Geraldine Deutsch, Charles Deutsch, and Patricia K. Deutsch Ginsberg, Plaintiffs/Respondents, v. Eugene L. Wolff, Alan G. Wolff, and Richard K. Deutsch, Defendants/Appellants.

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court. Opinion Missouri Court of Appeals Eastern District Case Style: Geraldine Deutsch, Charles Deutsch, and Patricia K. Deutsch Ginsberg, Plaintiffs/Respondents, v. Eugene L. Wolff, Alan G. Wolff, and Richard K. Deutsch, Defendants/Appellants. Case Number: 72975 and 72977 Handdown Date: 10/06/1998 Appeal From: Circuit Court of St. Louis County, Hon. Herbert Lasky Counsel for Appellant: Mark G. Arnold and Terese A. Drew Counsel for Respondent: Gerald P. Greiman and Daniel V. Conlisk Opinion Summary: Trustee of two trusts and accountant for the trusts appeal money judgments in favor of income beneficiaries of active trusts for breach of fiduciary duty and accountant malpractice. APPEALS DISMISSED. Division Five holds: (1) Judgments on equitable causes of action are not appealed. (2)Income beneficiaries of active trusts have equitable but not legal remedies. Citation: Opinion Author: Kent E. Karohl, Judge Opinion Vote: DISMISSED. R. Dowd, Jr., C.J. and Pudlowski, J., concur. Opinion: Opinion modified by Court's own motion on November 24, 1998. This substitution does not constitute a new opinion. Defendants Eugene Wolff and Alan Wolff, his son, appeal judgments entered in a court-tried case. Plaintiffs, as income beneficiaries of testamentary trusts of Marvin Deutsch, sued to remove Eugene Wolff as trustee and disqualify Alan Wolff as successor trustee. The portions of the judgments that removed Eugene Wolff, disqualified Alan Wolff, and

ordered an accounting, are not appealed. Plaintiffs also sought money judgments on Count I against Eugene Wolff (Trustee) and Alan Wolff (Accountant) for breach of fiduciary duty owed to the Family Trust in which all plaintiffs were beneficiaries and, on Count II against Trustee and Accountant for breach of fiduciary duties owed to the Living Trust in which Geraldine Deutsch, the widow of Marvin Deutsch, was the lifetime beneficiary. Counts III and IV alleged equitable causes of action that are not the subject of this appeal. The original petition was filed in 1994. On January 1, 1995, plaintiffs added a Count V alleging accountant's malpractice against Alan Wolff. The court entered joint and several judgments against Eugene Wolff and Alan Wolff for $908,404 in respect of overpayments of trustee's fees by the Family Trust; and, $602,667 in respect of overpayment of trustee's fees by the Living Trust. It entered a judgment against Eugene Wolff only for $167,940 in respect of an enhanced personal share of proceeds of sales of the Oxford Hill Apartment project where the Family Trust and Trustee each had an ownership interest; $740,840 received in respect of a disputed interest in partnerships in which the Family Trust and Trustee each had interests, a dispute resolved in favor of the Family Trust as owner; $183,224.50 to repay a loan from the Family Trust to a partnership in which Trustee had an interest together with Richard Deutsch, a beneficiary named as a nominal defendant; $95,850 in respect of bills to the Family Trust submitted by M-R Decorating, Inc., a company in which relatives of Trustee were investors, for work not done for the trust and unexplained add-ons; and, $200,000 in respect of commissions which Trustee took from the proceeds of the sale of tax losses by partnerships in which the Family Trust had an ownership interest. All of these money judgments are appealed by Trustee and the applicable money judgments are appealed by Accountant. The third trust, one funded by life insurance, was not implicated in the judgments and is not involved in this appeal. BACKGROUND The petition was brought by Geraldine Deutsch, widow of Marvin Deutsch, and two of their three children, Charles Deutsch and Patricia Deutsch Ginsberg, in their capacity as beneficiaries of two testamentary trusts. Richard Deutsch, a son and a fourth beneficiary of the trusts, is a nominal defendant. The trusts are not plaintiffs and the money judgments were for the beneficiaries, not the trusts. Plaintiffs have agreed the money judgments may be amended and awarded to the appropriate trusts in place of the beneficiaries individually. We conclude that we have no jurisdiction to amend the judgments. Marvin Deutsch (Settlor) and Trustee were close personal friends from 1948 until Settlor's death in May 1972. Their relationship began when Trustee became Settlor's accountant. It grew into a close personal relationship. They aided and assisted one another in their business activities. Trustee brought Settlor, an attorney, his first clients. He

