Opinion
No. 27870.
June 20, 1950.
APPEAL FROM THE CIRCUIT COURT, CAPE GIRARDEAU COUNTY, R. B. OLLIVER, III, J.
J. Grant Frye, Cape Girardeau, for appellant.
Robert M. Buerkle, Jackson, for respondent.
This case arose in the Probate Court of Cape Girardeau County upon the filing of exceptions by appellant, Frieda Schoen, guardian and curatrix of Theodore A. G. Schoen, n. c. m., to the final settlement in the estate of E. R. Schoen, deceased. Respondents are W. H. Wagner and L. L. Luetje, executors under the last will and testament of said E. R. Schoen. The Probate Court overruled the exceptions, and the Circuit Court on appeal sustained respondents' motion for judgment on the pleadings and dismissed the exceptions. From this judgment, the appeal is taken.
The transcript shows that the will of E. R. Schoen was duly probated on November 26, 1948, and that respondents were at said time granted letters testamentary.
Deceased left surviving him two children — a daughter, Flora Schoen Krueger, and a son, Theodore A. G. Schoen, an insane person. Appellant, on July 14, 1941, was appointed guardian of the person and curatrix of the estate of Theodore A. G. Schoen.
By his will, testator disposed of his property in the following manner:
"First: I direct that all my just debts, the expenses of my last illness and funeral expenses be paid out of my estate as soon after my demise as may be convenient.
" Second: I give, devise and bequeath to the St. Paul Lutheran Church of Jackson, Missouri, the sum of $25.00 to be applied on building fund.
" Third: It is my desire and I do hereby request that Miss Ella Lange, who has been my faithful helper over a period of years shall receive my automobile, to wit: One 1946 Chevrolet 4 door sedan, motor number DAA-8492, or such automobile as I may own, and have in my possession at the time of my death.
" Fourth: Should my daughter, Mrs. Flora Schoen Krueger, desire the use of the lot that I have purchased, and now own, in the Cape County Memorial Park, located on Highway No. 61, about five miles Southeast of Jackson, Missouri, for she and her three children, David, Harold and Walter, Jr., that she be granted the privilege.
" Fifth: All the rest, residue and remainder of my estate, be the same real estate, personal property, or mixed, of whatsoever nature and kind and wheresoever situated, I give, devise and bequeath to my children and Miss Ella Lange as follows: To my daughter, Mrs. Flora Schoen Krueger, the one third part, to my son Theodore A. Schoen, the one third part, and to Miss Ella Lange, the one third part. Further it is my desire that my son Theodore A. Schoen shall receive $25.00 in cash, and the balance of the one third part belonging to the said Theodore A. Schoen, or such amount as may be required to pay hereinafter mentioned note, shall be paid to Miss Minnie Northdurft, she being the holder of note, amount being $2,000.00 on which note, I, E. R. Schoen, am a co-signer."
The foregoing facts all appear from the exceptions filed. It is further alleged in said exceptions:
"4. That Ella M. Lange was of no blood relation to Testator, but was his domestic servant, and counseled and advised with him and to a great extent managed his affairs, and stood in such relation to Testator for a long period of time prior to the making of such will and also between that time and his death.
"5. That on the ____ day of ____ 19__, Testator was issued life insurance policy Number 8,371,650, in the sum of $5,000.00 by New York Life Insurance Company, payable to the wife of Testator as beneficiary; that the said wife of Testator died July __, 1946; that about February 10th, 1947, a statement was given to said insurance company, under the signature of Testator, that Ella M. Lange was his dependent; and that on February 10th, 1947, a change was made by such insurance company on their record making the said Ella M. Lange as beneficiary thereof.
"6. That on September 20th, 1948, Ella M. Lange inquired of said insurance company at to the cash value of such policy as of the date of the changing of beneficiary to her, and was advised by the company that such was $3,001.79.
"7. That on March 25th, 1941, and prior to the change of beneficiary under such policy, Testator had borrowed $2,019.00 from said insurance company on the security of such policy, and on January 8th, 1944, he transferred such loan from said insurance company to First National Bank of St. Joseph, Missouri, which bank thereupon paid said insurance company $2,390.73 representing the principal and interest of said loan in full then owing from deceased to such insurance company, and also at that time increased the loan by $219.27, so as to make the total loan from the First National Bank of St. Joseph, Missouri, on the security of the policy amount to $2,500.00; that on February 11th, 1947, Testator and Ella M. Lange executed an assignment of such policy in favor of First National Bank of St. Joseph, Missouri, to secure said loan; that at the time of the death of Testator, the amount due such bank on such loan was the principal sum of $2,500.00 but there was unearned interest of $2.88 owing from the bank of Testator.
"8. That at the time of the death of Testator, the said insurance company paid said bank such $2,500.00 and the bank in turn sent Ella M. Lange $2.88 as such unearned interest; that at such time such insurance company also sent her a check for $2,585.65 and sent First National Bank of St. Joseph a check for $2,500.00 totaling $5,085.65, representing the face of the policy plus accrued dividends and other small items.
