author: STOCKARD, Commissioner.

text:
    COMMERCE TRUST COMPANY, a corporation, Herbert S. Shue and S. Harvey Laner, Plaintiff-Respondents, v. Helen A. STARLING et al., Defendant-Respondents, and Anna Neevel, Esther Spector, Sadie Kadner, Charles S. Allis, Harold Neevel, Harriet Spector Scrinopskie, Marjorie Kadner Orleans Samuels, Mickey Kadner, Arthur Bruce Allis and Larry Allis, a minor, by his Guardian Ad Litem, Charles S. Allis, Defendant-Appellants.
    No. 51133.
    Supreme Court of Missouri, Division No. 2.
    Sept. 13, 1965.

      John B. Gage, William H. Leedy, Marvin E. Hankin, Gage, Hodges, Park & Kreamer, Kansas City, for respondents.
    Harry L. Browne, Howard F. Sachs, Spencer, Fane, Britt & Browne, Kansas City, for respondent Jewish Memorial Hospital Ass’n of Kansas City.
    Arnold N. Shanberg, Rope, Shanberg, Rope & Gibson, Kansas City, for respondent Beth Shalom Congregation.
    George L. Gordon, Lathrop, Righter, Gordon & Parker, Kansas City, for respondent Children’s Mercy Hospital.
    James H. Coonce, Mann, Coonce & Sullivan, Kansas City, for respondent Baptist Memorial Hospital, Inc.
    Thomas M. Sullivan, Downey, Sullivan & McCormick, Kansas City, for respondent Rockhurst College.
    Horace Warren Kimbrell, Kansas City, for respondent University of Kansas City.
    Paul Van Osdol, Jr., Terrell, Van Osdol & Magruder, Kansas City, for respondent Midwest Research Institute.
    Harry L. Jacobs, and Francis M. Hanna, Kansas City, for Dorothy A. Kovitz, Susan Allis Kovitz and Dorothy A. Kovitz, guardian ad litem for Louis Kovitz, Jr., respondents.
    Robert J. Coleman, Kansas City, pro se.
    Joseph A. Hoskins, Roger T. Hurwitz, Walter J. Kennedy, Hoskins, King, Springer & McGannon, Kansas City, for appellants.
   STOCKARD, Commissioner.

The principal issues on this appeal are (1) whether the grantor of an inter vivos trust provided that after his death certain non-charity distributees should receive the benefits payable to them from the trust free from all inheritance and estate taxes, and if not, (2) whether the method of allocating the taxes proposed by the trustees is proper. In addition, appellants present a question concerning the allowance of attorney fees.

On September 14, 1961, Barney L. Allis, as grantor, executed an inter vivos trust agreement with Commerce Trust Company, Herbert S. Shue and S. Harvey Laner as trustees. Mr. Allis died on April 17, 1962, leaving a will, and Commerce Trust Company is executor of the will. The total inventory and appraisement of the probate estate, exclusive of the assets of the trust, was $176,979. (All dollar amounts used herein omit cents). The total value, subject to possible adjustments, of the assets held by the trustees on April 17, 1962, was $12,285,871, and these funds were taxable in the decedent estate because the grantor had retained a life income and the right to revoke the trust. In addition to the property in the trust and in the probate estate, there was other property included in the gross estate for tax purposes, and other items, not included at the time of trial of this case, may be required to be included. The gross estate for federal estate tax purposes reflected by the return (but with possible adjustments which would also result in adjustment of the amount of taxes) was $12,533,028. Expenses, debts, the marital deduction, and the statutory exemption resulted in a taxable estate of $9,847,631. The net federal estate tax was computed to be $4,918,840, which has been paid out of funds of the trust. The estimated Missouri inheritance tax with respect to all gifts made by the grantor is $255,836 and the estimated Missouri estate tax is $797,724. These Missouri taxes have not been paid, but a reserve for this purpose has been set aside. Thus the total of all death and succession taxes, federal and Missouri, is estimated to be $5,972,400. The trustees contend, and the trial court held, that a portion of these taxes is to be borne by appellants and the other donees under Article V of the trust agreement whose gifts are not deductible as charitable gifts in computing estate taxes and which are not exempt under the Missouri inheritance tax law. Appellants contend that their particular gifts are to be distributed to them without reduction for any death or succession taxes. The amount in dispute is in excess of $275,000, and jurisdiction of this appeal is in this court.

We shall set forth in summary form, when that method is sufficient, and in detail, when appropriate, the material provisions of the trust agreement.

Article I. The grantor provided for the payment to him of the income from the trust during the remainder of his life, with the right of the trustees to encroach on the principal when necessary for his care and the care and support of his wife.

Article II. Upon the death of the grantor the trustees were to pay to Irene Allis, his wife, “if and only if” she survived the grantor, the sum of $100,000, without any “deduction from the amount so payable to grantor’s wife on account of any of such estate, inheritance, transfer or succession taxes.” (This provision was made, apparently, pursuant to an ante-nuptial agreement wherein grantor agreed, among other things, to leave his wife the sum of $100,000 without any tax burden).

Article III, Par. A. The grantor created what is referred to as the “Irene Trust.” It provided that “if and only if” Irene Allis survived the grantor and she and the grantor should be married and living together at the time of his death, the trustees should set aside a “trust share” for her benefit consisting of money or property equal in value in the opinion of the trustees to thirty-five per cent of the net trust estate plus one hundred thousand dollars in addition to the gift in Article II.

Par. B. defined for the purposes of Article III what would constitute the “net Trust Estate.”

Par. C. “Pending the time that the Trustees shall finally determine the amount of the net Trust Estate of the Grantor, as provided in Paragraph B above, they shall be fully authorized, if they see fit, to approximate the same in good faith for the purposes of the Trust Agreement, and pursuant to such approximation, to set up, handle and administer under the provisions hereof a tentative Irene Trust and the other Trust Parts or Trust Shares to be set up and established hereunder; provided, however, that the corpus and income thereof shall be subject to adjustment and adjusted upon the final determination of the amount and valuation of the net Trust Estate by the Trustees. The trustees shall also charge against and then deduct from the amounts payable to beneficiaries under this Trust and from the amounts set aside into the separate trusts to be established the amount of Federal Estate, inheritance or succession taxes, proportionately attributable to such payments or allocations and such deductions shall be subject to adjustment upon the final determination of the amount of such taxes.” (Italics added.)

Par. G provides that should Irene Allis predecease the grantor, which she did not do, or in the event that she and the grantor were not at the time of his death married and living together, a condition which did not occur, then Article III, except paragraph I thereof, “shall be of no force and effect as if this Article had never been contained herein.” Paragraph I was a “no contest” provision which is immaterial to this appeal.

Article V consists of sixteen paragraphs in which the grantor directed that within five years after his death the trustees should distribute to the persons and institutions therein named the stated sums. The appellants in this case are three sisters and one brother of the grantor and the children of each who were designated in Article V as distributees. The gift to each sister and brother was $20,000. In addition, the brother, Charles S. Allis, was given 3,000 shares of the capital stock of Trianon Hotel Company, subject to certain conditions, or the value thereof if the stock was sold by the trustees. (At the time of the death of the grantor the Trianon Hotel Company had sold its physical properties and was in the process of liquidation. The trustees estimated the value of the 3,000 shares for tax purposes at $206,298). Gifts to the named nephews and neices of grantor who are appellants were in the amount of $10,000 each. Other gifts were made to individuals who are not appellants, and to organizations who qualify as eleemosynary or charitable institutions. The total of the non-charity gifts was $456,298 and the total of the charity gifts was $115,000.

Article VI. “After the death of the Grantor, and not later than thirty days subsequent to the final determination of the amount of all estate, inheritance, transfer or succession taxes assessed against Grantor’s estate or payable by the Trustees out of the Trust Estate, the remainder of the Trust Estate subject, however, to the payment of such costs, expenses, taxes, either of the Trust or Grantor’s Estate as are authorized hereunder, after first paying or setting apart such sums, if any, as may be required in their judgment pursuant to the provisions of Articles II, III, IV and V hereof, shall be divided into two shares— one share to consist of one-half of said Remainder of the Trust Estate (hereinafter called the Helen Trust) for the benefit of Grantor’s daughter, Helen A. Starling and Grantor’s grandchildren hereinafter named, and one share to consist of the remaining one-half of the Trust Estate (héreinafter called the Dorothy Trust), for the benefit of Grantor’s daughter Dorothy A. Kovitz and Grantor’s said grandchildren.”

