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Merchants Nat. Bank of Aurora v. Weinold

JUNE 24, 1959.

MERCHANTS NATIONAL BANK OF AURORA, TRUSTEE UNDER TRUST NO. 401, PLAINTIFF,

v.

MARGARET BIRD WEINOLD, DEFENDANT-APPELLEE AND MARTHA ELLIS WAGNER, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Kane county; the Hon. CHARLES G. SEIDEL, Judge, presiding. Decree affirmed.

JUSTICE DOVE DELIVERED THE OPINION OF THE COURT.

Rehearing denied and opinion modified August 28, 1959.

On December 19, 1935, Winifred B. Colby and the Merchants National Bank of Aurora, entered into a trust agreement and at the same time Mrs. Colby delivered to the bank, as trustee, certain trust deed notes, bonds and securities listed in an exhibit attached to and made a part of the trust agreement. This agreement granted to the trustee the usual and customary powers to receive, hold, protect, manage and control the trust assets and to invest and reinvest the same and to receive and hold, pursuant to the terms of the trust agreement, any other property which might be devised, bequeathed, granted or assigned to it.

By the provisions of the agreement the Settlor, Mrs. Colby, was to receive the net income arising from the trust estate during her lifetime together with such part of the principal as the Settlor might, at any time, in writing direct. Upon the death of the Settlor the net income from the trust was to be paid to Maude B. Ellis, a sister of the Settlor, for and during the term of her life and if the income was not adequate for her comfortable support then the trustee, might augment such income from the principal to such an extent as, in the discretion of the trustee, would be adequate. The trust agreement further provided that upon the death of Maude B. Ellis or upon the death of the Settlor, if Maude B. Ellis should not then be living, the trust should terminate and the trustee should thereupon distribute the trust estate, as then constituted, one-half to Margaret Bird and one-half to Martha Ellis.

The Settlor reserved the right of modifying or changing the trust agreement at any time and in any manner, together with the right to revoke the same, and to withdraw from the trustee any or all of the trust estate at any time, or from time to time, and the Settlor further reserved the right to increase or decrease the amount of the trust estate and to change, alter, amend or cancel the trust agreement without the consent of any of the beneficiaries or of the trustee, provided the Settlor should exercise such right in writing. After the execution of this trust agreement the bank exercised and performed its duties as trustee as therein directed and apparently to the satisfaction of the Settlor.

On October 25, 1955, the bank, as trustee filed in the Circuit Court of Kane County the instant complaint alleging the execution of the trust agreement and averring among other things, that the said Maude B. Ellis died on May 26, 1939; that the said Margaret Bird had married and is now Margaret Bird Weinold and that the said Martha Ellis is now, by marriage, Martha Ellis Wagner. The complaint further alleged that on February 26, 1945, Winifred B. Colby executed her last will and thereafter, on January 11, 1954, died and that her will was duly admitted to probate by the probate court of Kane County on February 24, 1954. Attached to the complaint were copies of the trust agreement, the will and also a statement or account of the trustee from the inception of the trust to March 30, 1954.

The prayer of the complaint was (a) that the appointment of the plaintiff, as trustee, be confirmed and its acts ratified; (b) that a determination be made whether the last will and testament of Mrs. Colby did or did not revoke the trust agreement or did or did not have any effect on the trust assets and (c) that a determination of the rights and interests of Margaret Bird Weinold and Martha Ellis Wagner be made in and to the proceeds of the trust assets.

Separate answers were filed by Martha Ellis Wagner and Margaret Bird Weinold and Mrs. Weinold filed a reply to the answer filed by Mrs. Wagner. The issues made by the pleadings were heard by the chancellor resulting in a decree which found that the agreement executed by Mrs. Colby and the bank on December 19, 1935, created a valid inter vivos trust which has continued in full force and effect to the present time; that Mrs. Colby died testate on January 11, 1954; that Maude B. Ellis predeceased Mrs. Colby and that under the terms and provisions of the trust, Margaret Bird Weinold and Martha Ellis Wagner became the sole beneficiaries of the trust assets. The decree further found that the exhibit attached to the complaint set forth the assets of the trust at the time of the death of Mrs. Colby and directed the trustee to file a supplemental account and report of its acts and doings since the death of Mrs. Colby.

