Thomson v. Pace

Lesinski, C. J.

Proponents of the last will and testament of Marguerite Vollbrecht appeal the decision of a Wayne County Circuit Court jury in a will contest. The jury, after instructions upon the issues of due execution, testamentary capacity, and undue influence, returned a general verdict in favor of contestants. The facts surrounding the execution of the wills of both Mrs. Vollbrecht and her late husband are detailed here.

Before his death in 1962, Marguerite Vollbrecht’s husband accumulated an estate in excess of one million dollars. In 1959, after consultation with his attorney, Shirley Johnson, he executed his last will and testament. At that time Mr. Johnson also drafted a will for Mrs. Vollbrecht. Both wills contained residuary charitable pour-over provisions. In addition, Mr. Vollbrecht’s will contained a specific bequest of $150,000 to Mrs. Vollbrecht. Neither will contained any other significant bequests. The named executors under both wills were Mervyn Walsh and Manufacturer’s National Bank. Mrs. Vollbrecht was also an executor of her husband’s estate. To complete the estate plan, two charitable foundations were incorporated to receive the residuary bequests under the two wills. The trustees of both foundations were Mr. and Mrs. Vollbrecht, Mervyn Walsh, and Shirley Johnson.

Mr. Vollbrecht died in February 1962. His will was admitted to probate in March 1962. Apparently during the summer of 1962, Mrs. Vollbrecht became disenchanted with her co-executor-trustees and consulted a friend — former Probate Court Judge Sexton. Judge Sexton thereafter contacted attorney James Thomson, one of the present proponents, who began advising Mrs. Vollbrecht. In the fall of 1962, a new charitable foundation was incorporated by Mrs. Vollbrecht. The trustees of this foundation were Mrs. Vollbrecht, Mr. Thomson, and Mr. Dan-neels (Mrs. Vollbrecht’s accountant). The articles of incorporation of the new foundation were virtually identical to the articles of the old foundation. A new will was then executed by Mrs. Volbrecht. This will contained several pecuniary bequests to various persons (some of whom are contestants here) and a residuary charitable pour-over clause. The named executors under the new will were Mr. Thomson and Mr. Danneels. Both Mr. Thomson and Mr. Danneels witnessed the new will also. Soon thereafter, Mrs. Vollbrecht filed a widow’s election to take against her husband’s estate. This election resulted in an inheritance, before taxes, of $400,000 instead of the original $150,000. After Mrs. Voll-brecht’s death in 1964, the offering for probate of the 1962 will initiated the proceedings culminating in this appeal.

On appeal we are faced with two issues: first, whether the factual questions of due execution and testamentary capacity should have been submitted to the jury; and, second, whether sufficient evidence existed to support a jury finding of undue influence.

At the outset we note the record reveals that proponents’ prima facie case¹ of due execution and witnessing was not rebutted by contestants. Thus, proponents are correct in their contention that the submission of this issue to the jury was error.

Regarding the question of whether testamentary capacity should have been submitted to the jury, proponents argue on appeal that no evidence was adduced at trial to support a finding of decedent’s lack of testamentary capacity at the time of signing of the 1962 will. We agree. As the Supreme Court said in the ease of In re Sprenger’s Estate (1953), 337 Mich 514, 521:

“To have testamentary capacity, an individual must be able to comprehend the nature and extent of his property, to recall the natural objects of his bounty, and to determine and understand the disposition of property which he desires to make. In re Walker’s Estate, 270 Mich 33. The burden is upon the person questioning the competency of the deceased to establish that incompetency existed at the time the will was drawn. In re Hallitt’s Estate, 324 Mich 654.” (Emphasis supplied.)

Reviewing the voluminous record in this case, we find that the contestants failed to carry their burden of proof with respect to this issue. At most, the evidence reveals a picture of an elderly eccentric woman grieving over the loss of her husband and unhappy with the managers of her affairs. None of these characteristics individually or collectively is sufficient to overcome the statutory presumption of mental competency, MCLA § 600.2152 (Stat Ann 1962 Rev § 27A.2152), and invalidate a duly executed will. In re Sprenger’s Estate, supra, 521; In re Johnson’s Estate (1944), 308 Mich 366. See, also, In re Powers Estate (1965), 375 Mich 150, 158. Proponents’ motion for a directed verdict on this issue should have been granted also.

Proponents argue that a verdict based upon a finding of undue influence in the execution of this will is against the great weight of the evidence. After reviewing the record, we reject this contention.