Article VIII consists of six subpara-graphs, none of which is material to this appeal except a portion of subparagraph E as follows: “Subject to the provisions of Article IX [pertaining to acts of the trustees to be done at the direction of the grantor during his lifetime] and X hereof [pertaining to selection of new trustees in the event of disability or refusal of a trustee to serve, and also providing for removal of trustees], the Trustees from time to time acting hereunder are expressly authorized and empowered * * * (13) to make advancements or payments to the Executor or to the representative of the Estate of the Grantor, after his death, in case such Executor or other representative is in need of cash with which to pay any or all taxes and any and all claims or other indebtedness or expense of such Estate, and to make such advancements with or without interest and with or without obligation for repayment; * *

Article XIV. “Upon the written request of the Executors, Administrators, or other personal representative of the Grantor, the Trustees shall pay out of the corpus of the Trust Estate, without right to seek recoupment or contribution from [j*c] any other source, any and all inheritance, estate, succession and tranfer taxes assessed against the property declared or adjudged to be a part of the Grantor’s taxable estate, including not only the Trust Estate but any other estate or property owned and held by the Grantor at the time of his death or against any beneficiary of the Grantor who shall receive any property under the terms of this instrument or under his Last Will and Testament or otherwise.” (Italics added.)

Mr. Allis executed his will on the same day that he executed the trust agreement. He bequeathed $100 to. each of his two daughters and certain real estate and personal property to his widow. The remainder of his estate was bequeathed to the trustees named in the trust agreement to become part of the assets of the trust.

This case originated when the trustees filed suit requesting a construction of five separate articles of the trust agreement. Appellants do not contend that the trial court erred in its construction of the trust agreement except as to the placement of the ultimate burden of estate and inheritance taxes and as to the method of allocating the proportionate share of the taxes if they should bear any of the ultimate burden of the taxes. Appellants rely principally upon the italicized language of Article XIV of the trust agreement in support of their contention that the particular gifts to them and the other non-charity dis-tributees mentioned in Article V should be distributed without reduction for any death or succession taxes. The trustees rely principally upon the italicized language of Article III, and it is their position, and it was the ruling of the trial court, that the distributions to the non-charity beneficiaries named in Article V are subject to and there shall be attributed thereto and deducted proportionally therefrom federal and Missouri estate and Missouri inheritance taxes. The following is a summary of the amounts which would be received by the specific donees and by the Irene, Helen and Dorothy trusts under the opposing theories. Column I represents the construction of the trust agreement by the trustees; Column II represents appellants’ construction; and Column III represents the differences between the two in dollars amounts.

The parties are in agreement that the testator, in the case of a will, or the grantor, in the case of an inter vivos trust constituting a part of the taxable estate, may designate who or what fund should bear the ultimate burden of these taxes. See Priedeman v. Jamison, 356 Mo. 627, 202 S.W.2d 900, and the cases cited in 142 A.L.R. 1135. They also are in agreement that in this case the grantor has attempted to do so. If we are able to determine the intent of the grantor in this respect, the doctrine of equitable apportionment enunciated in Hammond v. Wheeler, Mo., 347 S.W.2d 884, and in Jones v. Jones, Mo., 376 S.W.2d 210, has no application. See St. Louis Union Trust Company v. Krueger, Mo., 377 S.W.2d 303, 306. In our determination of the grantor’s intent we are to give the words used their usual, ordinary and natural meaning in the absence of anything in the instrument to deflect from that meaning, 90 C.J.S. Trusts § 161 h(1), p. 24, but the instruments must be construed to avoid, if possible, repugnancy in the various provisions, and, as it has been tritely said, the provisions must be construed in the light of the entire instrument considered from its four corners. Old Folks Home of St. Louis County v. Saint Louis Union Trust Company, Mo., 313 S.W.2d 671; Housman v. Lewellen, 362 Mo. 759, 244 S.W.2d 21; Eckle v. Ryland, 256 Mo. 424, 165 S.W. 1035. If possible, effect should be given to all of the language used, Coleman v. Haworth, 320 Mo. 852, 8 S.W.2d 931; Boland v. Mercantile-Commerce Bank & Trust Co., 349 Mo. 731, 163 S.W.2d 597, and when, as here, a trust agreement and a will form parts of the same plan, the documents must be construed together.

When we construe the language of the trust agreement and the will according to the above rules, and in the light of the attending circumstances, we conclude that the grantor has provided (1) that taxes generated by or resulting from (a) the presence in the taxable estate of property or money not assets of the trust or probate estates, and (b) the transfer of such property or money, should be paid from the corpus of the trust, without right of the trustees to seek recoupment or contribution from any other source; (2) that federal estate and Missouri inheritance taxes generated by or resulting from (a) the presence in the taxable estate of property or money constituting assets of the trust or probate estate, and (b) the transfer of such property or money, should be paid from the corpus of the trust and the trustees shall then charge against and deduct from the amounts payable to non-charity beneficiaries under Article V and the amounts includable in the Helen and Dorothy trusts the amounts of such taxes “proportionately attributable” thereto; and (3) the Missouri estate tax should be paid out of the corpus of the trust without the right of the trustees to seek recoupment or contribution from any other source. We shall now set forth the reasons for the above conclusions.

The grantor executed the trust agreement and his will on the same day. He transferred to the trustees property with a value in excess of $12,000,000. This left him with other assets, which at the time of his death seven months later, was less than $200,000. After the execution of the trust agreement and before his death, the grantor conveyed away or disposed of some of his other assets, but even so the terms of the trust agreement demonstrate that he knew (and in the absence of actual knowledge we would presume that he knew) that his trust estate would be included in his “gross estate” for tax purposes, and that his probate estate would constitute only a fraction of the total death and succession taxes. The federal estate tax is a lien against the “gross estate,” and it is contemplated that it shall be paid, in the first instance, by the executor of the decedent’s estate, although if not paid by him collection can be had by proceeding directly against the gross estate. In view of this, and the size of the probate estate as compared to the trust estate, the grantor made provision in Article VIII, paragraph E(13) that the trustees were “expressly authorized and empowered” to make payments “to the Executor or to the representative of the [probate] Estate of the Grantor,” if needed, “to pay any or all taxes and any and all claims or other indebtedness or expense of such Estate,” and he also directed by Article XIV that upon written request of the executor or representative of his probate estate the trustees should pay directly without the right to seek recoupment or contribution from any other source, all inheritance, estate, succession and transfer taxes assessed (1) against the property declared or adjudged to be a part of the grantor’s taxable estate, or (2) against any beneficiary of the grantor who shall receive any property under the terms of the trust instrument or under his will “or otherwise.” In this manner the grantor made provision for the bulk of his assets, those of the trust estate, to be available for the payment of estate and inheritance taxes without the need of the taxing authorities to proceed directly against the trustees, against the beneficiaries under the trust or will, or against those who prior to his death received property or money as a gift or otherwise which, by reason of the nature of the gift or the time of making it, had to be included as a part of his taxable estate. The duty in the first instance of the executor of the decedent’s estate to pay the death and succession taxes, and the liability of a fund or of beneficiaries to bear the ultimate burden of those taxes, and in what proportion, are based on different principles, and are not to be confused. In view of the circumstances of the death and succession taxes being far in excess of the property in the hands of the executor of the probate estate, who had the duty in the first instance to pay or collect and transmit the taxes, we consider the above provisions of Articles VIII and XIV to constitute a direction by the grantor to the trustees to pay or to make available money to pay the death and succession taxes, and when paid at the written request of the executor or representative of his probate estate, the trustees were not to attempt to recoup from other sources the taxes so paid. These articles do not pertain to who or what funds shall bear the ultimate burden of the death and succession taxes.

Having arrived at the conclusion that Articles VIII and XIV provide the source and method for the original payment of taxes, we turn now to the question of whether the grantor has exercised his right to designate who or what fund should bear the ultimate burden of the death and succession of taxes.

The scheme or plan for the distribution of the property and money constituting the assets of the trust estate, was, first, to give Irene Allis the amount she should receive pursuant to the antenuptial agreement free from the burden of all taxes; second, to make certain specific gifts to named individuals and charitable organizations; and third, to create three trusts which we shall refer to, as did the grantor, as “trust shares” or as the Irene, Helen and Dorothy trusts in order to distinguish them from the main trust. The first trust share, or the Irene trust, is created by Article III, and the amount of its assets depends, in part, on the amount of the estate and inheritance taxes. The other two trust shares, the Helen and Dorothy trusts, are created by Article VI out of the residue of the assets of the main trust estate, and they also depend, in part, on the amount of taxes. The assets of each of these three trust shares are not subject to ready determination, so by paragraph C of Article III the grantor authorized the trustees to set up “a tentative Irene Trust and the other Trust Parts or Trust Shares to be set up and established hereunder.” Although this authority for setting up tentative trust shares is contained in paragraph C of Article III, which article pertains primarily to the Irene trust, there can be no question but that the authority extended to and included the Helen and Dorothy trusts. In Article VII reference is made to “the establishment of said Helen Trust and Dorothy Trust or Trust Shares tentatively or permanently by the Trustees.” This necessarily referred to the authority in Article III for tentative trusts; there being no other. Following then, in a separate sentence in paragraph C of Article III, it is provided that “The Trustees shall also charge against and then deduct from the amounts payable to beneficiaries under this Trust and from the amounts set aside into the separate trusts to he established the amount of Federal Estate, inheritance or succession taxes, proportionately attributable to such payments or allocations and such deductions shall be subject to adjustment upon the final determination of the amount of such taxes.” (Italics added.)