"9. That after the admission of said will to probate in common form, and before the expiration of one year, the said Flora Schoen Krueger and the said guardian of Theodore A. G. Schoen employed attorneys for the purpose of and with directions to proceed to take the necessary legal steps to set aside said will on the ground that the execution and publishing thereof was because of the undue influence of Ella M. Lange, and to set aside said change of beneficiary to her on said insurance policy on the ground of undue influence and fraud of the said Ella M. Lange; that it was also the intention of guardian and curatrix in behalf of her ward, to contest the validity of the promissory note of $2,000.00 signed by Testator and said ward held by Minnie Northdurft and set out in the inventory and also referred to in such will, on the ground that at the time of executing the same, said ward was non compos mentis and was not liable thereon; that said attorneys proceeded to investigate the facts in each instance thereof and about August 11th, 1948, when said attorneys were about ready to file the necessary legal proceedings all in that behalf, and on account thereof and in settlement and compromise of all such and in compassion for said Theodore A. G. Schoen, the said Ella M. Lange and Flora Schoen Krueger entered into an agreement in writing, drawn by attorneys for the Executors and said Ella M. Lange, in words and figures as follows:
"`Agreement
"`This agreement, made and entered into on the 27th day of August, 1948, by and between Mrs. Flora Schoen Krueger, Ella Lange and W. H. Wagner, witnesseth:
"`Whereas, the last will and testament of E. R. Schoen, deceased, duly probated in the Probate Court of Cape Girardeau County, Missouri, makes the following provision in the fifth paragraph thereof:
"`All of the rest, residue and remainder of my estate, be the same real estate, personal property, mixed, of whatsoever nature and kind and wheresoever situated, I give, devise and bequeath to my children and Miss Ella Lange as follows: To my daughter Mrs. Flora Schoen Krueger, the one third part, to my son Theodore A. Schoen, the one third part and to Miss Ella Lange, the one third part. Further it is my desire that my son Theodore A. Schoen shall receive $25.00 in cash and the balance of the one third part belonging to the said Theodore Schoen, or such amount as may be required to pay hereinafter mentioned note, shall be paid Miss Minnie Northdurft, she being the holder of note, amount being $2,000.00 on which note I, E. R. Schoen, am a co-signer.
"`And whereas, it is the desire of Mrs. Flora Schoen Krueger and Ella Lange to make provision for Theodore A. Schoen so that he shall receive some of the proceeds of the estate of E. R. Schoen, now, therefore, in consideration of the mutual promises herein contained the parties do agree as follows:
"`1. Mrs. Flora Schoen Krueger and Ella Lange shall assign their interest in and to the rest, residue and remainder of the said estate of E. R. Schoen to W. H. Wagner.
"`2. That said Ella Lange at the time the estate is closed shall turn over to W. H. Wagner the proceeds of an insurance policy in which E. R. Schoen was the insured and in which the said Ella Lange was the beneficiary, first deducting from such proceeds certain items in the following manner, to wit:
"`Net proceeds of insurance policy .......................... $2,585.00 "`Deductions for three premiums paid at $62.90 per premium 188.70
"`Deductions for interest paid ... 43.75
"`Deduction for cash surrender value paid in January 1947 (amount to be ascertained from the insurance company)
"`3. The said W. H. Wagner shall receive all the rest, residue and remainder of the said estate and the proceeds of the insurance policy as stated in paragraph 2 above and shall distribute the total sum so received in equal parts to Mrs. Flora Schoen Krueger, Ella Lange, and Mrs. Frieda A. Schoen, as guardian of Theodore A. Schoen provided that the $25.00 payment mentioned in paragraph five of said will shall not be paid to the said Theodore A. Schoen or to his guardian.
"`In witness whereof, the parties hereto have hereunto set their hands the day and year first above written.
"`s/ Ella M. Lange "`s/ Mrs. Flora Schoen Krueger'
"10. That said ward, through his said guardian and curatrix, acquiesced in, approved, and adopted such agreement between Flora Schoen Krueger and Ella M. Lange, and refrained from proceeding to contest the same will and to set aside such change of beneficiary on behalf of said Theodore A. B. Schoen as heretofore contemplated and to defendant against such note of Minnie Northdurft, because of such agreement the said Flora Schoen Krueger and said guardian and curatrix on behalf of her ward allowed the one year statute of limitations on contesting such will to run, and also allowed themselves to be guilty of such laches that in a contest of the validity of such change of beneficiary as to preclude an action to set aside such as theretofore contemplated, and caused guardian and curatrix to desist from any attempt or intent to contest the validity of such note of Minnie Northdurft as to said ward.
"11. That in the Final Settlement to which these Exceptions are made, there is shown a balance of $3,034.25 due Flora Schoen Krueger, Ella M. Lange, and ward, as distributees under such will and such agreement, after a payment of all charges against said estate.
