that any improper loss or dissipation of the property be made up from the income therefrom"; and

(c) any other and further relief as may be just, including attorneys' fees and expenses of suit.

In count I of the complaint, the children requested such relief based upon their alleged interests as vested remaindermen. In count II, they relied upon their alleged status as third-party beneficiaries to the contract contained in the joint and mutual will.

Both counts of the complaint made identical allegations. First, it was stated that because the will expressly applied "to all property...