The trustees took the position, and the trial court held, that by reason of this provision they are required to charge against and then deduct from the amounts payable to non-charity beneficiaries under Article V, and from the amounts set aside in the Helen and Dorothy trusts “the amount of federal and state, estate and inheritance taxes proportionately attributable to such distributions or allocations.” The Irene trust is not included upon the theory that the total amount payable to Irene or to be placed in trust for her qualifies for the federal estate tax marital deduction and for the exemption provided for by Section 145.090 RSMo 1959, V.A.M.S. Amounts payable to charitable institutions are not included because the presence in the taxable estate of the money to pay them generates or results in no federal estate tax, and they are exempt under Section 145.090, supra, pertaining to the Missouri inheritance tax.

We agree with the trial court concerning the meaning and application of paragraph C of Article III except as to the Missouri estate tax, and we shall set forth, first, our reasons for excluding the Missouri estate tax, and second, our reasons for otherwise agreeing with the trial court together with our comments on the contentions of appellants.

Paragraph C of Article III refers only to “the amount of Federal Estate, inheritance or succession taxes.” The Missouri estate tax, or “additional tax” imposed by Section 145.070 is none of these. It is a Missouri estate tax. Brown v. State, 323 Mo. 138, 19 S.W.2d 12, 17. It is not an inheritance or succession tax, in the commonly understood meaning of those terms. 28 Am.Jur. Inheritance, Estate, and Gift Taxes §§ 3, 5, 6 and 8. The fact that the grantor intentionally did not include the Missouri estate tax in paragraph C of Article III, and its exclusion was not an oversight, is obvious for two reasons. First. In the trust agreement the grantor referred to taxes in six places. In Article II he referred to “such estate, inheritance, transfer or succession taxes.” In Article III, paragraph B and in Article VI he referred to “all estate, inheritance, transfer or succession taxes.” In Article VIII, paragraph E(13) the reference was to “any and all taxes.” In Article XIV the reference was to “all inheritance, estate, succession and transfer taxes.” In this manner, in five separate places, the grantor demonstrated that when he wanted to include the Missouri estate tax he knew how to do so. Yet in paragraph C of Article III he referred to “Federal Estate, inheritance or succession taxes.” Second. The reference in paragraph C of Article III is for the purpose of directing the trustees to deduct from and charge against amounts payable under the trust the amount of designated taxes “proportionately attributable” to such payments. The Missouri estate tax is “equal to the difference between the total tax imposed under said section 145.060 [the inheritance tax], including all other state inheritance and estate taxes, and the credit for estate, inheritance, legacy and succession taxes allowable to the estate of such decedent against the United State federal estate tax.” Section 145.070 RSMo 1959, V.A.M.S. How the amount of such tax “proportionately attributable” to the amounts payable to beneficiaries under the main trust and to be set aside into trust shares could be determined defies imagination. It is therefore readily understandable why the grantor would intentionally exclude it from the taxes referred to in paragraph C of Article III.

We note at this point that neither the appellants nor any of the other parties make the specific contention that if paragraph C of Article III requires that the taxes there designated should be proportionately attributable to the bequests which generated, resulted in, or contributed to those taxes, that the Missouri estate tax was not included. However we cannot rule the contention made by appellants without meeting this issue, and we are not willing to close our eyes to what we consider to be such an obvious result from the construction of the trust agreement required by the issues which are presented.

We shall now comment on the arguments presented by appellants as to why paragraph C of Article III does not provide that the amounts payable to them should be charged with any of the taxes designated therein. They contend that the words “this Trust” in paragraph C refer only to the Irene trust, and that this sentence does not apply to the non-charitable gifts made in Article V. We do not agree. First, the two words cannot be isolated, but must be treated in context, and when this is done the grantor directed that charges be made against the amounts payable to the beneficiaries under “this Trust,” that is, the main trust, “and from the amounts set aside into the separate trusts to be established.” If the grantor had intended this sentence to apply only to beneficiaries under the Irene trust he would have said so, and he would have then referred to the Helen and Dorothy trusts by name and not “the separate trusts.” In addition, he used the word “beneficiaries” in the plural, but there is only one beneficiary of the Irene trust, namely, Irene Allis, his widow. It is true that if Irene did not survive the grantor, the Irene trust was not to be created, and instead a trust share in the amount of $50,000, called the “Douglas Trust” was to be created for the benefit of William Douglas Sellers, a son of Irene. But as used the words “this Trust” could not refer to the Douglas trust, and Sellers was not a beneficiary of the Irene trust. He acquired no interest whatever in it, and the Douglas trust never came into existence.

Appellants also assert, in effect, that paragraph C of Article III is not the logical place for a provision designating who shall bear the ultimate burden of taxes. However, when considered in relation to the other provisions there is a good reason for placing it there. Paragraph D authorizes immediate payments of income and corpus to Irene from the tentative Irene trust, and Article VII authorizes immediate payment of income from the Helen and Dorothy trusts to Helen and Dorothy and their children. Therefore, in the provision authorizing the tentative trusts it was logical and proper that the grantor would there place the provision substantially affecting the size of the trusts by charging against them the taxes proportionately attributable to them.

Appellants also assert that the provision in paragraph C could refer only to the Irene trust because if Irene predeceased the grantor the entire Article III, except paragraph I, became void and of no effect. This argument is not persuasive. First, Irene did not predecease the grantor, and we must construe the operative provisions of the trust agreement which includes Article III. Second, it could very well have been the intention of the grantor not to require Article V non-charity distribu-tees to share in the burden of taxes in the event his wife predeceased him because, other than the Douglas trust which then would have been created, the gifts to her would have gone into the Helen and Dorothy trusts created from the residue of the trust assets. In such event, the taxes would have been paid as directed by Article XIV, without the right of the trustees to seek recoupment or contribution from any other source, and the burden of taxes would have been shifted to the Helen and Dorothy trusts which would have been substantially increased. At least such reasoning on the part of the grantor would not have been illogical and without justification.

Appellants next argue that if the language of Article XIV be construed “as merely a direction to the trustees to pay taxes in the first instance out of trust corpus, and then [pursuant to paragraph C of Article III] to deduct the taxes before transferring the Article V gifts, or to collect the taxes from the Article V non-charity distributees, then this is no more than what the law would require absent a contrary direction by the grantor, and the language * * * would serve no purpose.” This argument also is not persuasive. First, absent the provisions of paragraph C of Article III this is not “what the law would require.” Appellants assume there would be equitable apportionment, but Article XIV requires that the trustees pay the taxes out of the corpus of the trust estate, without the right to seek recoupment or contribution from any other source. Second, if it would be what the law otherwise would require, it is of no significance. We know that testators usually provide in their wills for the payment of debts and funeral expenses, and that most certainly is an unnecessary provision. However, it does not thereby take on a meaning different from the ordinary and usual meaning of the words used. Also, in making this argument appellants rely on their interpretation of Article XIV to the effect that the grantor directed the trustees not to “seek recoupment or contribution” for the taxes so paid “against any beneficiary of the Grantor who shall receive any property under the terms of this instrument or under his Last Will and Testament or otherwise.” We disagree with that interpretation, and previously, when we set out the substance of Article XIV we inserted the figures 1 and 2 in order to demonstrate that reference was had to taxes “assessed [1] against the property * * * or [2] against any beneficiary of the Grantor who shall receive any property under the terms of this instrument or under his Last Will and Testament or otherwise.”

A restatement of our construction of the trust agreement is that Article XIV, when read and harmonized with the provisions of paragraph C of Article III, constitutes authority for and a direction to the trustees to pay in the first instance “all inheritance, estate, succession and transfer taxes” assessed against the taxable estate when requested in writing by the executor, without seeking recoupment or contribution from any other source, a general provision, which gives way to the specific provision in paragraph C of Article III that as to such taxes, except the Missouri estate tax, the trustees should charge against and deduct from amounts payable to beneficiaries under the main trust, including the trust shares, the amount of such taxes “proportionately attributable” to such payments or allocations. Under this construction the provisions of paragraph C of Article III and Article XIV are not repugnant, and they are all given effect and meaning. We reject the contention of appellants that they should receive the amounts named in Article V as payable to them without reduction for federal estate or state inheritance taxes.

This brings us to the alternative contention of appellants presented in their second point. They contend that if Articles III and XIV are construed adversely to their position, which we have done as to federal estate and Missouri inheritance taxes, then the trial court erred in holding that the amount of federal estates taxes “proportionately attributable” to the Article V non-charity distributees should be computed as proposed by the trustees. No contention is made that the formula used for Missouri inheritance taxes is erroneous. The formula approved by the trial court was to divide the federal estate tax ($4,918,840) by the net taxable estate ($9,-847,631) plus the $60,000 exemption, and then apply such resulting fraction or percentage (.496469817) to each payment or allocation to which the tax is attributable. The figure thus obtained constitutes the amount of federal estate tax proportionately attributable to such payment or allocation.