recruited lenders for Settlor, particularly in times of great need. Settlor paid Trustee for finding purchasers of assets of partnerships in which Settlor was a general partner. Settlor also permitted payment of commissions to Trustee and allowed him to acquire an ownership interest in some real estate developments as a limited partner. In May 1972, Settlor died unexpectedly as a result of injuries sustained in a boating accident. His will, which created the testamentary trusts involved in this litigation, was executed in February 1972. It established a marital deduction trust (now, the Living Trust) for his wife Geraldine and granted her a general power of appointment to distribute the remainder, if any, on her death. If she fails to exercise the power, then the remainder will become an asset of the Family Trust. She is living. The principal, original assets of the marital deduction trust were Beau Jardin Apartments, shown on the federal estate tax return to have a value of $3,475,000, and Willowbrook Shopping Center that had a federal estate tax value of $275,000. The second trust, a Family Trust, was created for the surviving spouse and three children. The principal, original assets of the Family Trust were four projects which Marvin Deutsch was developing at the time of his death as the managing general partner of partnerships, one for each project. The four projects were Whispering Lakes Apartments, which was 100% complete and in which Trustee personally had a five percent partnership interest; Oxford Hill Apartments which was 75% complete and in which Trustee had at least a 7% interest; Sierra Vista Apartments which was approximately 40% complete and in which Trustee claimed an interest, rejected by the trial court; and, Village Green Apartments which were under construction and in which Trustee claimed an ownership interest, rejected by the trial court. The trust owned 100% of Marvin Deutsch Enterprises (MDE); 70% of Whispering Lakes; 60, 62, or 63% of Oxford Hill; 48% of Sierra Vista; and 48% of Village Green. The court found the trust owned additional equitable interests in all but Whispering Lakes. The federal estate tax return was submitted by the personal representative, Trustee, on the theory that the collective liabilities of the four partnerships exceeded the value of the developments by more than $2,000,000. Thus, no tax was owed on the value of estate's interests in the partnerships. Although the interests of Marvin Deutsch may have had value, he was personally liable as a general partner on all the debts. Thus, the federal government determined the estate owed no federal estate tax on the Family Trust assets. Marvin Deutsch was the general partner in the development of four projects, which were unfinished at the time of his death. Trustee elected to complete the construction projects. He utilized MDE to do the work. When Accountant, at the request of Trustee, prepared a calculation of trustee's fees for the first year of the trust, 1972, he assumed a collective principal value of $14,386,011 as the then market value of the trust's interests in the four partnerships. The evidence will not support a finding as to the separate value of each partnership or the value of the Family Trust's interest in each partnership at the time the trusts began.

