APPEAL from the Appellate Court for the First District;
heard in that court on appeal from the Superior Court of Cook
County; the Hon. JOHN A. SBARBARO, Judge, presiding.
MR. JUSTICE DAVIS DELIVERED THE OPINION OF THE COURT:
Rehearing denied January 18, 1960.
This case presents a question of the construction of an inter vivos trust limiting gifts over to "issue" and "grandchildren" of the settlor. The plaintiff, Continental Illinois National Bank and Trust Company of Chicago, as trustee, filed its complaint to construe a trust agreement entered into by Merrill C. Clancy on July 5, 1928. The sole questions raised by the pleadings are whether the defendant Donald Merrill Clancy is a legally adopted son of the settlor's son, Leslie M. Clancy, and whether he is a beneficiary under the irrevocable trust. The trial court held that neither Donald Merrill Clancy nor the issue of his body had any interest in the principal or income of the trust. Upon appeal the Appellate Court affirmed (20 Ill. App.2d 307,) and we granted leave to appeal.
The pertinent language of the trust agreement sought to be construed is as follows:
"THIRD: Commencing with the date hereof, to pay the net income * * in equal shares, per stirpes, to the lawful issue of said party of the first part, [Merrill C. Clancy] from time to time surviving until the termination of this trust, * * *.
"FOURTH: This trust shall terminate upon the death of the last survivor of FRANK B. CLANCY, LESLIE M. CLANCY, MARION C. ATHERTON and LAURA L. CLANCY, children of said party of the first part, and upon the termination of this trust, said Trustee shall pay over, * * * in equal shares, to such of the grandchildren of said party of the first part as shall then be surviving, provided, however, that if any grandchild of said party of the first part shall have died, leaving lawful issue then surviving, said Trustee shall pay to such issue the share to which the said grandchild, their parent, would have been entitled, * * *.
"FIFTH: In the event that upon the termination of this trust, there shall be no grandchildren of said party of the first part, nor lawful issue of any deceased grandchild of said party of the first part then surviving, said Trustee shall pay over, convey and deliver all of the principal or corpus of said trust estate to said party of the first part, if he shall be living at that time, and if not, then to the heirs at law of said party of the first part, * * *."
The theory of the defendant Donald Merrill Clancy is that he is the legally adopted son of the settlor's deceased son, Leslie M. Clancy; and that in the light of surrounding circumstances he is included in the word "issue" in the third paragraph and in the word "grandchildren" in the fourth paragraph of the trust. The other defendants, appellees here, insist that the trust is unambiguous and that the defendant Donald Merrill Clancy cannot qualify as either "issue" or a "grandchild" of the settlor. They further contend that he was not a legally adopted child of Leslie M. Clancy.
The settlor, Merrill C. Clancy, was born in 1858 and achieved success as a real-estate developer and builder in Illinois. Four children were born of his first marriage: Leslie, Marion, Frank and Laura. His first wife died in 1903, and the settlor and his children moved to Spokane where they lived until his second marriage to Estelle Baxter in August, 1916. Shortly before this marriage he created a revocable inter vivos trust consisting of $300,000 in securities which he segregated from his other assets. The income was to go to his four children or their lawful issue per stirpes until 1937 when the corpus was to be distributed to his surviving children or their "lawful issue."
In July, 1928, the settlor created the irrevocable trust in question. At that time his four children were living. Marion had two children, born in 1920 and 1923; Frank had one, born in 1920; and Laura, unmarried, had none. Neither Marion, Frank nor Laura had adopted any children. In 1923, Leslie and his then wife, residents of Nebraska, who had no children, obtained a baby boy for adoption from the Christian Home Orphanage in Council Bluffs, Iowa. A formal adoption agreement was entered into in April, 1924, but was never recorded. The boy, the defendant-appellant, was named Donald Merrill Clancy. None of the children of Merrill C. Clancy, the settlor, ever had other children either adopted or born of their body. Merrill Clancy died March 28, 1949, leaving his four children surviving him. Leslie died on June 29, 1954, and thereafter the trustee instituted this suit for construction of the trust.
The case was heard below upon voluminous depositions and stipulations of fact. We have carefully examined the entire record, and, while there are conflicts in the testimony, many of the surrounding circumstances are undisputed. The settlor knew Donald well for about a year and a half prior to the execution of the 1928 trust. He apparently liked the boy and did not distinguish him or treat him in a manner different from the grandchildren of his blood. He knew Donald was not born of the blood of Leslie, but apparently did not question the legal sufficiency of the adoption proceedings. There is some testimony that occasionally when speaking to strangers, the settlor would introduce Donald as his grandson.
In construing this trust instrument, we must seek the intention of the settlor, insofar as it is ascertainable. In this effort we look first within the four corners of the instrument, (Storkan v. Ziska, 406 Ill. 259; Mitchell v. Snyder, 402 Ill. 279; Richardson v. Roney, 382 Ill. 528,) but we may also consider the surrounding circumstances at the time the instrument was executed to the extent that they may aid in determining the settlor's intention in using certain language. Munie v. Gruenewald, 289 Ill. 468; Coon v. McNelly, 254 Ill. 39.
Under the language of the trust instrument, the first gift of income was to the settlor's lawful issue per stirpes. Upon termination, the trust was to be distributed to the settlor's grandchildren or their lawful issue. In default of grandchildren or their lawful issue, the corpus was to go to the settlor's heirs-at-law. Even if we assume that Donald Merrill Clancy was legally adopted by the settlor's son prior to 1928, he would not ordinarily be included under the terms "lawful issue" or "grandchildren" under the law and statutes in force in 1928.
The term "issue" was then synonymous with "descendants" and meant those descending or issuing out of the stock or blood. It did not include strangers to the blood. (Stewart v. Lafferty, 12 Ill.2d 224; In re Estate of Tilliski, 390 Ill. 273; Miller v. Wick, 311 Ill. 269; Marsh v. Field, 297 Ill. 251; In re Howlett's Estate, 366 Pa. 293, 77 A.2d 390.) Nor was an adopted child an heir or grandchild of the parent of the adoptive father. (Smith-Hurd Stat. 1927, chap. 4, par. 5.) It is clear that the legal meaning of the language of the 1928 trust instrument would exclude Donald regardless of the legality of his ...