Appellants argue that the grantor did not intend this “harsh and confiscatory formula,” and that it does not give a “fair and reasonable” meaning to the words “proportionately attributable.” They point out that federal estate tax rates are based on a progressive or graduated scale; that once the grantor’s net trust estate exceeds the amounts of the specific gifts made in Article V, those distributees do not participate in the trust estate, but the larger the trust estate in excess of the sum of the Article V gifts, then the larger is the amounts to be received by the Irene, Helen and Dorothy trusts; and that the formula used by the trustees results in the “Article V non-charity distributees participating in the tax burden arising by reason of property being included in the taxable estate which is not part of the trust estate.” (We are not certain of the intended scope of this latter contention. Apparently it has reference to the fact that the non-trust and non-probate assets of the net taxable estate result in the application of a higher tax bracket. The tax generated by or resulting from these assets is required to be paid out of the corpus of the trust pursuant to Article XIV, which indirectly affects the amount of the Irene trust and directly affects the amounts of the Helen and Dorothy trusts). Appellants propose that a proper formula would be to determine a “constructive federal estate tax on the figure of $456,298 (the amount of the Article V non-charity gifts), and then determine a “constructive federal estate tax” on the balance of the taxable estate after subtracting therefrom the sum of $456,298. These two “constructive taxes” would then be totaled and the ratio of each to the total determined. Article V non-charity distributees would then have attributed to them that portion of the actual taxes equal to their ratio of the total of the two constructive taxes.

The primary objection to this proposal is that it operates upon a factual situation which does not exist. The burden of the federal estate tax is on the entire estate which generates or contributes to creating the tax, and it is on each part thereof. It is true that the federal estate tax is a graduated tax, but the graduation is a method of computing the total tax to be assessed against the total estate, and once computed the burden of that tax is then borne equally by every generating unit. There is no more reason to assume that the share of tax generated by a small gift was from the lower brackets than there is to assume that it was generated only from the highest bracket. We decline to accept appellants’ alternate formula.

The trustees, with the approval of the trial court, have charged against and deducted from Article V non-charity gifts the Missouri estate tax pursuant to a formula comparable to that used for the federal estate tax. Appellants challenge the application of that formula for several reasons other than that the Missouri estate tax is not included in the taxes designated in paragraph C of Article III. The Missouri estate tax is to be paid “by the executor * * * out of the assets of the estate,” Section 145.080 RSMo 1959, V.A.M.S., but when paid by the trustees pursuant to a written request of the executor as authorized and directed by Article XIV, the trustees are not to seek “recoupment or contribution” from any other source. We agree, that the Article V non-charity gifts are not to be charged with a portion of this tax, not because of any reason advanced by appellants in their second point in their brief, but because in our consideration of the first point we determine that it is not one of the taxes mentioned in paragraph C of Article III to be charged against and deducted from the amounts payable to the beneficiaries under the trust. There is to be no equitable apportionment of this tax (if in fact such apportionment could be made, which we doubt,) pursuant to the rule of Hammond v. Wheeler, Mo., 347 S.W.2d 884, and Jones v. Jones, Mo., 376 S.W.2d 210, because the grantor exercised his right to designate the fund from which it should be paid, and he provided in Article XIV that it should be paid out of the corpus of the trust estate, without right to seek recoupment or contribution from any other source.

The trial court further held that “the estate, inheritance or succession tax, if any, imposed by the State of Kansas or any other state, payable or paid by the plaintiff-trustees should be allocated, for the purpose of determining the amount deductible therefor through a computation made in the same manner as hereinabove provided for computing the deductions in respect to the Missouri estate tax or Missouri inheritance tax, as the case may be.” Appellants assert this was error because “there is no evidence in the record of this case that taxes of any nature will be assessed by any authority other than the federal government and the State of Missouri.” In their brief the trustees make no answer whatever to this contention.

From the record before us we do not see how the State of Kansas or any other state could assess an estate tax, but if they could and did, such tax is not included in paragraph C of Article III, and at least to that extent the judgment of the trial court is erroneous. However, the remainder of the judgment pertaining to inheritance or succession taxes assessed by other states is proper. We do not agree that evidence of the assessment of such tax had to be introduced. The judgment applies to the principle involved.

Appellants’ last point is that the trial court erred in denying their motion for allowance of attorney fees. This was done, apparently, on the theory that appellants did not prevail. However, we have determined that appellants should prevail as to the proposed allocation against their shares of the Missouri estate tax. Although the result reached was not precisely that advocated by appellants, it was a necessary incident of the first point in their brief. “A trust beneficiary who prevents a wrongful disposition of trust assets renders a benefit to the trust estate as much as the one who recovers back property wrongfully disposed of,” and where one “brings about the * * * protection of a fund in which others are entitled to share, those others will be required to contribute their proportionate part of counsel fees and expenses, and 'the equitable way to apportion these fees and expenses is to allow them against the fund.’ ” Jesser v. Mayfair Hotel, Inc., Mo., 360 S.W.2d 652, 661. In view of the fact that the judgment in this case must be reversed and the cause remanded for the correction of the judgment pertaining to the reduction of Article V non-charity gifts by reason of the Missouri (or any other state) estate tax, and in view of the fact that an improper disposition of trust assets to this limited extent has been prevented, the issue of attorney fees is also remanded for the discretionary consideration by the trial court according to the principles announced in Jesser v. Mayfair Hotel, Inc., supra, and other applicable cases cited therein.

The judgment is reversed and the cause remanded with directions to reconsider the issue of attorney fees to appellants, and to enter a new judgment in which the ultimate burden of the Missouri (and any other state) estate taxes is allocated as previously indicated herein (with the resulting changes in the computation of the Irene, Helen and Dorothy trusts) ; said judgment otherwise to conform to the judgment previously entered.

BARRETT and PRITCHARD, CC., concur.

PER CURIAM.

The foregoing opinion by STOCKARD, C., is adopted as the opinion of the Court.

All of the Judges concur.


source: Caselaw Access Project

license: Public Domain

text:
    Willis C. JONES and Betty Jones, Appellants, v. GARDEN PARK HOMES CORPORATION, a corporation, Fischer & Frichtel, Inc., a corporation, Clement McCarthy and Violet McCarthy, Respondents.
    No. 51071.
    Supreme Court of Missouri, Division No. 2.
    Sept. 13, 1965.

      Biggs, Hensley, Hughes, Curtis & Biggs, Ward Fickie, St. Louis, for appellants.
    Carroll J. Donohue, Shulamith Simon, Husch, Eppenberger, Donohue, Elson & Cornfeld, St. Louis, for respondents, Garden Park Homes Corp. and Fischer & Frichtel, Inc.
    Maurice L. Stewart, St. Louis, for respondents McCarthy.
   STOCKARD, Commissioner.

Plaintiffs have appealed from the judgment of the trial court dismissing their petition at the close of their evidence. By Count I they sought actual and punitive damages in the amount of $25,000, and by Count II they sought a declaratory judgment that title to certain land owned by them was not burdened with an easement.

Defendants offered no evidence, and the record does not indicate whether they had evidence to offer in the event their motions to dismiss had not been sustained. This is a court tried case, and pursuant to Civil Rule 73.01, V.A.M.R., we are to review the case upon both the law and the evidence as in suits of an equitable nature. In view of the record before us we cannot review the case on its merits. We can do no more than determine whether the trial court correctly entered judgment for defendants on both counts of the petition at the end of plaintiffs’ evidence.

On May 12, 1961, plaintiffs (designated as “purchaser”) and Fischer & Frichtel, Inc. (sales agent for Garden Park Homes Corp., the owner of the land) entered into a “Sales Contract” wherein it is stated that “real property situated in the County of St. Louis, State of Missouri, being described as Lot #21, * * * in Bellecoeur Plat 3 Subdivision,” together with improvements thereon to be erected, “this day is sold to purchaser.” It was provided in the contract that “Purchaser authorizes Seller [presumably Garden Park Homes Corp., the owner, although its name appears nowhere in the agreement] to order title search and certificate, stake out and spot survey and pay out required loan commitment fees, if any, for purchaser’s account and at purchaser’s expense.” Title was to pass “when sale is closed” under the “usual closing practices of the Metropolitan St. Louis Real Estate Board,” which were set out at the bottom of the instrument and which provided, among other things, that “Seller shall furnish a general warranty deed, subject to deed restrictions and zoning ordinances, easements, general taxes payable in current year, * *

On July 29, 1961, with no actual notice to plaintiffs, Garden Park Homes Corp. conveyed to Clement and Violet McCarthy, owners of land adjacent to said Lot 21 on the west, “an easement for a private roadway 50 feet wide,” which included the west fifty feet of Lot 21, and it was provided that the easement should “serve exclusively the McCarthys, their heirs, * *, and no electric or telephone poles shall be erected above ground on the westerly side of said easement [the west side of Lot 21] without the McCarthys’ consent.” It was further provided that “In addition Mc-Carthys and assigns shall have the privilege of placing a row of trees along the easterly side of said easement [fifty feet inside of Lot 21] opposite McCarthys present easterly line.” Garden Park Homes Corp. also agreed, as part of the consideration, to surface and pave a portion of the easement area. This easement was recorded on August 9, 1961.