THE WILL AND PROVISIONS OF TRUST Marvin Deutsch appointed Geraldine Deutsch and Eugene Wolff as trustees of the Marital Trust and Eugene Wolff as trustee of the Family Trust. Geraldine Deutsch elected to delegate her responsibilities to Trustee. The will provided for successor trustees who were attorneys of the law firm that prepared the will. In the event the attorneys were unwilling or unable to serve, it named Tower Grove Bank and Trust Company. The will directed Trustee(s) to distribute income and authorized Trustee(s), in his, or their sole and uncontrolled discretion, to encroach upon principal for any income beneficiaries for "need, comfort, or welfare of Geraldine" and the "education, need, comfort, welfare, maintenance and support" of the Family Trust beneficiaries. The will authorized Trustee to "assist a beneficiary in establishing a business, household, or profession." The administration of the Family Trust was organized in two phases. The first controls during Geraldine's lifetime and the second after her death. During her lifetime the assets of the trust are to be held for the beneficiaries, collectively. During the second phase, the assets of the trust are to be divided into as many equal parts as necessary to provide one part or share for each living child and one part or share for the then living descendants of each pre-deceased child, if any. During phase two, the shares will be managed with separate accounts. Distribution of a share in the trust may occur separately beginning at age twenty-one and concluding at age thirty-five. The children are all over the age of thirty-five. Trustee was not required to diversify investments or follow statutory or judicially imposed rules for investing trust funds. The will authorized Trustee to hold, and retain as trust investments, any of the property or other assets received. He was given "all of the powers that natural persons might exercise in relation thereto if it were their own [assets]." He had "absolute and uncontrolled discretion" over investments. Additionally, the will provided, "[w]henever the Trustee shall be required or authorized by the terms of this instrument to make any decision, the Trustee's decision in the absence of fraud shall be final, binding and conclusive on all parties in interest and shall not be subject to review or challenge by any court of equity or law." Trustee's additional powers and duties included: (1) rendering periodic reports, not less frequently than annually, to each person having a right to income from the trust, setting forth in detail the property held in trust, changes therein, income therefrom, and the disposition and distribution of income during the period; (2) keeping the records open for inspection; (3) doing "such additional things, whether expressly mentioned in this trust or not, as shall enable such Trustee to protect, carry forward and execute the various trusts created hereby in accordance with the intent and purposes thereof"; and, (4) employing agents, accountants or counsel. The will provided for compensation of Trustee. "Any acting Trustee shall be entitled to compensation for his, her or its services in accordance with such published schedule of fees as shall have been adopted by TOWER GROVE BANK

AND TRUST COMPANY and in effect at the time such services are rendered." There is no dispute that Tower Grove Bank and Trust Company subsequently became a part of Commerce Bank and that the fee schedules of the bank relevant to determination of trustee's fees were published in 1959, and revised in 1976, 1983, 1985, 1988 and 1991. The schedules were offered and received as exhibits. THE FEE SCHEDULES One of the major disputes is the determination of trustee's fees as determined by reference to bank fee schedules. There was evidence to support a finding that the fee schedule in effect in 1972 provided for compensation for: (1) a percentage of principal under management; (2) management or sale of real estate; and, (3) an additional amount for unusual or special services. The 1976 version permitted: (1) 2% of "gross income collected"; (2) a percentage of principal; (3) "5% of gross rentals collected" (in lieu of percentages of principal and income); and, (4) an additional payment for "unusual, special or extraordinary services." The 1983 version provided: (1) 4% of income; (2) a percent of principal; (3) 7% of gross rentals; and, (4) payment for "unusual, special or extraordinary services." There is no objective standard in any of the schedules by which to measure compensation for unusual, special, or extraordinary services. The fee schedules do not expressly mention compensation for a development of assets. Further, Ronald Fischer, a trust officer of Commerce Bank testified for the family. He related the schedules to compensation for: (1) a principal fee; (2) an income fee; (3) a fee for additional services; and, (4) a real estate management fee, sometimes payable in lieu of principal and income fees. A CPA, Gregory Golterman, testified for the family. He used Fischer's testimony in considering a base fee (start-up charge), an income fee, a principal fee and a distribution fee. Golterman did not include or consider development or real estate management fees. No terms are defined in the schedules. The meaning of gross income is the central dispute on the calculation of fees. The Trustee and Accountant used income to the partnerships. Plaintiffs' witnesses used income to the trusts, as the measure of "gross income." DISPUTE ON BASIS FOR TRIAL COURT REVIEW Trustee and Accountant contend the trial court's most fundamental error was its failure to consider the effect of the discretionary language in Paragraph 9(c) of the will because the legal effect of those provisions is to establish abuse of discretion as the only available basis for trial court review of Trustee's conduct, including the calculation of fees. Paragraph 9(c) provides: Whenever the Trustee shall be required or authorized by the terms of this instrument to make any decision, the Trustee's decision in the absence of fraud shall be final, binding and conclusive on all parties in interest and shall not be subject to review or challenge by any court of equity or law. This provision of the Family Trust is repeated in the marital deduction-Living Trust. Plaintiffs contend the relevant inquiry

