Appeal from the Circuit Court of Cook county; the Hon. CHARLES
S. DOUGHERTY, Judge, presiding. Affirmed.
JUSTICE MURPHY DELIVERED THE OPINION OF THE COURT.
This is an appeal by the defendant-trustee Bank, from a decree directing it to invade the corpus of trust estates for the purpose of effectuating a settlement agreement terminating litigation between the sole life tenant-remainderman and claimants to part of the remainder.
Montgomery Ward Thorne, a resident of Chicago, was the son of Gordon C. Thorne, now deceased, and Marion Thorne, plaintiff herein. On June 19, 1954, he was found dead under unusual circumstances. He was twenty years of age and left surviving plaintiff, his mother, as his only heir at law.
Montgomery Thorne had been engaged to Maureen Ragen, who was named as executrix of a will alleged to have been executed by him on June 10, 1954. In the will, he bequeathed one-half of his estate to Maureen Ragen, one-fourth to her mother, Mrs. Aleen Ragen, one-eighth to plaintiff, his mother, and one-eighth to his maternal aunt, Carol McDougall Lind. This will was admitted to probate on August 20, 1954, in the Probate Court of Cook County, Illinois.
Montgomery Thorne, at his death, had no estate other than a vested two-thirds interest in the remainder of the corpus of two trusts, which was subject to a life interest of plaintiff, and income annuities of relatively small amounts, each of which terminated upon the death of the annuitant. It was this vested two-thirds remainder which was affected by his will of June 10, 1954.
Plaintiff sued in the Circuit Court of Cook County to set aside the June 10, 1954, will, alleging undue influence was exercised over Montgomery Thorne by Maureen Ragen and her mother. On February 6, 1956, a decree was entered finding that the will of June 10, 1954, was not the free and voluntary act of Montgomery Thorne, and it was set aside. The decree directed the Probate Court to expunge the order admitting it to probate.
On July 30, 1956, a settlement agreement, purporting to end the will contest litigation, was entered into by and between plaintiff, the Ragens and Carol McDougall Lind, being all the beneficiaries of the Montgomery Thorne will of June 10, 1954.
Pursuant to the settlement agreement, plaintiff filed the instant complaint in chancery on August 9, 1956, against the Bank, as trustee under the trust agreement dated February 24, 1921, executed by Katharine C. Camp and known as Trust No. 9203, and as trustee under the last will and testament of Gordon C. Thorne, deceased, and Helen T. Kehoe, Richard E. Schmidt, Grace Bloom and Carl J. Gallauer. The four last named defendants are annuitants under Trust No. 9203 and are not involved in this appeal because their annuities are not disturbed by the decree appealed from.
We are concerned only with Count I of the complaint. It was in that count that Mrs. Thorne sought the court's approval of the agreement entered into on July 30, 1956, settling the will contest suit filed by her, and to direct the Bank to pay out and distribute, from the trust corpus, cash and shares of stock, to effectuate the settlement. The Bank answered, denying that plaintiff was entitled to the relief sought, and alleged that to permit the invasion of the corpus requested would defeat the provisions of the will of Gordon Thorne, deceased, and would be in derogation of a decree construing that will, entered in the Circuit Court of Cook County on February 3, 1939, in Case No. 38 C 8766.
It was on Count I, and the answer filed thereto, that the decree of July 8, 1957, was entered, approving the settlement agreement of July 30, 1956, and authorizing and directing the invasion of the corpus of the trusts for funds to carry out the terms of the settlement agreement.
The decree was based on testimony heard by the chancellor and made many findings, among which are: that on the date of its entry, the value of the principal of the corpus of the Katharine C. Camp Trust No. 9203 and the Gordon C. Thorne testamentary trust was approximately $2,208,670.94; that the estate of Montgomery Thorne consisted of a vested remainder in two-thirds of the corpus of these two trusts, and had a value of approximately $1,472,447.28; that the settlement agreement payments and the Illinois inheritance tax, with interest, aggregated $680,701.72, leaving approximately $1,527,969.22 as the corpus of both trusts, which would be subject to an estimated Federal estate tax of $222,258.37 with interest; that after due payment and allowance of the aforementioned sums, a sufficient amount of corpus would remain in the two trusts to provide properly for the annuitants under Trust No. 9203 and for Marion Thorne, the life tenant, and Carol McDougall Lind, and in accordance with the settlement agreement.
The decree found that in the prosecution of this acrimonious litigation vast legal expenses had been incurred for attorneys' fees and costs; that the continuation of the will contest proceedings would deplete the estate of Montgomery Thorne to a very marked degree and would do great harm to his memory and reputation; that the terms of the will contest settlement agreement are fair and equitable and should be carried into effect; that Gordon Thorne, at the time of signing his will, did not and could not have anticipated the changes in the circumstances which occurred subsequent to his death; and that such unforeseen circumstances constitute an emergency, which justified the court in ordering modification of the terms of the two trusts, in order that the settlement agreement may be carried into effect.
The chancellor further found that plaintiff was cognizant of the fact that to carry out the terms of said settlement agreement would deplete the corpus of the trust estates and reduce the amount of income available for her benefit, and reduce the corpus of the trusts she would be entitled to dispose of upon her death; that the encroachments upon the corpus of the trusts remaining, after carrying into effect the settlement agreement, would not endanger the rights of the annuitants or Carol McDougall Lind; that plaintiff was sixty-one years of age on her last birthday; that upon her death, in the event the settlement agreement is carried into effect, the remaining corpus, subject to the rights of any annuitants who survive her, will pass either to her heirs at law or according to her last will and testament; and that there is no other person interested in said trust estates, except Carol McDougall Lind, who participated in the settlement agreement.
The Bank, as trustee under the Gordon C. Thorne testamentary trust and the Katharine C. Camp Trust No. 9203, was directed (1) to make specified payments and stock distributions to the Ragens, their attorneys, to other attorneys representing various parties to the litigation, including the Bank and its attorneys, funeral expenses, and Illinois inheritance taxes; (2) to pay to Carol McDougall Lind the sum of $5400 per annum out of the income from and the principal of the combined trust funds, after providing for the annuitants under the Katharine C. Camp Trust No. 9203, said payments to continue until her death or until the death of plaintiff, whichever shall first occur; (3) to pay to Marion Thorne annually the sum of $36,000 net, after Federal income and capital gains taxes, using that portion of the principal of said trusts each year, if any, as may be required to provide this net sum; (4) to pay fees to plaintiff's attorneys in the sum of $150,000, with discretion to pay a deferred sum of $100,000, or any part thereof that may be made without jeopardizing the rights of any beneficiaries under said trust; (5) to pay Federal estate taxes assessed by reason of the death of Montgomery Thorne in such manner and at such ...