On September 8, 1961, Garden Park Homes Corp. conveyed to plaintiffs by general warranty deed “Lot 21 of Bellecoeur Plat 3, according to the plat thereof recorded in Plat Book 99 page 5 of the St. Louis County Recorder’s Office, subject to building line, easements, restrictions and conditions of record.”

The plat referred to in the deed was labeled “Bellecoeur Plat 3,” and it was filed in the office of the Recorder of St. Louis County on April 27, 1961. On the plat there are provisions whereby Garden Park Homes Corp. “dedicated to the County of St. Louis, Missouri for public utility use, sewer and drainage purposes” the “easements shown on this plat, unless otherwise noted,” and whereby “The street designated on this plat as Chasselle Lane” was “dedicated to public use forever.” Lot 21 is shown to be 271 feet in length east and west, and 161 feet in width facing on Chasselle Lane. The plat contains a broken line across the west end of Lots 21, 22, 23 and part of Lot 20 with the identification of “15'’ W. Easem’t.” Broken lines on the plat indicate a 15-foot easement, with 7(4 feet on each of Lots 21 and 22, extending eastward 120 feet from the west boundary of the two lots. The identification on the plat is “7(4' W. Easements.” The purpose of these easements is not indicated on the plat, but apparently they are for public utility use, sewer and drainage purposes. On the plat there is another broken line extending across the west portion of Lots 21, 22, 23 and part of Lot 20, and it is identified as “50' wide Roadway Easement.” This fifty feet includes the fifteen foot easement across the west end-of the lots.

On the same day the plat was filed, there was also recorded what was captioned “Bellecoeur Plat #3 Restriction Indenture.” This was executed by Garden Park Homes Corp. by Edward F. Fischer, president. It was therein stated that Garden Park Homes Corp. was the owner of all the lots in Bellecoeur Plat #3, a subdivision, and it was then provided that the lots “shall be subject to the easements, conditions, restrictions, reservations and limitations as hereinafter set forth, to-wit: * * *. (2) Easements: All easements as shown on said plat shall be and the same are hereby set aside and reserved for wires, poles, water and gas mains, sewers and other subdivision utilities, essentials and facilities.” By paragraph (7) a board of trustees was appointed to consist of three individuals, and it was stated that the board “shall have the following rights and authority to wit: * * * (e) to exercise such control over the easements shown on the record plat except those easements which are now dedicated to public bodies and agencies as is necessary to maintain, supervise, and insure the proper use of said easements by the necessary public utilities, including the right (to themselves and to others to whom they may grant permission) to construct, operate and maintain on, under and over said easements and streets, sewers, pipes, wires, and other facilities and public utilities for service to the lots shown on said plat. * * * (h) Abandon an easement or portion thereof * * * when all the Trustees unanimously agree that there is no further use for same.” In paragraph (14) it was provided, after reciting various considerations, that “Garden Park Homes Corp., hereby grants, bargains, and sells, conveys, and confirms unto the said Trustees as joint tenants and not as tenants in common, and to the successor and successors of them as Trustees of Bellecoeur Plat #3, the following: Easements in, over, upon, and across such portions of said land as may now or hereinafter be designated as streets, roads, driveways, and paths as follows: The rights, benefits and advantages of having ingress and egress from and to, over, along and across such streets, roads, driveways and paths, and appropriately beautifying and maintaining the same;

Mr. Willis C. Jones, who with his wife were the purchasers of Lot 21 and are the plaintiffs in this action, testified that when he looked at Lot 21 with the salesman several weeks before he signed the “Sales Contract” he saw a 10 or 12-foot graveled road across the rear of Lot 21, and he was told by the salesman that it was “merely to provide egress and so forth into the McCarthy home.” He was not shown the recorded plat, no one told him a fifty-foot easement for roadway existed, and he was never told about the easement which was executed on July 29, 1961. The certificate of title, dated September 11, 1961, issued in plaintiffs’ names but which apparently was ordered and obtained by the “Seller” pursuant to the provisions of the “Sales Contract,” stated that “the fee simple title” to “Lot 21 of Bellecoeur, Plat 3” was vested in plaintiffs subject to a deed of trust, general taxes for 1961, “building line, conditions, restrictions and rights and powers of trustees, according to the plat of said Subdivision * * * and [two] instruments” recorded in the designated books, one of which was the instrument filed at the same time as the plat. No specific mention was made of a fifty foot easement for roadway purposes.

By Count I plaintiffs seek damages from defendants for fraudulently placing a fifty foot roadway easement on Lot 21 between the execution of the sales contract and the delivery of the deed. We shall consider first whether plaintiffs’ evidence, when accepted as true and given all favorable permissible inferences, would authorize a recovery. In our consideration we do not necessarily restrict ourselves to the precise theory pleaded because the pleadings may be presumed to have been amended to conform to the proof.

On May 21, 1961, Garden Park Homes Corp. received part payment for Lot 21 in the amount of $2,000 as earnest money, and “this day * * * sold” it to plaintiffs. The sale of the lot was subject to valid restrictions and easements then of record, and also subject to any lien for taxes. From that time until the transfer of legal title plaintiffs were the equitable owners, and Garden Park Homes Corp. held legal title for them as trustee. State ex rel. City of St. Louis v. Baumann, 348 Mo. 164, 153 S.W.2d 31; Hernandez v. Prieto, 349 Mo. 658, 162 S.W.2d 829; Branch v. Lee, Mo., 159 S.W.2d 677; Levine v. Humphreys, 297 Mo. 555, 249 S.W. 395; Savings Trust Co. of St. Louis v. Skain, 345 Mo. 46, 131 S.W.2d 566; Kansas City v. Kansas City Terminal Ry. Co., 324 Mo. 461, 23 S.W.2d 1006; 91 C.J.S. Vendor & Purchaser § 106b; 55 Am.Jur. Vendor and Purchaser § 356. Any subsequent conveyance of any portion of the title by Garden Park Homes Corp. to a third party without plaintiffs’ consent was wrongful as to plaintiffs, and constituted a violation of the contract to sell and a violation of the trust. In such situation various remedies are available. As stated in 92 C.J.S. Vendor & Purchaser § 299, the original purchaser may treat the contract as rescinded and recover the purchase money, he may sue to recover damages for the breach of the contract, and among other avail-able remedies, “where the conveyance was made with intent to defraud him is an action to recover damages for the tort.” See also the complete discussion of the available remedies in such situation in 55 Am.Jur. Vendor and Purchaser §§ 412-416, and particularly § 413 where it is stated that “An action ex delicto has been held to be an appropriate form of remedy in favor of a purchaser of real estate against his vendor, where the latter subsequently sells the property to a bona fide purchaser who acquires title to the property free and clear of the interest of the original purchaser.” Recognition of an action in tort in such situation also appears in Restatement Torts § 871.

We shall first assume, as plaintiffs contend, that the dotted line and identification on the plat did not create an easement for roadway purposes. In that event, when Garden Park Homes Corp. sold Lot 21 to plaintiffs on May 12, 1961, it agreed that at the designated time it would transfer the fee of Lot 21 to the plaintiffs unencumbered by a roadway easement, and that in the meantime it would hold such title in trust for the benefit of plaintiffs. Notwithstanding its agreement, and in violation of its trust, on July 29, 1961, with no actual notice to plaintiffs then or later when legal title was transferred, it purported to convey for value a portion of the title held by it to a third party. In so doing it violáted its contract, and its wrongful conduct constituted a tortious act to plaintiffs’ damage. In this factual situation, the trial court improperly entered judgment for defendants on Count I of the petition at the close of plaintiffs’ evidence.

