 | Board of Visitors minutes January 9, 1953 |  |
LATIMER CASE
The President read the following letter from Mr. Venable Minor, Special Counsel for the
University
President, University of Virginia
West Lawn
Charlottesville, Virginia
Under date of December 15, 1952, Mr. Vincent Shea notified me that the Board of Visitors had asked
for an opinion from me as Special Counsel for the University in regard to its authority to comply
with a request made by Continental Illinois National Bank and Trust Company of Chicago concerning
disbursement of certain funds in the Estate of James Brandt Latimer for the use and benefit of his
wife, Anne Mayo Latimer, life tenant under the trust created by his will.
Upon receipt of Mr. Shea's request I got in touch with Continental Illinois National Bank and Trust
Company of Chicago and obtained from them copy of the will of James Brandt Mayo, copy of partial
release of power of appointment executed by Anne Mayo Latimer on January 30, 1945, copy of letter
from J. L. Newcomb, President of the University, addressed to Continental Illinois National Bank
and Trust Company of Chicago dated January , 1945, and copy of letter from Mrs. Anne Mayo Latimer
to said Bank dated January 30, 1945, all of these papers being necessary in order to render an
opinion on the matter requested by the Board. Mr. Perkins, at my request, has also talked over
the telephone with Mr. J. H. Baskerville, Trust Officer of First and Merchants National Bank of
Richmond.
Rather than copy all of the papers above mentioned, I think it preferrable to set out a condensation
of the facts in this case which appear to be as follows
James Brandt Latimer, husband of Anne Mayo Latimer, by his will, gave the
residue of his estate to Continental Illinois National Bank and Trust Company as
Trustee, to invest and pay the income to Mrs. Latimer as long as she lived and at her
death the principal is to pass to such persons as said Mrs. Latimer might, by her will,
appoint. In default of such appointment, the will contains rather elaborate provisions
for the continuation of the trust during the lifetime of other individuals named in the
will and upon the death of the last survivor of all of said persons the whole trust
estate shall pass to John Hopkins University in Baltimore.
Paragraph (g) of the FIFTH Article of the will provides that no property held
by said Trustee shall be pledged, assigned, transferred, sold or in any manner whatsoever
anticipated, charged or encumbered by any of the beneficiaries under the will or be in
any manner liable in the possession of the Trustee for the debts or contracts of any of
the beneficiaries.
Under date of January 30, 1945, Anne Mayo Latimer executed an irrevocable
renunciation of all powers given her to appoint under said will except the power to
appoint the First and Merchants Bank of Richmond as Trustee to be held by said Bank for
ten years from date of Mrs. Latimer's death, accumulating the income and adding it to
the principal and at the end of said ten years to pay the whole amount to The Rector
and Visitors of the University of Virginia. And in a letter directed to Continental
Illinois National Bank (our copy being dated January , 1945) J. L. Newcomb, President,
on behalf of the University of Virginia, consented to the Bank's use of $1,000.00 of the
principal of said trust to pay hospital and medical expenses incurred by Mrs. Latimer.
And in consideration of this consent Mrs. Latimer addressed a letter to
Continental Illinois Bank as Trustee, dated January 30, 1945, in which she states that in
consideration of the Bank's applying said $1,000.00 to her hospital and doctor's bills,
she is executing a release of her power of appointment except in favor of the University
of Virginia and she further agrees that she will "by my last will and testament exercise
the power of appointment retained by me in favor of said Bank as Trustee and said University".
On November 13, 1952, Mr. H. P. Blessing, Trust Officer of Continental Illinois
Bank, addressed a letter to the University stating that Mrs. Latimer was incurably ill,
that the doctors gave her three years at most to live, and that it was estimated that her
hospital and medical expenses during that period may be as much as $30,000.00. He stated
that the total trust fund is about $65,000.00 and asks that the University consent to the
Trustee applying that amount for such purpose.
We are advised by Mr. J. H. Baskerville, Trust Officer of First and Merchants
National Bank of Richmond, that that Bank holds the original renunciation of Mrs. Latimer's
power of appointment under her husband's will, and also has in its possession a will properly
executed by her appointing the First and Merchants Bank Trustee to hold this fund
on her death for the University of Virginia.
At a meeting of the Board of Visitors held on the 12th of December, 1952, the
Board approved the recommendation of Continental Bank that the University release its
right in a portion of the trust fund if Special Counsel for the University was of the
opinion that such action on the part of the Board was legal.
Opinion
In my opinion, the validity of the renunciation of her general powers of appointment and the reservation
by her of the special power of appointment for the benefit of The Rector and Visitors, executed
by Mrs. Latimer on January 30, 1945, is governed by the laws of Illinois. However, I am of
the opinion that the renunciation is valid under the Virginia as well as under the Illinois statute.
Apparently Mrs. Latimer has exercised the special power which she had reserved in favor of The
Rector and Visitors but undoubtedly she can make another will if she desires to do so in which
she does not exercise the special reserved power, or she can revoke her present will and die
intestate. In either case, since there would be a default in appointment, the trust property would
pass under the provisions of her husband's will in which case The Rector and Visitors would not
participate.
In the event of Mrs. Latimer's failure to exercise the special reserved power, no action would lie
on the part of The Rector and Visitors in Illinois (and probably not in Virginia) against the estate
of James Brandt Latimer to enforce any agreement that Mrs. Latimer may have made to appoint to The
Rector and Visitors, and Mr. Latimer's estate would pass to those who, in default of appointment,
are entitled thereto under his will.
In this event the University's only recourse would be to sue Mrs. Latimer's personal representative
under the contract set out in Mrs. Latimer's letter to Continental Illinois Bank dated
January 30, 1945. Mr. Baskerville tells us that Mrs. Latimer has some estate of her own but he
did not feel at liberty to disclose any details and we infer from what he says that it is not
large.
Could the contract contained in letter from Mrs. Latimer dated January 30, 1945, be enforced?
Was there any real consideration given by the University for Mrs. Latimer's agreement?
I am of the opinion that the consent by the University of the expenditure of $1,000.00 from the
principal of the trust fund was not a valuable consideration for the execution of the contract
by Mrs. Latimer. The University did not pay the money from its own funds and merely consented
to the use of funds in which it had no interest at the time its consent was given. It follows,
therefore, that the contract, lacking consideration, is unenforceable.
While it is a fundamental principle that the Board of Visitors cannot relinquish any rights or
surrender any property held by it for the State of Virginia, it is an equally fundamental principle
that the Board has the right to compromise and settle doubtful claims.
In this case, the University's right ultimately to receive an estate of some $65,000.00 under the
special power of appointment in Mrs. Latimer's existing will, is based upon a contract which I do
not think enforceable. It would follow, therefore, that The Rector and Visitors, in order to
receive anything from Mrs. Latimer would be wise as a matter of policy to consent to the request
of Mrs. Latimer for the expenditure of $30,000.00 for her use and benefit primarily for medical
attention and hospitalization. Such action on the part of The Rector and Visitors would, in my
opinion, be justified under the power to compromise a doubtful claim. Any consent by The Rector
and Visitors should be conditioned upon Court approval being obtained by Continental Illinois
Bank for the disbursement of the funds above referred to.
University of Virginia
The President pointed out that the Board had adopted a resolution at its December meeting
approving the expenditure of these funds, subject to legal clearance by Mr. Minor.
| Board of Visitors minutes January 9, 1953 | |