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Dennis v. Dennis

JUNE 15, 1971.

MARJORIE EDITH DENNIS, PLAINTIFF-APPELLANT,

v.

DAVID PAUL DENNIS ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Hancock County; the Hon. ALBERT S. SCOTT, Judge, presiding.

MR. JUSTICE MCNEAL DELIVERED THE OPINION OF THE COURT:

Plaintiff Marjorie Edith Dennis appeals from dismissal of her complaint to set aside a trust made by her husband a few days before their marriage. The issue presented for review is whether or not the trial court ruled correctly in dismissing her amended complaint as modified and an amendment thereto.

The substance of plaintiff's allegations follows. Clenard Oren Dennis was the principal stockholder and active in the management of the Dennis Chicken Products Company, Augusta, Illinois. From September 1956 until May 1959 plaintiff was employed as a bookkeeper and served as secretary of the company, and in the performance of her duties she acquired a knowledge of Dennis' holdings in the company, his interests in the Davis-Cleaver Produce Company, and his real estate holdings.

In the fall of 1956 Clenard commenced to court the plaintiff. In February 1959 when he was 62 and well experienced in business affairs, and Marjorie was 37 years of age and a person with meager assets, a modest income and two children by a former marriage, they became engaged. As an inducement to marriage Clenard assured Marjorie that he would pay the expenses of schooling her children, and in the event of his death, she would be well provided for and his farm lands would become her property. She relied on his inducements in accepting his proposal, and they were married on May 26, 1959.

On May 20, 1959 notwithstanding his inducements to marriage, Oren Dennis entered into a trust agreement with the Illinois State Bank of Quincy. By this agreement which was exhibited with the complaint, Dennis deposited with the bank 106 shares of stock of Dennis Chicken Products Company, 50 shares of stock and 25 $1000 debentures of Davis-Cleaver Produce Company in trust to pay the income to Dennis during his lifetime, and upon his death to pay the proceeds of the Davis-Cleaver items to his daughter, Dorothy Tweedell, and the proceeds from the sale of the Chicken Products stock to his son, David Paul Dennis. The agreement also provided that the settlor by written direction to the trustee could accelerate distribution to the beneficiaries prior to his death, vote the stock, and revoke the trusts in whole or in part or amend the agreement.

On December 11, 1963 the trust agreement was amended, the provision for revocation was cancelled, and it was then agreed that the trust was irrevocable, and that there was no right to revoke or amend the trust thereafter.

Plaintiff further alleged that the assets transferred to the trust constituted a substantial portion of Dennis' assets at the date plaintiff accepted his proposal of marriage, that he did not inform her of the execution of the trust agreement, that such execution and the deposit of stock and debentures was concealed from her, that she did not consent to the execution of the agreement, and that she had no knowledge of the trust until after Dennis' death on July 15, 1965.

On July 9, 1965 Dennis made a will by which he gave his residence, his household goods and furnishings, and $12,000 to his wife, bequests of $1000 each to two friends, a $500 bequest to another friend, two farms in Schuyler County to his daughter, and all the rest, residue and remainder of his estate to his son. The will named the Illinois State Bank of Quincy as executor. The bank was appointed executor and the will admitted to probate on September 7, 1965. Plaintiff filed her renunciation and election to take against the will on July 1, 1966.

Plaintiff estimated the value of the farm land at $72,500, the dwelling house at $15,000, and deceased's personal property exclusive of assets deposited in the trust at $45,000. It was alleged that the provisions in the trust agreement retaining the life income and reserving the power to vote the stock and to revoke or amend the trust rendered the agreement colorable, illusory and invalid as to plaintiff. She prayed that the court find and declare that the trust agreement was void as to her and that she was entitled to a third of the trust assets, and that the trustee be directed to pay her a third of the trust assets and a third of the income from the trust after Dennis' death.

Named as defendants in the original complaint were: Dennis' daughter, Dorothy Tweedell, his son, David Paul Dennis, and the Illinois State Bank of Quincy as executor of deceased's will and also as trustee of the trust created on May 20, 1959. The daughter, Dorothy Tweedell filed a special appearance, and on May 6, 1969, she was dismissed from the suit and not again made a party. A motion to dismiss plaintiff's amended complaint as modified and an amendment thereto filed by the remaining defendants was allowed on March 6, 1970, and this appeal followed.

In Padfield v. Padfield (1875), 78 Ill. 16, cited by appellant, the Court held that the court below did right in sustaining a demurrer and dismissing a bill which alleged that plaintiff's husband, in his lifetime, and for the purpose of evading the statute, and to deprive her, at his death, of any share in his personal estate, transferred to his son, William, notes worth about $60,000, under an agreement that he was to have one-third at his father's death, and two-thirds was to be delivered for the use of Padfield's other children. The agreement also provided that William pay his father $2000 annually for his support. By his will Padfield bequeathed $5 to each of his children, and the remainder of his property to plaintiff. She renounced all rights under the will.

It was urged that the transaction was void as to plaintiff, that under the statute Padfield had no power to dispose of his personal property so as to deprive his wife of her distributive share, and that the demurrer admitted the allegation that the transfer was made to evade the statute. By way of dicta the Court said that where a husband still retained the right to control the property and resume the same at his pleasure, such a gift was held to be in fraud of the wife's rights because the transfer was only colorable and the title was still in the husband. The Court referred to provisions of the Statute of Wills and the 1861 Married Woman's Law, and concluded that there was nothing in the Wills Act which prevented the husband from disposing of his personal property free from any claim of the wife, whether by sale, gift to his children, or otherwise in his lifetime, and that since the Married Woman's Law conferred upon femes covert the power to dispose of their separate property, absolutely and as they may choose, free from the control of their husbands, it was manifestly the intention of the General Assembly to confer on married women the same and no greater rights, in regard to their property, as were possessed by their husbands.

The Court approved as a correct statement of doctrine that "There can be no doubt of the power of a husband to dispose absolutely of his property during his life, independently of the concurrence, and exonerated from the claim of his wife, provided the transaction is not merely colorable, and be unattended with circumstances indicative of fraud upon the rights of the wife. If the disposition of the husband be bona fide, and no right is reserved to him, though made to defeat the right of the wife, it will be good against her."

In Smith v. Northern Trust Co. (1944), 322 Ill. App. 168, also cited by appellant, Smith conveyed all of his estate except his pension to the Northern Trust Company in trust to pay all the income to himself during his life, and upon his death to deliver the trust assets to his son and daughter 40 per cent each, and 20 per cent to his wife. Settlor reserved the right in the event of a change of circumstances to request enough of principal to maintain himself as he was accustomed to live, also the right to veto any change in investment of trust assets, and to revoke, alter or amend the trust agreement. Smith was married in July 1939, made the trust agreement the next March, and in November 1940 altered it to eliminate his wife and to divide her share between his ...


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