119 S.W.2d 951 | Mo. | 1938
In this proceeding the cestuis que trustent under the will of William Frank Shelton, Jr. (known to the record as Frank) seek the removal of the trustees. Testator was twice married. His first wife was Edith Shelton. They had one child, William Frank Shelton, III. His second wife was Ruby Shelton. They had two children, Frank Joseph and Mariam Claire Shelton. By his last will and testament, Mr. Shelton, appointed Hal H. McHaney, A. J. Langdon, Jr., and Lee Shelton trustees of his residuary estate' and contemplated the final distribution of his estate in equal parts to Ruby, William Frank, III, Frank Joseph and Miriam Claire Shelton. The decree was for the defendants.
Testator died December 22, 1929. Substantially all of testator’s assets, embracing considerable real and personal property, were devised and bequeathed as folloivs (provisions of no consequence to the instant issues being omitted) :
“Seven. I give, devise and bequeath all the rest, residue and remainder of my estate, real or personal, and wheresoever situate, which I may own or have the right to dispose of at the time of my decease, unto my brother Lee Shelton of Kennett, Missouri, Hal H. McHaney of Kennett, Missouri, and A. J. Langdon, Jr., of Hornersville, Missouri, as trustees, to have and to hold the same in trust, nevertheless, for the joint use and benefit of my wife Ruby Shelton, my son William Frank Shelton, III, my son Frank Joseph Shelton and my daughter, Miriam Claire Shelton, with the powers and authority and subject to the terms, conditions and provisions hereinafter set forth.
“The trustees named, and their successors, during the continuance of said trust, shall hold and manage the property held in trust with power to pay taxes and other charges against the property, and all legal and proper expenses incident to its care and protection, and such other expenses as may be connected with the execution of this trust; to sell, assign, convey or otherwise transfer any part of said property upon such terms or conditions as said trustees, or their successors, may deem advisable for the best interest of my estate; . . . to receive, and receipt for, the proceeds of any such sale, transfer, hypothecation or encumbrance; to invest, or reinvest, the same in such manner as said trustees, or their successors, may deem best; to receive and receipt for, any and all income that may be de
“I further request and direct my said trustees, or their successors, to make or procure a division of my property, held jointly with my brother Lee Shelton, prior to the expiration of five (5) years following my demise.
“A sufficient amount of the income derived from the trust estate, hereby created, during the first five (5) years after my demise, after deducting all taxes and expenses of administration, including reasonable fees for the services of the trustees herein named, provided the aggregate of such fees shall not exceed in any one year ten percent (10%) of the net income from my said estate during such year, together with such part of the principal of my estate as in the absolute discretion of the trustees herein named may be necessary and/or advisable, shall be used by said trustees for the support, maintenance, education and care of the beneficiaries of this trust, during such five (5) year period, and same shall be paifl to them from time to time in convenient amounts.
“Eight. At the end of said five (5) year period, the said trust estate shall be divided into four (4) parts, equal in amount and value, by the within named trustees, or their successors, and one part shall ■ be paid over and delivered to my wife, Ruby Shelton, to have and to hold as her absolute property in fee simple.
“Nine. The remaining three parts of said trust estate ah all remain in the hands of my trustees, or their successors, for the separate use and benefit of each of William Frank Shelton, III, Frank Joseph Shelton and Mariam Claire Shelton,.until such time,.or times, as hereinafter provided/ ... . ' ' "
[By paragraphs “ (a),” “ (b) ” and “ (c) ” of Clause “Nine,” the
“Fifteen. The general purpose and intention in creating the . trust provided for .herein, whereby the trustees are given broad, general powers and are substituted in my place ..and stead as nearly as practicable, has been done by me with the desire that during the first five (5) year period after my demise said trustees shall do everything possible, by careful management, to protect my estate from waste, which often occurs in the administration and distribution of estates, to the end that my estate may be gotten into the best possible condition for division among my beneficiaries by the end of such five (5) year period, as provided herein, and, also, for the proper care, maintenance, education and support of my beneficiaries in the way I deem best during the periods their said property is entrusted as provided herein, -and, also, to the end that said estates will be better preserved for their ultimate enjoyment, use and benefit. ...