"12. That the said written agreement recites the `Fifth' paragraph of the will of Testator; that said agreement, stripped of its polixity, says: That whereas the will contains such `Fifth' paragraph, and whereas Flora Schoen Krueger and Ella M. Lange are desirous that ward receive some of the proceeds of said estate, they assign to Executors the interest given them in such `Fifth' paragraph, and also that Ella M. Lange transfers to such Executors the proceeds of the insurance received by her as above set out, after deducting the items totaling $2,818.10 and another small item then undetermined (the exact amount of which Exceptor does not know but alleges it to be not exceeding $25.00) so that Ella M. Lange was to turn over to said Executors approximately $2,245.43, and said Executors were then to pay out of such net proceeds of such insurance and also all the estate above the debts and costs of administration, in equal parts to Flora Schoen Krueger, Ella M. Lange, and said ward, which would mean that this Exceptor would receive on behalf of her ward not the sum of $25.00 as set out in the Final Settlement, but at least one third of the $3,034.24 set out in the Final Settlement as being `Balance due Estate,' and also further item of one third of the balance of such insurance policy, which (considering the items scheduled in paragraph 2 of the Agreement above mentioned) would amount to approximately $2,245.43; so that instead of receiving $25.00 for her ward this Exceptor should receive approximately $1,759.89.
"Wherefore, Exceptor prays that said Final Settlement may be disapproved and set aside; that Executors be required to submit a Final Settlement giving this Exceptor for her ward his lawful rights as acquired under the facts hereinabove alleged and such other facts as the court shall find after due hearing; and that before approving any other final settlement, Exceptor may have advance notice thereof and an opportunity to be heard before the same is approved."
The final settlement shows a balance due the estate of $3,034.24, to be distributed as follows:
"St Paul Lutheran Church, Jackson, $ 25.00
"Frieda Schoen, as guardian of Theodore Schoen, $25.00 plus payment of note owed to Minnie Northdurft $2148.72 as per paragraph five of the Last Will and Testament of E. R. Schoen (This amount exceeds one-third of the estate by $454.40) ................... 25.00
"Flora Schoen Krueger, one third of the balance due estate minus one-half of the overpayment to Theodore Schoen as per Last Will and Testament of E. R. Schoen .. 1,577.36
"Ella Lange, one-third of the balance due estate minus one half of the overpayment to Theodore Schoen as per Last Will and Testament of E. R. Schoen ................... 1,406.88 --------- "Total Distributed .... $3,034.24"
It appears from the final settlement that the executors did not include the $2,585.65 (the net proceeds of the insurance policy) as an asset of the estate, nor did they make distribution on the basis of the compromise agreement.
It is appellant's contention that the agreement made between Ella Lange and Flora Schoen Krueger was based on a valid consideration because of their mutual promises and, being for the benefit of appellant's ward, it gave him a vested right under such agreement, and that the executors should have made distribution of the insurance money and the assets of the estate pursuant to said agreement.
There can be no doubt but that beneficiaries under a will may agree among themselves upon a distribution of the estate contrary to the disposition made under the will, where such agreement does not defeat a trust or specific restrictions placed upon the property in the will. 69 C.J. 1276; McClure v. Baker, Mo.App., 216 S.W. 1018. See also, Annotation, 97 A.L.R., p. 468.
In the case at bar two of the beneficiaries, Ella Lange and Flora Schoen Krueger, entered into an agreement for the benefit of the third beneficiary — Theodore A. G. Schoen. By this instrument it was agreed: (1) that Flora Schoen Krueger and Ella Lange assign their interest in the rest, residue and remainder of said estate to W. H. Wagner; (2) that Ella Lange, at the time of closing the estate, would turn over to W. H. Wagner the net proceeds of a certain life insurance policy, after certain deductions; and (3) that W. H. Wagner would then equally distribute between Flora Schoen Krueger, Ella Lange, and Theodore A. G. Schoen the sums received by him.
The terms of the agreement were not carried out. Ella Lange and Flora Schoen Krueger did not assign to W. H. Wagner their respective shares of the residue of the estate; nor did Ella Lange turn over to W. H. Wagner the money she received from the insurance company.
It is clear that the insurance money was not made an asset of the estate by the terms of the agreement. The contract did not provide that it should be turned over to the executors to be distributed by them to the beneficiaries of the estate, but the agreement stipulated that it should be paid to W. H. Wagner who would then make distribution in accordance with the terms of the contract. Wagner, in receiving the money and making distribution, would not be acting for the estate, but as trustee of an express trust. The insurance money never became a part of the assets of the estate, and the executors cannot be held to account for it.
The executors had no right whatever to the proceeds of the insurance policy. Nor could the executors distribute the residue and remainder except in accordance with the terms of the will. Ella Lange and Flora Schoen Krueger did not make the assignment of their shares of the residue as they had agreed. In such a situation, the executors could only distribute the estate in accordance with the terms of the will. The Probate Court is without jurisdiction to enforce the agreement. McClure v. Baker, Mo.App., 216 S.W. 1018; In re Winnegar's Estate, 118 Mo.App. 445, 94 S.W. 833. Any right appellant might have under the agreement in question would be in the Circuit Court.
The judgment is affirmed.
HUGHES and McCULLEN, JJ., concur.