White v. O'Bryan

• Decision Date: 18 May 1923
• Citation: 251 S.W. 785,148 Tenn. 18
• Parties: WHITE v. O'BRYAN ET AL.
• Court: Tennessee Supreme Court

251 S.W. 785

148 Tenn. 18

WHITE v. O'BRYAN ET AL.

Supreme Court of Tennessee.

May 18, 1923

Appeal from Chancery Court, Davidson County; Jno. R. Aust Chancellor.

Bill by Miss Mary Lou White, administratrix, against Lawrence G O'Bryan and others. From decree for defendants, plaintiff appeals. Modified and affirmed.

Maj. H H. Barr, of Nashville, for appellant.

Keeble & Seay, of Nashville, for appellees.

MALONE Special Justice.

The bill in this cause was filed by a judgment creditor, with nulla bona return, to subject the interest of the defendant, Joseph B. O'Bryan, Jr., in certain property held in trust for him.

The defense relied upon in the answer of defendants (and sustained by the chancellor) is that the trust in question was a "spendthrift trust" created by will duly recorded. Complainant's bill was accordingly dismissed, and from this decree she has appealed.

The will in question is the will of Mrs. Mary C. O'Bryan, mother of the defendant Joseph B. O'Bryan, and his interest and the interest of all other beneficiaries in that estate was heretofore fixed and determined under another proceeding brought in the chancery court at Nashville by Lawrence G. O'Bryan, the executor of said estate.

The report of the clerk and master in that case, confirmed by the chancellor, and supported by evidence (and therefore binding upon all parties to the suit, including the defendant Joseph B. O'Bryan), clearly sets forth the pertinent provisions of the will and the facts regarding a certain family settlement made between the beneficiaries. The report is as follows:

"Pursuant to a decree in the above-entitled cause, entered in Minute Book 96, page 56, the parties have taken and submitted to me the depositions of Lawrence G. O'Bryan, Mrs. Leonora O' Bryan Trabue, H. H. Trabue and J. B. O'Bryan, from which and from the entire record in the cause I report as follows:

(1) When Mary C. O'Bryan died and where.

Mary C. O'Bryan died in Nashville Tennessee on May 25, 1916.

(2) Whether she died testate or intestate and who are her heirs at law, devisees, and legatees.

Mrs. O'Bryan died testate leaving surviving her her children, Lawrence G. O'Bryan, Leonora O'Bryan Trabue, wife of H. H. Trabue, and J. B. O'Bryan, and her grandchildren Lawrence O'Bryan Trabue, son of Leonora O'Bryan Trabue, and Mary C. O'Bryan, daughter of J. B. O'Bryan.

Under the terms of the will of Mrs. O'Bryan, she devised all her real estate to her executor, Lawrence G. O'Bryan, with the direction to sell such real estate, and, after the payment of taxes, etc., she devised the net proceeds to her three children, one-third to her son, Lawrence G. O'Bryan, and the remainder in equal shares to her daughter, Leonora O'Bryan Trabue, and her daughter-in-law, Mesa Rose O'Bryan, wife of J. B. O'Bryan, under certain trusts thereafter mentioned in the will.

She further devised and bequeathed her interest in the business of O'Bryan Bros., and to all her other property, to her said son Lawrence G. O'Bryan, of which one-third was to go to her daughter, Mrs. Trabue, for life and one-third to her son, J. B. O'Bryan, under the following trusts:

'The remainder of my estate I divide into three equal portions, one of which I give and bequeath to my son, Lawrence G. O'Bryan, to be his absolutely; one portion shall be for the use and benefit of my daughter, Leonora O'Bryan Trabue, for and during her natural life, upon the trusts hereinafter mentioned; and the remaining portion I give to my son Joseph B. O'Bryan, Jr., for and during his natural life upon the trusts hereinafter mentioned.

The legal title of the interest in my estate given to my daughter Leonora O'Bryan Trabue, is vested in my son Lawrence G. O'Bryan as trustee, and he shall hold the same for the separate use and benefit of my daughter and shall pay to her the rents, incomes and profits, of her portion of my estate for her support and maintenance and she shall not have the power to anticipate nor the power to assign her portion of the rents, incomes and profits but said rents, incomes and profits thereof shall be paid to her by my trustee into her own hands, and not into the hands of any other person, for and during the term of her natural life. She is given the power by last will and testament which shall be executed according to the formalities of wills and testaments devising real estate, to appoint the person or persons to whom my said trustee shall, at her death pay her portion of my estate. In the event she fails to exercise this power and leave issue surviving, her portion shall be paid to such issue per stirpes. But in the event she leave no issue surviving and fail to exercise this power, then her portion shall be paid to those persons who at the time of her death are my heirs at law.'