is whether Trustee complied with the recognized, legally objective and governing standards for trustees in following the bank fee schedules, not whether he abused his discretion, on the issue of determining trustee's fees. We would conclude that the will did not grant absolute authority, absent fraud, for Trustee to calculate his own fees. Such authority centralized business and management decisions in the Trustee to avoid family conflicts and to inform persons dealing with Trustee that they need not require security, or collateral or a bond to guarantee authority of Trustee to act on behalf of the trusts. These provisions facilitate the work of Trustee. They do not authorize Trustee to act in a manner inconsistent with the best interests of the beneficiaries. The determination of compensation by Trustee, for himself, is particularly sensitive in light of a trustee's duty to administer the trusts solely in the interest of the beneficiaries. Vest v. Bialson, 293 S.W.2d 369, 380 (Mo. 1956). In the absence of a comprehensive objective standard that would permit a trustee to apply documented facts to a mathematical formula, the determination of Trustee's fees required subjective decisions. A trust instrument may avoid uncertainty which may cause a conflict between serving the best interests of the beneficiary and the interests of the trustee, by requiring either a consent of the beneficiary or a third-party determination of compensation for, as in this case, unusual or additional services not expressly covered by published fee schedules. Marvin Deutsch did not provide for either possibility. The facts in the present case would support a finding the bank's published fee schedules are insufficient to provide a comprehensive objective standard for computing trustee's fees earned by Trustee for services to the Living and Family Trusts. There were unusual, additional services rendered. Plaintiffs agree and the court so found. The fee schedules recognize such services, but they fail to offer a formula for computing compensation. The trial court found: (1) Trustee spent "substantial time and effort overseeing the development and management of the apartment projects," and, (2) Trustee "deserves substantial credit for the completion, management and ultimate sale of the apartment projects following Marvin's death, which produced the foregoing benefits for the Family Trust." However, Trustee's duty to administer a trust solely for the interest of the beneficiary, requires an interpretation that the will provisions granting "absolute power," absent fraud, to make decisions which are not subject to judicial review did not include authority for self-determination of compensation by the Trustee, where that requires substantial subjective decisions. We notice Trustee did not argue to the trial court that abuse of discretion was the basis for reviewing his conduct in determining trustee's fees. Accordingly, we would reject Trustee's and Accountant's proposed basis for trial court review only for abuse of discretion because: (1) the powers conferred on Trustee by the will do not include authority to determine trustee's fees; and, (2) this argument, presented on appeal for the first time, is not appropriate for consideration. Artman v. State Bd. of Registration, 918 S.W.2d 247, 252 (Mo. banc 1996). The evidence of close personal and business relationships between

