Tootle-Lacy Nat. Bank v. Rollier

• Decision Date: 14 December 1937
• Citation: 111 S.W.2d 12,341 Mo. 1029
• Parties: Tootle-Lacy National Bank, Executor and Trustee of the Estate of Edward W. Rollier, v. Edward Franklin Rollier et al., Mary E. Schelhamer, Appellant
• Court: Missouri Supreme Court

111 S.W.2d 12

341 Mo. 1029

Tootle-Lacy National Bank, Executor and Trustee of the Estate of Edward W. Rollier, v. Edward Franklin Rollier et al., Mary E. Schelhamer, Appellant

Supreme Court of Missouri

December 14, 1937

Appeal from Buchanan Circuit Court; Hon. L. A. Vories Judge.

Affirmed.

John D. McNeely, James F. Selby and Fred M. Wanger for appellant.

(1) By reason of the loose, indefinite and uncertain terms and conditions of the endorsements on the policies, as to subject, object, beneficiaries and purposes thereof, no valid enforcible express trust was created. All of the following essentials of a valid trust are absent and the absence of any one of them would be fatal. 65 C. J. 231, sec. 21; 26 R. C L. 1179. (a) The endorsements do not create a trust for any particular term. (b) They do not vest the legal title presently in the bank. Sell v. West, 125 Mo. 631, 46 Am. St. Rep., 508; Harris Banking Co. v. Miller, 190 Mo. 640, 1 L. R. A. (N. S.) 790. (2) They make no provisions for the benefit of any definite cestui qui trust and designate none. Northrip v. Burge, 255 Mo. 654; Clark v. Campbell, 45 A. L. R. 1433. (d) They make no provisions for any definite object or trust purpose to which the fund is to be applied. Sanford v. Van Pelt, 314 Mo. 175; Foster v. Fried, 37 Mo. 36. "The declaration of intention to establish a trust must be definite, clear and explicit and embody all the essential elements" -- "and the beneficiary must be definitely ascertainable." Brubaker v. Lauver, 322 Pa. 461, 185 A. 185. (2) Though the endorsements failed to create such an effectual and enforcible express trusts their effect was a resulting trust to the use of the donor and hence to his legal representatives. 65 C. J. 526, sec. 271; Sanford v. Van Pelt, 314 Mo. 302, 282 S.W. 1022; Platt v. Huegel, 326 Mo. 782, 32 S.W.2d 605; Seran v. Davis, 50 P.2d 662; Prudential Ins. Co. v. Bloomfield Trust Co., 145 A. 735. This well-established rule cannot be stated more concisely than in the case last above cited, citing Irwin on Trusts: "Upon an imperfect trust the law raises a resulting trust to the use of the donor of the power." (3) From the above points and authorities it follows that the proceeds of the insurance go to the executor of his estate to be administered according to the mandate of his will.

W. M. Morton for respondent.

(1) It was wholly unnecessary for the change of beneficiary clause, in the matter of the Penn Mutual Life Insurance policies, to be actually endorsed on the policies. The execution of the forms provided by the company and referring in apt language to the policies affected and submitted to and approved by the company effected such change. Moreover, the provisions in the policies as to endorsement of change of beneficiary are for the benefit of the insurer and were waived by the company. Dunnavant v. Mountain States Life Ins. Co., 67 S.W.2d 785; Frakes v. Brotherhood of Locomotive Firemen, 204 S.W. 26; Mutual Life Ins. Co. v. Tuemler, 251 S.W. 727; Mo. State Life Ins. Co. v. Robertson Banking Co., 134 So. 25, 223 Ala. 13; In re Lynch's Estate, 237 N.Y.S. 663, 135 Misc. 436; Hoskins v. Hoskins, 231 Ky. 5, 20 S.W.2d 1029; American Natl. Ins. Co. v. Wallace, 210 S.W. 859; White v. White, 194 N.Y.S. 114; Royal Union Mut. Life Ins. Co. v. Lloyd, 254 F. 407; Bank v. Hodges, 132 Miss. 238, 96 So. 97. (2) Although the intent to create an express trust must be clear the fact that the declaration is open to more than one interpretation and requires judicial construction does not defeat the trust. Where an intention to create a trust is manifest, that intention should not be nullified by construction if there is any way in which it can be sustained. 65 C. J. 275, sec. 58; Pomeroy's Equity Juris. (4 Ed.), sec. 1010, p. 2242. (3) The declaration of this trust, the subject matter of which was the proceeds of these insurance policies, need not be contained in or endorsed on the instrument which transfers the property involved. It may be set out in or on several instruments executed at other times than that of the transfer of title provided, when construed together, they afford evidence of the execution of the trust. Platt v. Huegel, 326 Mo. 782, 32 S.W.2d 605; Smith v. Hainline, 253 S.W. 1051; Ketcham v. Miller, 37 S.W.2d 635; Kendrick v. Ray, 173 Mass. 305, 53 N.E. 823; Dupre v. Thompson, 8 Barb. 537; Adamson v. Black Rock Power & Irrigation Co., 297 F. 905. (a) The beneficiary clauses alone established a dominating intention to create a trust and, without more, even parol evidence can be resorted to for the purpose of establishing the purpose, beneficiary, term, and other conditions. Union Pac. Railroad Co. v. Durant, 95 U.S. 576, 24 L.Ed. 391; Bryan v. McCaskill, 284 Mo. 583, 225 S.W. 682; Sanford v. Van Pelt, 314 Mo. 175, 282 S.W. 1022; Eisel v. Miller, 84 F.2d 174. (4) Under the authority of the decisions above cited the beneficiary clauses must be considered in connection with the will of the deceased together with all the surrounding facts and circumstances. When this is done it is determined without question that there was a person competent to create a trust, sufficient words to create it, a competent designated trustee, a definite subject constituting the trust property, a definite purpose and beneficiaries, and a declaration of the terms. Thus there was created an express trust. 26 R. C. L., p. 1179, secs. 17-29; 65 C. J., p. 232, sec. 21. (5) Any trustee placed in circumstances in which he may have a reasonable doubt as to the proper distribution of the funds in his hands has a right to apply to a court of equity for directions, making the persons interested parties to the proceeding. Hayden's Executors v. Marmaduke, 19 Mo. 403.

