Court Opinion

ID: 9743417
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:32:44.332023+00
Date Added: 2024-06-11T07:24:41.144219
License: Public Domain

JUSTICE APPLETON, dissenting: I respectfully dissent from the majority’s decision. By the 1992 amendment to section 6 (625 ILCS 35/6 (West 1992)), the legislature declared an express trust. Illinois residents 16 years of age or older with a valid driver’s license have a beneficial interest in the “trust fund.” That beneficial interest is property, which the State cannot take without violating the takings clause of the Illinois Constitution (Ill. Const. 1970, art. I, §15). The budget-implementation plans are unconstitutional insomuch as they take amounts already deposited in the trust fund and transfer those amounts to the General Revenue Fund. A. An Express Trust 1. The Capacity of the State To Create a Trust “[T]he General Assembly is free to enact any legislation that the constitution does not expressly prohibit.” Maddux v. Blagojevich, 233 Ill. 2d 508, 522, 911 N.E.2d 979, 988 (2009); see also Locust Grove Cemetery Ass’n v. Rose, 16 Ill. 2d 132, 138, 156 N.E.2d 577, 580 (1959) (“Every subject within the scope of civil government which is not within some constitutional inhibition may be acted upon by the General Assembly”). I am aware of no constitutional provision expressly prohibiting the General Assembly from enacting legislation making the State of Illinois the settlor of a trust. I do not doubt that the General Assembly has the power to grant property outright, such as by awarding grants out of public funds. It follows that the General Assembly also has the power to transfer public funds in trust. “A person has capacity to create a trust by transferring property inter vivos in trust to the extent that he has capacity to transfer the property inter vivos free of trust.” Restatement (Second) of Trusts §19, at 64 (1959). Several treatises on the law of trusts recognize that a state can be a trustee. (They also add that sovereign immunity might prevent a beneficiary from enforcing the trust. Sovereign immunity does not prevent us, however, from assessing the constitutionality of a statute.) 2 A. Scott, M. Ascher & W. Fratcher, Scott & Ascher on Trusts §11.1.5, at 607-08 (5th ed. 2006); G. Bogert & G. Bogert, Trusts & Trustees §128, at 393 (1984); Restatement (Second) of Trusts §95, at 221-22 (1959). If, in the view of these authorities, a state can take property in trust, a state can transfer property in trust to one of its agencies. I conclude that the General Assembly has the inherent power to make the State of Illinois the settlor of a trust and to appoint a state agency as the trustee. 2. Requirements for the Creation of an Express Trust The supreme court has held there are six requirements for the creation of an express trust: “(1) [the] intent of the parties to create a trust, which may be shown by a declaration of trust by the settlor or by circumstances which show that the settlor intended to create a trust; (2) a definite subject matter or trust property; (3) ascertainable beneficiaries; (4) a trustee; (5) specifications of a trust purpose and how the trust is to be performed; and (6) delivery of the trust property to the trustee.” Eychaner v. Gross, 202 Ill. 2d 228, 253, 779 N.E.2d 1115, 1131 (2002). I find the fulfillment of each of those requirements in this case. a. A Declaration of Trust by the Settlor In section 6 of the State Finance Act (625 ILCS 35/6 (West 2004)), the General Assembly makes “a declaration of trust.” Eychaner, 202 Ill. 2d at 253, 779 N.E.2d at 1131. To finance a training program for motorcycle riders, the General Assembly requires the Secretary of State to “deposit with the State Treasurer an amount equal to each annual fee and *** reduced fee[ ] for the registration of each motorcycle, motor driven cycle[,] and motorized pedalcycle processed by the Office of the Secretary of State during the preceding quarter ***, which amount the State Comptroller shall transfer quarterly to a trust fund outside of the State treasury[,] to be known as the [‘] Cycle Rider Safety Training Fund,[’] which is hereby created.” (Emphasis added.) 625 ILCS 35/6 (West 2004). The mere use of the word “trust” does not establish the existence of an express trust. La Throp v. Bell Federal Savings & Loan Ass’n, 68 Ill. 2d 375, 381, 370 N.E.2d 188, 191 (1977). (Again, six requirements must be met. Eychaner, 202 Ill. 2d at 253, 779 N.E.2d at 1131.) Nevertheless, I consider the legislature’s use of the term “trust fund” to be compelling evidence that it intended to create a trust. See Oglesby v. Springfield Marine Bank, 395 Ill. 37, 49, 69 N.E.2d 269, 276 (1946) (“Ordinarily, where an express private trust is relied on, the instruments introduced in evidence to establish such trust contain words such as ‘in trust’ ”). I must assume the legislature did not use that term lightly or in ignorance. b. Definite Subject Matter or Trust Property The subject matter of the trust is definite: the amounts deposited in the trust fund. These amounts are to be “equal to each annual fee and *** reduced fee[ ] for the registration of each motorcycle, motor driven cycle[,] and motorized pedalcycle.” 625 ILCS 35/6 (West 2004). c. Ascertainable Beneficiaries The beneficiaries are ascertainable: “all residents of the State who hold a currently valid driver’s license and who have reached their 16th birthday.” 625 ILCS 35/4 (West 2004). These are beneficiaries “ ‘capable of taking, and so defined and pointed out, that the trust will not be void for uncertainty.’ ” Kingsley v. Montrose Cemetery Co., 304 Ill. App. 273, 284, 26 N.E.2d 613, 618 (1940), quoting Gallego’s Executors v. Attorney General, 30 Va. 450, 466 (1832). “It is not essential to the validity of a deed of trust that the beneficiaries should appear therein by name. It will be sufficient if they are so described or designated that they may be ascertained and distinguished.” First National Bank of Elgin v. Schween, 127 Ill. 573, 580, 20 N.E. 681, 685 (1889). I am aware of no authority forbidding the establishment of a trust with numerous beneficiaries. The beneficiaries in this case, though numerous, are definite and ascertainable. d. A Trustee The Department of Transportation is the trustee of the trust fund. The Act does not call the Department the “trustee,” but the use or nonuse of that word is not controlling. See La Throp, 68 Ill. 2d at 381, 370 N.E.2d at 191; Restatement (Second) of Trusts §24(2), at 67 (1959). Through its description of the Department’s powers and duties with respect to the trust fund, the Act appoints the Department as trustee. The Department has “the power, duty[,] and authority to administer [the] Act” (625 ILCS 35/3 (West 2004)), and administering the Act ultimately comes down to deciding specifically how the trust fund will be spent (consistently with the provisions setting forth the purpose of the trust and the manner of performance). The Department may promulgate rules and regulations for the administration of the Act. 625 ILCS 35/5 (West 2004). The Department shall designate the state colleges, community colleges, state universities, and community agencies that may organize “Training Centers,” in which “cycle rider safety training courses” will be taught. 625 ILCS 35/4 (West 2004). “The Department is authorized to and shall award contracts out of appropriations to the Department from ‘The Cycle Rider Safety Training Fund’ to qualifying Regional Cycle Rider Safety Training Centers for the conduct of approved Cycle Rider Safety Training courses.” 625 ILCS 35/7 (West 2004). By rule and regulation, the Department shall prescribe the curriculum and accreditation for these courses, along with the qualifications and certification requirements for the instructors. 625 ILCS 35/4 (West 2004). The Department shall accept moneys for deposit into the trust fund, which it shall use “for the expenses of the Department in administering the provisions of [the] Act, for funding of contracts with approved Regional Cycle Rider Safety Training Centers for the conduct of courses, or for any purpose related or incident thereto and connected therewith.” 625 ILCS 35/6 (West 2004). These are just the sort of tasks one would expect a trustee to perform in administering the trust fund. e. Specification of the Trust Purposes and How the Trust Is To Be Performed i. The Trust Purpose The trust purpose is to provide “courses of instruction in the use and operation of cycles, including instruction in the safe on-road operation of cycles, the rules of the road[,] and the laws of this State relating to motor vehicles.” 625 ILCS 35/2.03 (West 2004). These courses are open to all Illinois residents 16 years of age or older who possess a valid driver’s license. 625 ILCS 35/4 (West 2004). ii. How the Trust Is To Be Performed By describing the trustee’s powers and duties, the Act describes how the trust is to be performed. Generally, the manner of performance is as follows. The Department will approve the organization of regional training centers, which will offer courses on motorcycle safety. 625 ILCS 35/4 (West 2004). The Department will enter into contracts with these training centers and, by disbursements from the trust fund, pay for their services to trainees. 625 ILCS 35/7 (West 2004). By publishing rules and regulations, the Department will fill in certain details, such as the curriculum and accreditation for the courses and the qualifications and certification of instructors. 625 ILCS 35/4 (West 2004). A trust instrument need not specify all the details of administration, so long as it describes, in general terms, the manner in which the trust is to be performed. In re Estate of Zukerman, 218 Ill. App. 3d 325, 330, 578 N.E.2d 248, 252 (1991). f. Delivery of the Trust Property to the Trustee The State has delivered trust property to the Department, as trustee, by depositing amounts in the trust fund. B. A Taking “Private property shall not be taken *** for public use without just compensation as provided by law.” Ill. Const. 1970, art. I, §15. The budget implementation plans violate the takings clause insomuch as they transfer amounts from the trust fund to the General Revenue Fund, for, in so doing, they take what does not belong to the State of Illinois: the beneficial interest in the trust fund. Plaintiffs characterize the corpus of the trust as “private funds,” and defendants characterize it as “public funds.” Neither term is apt. Whenever the Comptroller deposits an amount of money into the trust fund, the ownership of that money divides in two: the Department of Transportation, as trustee, receives the legal title, and the beneficiaries receive the equitable estate. See Randolph v. Wilkinson, 294 Ill. 508, 515, 128 N.E. 525, 529 (1920); 35 Ill. L. & Prac. Trusts §59, at 111 (2001). The equitable estate is property (Merchants’ Loan & Trust Co. v. Patterson, 308 Ill. 519, 530, 139 N.E. 912, 916 (1923)), and the State cannot take it any more than it could take the car parked in someone’s driveway. The trust fund in this case is an educational trust fund, and, essentially, it is no different from the educational trust fund an uncle might establish for a nephew, with himself as trustee. If he and his nephew have a falling out, he cannot remove the money from the trust account and put it back in his private account. That would be conversion (or, in the State’s case, an uncompensated taking). He can stop depositing money into the trust account (just as the General Assembly, if it wished, could repeal the provision in section 6 (625 ILCS 35/6 (West 2004)) whereby registration fees are deposited every quarter into the trust fund). But once he deposits a sum into the trust account, he loses the equitable title to it and retains only the legal title.