“Seventeen. This will has been carefully planned by me and it is my deliberate judgment that all of its provisions are wise and just and that the plan as a whole will prove beneficial and satisfactory to my wife and. family. . . .
“Eighteen. I hereby nominate .and appoint Lee Shelton and Hal H. McHaney of Eennett, Missouri, and A. J. Langdon, Jr., of Hornersville, Missouri, executors of this my will and trustees of each trust hereby and herein created, and I direct that no bond or other security be required of them to qualify them to act as such executors or trustees in the State of Missouri, or any other State. . . . ”
Many of the issues presented here are factual rather than legal. Plaintiffs’ abstract places emphasis upon testimony favorable to plaintiffs while minimizing some of the testimony favorable to defendants; and defendants have filed an additional abstract. Defendants, having prevailed below, are entitled to have the full effect of that testimony favorable to their judgment considered upon review. Our task has not been lightened by the necessity of reviewing and comparing the two rather lengthy abstracts.
While this court passes on the weight of the evidence upon the review of a cause in equity, we accord due deference to a chancellor’s determination of factual questions, especially, from necessity and. convenience arising out of the superior opportunity afforded a trial court, facts determinable from conflicting viva voce testimony. [Howard v. Zweigart (Banc), 197 S. W. 46, 48(1); Fendler v. Roy, 331 Mo. 1083, 1095, 58 S. W. (2d) 459, 465(8, 9); Bank of Brimson v. Graham, 335 Mo. 1196, 1204, 76 S. W. (2d) 376, 380(4); Jones v. Jones, 333 Mo. 478, 484, 63 S. W. (2d) 146, 149(1); 5 C. J. S., pp. 757, 765, secs. 1663, 1664; 3 Am. Jur., p. 479, sec. 912.]
I. Hal H. MeHaney is a lawyer. Plaintiffs say the evidence sustains their charge that he intended to, and with the cooperation of the other trustees, did fraudulently collect $3000 for services as an attorney, and $600 for services performed by his stenographer from the Shelton estate; and, therefore, said trustees should be removed.
a. Testator’s estate inventoried $609,628.70. Testator, or with his brother Lee Shelton, owned approximately 10,000 acres of real estate situate in Missouri and Arkansas, and reference to Re Shelton’s Estate, 338 Mo. 1000, 1004, 93 S. W. (2d) 984, 995, discloses testator’s personal estate .aggregated over $400,000. Testator and his brother Lee engaged in business ventures under the names of Shelton Brothers and Shelton Store Company — the latter being the common designation of the William Frank Shelton, Jr., Store Company, a corporation. The record indicates the Store Company had a capital stock of $25,000, divided into 250 shares, of which testator owned one share less than three-fourths, the other shares being owned by Lee. The book value of the corporate assets at the time of testator’s death •was between $320,000 and $350,0.00. The brothers cleared their financial transactions through the Store Company’s cash and bank accounts. Prior to testator’s death MeHaney was his personal attorney and thereafter MeHaney rendered legal services to the Shelton es
b. Mr. McHaney’s stenographer performed all the necessary stenographic services connected with the administration of the Shelton estate which was pending in the probate court for approximately fourteen months. His stenographer’s salary of $50 per month was increased during the pendency of the said administration to $65. McHaney estimated three-fourths of his stenographer’s time was devoted to stenographic services rendered the Shelton estate, and that the services thus rendered were reasonably worth $600. After conference with his co-executors, an item of $600 for stenographic • services was presented to .and approved by the probate court for allowance. McHaney, having thérétofore paid his stenographer, received this.
