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Costello v. Warnisher

FEBRUARY 15, 1955.

FRANK J. COSTELLO, AS TRUSTEE UNDER LAST WILL OF THOMAS H. COSTELLO, DECEASED, PLAINTIFF-APPELLEE,

v.

ROSE MARY COSTELLO WARNISHER ET AL., DEFENDANTS-APPELLANTS. MABEL M. COSTELLO, INDIVIDUALLY AND AS ADMINISTRATRIX OF ESTATE OF FRANK J. COSTELLO, DECEASED, IMPLEADED DEFENDANT-APPELLEE.



Appeal from the Superior Court of Cook county; the Hon. JOHN F. HAAS, Judge, presiding. Decree affirmed.

MR. JUSTICE SCHWARTZ DELIVERED THE OPINION OF THE COURT.

This is an appeal from a decree of the superior court of Cook county dismissing what appellants call a bill of review. The bill seeks to modify a decree previously entered in the same case. That decree construes the will of Thomas H. Costello who died August 4, 1926, and provides for distribution of funds derived from the sale of the corpus of a trust thereby created. The will is long and complicated. Among its many provisions, Section Fifth establishes a trust consisting solely of all the shares of capital stock of Weber Costello Company owned by the testator. It further provides that the income from the trust shall be paid to the testator's children from time to time surviving until termination of the trust, and then follows paragraph (b), which being the center of the controversy, we quote in full:

"At any time after my death, and upon the written request of all of my children who are living and under no legal disability when such request is made, the trustees shall sell and dispose of said stock and pay the proceeds thereof per stirpes to my descendants who are then living."

On July 9, 1951, Frank J. Costello was the only surviving child of the testator. He was also one of two trustees under the trust. The appellants are grandchildren of the testator (the children of a deceased son) and on the above date were the testator's only other surviving descendants. Thus at that time Frank Costello was entitled to make the request referred to in Section Fifth (b). This he did on July 9, 1951. Thereafter he negotiated for the sale and on August 4, 1951, as sole trustee (his cotrustee having died in the interim), he entered into an agreement for the sale of the stock for $410,000. This agreement provided for payment of $25,000 within ten days and the balance of $385,000 within ninety days after the entry of a court decree approving the sale. Frank Costello promptly filed a complaint to procure a decree approving the contract and directing distribution of the proceeds to be derived from sale of the stock.

On October 10, 1951, pursuant to the complaint filed by Frank as trustee, the court entered a decree approving the sale, terminating the trust, and providing for distribution of the proceeds of the estate as prayed, one-half to Frank and one-sixth to each of the appellants. The decree also provided "that said trust be and it is hereby terminated, subject only to the payment of the balance of the purchase price and the distribution of the net proceeds thereof. . . ." In that proceeding the two adult appellants were defaulted (although they were present in court and were given an opportunity to object to the sale or to the terms of the decree). The husband of one of the appellants, a member of the Illinois bar, was also present at the hearing. The minor appellant was represented by a guardian ad litem, and a formal answer was filed for him. On the day the decree was entered the stock was deposited in escrow along with the $25,000 payment called for by the sale agreement. The escrow agreement also required payment of the additional $385,000 within ninety days and provided for distribution of the proceeds in accordance with the court decree.

Ten days later, October 20, 1951, Frank died, leaving his widow Mabel as administratrix of his estate. On December 31, 1951, the two adult appellants consulted an attorney, who immediately served a notice of Frank's death on the escrowee and requested him not to make distribution. On January 2, 1952 (within the ninety-day period provided by the sale and escrow agreements) the purchaser deposited the balance of the purchase price, and the escrowee, notwithstanding the notice, made distribution by checks in the appropriate amounts to the appellants and by a check for $196,639.40 payable to Frank J. Costello. This latter check was delivered to Mabel M. Costello through her attorney and by her endorsed as administratrix of Frank J. Costello's estate and deposited to the credit of the estate.

On October 8, 1952, pursuant to leave, appellants filed the bill of review now under consideration. The bill alleged in substance that no sale and disposition of the stock could or did occur until payment of the purchase price was made January 2, 1952; that the death of Frank rendered the decree illegal; that the three grandchildren immediately upon Frank's death became the sole living descendants of the testator and entitled to all the proceeds of the sale of the stock. The bill prayed that all the provisions of the decree relating to termination of the trust and distribution of the proceeds of the sale of the stock be set aside and that the court decree that all the proceeds passed to the grandchildren upon Frank's death. Mabel M. Costello, individually and as administratrix of the estate of Frank J. Costello, deceased, as respondent to the bill for review, filed an answer consisting of five special defenses and a general defense. The appellants filed their reply to the general defense, as well as five motions to strike the five special defenses. Respondent moved to strike portions of petitioners' motions to strike and to dismiss the bill of review. The order dismissing the bill followed. Out of this melange of pleadings the issues here involved emerge, that is (1) could the appellants use a bill of review to attack the decree in question, and (2) if so, did Frank Costello's interest vest in him prior to the time of his death, or were the "then living" descendants those who survived the time of final payment and distribution, January 2, 1952.