Settlor and Trustee are not sufficient to require an interpretation that the grant of broad and unfettered authority included subjective determination of trustee's fees. The requirement for an annual accounting and open records, with details, suggests Settlor's reliance on the general law regarding Trustee's conduct on behalf of beneficiaries when he adopted, by reference, the bank schedules as the basis for determining trustee's fees. TRUSTEE'S ACTIVITIES Trustee decided to complete the apartment projects. Plaintiffs told the court in a pretrial motion for leave to amend their petition that Trustee "did a commendable job in completing the apartment projects after Marvin's death, but was well paid for his efforts, and no doubt pursued completion of the projects because he had a personal stake in them." The Family Trust and Trustee utilized MDE as the general contractor and manager of the projects. Trustee borrowed from the insurance trust for construction capital. Between 1972 and 1980 the partnerships acquired cash by the sale of tax losses in the same manner as Marvin Deutsch had done. Trustee successfully completed the projects by 1977. In 1984 the partnerships sold two, and in 1985 the remaining two projects were sold for an aggregate of $71,000,000. The Family Trust's share for its interests was at least $23,000,000. For the Living Trust, Trustee converted 98 of 182 Beau Jardin Apartment units into condominiums. He gifted one unit to an employee of MDE and sold the rest. The sums paid to or received by Trustee, for the twenty-two years between 1972 and 1993, were for fees, commissions, salary and proceeds of sale for his personal holdings. They were: 1.Total Trustee's fees. Family Trust - $2,344,447÷22= $106,566 per year Living Trust - $1,274,594 ÷22= $ 57,939 per year $3,802,085 $164,502 per year

1. Salary Paid by MDE$ 823,200
2. Proceeds of Sales of Trustee's Interests in Partnerships

$2,288,500 4.Commissions Paid by Family Trust on Sale of Partnership Tax Losses $200,000 [@10%] 5.Trustee's personal share of rents the Family Trust paid a partnership $126,910 in which Trustee was a partner. There is evidence to support findings that the Family Trust paid no trustee's fees in 1972 and 1973; paid $25,000 in 1974; and, between 1975 and 1985 paid trustee's fees in varying amounts. Because the Family Trust had no funds to pay fees in the beginning, Trustee delayed and accrued payment of fees until after the sales. He was paid a salary by MDE. After the partnerships were sold and Accountant calculated the accrued, but unpaid trustee's fees, the Family Trust paid Trustee $890,000 in 1984, $185,000 in 1985, and $589,901 in 1986. Beginning in 1987 the Family Trust paid

Trustee a fixed sum each year. The Family Trust also paid rent for an office in a building owned by D & W Partnership in which Trustee was a one-third-partner and his share of the total rents was $126,910. Each member of the family received 5.5 to 6 million dollars in distributions from the Family Trust after the partnership interests were sold. Between 1987 and 1991, the Living Trust distributed $1,621,000 to Geraldine and increased in value by $1,941,000. Trustee testified that he discarded financial records of trust activities after a three-year period. He reasoned that the records were no longer required after the accepted federal income tax holding period had expired. During the pendency of the lawsuit some of the income tax records which were reported discarded reappeared. Accountant testified that he utilized a four-year holding period. FINDINGS SUPPORTED BY PLAINTIFFS' EVIDENCE (1)Trustee owned 7% of Oxford Hill Apartments, not the 10% he claimed and received from sale proceeds. He was thereby overcompensated by $167,940 and $335,880. (2)Trustee did not own a 2% interest in Sierra Vista Apartments or Village Green Apartments which he claimed and thereby was overcompensated by $265,600 and $139,000, respectively. (3)Trustee engaged in various business activities of the Trusts with entities which he, or members of his family, had an interest. (4)Trustee failed to keep complete records of trust accounts for the period of his service. Thus, he was unable to explain and document all his activities. (5)The value of the Family Trust at the time of trial was $16,600,000. Some of these findings are on disputed issues. TRIAL COURT CONCLUSIONS OF LAW The trial court noted a requirement that a trustee owes the trust and its beneficiaries fiduciary duties of the utmost loyalty. Morrison v. Asher, 361 S.W.2d 844, 850-851 (Mo. App. 1962). "[A] trustee must act solely in the interest of the beneficiary and refrain from self-dealing or duplicity." American Cancer Society v. Hammerstein, 631 S.W.2d 858, 863 (Mo. App. 1981). A trustee is "to account for his handling of the beneficiary's business." Zelch v. Ahlemeyer, 592 S.W.2d 482, 485 (Mo. App. 1979). "The burden of proof to establish his fidelity to the trust is upon the trustee." Cozart v. Green Trails Management Corp., 501 S.W.2d 184, 187 (Mo. App. 1973). A trustee must "keep complete and accurate accounts or records and if he has not done so all doubts and obscurities are resolved against him." Zelch-, 592 S.W.2d at 485. A trustee "bears the burden of proving what the lost or absent records would show." Id. All presumptions, doubts and obscurities are resolved against the trustee who cannot meet his burden of proving faithful performance of his duties. Corpus Christi Bank & Trust v. Roberts, 587 S.W.2d 173, 181 (Tex. App. 1979). TRUSTEE'S POINTS ON APPEAL

