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Tree v. Demar

OPINION FILED JANUARY 20, 1954

ARTHUR RONALD LAMBERT FIELD TREE, APPELLANT,

v.

JACK DEMAR ET AL., APPELLEES. — ARTHUR RONALD LAMBERT FIELD TREE

v.

CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO ET AL., APPELLEES. — (PENELOPE TREE ET AL., APPELLANTS.)



APPEALS from the Circuit Court of Cook County, the Hon. WILLIAM J. TUOHY, Judge, presiding; and from the Superior Court of Cook County, the Hon. JOSEPH A. GRABER, Judge, presiding.

MR. JUSTICE HERSHEY DELIVERED THE OPINION OF THE COURT:

Rehearing denied March 15, 1954.

This is a consolidation of two appeals to this court, involving identically the same background of facts and depending ultimately upon the same determination of the Appellate Court, First District. Cause No. 32930, Tree v. DeMar, comes here on appeal from the circuit court of Cook County, which court refused to follow the recommendation of the examiner of titles of Cook County, and entered a decree finding that the applicant, Ronald Tree, did not have equitable title to the real estate in question and dismissed his application for registration under the Torrens Act.

In the other cause, Tree v. Continental Illinois National Bank, No. 33006, the guardian ad litem and trustee for persons not in being appeals, as a precautionary measure only, from the decree of the superior court of Cook County approving a "family settlement agreement." By this decree Ronald Tree, cestui for life of a trust created by the will of his grandfather, was granted $535,000 in cash and $65,000 in specified real estate on his petition for approval of the "family settlement agreement."

Lambert Tree, a resident of the city of Chicago, died testate on October 9, 1910. By his will and two codicils thereto he devised and bequeathed the residue of his estate to Arthur M. Tree, his son, The Merchants Loan and Trust Co. and Seymour Morris, and to the survivor or survivors in trust as trustees. Ronald Tree, son of Arthur M. Tree, and the Continental Illinois National Bank and Trust Co., hereinafter referred to as the bank, are the present successors in trust. The net income of the trust was directed to be paid to Arthur M. Tree until Ronald Tree reached the age of 30 years, and thereafter one-fourth of the net income to Ronald Tree and the remaining income to Arthur M. Tree. Upon the death of Arthur M. Tree the net income was directed to be paid to Ronald Tree and any other child or children of Arthur M. Tree born in lawful wedlock and their survivors. The trust was directed to be terminated at the expiration of 20 years after the death of the last survivor of Arthur M. Tree and his children born in lawful wedlock and prior to testator's decease. The trustees were then to divide the corpus into two equal parts, one part to go to the lawful issue of Arthur M. Tree per stirpes, and the other share to St. Luke's Hospital of Chicago.

A short summary of the litigation involving the trust and Ronald Tree and preceding the two causes consolidated in this appeal will no doubt be helpful in an understanding of the facts presented in this proceeding. The first action, Tree v. St. Luke's Hospital, was filed by Ronald Tree in the circuit court of Cook County on May 7, 1948. In the complaint he alleged that the will of Lambert Tree violated the rule against perpetuities and prayed a decree that all property in the trust estate pass as intestate property to himself. He therein filed a petition for approval of a "settlement agreement" for $750,000 from the corpus, which he later abandoned and it was dismissed by the court. Ronald Tree then moved to dismiss this entire action but his motion was denied and hearing had. On May 2, 1950, the court decreed the will valid and dismissed the complaint for want of equity. Plaintiff appealed to this court alleging only procedural errors, and his appeal was transferred to the Appellate Court. That court upheld the decree of the circuit court and leave to appeal was denied by this court.

