Matter of Trust of Rothrock

452 N.W.2d 403, 1990 Iowa Sup. LEXIS 57, 1990 WL 32190
CourtSupreme Court of Iowa
DecidedMarch 21, 1990
Docket88-886
StatusPublished
Cited by11 cases

This text of 452 N.W.2d 403 (Matter of Trust of Rothrock) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Matter of Trust of Rothrock, 452 N.W.2d 403, 1990 Iowa Sup. LEXIS 57, 1990 WL 32190 (iowa 1990).

Opinion

SCHULTZ, Justice.

This appeal results from the various orders of the district court concerning the testamentary trust of Albert Rothrock. Farmers National Bank of Webster City, Iowa, was appointed trustee in 1982 and filed annual reports with the court. Edna J. Fisher and Elva V. Day, cousins of the deceased, appeal from a final order distributing the trust assets.

Albert Rothrock’s will was executed on August 27, 1971. In the first part of his will Mr. Rothrock made bequests of $1,000 *404 to his sister-in-law, $500 to his wife’s niece, $300 each to a friend and several cousins, and $200 each to a group of six cousins including the two appellants. He then gave the rest, residue and remainder of his property “in trust” to his two unmarried sisters or their survivor, subject to terms and conditions. They were to have the income from the property and any portion of the principal that was necessary for their care.

The portion of the trust which disposes of the remainder after the death of the sisters is the focal point of this appeal. It reads as follows:

Upon the death of the survivor of my sisters, Florence Rothrock and Edith Rothrock, or if neither survives me, the balance, if any, of my property shall first be paid $10,000.00 to the Congregational United Church of Christ at Blairsburg, Iowa. If after the payment of said $10,-000.00 any funds remain, such balance shall be paid to the First Congregational Church, United Church of Christ at Webster City, Iowa, to be used, however, solely for building a new church.

Mr. Rothrock died on January 20, 1981, and the trust was opened on April 5, 1982. Edith Rothrock, the surviving beneficiary, died on January 15, 1988. The balance of the corpus of the trust is now valued at approximately $210,000. The trustee filed a final report on February 8, 1988, asking that the trust be closed, the trustee discharged and its bond exonerated.

On March 8, 1988, the First Congregational Church, United Church of Christ at Webster City, Iowa, (church) filed a petition to construe the trust provisions of the will, asking the court, pursuant to Iowa Rule of Civil Procedure 262, to resolve certain alleged ambiguities. The church asked that the trust provisions be construed as follows:

a. That the provision stating, “to be used however, solely for building a new Church,” shall be construed to mean that the undersigned Petitioner can receive the funds from the Trust and use those said funds for not only the construction of a new and separate Church facility, but to be able to use said funds for the remodeling, the improvement and/or the expansion and extension of the existing Church facilities, including the Parsonage, and for the acquisition of any real estate required for the construction or improvement of said Church facilities.

The church also requested that the trust corpus be held by the governing body of the church as a building and improvement fund without an accounting except to church members. It further requested that all income derived from the funds be used for whatever purposes the governing body designated.

Pursuant to Iowa Code section 633.303 (1987), the Attorney General reviewed the petition to construe and asked that the court grant the relief requested. The cousins filed a resistance to the petition claiming that there were no obvious ambiguities in Mr. Rothrock’s will and that the “church intends to use the funds for purposes other than building a new church.” They urged that the will be “declared impossible to fulfill” and requested the residue be “distributed to the heirs.”

An evidentiary hearing was held. The church called decedent’s attorney, the church pastor, and several members of the church board of trustees as witnesses. The appellants appeared pro se and did not call any witnesses on their behalf. In granting the church’s petition, the trial court concluded that decedent intended that the remainder of the trust go to the church, and that “[cjlearly Albert Rothrock had given to his heirs all that he intended in the first paragraph of his will.”

The court further concluded that the doctrine of cy pres would apply under these circumstances. The court felt that the remaining funds could be used either for the construction of a new and separate church facility or for the remodeling, the improvement, the expansion and extension of existing church facilities, including the parsonage, and for the acquisition of real estate. It also held that any and all of the income derived from the funds could be used for whatever purpose the governing body of the church would designate. The final re *405 port of the trustee was approved and provided for the distribution of the funds to the church. The court of appeals affirmed the trial court but struck that portion of the court’s decree allowing the remodeling of the parsonage.

The heirs raise several issues on appeal. They claim that the trial court erred by (1) construing an unambiguous will, (2) allowing extrinsic evidence to aid in that construction, and (3) applying the doctrine of cy pres.

There is a serious question as to whether or not the heirs have standing to enforce the condition of the trust. Language creating the trust did not provide a reversionary interest in the estate of the decedent nor in his heirs in the event there was a violation of the condition. Generally, the attorney general or a person who has a special interest in the enforcement of a charitable trust, rather than the settlor or his heirs, can maintain a suit to enforce the provisions. Restatement (Second) of Trusts § 391 (1959); Francis v. Preachers’ Aid Soc’y, 149 Iowa 158, 166, 126 N.W. 1027, 1030 (1910); see Iowa Code § 633.303. We need not decide this issue as the question of standing has not been raised in either the district court or on appeal. Richards v. Iowa Dep 't of Revenue, 414 N.W.2d 344, 349 (Iowa 1987).

We next address a matter that has caused some confusion. The heirs incorrectly claim that the will did not set up a trust. The second paragraph of Rothrock’s will specifically gives the remainder of the property “in trust” to decedent’s two sisters during their lifetime and provides upon their death for the trustee to pay the balance to the church. The two cousins who are contestants in this proceeding received their specific bequest. No one contested the will or the final report. The estate was closed and distribution was made. The trust has existed under court supervision since 1982.

The terms of - the will created an express trust. In re Estate of Young, 273 N.W.2d 388, 393 (Iowa 1978). When the residue of the estate was distributed to the trustee in 1982, title to the property vested in the trustee. See In re Estate of Small, 244 Iowa 1209, 1225, 58 N.W.2d 477, 485 (1953). The trustee had authority to invade the trust during the lifetime of the sisters to provide for their care.

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452 N.W.2d 403, 1990 Iowa Sup. LEXIS 57, 1990 WL 32190, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matter-of-trust-of-rothrock-iowa-1990.