All of Trustee's points on appeal relate to money judgments. He claims the court erred in: (1) determining overpayment of trustee's fees beginning in 1972 and concluding in 1994; (2) ordering a repayment of sums paid to Trustee for partnership interests he claimed but the court found belonged to the Family Trust; (3) ordering a refund of an additional interest in the Oxford Hill Partnership claimed by Trustee, but found by the trial court to belong to the Family Trust; (4) entering a judgment to compensate the Family Trust for loans made to an entity in which Trustee had an interest together with Richard Deutsch where Trustee was authorized to distribute, and did distribute, the loan balances to Richard Deutsch, a beneficiary; (5) charging Trustee for bills submitted to the Family Trust from a company in which Trustee's family had a majority interest where it found the bills were owed by others or the transactions were improper, because the trust received no value; and, (6) entering judgment against Trustee after a finding he received 10% commission on sales of partnership tax losses. ACCOUNTANT'S POINTS ON APPEAL Accountant argues plaintiffs failed to offer evidence to support finding: (1) malpractice in calculating trustee's fees; (2) any miscalculation of fees by applying an available formula; (3) section 456.770 RSMo 1986, the Principal and Income Act, applied; and, (4) liability for overpayment of interest in the absence of expert testimony. He also argues error in rejecting his statute of limitations defense. We review the findings and conclusions of the trial court to determine whether there was substantial evidence to support the judgment, whether the judgment is against the weight of the evidence, and whether the judgment erroneously declares the law or erroneously applies the law. Gauzy Excavating & Grading Co. v. Kersten Homes, Inc., 934 S.W.2d 303, 304 (Mo. banc 1996). Plaintiffs in this case are entitled to the benefit of all evidence and inferences favorable to their causes of action without regard to contrary evidence. Beehen v. Elliott, 791 S.W.2d 475, 476 (Mo. App. 1990). DISCUSSION Our first obligation is to determine whether we have jurisdiction. The trial court removed Trustee and ordered an accounting. It disqualified Accountant from serving as a successor trustee of the Living Trust and the Insurance Trust. In accord with the provisions of the will, it appointed Stanley Rosenblum and Robert Goldenhersh as successor trustees of the Family Trust, the Living Trust and the Insurance Trust. There is no dispute that plaintiffs, as income beneficiaries of active trusts, had standing to seek these equitable remedies. They have an equitable interest in the trusts and have equitable remedies to protect those interests. However, they do not have legal interests and their remedies are exclusively equitable, Restatement (Second) of Trusts, Section 197 (1959), unless the "trustee is under a duty to pay money immediately and unconditionally" to them, Restatement (Second), Section 198 (1)(1959). See also, 76 Am.Jur.2d

