Easterday v. American Trust Co.

114 P.2d 669, 45 Cal. App. 2d 598, 1941 Cal. App. LEXIS 1520
CourtCalifornia Court of Appeal
DecidedJune 30, 1941
DocketCiv. No. 11633
StatusPublished
Cited by3 cases

This text of 114 P.2d 669 (Easterday v. American Trust Co.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Easterday v. American Trust Co., 114 P.2d 669, 45 Cal. App. 2d 598, 1941 Cal. App. LEXIS 1520 (Cal. Ct. App. 1941).

Opinion

PETERS, P. J.

John W. Easterday appeals from a decree of final distribution entered in the estate of his father.

The decedent devised his estate to respondent American Trust Company in trust to pay the net income to his son, the appellant, for life, and upon his death to convert the corpus into money or bonds, to be delivered to descendants of the testator’s predeceased brother, of two predeceased sisters, and of one sister who was living when the will was executed. Under the will, one-fourth of the corpus, upon the death of appellant, was to be delivered to the testator’s niece, Clara M. Prentice, daughter of the testator’s predeceased brother. She has assigned her remainder interest to appellant. He contends that, since he has become the owner of the life and remainder interests in this fraction of the estate, this one-fourth interest should be distributed to him absolutely, rather than to the trustee, since he is now the sole person who has any beneficial interest therein. This result should follow, he contends, even though the interest of Mrs. Prentice is contingent on her surviving appellant. In such event, should she predecease him, there would be an intestacy as to this one-fourth interest, to which he would succeed as the sole heir of his father. There is no provision that in the event of the death of Mrs. Prentice her share shall go to her issue. The legacy to her is as follows: “To Clara M. Prentice, my niece, being the only daughter of my deceased brother, William T. Easter-day, residing at San Francisco, California, one-fourth (%) of the residue of said trust fund. ’ ’

Appellant further contends that by reason of the wording of the provision for the descendants of the testator’s predeceased sister, Elizabeth H. Spitzer, there is an intestacy as to 6/28 of the corpus upon the termination of the trust, to which he succeeds as the heir of his father, and that this fraction also should be distributed to him absolutely.

[601]*601Appellant also contends that remainder interests in the balance of the property vested in descendants of the testator’s predeceased sisters living at the testator’s death, rather than in descendants living at the death of appellant, the life beneficiary. He desires such a construction of the will in order that he may seek to acquire their interests and terminate the trust, thereby acquiring the balance of the estate absolutely. If persons yet unborn have a contingent interest in trust property, a life beneficiary who has acquired the interest of living remaindermen may not terminate the trust. (Gray v. Union Trust Co., 171 Cal. 637 [154 Pac. 306] ; Fletcher v. Los Angeles Trust etc. Bank, 182 Cal. 177 [187 Pac. 425] ; Woestman v. Union Trust etc. Bank, 50 Cal. App. 604 [195 Pac. 944] ; Hunt v. Lawton, 76 Cal. App. 655 [245 Pac. 803] ; 4 Bogert, Trusts and Trustees, § 1002, p. 2930.)

The court refused to terminate the trust in part. It ordered the entire estate distributed to the trustee. It decreed that the entire corpus should be held in trust until appellant’s death, and, further, that, upon appellant’s death, the one-quarter Prentice interest should be distributed to appellant’s executors, administrators, heirs or assigns, inasmuch as appellant has become the owner of the Prentice interest. The court also found that there was no intestacy as to the 6/28 interest on termination of the trust.

The theory of respondent trustee, sustained by the trial court, is that the testator, in his son’s own interest, created a trust for his benefit, because he deemed him incompetent to manage the property, and did not wish him to have its control. Respondent urges that in such circumstances the court should give effect to the intention of the testator and refuse termination even as to portions of the trust principal in which no one but appellant has any beneficial interest. It is our opinion that, under the facts of this case, and the authorities hereafter cited, this contention is sound.

The testator died on October 18, 1936. By his will, dated October 17, 1927, he originally gave $2,000 to his sister, Lucy Blake, and $1,200 to appellant’s divorced wife, Gertrude Bennett. He named the respondent, American Trust Company, executor. By paragraph fourth he gave, devised and bequeathed the residue of his estate to the American Trust Company, in trust as set forth in subsequent paragraphs. The trustee was given broad powers to sell the trust property, [602]*602invest and reinvest the proceeds, and generally to do every act which it deemed for the best interests of the trust estate. The two specific money bequests were revoked by codicils, with the result that paragraph fourth operated upon the entire estate remaining for distribution, found to be. of the value of $40,773.87 in the decree of distribution.

The provision by which the income is given to appellant is as follows:

“That the said trustee shall pay all taxes, assessments and other charges and expenses of every kind and nature against or in connection with the trust estate and this trust, and shall pay the net income from the trust estate to my son, John Wallace Easterday, for and during his natural life.” (Paragraph fourth, subdivision 2.)

Immediately following, in subdivision 3 of paragraph fourth, is the provision for division of the corpus upon the death of the son. It commences: ‘ ‘ That upon the death of my son, John Wallace Easterday, this trust shall terminate and the trustee shall convert, if necessary, any real property that may be in its possession so that all the estate may be converted into money or bonds in such denomination that the same may be delivered to the following persons, to wit:

“(a) To Clara M. Prentice, my niece, being the only daughter of my deceased brother, William T. Easterday, residing at San Francisco, California, one-fourth (%) of the residue of said trust fund.”

The bequest to Mrs. Prentice is followed by the several provisions relating to the descendants of the three sisters of the testator. The paragraph relating to children of his sister, Lucy Ellen Blake, is typical, and reads as follows:

“(d) To Thomas F. Blake, John PI. Blake and Stella I. Wilson, being children of my sister, Lucy Ellen Blake, a one-fourth (%) interest -in the residue of the said estate, share and share alike, but in the event of the death of any of said nephews and niece without issue, then his or their share shall go equally to the survivor or survivors.”

The will further provided that pending distribution the trustee should pay $100 a month to the son, who was thirty-six years of age at his father’s death. It contained no spendthrift provisions by which alienation by the son was prohibited and the trust benefits placed beyond the reach of his creditors. The appellant in fact had assigned his interest to a bank as security for advances, and, accordingly, the decree [603]*603of distribution provided that income otherwise payable to him should be paid to the bank until the loans were discharged.

Over the objection of appellant, the respondent was permitted to introduce further evidence after the hearing on the trustee’s petition for distribution had been concluded and the case had been continued to permit further argument after filing briefs. Attorney H.

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Related

McLaughlin v. McLaughlin
268 Cal. App. 2d 556 (California Court of Appeal, 1968)
Herrington v. National Foundation for Infantile Paralysis
235 Cal. App. 2d 174 (California Court of Appeal, 1965)
Estate of Easterday
114 P.2d 669 (California Court of Appeal, 1941)

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Bluebook (online)
114 P.2d 669, 45 Cal. App. 2d 598, 1941 Cal. App. LEXIS 1520, Counsel Stack Legal Research, https://law.counselstack.com/opinion/easterday-v-american-trust-co-calctapp-1941.