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Northern Trust Co. v. North

JULY 29, 1966.

THE NORTHERN TRUST COMPANY, AS TRUSTEE UNDER THE WILL OF HELEN B. NORTH, PLAINTIFF-APPELLEE,

v.

ESTHER L. NORTH, ET AL., AND BOARD OF REGENTS OF UNIVERSITY AND STATE COLLEGES OF ARIZONA, SONJA PINKHAM NORTH, ET AL., AND UNKNOWN OWNERS, DEFENDANTS-APPELLEES, AND THE VALLEY NATIONAL BANK OF ARIZONA AS TRUSTEE UNDER THE WILL OF DAVID BRINDLEY NORTH SUED HEREIN AS VALLEY NATIONAL BANK, TRUSTEE UNDER THE WILL OF DAVID BRINDLEY NORTH, DEFENDANT-APPELLANT, AND RICHARD W. WOLCOTT AND THE NORTHERN TRUST COMPANY, EXECUTORS UNDER THE WILL OF ROBIN PERLE DIENST, THE NORTHERN TRUST COMPANY, TRUSTEE UNDER SAID WILL, HENRY E. MORRIS, ET AL., DEFENDANTS-CROSS-APPELLANTS.



Appeal from the Circuit Court of Cook County; the Hon. WALKER BUTLER, Judge, presiding. Affirmed.

MR. PRESIDING JUSTICE DRUCKER DELIVERED THE OPINION OF THE COURT.

This is an appeal and cross-appeal from a judgment construing that portion of a will relating to the disposition of the remainder interest in trust property upon termination of a life estate.

Plaintiff (The Northern Trust Company, as Trustee under the Will of Helen B. North) brought this action requesting the court to construe the will of Helen Brigham North and to instruct it as trustee thereunder as to the distribution of certain trust property. The will in question, executed on October 5, 1938, named as beneficiaries David Brindley North, her adopted son, Henry A. North, a brother, Dorothy North Haskins, a sister, and Robin Perle Dienst, a friend. The testatrix died in 1941; Henry A. North died in 1944; David Brindley North died in 1956 at the age of forty-one leaving a wife but no descendants; Robin Perle Dienst died on March 3, 1962; Dorothy North Haskins died on December 1, 1962, prior to the distribution to her of any share of the trust property. The Valley National Bank, trustee under the will of David Brindley North, is the appellant and the legal successors of Henry A. North and Dorothy North Haskins are the appellees. A cross-appeal is taken by the executors under the will of Robin Perle Dienst.

In Article III of her will the decedent established a trust, the property of which consisted of shares of stock, and directed that the income and res thereof be distributed in relevant part as follows:

Section 1 contains bequests of specific sums of money to specified persons "who may be living at the time of my death" and orders the trustee to set aside and apply trust income for a period of three years to satisfy those bequests.

Section 2 provides that Robin Dienst (a friend of the decedent) shall have a life estate in the income of one-half of the trust property and also establishes an estate in the trust for David Brindley North, the legally adopted son of the decedent.

Section 4 states that David North shall have a remainder interest in the life estate of Robin Dienst.

Section 5 disposes of the principal of the trust estate if David North survived the testatrix but died before receiving all of the trust estate, and provides in pertinent part:

[I]f he [David North] shall survive me and die before he shall have received all of said trust estate as aforesaid then upon his death, all of the remainder of said trust estate, including the share aforesaid held for the primary benefit of ROBIN PERLE DIENST . . . [subject to Robin Dienst's life estate] be held by my said Trustees for the benefit of and shall vest, share and share alike, in the descendants of my said adopted son who shall then be living, or if no descendents of his are then living, the same shall be held by my said Trustees for the benefit of and shall vest in my sister, DOROTHY NORTH HASKINS, and my brother, HENRY A. NORTH, share and share alike, if they both survive me, or if either of them does not survive me, then in the survivor of them, and distribution to said beneficiaries shall be postponed . . . [specifying the time of distribution]. Nothing in this Section 5 contained shall in any way affect the payment of income to ROBIN PERLE DIENST for and during her natural life derived from that certain one-half (1/2) of the said trust estate. . . .

Article IV of the decedent's will disposes of the residuary estate.

Article VI of the will provides as follows:

Payments to each beneficiary under any of the provisions of this, my Will, shall be made in person or upon his or her personal receipt and to no one else. No beneficiary shall have any power to sell, anticipate, assign, mortgage, pledge or encumber, in whole or in part, his or her interest under this, my Will, or his or her right to receive the same or any part thereof, and no interest of any beneficiary hereunder shall be subject to seizure on any judgment, attachment, execution or other legal process issued against such beneficiary, or his or her interest hereunder, either at law or in equity, including, without limiting the scope of the aforesaid, any judgment, demand or decree for alimony or support, and any attempted sale, anticipation, assignment, mortgage, pledge or other encumbrance, and any attempted seizure on any judgment, attachment, execution or other legal process shall be absolutely null and void. No interest of any beneficiary shall be liable in any way for such beneficiary's debts.

The controversy in this case concerns the disposition of the remainder interest in Robin Dienst's life estate in the trust, the principal issue being the effect to be given Article VI of the will as aforesaid. The trial court determined that it was the intention of the testatrix under the existing factual situation that the remainder interest of Robin Dienst's life estate in the trust should pass in equal shares to Henry A. North and Dorothy North Haskins. Therefore it awarded one-half of the remainder interest to William S. North as executor of the will of Dorothy North Haskins and one-half of said remainder to the estate of Henry A. North, or to Esther L. North as sole distributee of said estate. With regard to Article VI of the will of Helen North the court stated that:

Article VI of the will is a spendthrift provision restricting transfer of interests prior to the time for the technical termination of the trust on the death of Robin Dienst. It is not a dispositive provision requiring survival of beneficiaries until the time for distribution and does not extend to prevent devolution on death or to prevent beneficial interests from being estates of inheritance or transmissible by will on the death of the holder of the interest. Notwithstanding Article VI the interest of Henry A. North passed under his will and the interest of Dorothy North Haskins passed under her will.

Defendant-appellant argues that the provision of Article VI which directs that payments to each beneficiary be made "in person . . . and to no one else" should be strictly construed so that a remainder interest, which would ordinarily vest at the death of the life tenant or at some prior time, would not become indefeasibly vested unless the remainderman survived actual distribution of the property; that therefore the clause precludes distribution to the executor of a deceased beneficiary of the share of corpus which that beneficiary would have received if living at the time of distribution; that an interpretation of the aforesaid clause which would allow the property to pass to the executor of a deceased beneficiary would subject the property to claims of the latter's creditors in contravention of the intention of the testatrix; and that since all of the named remaindermen except for Dorothy North Haskins predeceased Robin Dienst, and the former died before distribution to her of any portion of the aforesaid remainder, the property in question therefore passes by intestacy and should be distributed to it (defendant-appellant) as testamentary trustee of the estate of David North, the testatrix' sole heir.

Defendant-appellant relies principally upon Routt v. Newman, 253 Ill. 185, 97 N.E. 208; First Nat. Bank of Chicago v. Cleveland Trust Co., 308 Ill. App. 639, 32 N.E.2d 964; and Cowdery v. Northern Trust Co., 321 Ill. App. 243, 53 N.E.2d 43.

In Routt v. Newman, supra, the will of Caroline Newman devised certain real estate to William Routt in trust to pay the net income therefrom to her four sons, "one-fourth to each in person, and not upon any written or verbal order or upon any assignment or transfer by either or any of her sons." Under the terms of the will the trust was to ...


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