OPINION. We have read over the record of the proceedings at the trial of this cause and it may be said generally that there was evidence tending to sustain the material facts as pleaded by the respective parties, that is, as to the issuance of the policy, its terms and the beneficiaries thereunder, collection of the installments by the defendant Clyde S. Fisher, as trustee, as they respectively became due, and that he had in his hands at the institution of this suit at least the amount admitted by him. The testimony was conflicting as to the relations between Mrs. Scammell and her family and defendant Fisher and his. *Page 56
In our view of the case, it turns upon the construction of the provision or rider to the insurance policy, which, to repeat as far as necessary, provides:
"The said two hundred and forty monthly installments or such of them as remain unpaid shall be paid, each as it becomes due, to Clyde S. Fisher, brother of the insured, trustee for Pearl Lucille Fisher, daughter of the insured, if said Pearl Lucille Fisher be living on the due date of such installments, otherwise to Maude S. Fisher, mother of the insured, if said Maude S. Fisher be living on the due date of such installment."
The payments are limited to 240 monthly installments.
Pearl Lucille Fisher, the daughter of the insured, being alive on the due date of all the installments that have so far fallen due after the death of the insured and of his wife, the first named beneficiary, undoubtedly became entitled to receive those installments through her trustee, Clyde S. Fisher.
We think that it is beyond question that the trust created by the policy or, more accurately, its rider, is a passive, dry trust, uncoupled with any interest or duty in the trustee with respect of the fund beyond its collection from the Insurance Company and payment of it to the beneficiary, and that he has no right, looking at the terms of the trust itself, to withhold the same from plaintiff or, she being a minor, her duly appointed guardian.
That this is a simple or dry trust is clear, a reference to accepted authorities conclusive shows. Thus, in 2 Perry on Trusts and Trustees (6 Ed., Howes' Revision), sec. 520, it is said:
"It is a simple or dry trust, when property is vested in one person in trust for another, and the nature of the trust, not being prescribed by the donor, is left to the construction of law. In such case the cestui que trust is entitled to the actual possession and enjoyment of the property, and to dispose of it, or to call upon the trustee to execute such conveyances of the legal estate *Page 57 as he directs. In short, the cestui que trust has an absolute control over the beneficial interest, together with a right to call for the legal title, and the person in whom the legal title vests is a simple or dry trustee."
It is further said by the same author (section 521):
"In a simple trust of this nature, the dry trustee has no power of managing or disposing of the estate, even although the cestuique trust is an infant, married woman, lunatic, or other person incapable of the management or control. Nor can he alter the nature of the property, by changing real estate into personal, orvice versa."
In 1 Lewin on Trusts and Trustees (First American, from Eighth English Edition by Flint), chap. 8, it is said:
"The simple trust is where property is vested in one personupon trust for another, and the nature of the trust, not being prescribed by the settlor, is left to the construction of law. In this case the cestui que trust has jus habendi, or the right to be put into actual possession of the property, and jusdisponendi, or the right to call upon the trustee to execute conveyances of the legal estate as the cestui que trust directs."
The text-writers are supported by ample authority, as for instance see Atkins v. Atkins, 70 Vt. 565; Hill v. Hill,90 Neb. 43, l.c. 48; Hamlin v. Mansfield, 88 Me. 131, l.c. 138; Ringrose v. Gleadall, 17 Cal. App. 664, l.c. 669.
We find no decision by our courts directly in point. In Cornwell v. Wulff, 148 Mo. 542, l.c. 556, 50 S.W. 439, section 520, Perry on Trustee, is quoted approvingly. The Cornwall decision was overruled in Walton v. Drumtra, 152, Mo. 489, 54 S.W. 233, but we do not understand that the quoted matter from Perry on Trusts has been disavowed.