W. J. Boyd for Jimmie Lowe, guardian of Emma E. Rollier, insane; Elliott & Crouse for Edward F. Rollier.

Ferguson, C. Hyde and Bradley, CC., concur.

OPINION

FERGUSON

This is a suit in equity brought by the plaintiff Tootle-Lacy National Bank of St. Joseph in a fiduciary capacity. One Edward W. Rollier and his wife Emma E. Rollier were residents of St. Joseph. Rollier carried eight policies of life insurance, of an aggregate face amount of $ 10,000, in which his wife Emma E. Rollier was designated as the sole and unconditional beneficiary. In each of said policies the right of the insured to change the beneficiary was reserved. In March, 1930, the wife was adjudged of unsound mind and committed to a hospital for the insane where she has since continuously remained as an inmate. "The doctors say there is no probability that Mrs. Rollier will recover." At that time the Rolliers had been married for more than 20 years. No children were born of the marriage but Edward W. Rollier had one child, a son, Franklin Rollier, born of a previous marriage which had terminated in a divorce. After the divorce the son had not made his home with his father, but "when he was small his home was with his mother and grandfather in Rock Island, Illinois." Shortly after his wife was committed to a hospital for the insane Rollier made a change of beneficiary in all of his policies of life insurance specifying in the form, hereinafter set out, that the proceeds thereof should be paid to plaintiff, Tootle-Lacy National Bank, as trustee. The endorsements making a change of beneficiary did not specifically designate the beneficiary of the trust or declare the terms and conditions thereof. On June 21, 1934, Rollier executed a will. Having first directed payment of debts and funeral expenses he made one bequest, that of $ 6000 to Mary E. Schelhamer "together with all" of his "jewelry and personal effects," adding; "This bequest is made to compensate the said Mary E. Schelhamer for services rendered to me and my family." The residuary estate is then put in trust for "the use and benefit of my wife, Emma E. Rollier," the "income therefrom, or in case of necessity, any part of the principal thereof" to be used by the trustee "for the proper maintenance and support of my said wife, Emma E. Rollier, so long as she may live" and upon her death the trust to "cease and determine and said trustee after the payment of the funeral expenses of my said wife shall pay over and deliver to my son, Edward Franklin Rollier" the property remaining "to be his property absolutely." The Tootle-Lacy National Bank is named as trustee of this testamentary trust and is also made executor of the will. Edward W. Rollier died September 17, 1934, and the will of June 21, 1934, supra, was admitted to probate as his last will and testament. The Tootle-Lacy National Bank qualified as executor. The record herein does not disclose what money or property Rollier possessed at the time that he made the will or whether in the interim between the date of the execution of the will and the date of his death he conveyed or transferred any property to Mary E. Schelhamer, the beneficiary of the sole legacy or bequest made, or any other person, but it does appear that after payment of the funeral expenses and costs of administration but little will be left in the hands of the executor and the net estate wholly insufficient to pay the $ 6000 bequest to Mary E. Schelhamer. The Tootle-Lacy National Bank, as trustee, the payee and beneficiary designated in the insurance policies, collected the proceeds thereof, aggregating $ 10,258.10. As noted the Tootle-Lacy National Bank (hereafter referred to merely as the bank) was designated as trustee-beneficiary in the insurance policies, as trustee in the trust created by the will covering the residuary estate, and as executor of the will.

Mary E Schelhamer's position is that the endorsements on the insurance policies, whereby the bank was made trustee-beneficiary, "created no trust for any object or in favor of any beneficiary...