Section 667 ("An action by beneficiaries for breach of trust is an equitable proceeding, even if money damages are the only remedy sought.") There are some authorities that recognize a suit at law for beneficiaries if the trustee repudiates the trust. The trusts in this case are active trusts and the trustee is active. Trustee has no duty to pay money immediately to one, or any, of the beneficiaries under the terms of the testamentary trusts and the facts of this case. Distribution of assets depends upon a decision of Trustee(s), in his, or their, absolute discretion so long as Geraldine Deutsch is living. In fact, because she has a power of appointment of the ultimate beneficiaries of the Living Trust, during her lifetime they remain uncertain. After her death the Family Trust assets must be distributed to the three children. So long as she lives, no beneficiary has an identifiable interest in the assets of the Living and Family Trusts because of the absolute authority of Trustee to make distribution to one or more of the beneficiaries. The trust provisions expressly provide that an equal distribution is not required. The successor trustees will or may have legal claims based on the final accounting which Eugene Wolff must file. If any claim succeeds, the recovery would be, in form, a restoration of principal to the trusts for losses sustained by a breach of duty by Trustee. In that event, the successor trustees would have discretion in managing the assets of the trusts, including those sums recovered, for the purposes described in the trust instruments. For a number of reasons the money judgments on legal claims in the present case illustrate why the law does not recognize suits at law by income beneficiaries of active trusts. First, the present judgments represent, or are in fact, a distribution of trust assets in violation of the requirement of a decision by Trustee. Second, the judgments were entered in favor of only three of the four beneficiaries. This also is a violation of the same provisions of the Family Trust. Third, the claims made by the plaintiff-beneficiaries in this case involve damages to the trust, not to the beneficiaries, and the nature and extent of any damages cannot be fully defined until Trustee files a final accounting. The claims, if any, of successor trustees may or may not be the same as tried in this case. They will be subject to a jury trial. Fourth, the plaintiff-beneficiaries attempt to litigate legal claims before Trustee's accounting precipitated an abstract debate on the appropriate statute of limitations. There is no statute of limitations for a claim which is not recognized. The trial court agreed with plaintiffs who contended the applicable statute of limitations for their personal claims is section 456.220 RSMo 1994. This provides a five-year statute of limitations "after the trust relationship has terminated and a final accounting received." Neither event has yet occurred. Trustee argues section 516.120(1) RSMo 1994 controls some of the claims. He refers to damages "sustained and capable of ascertainment" in his argument. His position does not recognize that the claims made, if valid, were known to him and it is his knowledge, not the plaintiffs-

beneficiaries, that is relevant if he breached a fiduciary duty owed to the beneficiaries on the subject of these claims by allowing a period of limitations to expire, if it did. If that breach occurred and he failed to represent the trust, it may be the subject of a claim by the successor trustees. However, this supports the conclusion that the beneficiaries have no action at law against Trustee while it explains why the beneficiaries' actual or constructive knowledge of the conduct of the trustees is irrelevant on a "non-existing" cause of action. The issue of Accountant's statute of limitation defense also supports the conclusion that his appeal must be dismissed. The applicable statute of limitations on his conduct in rendering accounting services is a matter for the consideration of successor trustees. The knowledge, actual or constructive, of the plaintiff-beneficiaries about his professional services is irrelevant to his statute of limitations defense. Accountant served the trusts and rendered accounting services to the trusts. Accordingly, the knowledge of Trustee, of any malpractice, not of the plaintiff- beneficiaries, would be relevant in determining when the statute of limitations for a claim against Accountant for malpractice began to run. The failure of Trustee to assert this claim may support an additional claim against Trustee but would not make section 456.220 RSMo 1994 applicable to any claim against Accountant. On request, the parties have provided this court with supplemental briefs on the jurisdictional issue. Plaintiff- beneficiaries rely on Fortune v. First Union National Bank, 371 S.E. 2d 483 (N.C. 1988) as authority for this court to recognize their claims at law on behalf of themselves. In Fortune, four judges of the North Carolina Supreme Court recognized the claim of one minor child for breach of fiduciary duty of First Union National Bank. Three judges dissented. The Fortune opinion is not persuasive. First, the opinion was decided in a case where the alleged breach of duty was by a bank which was named personal representative and trustee of testamentary trusts. It acted as personal representative, before the two trusts were funded with one dollar each. Accordingly, the final accounting in the probate estate was filed before the trusts were funded. The cause of action depended upon proof to support findings that the bank, acting as personal representative, breached its duty to plaintiff-beneficiary during the probate estate. Second, the estate accounting was available to define the issues. There was no need of an accounting at the close or termination of the trust relationship. Third, the majority opinion appears to have assumed the minor plaintiff had provable damages that a jury could decide, a concept not applicable here until the successor trustees file legal claims, if they do. Fourth, the dissenting opinion relies on section 198 of the Restatement (Second) of Trusts (1959) and 76 Am. Jur. 2d Trusts section 589, at 796-97 (1975) which are persuasive on the non-existence of legal claims by income beneficiaries of active trusts.