Under item 5, it is provided:

'The legal title of the interest in my estate given to my son Joseph B. O'Bryan, Jr., shall be vested in my son Lawrence G. O'Bryan. as trustee under trusts in every respect similar to those under which he holds the estate given to my daughter Leonora.'

(3) What was the estate of Mrs. Mary C. O'Bryan at the time of her death, and from what source did she derive her estate. What were the debts and liabilities, if any, owing by said Mrs. Mary C. O'Bryan, at the time of her death, stating the facts fully, and of what her estate now consists, and how far her estate has been administered.

Prior to her death Mrs. O'Bryan had sold all her real estate, and out of the proceeds paid the indebtedness which she owed the firm of O'Bryan Bros.

Mrs. O'Bryan owned an interest in O'Bryan Bros. O'Bryan Bros., at the time of Mrs. O'Bryan's death, was a corporation, which had been formed from the partnership of O'Bryan Bros., originally consisting of Geo. G. O'Bryan and J. B. O'Bryan, the husband of Mrs. Mary C. O'Bryan. This corporation had a capital stock of $150,000, of which 750 shares, of the par value of $100 each, were owned and held in trust for the widow and heirs of Geo. G. O'Bryan, and of the remainder Mrs. Mary C. O'Bryan owned 650 shares, and Lawrence G. O'Bryan 100 shares.

Before Mrs. O'Bryan's death, she, together with Lawrence G. O'Bryan, T. B. Kennedy, and R. B. Puryear, purchased 750 shares of the Geo. O'Bryan heirs' stock, at the price of $100,000. In addition to this consideration the Geo. O'Bryan heirs released the firm of O'Bryan Bros. from an obligation which it had theretofore entered into, to pay them the sum of $100 weekly for seven years succeeding the death of Geo. G. O'Bryan. For this $100,000 the purchasers had executed their notes, payable $5,000 every six months with interest payable weekly, and had secured the same by pledging not only all the stock purchased, but all the stock theretofore owned, by Mrs. Mary C. O'Bryan and Lawrence G. O'Bryan.

At the death of Mrs. O'Bryan, $25,000 of this amount had been paid.

As between the makers of these notes, Mrs. O'Bryan was obligated to pay 40/75 of the entire amount, and therefore would have acquired 40/75 of the entire amount of the shares purchased, or 400 shares, making her holdings in the chancery 1,050 shares of the par value of $100 each, or $105,000, encumbered with the balance of the $100,000 indebtedness.

Under an agreement with the Geo. G. O'Bryan heirs, the said Lawrence G. O'Bryan and Leonora O'Bryan Trabue have assumed and agreed to pay the balance due upon the said 400 shares of stock which Mrs. O'Bryan's estate would be entitled to when the indebtedness should have been paid, and under this agreement the estate of Mrs. O'Bryan was released from any and all liability upon said indebtedness, accepting in lieu thereof the liability of the said Lawrence G. O'Bryan and Mrs. Leonora O'Bryan Trabue, all of the stock, however, still remaining pledged to secure the balance of the indebtedness.

The remainder of the estate of Mrs. O'Bryan consisted of household and kitchen furniture of the value of about $1,000, which has been divided among her children by her executor, pursuant to her will; one Packard limousine, which has been sold for the sum of $600; and the indebtedness to the estate due from J. B. O'Bryan, $29,892.50.

The debts and charges outstanding against the estate were the amount due the Geo. O'Bryan heirs, as hereinabove stated, and the indebtedness of $6,028.19 to Lawrence G. O'Bryan.

(4) Whether or not the administration of said estate should be transferred to the chancery court, and whether or not the same is in condition to be administered.

The value of the estate is more than $1,000 and should be transferred under the circumstances from the county court to this court, and especially in view of the proposed settlement hereinafter stated.

(5) Report the facts as to any proposed settlement of the estate which may have been agreed upon between the adult heirs, legatees, and devisees, and how said proposed settlement affects the interest of the minor defendants and whether or not said proposed settlement should be ratified and approved, and especially whether the same is to the manifest interests of the minor defendants.

As hereinbefore stated, the interest of Mrs. O'Bryan in O'Bryan Bros., consisted of 1,050 shares, of which she owned 650 shares at the time of her death, the remaining 400 being the proportion of the 750 shares purchased by her and her associates to which she would be entitled when the purchase price was paid.

As one-fourth of the entire purchase price had been paid by her and her associates at the time of her death, this would leave one-fourth of the 400 shares which could be treated as having been paid for by her, fully, prior to her death, leaving her owning 750 shares of this stock, the remaining 300 shares to go to Lawrence O'Bryan and Mrs. Trabue in...