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Mortimer v. Mortimer

JUNE 6, 1972.

J. STIRLING MORTIMER, AS TRUSTEE, PLAINTIFF-APPELLEE,

v.

EARL C. MORTIMER ET AL., DEFENDANTS-APPELLANTS — (CHARLES E. MORTIMER, A MINOR, BY JOSEPH H. HORWICH, HIS GUARDIAN AD LITEM, COUNTER PLAINTIFF-APPELLANT,

v.

J. STIRLING MORTIMER, AS TRUSTEE, ET AL., COUNTER DEFENDANTS-APPELLEES.)



APPEAL from the Circuit Court of Cook County; the Hon. WALKER BUTLER, Judge, presiding.

MR. JUSTICE LEIGHTON DELIVERED THE OPINION OF THE COURT:

Rehearing denied July 19, 1972.

This appeal presents two issues. 1. Whether the trial court erred in permitting an incompetent witness to testify. 2. Whether an inter vivos trust created in 1959 was revocable. The issues arise from pleadings in a declaratory judgment proceeding, the evidence and a declaratory judgment in which it was found that in 1965 the settlor revoked the trust. A brief summary of the material facts is necessary for our resolution of the issues.

I.

John J. Mortimer had two sons, Earl C. Mortimer and the appellee, J. Stirling Mortimer. Earl C. Mortimer had one son, the appellant, Charles E. Mortimer. Appellee is a lawyer. In November 1959, at his father's request, he prepared a trust agreement "[d]ated the 21st day of November, 1959, and to be known as Trust No. 112159, by and between John J. Mortimer * * * [as settlor] and J. Stirling Mortimer * * * [as trustee] * * *." The trust consisted of the proceeds of insurance policies and shares of corporate stock. Its net income and such additional sums which the trustee in his discretion thought was necessary for the settlor's comfort, welfare and support, were to be paid to him for life. On the death of the settlor, the trust estate was to be divided in two equal parts, one-half for appellee and the other half for his child or children, then living. Among the trust terms was an article that made the settlement irrevocable. On the face of the document however, appellee drew lines through the words of the article. In the right hand margin, he wrote "OK" and underneath, initialed the deletions. The agreement was signed by John J. Mortimer and appellee.

Two or three days later, John J. Mortimer destroyed the trust agreement and signed another one, also prepared by appellee. This document like the first, was "[d]ated the 21st day of November, 1959, and to be known as Trust No. 112159 * * *." Appellee was the trustee and settlor was a life-interest beneficiary in the net income. As to the interests in remainder, this trust agreement provided that on the settlor's death, the trust estate was to be divided into two equal parts, one-half for the child or children of appellee then living and the other half to be equally divided (at a stated time) between Earl C. Mortimer and his child or children. Appellant was two years old. He was then, and at the time of John J. Mortimer's death, Earl Mortimer's only child. The trust agreement contained the same article that had made the earlier trust irrevocable. It was deleted by appellee in the same way. Like the first one, it was signed by John J. Mortimer and appellee. At the point of the deletions, the document had this appearance:

ARTICLE VII: The donor agrees that the terms and provisions made for his benefit, as well as the rights OK of any beneficiary named, shall be irrevocable and he JSM hereby waives the right to revoke, alter or amend this agreement.

For almost six years appellee administered the trust and paid the net income to settlor. Then, John J. Mortimer and appellee signed a third trust agreement. Like the other two, this one was also dated the 21st day of November 1959. However, in appellee's handwriting, the typewritten document was interlineated with the words "amended 11/17/65." This agreement provided that on the death of the settlor the trust estate was to be divided in two equal parts, "[P]art One to be designated `Earl C. Mortimer,' and Part Two to be designated the J. Stirling Mortimer Trust * * * [and] as soon as conveniently may be * * * [the trustee shall] disburse that portion designated `Earl C. Mortimer' to Earl C. Mortimer * * *." By this change in its provisions, appellant's vested interest in the trust was eliminated. Appellee continued to pay settlor the net income. John J. Mortimer died on July 4, 1966.

On December 21, 1966, appellee filed a complaint which he later amended to pray for a declaratory judgment that either the first trust agreement which John J. Mortimer signed was "[t]he operating and controlling trust by reason of its irrevocability * * * or the trust amended November 17, 1965 (the last one), because the other two trusts were revocable, is "[t]he valid and controlling trust to the exclusion of * * *" the other two which John J. Mortimer executed during his lifetime.

Appellant was nine years old when the suit was filed. A guardian ad litem was appointed for him. The complaint was answered. Later, by his guardian, appellant filed a counter-complaint praying for a declaratory judgment that the second agreement which gave him a vested remainder in the corpus was irrevocable because the settlor, John J. Mortimer, did not expressly reserve the power to alter, amend or revoke the trust. The complaint and counter-complaint were consolidated for trial. Appellee was the only witness who could testify concerning the circumstances surrounding the preparation and execution of the three trust agreements. When he appeared as a witness on his behalf, appellant, by his guardian ad litem, objected on the ground that under the rules of evidence appellee could not testify. Appellant contended that trusts and wills were governed by the same rules; therefore, the "deadman's statute" barred appellee as a witness. The trial judge overruled the objection. After hearing the evidence that consisted mainly of appellee's testimony, the trial judge entered a declaratory judgment as prayed for in the amended complaint. In addition, the judgment contained findings that appellant failed to produce evidence in support of the allegations in his counter-complaint.

In this court, relying on the statute (Ill. Rev. Stat. 1967, ch. 51, par. 2), appellant argues that appellee was not competent to testify concerning the trust transactions between him and John J. Mortimer; and that the trial court erred in entering the declaratory judgment.

II.

• 1-3 The principal purpose of the "deadman's statute" is protection of decedents' estates from fraudulent claims. (Fredrich v. Wolf, 383 Ill. 638, 642-643, 50 N.E.2d 755.) This purpose is accomplished by prohibiting a party to a civil a action, suit or proceeding (or a person directly interested) from testifying of his own motion or in his own behalf when the adverse party sues or defends as an executor, admnistrator, heir, legatee or devisee. (Brownlie v. Brownlie, 351 Ill. 72, 75-76, 183 N.E. 613.) In determining whether the statute applies, it is important to ascertain whether the suit, action or proceeding is brought or defended by a person in the capacity of personal representative, heir, legatee or devisee, or whether it involves or tends to impair the estate of a decedent. (See Alward v. Woodward, 315 Ill. 150, 146 N.E. 154; Kalschinski v. Illinois Bankers Life Assur. Co., 311 Ill. App. 181, 35 N.E.2d 705.) In the case before us, neither appellee's complaint nor appellant's counter-complaint was brought or defended by a person in the capacity of a personal representative, heir, legatee or devisee. It does not appear that the suit or proceeding involves or tends to impair the estate of a decedent. For these reasons, the statute did not apply. Appellee was a competent witness. Therefore, the trial judge did not err when he allowed appellee to testify.

From his testimony, it appears that John J. Mortimer executed the first of three trust agreements in November, 1959. Appellant had no interest in the corpus of that trust. Two or three days later, the original of the agreement was destroyed. Appellee "[f]rankly considered this trust terminated * * *." He testified that he never acted as trustee under the intended trust. In its declaratory judgment, the trial court found that this trust was revoked. Appellant accepts this ruling and raises no ...


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