We shall next assume, as defendants apparently contend, but this is not entirely clear, that by the dotted line on the plat and the identification thereon, a fifty foot roadway easement was created. We say the contention is not clear because defendants do not indicate whether such easement was in the public generally, whether it was reserved to Garden Park Homes Corp. for its exclusive use, or whether it was for the benefit of certain persons, or appurtenant to some other land. Neither do they indicate whether ownership of the easement was or was not in the trustees named in the restriction indenture. However, regardless of these unanswered questions, whatever the easement was which was created, it was no more than a fifty foot easement across the west end of Lot 21 for roadway purposes. It had nothing to do with the location of electric and telephone poles or the planting of a row of trees, and we find no basis for concluding that it was for the exclusive use of the McCarthys as a private roadway, nor that it should be paved. Therefore, if an easement was created by the plat, Garden Park Homes Corp. agreed on May 21, 1961, to convey to plaintiffs the fee of Lot 21 subject to that easement, but plaintiffs did not agree that they should receive the fee subject to a greater burden. Notwithstanding, on July 29, Garden Park Homes Corp. in violation of the contract and its trust, purported to convey to the McCarthys “an easement for a private roadway” over the precise area of the easement created by the plat and stated that it should “serve exclusively the McCarthys.” It also purported to convey away the right of plaintiffs to have the west fifteen feet of Lot 21 used for “electric or telephone poles,” and it purported to grant to third parties the right to place a row of trees fifty feet inside of Lot 21. In this manner, Garden Park Homes Corp. purported to convey to the McCarthys an interest substantially in excess of the burden of the roadway easement. If a roadway easement was created by the recorded plat, we have difficulty in determining on what theory Garden Park Homes Corp. had title to it so that it could disturb it in any manner. But, in any event, its conveyance to the McCarthys was not limited to the easement for roadway purposes created by the recorded plat. It conveyed away a substantial portion of the title it had contracted to convey to plaintiffs, and its acts were tortious as to plaintiffs.

For two reasons we expressly do not rule whether or not some interest (in someone or the public generally) in the form of a roadway easement was created by the recorded plat. First, the only issue now before us for decision is whether judgment should have been entered for defendants at the end of plaintiffs’ evidence, and we have determined that it should not. Second, defendants’ evidence is not before us. This demonstrates why in most court tried cases a full and complete review on appeal should not be prevented by hearing only the plaintiffs’ evidence.

We turn now to Count II of the petition, which is an action for a declaratory judgment in the nature of a suit to quiet title. The judgment of the trial court was that “this cause be and is hereby dismissed.” This was erroneous. This court has held that when a party by proper action seeks to set up title in himself he “ ‘is entitled to an adjudication of his existing title, and if he have no title the court should so adjudge or decree.’ ” Evans v. Brussel, Mo., 300 S.W.2d 442. See also the cases there cited, and particularly Kingston v. St. Louis Union Trust Co., 348 Mo. 448, 154 S.W.2d 39, and Pitts v. Pitts, Mo., 388 S.W.2d 337.

There is another reason why we reverse the judgment as to Count II in this case on the record before us. Plaintiffs contend that they own Lot 21 free and clear of an easement for roadway purposes. The McCarthys rely, among other defenses, on the conveyance to them on July 29, 1961 from Garden Park Homes Corp. That conveyance purports to provide that the west fifteen feet of Lot 21 may not be used for electric and telephone poles without the consent of the McCarthys, but on the plat it is provided that “easements shown on this plat, unless otherwise noted” are “dedicated to the County of St. Louis for public utility use * * St. Louis County did not join in the conveyance to the McCarthys, and from the record before us we question the right of Garden Park Homes Corp. to take away that which it previously dedicated to St. Louis County. In addition, by the restriction indenture Garden Park Homes Corp. provided that “all easements as shown on said plat shall be and the same are hereby set aside and reserved for wires, poles, water and gas mains, sewers and subdivision utilities, essentials and facilities.” This presents a question as to whether Garden Park Homes Corp. could subsequently grant the “exclusive” use of the fifty foot area to the McCarthys, or deny the use of the fifteen foot area for the reserved purposes. If the above language of the restriction indenture did not include the fifty foot roadway easement, the same instrument also conveyed to the named trustees “Easements in, over, upon, and across such portions of said land as may now or hereafter be designated as * * * roads, * * *.” The extent of this conveyance is somewhat confusing by reason of the language used, but it extended to “The rights, benefits and advantages of having ingress and. egress from and to, over, along and across such * * * roads, * * *.” The trustees did not join in the execution of the conveyance to the McCarthys. We point out these matters to demonstrate that there are unanswered questions pertaining to the interests of plaintiffs and of the Mc-Carthys. The dismissal of Count II whereby plaintiffs sought a declaration of those interests was improper.

The judgment is reversed and the cause remanded.

BARRETT and PRITCHARD, CG, concur.

PER CURIAM.

The foregoing opinion by STOCKARD, C., is adopted as the opinion of the Court.

All of the Judges concur.


text:
    Frank PARISH and Doral Parish, Respondents, v. Frank USKALI and Alice J. Uskali, Appellants.
    No. 50749.
    Supreme Court of Missouri, Division No. 2.
    Sept. 13, 1965.

      Neale, Newman, Bradshaw, Freeman & Neale, O. J. Taylor, Springfield, for respondents.
    Anthony P. Nugent, Jr., Kansas City, Donnelly & Donnelly, Lebanon, Winger, Nugent, Rayburn & Adams, Kansas City, of counsel, for appellants.
   STOCKARD, Commissioner.

This is an appeal by defendants from a judgment favorable to plaintiffs in their suit for a declaratory judgment to construe a contract and against defendants in their counterclaim wherein they sought rescission of the contract and actual and punitive damages in the amount of $200,000.

Defendants Frank Uskali and Alice J. Uskali, his wife, were the owners of a tract of undeveloped land situated on the shores of the Lake of the Ozarks on the Little Niangua arm of the lake in Camden County. Their land included what was known as Big Island which had about three miles of shore line and was joined to the mainland by a narrow neck of land. Although defendants had plans for the commercial and residential development of their land, they were not able to finance the development themselves, and prior to 1959 had not been able to interest anyone else in developing it.

In 1959, after discussion and negotiation, plaintiffs and defendants entered into a contract dated July 1, 1959, wherein it was agreed that plaintiffs would develop -Big Island and sell lots to the public. Plaintiffs agreed to pay to defendants $5,000 in cash, and to pay to the First National Bank of Camdenton the sum of $12,000 to retire an indebtedness of defendants secured by a deed of trust on Big Island. Defendants were to give plaintiffs a note for $12,000, with interest at 7% but with no provision for payment except from a portion of defendants’ share of the proceeds of the sale of the lots. It was also provided that plaintiffs were to pay “all costs of promotion and development of said lands for sale to the public.” Plaintiffs and defendants were each to receive one half of the proceeds from the sale of the lots. Paragraph 2 of the agreement, about which the parties cannot now agree as to its meaning, is as follows: “First parties [defendants] agree that Second Parties [plaintiffs] shall have complete control and authority over the development and sale of said lands with no hindrance from any party whatsoever and Second Parties shall devote their best efforts to such development and sale.”

On August 4, 1959, the parties executed what was entitled a “Modification and Addendum to Contract.” In it the legal description of Big Island was set forth, and among other things it was provided that plaintiffs “shall not sell any lots fronting on the Lake of the Ozarks for less than Eighteen Dollars ($18) per lake front foot” unless by agreement of the parties or as the result of the decision of a named arbiter, and further, that because the market value of lots may fluctuate the parties should meet at such times and places as are mutually agreed upon to confer about property valuations. It was expressly provided that “with the exception of the matters herein contained” the contract dated July 1, 1959, “shall in all other respects remain valid, binding, and enforceable.” Other provisions of the two contracts will be mentioned in the course of this opinion.

Plaintiffs paid the $5,000 to defendants and the $12,000 to the bank, and defendants executed the note. Plaintiffs then spent approximately $11,000 in developing the land and advertising the lots for sale. R. W. Vincent, admittedly a competent surveyor and engineer, was employed by plaintiffs to lay out a subdivision composed of 65 lake front lots entitled Big Island Lake Sites. A plat of the subdivision was prepared, and defendants signed and acknowledged it for recording in the office of the county recorder of deeds. At the same time there was also prepared by plaintiffs and executed and recorded by defendants an instrument entitled “Restrictions and Conditions Affecting Big Island Lake Sites,” which provided, among other things, that no “commercial building” should be erected on any lot unless the plans and specifications be first approved by the “Dedicators,” identified as the defendants, and that no “residential building” should be erected on any lot unless the plans and specifications “have first been submitted to Frank Parish of Camden County, Missouri, the Developer,” for his approval. No objection by defendants was made to the above plat or to- the restrictions.

After a substantial number of lots in Big Island Lake Sites were sold, plaintiffs again employed R. W. Vincent to lay out a second subdivision to be known as Big Island Lake Sites, First Addition. A plat was prepared showing 101 lake front lots of varying sizes and depths. Back of each lot was shown a road named Lake Shore Drive which provided the only access to any of the lots except by water. When this plat was submitted to defendants they refused to sign it until they changed the dedication statement thereon to provide that the subdivision shown by the plat was no more than a “proposed subdivision,” that it was “proposed” that Lake Shore Drive be dedicated to public use, that it was “proposed” that the “proposed lots” be sold subject to restrictions that were to be recorded at the same time, and that “the undersigned owners [defendants] reserve the right to abandon in whole or in part the proposed plat” except a small portion thereof pertaining to Lot 8 and the road leading to it.

