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Shamel v. Shamel

OPINION FILED SEPTEMBER 23, 1954.

ARCHIBALD D. SHAMEL ET AL., APPELLEES,

v.

FAY BREMER SHAMEL ET AL. — (RICHARD SHAMEL, ET AL., APPELLANTS.)



APPEAL from the Circuit Court of Christian County; the Hon. F.R. DOVE, Judge, presiding.

MR. CHIEF JUSTICE BRISTOW DELIVERED THE OPINION OF THE COURT:

A direct appeal to this court from a decree of the circuit court of Christian County, wherein a trust was declared of certain Christian County real estate and a trustee appointed thereof and directed to sell at private sale coal rights therein, pursuant to section 50 of the Chancery Act, (Ill. Rev. Stat. 1953, chap. 22, par. 50,) is taken by the guardian ad litem, trustee for persons not in being and attorney for defendant in the military service, pursuant to leave granted.

A freehold being involved, the appeal is properly taken directly to this court.

The facts, as established by plaintiffs' evidence, are undisputed. On February 15, 1900, a trust was created by a written agreement executed by five individual settlors, who were the owners in common of about 700 acres of land in Christian County and other real estate. The subject matter of this proceeding is the coal beneath the surface of three tracts of said trust real estate situated in Christian County. Since 1931 the trust has been administered under jurisdiction of the circuit court of Christian County as the Conrad Shamel and Caroline Shamel Trust Estate, and at the time of the institution of the present litigation Springfield Marine Bank of Springfield, appellee herein, was successor trustee thereof by appointment of the court. The present action was instituted by the trustee and certain other beneficiaries, as plaintiffs, against the other beneficiaries and other parties who constitute all persons in being who have or may have an interest in the trust, by petition for appointment of a trustee to sell coal and mining rights pursuant to section 50 of the Chancery Act.

Under the trust agreement the five settlors conveyed to Caroline Shamel, as trustee, their fee interests in the trust property. An equal share of the net trust income was to be paid to each settlor during his or her lifetime. The share of Caroline Shamel in the trust income and corpus was to terminate at her death. The trust was to continue until twenty-one years after the death of the survivor of whichever of the four settlor-beneficiaries should live the longest, and then terminate. Each of the four settlor-beneficiaries could by will direct and appoint to whom his share of the net income should be paid after his death for the remainder of the term of the trust. If a settlor-beneficiary should die, without by will exercising his power of appointment, then his share of the income should be paid to his surviving widow, children and descendants, or if none, to the surviving settlor-beneficiaries for the remainder of the term of the trust. Upon termination of the trust the title to the one-fourth interest of each settlor-beneficiary in the trust property should vest in fee in such person or persons as he had by will directed and appointed, or if any settlor-beneficiary failed to exercise his power of appointment his interest should descend and vest in accordance with the laws of descent of Illinois then in force. The trust agreement contained other provisions for execution of the trust, including a limited power to mortgage for the purpose of buying real estate and a limited power to sell on written request of the adult beneficiaries, provided the trustee had made a written contract for purchase of other real estate of equal or greater value than the real estate to be sold and to be held on the same terms.

The settlor Caroline Shamel had died on April 21, 1931. The settlor-beneficiary Clarence A. Shamel had died testate on January 7, 1931, and by his will he exercised the power of appointment provided for in the trust agreement, devising and bequeathing his interest in the trust income and corpus to his children and widow in equal parts.

The settlor-beneficiary J. Young Shamel had died intestate on September 29, 1934, leaving surviving his widow and three sons, which three sons each had wives, children and grandchildren. The remaining two settlor-beneficiaries are living, one of whom has a wife and three children, which children are married and have wives and children. The other living settlor-beneficiary has never been married, has no child or descendants, and is an incompetent person with conservator.

