McMurray v. Sivertsen

83 P.2d 48, 28 Cal. App. 2d 541, 1938 Cal. App. LEXIS 584
CourtCalifornia Court of Appeal
DecidedSeptember 27, 1938
DocketCiv. 11929
StatusPublished
Cited by5 cases

This text of 83 P.2d 48 (McMurray v. Sivertsen) 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
McMurray v. Sivertsen, 83 P.2d 48, 28 Cal. App. 2d 541, 1938 Cal. App. LEXIS 584 (Cal. Ct. App. 1938).

Opinion

CRAIL, P. J.

This case has been transferred by the Supreme Court to this court for decision and is an appeal by the cross-complainant Clyde McMurray from a decree of the trial court denying all her claims.

*543 The case arises out of a controversy between the mother, Clyde McMurray, and the wife and children of a decedent, and concerns two trusts created by him during his lifetime. The cross-complaint attacks the second trust wherein decedent made provision for his mother, wife and children, charging that she was induced by fraud, concealment and superinduced mistake to relinquish a contingent remainderman’s interest in the original trust estate, which, however, could vest only upon the event of the death of her son prior to August 10, 1937, leaving her surviving him. She now repudiates the second trust and seeks to establish rights under the prior trust. Owing to the unexpected death of the son at the age of twenty-seven years it has become apparent that her contingent interest would have vested within the time prescribed and would have conferred upon her benefits of greater pecuniary value than those which she has received under the second trust agreement.

The cross-complaint, the primary object of which was to establish a constructive trust in the assets held by the Chase National Bank, as trustee, alleged that her son, his agents and attorneys, by means of false and fraudulent representations, coupled with promises made without any intention of performance, induced her to consent to the extinguishment of her contingent interest in the first trust, which for convenience is called the “Klingerman” trust, the assets of which were then placed by her son in the so-called “Chase” trust, which she now attacks; and that the acts alleged to have been committed by her son, his agents and attorneys, were in violation of duties which she claimed arose out of an alleged fiduciary relationship between the parties.

The cross-complainant makes the contention on this appeal that there is no substantial evidence to sustain certain findings of the trial court, but she says that “if this court can find any support in the record for the ‘findings’ of the lower court, that there was no fiduciary relation between the parties to the ‘ transaction’ under consideration, . . . then we shall confess defeat and admit that this appeal is without merit”.

Will McMurray and cross-complainant were husband and wife and Donald McMurray, who became the trustor of the two trusts, was their only child. In the year 1924 appellant divorced her husband, accepting $50,000 in settlement of her property rights. Not long after, in 1925, Will McMurray *544 died intestate, leaving Donald MeMurray, cross-complainant’s son, as his sole heir. The boy was then a minor aged eighteen years, and an irresponsible and inexperienced youth. Distribution of the estate was postponed until the boy reached the age of twenty-one, by which time appellant, who testified that she was very much concerned over the possibility of the boy’s having so much money to spend, together with her cousin, the cross-defendant Ralph G. Klingerman, had persuaded him to create the so-called Klingerman trust with Klingerman as the trustee.

Discussions between the three continued for nearly a year prior to the boy’s becoming of age, at which time he was taken to Wyoming by cross-complainant and Klingerman, where, on his twenty-first birthday, his father’s estate was distributed tu him. Cross-complainant and Klingerman had taken with them a trust agreement drafted by Klingerman’s attorney, and on the same day caused him to sign it. By the terms of this trust, the trustee was to pay to the trustor the sum of $2,000 per month, utilizing, if necessary to make up such payments, a portion of the oil royalties, and was to pay the balance of the royalties to cross-complainant until she should have received in all the sum of $50,000. Thereafter, cross-complainant was to be paid one-half of the royalties. The trust was to terminate by lapse of time on August 10, 1932, and the corpus thereof was to be paid to Donald MeMurray, if living, as his sole and separate property. In the event of his death prior to that time, the corpus was ultimately limited in succession to the wife and to the mother of the trustor.

Pursuant to the provisions of the trust, cross-complainant received large sums of money. Payments aggregating $50,000 were made to her, and she received the further sum of $36,000, which last sum she testified she kept as an emergency fund. In addition to these benefits, she had received $50,000 worth of Liberty bonds from her son at or about the time of the inception of the trust.

On May 16, 1928, they executed a supplement to the trust indenture whereby it was provided that the trust should continue for an additional five years, provided that in the event of the trustor’s prior death the corpus of the trust estate was to be distributed and disposed of according to the provisions of the original indenture. It was further directed, how *545 ever, that after the expiration of the original five-year period all payments to cross-eomplainant should cease.

After August 10, 1932, on or about which date cross-complainant received the last of the payments to which she was entitled under the Klingerman trust as supplemented, she received nothing whatsoever from the trust estate. From that date on her rights therein were limited to a contingent interest in the corpus which could vest only in the event of her son's death prior to August 10, 1937, leaving her surviving him, a possibility which, in view of their respective ages (Donald, 27 years, and appellant, 53 years), was exceedingly remote.

The condition of Donald MeMurray's financial affairs at the time of his marriage to cross-defendant in 1932 was distressing. The revenues of the estate, whether from mismanagement or otherwise, had dwindled to a point where the trust, burdened as it was with an annual trustee’s fee of $5,000, was unable to disburse to the trustor much more than 25 per cent of the minimum monthly payments providéd for him. Abroad, with insufficient funds to pay his living expenses, he was continually calling on Klingerman for money, and although he knew cross-complainant to be short of funds, he even cabled in an effort (which proved fruitless) to secure financial assistance from her.

In February, 1936, Myron Reynolds, the father-in-law of Donald McMurray, came to Los Angeles, at the latter’s request, to investigate and to see what could be done to unravel the tangle of Donald’s affairs. He dealt chiefly with Klingerman and Klingerman’s attorney, but in the course of his investigation he consulted with cross-complainant, and secured from her copies of certain of the trustee’s reports. From the outset, he told her that it was Donald’s wish and his own purpose to have the assets of the estate returned to Donald, free and clear of any trust, and in this she acquiesced. Klingerman likewise informed cross-complainant of his intention to resign and warned her that she would have to look out for her own interests.

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Cite This Page — Counsel Stack

Bluebook (online)
83 P.2d 48, 28 Cal. App. 2d 541, 1938 Cal. App. LEXIS 584, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcmurray-v-sivertsen-calctapp-1938.