In In re Wood Estate (1965), 374 Mich 278, 285, the Court held that a presumption of undue influence arose after a jury finding of a fiduciary relationship between the parties and a further jury finding that the fiduciary, or an interest which he represents, substantially benefits from the will. In the instant case there is no question that a jury could find that Mr. Thomson was in a fiduciary relationship with Mrs. Vollbrecht when she signed the 1962 will. As her attorney he clearly acted as a fiduciary. In re Karabatian’s Estate (1969), 17 Mich App 541. See also, In re Hartlerode’s Estate (1914), 183 Mich 51, 60. By his own admission, he was the object of her confidence. The relationship of Mr. Danneels is not quite as obvious, but it appears that, as Mrs. Voll-brecht’s accountant, he kept her books and filled out her checks for her. Thus a jury, under proper instructions, could also find him to be a fiduciary to Mrs. Vollbrecht by virtue of the faith, confidence, and trust reposed in him by her. See In re Jennings’ Estate (1952), 335 Mich 241, 244. We will assume, without deciding, that the jury so found.

The second element necessary to raise the presumption of undue influence is substantial benefit to the fiduciaries or an interest which they represent.

It is conceded by contestants in their brief that the mere appointment of a fiduciary as executor of the will, or even trustee of a limited testamentary trust, would not alone establish the kind of benefit necessary to raise the presumption. While we find no Michigan case either supporting or denying this proposition, we are cited to the Supreme Court of Alabama decision in Zeigler v. Coffin (1929), 219 Ala 586 (123 So 22, 63 ALR 942). In that case the testator’s attorney drew a will, the terms of which nominated him trustee of a testamentary trust with full power to sell and convey, invest and reinvest trust assets, and pay administration expenses without accounting to any court. Payments to the income beneficiary were totally discretionary and were characterized as a “right” rather than as a “duty” of the trustee. The court held that the creation of a trust, with the scrivener as trustee, alone, without other factors, would not constitute the kind of benefit necessary to raise the presumption. However, the court found a substantial personal benefit to the trustee due to the nature and probable duration of the trust, the amount of property involved, the amount of fees which the trustee would receive, the discretionary powers of the trustee, and the fact that the lawyer-scrivener was the sole trustee.

We agree with both contestants’ concession and the reasoning in Zeigler v. Coffin, supra. Appointment of the scrivener as trustee alone does not create a substantial benefit sufficient to raise the presumption of undue influence. There is, however, a large middle ground between such appointments and the trust in Zeigler, which was the equivalent of a personal trust.

Thus, in many instances the question of substantial benefit will be left to the finder of fact. The determination should be made in light of all the powers, privileges, and duties given the trustee and all the instruments concerned. Moreover, the finder of fact must consider that the Attorney General is charged with the supervision of the trustees of charitable foundations. MCLA § 14.251, et seq. (Stat Ann 1970 Cum Supp § 26.1200[1] et seq.). Finally, consideration must be given to the legal requirement that the trustees are bound to exercise their discretion reasonably for the exclusive benefit of the beneficiaries.

Turning to the facts of the instant case, there is evidence that the trustees of the charitable foundation have the power to amend the articles of incorporation, determine its activities, and fix their own fees. We think that after reviewing these facts in-light of the considerations outlined above, the jury would have been entitled to find the substantial personal benefit necessary to raise the presumption.

As we have stated, once the jury finds substantial benefit to the fiduciaries, or their interest, a presumption of undue influence will arise. Whether or not this presumption is rebutted, thereby becoming merely a permissible inference, is another question to be resolved by the jury upon proper instructions.² Mention should be made, at this point, of the recent decision in In re Cox Estate (1970), 383 Mich 108, regarding the presumption of undue influence.

If the issue of undue influence had been the sole issue before the jury, we would bow to their determination and affirm. However, the jury was erroneously allowed to speculate on the validity of the execution of the will and on the testamentary capacity of Mrs. Vollbrecht. Since it is impossible to ascertain whether the jury’s general verdict was based upon either of the two latter issues, we are constrained to reverse and order a new trial on the issue of undue influence only. See Bachellar v. Maryland (1970), 397 US 564 (90 S Ct 1312, 25 L Ed 2d 570, 576).

Reversed and remanded for new trial. Costs to • proponents.

All concurred.

1 MCLA § 702.5 (Stat Ann 1962 Rev § 27.3178[75]).

2 For suggestions in formulating instructions in this regard, see In re Wood Estate (1965), 374 Mich 278, especially at 292,