All persons in being, who have or may have an interest in the trust, are parties defendant and appellant Clark Miley was appointed guardian ad litem for minor and incompetent defendants, trustee for persons not in being and not presently identified, under section 6 of the Chancery Act, and attorney for defendant in the military service.

A mineable vein of bituminous coal exists below the surface of each of the tracts of trust real estate in question. Peabody Coal Company and Wabash Railroad Company own all of the coal underlying several thousand acres of land contiguous to each of the tracts in question and surrounding each of the tracts in question. Peabody Coal Company is constructing a new coal shaft mine to mine its coal and the coal of the Wabash contiguous to and surrounding the tracts in question and is sinking its shaft about one mile west of one of the tracts.

Peabody has plans for the new mine which would permit it to mine the coal underlying the tracts in question provided it obtained title thereto with mining rights therein before its workings reach the boundaries of that tract, and if Peabody does not obtain such title to the said coal said tracts will be by-passed. Said tracts in question are not large enough to justify the sinking of a mine solely to obtain the coal underlying each of said tracts, and if Peabody and Wabash do not obtain title to the coal underlying the tracts in question the mineability of said tracts will be forever lost, which loss will occur a long time prior to the termination of the Shamel trust and the time when the interests of the parties to the litigation will be determined. Peabody and Wabash have offered to purchase at private sale all coal and such other minerals as are mixed with and accompanying the coal and as would necessarily be mined and removed in mining and removing the coal, for a cash consideration of $65 per acre and to pay the cost of this litigation, provided a merchantable title thereto can be obtained. The uncontroverted evidence establishes that the price of $65 per acre is the full, fair, cash market value of the coal, mineral and mining rights in issue and that the mineability thereof will be forever lost unless mined in conjunction with the mining of the coal underlying the acreage owned by Peabody and Wabash.

The trial court decree granted relief as prayed in the petition and declared the trust, appointed Springfield Marine Bank as trustee, vested title to coal and other minerals aforesaid and mining rights in the tracts in question in said trustee and directed the trustee to sell the same at private sale for cash to Peabody and Wabash at the prices stated and to make conveyances, reports of sale and investment of proceeds as directed by the court for the benefit of the persons entitled or who may become entitled thereto.

The appeal assigns two errors as a basis for reversal. First, that section 50 of the Chancery Act does not permit the appointment of a trustee with reference to a future interest arising by the exercise of a power of appointment and that the circuit court has no power or jurisdiction to appoint a trustee under such section. Second, that the sale authorized by the trial court was in contravention of and deviation of the terms of the trust instrument.

Appellees' answers to these two assignments of error are likewise two in number. First, that section 50 of the Chancery Act applies to the future interests which arose under the trust instrument in question, and the fact that said instrument contained a power of appointment does not alter its application nor the jurisdiction of the court to render the decree in question. Second, that the uncontradicted evidence conclusively shows that the beneficiaries of the trust would have suffered a total loss in the trust estate and that such facts permit the court in equity to deviate from the trust instrument.

Insofar as applicable to the present litigation, section 50 of the Chancery Act provides as follows: "Where lands or any estate therein are subject to contingent future interest, legal or equitable, whether arising by way of remainder, reversion, possibility of reverter, executory devise, upon the happening of a condition subsequent or otherwise, and whether a trust is involved or not, and it is made to appear that such lands or estate are liable to waste or depreciation in value, or that the sale thereof and the safe and proper investment of the proceeds will inure to the benefit and advantage of the persons entitled thereto, or that it is otherwise necessary for the conservation, preservation or protection of the property or estate or of any present or contingent future interests therein that such lands or estate be sold, mortgaged, leased, converted, exchanged, improved, managed or otherwise dealt with, the court shall have power, pending the happening of the contingency and the vesting of such future interests, to declare a trust, and to appoint a trustee or trustees for such lands or estate and to vest in a trustee or trustees title to the property, and to authorize and direct the sale of such property, either at public sale or at private sale, and upon such terms and ...


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