A bill of review is not an alternative remedy for an appeal. In Ward v. Sampson, 395 Ill. 353, 363, 70 N.E.2d 324, the court said:

"A bill of review cannot be made to perform the function of an appeal or writ of error. . . . Errors in a decree resulting from mistaken judgment going only to the correctness of the court's decision, may not . . . be made the basis upon which equitable relief by way of a bill of review may be granted."

The Supreme Court of this State in Bushnell v. Cooper, 289 Ill. 260, 265, 124 N.E. 521, stated that the function of bills of review was "to prevent a miscarriage of justice, and they will be allowed only in furtherance of that object." A decree should not be lightly upset, especially where the right of appeal is deliberately waived. It is within these limitations that the present proceeding must be considered.

Appellants cite many cases holding that events occurring subsequent to the entry of a decree properly form the basis for a bill of review. The statement of law is correct if the event itself provides the causal nexus for disturbing the decree. In Bushnell v. Cooper, supra, the court had entered a decree of separate maintenance for the wife, including an allowance of support money and attorneys' fees. It was subsequently discovered that the wife had died two hours prior to the entry of the decree. Since the death of either party abates a separate maintenance action (cf. Milewski v. Milewski, 351 Ill. App. 158, 114 N.E.2d 419 (1953)), the bill for review was held the proper method for raising such facts, although the court refused to grant any relief on the ground of laches. To the same effect are Merrion v. O'Donnell, 288 Ill. App. 47, 5 N.E.2d 765 (1936), and Ballard v. Searls, 130 U.S. 50 (1889). The facts in the instant case are different.

The death of Frank Costello was not an event which changed the situation and altered the rights of the parties. If the bequest was subject to the contingency of survival until the actual distribution of the proceeds of the sale, that contingency existed prior to and at the time of the original decree. Frank's death ten days after the entry of that decree was such a dramatic event that its occurrence has beclouded the true character of the issue, but it in nowise affected the construction of the will nor did it provide any clue with respect to the testator's intention not theretofore known. Therefore the appellants' position, that the rights of the parties were contingent on survival to the date of distribution and payment, should have been taken and urged upon the court in the original suit. If the court did not adopt such a position, the remedy for any error was by appeal. Appellants did not take such action, but waited until Frank's death made it to their advantage to attack the decree. They now seek to do by bill of review what they failed to do in the original proceeding, when all the pertinent facts relative to the will were known and the only unknown quantity was whether or not it would be to their advantage to raise the point. It is not only vis-a-vis Frank Costello that such a proceeding would be unsound. Its unjustness would apply equally to a case in which any of the appellant grandchildren had died a moment before distribution.

Appellants argue that in the light of Frank's death it would be a grave injustice to deprive them of their right to the entire corpus of the trust estate. At the time of commencement of the original proceeding Frank Costello was a sick man. Appellants knew this and knew that he had determined to sell the stock and subject one-half of the proceeds to his absolute ownership. Under the will he had the right to do so and no one questions that right. He made a contract for the sale of the stock at a price, the fairness of which is not questioned by appellants, but it was not a sale for cash. It cannot be doubted that Frank could have avoided any legal proceedings by arranging a cash transaction for the sale of the stock, even if by so doing he would have had to sell the stock at a lower price. We must therefore assume that if at the time of the original proceeding, Frank Costello had been advised of any opposition to the decree on the part of appellants or had been forewarned of their contention that his interest would not be fixed by such decree unless he survived to the date of distribution, he could well have considered abandonment of the suit and have sought a sale of the stock for cash. It is not necessary for us to say this was something he should have done nor to inquire into the precise character of his duties as trustee. All we need consider in this respect is that at least he should have had that opportunity. Even if the appellants' legal position were meritorious, it could well be argued that it would be unjust to respondent to review the original proceeding now.

We will now consider whether the will itself makes the bequests in question contingent upon survival to the date of distribution. The will contemplates the following events: (1) written request for sale of the stock by all the children who are living; (2) sale of the stock; (3) disposition of the stock; and (4) payment of the proceeds. It is the contention of appellants that in the phrase "to my descendants then living," the words "then living" mean those who survive to the time when the stock is sold and disposed of and proceeds paid. In other words, not until the actual cash jingles in the pocket of the ultimate distributee can it be determined who the ...


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