Appeal from the Superior Court of Cook county; the Hon. FRANK
M. PADDEN, Judge, presiding. Order as to count I affirmed in part
and reversed in part, and the cause remanded with directions;
order as to count II affirmed; motion to transfer cause to
Supreme Court denied.
PRESIDING JUSTICE FRIEND DELIVERED THE OPINION OF THE COURT.
Plaintiffs appeal from an order of the Superior Court allowing defendants' motions to dismiss, under section 48 of the Civil Practice Act (Ill. Rev. Stat. 1955, ch. 110 [§ 48]), a suit in equity for the establishment of a constructive trust on certain real and personal property.
The case was decided solely on the basis of the pleadings and affidavits. The complaint consists of two counts. Plaintiffs allege in count I that the testatrix, Edith Symonds Ramsay, died September 10, 1948, leaving a last will and testament which had been executed on May 31, 1935 in the presence of defendant Robert S. Ramsay; that decedent reposed the utmost confidence in Robert and relied completely on him, and was influenced, guided and controlled by him in all business affairs; that in reliance on his advice, and by reason of the fiduciary relationship between them, she informed him that she was devising all her property to him, with the understanding that he would hold it in trust for the benefit of Gordon A. Ramsay, her husband, and of Robert, Gordon, Jr., and Kenneth, her children; that Robert promised to so hold it; that she accordingly devised the property in that manner in her will; that he informed the plaintiffs of the trust and promised to fulfill it; but that he has since refused their repeated requests to do so. In count I plaintiffs sought the declaration and establishment of a constructive trust and the declaration of plaintiffs' equitable rights in and to the property received by Robert.
Count II as amended alleges that in 1902 Gordon A. Ramsay, Sr., Robert's father, was the legal owner of certain real property in Glencoe, Illinois, and that he had furnished all the consideration for the purchase thereof; that he transferred the property without any consideration to certain persons to hold it for his use and benefit; that in 1934 Robert advised and requested his father to transfer title to the property to a trustee for the use and benefit of Robert so as to relieve his father of the burdens and responsibilities of legal ownership, and promised him that the avails of the property would be held for the senior Ramsay's use and benefit; that thereafter, in reliance on the promise, Ramsay, Sr., executed a deed with his wife, the decedent, transferring the property to the defendant, American National Bank and Trust Company, as trustee, for the use and benefit of Robert, under trust No. 2807; but that the request by Ramsay, Sr., of his son Robert to carry out his promise has been ignored. Count II likewise requested the establishment and declaration of a constructive trust in and to this real estate.
The motions of defendants set forth the defenses of res judicata and release as to count I, and the absence of a writing as required by the Statute of Frauds (Ill. Rev. Stat. 1955, ch. 59, sec. 9), as to amended count II. In support thereof defendants filed the affidavit of John B. Schmidt, who had represented Robert Ramsay in his capacity as executor when the estate was probated; in addition they filed a copy of objections to the final account in the Probate Court, copies of receipts for specific bequests signed by the plaintiffs Gordon A. Ramsay, Jr., and Kenneth S. Ramsay, and a reproduction of the tract book for the real property in question. In opposition plaintiffs filed counteraffidavits and the transcript of proceedings before William F. Waugh, Judge of the Probate Court.
Additional facts necessary for consideration of the issues involved disclose that by the terms of her will decedent made various specific bequests to all her sons and her husband, and then bequeathed the remainder of her estate to Robert. The will named Gordon Ramsay, Sr., decedent's husband, and Robert and Gordon, Jr., her sons, as co-executors; however, only Robert served.
Ramsay, Sr., was anxious that his wife's will be probated without delay. Accordingly, to avoid the loss of time needed to publish for heirs, he filed his appearance in the Probate Court, waiving all notice and consenting to an immediate hearing. He also persuaded his sons Gordon, Jr., and Kenneth to file appearances of similar import with the court. As a result of this procedure, the will was shortly admitted to probate.
