Appeal from the Circuit Court of Cook County; the Hon. James
C. Murray, Judge, presiding.
JUSTICE LINN DELIVERED THE OPINION OF THE COURT:
Rehearing denied July 15, 1985.
Plaintiffs Edwin C. Thomas III (Edwin) and Robert C. Thomas (Robert), individually and as co-executors of the estate of Edwin C. Thomas (Mr. Thomas), deceased, and LaVerne Ann Thomas (LaVerne) (hereinafter collectively the Thomas children) filed a two-count complaint against their mother, A. LaVerne Thomas (Mrs. Thomas), and First National Bank of Chicago (FNB) in the Cook County circuit court. Plaintiffs sought a declaratory judgment of the family members' interests in the property of Mr. and Mrs. Thomas pursuant to the terms of a joint and mutual will which Mr. and Mrs. Thomas had executed. The lawsuit further requested an accounting of Mrs. Thomas' use of the property both in the past and in the future.
Mrs. Thomas answered the complaint and counterclaimed against Robert for money owed on a promissory note on which she alleged Robert's payments were in default. FNB filed a motion to be dismissed as a party defendant, which the trial court granted. Thereafter Mrs. Thomas motioned the court for summary judgment in her favor. The Thomas children disputed her entitlement to such judgment; they did not, however, file a countermotion for summary judgment on their own behalf. The trial court granted Mrs. Thomas' motion on both the children's complaint and her counterclaim against Robert.
With regard to the joint and mutual will and the interests of the family members thereunder, the trial court held, inter alia, that Mrs. Thomas had full power to sell, convey, invest, and reinvest all property. Although the trial court further found that Mrs. Thomas had no present duty to account, she was nevertheless ordered to furnish to the Thomas children an annual report of investments which she had placed in a self-declaration of trust with FNB.
The Thomas children now appeal from the trial court's judgments; Mrs. Thomas cross-appeals. They raise the following questions for our review:
1. Whether Mrs. Thomas' interest in the property, in view of the joint and mutual will, was limited to a life estate interest with no power of sale of the property involved;
2. Whether Mrs. Thomas had a present duty to account to the Thomas children on her management or disposition of the property, and if so, to what extent she was obligated to do so;
3. Whether the FNB was properly dismissed as a party defendant to the cause;
4. Whether Robert's statements in his verified answer that the promissory note he executed to his mother was conditionally delivered to her, and that the condition had not yet occurred so that the debt had not yet become due, was sufficient to present a genuine issue of material fact in consequence of which the summary judgment was erroneously entered in favor of Mrs. Thomas on her counterclaim.
1. The Thomas children waived any argument on appeal that Mrs. Thomas' life estate interest did not include the power of sale of the property because they agreed before the trial court that the scope of Mrs. Thomas' interest and power of disposition over the property in question was governed by Moline National Bank v. Flemming (1980), 91 Ill. App.3d 398, 414 N.E.2d 936, which applies where a life estate tenant is given power of sale.
2. Mrs. Thomas had no present duty to account to her children on her management or disposition of any of the estate property, since the affidavits presented by the parties raised no genuine issue of material fact and further showed no fraud or malfeasance of the power granted to Mrs. Thomas under the will;
3. The trial court properly dismissed FNB as a party defendant, since Mrs. Thomas had no present duty to account;
4. Robert's statements in his verified answer presented no genuine issue of material fact to show conditional delivery of the note, as an oral statement regarding such delivery is inadmissible under the parol evidence rule.
Accordingly, we affirm that portion of the trial court's order setting forth Mrs. Thomas' interest in and power over the property; we reverse that portion of the order which obligated her to account to her children for the investments held in a self-declaration of trust with FNB; we affirm without discussion the trial court's order which granted FNB's motion to dismiss; and we affirm the portion of the trial court's order which granted Mrs. Thomas' motion for summary judgment upon her counterclaim against Robert.
The record establishes the following background information which stands undisputed between the parties. *fn1 Mr. and Mrs. Thomas were married in 1935. Three children were born of the marriage, each of whom is a plaintiff in this cause. In 1982 when this action was commenced, Edwin was 41 years old; Robert was 40; and LaVerne Ann was 38. Mrs. Thomas was 63 years old.
Mrs. Thomas and her husband executed their "Last Will and Testament" on March 14, 1964. The text of this document specifically referred to the will as being "joint and mutual." Mr. and Mrs. Thomas subsequently executed a codicil to this will on July 8, 1973, by which Edwin and Robert were named co-executors of the estate and were granted certain powers not pertinent here. The codicil otherwise republished the 1964 will.
The will provided in relevant part:
"First: In consideration of our love and affection for each other and of a mutual understanding between us that all property belonging to us jointly or to either of us is to pass to the survivor of us and upon the death of such survivor all such property is to pass pursuant to the provisions hereof, we make this our joint and mutual Will. We do hereby mutually agree that during the remainder of our joint lifetimes neither of us may alter or revoke this our last Will without the consent of the other and, upon the death of the first of us to die, the survivor may in no event alter or revoke this our Will.
Second: On the death of each of us our Executor shall pay out of the principal of the estate of the one of us so dying all debts, funeral expenses, and costs of administration. Our Executor shall also pay out of the principal of such estate all estate, inheritance, transfer, and succession taxes, including any interest and penalties thereon, which may be assessed in any way by reason of such death, without seeking reimbursement from or charging any person for any part of such taxes so paid.
