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Rudolph v. Gersten

OCTOBER 14, 1968.

BARBARA

v.

RUDOLPH AND DONALD RUDOLPH, PLAINTIFFS-APPELLANTS,

v.

BETTY R. GERSTEN AND CHICAGO TITLE & TRUST CO., TRUSTEE, TRUST NO. 35734, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. DANIEL A. COVELLI, Judge, presiding. Affirmed.

MR. JUSTICE MURPHY DELIVERED THE OPINION OF THE COURT.

Rehearing denied November 13, 1968.

Plaintiff, Barbara V. Rudolph, daughter of defendant and counterclaimant, Betty R. Gersten, appeals from a decree which (1) dismissed plaintiff's claim for a one-half interest in real estate held in a land trust, or its proceeds; (2) determined that a stock certificate held by plaintiff was a nullity; and (3) on unpaid notes admittedly executed by plaintiff, the decree awarded defendant a judgment against plaintiff for $8,010.71. In sum, plaintiff's contentions on appeal are that the findings of the trial court are contrary to law and against the manifest weight of the evidence.

Considered first is that part of the decree which dealt with the land trust. On September 3, 1952, defendant, Betty R. Gersten, and her husband, Leo L. Gersten, parents of plaintiff, entered into a land trust agreement with the Chicago Title & Trust Company, as trustee, by the terms of which, as owners, they conveyed real estate to the trust company, in trust, with themselves named as beneficiaries, each owning 50% in joint tenancy with the right of survivorship.

Under date of March 14, 1961, defendant and her husband assigned to themselves and to plaintiff, Barbara V. Rudolph, "as joint tenants and not as tenants in common with right of survivorship," all their rights, power, privileges and beneficial interest in the trust. The terms of the assignment included: "It is understood and agreed by the assignee, Barbara V. Rudolph, that the full power to direct the acts of the Trustee, Chicago Title & Trust Co. shall be in Leo L. Gersten and Betty R. Gersten acting jointly, or in the survivor of them in the event of the death of either Leo L. Gersten or Betty R. Gersten." The assignment included an "Acceptance" signed by all three. It stated, "We accept the foregoing assignment subject to all of the provisions of said trust agreement." It is not disputed that Barbara Rudolph did not give any consideration to her parents for the assignment.

Mr. Gersten died on December 20, 1961. At that time there were two parcels of real estate in the trust, from which Mrs. Gersten collected the income following her husband's death. On January 5, 1966, and at the direction of Mrs. Gersten, the trustee conveyed the real estate to a third person, who immediately reconveyed it to the trustee to be held in a new land trust, of which Mrs. Gersten was the sole beneficiary. Thereafter, one parcel was sold, and the sale proceeds were held pursuant to further order of court. Plaintiff commenced the instant action on January 10, 1966.

Plaintiff testified that her mother told her many times that "I owned one-half of the real estate and no one could take it from me. These conversations took place when only the two of us were present; my husband might have been there at the time. My husband had begun to manage the property in March of 1961. He and I helped move my father out so that the new tenants could move in. He did not receive any compensation for the management. He nor I never collected any rent," — her mother collected all the income from real estate since December 20, 1961.

Defendant, Betty R. Gersten, testified that the land trust assignment had been prepared at her direction by an attorney named Leo Ferdinand, who was deceased at the time of trial. On March 14, 1961, at defendant's instruction, Barbara brought the assignment to Mr. Gersten's room at the hospital. At that time defendant said to Barbara, "You know, `This has nothing to do with you during the lifetime of your father and myself.' And she said, `Of course.' . . . I never made a statement to my daughter that she owned one half of the real estate involved herein and that no one could take it from her. Her name was on here as what I learned is a contingent beneficiary, because I had the power of direction. I would say yes, I had a conversation with her about this. These conversations took place in her house or my house and there wasn't anyone else present except possibly her husband and probably the children may have been there. I never told her in any of these conversations that she owned one-half of the real estate involved herein and that no one could take it from her." Barbara and Mrs. Gersten signed the assignment on March 14, 1961, and Leo L. Gersten signed it two days later.

As to the land trust assignment, the decree included the following findings:

e. . . . that said assignment amended the power of direction and restricted said power in that said power to direct the acts of the Trustee were limited solely in LEO L. GERSTEN and BETTY R. GERSTEN, acting jointly, or in the survivor of them in the event of the death of either of them and said restriction was placed specifically on the assignee BARBARA V. GERSTEN RUDOLPH only.

f. That said assignment was accepted by the three assignees and that the Trustee acknowledged receipt of the assignment amending the power of direction and acceptance thereof as having been lodged with the Trustee, and that this assignment, having been accepted by the assignees, and consented to by the receipt thereof by the Trustee, effectively amends and limits the power under the original Trust Agreement.

h. . . . That from the evidence, it appears that it was never the intention of LEO L. GERSTEN or BETTY R. GERSTEN to convey an irrevocable interest to BARBARA V. GERSTEN RUDOLPH, their daughter, until the time of the death of both LEO L. GERSTEN and BETTY R. GERSTEN. That it further appears that the daughter, the plaintiff herein, always permitted the mother, the defendant herein, to retain all of the income and always permitted the mother to manage, as her own, the property which was held in trust. That the conduct of the parties from the date of the assignment to the time subsequent to the death of the father and up to shortly prior to the filing of this suit evidences the intention that the daughter, BARBARA V. GERSTEN RUDOLPH, never treated said property or the income thereof as her own.

j. That the assignment was an attempt by the father and mother to avoid probate and was intended as a testamentary disposition of property. . . .

k. That the assignment as such was valid to pass a future interest but that the power of direction was retained by both the father and mother, the assignors herein, in that either one or both could effectively take away all rights by directing the Trustee to convey out the property. Said reserved rights were exercised by the mother, the defendant herein.

l. That the power to direct the acts of the Trustee reserved by the assignors could be exercised in any manner the assignors saw fit and that the said power was so exercised by the mother, BETTY R. GERSTEN, when she directed the Trustee to make a conveyance to GROSS and when she obtained a reconveyance from GROSS to a new Trustee wherein she was the sole beneficiary.

m. That the rights of the daughter as a beneficiary were illusory until the death of both parents and not actual because there was never an intention to give any control to the daughter as to the property until the time of death of both the father and mother.

n. That at most, the daughter can claim part of the net rents during the period of time that she was a named beneficiary under the Trust, being from the date of the assignment to the date of the direction to convey out to GROSS, and even this claim is questionable; but to avoid family discord, the Court, in exercising its broad discretionary equitable powers, should allow said claim for the sake of family harmony.

o. That when the assignment was made, it was the intention of the father, LEO L. GERSTEN, to make a testamentary disposition of his property. . . .

p. That the typewritten portion of the assignment of the Trust Agreement . . . supersedes the language of the original printed form of said Trust Agreement. . . . the Court must conclude that all of the parties to the Trust, namely: the trustee, the assignees and the assignors, were all bound by the amendment ...


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