The decree further found that by reason of the death of Mrs. Colby the trust terminated; that the last will and testament of Mrs. Colby had been duly admitted to probate by the Probate Court of Kane County and that this will did not in any way alter or revoke the trust created by Mrs. Colby on December 19, 1935. The decree followed the findings made therein and directed the trustee to distribute, either in kind or in money, one-half of the assets of the trust to Margaret Bird Weinold and one-half to Martha Ellis Wagner. To reverse this decree Martha Ellis Wagner appeals.

Upon the hearing it appeared that the will of Mrs. Colby was prepared by her attorney, duly executed on February 29, 1945, by the testator at a hospital in Aurora where Mrs. Colby was a patient and was, after its execution delivered to Mr. Ready who was then trust officer of the Merchants National Bank of Aurora. Mr. Ready was present at the time of the execution of the will but was not a witness thereto. The attorney who prepared the will testified upon the hearing that Mr. Ready handled Mrs. Colby's affairs; that at the time of the hearing Mr. Ready was deceased and had been succeeded as trust officer by Oliver M. Wolcott who testified that the bank records disclosed that Mrs. Colby's will had been held by it in its files.

It further appeared upon the instant hearing that the estate of Mrs. Colby, as inventoried by the trust company, as executor of her will consisted of real estate valued at $43,000 and personal property valued at $6751.46 and it was stipulated that at the time the trust was created on December 19, 1935, Mrs. Colby had other assets than those named in the trust agreement. Over the objection of counsel for appellee Mr. Wolcott who succeeded Mr. Ready as trust officer of the trustee bank, was permitted to testify that after the death of Mrs. Colby but prior to the filing of the instant complaint the bank as executor receipted the bank as trustee for all the assets in the trust. Also over the objection of counsel for appellee, Mrs. Blodwen J. Davies, a long time friend of Mrs. Colby, was permitted to testify to statements made by Mrs. Colby to Mrs. Davies on the day the will was executed to the effect that the men from the bank had been there so she could change her will; that it was a load off of her mind and that she had left everything to Martha, (appellant) except $1000 to Margaret (appellee). This same witness further testified, over objection, that upon another occasion, a few months later, Mrs. Colby said that she was even sorry she had left appellee $1000.

Under the will of Mrs. Colby appellant is the residuary legatee and devisee. Other than bequests to a niece, to the Aurora Chapter of the Red Cross, to her housekeeper and to a friend all aggregating $2500, appellant will receive the entire estate of Mrs. Colby. Under the provisions of the trust agreement, one-half of the assets of the trust are to be distributed to appellant and one-half to appellee.

It is the contention of appellant that under the provisions of the trust agreement Mrs. Colby expressly reserved the right or power to change the provisions of the trust agreement; that in order to change, alter, amend or cancel the trust agreement, all Mrs. Colby had to do was to exercise such right or power in writing; that when she executed and delivered her will to Mr. Ready, trust officer, of the Merchants National Bank of Aurora on February 26, 1945 she exercised this right or power; that she did this in her lifetime and the legal effect of this instrument or will was to change the provisions of the trust agreement. The change which appellant insists was effected thereby, is that the assets of the trust should be distributed not according to the provisions of the trust agreement but according to the provisions of Mrs. Colby's will.

The writing which it is insisted by counsel for appellant accomplished this change, alteration and cancellation of the trust agreement was Mrs. Colby's will executed in February, 1945, almost nine years before she died. There is nothing in the will or any of the words used therein to indicate that it was the desire or wish of Mrs. Colby to revoke, change or alter the trust agreement or any portion thereof. Her will did not directly attempt to exercise any power of amendment or revocation of the trust agreement. It made no reference directly or indirectly to the trust agreement or ...


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