After letters testamentary were issued, Ramsay, Sr., as surviving spouse, formally renounced the will and ultimately, upon distribution, received his statutory share consisting of one-third of all his wife's net assets. Thereupon he executed the following instrument: "The above assets are received in full payment and satisfaction of the undersigned's distributive share of the Estate. . ."
Gordon Ramsay, Jr., and his brother Kenneth also received a part of their mother's estate; however, their respective distributions were as originally provided for in the will. Like their father, both brothers, upon receiving their legacies, executed instruments stating that the assets received by each were in "full payment of my distributive share under the Will of Edith Symonds Ramsay." When the chancellor heard the motion to dismiss filed herein, Kenneth and Gordon Ramsay, Jr., in an effort to resist the plea that these instruments were in the nature of releases, filed affidavits alleging that they had executed the instruments solely at their brother Robert's request, and they now claim that they signed only because they relied completely on Robert's representation that the documents were mere receipts.
Late in 1949 when Robert as executor was ready to close his mother's estate, he submitted his final accounts for the court's approval. Ramsay, Sr., in his capacity as surviving spouse, filed various objections to Robert's accounting. One of the objections was that Robert had paid too much Illinois inheritance tax because the tax was computed on the theory that Robert was "to receive his residuary legacy under the Will . . . unconditionally, whereas in truth and in fact this residuary legacy is to be held for the use and benefit of the members of the family; a disclosure of the true facts would result in a saving of Illinois Inheritance Taxes." Hearing upon these objections was had in January 1950; early in the proceeding the Probate Judge stated that he had previously held "that there was no obligation under the Will to hold any of these assets in trust . . ." Accordingly, most of the hearing reported was concerned with the propriety of attorney and executor fees. Kenneth and Gordon Ramsay, Jr., both testified in support of their father's objections. After proofs were closed, the Probate Court orally ruled upon each of the objections. Objection No. 3, relating to the computation of the Illinois inheritance tax, was specifically overruled. No appeal was taken from that ruling. Decedent's estate was closed in December 1953, and this suit was filed some thirteen months later.
It will be noted that count II involved a totally separate cause of action between Ramsay, Sr., as plaintiff, and his son Robert and the American National Bank as defendants. It appears that in 1902 Ramsay, Sr., acquired the realty located at 100 Beach Road, Glencoe, Illinois, taking title by warranty deed. He held this property until 1908, at which time he conveyed all his interest to his mother by warranty deed. His mother held the fee until 1912, when she conveyed by warranty deed to decedent, who retained ownership until 1934, and then, with her husband joining, conveyed the land by deed in trust to the present holder, the American National Bank and Trust Company. Robert has been the trust's sole beneficiary since its inception.
Count II, as originally filed, alleged that Ramsay, Sr., owned the land in fee simple from 1902 to 1934, that in 1934, in reliance upon the advice of Robert and solely to relieve himself "of the responsibilities and burdens" of holding legal title, he (Ramsay, Sr.) conveyed the land to American National Bank, naming Robert as beneficiary of the trust so created. Robert in turn, however, was alleged to hold his beneficial interest in trust for the benefit of his father. Ramsay, Sr., prayed that the legal and equitable titles be reconveyed to him, and that he be accorded an accounting. The complaint did not mention that Ramsay, Sr., had been out of title since 1908. In the circumstances the court allowed Robert Ramsay's motion for an order requiring plaintiffs, pursuant to the then Rule 17 of the Supreme Court [Ill. Rev. Stats. 1955, ch. 110, § 101.17], to file a sworn list of documents. The list filed, like the complaint, contained no reference to any writing that would evidence the existence of a trust, as alleged by Ramsay, Sr. Thereafter, Robert filed a motion to strike and dismiss, pleading the Statute of Frauds, and the chain of title since 1902; the bank also filed a motion to strike and dismiss. Both motions were allowed, and an amended complaint was then filed which alleged that although Ramsay, Sr., had been out of title since 1908 he had always been the sole equitable owner of the property, thus averring that his mother and his wife were, and now the bank and Robert are, trustees, and that he is the bona fide owner of the property. The amended complaint also alleged that the sole purpose for the various conveyances made since 1908 was to relieve Ramsay, Sr., of the "burdens and responsibilities imposed on the legal title holder of the said property." Motions to strike and dismiss the amended count II, pleading the Statute of Frauds, were allowed, and the action was dismissed as to both counts.