At the time the “proposed” plat was recorded defendants recorded a “Declaration of Restrictions” applicable to all of Big Island Lake Sites. The restrictions varied substantially from the restrictions applicable to Big Island Lake Sites, and defendants as “owners” reserved to themselves the right to approve the plans and specifications of all buildings and structures. It is obvious that the ability of plaintiffs to sell lots in the new subdivision was practically eliminated when the location of the only access road to the lots was not fixed and the road was not dedicated to public use, when the size of lots was subject to change, and when plans and specifications for construction of homes had to be approved by persons who did not live in the area and the sale of a lot and approval of plans could not be made at the same time.

It appears that the principal objection of defendants to this seeond plat, as prepared by Mr. Vincent for plaintiffs, was that in their opinion certain of the lots were too deep. Plaintiffs’ explanation, and the explanation of Mr. Vincent, was that these particular lots had a very steep grade running back a little more than 100 feet from the shore line which made the lots undesirable as building sites unless the depth was increased to provide a level area. Appellants’ surveyor admitted that the grade was approximately 50% and that it would not be feasible to build a house there.

By their petition plaintiffs sought a declaration that pursuant to the agreement between the parties as evidenced by the instruments dated July 21 and August 4, 1959, (1) plaintiffs have complete authority and control over the development and sale of the land described therein; (2) said authority includes the right of subdividing said land, and the preparing of plats and restrictions and conditions applicable thereto; (3) defendants were bound and obligated under said contract to execute the plat to Big Island Lake Sites, First Addition, in the form presented to them by plaintiffs, and to execute restrictions and conditions applicable thereto which would be identical in- substance to those theretofore executed with respect to Big Island Lake Sites; and (4) defendants were without right to alter the aforesaid plat, in the manner they did, or to file a declaration of restrictions differing in any material respect from the restrictions and conditions theretofore executed by them.

In defendants’ answer they denied “the execution of a valid and enforceable contract” and stated that the instruments dated July 1 and August 4, 1959 are nullities “in that (1) at the time of the execution of each of said instruments, each of the defendants lacked the legal capacity to enter into a contract because each defendant was then suffering from mental illness, (2) defendants have never ratified said alleged agreements and acts, and (3) the signatures of each of said defendants to each of said instruments were secured by plaintiff Frank Parish by means of duress, threats and fraudulent representations to defendants at a time when said plaintiff knew defendants were mentally ill.” It was also alleged that the agreements “are void for failure of consideration in that plaintiffs have committed numerous serious and substantial breaches of said alleged agreements.” Defendants also filed a counterclaim in three counts. In the first count they incorporated the allegations of their answer and prayed that the court enter its decree “rescinding and cancelling said agreements.” In the second count they alleged that plaintiffs had breached the agreement in seven respects, and they prayed that the court enter its decree “rescinding and cancelling the agreements,” and that it enter judgment in their favor in the amount of actual damages. The third count was for punitive damages.

After trial before the court without a jury, the trial court filed its memorandum of findings of facts and conclusions of law, the substance of which was that “after observing the defendants for three days during trial of this case, [it] has concluded that they are unusually intelligent and that they were at the time of the execution of the contracts as well informed as the average person about the development of lake property in Camden County, that being financially pressed in 1959 and being desirous of having Big Island developed, they executed the contracts after many discussions during which defendants intelligently discussed the project and made various proposals and counter proposals as to the terms of the contracts, * * *.” The court further found that there was “no evidence * * * that plaintiffs fraudulently misrepresented the facts and there is no evidence that defendants executed the contracts under duress or threats, [and] that there is no proof that plaintiffs have breached the contracts so that defendants are entitled to have them rescinded or that defendants are entitled to damages for alleged breach.” The court concluded that at the time of signing the contracts defendants “were mentally competent, intelligent persons, that they realized full well the terms of the contracts, that they executed them of their own free will in the absence of any fraud, duress or threats, that the contracts are not unconscionable and that they are enforcible as executed.” The court then entered judgment accordingly, and decreed therein that “under a true and proper construction of said contracts, the plaintiffs have complete control and authority over the development and sale of the land described therein, including the right of sub-dividing said land and preparing plats and restrictions and conditions applicable thereto;” that defendants were “bound and obligated to execute a plat to Big Island Lake Sites, First Addition, in the form presented to them * * * and to execute restrictions and conditions applicable thereto, identical in substance to those theretofore executed by defendants with respect to Big Island Lake Sites.” It was then ordered and decreed that defendants place on file with the Recorder of Deeds of Camden County an amended plat to Big Island Lake Sites, First Addition, in the form presented to them by plaintiffs, and that they execute and record conditions and restrictions applicable to Big Island Lake Sites, First Addition, identical in substance to those recorded with respect to Big Island Lake Sites.

In the first point in their brief defendants assert that the trial court erred in ruling that the contracts were supported by adequate consideration and that they were not unconscionable. We do not agree.

In regard to the issue of adequate consideration, defendants present no reasons in support of their contention in either the point in their brief or in the argument. We find that the consideration moving from plaintiffs to defendants was substantial. Plaintiffs paid to defendants $5,000 in cash, and they also paid a $12,000 note owed by defendants with no duty on the part of defendants to repay that amount to plaintiffs except from a portion of their share of the proceeds of the sale of lots. Plaintiffs were required to pay “all costs of promotion and development,” which at time of trial amounted to $11,000, with no right to charge any part thereof to defendants, and plaintiffs promised to “devote their best efforts to such development and sale.” In addition, defendants were to receive one half of the proceeds from the sale of the lots with no work or investment of money on their part. There is no evidence of the value of the land in its undeveloped condition or as to the original cost to defendants.

The above statement of the consideration moving from plaintiffs to defendants, without the need for discussing the basic principles involved, establishes beyond doubt that the contracts were supported by adequate consideration. See Vondera v. Chapman, 352 Mo. 1034, 180 S.W.2d 704; Brown v. Weare, 348 Mo. 135, 152 S.W.2d 649, 136 A.L.R. 286; 17 Am.Jur.2d Contracts § 92. In addition, there can be no possible basis for a contention that the consideration moving from plaintiffs to defendants is so disproportionate from the consideration moving from defendants to plaintiffs that the contracts are unconscionable, and we do not understand defendants to so contend.

Defendants’ argument in support of their contention that the contracts are unconscionable is directed solely to the proposition that “each of the defendants lacked the legal capacity to enter into a contract because each was then suffering from mental illness.” Defendants’ contention necessarily is that the trial court arrived at the wrong conclusion concerning the mental capacity of defendants at the time they executed the contracts, and that a contract entered into with persons with the mental capacity then had by defendants is unconscionable. However, although the trial court expressly found as a fact that at the time the contracts were executed defendants were mentally competent, neither in their motion for new trial nor in a point in their brief do they expressly challenge that finding. Neither do they specifically assert that the evidence of their competency is not sufficient to support the judgment, and there can be no question whatever but that it is. Testimony of persons who were with them at the time, and who negotiated with them concerning the terms of the contracts, was clear, concise and substantial to the effect that they acted and spoke rationally, and that they displayed an unusual ability in discussing the terms of the contracts. Therefore, the issue really is whether in our review pursuant to Civil Rule 73.01(d), V.A.M.R., of the case upon both the law and the evidence we would reach a conclusion as to the mental capacity of defendants different from that of the trial court. However, we are admonished by the rule that a judgment is not to be set aside unless clearly erroneous, and that due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.

Mrs. Joan Jordan, the daughter of Mrs. Uskali and the stepdaughter of Mr. Uskali, testified by deposition that both defendants were highly intelligent and that she did not know of any diagnosed mental difficulties of either of them prior to July 1959. She then testified that prior to July 1959 there were “a lot of little things that happened” which caused her to believe “something was wrong.” She said that defendants were highly suspicious of everybody and thought people were watching them and that their house was “bugged.” She also stated that Mr. Uskali was highly excitable and that at times she had trouble in understanding him. When Mrs. Uskali signed the contract dated July 21, 1959, she was living with her daughter in Overland Park, Kansas, and was working. Mrs. Jordan related that her mother had a “complete breakdown” on Easter Sunday in 1960, which resulted in medical treatment and shock treatments. On the other hand Mr. Parish and Mr. Low, an attorney, testified that during the negotiations of the contracts Mr. Uskali was rational and that they could understand him at all times. Both defendants testified, and the trial court had the opportunity to observe them on the witness stand. From their testimony we find that at the time the contracts were negotiated, Mr. Uskali discussed the terms and suggested changes and made proposals for additional provisions. In his testimony at the trial he unquestionably demonstrated an unusual ability and knowledge concerning the development of lake property. Defendants’ counsel refers in the brief to testimony of Mr. Uskali to show “how incomprehensible and rambling” he can be. We do not so construe that testimony. It is our impression from all of his testimony that he is a headstrong person of strong convictions, and that the particular testimony referred to indicates a studied effort on his part not to confine his answers to the questions asked.

