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Storkan v. Ziska

OPINION FILED MAY 18, 1950.

JAMES STORKAN, SUCCESSOR TRUSTEE, APPELLEE,

v.

JOHN JAMES ZISKA, APPELLANT.



APPEAL from the Third Division of the Appellate Court for the First District; — heard in that court on appeal from the Superior Court of Cook County; the Hon. DONALD S. McKINLAY, Judge, presiding. MR. CHIEF JUSTICE THOMPSON DELIVERED THE OPINION OF THE COURT:

Rehearing denied September 18, 1950.

This suit was brought by James Storkan, appellee and successor trustee, to construe a trust made by John Kralovec in favor of his five children named in the trust agreement. A decree was entered in the superior court of Cook County, finding that Adela K. Ziska in her lifetime was possessed of a vested interest in personal property, which passed by her will to her brothers and son, John James Ziska, appellant, in equal parts. This decree was affirmed by the Appellate Court for the First District and we have granted leave to appeal.

The pertinent provisions of the trust agreement in question are as follows:

"This agreement, made this Eighth day of February, A.D. 1927 between John Kralovec, of the City of Chicago, County of Cook and State of Illinois, party of the first part, and Kaspar American State Bank, a corporation duly organized and existing under the laws of the State of Illinois, having its office in the City of Chicago, party of the second part:

"The said party of the first part, for and in consideration of One Dollar ($1.00), and other good and valuable considerations to him in hand paid, the receipt whereof is hereby acknowledged, does by these presents transfer, assign and deliver to said party of the second part, as trustee, the following, to-wit: Three Hundred shares of stock of the Atlas Brewing Company, to have and to hold the said property in trust for the uses and purposes and upon the terms in this agreement set forth.

"The income from said trust estate shall be paid over to said John Kralovec for and during the period of his natural life, or to such person or persons as he shall from time to time direct, and after the death of said John Kralovec the net income from said trust fund shall be paid over to five of his children, namely; Marie E. Storkan, Otto J. Kralovec, Emil G. Kralovec, Adela K. Ziska and Robert J. Kralovec, to be divided between them in equal shares.

"Said trustee shall have full power and authority to sell said Three Hundred (300) shares of stock only in the event that the entire three hundred shares of stock are sold and only with the consent in writing of all of the five beneficiaries, namely: Marie E. Storkan, Otto J. Kralovec, Emil G. Kralovec, Adela K. Ziska and Robert J. Kralovec, or the survivors of them; it being the intention that a portion of said shares of stock cannot be sold, but only the entire three hundred shares can be sold in bulk and only with the consent of all of the five beneficiaries or the survivors of them, and the proceeds derived from the sale of said shares of stock shall be divided in equal shares among said Marie E. Storkan, Otto J. Kralovec, Emil G. Kralovec, Adela K. Ziska and Robert J. Kralovec, and in no case shall any party dealing with said trustee in relation to said property, or to whom said property shall be sold by said trustee, be obliged to see to the application of the purchase money.

"In the event that said shares of stock are not sold within the period of twenty-one years after the death of said John Kralovec then upon the expiration of said twenty-one years the trust hereby created shall terminate and the said trustee shall divide said shares of stock among said Marie E. Storkan, Otto J. Kralovec, Emil G. Kralovec, Adela K. Ziska, and Robert J. Kralovec in equal shares. And in case of the death of any of said children, then such shares coming to such deceased child or children shall descend to the heirs of such deceased child or children."

The facts disclose that the Kaspar American State Bank duly executed said agreement and undertook to act as trustee thereunder; that pursuant thereto, John Kralovec delivered three hundred shares of capital stock of the Atlas Brewing Company to the said bank as trustee. John Kralovec died February 27, 1931, and on September 26, 1932, by virtue of a decree entered in the case of People of the State of Illinois v. Kaspar American State Bank, Superior Court of Cook County, the plaintiff in the trial court, James Storkan, was duly appointed successor trustee, accepted, received the stock and is now the acting successor trustee. June 17, 1940, Adela K. Ziska, one of the beneficiaries named in the trust, died leaving a last will and testament which was duly admitted to probate in the probate court of Cook County. In and by said will she devised all her property to her brothers, Otto J. Kralovec, Emil G. Kralovec, Robert J. Kralovec, and her son, John James Ziska, in equal shares. At the time of her death she was divorced from John J. Ziska and had not remarried, and she was survived by her two sons, John James Ziska and Richard E. Ziska, as her next of kin and heirs-at-law. Richard E. Ziska died March 1, 1948. On May 1, 1948, the Atlas Brewing Company declared a dividend on the stock referred to in the trust agreement amounting to $30,000. This sum was equally distributed among all the beneficiaries named in the trust agreement, except the share of Adela K. Ziska.

The theory of the appellee as successor trustee is that the fourth and fifth clauses of the trust agreement are ambiguous and he asks for a construction of the trust instrument. It was the contention of the appellant, who was a defendant in the trial court, that the language in the trust instrument clearly and plainly directed that in the event that one of the children named therein should die before the termination of the trust, that child's share should go to that child's heirs-at-law, and that the intention of the settlor in the instrument should be carried out regardless of any technical rules of construction; that the language of the trust instrument is such that if one of the beneficiaries therein named dies before the trust is terminated, that beneficiary's share either descends to the heirs-at-law of that beneficiary determined as of the time of the trust, or to the heirs-at-law of that beneficiary determined as of the death of that beneficiary, and the interest of the beneficiary who so died could not be bequeathed by a last will and testament.

We find from the trust agreement that 300 shares of stock of the Atlas Brewing Company was placed in the hands of the named trustee, with the understanding that the income should be paid to the settlor for and during his natural life, and after his death to his five named children, to be divided equally between them. It further provides that the trustee should have power to sell the stock only in the event that the five beneficiaries should each consent to the sale, and then only that the entire 300 shares could be sold in bulk. Further provision is made that in the event the shares of stock are not sold within the period of 21 years after the death of the settlor, then the trust was terminated and the trustee should divide the shares of stock between the five named beneficiaries in equal shares. Then this provision was added, "And in case of the death of any of said children, then such shares coming to such deceased child or children shall descend to the heirs of such deceased child or children."

A trust is to be interpreted for the real purpose of determining the settlor's intention. The same rules of construction used in regard to wills are alike applicable to the construction of trust agreements. General rules of construction of written instruments apply to the construction of trust instruments, whether they are contracts, deeds, or wills. (54 Am.Jur. 34, par. 17; Bear v. Millikin Trust Co. 336 Ill. 366.) The question then of paramount importance is the settlor's intention. This seems to be the general purpose, rather than to determine which technical rule of construction can be applied to the facts and adopted regardless of the stated and apparent intention and desire of the settlor.

We have held that technical rules of construction of trusts and wills are not present in the testator's mind at the time he is making his bequest in a will or trust. In construing a will the intention is to be gathered from the whole instrument. If the intention may be gathered from its language without reference to rules of construction, there is no occasion to use the latter. Where the use of rules as to a presumed intention so twist and warp the evident meaning of a will as to render it ambiguous or unreasonable, and when, on the other hand, the words used in their ordinary sense are plain and their meaning clear, construction demands the use of the plain intention over the presumed intention, which is fixed by rules used only where the actual intent cannot be ascertained. Stagg v. Phenix, 401 Ill. 134.

Appellee urges the question to be determined is whether the interest of the named beneficiary in the trust is a vested or contingent interest, it being appellee's position that the interest is vested in the named beneficiaries, and that hence it is vested in the cestui que trust, and that Adela K. Ziska, one of the ...


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