Isaac H. TAYLOR, Administrator of the Estate of Clarence W. Taylor, Plaintiff,
Vera M. HOWETT, Executrix of the Will of Mary E. Taylor and Equitable Security Trust Company, a corporation of the State of Delaware, individually and as Trustee u/a/w Mary E. Taylor, dated June 16, 1953, Defendants.
William E. Taylor, Jr., and A. James Gallo, Wilmington, for plaintiff.
[39 Del.Ch. 570] Max S. Bell, Jr., of Richards, Layton & Finger, Wilmington, for defendants.
MARVEL, Vice Chancellor.
Plaintiff, who on May 10, 1955 qualified as administrator of the estate of his father, Clarence W. Taylor, brought this suit on May 23, 1955 for the purpose of having set aside a revocable trust agreement which Mary E. Taylor, wife of Clarence W. Taylor, executed shortly before her death on July 18, 1953, and in which Equitable Trust Company (now Bank of Delaware) was named trustee.
Plaintiff's theory of his case is that Mrs. Taylor, who was almost seventy eight years of age and ill at the time of the execution of the trust agreement and who had for many years relied for financial advice on certain officials of the defendant corporation, was persuaded to execute an agreement
allegedly containing advantages to the bank and the defendant Vera Howett, a bank employee, while the advantages gained thereby by Mrs. Taylor were at the most minor; that the settlor was at the time not only senile and legally incapable of executing the document under attack but was also unduly influenced. A novel aspect of the action is that it is derivative in form, plaintiff as administrator of his father's estate (which would be benefited under the terms of Mrs. Taylor's last will and testament should the trust be set aside) having allegedly sued because demand for action from Miss Howett, executrix of Mrs. Taylor's estate, would be to no avail in the light of her long employment and loyalty to the corporate defendant and the part played by her in the preparation and execution of the trust agreement sought to be set aside. It is also alleged that others concerned in the execution of the trust were also employed by the bank and accordingly interested in promoting its business affairs rather than in the preservation of the decedent's estate. It is finally contended that the trust agreement under the terms of which the bulk of Mrs. Taylor's assets were siphoned off from what was shortly to constitute her estate was in effect a testamentary device not executed in conformity with the laws of Delaware governing the execution of wills. The relief sought in addition to the setting aside of the trust agreement is that the bank be ordered to account to the executrix for all moneys received by it as trustee and that plaintiff be awarded his costs and counsel fees.
[39 Del.Ch. 571] In its answer the trustee admits the execution of the agreement and the receipt of the bulk of Mrs. Taylor's assets in trust as a result of the execution of the instrument which plaintiff attacks. It concedes that for a number of years prior to his death on October 15, 1950, Mrs. Taylor had relied on one John L. Carney, an employee of the bank, for financial advice but denies that it had more than two or three days prior notice of the suit. It admits no formal demand for action was made on the executrix and professes to have no knowledge as to whether or not a demand would have been nugatory. The answer concludes by denying that the trust agreement was in effect a will. All of these allegations are adopted by the executrix in her answer. Following a pre-trial conference the bank was permitted to plead the additional defense of laches.
The basic facts around which this dispute centers are not complex. However, those called to testify for and against the validity of the trust gave drastically conflicting pictures of the state of health of Mary E. Taylor during the period which elapsed between her departure from the Taylor lodgings in Atlantic City on April 6, 1953 and the date of her death in Wilmington on July 18 of the same year. And because the state of Mrs. Taylor's health at the time she created the trust is the underlying issue in this case it is incumbent on the Court to resolve this conflict in the light of the principle that proof of mental incapacity rests on the party alleging it, Frazer v. Frazer, 2 Del.Ch. 260; Reeve v. Bonwill, 5 Del.Ch. 1; Eidelsburger v. Ballance, 29 Del.Ch. 378, 50 A.2d 903, and Greenbaum v. Keil, 30 Del.Ch. 425, 62 A.2d 441. Further, it has been held that a virtual gift by deed to a son will be closely examined when the grantor is charged to have been lacking in mental capacity, Jones v. Thompson, 5 Del.Ch. 374.
Plaintiff would have the Court believe that on June 16, 1953 when she executed the document under attack Mrs. Taylor was so ill and disoriented by reason of cerebral arteriosclerosis as to be entirely incapable of understanding its significance, or at least senile to such a degree that she was improperly persuaded to execute a document which in addition to altering the pre-existing arrangements of her last will and testament for the benefit of her friend, Sarah Alexander, served no vital purpose.
[39 Del.Ch. 572] The trustee on the other hand presents a picture of an apprehensive but mentally
competent aged person who knew quite well what she was doing when a month before her death she executed a document which not only reasonably affected the dispositive scheme of her last will and testament but transferred title to her securities to a corporate trustee which could then not only pay her living and other expenses directly but handle more efficaciously matters having to do with the purchase and sale of stock and the like.
The clain of events leading up to the execution of the controversial trust agreement is as follows. Mrs. Taylor's stepdaughter, Mrs. Mildred Gault, having been notified by the Taylors' landlady by telephone on the night of April 6, 1953 that Clarence W. Taylor had suffered a stroke in Atlantic City, immediately brought both her father and her stepmother back to the Gault home in Camden, New Jersey by ambulance. The Taylors were then installed in a bedroom in the Gault home and Edwin A. Preis, a physician known to Mrs. Gault and who had treated members of the Gault family, was called primarily if not solely  to attend the stricken and paralyzed Mr. Taylor who for some time thereafter was bedridden. Mrs. Taylor remained at the Gault residence until May 14, 1953, at which time apparently not only to ease the burden on Mrs. Gault but in response to Mrs. Taylor's own wishes and Dr. Preis' suggestion she was moved to the home of Sarah Alexander in Wilmington. Mrs. Taylor's friendship with Mrs. Alexander, nee Sarah Dougherty, dated back to their youth in Wilmington, a city where Mrs. Taylor was born and had lived until 1924, when at the age of forty-nine she married Clarence W. Taylor, a widower fifty-five years of age, and moved to Atlantic City. Perhaps it is needless to say their marriage was barren. In the light of Mrs. Taylor's later actions in reference to her property, a large part of which was apparently inherited from a brother, it is significant that throughout her [39 Del.Ch. 573] life Mrs. Taylor was a devout Roman Catholic while her husband was not of that faith.
Notwithstanding the move to Atlantic City Mrs. Taylor maintained close ties with Wilmington. For instance during the period of almost thirty years between her marriage and death she continued to use Wilmington depositories for her not inconsiderable property and in two 1949 wills and a codicil to the latter executed in the year following, gave her address as Wilmington. In an earlier 1941 will she had to be sure stated her address to be Atlantic City but named the corporate defendant as executor or on its failure to qualify John L. Carney, a bank employee. Furthermore, I am satisfied that Mrs. Taylor during this period kept in touch with the Alexander family and with her personal advisers at the bank. Accordingly, assuming that she was then capable of rational decision, it was not unreasonable for her to move to the home of an old friend in Wilmington in May of 1953 in view of her husband's serious illness and the frailty of her own health. I am also satisfied that Mrs. Taylor for reasons personal to her never intended to make her husband her principal beneficiary in the event she predeceased him. Her 1941 will made no mention of him, and while her first 1949 will left Mr. Taylor certain specific items and a ...