II. William Frank Shelton, III, known in the record as “Bill,’’ lived with his mother Edith Shelton, in the state of California. Soon after his father’s death he became entitled to the proceeds of a $10,000 insurance policy his father had taken out in his favor and $750 from the sale of an automobile his father had willed to him. The probate court of California having jurisdiction appointed Edith Shelton guardian and curatrix of the minor’s, Bill’s, estate and allowed Mrs. Shelton $500 monthly for Bill’s support. After advancing $300 or $400 the trustees discontinued remittances to Trim in February, 1930, and during the course of the ensuing controversy, informed Bill and hjg mother they thought it was not to Bill’s advantage to have too much money; that whenever deemed necessary and advisable they would be glad to make reasonable remittances to Bill; and that, upon division, Bill’s share of the estate would be increased by whatever might be determined to be reasonable for the purposes specified in the will during the interval he was receiving $500 monthly from the insurance money. Bill advised the trustees in May, 1931, that the guardianship funds had been exhausted. The trustees had made inquiry covering a reasonable allowance for students at the University Bill was attending and thereupon made monthly remittances of $175 for Bill’s support, maintenance, edu
III. Plaintiffs say that the trustees refused to account and in their argument assert they failed to furnish copies of audits of the estate and the Store Company to Ruby Shelton and Bill Shelton; and that McHaney refused to submit to Ruby Shelton an itemized statement covering legal services rendered the estate by him during 1930. The record discloses the auditor had specific instructions to prepare a copy of each audit for Ruby Shelton; that McHaney had instructed his stenographer to mail a copy of each audit to Ruby Shelton; that Ruby Shelton was furnished a copy of the audit of the estate and also the Store Company for 1930 and was advised the records of the trustees and of the Store Company were open for her inspection at all times, and she was invited to (and did) inspect them from time to time; that the trustees informed Bill Shelton they did not have a copy of the 1930 audit available for him, but forwarded a statement of the receipts and disbursements, advising him if he desired a copy of the audit they would prepare one; and that Bill did not request a copy. Ruby Shelton was shown four audits and testified she could not say whether they were all the audits she received or not. After Ruby Shelton protested the allowance of any attorney’s fees to McHaney, he informed her he felt justified in refusing to submit “any further statements” to her in that matter, but expressed a willingness to discuss it with her representative. We understand from the record that Ruby Shelton had information concerning the legal services rendered by McHaney. Again, the chancellor’s conclusions are sufficiently supported by the evidence.
(a) The Store Company was used by the brothers to facilitate financial transactions, that is, they carried sufficient cash to the credit of the Store Company account to finance the various Shelton interests and book entries were kept to reflect the various business enterprises and the individual interests of the two brothers. Each drew on the Store Company’s account for such cash as they might need. At the time of his death testator owed (we use round numbers) the Store Company $34,000' and Lee Shelton owed the Store Company $33,000. An audit of the affairs of the brothers revealed that testator was entitled to credits reducing his indebtedness to $18,000. The William Frank Shelton, deceased, estate was in the course of administration in the probate court. The executors desired to close this administration in due course.- They secured the allowance of a demand covering said $18,000 principal amount, with no interest added. The Store Company had not declared a dividend for a number of years and had undivided profits in excess of $300,000 consisting largely of investments in real estate of a nonliquid nature. It did not have sufficient cash on hand to permit of the handling of all necessary transactions on a cash basis. ' It was contemplated at first to declare a Store Company dividend sufficient to liquidate the indebtedness of Lee, as well as the indebtedness of testator, a dividend of approximately $150,000. Upon being informed by the auditor and ascertaining that such a dividend would result in prohibitive surtaxes, it was finally determined to declare a dividend of $50,000 which was used, in part, to liquidate Frank’s, indebtedness and reduce Lee’s indebtedness to $20,000. Plaintiffs complain that this $20,000 has never been collected from Lee and that he has paid no interest thereon. Prior to Frank’s death the brothers never charged the Store Company" interest on credits standing to their individual accounts, and they never,-through the Store Company, charged each other with interest on their individual withdrawals from the undivided profits standing to the credit of the Store Company. Lee would have been entitled to have his indebtedness discharged in like manner as Frank. It -clearly appears -that the failure to discharge Lee’s indebtedness at the time Frank’s was discharged was to the advantage'of the trust estate. The testimony-is to the'effect that Lee is a man of affairs; his wealth being estimated at $300,000, consisting in part of his holdings in the Store Company (wlrch still has an undivided profit in excess of $200,000). The preexisting policies of the brothers in the conduct of their business enterprises has "been
(b) Plaintiffs next complain of the sale of one hundred twenty acres of land at $150 an acre. The will-authorizes the trustees “to sell . . . any part of said property upon such terms or conditions as said trustees . . . may deem advisable for the best interests of my estate. . . .” There was some hearsay testimony to the effect testator had refused $200 an acre for the land, but the same witness was of opinion $150 an acre was a good price. There was other testimony that the land brought more than it was worth at the time of sale. The land was the property of the Store Company. If sold for less than its value Lee Shelton sustained a loss.
