Appeal from the Circuit Court of Bureau County; the Hon.
WALTER DIXON, Judge, presiding. Reversed and remanded with
This is an appeal from an order of November 9, 1962 of the Circuit Court of Bureau County overruling objections by the plaintiffs-appellants Donald Szabo and Joseph Szabo, remainder beneficiaries to the extent of an undivided one-half interest, to the current report and supplement thereto filed by the appellee Harold Parr, as successor trustee under the will of Lewis F. Hartzell, deceased, and approving the report and supplement. The trustee had conveyed certain real estate of the trust to a purchaser in 1959 but had not reported that he had collected any of the purchase price. The plaintiffs-appellants, objectors, charged that the trustee neglected his duty in failing to collect the consideration for the sale of the property and asked the Court to charge the trustee with the entire original purchase price of $15,000, with interest from the date the deed was delivered.
On March 3, 1959, Ida Hartzell, Guy Hartman, sometimes known as Guy Fletcher, Joseph Szabo and Donald Szabo, by L.D. Spaulding, Jr., their attorney, had filed a complaint herein, No. 28193 in the Trial Court, against Lawrence Rici, defendant, alleging, in substance, so far as relevant, that Lewis F. Hartzell, of Bureau County, had died, testate, September 10, 1927, leaving a will, duly admitted to probate; he owned certain real estate in Princeton, Illinois; the will named Alfred Hartzell executor and trustee, but he is now deceased, and no one has been appointed successor trustee; by the will, a copy of which was attached as an exhibit, certain provisions were made as to a power of sale of the real estate in the executor and trustee, and as to the payment of the income and distribution of the corpus; Alfred Hartzell, one of the life income beneficiaries of the trust, is deceased; Bessie Szabo, one of the ultimate beneficiary remaindermen, to the extent of an undivided one-half of the corpus, is deceased, having died in 1956, leaving surviving her children, Joseph Szabo and Donald Szabo; the real estate concerned is used as a restaurant by the defendant, who is in possession; the defendant has offered $15,000 purchase price for the property, which is its fair price, and such is satisfactory to the plaintiffs, being all the owners now in existence. The complaint prayed that a successor trustee be appointed, with all the power and authority of the deceased trustee, the successor trustee be authorized to sell the property to the defendant for $15,000, the successor trustee be authorized to hold, invest, and reinvest the $15,000 for the lifetime of Ida Hartzell, the sole surviving life tenant, the income to be paid her, and on her decease to pay the $15,000 one-half to Guy Hartman, or if he be not living, to his children, and one-half to Joseph Szabo and Donald Szabo, children of Bessie Szabo, deceased.
The copy of the will of Lewis F. Hartzell, attached to the complaint, provided, so far as material, that the residuary estate, including the real estate here concerned, was devised to the executor, in trust; the executor, as trustee, was to convert it into securities, reinvest from time to time, pay the income to Alfred Hartzell, the decedent's uncle, for his life, and after his decease if his wife, Ida Hartzell, is living, pay the income to her for her life, and at the deaths of Alfred and Ida Hartzell the residuary estate shall go to and is devised to Bessie Zabo and Guy Fletcher (Guy Hartman), the decedent's cousins, in equal shares, and in the event of the death of Bessie or Guy before Alfred and Ida Hartzell the share Bessie or Guy would have taken if living shall go to their respective children. The will nominated Alfred Hartzell as executor and trustee to carry out and execute the trust, and gave the executor and trustee a power of sale as to the real estate to carry out the provisions of the will.
The defendant Lawrence Rici entered his appearance to the complaint.
On March 5, 1959 a decree was entered on that complaint, finding the facts as therein alleged, that a trustee should be appointed, authorized to sell the real estate at private sale to the defendant Rici, and proceed with the execution of the trust, and Harold E. Parr should be so appointed as trustee and authorized to execute the will of the decedent. That decree provided:
"A. That Harold E. Parr be and he is hereby appointed Trustee under the Last Will and Testament of Lewis F. Hartzell, deceased;
B. That, Harold E. Parr, as such Trustee, shall furnish bond in the amount of Thirty Thousand and no/100 ($30,000.00) Dollars, with good and sufficient sureties to be approved by this Court, and upon approval of said bond, the Clerk of this Court be and she is hereby directed to issue Letters of Trusteeship to said Harold E. Parr;
C. That said Trustee be and he is hereby directed to sell the real estate described in Paragraph 1 of this Decree, at private sale to Lawrence Rici at and for the sum of Fifteen Thousand and no/100 ($15,000.00) Dollars;
D. That said Trustee be, and he is hereby authorized and empowered to have prepared and purchase abstract of title, or title guarantee policy, to said premises to be delivered to the purchaser thereof;
E. That said Trustee be and he is hereby authorized and directed, upon the payment to him of the sum of Fifteen Thousand and no/100 ($15,000.00) Dollars, by Lawrence Rici, the purchaser of said real estate, to execute, acknowledge and deliver to said purchaser, a good and sufficient Trustee's Deed conveying said real estate to him.
F. That this Court retains jurisdiction of this cause until the execution of the Trust herein."
Subsequently, bond of the successor trustee in the amount of $30,000, with sureties, was approved and filed, and Letters of Trusteeship were issued to Harold E. Parr on March 10, 1959.
On February 1, 1961, Harold Parr, as successor trustee, filed a current report, which recites:
"1. That the sole and only asset comprising the trust as of March 5, 1959 was an unrecorded Agreement for Warranty Deed dated June 12, 1955 made by and between Ida Hartzell, Bessie Szabo and Guy Fletcher Hartman and Jeanette Hartman, his wife, party of the first part, and Lawrence Rici and Eleanor Rici, party of the second part; that at said time the balance of the principal upon said contract was Ten Thousand Three Hundred Forty-six and 20/100 Dollars ($10,346.20).
2. That in the month of March, 1959 he executed as such Trustee a Trustee's Deed to Lawrence Rici, which Deed was prepared by Attorney L.D. Spaulding and was given to him for delivery to Lawrence Rici. Attorney Spaulding delivered said deed to Lawrence Rici and received therefor a check of Lawrence Rici in the amount of Ten Thousand Three Hundred Forty-six and 20/100 Dollars ($10,346.20) made out to L.D. Spaulding. Said check was endorsed by and cashed by L.D. Spaulding.
3. Thereafter L.D. Spaulding informed your Trustee many times that the money received upon the cashing of said check was prudently invested by Spaulding for the benefit of the beneficiaries under the Will of said Hartzell, deceased."
That current report also recited that Spaulding had delivered to the trustee a trust deed and note of November 2, 1951 for $5000 of Guy Fletcher Hartman and Jeanette, his wife, to Mr. Spaulding as trustee, the note being endorsed by one L.R. Zeller to Harold Parr, and showing interest paid to May 10, 1959, and the trustee recited he was investigating the validity of that note and trust deed.
The plaintiffs-appellants Donald Szabo and Joseph Szabo filed objections to that current report of the trustee, in substance, to the effect that the report does not account for the purchase price of $15,000 due from Lawrence Rici, the trustee has negligently failed to collect the $15,000, the trustee has failed to invest such in securities approved by the statute, the trustee has negligently failed to take any action to collect the $15,000 from Rici, the trustee negligently executed his deed to Rici and left it with Spaulding for collection of the purchase price, the trustee negligently failed to recover the proceeds alleged to have been collected by Spaulding, the trustee negligently failed to investigate the trust deed and note of Guy Fletcher Hartman et al. whereas the trust deed was released and note cancelled March 18, 1959 by Mr. Spaulding, as trustee, the trustee ...