Defendants contend that res judicata bars count I. They argue that plaintiffs cannot claim that Robert Ramsay is trustee of the residuary assets of his mother's estate because that issue was adjudicated against them in the Probate Court, and they rely upon two circumstances arising in that court during the course of an extended hearing. The first of these was a statement by Judge Waugh that "I have already ruled that there was no obligation under the Will to hold any of these assets in trust and this represents a prospective settlement of a controversy . . . between Mr. Ramsay and his son." This statement was made by the court during an examination of John B. Schmidt, Robert Ramsay's former counsel. The immediate question was whether these services were compensable out of the estate of the deceased or whether they were services for which Robert should pay in his individual capacity. Mr. Schmidt had testified that after Mrs. Ramsay's death he had prepared the first draft of a testamentary trust calculated to produce harmony among the members of the Ramsay family, but the draft was not produced in court. While Mr. Schmidt was being examined as to the provisions of the draft Judge Waugh suggested that "the agreement itself would be the best evidence of what it contains if it is still in existence," and subsequently expressed doubt as to whether the terms of the agreement were material. Counsel for defendants then stated that in his opinion they were not; that he merely wanted to show that such an agreement had been prepared, but that it had never been executed. It was at this point that the court made the quoted statement upon which defendants rely. Since an examination of the entire transcript of testimony taken in the Probate Court fails to disclose that any evidence was introduced or any hearing whatever had upon the question whether Robert Ramsay held the property devised to him by his mother as trustee for the benefit of defendants, it is difficult to conceive how Judge Waugh's statement could be considered as an adjudication on that question. Affidavits filed by defendants in support of their motion to dismiss reveal that no hearing was ever had by the Probate Court with respect to the constructive trust sought to be enforced in count I. Obviously the reason no hearing was had to determine that issue was because the Probate Court had no jurisdiction to establish or administer a constructive trust, which was the only issue involved in count I. Judge Waugh evidently recognized this fact because in the course of the hearing before him, George A. Reilly, attorney for Gordon A. Ramsay, Sr., in calling the court's attention to the fact that the parties had carried on settlement negotiations for about a year which were never consummated and never resulted in an agreement, sought to make the point that "where a party obtains a legacy from a decedent by representation on an agreement, that upon receiving that property, that party will dispose of it in a certain manner, that that is an agreement that is enforceable in a court of chancery," to which Judge Waugh replied: "Yes, but we are not in a court of chancery at the moment"; he thus clearly indicated he recognized that such an issue could be determined only in a court of chancery, and not in the Probate Court.
The other circumstance relied on by defendants in support of their contention that res judicata bars count I was an order overruling Ramsay, Sr.'s, objection No. 3 to the executor's report. This objection urged that because of the alleged existence of a trust Robert as an executor paid an excessive inheritance tax, and that he should have been made to account for the overpayment; and defendants argue that the Probate Court had to construe Mrs. Ramsay's will to ascertain whether or not a trust was in fact created. It is urged that in overruling Ramsay, Sr.'s, objection No. 3 to the final account, the Probate Court unequivocally held that no trust whatever had been created by Mrs. Ramsay, and that plaintiffs now seek to make a collateral attack upon a Probate Court order from which no appeal was taken. Alcorn v. Alcorn, 309 Ill. App. 267, and Marshall v. New Amsterdam Casualty Co. of Baltimore (Abst.), 318 Ill. App. 636, are cited in support of this contention. In the Alcorn case the trust involved was sought to be enforced against the decedent, not against the legatee of the will of the decedent. Of course such a complaint would have to be filed as a claim against the estate of the alleged constructive trustee after his death, just as here plaintiffs would have to file a claim against the estate of Robert Ramsay if he were deceased at the time of the alleged breach of the constructive trust. In the Marshall case, a suit against a surety on an administrator's bond was held barred by res ...