Third: Upon the death of the first of us to die each of us gives and bequeaths all the residue of our respective estates and property, real and personal, wherever situated, to the survivor of us; provided, however, that said survivor survives for thirty days. And if no survivor as herein provided, then our separate estates shall go to our children as provided in paragraph Fourth.
Fourth: Upon the death of the survivor of us, each of us gives and bequeaths all the residue of our respective estates and property, real and personal, wherever situated, as follows:
In equal shares to our children, Edwin C. Thomas III, Robert C. Thomas and LaVerne Ann Thomas, and to the heirs of their bodies begotten, and in the case of the death of either of them at any time leaving no heirs of their bodies begotten, then to the survivor or survivors of them. Any child or children of a deceased child of ours shall take such share only as their parent would have taken if living."
Mr. Thomas died on July 30, 1979, and the will was admitted to probate. No argument is raised by any party regarding the propriety of the probate action, which was still pending at the time this cause commenced.
The Thomas children filed their two-count complaint for declaratory judgment and relief ancillary thereto against FNB and Mrs. Thomas on January 4, 1982. Both counts of the complaint sought identical relief:
(1) a declaratory judgment stating that Mrs. Thomas "has only a life estate in the property [of herself and Mr. Thomas by virtue of the will] and is subject to the duties of a life tenant to account for the property and not to waste, mismanage or dissipate the property";
(2) as ancillary to the declaratory judgment and in aid thereof, an order to the effect that:
(a) "any transfer by either [Mrs. Thomas or FNB] of any part of the property is unlawful if it affects adversely the interests of those persons whom [Mr. Thomas] provided should have the property after the death of [Mrs. Thomas]";
(b) "[Mrs. Thomas and FNB] account to [the Thomas children], both for the past and in the future, for the property, the income therefrom and the need, if any, to sell or exchange any of the property in order to provide [Mrs. Thomas] with appropriate support and maintenance and that any improper loss or dissipation of the property be made up from the income therefrom"; and
(c) any other and further relief as may be just, including attorneys' fees and expenses of suit.
In count I of the complaint, the children requested such relief based upon their alleged interests as vested remaindermen. In count II, they relied upon their alleged status as third-party beneficiaries to the contract contained in the joint and mutual will.
Both counts of the complaint made identical allegations. First, it was stated that because the will expressly applied "to all property belonging to us jointly or to either of us," its effect was to have created, upon Mr. Thomas' death, a life estate interest in Mrs. Thomas in all property, both real and personal, which Mrs. Thomas held either in her own right, as surviving joint tenant with Mr. Thomas, or as beneficiary under the will. The pleading alleged that FNB at all times relevant had full knowledge of the joint and mutual will and that Mrs. Thomas' interest in the property was limited to a life estate.
The complaint stated that after Mr. Thomas' death, Mrs. Thomas "recognized and acknowledged that she had only the aforesaid limited interest in the property." It then went on to allege that the children had "continuously sought to arrange with [Mrs. Thomas] procedures for regularizing the information [they] receive about the identity and condition of the property and about any changes in its nature or composition, but that all such efforts have been to no avail and she has failed to give [them] any information about that very substantial part of the property which is in her possession and control."
The complaint further specified that Mrs. Thomas had "made statements inconsistent with her ownership of only the aforesaid limited interest in the property, has exercised dominion and control over the property as if she were the owner in fee, and has repudiated the contract contained in the joint and mutual Will * * *." They alleged that these acts were:
"(a) She has placed part of the property with defendant [FNB] in a manner which is improper and unlawful for the holder of only a life estate in such property.
(b) She has stated that she revoked said joint and mutual Will during Edwin C. Thomas' lifetime with his knowledge.
(c) She has made gifts of substantial items of the property and has stated she intends to make more such donations.
(d) She has taken steps to offer for sale at an unreasonably low price real estate which is the sole asset of a corporation whose controlling shares are part of the property."
Based on the foregoing, the pleading stated that the Thomas children had no adequate remedy at law for damages for Mrs. Thomas' alleged wrongful dealings.
FNB filed its motion to be dismissed as party defendant on January 4, 1982. The motion relied upon sections 26, 45, and 48 of the Civil Practice Act (now sections 2-407, 2-615, and 2-619 of the Code of Civil Procedure). (Ill. Rev. Stat. 1981, ch. 110, pars. 2-407, 2-615, 2-619.) The motion claimed that the Thomas children's pleading failed to state a cause of action against it in that the allegation in the complaint that Mrs. Thomas had placed part of the property with FNB in a manner which was improper and unlawful for the holder of a life estate was insufficient, vague, and conclusory. The motion to dismiss further claimed that FNB had "no personal stake in this intrafamily dispute" and therefore was not properly joined as a party. The motion stated that FNB, as custodian for Mrs. Thomas, had accepted certain of her securities in an investment management account; in this capacity, FNB's duties were to collect and remit income, to make investment recommendations, and to act solely on the direction of its principal. FNB therefore contended that it was not a necessary party and requested that it be dismissed as a party defendant. In support of the motion, FNB presented the affidavit of one of its officers, who stated that the facts stated in the motion were true. FNB filed its memorandum in support of the motion on February 22, 1982.
The Thomas children responded to the bank's motion with a memorandum in opposition in which they stated that they would "be able to allege the details of the Bank's improper arrangement only after [they ...