It is true, as stated by counsel for respondent, that our "statute of uses," as it is commonly called (section 2867, Revised Statutes 1909), does not affect personalty. See Slevin, Trustee, v. Brown, 32 Mo. 176, l.c. 185. *Page 58
As we have seen the rule is applicable even though the beneficiary be a minor or other person incapable of managing its affairs. Perry on Trusts and Trustees, supra, sec. 521.
Learned counsel for the respondent assert that plaintiff had alleged and proved an active trust in defendant Fisher, of personal property for the use of a minor, and their claim that they had proved an active trust is based on the fact that they had offered to prove this by the testimony of Clyde S. Fisher alone, uncorroborated by any third party; that in a conversation with Nathan Walter Fisher, the donor or trustor of the trust, and himself, the donor imposed on this trustee the following duties: To collect, retain and invest the money until the beneficiary, called Pearl Lucille Fisher, becomes of age, at which time to turn the money over to her; and also it was the understanding between Nathan Walter Fisher and the witness that he was to have the custody of the child; he and his mother were to take care of the child.
It is true that the defendant Clyde S. Fisher offered to prove these facts by his own testimony, but it cannot be said that he proved them for the very sufficient reason that the learned trial court excluded the testimony, on the ground that Nathan Walter Fisher being dead, the defendant could not testify as to conversations or understandings between himself and the dead man as to the contract between them, here the cause of action. Learned counsel for respondents rely upon the decision of our Supreme Court in Pitts v. Weakley, 155 Mo. 109, l.c. 143, 55 S.W. 1055, in support of their contention. At that place it is said: "What the terms of the trust were, if there was a trust, are known only to Mrs. Weakley and the plaintiffs themselves would not allow her on the trial to disclose them." This is assumed by counsel to mean that the Supreme Court criticized advisedly the action of the trial court in excluding that testimony. This expression is far from holding any such thing. The disqualification of witnesses, where one of *Page 59 the parties to the contract or cause of action is dead, imposed by section 6354, Revised Statutes 1909, has been a matter of frequent decision in our State, the decisions not always reconcilable. One of them, near in point here, is that of Gibbs v. Haughowout, 207 Mo. 384, 105 S.W. 1067. In that case it was held that the grantee in a deed being dead at the time of the trial, the grantor is not a competent witness to testify as to what the contract was in pursuance to which the deed was made, our Supreme Court holding that in such case the trial court had committed error in permitting him to testify.
In Collins v. Crawford, 214 Mo. 167, l.c. 186, 112 S.W. 538, where objection had been made to the defendant testifying to a contract with a deceased party, our Supreme Court said that the witness "simply testified to the disposition he made of the trust funds in his hands. This was a suit by plaintiff for lands which he claimed were devised to him, not by his mother, Mrs. Collins, but by his grandfather, Mr. Crawford. Mrs. Collins was not interested in this action and neither her heirs nor personal representatives were parties to the suit. Plaintiff does not claim under or through Mrs. Collins, but as a purchaser from the grandfather. We do not think the statute has any application to the facts developed." In the case at bar the cause of action is on a contract made for the benefit of the plaintiff by her father with the Insurance Company and the defendant Fisher, as trustee, it being claimed by Fisher that under the provisions of that contract he is entitled to handle the trust money in a certain way, deriving that from the authorization given verbally to him by his deceased brother. We think that this case comes distinctly under the statute (section 6354), which provides that "in actions where one of the original parties to the contract or cause of action in issue and on trial is dead, . . . the other party to such contract or cause of action shall not be admitted to testify either in his own favor or in favor of any party to the action claiming under him," etc., *Page 60 and that there was no error in the trial court excluding this testimony.
Learned counsel for respondent cite in support of their proposition, that there is no objection to a trust because it is created partly by a written instrument and partly by oral declarations, two cases: Kendrick v. Ray, 173 Mass. 305, and Bloodgood v. Massachusetts Ben. Life Ass'n, 44 N.Y.S. 563. It is impossible to tell from the reading of the opinions in those cases whether or not the parties proposing to give the oral testimony as to the intent of the trust or its terms were qualified witnesses under our statute, so that as far as this point is concerned we do not think those cases applicable.
