Court Opinion

ID: 3420265
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:47:26.910425+00
Date Added: 2024-06-11T14:23:56.070818
License: Public Domain

I disagree with the majority opinion. Substantially the same clause providing for termination is contained in this *Page 316 
case as was under consideration in Olson v. Rossetter, 399 Ill. 232. The termination clause in this case is as follows: "This trust may be terminated at such time as the Trust Managers in their sole discretion may determine; it being the intention, however, that the trust property be sold and liquidated as soon after the institution of this trust as conditions may permit and that the net proceeds thereof be distributed to the holders of certificates of interest; but if not sooner terminated, then this trust in any event shall terminate within ten (10) years from and after the date hereof."
In the Olson case just cited, we held that the period of the trust was not to exceed ten years and I think the same law applies to this case.
It is urged, however, that there has been a sale of the premises within the ten-year period. The evidence shows that a notice was given to the owners of 10,216 units of the trust in regard to the plan finally accepted. The opinion recites that only 1308 units were against the plan, but the record discloses that less than a majority of the units, namely, 4717, voted for the plan. The difference was represented by 4196 units not voting. It is true that in their notice the managers stated that if the owner of a unit did not vote he would be counted as voting for it, but we have been unable to find any authority which authorizes the managers of a trust or the directors of a corporation to vote the shares or units of owners in this manner. It does appear that the plan was adopted by a minority of the unit owners. Examination of the proposed plan which the managers adopted discloses that it leaves the property in the hands of the same trustee who held it before the sale was made and that no new money has gone into the plan. A new corporation was organized and each certificate holder in the trust received a share of the corporate stock in exchange, plus a revenue mortgage bond for $35. The stock had a par value of $5, and a mortgage payable solely *Page 317 
out of income of $357,590.63 was placed upon the property. It thus appears that the owners of the corporation are the same persons who were the owners of the trust. The money received is by a mortgage on their own property. It obligates nobody to pay the mortgage if the income is not sufficient for that purpose. It must be apparent that the whole scheme is one to continue the operation of the trust in the same trustee. No authority is offered to disclose that such a transaction constitutes a sale and certainly it does not fit into the provision of article XII that in any event the trust should be terminated and the net proceeds distributed among the holders of the certificates of interest.
It is my opinion that the decree of the superior court of Cook County should be reversed.