On May 3, 1950, Ronald Tree instituted his second action by filing in the superior court of Cook County a suit in chancery to construe the will of Lambert Tree. He sought construction to compel the trustees to distribute to him an unspecified sum from the corpus of the trust in order to maintain his position in life, to purchase a home, and to enter into business, for the alleged reason that his grandfather intended his grandson's station in life to be one of aggression, action, force and influence. Daniel J. Lamont was then appointed guardian ad litem for Penelope Tree, the minor child of Ronald Tree, and the minor collateral heirs of Lambert Tree, and trustee for persons not in being. The guardian ad litem and the bank, as cotrustee, opposed any distribution of corpus. Plaintiff's adult children and numerous collateral adult heirs denied Ronald Tree was entitled to any relief but later consented to the payment of $600,000 to him from the corpus of the trust. In this case, known as Tree v. Rives, the superior court decreed on August 2, 1950, that the trustees distribute $600,000 from the trust corpus to Ronald Tree. On June 18, 1952, the Appellate Court reversed this decree, and this court denied leave to appeal.

On August 11, 1950, Ronald Tree filed a complaint in chancery in the superior court of Cook County, praying the court to instruct the bank and himself, as trustees, whether there was any duty upon them to appeal from the superior court decree in the case of Tree v. Rives. This third action is denominated Tree v. Continental Illinois National Bank, No. 33006, and is one of the causes consolidated in this appeal. This complaint further prayed that if the taking of such appeal was a matter of discretion to be exercised by disinterested trustees, then a third trustee be appointed to act with the bank.

Subsequently, on January 18, 1951, all adult persons having any equitable interest in the estate of Lambert Tree filed a petition in this third action praying that the court approve a "family settlement agreement" attached thereto. This agreement provided that $535,000 in cash be paid to Ronald Tree and certain specified real estate valued at $65,000 be transferred to him. All of the payments under the agreement were to be made out of the trust corpus, and in full settlement of the claims of Ronald Tree. St. Luke's Hospital was not a party to the agreement.

The superior court found that it had jurisdiction of the parties and subject matter of the cause, that all parties having an equitable or legal interest in the estate of Lambert Tree, under or pursuant to his will and the codicils thereto, had been made parties, and decreed approval of the settlement agreement, and directed the sum of $600,000, represented by $535,000 in cash and $65,000 in specified real estate, be paid and transferred to Ronald Tree. It was further decreed that, upon the distribution of the corpus at the termination of the trust, $600,000 be charged to the share of the issue of Arthur M. Tree and be first paid to St. Luke's Hospital out of the trust corpus before it is divided into equal shares.

The bank, as cotrustee, appealed to the Appellate Court, First District, contending (1) that the will is free from doubt or uncertainty, and provides no basis for the contention that the trust violates the rule of perpetuities, (2) that a family settlement agreement cannot be employed in the instant case to overturn the clear intent of the testator in the creation of the spendthrift trust, (3) that Ronald, the cotrustee, cannot, by bringing the three separate actions referred to and by the employment of special counsel to render an opinion, create a substantial doubt as to the validity of the trust provisions, and thereby furnish the basis for a family settlement from which he is to personally obtain substantial benefit, and thus overturn the will and intention of the testator therein expressed, and (4) that the trial court was without jurisdiction of the subject matter because of the pendency of an appeal in the Appellate Court from the decree in the second action, construing the will and awarding Ronald $600,000 from the trust corpus.

The Appellate Court found that to confirm the family settlement agreement would result in abrogating the spendthrift provisions of the trust and would terminate the trust before its purposes had been accomplished. Hence the Appellate Court reversed the decree of the superior court.

Ronald Tree then filed a petition for rehearing alleging for the first time that the cause involved a freehold and therefore the Appellate Court had no jurisdiction and its judgment of reversal was void. On April 25, 1952, the Appellate Court, in an additional opinion, found that no freehold was involved, and denied the petition for rehearing.

On August 11, 1952, Ronald Tree filed an application for initial registration of title to land, in the circuit court of Cook County, for the purpose of registering title to the real estate specified in the settlement agreement in his name. This application is the basis for the other cause here appealed, Tree v. DeMar, No. 32930. The bank made answer to the application, denying that Ronald Tree was entitled to have any registered title to the described real estate. Lawrence J. Hayes was appointed ...


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