APPEAL from the Circuit Court of Kane County; the Hon. CHARLES
G. SEIDEL, Judge, presiding.
MR. JUSTICE GUILD DELIVERED THE OPINION OF THE COURT:
This appeal arose out of a petition by the appellant to revoke a special ten year trust after only three years had elapsed from the date of its execution in 1967. The primary purposes of the trust were twofold: to provide for the rehabilitation of appellant from personal injuries suffered by him, and for regular payment of mortgage indebtedness on a new home in substitution for the home he owned at the time the trust was executed. The trust was spendthrift in nature. The trial court held that appellant could not revoke the trust because interests of minors and unborn heirs were involved, and this appeal was taken.
The trust in question was suggested to the appellant by his attorney following the settlement of a personal injury action wherein he represented the appellant. Appellant had been struck by an automobile while riding his motorcycle to work. Serious damage to one eye occurred as well as other injuries. In the trust instrument, appellant's attorney designated himself as the settlor and appellant as the beneficiary.
• 1, 2 From these circumstances, appellant has argued on appeal that the trust was void as a matter of law inasmuch as the attorney acted as settlor without having full ownership of the trust property. Appellant's authority is the statement in Loomis v. Loomis (1862), 28 Ill. 454, that:
"Such a (express) trust cannot be created by a person having no title to the premises. It is, of course, impossible for a person not having title, to transfer any interest in a thing to another person."
After examining this authority, however, there is no question in our minds but that the authority cited by the appellee, Guaranty Trust Co. v. New York Trust Co. (1947), 297 N.Y. 45, 74 N.E.2d 232, is the one properly applicable to the facts of our case. That case holds that
"The person who furnishes the consideration for the creation of a trust is the settlor, even though, in form, the trust is created by another."
Thus, so long as appellant intelligently ratified this trust, it is not void for want of a competent settlor. Although some testimony arose in the proceedings below concerning the degree of appellant's understanding of the trust provisions, such facts have not entered into this appeal. We therefore hold that the beneficiary of the trust was in fact the settlor of the trust.
• 3, 4 The more significant controversy in this appeal is whether appellant was the sole beneficiary of the trust. Thus the chief question on this appeal is whether the instant trust created such an interest in the appellant's heirs that their consent was necessary for revocation. At this point we quote the pertinent trust provision:
"On May 25, 1977, upon the beneficiary's death, or upon the exhaustion of the principal and income by disbursements as herein provided, whichever first occurs, the Trust shall terminate. Upon the beneficiary's death, if there be any principal or accumulated income remaining in the Trust Estate, the Trustee shall pay the beneficiary's funeral expenses, the claims against the estate and the administration expenses of his estate, the taxes due by reason of his death, and distribute the remainder as the Last Will and Testament of the beneficiary may provide, or to the beneficiary's heirs-at-law in equal shares if beneficiary leaves no valid will."
The trial court held that contingent interests were created in the appellant's heirs-at-law so that their consent would be required to revoke the trust, and since such heirs would include minors and possible unborn heirs, their consent was impossible. The trial court's statement of the applicable law was entirely correct if, in fact, the trust did create legal interests in the heirs requiring their consent for revocation. In Pernod v. American National Bank and Trust Company (1956), 8 Ill.2d 16, 132 N.E.2d 540, cited by both appellants and appellees, it was held that a trust may not be revoked by consent unless "all parties in interest are ascertained, are under no incapacity, and consent to the revocation." On the other hand, within these limits, according to Vlahos v. Andrews (1936), 362 Ill. 593, 1 N.E.2d 59,
"The sole beneficiaries of a trust, created by themselves as settlors, may revoke the trust without the consent of the trustee, although they do not reserve a power of revocation."
As we have held that appellant was the settlor of this trust, that requirement under Vlahos, at least, is satisfied in our case.
One difference between this trust and that involved in Vlahos is that in the instant trust, the trust was expressly irrevocable. However, the Restatement (2nd) of Trusts, Sec. 339, and Illinois Central Railroad v. U.S. (1967), 263 F.D. 427 (construing an Illinois trust)) as well as authorities cited in Illinois Central from other jurisdictions suggest that the insertion of such a clause does not affect the rule in Vlahos. In May v. Marx (1939), 300 Ill. App. 144, 20 N.E.2d 144, 20 N.E.2d 821, an attempt was made to modify a trust by the execution of a supplemental trust instrument. The settlor of that trust was also the sole beneficiary thereof with regard to income, and she sought, by means of the supplemental instrument, to change the income provision from a lump sum $3000 quarterly payment out of income to a payment of all accumulated income. The trustee petitioned the trial court to construe the two instruments, and the trial court held the modification to be ...