Northern Trust Co. v. Knox

869 N.E.2d 401, 373 Ill. App. 3d 479
CourtAppellate Court of Illinois
DecidedMay 10, 2007
Docket1-06-1713
StatusPublished
Cited by4 cases

This text of 869 N.E.2d 401 (Northern Trust Co. v. Knox) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northern Trust Co. v. Knox, 869 N.E.2d 401, 373 Ill. App. 3d 479 (Ill. Ct. App. 2007).

Opinion

JUSTICE MURPHY

delivered the opinion of the court:

This action was brought by plaintiff, The Northern Trust Company, as trustee of the Caroline E. Haskell Trust (Northern Trust), which sought instructions from the trial court on how to distribute the trust principal upon termination of the trust. Defendant New England Conservatory of Music (NEC) and defendant Charles C. Eliot filed cross-motions for summary judgment arising from their mutual claim of the same one-sixth share of the trust principal known as the “Lucy Smith” share. The" trial court, finding that Eliot was entitled to the entire “Lucy Smith” share of the trust principal, granted Eliot’s motion for summary judgment and denied NEC’s motion. On appeal, NEC argues that the trial court incorrectly determined when the trust vested. For the following reasons, we affirm the decision of the trial court.

I. BACKGROUND

Caroline E. Haskell executed a trust indenture on July 7, 1892, and a companion trust indenture on April 15, 1896, that transferred real property to Northern Trust as trustee. Under the terms of the trust, after Caroline’s death, each of 17 named individuals (First Takers) received a specified income interest in the trust until the earlier to occur of the trust’s termination or the income beneficiary’s death. Specifically, “paragraph FIRST” provided that Lucy Smith, Caroline’s sister and one of the 17 First Takers, would receive one-sixth of the income interest “for and during her natural life should she survive said party of the first part, and after her death, or after the death of said party of the first part should she survive said Lucy Smith, and up to the time of the final sale and distribution of the proceeds of said property as hereinafter provided, to the lawful heirs of the said Lucy Smith, per stirpes.”

Furthermore, pursuant to “paragraph SECOND” of the trust, the trust terminated on October 14, 2003, 21 years after the last to die of certain named individuals, which included Haskell; three First Takers, including Lucy Smith; and the children of those three First Takers, including Lucy Smith’s children, Lillian MacLennon and Lucius Waldo Smith, Jr. “Paragraph SECOND” provided that upon the termination date, the property was to be sold and the proceeds were to he distributed either (1) among the First Taker’s lawful heirs, per stirpes, as to the three First Takers named as measuring lives; or (2) to the First Taker, if living, otherwise to the First Taker’s lawful heirs, per stirpes, as to the 14 First Takers not named as measuring lives. The trust specifically provided that one-sixth of the trust principal was to be distributed “among the lawful heirs of the said Lucy Smith, per stirpes.”

Caroline died in April 1900, and each of the First Takers died before the termination of the Trust. Lucy Smith died in 1935 with two lawful heirs: Lucius Waldo Smith, Jr., and Lillian MacLennon. Lucius died in 1936 and bequeathed his entire interest in the Trust to his sister, Lillian. From 1936 until her death in 1961, Lillian received the one-sixth income interest originally paid to Lucy Smith.

Lillian’s will provided that her husband, Norman MacLennon, and son, Sidney F. Eliot, were each to receive a lifetime one-half interest of the income interest, which NEC would receive upon their respective deaths. Lillian’s will also attempted to bequeath her interest in the proceeds of the final sale and distribution of the trust property to NEC.

Sidney Eliot died a widower in 1985. He had one child, Charles Eliot, who survived him. Charles Eliot is Lucy Smith’s great-grandchild and her only surviving heir.

Soon after the trust terminated, Northern Trust filed this action seeking a determination as to the remainder beneficiaries under the Trust. NEC and Charles Eliot each attempted to claim Lucy Smith’s share and filed cross-motions for summary judgment. NEC argued that the trust vested at the time of the First Taker’s death and, therefore, Lucy Smith’s “lawful heirs” were determined as of Lucy Smith’s death. Accordingly, Lucius and Lillian were entitled to Lucy Smith’s share of the net proceeds of the trust estate at the time of the termination of the trust, and Lillian could bequeath her share of the trust principal to NEC. Eliot, however, claimed that vesting was determined at termination of the trust. Therefore, Eliot, Lillian’s grandson, was entitled to the Lucy Smith share of the trust principal.

The trial court held that a 1929 Illinois Supreme Court case interpreting the trust addressed the question of vesting, while a 1933 circuit court decree interpreting the trust addressed the question of who was to receive the income. The 1933 decree gave lawful heirs of First Takers the right to dispose of the income in any way they wanted but did not give them the right to dispose of the principal. Although the court did not believe that the 1929 case had a res judicata effect, it found the case to be “very instructive.” Accordingly, Lucy Smith’s “lawful heirs” would be determined for purposes of the principal distribution at the time of the termination of the trust, not at the time of Lucy Smith’s death. Therefore, the trial court granted Eliot’s motion and found he was entitled to the entire “Lucy Smith” share of the trust.

The trial court found that there was no just reason for delaying enforcement of the order granting Eliot’s motion for summary judgment and denying NEC’s motion. This appeal followed.

II. ANALYSIS

Summary judgment is appropriate when the pleadings, depositions, and other evidence reveal that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2 — 1005 (West 2004). Summary judgment is a drastic means of resolving litigation and should only be allowed when the right of the moving party is clear and free from doubt. Bier v. Leanna Lakeside Property Ass’n, 305 Ill. App. 3d 45, 50 (1999). An appellate court’s review of a grant of summary judgment is de novo. Woods v. Pence, 303 Ill. App. 3d 573, 576 (1999).

Eliot and NEC agree that there is no genuine issue of material fact but disagree as to when the trust vested. NEC argues that the 1933 decree held that Lucy Smith’s “lawful heirs” were determined as of Lucy Smith’s death, while Eliot contends that the parties are bound by the 1929 case because it determined that the sole interest of the initial heirs was income interest. Furthermore, both NEC and Eliot argue that the plain language of the trust and/or rules of construction support their respective positions.

A. Previous Trust Constructions

NEC contends that the 1933 decree held that Lucy Smith’s “lawful heirs” were determined as of Lucy Smith’s death, and the parties are bound by it pursuant to the doctrine of collateral estoppel. Conversely, Eliot argues that the 1933 decree only sets the time at which heirship is determined at each generation, not the time for vesting of the principal interest. Instead, Eliot contends, the parties are bound by the 1929 supreme court case because it determined that the sole interest of the initial heirs was income interest. As such, Lillian MacLennon could not bequeath an interest in the principal.

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Cite This Page — Counsel Stack

Bluebook (online)
869 N.E.2d 401, 373 Ill. App. 3d 479, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northern-trust-co-v-knox-illappct-2007.