(c, d) "William Frank Shelton owned the controlling interest in the Bank of Kennett at the time of his death and Lee Shelton was the next largest stockholder. Plaintiffs say shares of stock were sold over the protest of Ruby Shelton so that Lee could secure control; that the trustees refused to elect Ruby Shelton a director; and that five shares of stock were placed in the name of McHaney and he was elected a director. The testimony was to the effect that in 1930 on account of financial conditions then existing it became necessary to rehabilitate and reorganize the bank; that Frank Hunt, vice-president of the First National Bank in St. Louis, was called in consultation; that he recommended enlarging the Board of Directors from five to seven and securing men who would take an active part in the management; and that after conferences J. D. Spence and T. H. Masterson each purchased five shares for $300 a share from the trust estate and were elected directors. We are unable to find that said stock did not bring full value. -Lee Shelton acquired no stock from the trust estate and does not own a majority of the stock. McHaney testified he did not solicit the directorship but was selected at the suggestion of Mr. Hunt. He gave a $1500 demand note to the trustees of the trust estate for the five shares placed in his name. This note contains a provision providing 'for payment upon the return of the stock and all dividends. The dividends have been turned over to the estate. McHaney’s election and service on the board has been with the understanding he was assisting and looking after the interests of the trust estate. There is no showing that he has been derelict in this. Under the statutes of this State [Secs. 5363, 5364, R. S.
(e) H. S. Wells was dismissed from the service-of the. Shelton Store Company and McHaney was named secretary to discharge a portion of the duties formerly performed by Wells. There is ample, evidence that the services of Wells were no longer needed. The minutes of the Store Company show $3000 was paid McHaney for services' as counsel and secretary. This is the $3000 item hereinbefore discussed; but plaintiffs say McHaney received this $3000 for services as secretary. McHaney asked no compensation for services as secretary and his legal services stand established as reasonably worth $3000. The greater weight of the'evidence is against plaintiffs’ contention.
(f) Plaintiffs next complain of the sale of one hundred twenty shares of J. R. Bissell Dry Goods Company stock at $125 a share. There was hearsay testimony that in 1926 or 1927 testator stated he did not want to sell the stock. The trustees sold the stock because they knew nothing about the wholesale dry goods business and were removed from the company’s location. There was testimony that the stocks paid dividends of 15% in 1929, 10% in 1931 and 20% in 1933; that at the time of the sale the book value of the- stock was $140, although the trustees figured the book value at $125; and that “things were pretty hard with the company.”' However, the company succeeded in collecting all but 4% of $175,000 it then had outstanding on its books. Defendants’ Exhibit 67, a financial statement of the Bissell Company, is not incorporated into the record; and it is not established that the. trustees exceeded their authority or sacrificed the stock; especially if the sale occurred prior to the declaration of the 1933 dividend.
