APPEAL from the Circuit Court of Cook County; the Hon. F.
EMMETT MORRISSEY, Judge, presiding.
MR. JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:
This is an appeal from an order construing certain provisions of a trust agreement. *fn1 The original action was brought by Lois Beck and the 2416 Corporation as revenue bondholders of the Chicago Transit Authority (CTA) against The First National Bank of Chicago as trustee (Trustee) and the CTA. The Trustee, in turn, because the CTA had failed to provide for interest fund payments on the revenue bonds due to insufficient revenue, sought a declaration that the Trustee had an unfettered right pursuant to the trust agreement to use the moneys accumulated in the modernization fund and the depreciation reserve fund to make payments to the interest fund as provided for in the trust agreement. The Harris Bank and Trust Co. (Harris), as equipment trustee, intervened, claiming that any use by the Trustee of the moneys in the modernization fund would deplete the assets available therein from which payments of the equipment trust certificates on the rolling stock of the CTA must also be made.
A declaratory judgment order was entered from which the bondholders and the Trustee appeal. The controversy concerns primarily paragraphs 2 and 3 of the order, which state:
"2. Moneys deposited by the CTA to the Modernization Fund from any source other than income or revenue as defined in the Trust Agreement, may only be disbursed from the Modernization Fund upon the written order of the CTA Board for one or more of the purposes specified in § 803 of the Trust Agreement. The CTA Board is vested with discretion as to the application of such moneys to the purposes specified in § 803 of the Trust Agreement.
3. The First National Bank of Chicago, as Trustee, has a claim of right under § 705 of the Trust Agreement to moneys in and hereafter deposited to the Modernization Fund and the Depreciation Reserve Fund from income or revenue as defined in the Trust Agreement, whenever moneys in the Transit Revenue Fund may be insufficient to make the deposits specified *fn2 in sub-paragraphs (b) to (e), both inclusive, of § 703 and § 704 of the Trust Agreement, as amended."
In the original trust agreement, certain channels were established for the routing of all receipts of the CTA. *fn3 The basic distinction was made between income or revenue and receipts from other sources, i.e., gifts, grants, loans, proceeds from insurance, recoveries for damages to property or from the liquidation, conversion or disposition of property, and proceeds from subway rentals pursuant to a franchise ordinance. Proceeds from the liquidation, conversion or disposition of any property or assets, or moneys received on account of any damage, loss or casualty was to be paid to the Trustee and by it deposited in the modernization fund. The income or revenue of the CTA was to be placed in the transit revenue fund.
From the transit revenue fund the Trustee was to apply amounts specified by written orders of the CTA Board into the CTA working cash account. Then, to the extent that moneys were available, the Trustee was to make withdrawals from the transit revenue fund of sums "sufficient to pay when due the next succeeding semi-annual installment of interest" on outstanding bonds for deposit to the interest fund. *fn4 Thereafter, to the extent moneys were available, the Trustee was to transfer specified sums from the transit revenue fund into the serial bond maturity fund, *fn5 the sinking fund, *fn6 the revenue bond reserve fund, *fn7 the depreciation reserve fund, *fn8 the operating expense reserve fund, *fn9 the municipal compensation fund, *fn10 and finally, the Modernization Fund. *fn11 Whenever moneys in the transit revenue fund were insufficient to make the fixed deposit specified for those various funds, section 705 of article 7 provided that:
"[T]he Trustee shall use any moneys then in the Modernization Fund, other than the proceeds of gifts, loans and grants, to make the deposits specified in said subparagraphs (b) to (e) both inclusive [of Section 703], and in the event sufficient moneys should not then be in the Modernization Fund to make the full amount of such deposits, the Trustee shall use any moneys then in the Municipal Compensation Fund, the Operating Expense Reserve Fund, and the Depreciation Reserve Fund to make the full amount of such deposits." *fn12
Likewise, the preamble to section 803 of article 8 of the trust agreement states:
"Disbursements of the moneys in the Modernization Fund shall be made or authorized by the Trustee at any time and from time to time upon the written order of the Board."
"[I]f and whenever moneys in the Transit Revenue Fund may be insufficient to make the deposits specified in paragraphs (b) to (e), both inclusive, of Section 703 and Section 704 of Article Seven, the Trustee shall use any moneys then in the Modernization Fund other than the proceeds of gifts, loans and grants, to make up such deficiencies with priority in the order in said Section 703 expressed."
The CTA and Harris argue (1) that the right of the Trustee to invade the modernization fund pursuant to section 705 applies only to the income and revenue portion of the modernization fund and not to funds received from other sources; *fn13 and (2) that the preamble to section 803 is to be construed so as to require a written order of the CTA Board before the Trustee may use moneys in the modernization fund derived from "other sources" to make the specified section 705 payments. This second contention is predicated on the theory that the section 803 preamble, "Disbursements * * * shall be made * * * by the Trustee at any time and from time to time upon the written order of the Board," is to be read conjunctively. They argue that the use of the phrase "and from time to time" was meant to preclude any possible constructional ambiguity that the phrase "at any time" should mean only once.
• 1 General rules for the construction of written instruments apply to the construction of trust instruments. (Storkan v. Ziska, 406 Ill. 259, 94 N.E.2d 185; I.L.P. Trusts § 81.) In construing a trust and in determining whether an ambiguity exists in a trust instrument, the instrument creating or declaring the trust must be considered as a whole. Bear v. Millikin Trust Co., 336 Ill. 366, 168 N.E. 349; I.L.P. Trusts § 81.
We believe that section 705 and section 803(6) must be read together. Section 705 clearly gives the Trustee the sole right to invade the modernization fund to make the payments to the various sinking funds in the event insufficient revenue is generated. No written authorization of the Board is required by this section, nor does the CTA or Harris so contend. They do assert, however, that this provision allowing the Trustee to invade applies only to that portion of the modernization fund attributable to income or revenue. However, we are of the belief that there is no requirement in the modernization fund for a segregation of moneys derived from income or revenue and those derived from other sources except for the express exclusion of "proceeds of gifts, loans or grants" appearing in both sections. Article 7 is not limited in application to income or revenue only. The very title of article 7 relates to "receipts" of the transportation system a term more generic than "income or revenue." The second half of section 701 of article 7 relates and pertains to the application and disposition of all nonincome funds. As stated above, section 705 itself only excludes from the ...