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Tree v. Continental Ill. Nat. Bank & Trust Co.

OPINION FILED MARCH 19, 1952

ARTHUR RONALD LAMBERT FIELD TREE, AS CO-TRUSTEE UNDER LAST WILL AND TESTAMENT AND CODICILS THERETO OF LAMBERT TREE, DECEASED, PLAINTIFF-APPELLEE,

v.

CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO, AS CO-TRUSTEE UNDER LAST WILL AND TESTAMENT AND CODICILS THERETO OF LAMBERT TREE, DECEASED, DEFENDANT-APPELLANT. ISABEL RIVES ET AL., DEFENDANTS-APPELLEES.



Appeal by defendant from the Superior Court of Cook county; the Hon. JOSEPH A. GRABER, Judge, presiding. Heard in the third division of this court for the first district at the October term, 1951. Reversed. Opinion filed March 19, 1952. Rehearing denied and petition on rehearing filed April 25, 1952. Released for publication April 25, 1952.

MR. JUSTICE FEINBERG DELIVERED THE OPINION OF THE COURT.

Rehearing denied and petition on rehearing filed April 25, 1952

Defendant Continental Illinois National Bank and Trust Company of Chicago, as co-trustee under the last will and testament of Lambert Tree, deceased, hereinafter referred to as the bank, appeals from a decree in this action by Arthur Ronald Tree, hereinafter referred to as Ronald, as a co-trustee under the same will, seeking directions from the court concerning the right and duty of either of the trustees to appeal from a decree entered in another action brought by plaintiff as co-trustee for the construction of said last will.

Plaintiff, as co-trustee, brought three separate actions involving the will in question. The first was in the circuit court of Cook county to construe the will and to declare the provisions of the will creating the trust estate invalid, upon the theory that they violate the rule against perpetuities. Upon a hearing a decree was entered finding that the trust provisions of the will did not violate the rule. Plaintiff's appeal from that decree is now pending in this court. After the entry of said decree plaintiff instituted a second action to construe the will and to direct the trustees to award plaintiff, as one of the beneficiaries of the trust, out of the corpus of the trust, such amount as may be found necessary for the maintenance of the plaintiff. A decree was entered awarding plaintiff $600,000 out of the corpus of the trust. The bank's appeal from that decree is presently pending in this court. Plaintiff then brought the instant action. All the parties in interest were made defendants, including the guardian ad litem of Penelope Tree, a minor, the child of plaintiff.

When the instant action was pending in the superior court, plaintiff presented a petition for the approval of a family settlement agreement. The minor was not a party to this agreement. Answers were filed to the petition, and upon a hearing the court aproved this agreement, the pertinent terms of which will be presently stated. From this decree the bank appeals. The decree directed the guardian ad litem not to appeal, but a brief has been filed here by the guardian ad litem.

The testator died October 9, 1910, and his will was admitted to probate in the probate court of Cook county on December 31, 1910. He left surviving him his only child, Arthur M. Tree, and one grandchild, Ronald, they being his only issue. Arthur M. Tree, father of plaintiff, died September 26, 1914, leaving Ronald his only issue. Ronald is now 52 years of age, and his life expectancy is shown to be 19.91 years. Ronald has three children, Michael, age 28; Arthur, age 24; and Penelope, born December 3, 1949. He has no other children or grandchildren, and Ronald and the three children are the only issue of the testator and the only issue of Arthur.

The pertinent provisions of the will, which are the basis of the respective contentions of the parties, are found in paragraph 20 of the will. It creates a spendthrift trust for Arthur and Ronald, and directs the payment of the net income to Arthur until Ronald arrives at the age of 30 years, in which event, if Ronald is at the time "a man of temperate habits and good moral character," then and thereafter to pay to Ronald one-quarter and to Arthur three-quarters of the net income of said trust estate. Upon the death of Arthur, the net income is to be paid to Ronald and any other child or children born in lawful wedlock of Arthur, and survivors of them, during the continuance of the trust, in equal shares. In the event of the death of any of Arthur's children born in lawful wedlock, during the continuance of the trust, leaving issue surviving, such issue shall receive the same share of the income which deceased child would have been entitled to receive if living.

As to the termination of the trust, the will provides:

"The trust hereby created shall continue until the death of my son Arthur and of the children of my said son Arthur born in lawful wedlock; provided, however, that in any event the trust hereby created shall cease and determine at the expiration of twenty-one (21) years after the death of the last survivor of my said son and his children born in lawful wedlock prior to my decease." (Italics ours.)

The will further provided:

"Upon the termination of the trust hereby created one-half of the trust estate then remaining in the hands of my said trustees shall go to and be distributed between the lawful issue of my said son Arthur per stirpes, in the same shares and interests in which they would inherit property owned by him if he had died intestate under the laws of the State of Illinois; and in the event that no lawful issue of my said son Arthur, born in lawful wedlock, shall then survive, then one equal half of the said trust estate shall go to my heirs at law. The other equal one-half of said trust estate I give and bequeath to St. Luke's hospital of the City of Chicago. . . ."

The will further provides:

"Neither my said son Arthur, nor either of his children, or any of their issue, shall have power to anticipate, assign, transfer or otherwise dispose of the whole or any part of the income payable to him or them, or either of them, under the terms and provisions of this article of my will, it being my intention hereby to provide for the comfortable support and maintenance of my said son and his children, and their issue, during the life of the trust hereby created, in the manner and to the extent hereinbefore provided, and which shall not be liable to be diverted from the purposes aforesaid, either by the act of the parties or by process of law." (Italics ours.)

The "family settlement" agreement recites that the parties to the agreement are the only persons who have any equitable or legal interest under the will, except St. Luke's Hospital, whose interest is in no way affected by the settlement agreement; that Penelope, the minor child, who, though not a party to the agreement, is a party to the proceeding by her guardian ad litem; that originally plaintiff filed his complaint in the circuit court of Cook county to have the trust declared void because it violates the rule against perpetuities; that a decree was entered in said cause, dismissing the complaint for want of equity, from which plaintiff appealed; that subsequently another action was filed by plaintiff for the construction of said will, in which action a decree was entered construing the will and awarding $600,000 to Ronald out of the corpus of said estate; that an appeal was taken to the Appellate Court by the co-trustee bank; that subsequently another action (the instant action) was filed, asking for instructions as to the right and the duty of either trustee to appeal from said decree; that "all parties to this agreement are of the opinion that the legal questions involved in all said proceedings are not free from doubt, and if not settled by agreement of the parties would require long, expensive, uncertain and bitter litigation"; that "the parties equitably interested herein are blood relatives, and the relations of all of the parties to this agreement have at all times been most friendly, cordial and pleasant, and all parties hereto desire to preserve such relationship, and to avoid the antagonism and enmity which litigation might cause. All parties hereto recognize the desirability of avoiding the drastic and disastrous results which would accrue to any of the parties hereto, if their contentions in said litigation ultimately were to be resolved completely against them; and each party hereto is anxious to preserve to itself or himself the certainty of the interest reserved to him or them under this settlement agreement, rather than to risk the entire destruction of his or their rights"; that all of the parties have been desirous of securing from ...


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