Opinion ID: 1499665
Heading Depth: 1
Heading Rank: 4

Heading: Advancements to Remaindermen

Text: Mrs. Sophie Franz was a housewife without business aptitude or experience. For some months after the death of her husband, two of her sons looked after her business affairs until they moved away from St. Louis, where she then lived. Thereafter, these duties were assumed by a son-in-law, S. H. Kleinschmidt, under two successive powers of attorney, executed June 1, 1899, and June 13, 1905. This arrangement remained until the execution of the trust instrument on January 30, 1909. Under Kleinschmidt, various amounts were paid out (always at the direction of Mrs. Franz) to the different children. Some of these payments were Christmas or birthday gifts; some were loans; and some were what are now involved. Of this last character, Kleinschmidt paid out in all to each of five children $8700 and to each of the other five $8800 or a total of $87,500. Within less than two months after execution of the trust instrument, the trustees paid $5000 to each of the ten children, at direction of Mrs. Franz. The total of all such payments was $137,500. Upon receipt of any payment, both under Kleinschmidt and the trustees, the recipient signed a receipt prepared by Rassieur and Buder (G. A. Buder) formerly attorneys for Mrs. Sophie Franz. This receipt was in form following: I, the undersigned, one of the children of Ehrhardt D. Franz, late of the City of St. Louis, deceased, hereby acknowledge that I have this day received of Sophie D. Franz, widow of said deceased, the sum of ..... Dollars, on account of my share in the assets of said estate, given to her for life, it being understood that this is to be treated as an advancement made to me at the time the said estate is divided among the remaindermen, mentioned in last will of said E. D. Franz. Signed ...... In the Ernst & Ernst audit in 1942, it is stated the records indicate that the cash advances shown above ($137,500.00) were obtained from the following sources: Cash in the Estate of Ehrhardt D. Franz $ 36,704.54 Cash originally advanced by Sophie Franz 100,795.46 ____________ $137,500.00 The exceptions, at least of the Mississippi Valley Trust Company, claim these advances in the amount of $137,500 to be a part of the corpus of the estate of E. D. Franz to be proportionately shared by the remaindermen. The Court made findings that, in December 1926, the trustees had received money from redemption of preferred stock belonging to the corpus of such estate; that, in January 1927, they had credited from such funds to themselves as trustees for Sophie Franz in alleged payment of alleged advancements made by her the sum of $100,795.46; that the evidence does not establish an intent upon the part of Sophie Franz to create an indebtedness in her favor    for this amount and that this amount was not a loan by nor an indebtedness to her from the estate of E. D. Franz or from the remaindermen; that if there were any such claim by Sophie Franz, she had not included such in the trust instrument; that the claim of the trustees for credit for this sum is disallowed and the trustees surcharged therewith and interest (6%) thereon from April 15, 1930 (Mrs. Franz died April 14, 1930); and that charges for advancements was allowable only for the $36,704.54, representing cash from the Estate of Ehrhardt D. Franz, deceased. Appellants contend (1) that the funds ($100,795.46) were taken by Sophie Franz from her personal estate and there was an implied obligation on the E. D. Franz Estate to repay this principal sum; (2) that the advancements were not gifts; (3) that she intended to and did include this claim in the trust estate created by her; (4) that she was entitled to reimbursement; (5) res judicata; (6) laches; (7) waiver or estoppel. The evidence convinces that these funds came from the personal estate of Sophie Franz. Whether the trust instrument by Sophie Franz conveyed any legal claim, if such claim existed, to these trustees covering the $87,500 received by the children before creation of the trust need not be and is not determined but, for the purposes of this opinion, is assumed. The most serious matter in this issue as to advancements is whether these payments were gifts or were to be repaid. Appellants contend that they were not gifts but either there was an implied obligation to repay or that her estate was entitled to reimbursement. Appellees contend that they were gifts. Such contentions are as to facts to be resolved from the evidence. Every word of this record has been read and carefully considered. The evidence definitely supports the contention that these payments were unsolicited; were made by Mrs. Franz as gifts to her children; and were so received and regarded by them. This evidence is that of a good mother, of simple needs and desires, who found pleasure in giving to her children some of the flood of wealth which poured in upon her and for which she found no other use. The findings of the Court as to this matter are fully sustained. Appellants' contentions as to res judicata and laches are ruled adversely by Fiske v. Buder, 8 Cir., 125 F.2d 841 and Bickel v. Argyle Inv. Co., 343 Mo. 456, 121 S.W.2d 803, 807. The contention of waiver must be ruled against appellants. The basis of this contention in connection with advancements is, at least, no firmer than in connection with the stock rights. The surcharge of this principal sum of $100,795.46 must be sustained as resting upon substantial evidence. Since these advancements were gifts to the remaindermen (even though they might possibly have to be reckoned with, as between the remaindermen, in the final distribution of the estate of E. D. Franz among them), there arises a query as to whether she was entitled to any income from the above principal sum prior to her death. However, the interest allowed by the Court here is from her death. From that time, the remaindermen were clearly entitled to the use of this money. The recovery accorded for such use is at the legal rate of interest and must be sustained.