Opinion ID: 413395
Heading Depth: 2
Heading Rank: 2

Heading: Title to Ticket 13540

Text: 16 Having determined that the prize agreement is enforceable, we must determine whether Morgan has rights in ticket 13540. Smith and Evelyn provided Morgan with a prize of four sheets of official tickets as promised. If Morgan has no rights to ticket 13540, he has no further claim against Smith or the Williams. 17 The district court held that Smith created an express trust in favor of the future raffle winner when she transferred her two sheets to Evelyn. Thus, the district court held that Morgan had specifically enforceable rights in the ticket 13540 as the beneficiary of a valid express trust. Smith and the Williams argue that it was error for the district court to find an express trust because there was no named beneficiary, the trust purpose was illegal, and the parties had not manifested a clear trust intent. 18 The Restatement of Trusts provides the applicable common-law rules absent contrary local laws. V.I.Code Ann. tit. 1 Sec. 4 (1964). The district court properly held that the trust did not fail for lack of a named beneficiary. Restatement (Second) of Trusts Sec. 112 provides that a trust can be created in favor of an unnamed beneficiary as long as a definite beneficiary can be ascertained at some future time within the period of the rule against perpetuities. 19 The district court also properly held that the trust did not fail for illegality. Restatement (Second) of Trusts Sec. 65 provides that a trust executed by illegal means need not fail if the trust could have been executed by legal means without defeating the settlor's purpose. See id. comment a. Smith's sole purpose in creating the trust was to conduct a raffle with four sheets of tickets as the prize. Although she directed that the trust be executed by conducting a raffle without a permit, the illegal without permit provision was not necessary to her trust purpose. Because the trust could have been executed by legal means without defeating the purposes of its settlor, it does not fail for illegality. 20 Finally, the district court held that the parties had manifested the necessary trust intent. In so holding, the district court applied the correct legal standard. It held that no express trust may be created without evidence of a certain and unequivocal intent on the part of the settlor to create such a trust. Restatement (Second) of Trusts Sec. 23. The district court then examined the undisputed evidence to determine whether there was a triable issue of fact as to such an intent. 21 The district court held that the parties had offered no specific facts showing that there is a genuine issue as to Smith's intent to create an express trust. From the undisputed evidence, the district court held that when Smith delivered two tickets to Evelyn she clearly manifested her intent that specifically set aside tickets ... were to be held 'in trust' for the benefit of an unnamed beneficiary whose identity would be established at the time of the raffle drawing. We do not think that this was error. 22 First, it is clear that the parties attached some importance to the terminal numbers of the tickets on the four sheets and did not regard the sheets as fungible. Terminal numbers are important in the Virgin Islands lottery. Anyone who holds a ticket that has the same terminal number as the winning ticket is entitled to a refund of the ticket's purchase price. 23 Evelyn testified at her deposition that when she went to Smith's house to pick up the lottery tickets, Smith wanted to know the terminal numbers of the tickets that Evelyn was donating. When Evelyn did not know those numbers, Smith insisted that Evelyn call her husband to find out. Only after Smith learned that Evelyn's tickets ended in 8 and 4 did she give Evelyn her two sheets of tickets, which ended in 5 and 0. 24 Second, it is clear that Smith transferred her two sheets to Evelyn with the understanding that Evelyn would convey the four sheets specifically set aside to the raffle winner. Evelyn testified that after the results of the official lottery were announced. Smith called her to tell her that the winner of their raffle had won ticket 13540 and thus the official grand prize. Thus, it is clear that Smith assumed that Evelyn had conveyed ticket 13540 to the winner of the Smith/Williams raffle as instructed. On these undisputed facts, we cannot say that the district court erred in holding that Smith's transfer to Evelyn manifested an intent to create an express trust. 25 We also agree with the district court's holding that Evelyn breached her fiduciary duty to Morgan as beneficiary when she allowed her husband to exchange one of his tickets for ticket 13540. Virgin Islands law prohibits a trustee from directly or indirectly selling any property of the trust to a relative. V.I.Code Ann. tit. 15 Sec. 1095 (1964). 26 If a trustee engages in such self-dealing without the consent of the beneficiary, the transaction is voidable even though the transaction was in all other respects fair and reasonable. Restatement (Second) of Trusts Sec. 170: Scott on Trusts Sec. 170 at 1298 (3rd ed. 1967).