When we review all the evidence on the issue of mental capacity of the defendants we conclude that there is more than sufficient evidence to support the judgment of the trial court, and when we review the evidence de novo, and give consideration to the opportunity of the trial court to observe the witnesses, other than Mrs. Uskali’s daughter, and to judge their credibility, we necessarily reach the same conclusion as the trial judge, that is, that although defendants displayed an excitable nature and in the case of Mr. Uskali, a tendency to be headstrong, they are unusually intelligent, well versed, extremely careful in their dealings with others, and mentally competent at the time of trial and at the time the contracts were negotiated and executed. We find no merit to defendants’ first point.

Defendants’ second point is that the trial court erred in ruling “that the contracts had not been breached by the plaintiffs and that defendants were not entitled to have said contracts rescinded or cancelled because in fact there had been numerous breaches of the agency relationship by plaintiffs * * The alleged breaches are not set out in the point.

Defendants first argue that they “pleaded numerous, serious and substantial breaches,” and they refer to the allegations “that plaintiffs have misused and wasted defendants’ property and that plaintiffs have exercised dominion over and appropriated to their own use defendants’ property against the interests of defendants.” They then add that “Evidence as to these matters was admitted,” but they neither set out the evidence nor refer to where it may be found. Defendants did plead that plaintiffs breached the contracts, but pleading alone, when denied as was done in this case, does not constitute proof. Defendants add that “Other serious breaches of the contract were proved at trial,” and they set forth several examples which we shall now examine.

Defendants assert that their engineer testified to numerous examples of violations of the building restrictions. We find that this witness stated that he found several instances, apparently on Big Island Lake Sites subdivision, where a building was too close to the line. In two instances the adjoining lot was vacant, and as far as is shown by the record the vacant lot may have belonged to the owner of the lot where the alleged violation occurred. There was no showing that Frank Parish approved plans and specifications which included the alleged violations. By the recorded restrictions defendants reserved to themselves, with other owners of the lots, the right to prevent violations. Therefore, if there were violations of the nature testified to by defendants’ engineer, defendants were equally at fault, as far as is shown by the record, for permitting them to continue, and of this they will not be heard to complain.

Defendants next argue that “Both the engineer and Mr. Uskali testified as to the waste of land involved in moving the road in Big Island Lake Sites, First Addition, back so far from the shoreline.” The trial court found that plaintffs had the right to do this under the contracts, and the evidence convinces us that the physical condition of the land justified the decision of plaintiffs to do so. We agree, and we subsequently rule, that the contracts gave plaintiffs that right.

Defendants next assert that “plaintiffs had acquired title to certain lots without knowledge of defendants by the exercise of the power of attorney by the person who was given such power in the contracts.” Defendants do not point out what provision of the contract they contend was violated. They do not contend that the price was not adequate or proper, or that they did not receive their share. The evidence shows that a developer frequently builds in a subdivision in order to get the sales of lots started. Other than lack of knowledge until after the transfer of title, defendants apparently have no objection, and at no time did they claim that damage resulted to them. Finally, while cross-examining Mr. Parish at the trial appellants’ counsel made this statement: “I would have to make the admission to the court and before you that it was agreed that you had a right to buy any lots you wanted to and build on any lot you wanted to, just as you did down there, * *

The next contention is that “The court heard evidence of a number of occasions on which plaintiffs built on the property of defendants without notice to or permission of the defendants.” No evidence is set out and no reference is made where that evidence can be found. A reference is made to a portion of the transcript where Mr. Parish explained the procedure whereby he sold lots and contracted to build for the purchaser. But, there is no contention that defendants did not get their share of a proper price for the lots, and the record indicates that counsel for appellants approved the procedure followed. We find no merit to defendants’ second point in their brief.

The third and last point is that the trial court erred in ruling that “a true and proper construction of said contracts gave plaintiffs complete control and authority over the development and sale of the land described therein, including the right of subdividing said land and preparing plats and restrictions and conditions applicable thereto, because under the applicable law of Missouri there was no meeting of the minds of the parties and the intentions of the parties govern ambiguities and such ambiguities should here have been decided in favor of defendants.” Defendants have reference to paragraph 2 of the agreement dated July 21, 1959, which in its material part was as follows: “First Parties [defendants] agree that Second Parties [plaintiffs] shall have complete control and authority over the development and sale of said lands with no hindrance from any party whatsoever, * * Defendants contend that this provision means that plaintiffs were to “have the right to promote the sale of the land and shall act as the agents of [defendants] for the purpose of selling the lots on the island and shall be free to promote and sell such lots without hindrance from the [defendants], but the [defendants] are in turn free to participate in the planning and development of the island, including the platting and the imposition of restrictions and conditions upon the use of the land.” We cannot agree with defendants’ interpretation. We are inclined to consider the meaning of paragraph 2 to be plain, clear and unambiguous, and that no judicial construction is called for. In such event the unequivocal language is to be given its plain meaning and enforced as written. Allen v. Globe-Democrat Publishing Company, Mo., 368 S.W.2d 460, 463. However, for the purposes of this opinion we shall consider the language to be fairly susceptible to different constructions, and for that reason we shall look to the circumstances, the purposes of the provision, and the context in which used in order tp ascertain the intent of the parties. Wilson v. Owen, Mo., 261 S.W.2d 19, 23.

In the two contracts forming the complete agreement between the parties, it was provided that plaintiffs should “pay all costs of * * * development of said lands for sale to the public.” The construction placed by the defendants on this duty of plaintiffs is at least some evidence as to the construction which should be placed on the provision in the following paragraph that plaintiffs “shall have complete control * * * over the development and sale of said lands.” Landau v. Laughren, Mo., 357 S.W.2d 74. We find no contention that the term “development” as used in connection with the payment of the costs should not include the cost of platting the island and drafting the restrictions and conditions. At least there was no offer by-defendants to pay what would be their share under their theory. Aside from this, however, when all the terms are read together and paragraph 2 is considered in context, we find that the agreement of the parties included the following. Plaintiffs were to pay all the costs for developing the land for sale by lots. This included the cost of locating and building roads, surveying and subdividing the land into lots, and the cost of determining and preparing the restrictions on the use of the land. These were the essential activities necessary to prepare, that is, develop the land so that lots could be made available and attractive to potential purchasers. In carrying on these acts of development, plaintiffs were to have complete control with no hindrance from any party, which included defendants, except as otherwise provided in the agreement. We find that it was otherwise provided that plaintiffs’ complete control was to be limited in the following respects: (1) they could sell lots for residential purposes only, (2) they could not sell lots fronting on the lake for a price less than $18 per lake front foot unless defendants agreed or unless the price was set by the named arbiter, (3) they could not enter into any lease or option agreement in connection with the sale of the lots, (4) they could not cause assessments to be made against any lot which would place a cloud on the title or constitute a lien or encumbrance, (S) they could not sell certain designated lots reserved to defendants, (6) they were to meet and confer with defendants about property valuations, and (7) “should any dispute arise between [plaintiffs and defendants] in connection with the subject matter of this contract [dated August 4, 1959] and the parent contract above referred to [dated July 21, 1959], that such dispute shall be referred to John F. Low, * * * and he shall act as sole arbiter in said dispute, and his decision shall be binding on all parties hereto.” We find no statement as to whether the arbitration provision was complied with, and if not, why not. We assume the parties have waived it, or have agreed that it is not applicable.

Mr. Low testified that the provisions of paragraph 2 of the contract dated July 21, 1959 were fully and completely discussed by the parties during the negotiations, and some of the restrictions set out above on the exercise of complete control by the plaintiffs were included at the suggestion of Mr. Uskali. The substance of defendants’ testimony is that the provision was discussed, but that they did not then understand that plaintiffs’ right extended beyond the right to sell the lots without their interference. The purpose of the provision is obvious, and the reasonableness of it and the necessity for responsibility and control over such matters not to be spread among several persons is best demonstrated by what happened in this case when defendants assumed the authority to veto the decisions of plaintiffs and their surveyor and engineer. Mr. Parish testified that he insisted during negotiations on having control over the location of the road, the surveying and the subdividing “because I certainly wasn’t going to put up my money and have somebody else do the developing.” There was, in our opinion, a complete and full understanding of the provision, its purpose and its effect, and there is no equitable or legal reason why this court should rewrite the contract by judicial interpretation to express a meaning different from that which is obvious from the words used, and different from the meaning when the provision is considered in context, in connection with its purpose, and in view of the attending circumstances. Defendants understandingly sold to plaintiffs this right of control over the development of Big Island, subject to the expressed limitations, for what we consider to have been an adequate and legal consideration, and we see no reason why they should be excused from their bargain. What we have said does not, of course, mean that plaintiffs have the right to be arbitrary and unreasonable in the exercise of their control, but defendants have not demonstrated arbitrary and unreasonable action, and their contentions on this appeal are not directed to that but to the proposition that they and not plaintiffs have the ultimate right of control. Defendants’ third point is without merit.

We find no error prejudicial to defendants, and the judgment is affirmed.

BARRETT and PRITCHARD, CC., concur.

PER CURIAM.

The foregoing opinion by STOCKARD, C., is adopted as the opinion of the Court.

All of the Judges concur.