In Atkins v. Atkins, supra, a very interesting decision by the Supreme Court of Vermont, in which it appeared that the insured had endeavored by his will to dispose of the proceeds of the policies in a manner different from that provided for in the policies, it is held that the rules of construction applicable to wills are also applicable to the construction of insurance policies and like contracts. It is further there held (l.c. 566):
"It is a general rule that a policy of life insurance, and the money to become due under it, belong, from the time it is issued, to the person or persons named in it as the beneficiary or beneficiaries, and that there is no power in the person procuring the insurance, by any act of his, by deed or will, to transfer to any other person the interest in the person named, nor to modify and limit such interest. An irrevocable trust is created." (Cases are cited from the Supreme Court of the United States and from Massachusetts, Pennsylvania, Indiana and Connecticut.)
"The person who procures insurance on his life payable to a beneficiary named in the policy, thereby creates in effect a voluntary trust, and what is equivalent to a voluntary settlement, for the benefit of such beneficiary, and when such trust or settlement is once created, it cannot be annulled nor modified by the act or declaration *Page 61 of the party creating it, unless a power of revocation or modification is reserved by the terms of the trust for that purpose."
But we are not holding that parole testimony cannot be given to explain the terms of the trust here involved. That question is not before us. We do hold that it was not competent for the trustee to prove the character of his trust and his duties under the trust by conversations between himself and the trustor, the creator of the trust, no one else appearing to have heard it or to have been present. To admit such evidence on the sole testimony of the trustee, the trustor dead, would open the door to the the perpetration of unlimited fraud. We think that in the case at bar the disqualification of the statute is applicable here and that the testimony offered was properly excluded.
It will be noticed that by his answer and by some testimony, defendant Clyde S. Fisher charges that the guardian of plaintiff has wasted or expended all of her property and will have to draw on this fund for her support, and that it would be hazardous to the interest of the child to turn the money over to the guardian. The guardian was appointed by, and is under, the exclusive jurisdiction, in the first instance, of the Probate Court and it is not to be assumed that that court will make either undue allowances for expenditures or permit any wasting of the fund of the ward.
This clause of the policy here involved makes the installments payable monthly, and that, to our minds, evinces a very clear intention that it is for the immediate need and support of the daughter. If the father had intended to create a fund to become available when she became of age, it was easy to have done that, and very likely, in that situation, he could have secured a much larger sum payable at the arrival of majority of the daughter for the same premium that he paid to secure monthly payments of installments. Construing this provision of the policy as we would wills or other contracts, it seems very clear that it was the intention of *Page 62 the father to provide for the immediate needs of his daughter if she lived until the 240 payments fell due.
We have read the testimony as to the relations between the grandmother, who is the guardian of plaintiff, and the defendant Clyde S. Fisher. It must be admitted that by the showing made by defendant himself, they are not very amicable. That, however, in itself, we would not hold as a sufficient cause for the removal of the trustee.
Our conclusion on the whole case is that the judgment of the circuit court must be reversed and the cause remanded with directions to that court to order an accounting of the amount of funds collected by the trustee from the defendant insurance company from the beginning of payments due and made to him until the time of the accounting, and that whatever sum is found to be due, with interest from the date of the collection of the several installments, be adjudged against him and he be required to pay the amount to the guardian of the plaintiff, and that all amounts falling due hereafter under the terms of the clause of the policy involved be paid by the Prudential Insurance Company of America to Mrs. Fannie Scammell as long as she remains guardian of the ward, and upon the ward arriving at majority to be paid to her direct, until the whole 240 payments shall have been made, preserving the contingent right of the mother, Maude S. Fisher, to any of the 240 installments unpaid during the life of Pearl Lucille Fisher, as provided for in the policy, costs to be adjudged against Clyde S. Fisher, both of this suit and of the present appeal, payable by him individually and not out of the trust fund. Allen and Becker, JJ., concur. *Page 63