Fifth, the plaintiffs in Fortune were the widow, individually and as guardian ad litem for her son. Prior to trial, the court granted summary judgment against the widow on all her claims except her claim for an accounting. The appeal did not include any issues regarding the claim of the widow on her own behalf. The majority assumed there was a single beneficiary. Our facts are inapposite. Sixth, the trusts in the present case are complicated by detailed provisions for administration on behalf of multiple beneficiaries whose present interests cannot be identified. Finally, the Eight Circuit Court of Appeals' decision in Brown v. United Missouri Bank, N.A., 78 F. 3d 382, 387 (8th Cir. 1996) reviewed an appeal from the district court for the Eastern District of Missouri. It did not have the benefit of any Missouri appellate opinions. It did cite Mertens v. Hewitt Assocs., 508 U.S. 248, 256, 113 S.Ct. 2063, 2068, 124 L.Ed 2d 161 (1993). On the issue of whether a plaintiff was entitled to a jury trial, the court found: Courts of equity generally have exclusive jurisdiction over actions against a trustee for breach of trust, as they are equitable actions. (Citation omitted.) Such actions are legal and not equitable, however, if the beneficiaries are entitled to recover money arising out of a breach of trust directly upon obtaining a judgment against the trustee. (Citations omitted.) An action for damages for a breach of trust, as distinguished from an indebtedness arising out of a breach of trust, remains an equitable action. See Restatement (Second) of Trusts section 198(1) cmt. e (1959). The parties have not provided and we have found no Missouri appellate opinions adopting sections 197 and 198 Restatement (Second) of Trusts. We rely on those provisions. Thus, we are confronted with an issue not raised by the parties and not ruled by the trial court. We are obligated to determine jurisdiction whether or not raised by a party. Schott v. Beussink, 913 S.W.2d 106, 107 (Mo. App. E.D. 1995). If plaintiffs failed to state a cause of action at law then the trial court did not acquire jurisdiction to decide the legal issues on the merits and we do not have jurisdiction of the appeals. Warner v. Warner, 658 S.W.2d 81, 82 (Mo.App. 1983); In Re Moore's Estate, 189 S.W.2d 229, 235 (Mo. 1945). The appeals must be dismissed solely because the trial court had no jurisdiction to enter money judgments against Trustee and Accountant. Before reaching the conclusion that these appeals must be dismissed we have considered 3,154 pages of trial transcript, 355 pages of legal file offered by Trustee and Accountant, 232 pages of legal file offered by plaintiffs and have analyzed 94 pages of judgment, findings and conclusions entered by the trial court. Thereafter, we have requested and received supplemental briefs. We have written in order to clarify the reasons for dismissal and in respect for the attorneys who have participated in this case. A proposal was made that we amend the money judgments so that the trusts would become the judgment-creditors against Trustee and Accountant. We have no authority to enter a judgment in favor of the trusts where: (1) it is uncertain that the claims of the trusts and the defenses against those claims would be the same as

tried by the parties in the present case; and, (2) defendants would be entitled to a jury trial. Moreover, if the trial court had no jurisdiction, then we have no jurisdiction, except to dismiss the appeals. In Re Moore's Estate, 189 S.W.2d at 235. Appeals dismissed. Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.