(g) During his lifetime testator had a “riding boss,” as they are designated in the cotton country, paying him $150 monthly. The trustees employed a party to render this service in the management of the approximately 10,000 acres of land which the trust estate owned or had an .interest in, paying $125 monthly therefor and charging the same ¡against the accounts of the trust estate, the Store Company and Sheltpn Brothers. We shall not go into the details of the services, rendered. He exercised, no functions of management
Y. Plaintiffs’ brief makes a general complaint against the expenditures for counsel fees and to physicians who testified as expert witnesses in the defense of a suit [Shelton v. McHaney, 338 Mo. 749, 92 S. W. (2d) 173] to set aside testator’s will. With the exception of Ruby Shelton, plaintiffs here were the parties plaintiff in the will contest; and Ruby Shelton although named as a party defendant in the will contest was, in effect, also a contestant [Ibid., l. c. 754 and 173, respectively]. A short time before the execution of the will testator had been informed by • physicians he had multiple myeloma, a rare, but fatal disease, and only a short time- to live. One of the grounds for setting aside the will was testator’s alleged mental incapacity occasioned by disease and mental and physical deterioration. Testator’s will expressly provided “Seventeen. This will has been carefully planned by me and it is my deliberate judgment that all of its provisions are wise and just and that the plan as a whole will prove beneficial and satisfactory to my wife and family. . . As indicated by this record and stated by this court in upholding testator’s will: [Ibid., l. c. 770; 183, respectively] : “Tes tator was a man of strong mind and character, an experienced and able businessman, a man not easily influenced to act against his judgment or to abandon a purpose he had determined upon. ’ ’’ Ruby Shelton in a letter written in September, 1930, speaking of testator’s will, stated: “. . . I think Mr. Frank’s mind worked with its old methodical coolness. The habits of a lifetime are hard to break.” Testator, no doubt, during his lifetime would have resisted any attempt to declare him incompetent and likewise would have desired his legal representatives to resist any effort to have him declared mentally incompetent to execute his last will and testament. The will by broad general powers seeks to substitute the trustees in testator’s place and stead as nearly as practicable. Upon advice of counsel, the -proponents of the will secured physicians recognized as authority on mental conditions and who had made or were requested to make a study of the effect of the uncommon disease of multiple myeloma on the mind. Conferences were had with these witnesses and they were in attendance for several days'at the trial, which lasted three wéeks, that they-might-be available for necessary consultations during-its progress. - These facts differentiate this-ease from, tbe Missouri cases cited by plaintiffs, viz., Burnett v. Freeman, 125 Mo. App. 683, 103 S. W. 121, 134 Mo. App: 709, 113 S. W. 488; State v. Bell, 212 Mo. 111, 126 (III), 111 S. W. 24, 28 (3); and Klepper v. Klepper, 199 Mo. App. 294, 300 (II), 202 S. W. 593, 595 (4, 5), which are to the effect expert' witnesses are not entitled to compensation in addition to regular witness fees for services as a witness but
VI. Plaintiffs also urge the removal of the trustees because, they say, (a) Lee Shelton’s interests are antagonistic to the interests of the eestuis; (b) because Lee Shelton is intemperate in his indulgence of intoxicating liquor to such an extent as to incapacitate him in the discharge of his duties as trustee; and (c) because the trustees are hostile to the beneficiaries.
(a) At the time testator created the trust estate he had full knowledge of the business relationship existing between himself and his brother in properties involved in the trust estate. Testator’s selection of Lee Shelton must have been prompted by testator’s knowledge of Lee’s familiarity with the property and their joint affairs, and his confidence in Lee’s ability and integrity. The instant record indicates the trustees have conducted these business interests along the same lines they were transacted during testator’s lifetime.
(b) Lee Shelton admits he “drinks.” There is testimony pro and con on the extent of his indulgence. The vast preponderance of the probative testimony on the issue refuted plaintiff’s contention. The record establishes him ás a man of property, having the confidence of his business associate's (as he had of testator) and occupying from time to time places of trust and confidence in the community.
(c) Plaintiffs’ argument under this point sets forth twenty incidents or acts of hostility for which they urge defendants’ removal. Many are of a trivial nature. Others plaintiffs affirmed and der fendants denied or explained; and as to these w;e are not disposed to disturb the conclusions of the learned chancellor nisi who was in a better position to weigh the - probative value of the evidence. The more important are disposed of by the rulings hereinbefore made. In several instances plaintiffs must have considered" the questioned action of little eonsequénee as they failed to incorporate in their abstract supporting exhibits referred to in their argument. '
VII. Other points briefed by plaintiffs relate to charges of fraud connected with the procurement of testator’s will. They were considered in Shelton v. McHaney, 338 Mo. 749, 755 et seq., 92 S. W. (2d) 173, 174 et seq., and we ruled, speaking through Cooley, C., that the charges were not supported by substantial evidence. The instant record does not present facts calling for a different result.
The judgment is affirmed.
PER CURIAM: — The foregoing opinion by Bohling, C., in Division Two is adopted, as the opinion of the Court en Bane.
