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Burrows v. Palmer

OPINION FILED MARCH 24, 1955.

THOMAS W. BURROWS ET AL., APPELLANTS,

v.

BURTON W. PALMER ET AL., APPELLEES.



APPEAL from the Circuit Court of La Salle County; the Hon. ROBERT L. BRACKEN, Judge, presiding.

MR. JUSTICE HERSHEY DELIVERED THE OPINION OF THE COURT:

This is an appeal from an order of the circuit court of La Salle County which dismissed the complaint of plaintiffs-appellants for want of proper parties plaintiff.

The plaintiffs, who are minor children of Margaret Burrows and grandchildren of Mary F. Palmer, deceased, filed their complaint on November 9, 1953, by their father and next friend, Samuel J. Burrows.

The complaint alleges the following: The plaintiffs' grandmother, Mary F. Palmer, died testate on March 6, 1943, leaving Margaret Burrows (a daughter) and Burton W. Palmer (a son) as her only heirs-at-law. Her will was admitted to probate in La Salle County on April 30, 1943, and Burton W. Palmer qualified as executor. By the sixth clause of her will the testatrix devised the residue of her estate to Burton W. Palmer and Margaret Burrows as trustees for certain express purposes. The trustees were directed to pay the net income from the trust estate to one Agnes Palmer during her lifetime. Upon her death the trust was to terminate and the net estate distributed as follows: (a) two thirds to Margaret Burrows, or in case she is not living at that time, to the heirs of her body; and (b) one third to Burton W. Palmer, and in case he is not living at that time, to his wife, Helen Palmer, and in case she is not living at that time, then to the heirs of the body of Burton W. Palmer then surviving and if he leaves no heirs of his body then surviving, then to the children of Margaret Burrows.

It is further alleged that, upon final settlement of the estate, Burton W. Palmer, as executor, purported to transfer to himself and Margaret Burrows, as trustees, certain of his personal notes amounting to $9261.44, which notes were to comprise the corpus of the trust estate. The plaintiffs were not notified of this proceeding, and they were not represented by a guardian ad litem.

The complaint also charges that on April 27, 1936, Mary F. Palmer was the owner of two lots in the city of Ottawa, upon which were situated two three-story apartment buildings valued at more than $100,000. At that time she was in financial difficulty, and there was an outstanding mortgage on this property of $52,000. She was then a widow sixty years of age and physically unable to personally care for, rent, manage and control said property, and, although the property was good security for her outstanding indebtedness, it was impossible for her to borrow money to liquidate her indebtedness by reason of her advanced age and physical condition. Because of this she conveyed legal title to the property to her son, Burton W. Palmer, who was thirty-five years of age, in good physical health and possessed of the personal qualifications for securing a mortgage loan. Said conveyance was made on April 27, 1936, by warranty deed, for the purpose of mortgaging the property and borrowing the necessary money to pay her existing debts. At the same time, Margaret Burrows and her husband, Samuel J. Burrows, executed a quitclaim deed to Burton W. Palmer, conveying all of their interest in said property for the purpose of aiding him in negotiating the loan on the property. Both deeds were executed and delivered to Burton W. Palmer without consideration and solely because of the necessity of the situation. Mary F. Palmer retained the beneficial ownership of said property, and Burton W. Palmer acquired and held the legal title as trustee for her use and benefit. On the same day, Burton W. Palmer and his wife borrowed $49,000 from the First Federal Savings & Loan Association of Ottawa, and as security therefor executed and delivered a mortgage on said property.

Thereafter, it is alleged, Burton W. Palmer operated, managed and controlled said premises. He collected rentals and paid taxes and costs of maintenance until Mary F. Palmer's death on March 6, 1943. Out of the net income he paid her a sufficient sum for her support and maintenance and retained a sufficient amount to support himself and his wife. The remainder of the net income was applied upon the mortgage indebtedness and upon mortgages which were subsequently given by him in refinancing the debt. At the time of the testatrix's death, the principal of said indebtedness remaining unpaid was approximately $20,000. For many years prior to April 27, 1936, Burton W. Palmer had taken care of all of his mother's business affairs and had operated, managed and controlled said property, and so continued until her death. During all of this time a confidential and fiduciary relationship existed between them.

Finally, it is charged that the failure of Burton W. Palmer to inventory said premises as assets of the estate of Mary F. Palmer was a fraud upon the plaintiffs; that the said notes of Burton W. Palmer do not constitute the corpus of the trust estate established by Mary F. Palmer's will, but that the assets thereof consist of said described premises, subject to the unpaid portion of the mortgage thereon at the time of her death; and that since the death of Mary F. Palmer, Burton W. Palmer has retained possession of said premises, collected the income therefrom, appropriated the income to his own use, except that he has permitted Agnes Palmer to occupy living quarters in one of the buildings and has paid her a sufficient sum to procure the bare necessities of life.

The plaintiffs asked the following relief: (a) that the defendant, Burton W. Palmer, be disqualified as trustee; (b) that the court decree that Burton W. Palmer is seized and possessed of the legal title to the apartment buildings as trustee, and that he be required to convey such legal title to Margaret Burrows as sole trustee; (c) that the court ascertain and determine the assets of the trust under the will of Mary F. Palmer, deceased; (d) that the court take jurisdiction of the trust for the future administration thereof; and (e) that the plaintiffs have such other and further relief as equity may require.

Named as defendants were Burton W. Palmer and Margaret Burrows, individually and as trustees under the will of Mary F. Palmer, Agnes Palmer, Helen Palmer and Dorothy Palmer. Helen Palmer is Burton W. Palmer's former wife, and Dorothy Palmer is his present wife.

Margaret Burrows filed an answer in which she admitted the allegations of the complaint. Agnes Palmer filed an answer, which among other things denied that Mary F. Palmer was seized and possessed of any title whatsoever in said premises at the time of her death. Burton W. Palmer first filed an answer to the complaint, but was granted leave to withdraw his answer and file a motion to dismiss. In his motion to dismiss he alleged that it appears on the face of the complaint that the two trustees of the trust are still living, and the only beneficiary of the trust is still living; that the minor plaintiffs do not, cannot, and will not inherit any portion of the trust property so long as Agnes Palmer is alive, and as long as their mother, Margaret Burrows, is alive, and as long as Burton W. Palmer is alive; and that upon the death of Agnes Palmer, if Margaret Burrows, mother of the minor plaintiffs, and Burton W. Palmer are living, the assets of the trust will be immediately dissipated, and the minors, therefore, have no claim under the provisions of this will, nor a right to bring or maintain this suit.

The court granted the motion to dismiss, stating in a written opinion that the plaintiffs have no legal right to bring the suit since they have no present substantial interest in the trust.

On this appeal, the plaintiffs assert that they have a contingent interest in the trust property under the express provisions of the sixth clause of the will of Mary F. Palmer, and as contingent remaindermen they have sufficient interest in the property to entitle them to bring the instant suit to protect and preserve this interest.

The defendants (Burton W. Palmer, Agnes Palmer and Dorothy Palmer) contend that these plaintiffs are not proper parties to bring the action. It is argued that they have no actual present existing interest in the trust corpus, but only a mere expectancy of future contingent interest. Moreover, it is asserted that contingent remaindermen have no title on which to base a complaint against a trustee, except for waste, mismanagement ...


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