Court Opinion

ID: 9797317
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:18:16.060606+00
Date Added: 2024-06-11T08:54:26.675558
License: Public Domain

ARMSTRONG, J.,
dissenting.
The majority asks a question that this case does not present and then answers it incorrectly. In the process, it confuses the Oregon law of future interests in a way that, because of the rarity of cases on the subject, may take years to correct. Because I cannot join in creating that confusion, I dissent from the majority’s decision.
In his will, Charles F. Berg gave the Saidee trust1 a contingent remainder in the Forrest trust that was expressly contingent on Forrest dying without surviving issue. Nothing in Charles’ will or in the nature of the remainder suggests that it was also implicitly contingent on the Saidee trust continuing in existence until Forrest died. Charles’ will simply provided that, if Forrest died without leaving issue, “the said stock [in Charles F. Berg, Inc.] shall be transferred to and become a part of’ the Saidee trust, subject to provision for *128Forrest’s widow. Yet the majority, without even explaining why it decided to undertake the quest, feels compelled to search out an additional contingency whose consequence is that the remainder fails and the trust’s assets will be distributed in a way that neither Charles nor Saidee intended.
The majority reaches that result even though nothing in Charles’ testamentary scheme requires (or even suggests the requirement) that the Saidee trust be in existence when Forrest died in order for the remainder in its favor to be effective. The majority’s suggestion otherwise is the result of its failure to recognize the essential nature of every future interest: it represents an interest in the property that, although it will not result in possession until tomorrow, exists as much today as does the interest of the person who possesses the property today. A future interest is one stick out of the bundle of sticks that represents full ownership, and the owner of that stick owns a piece of the property today. With exceptions that I discuss below, under Oregon law that stick is as subject to being passed from one entity to another as is any other stick. Thus, although the remainder that the Saidee trust owned was contingent because the Saidee trust would not receive possession unless Forrest died without surviving issue, the Saidee trust still had a present interest in the Forrest trust. In his will, Charles described the nature and extent of that interest and designated the Saidee trust as the original owner.
These statements are hornbook law. A future interest “is an existing interest from the time of its creation, and is looked upon as a part of the total ownership of the land or other thing which is its subject matter”; the term is “applied only to indicate that the possession or enjoyment of the subject matter is to take place in the future.” Lewis M. Simes and Allan F. Smith, 1 The Law of Future Interests § 1, 3 (2d ed 1956). A contingent remainder has a present existence as certainly as does a vested interest. Id. § 65 at 55. The contingent remainder in the Forrest trust, thus, was one of the assets of the Saidee trust from the moment that the Saidee trust came into existence.2
*129Nothing in what Charles said in his will makes this remainder explicitly contingent on the continued existence of its original owner, and I find nothing that does so implicitly. The majority seems to base its contrary conclusion in large part on the words that Charles used in creating the remainder. He stated that, if Forrest died without surviving issue, the stock shall be “transferred to and become a part of’ the Saidee trust at that time. The majority apparently treats that statement as a requirement that the Saidee trust exist rather than as a description of who is the original owner of the remainder. If it were correct, few remainders could survive the original owner, because remainders normally provide for transferring possession to the remainderperson. Yet it is clear that the original owner of a remainder may convey it to another, who will take possession without regard to whether the original owner is alive at the time. See, e.g., Restatement of Property § 162, illustration 1 (1936).3 There is thus no reason to read words that designate the original owner of the remainder, but that do not expressly require survivorship, as impliedly creating such a condition. Implying a condition of survivorship could make sense only if a remainder were inalienable, so that no one other than the original owner could ever own it. However, the remainder in this case was clearly alienable when Charles wrote his will and continues to be alienable today. There is, thus, no implied condition of survivorship.
*130This remainder is contingent because it is uncertain whether an event — Forrest’s death without surviving issue— will occur. There is no contingency concerning what person will have the right to possession if the event occurs. When Charles executed his will, as today, Oregon law clearly provided that a remainder that was contingent on an event was alienable. Love v. Lindstedt, 76 Or 66, 147 P 935 (1915). The remainder interests in Love were “contingent as to their occurrence, but vested as to the persons who should enjoy them[.]” Id. at 74. As a result, the court held in Love, those who held the contingent remainders could convey them to the life tenant, with the result that the life tenant could then convey the fee title to a third party. Shortly after Charles executed his will, the Supreme Court nailed that point down in Hawkins & Roberts v. Jerman, 147 Or 657, 35 P2d 248 (1934). Quoting a treatise, it indicated that the reason for the distinction is that, when the contingency involves the existence of a person, there is no one who has the capacity to convey it. That is not the case when the contingency involves an event and the person who will take possession if the contingency occurs is certain. 147 Or at 664-65.
The legal effect of Charles’ will, both under the law as it existed at the time of his will and under the law today, is that the Saidee trust owned a present contingent interest in the Forrest trust that carried with it the power of alienation. Although Charles may have restricted the trust’s authority to alienate the remainder, that restriction does not affect the legal character of the remainder.
This discussion tells us all that we need to know about this contingent remainder in order to decide the issues before us. We know that the remainder was a separate property right that represented a present interest in the Forrest trust, that the Saidee trust was the original owner of the remainder, and that the trust had the legal capacity to alienate it in accordance with any restrictions that Charles placed on doing so. The remainder, that is, was like any other piece of property that the trust owned. Nothing about the trust or Charles’ will suggests that it had any other contingencies or restrictions. The only remaining issue is to determine who succeeded to the remainder when the Saidee trust terminated and distributed its assets.
*131Instead of deciding that issue, the majority asks whether there is an additional, unexpressed contingency to the remainder: that the Saidee trust be in existence when Forrest died without surviving issue. The cases that the majority cites do not require it to ask that question, because they do not involve remainders with similar terms. In one case the issue did not involve the terms of a remainder in a trust but, rather, whether the property at issue ever entered the trust at all. The court held that the property was part of the trust and, thus, the remainder expressly required the original owner of the remainder to survive until the trust terminated. Because he did not, the interest in the trust passed to the original owner’s children, in accordance with the terms of the trust, rather than to his children and his wife, in accordance with his will. Morse et al v. Paulson et al, 182 Or 111, 186 P2d 394 (1947). In another case, the issue was whether the original owner’s interest was vested; because it was, her husband succeeded to it. Williamson v. Denison and Groves, 185 Or 249, 202 P2d 477 (1949). Those cases involved no more than construing the express terms of the wills involved. To the extent that those words raised issues of whether the interest was contingent on survivorship, the court had to consider that issue. Here, in contrast, the words of Charles’ will do not raise such issues.
The majority fails to recognize that the provision that, if Forrest died without issue, the stock in the Forrest trust “shall be transferred to and become a part of’ the Saidee trust simply creates the remainder and describes who owns it. It is the same as if Charles had provided that, if Forrest died without surviving issue, the stock in the Forrest trust would become the property of A. In that case, A would have a contingent remainder that was contingent as to an event, not a person. If A died before Forrest, the remainder would pass through A’s will or by intestacy. If A conveyed the remainder to some one else inter vivos, that person would own it without regard to whether A survived Forrest. What Charles actually did had exactly the same effect, except that he gave the remainder to a trust rather than a person. When the trust dissolved, it was the same as if A died; the remainder did not disappear but went somewhere else.
*132Even if there were some reason that we had to decide whether Charles intended the remainder to be contingent on the existence of the Saidee trust, the majority’s answer to that question is wrong. The majority bases its conclusion primarily on its belief that Charles’ sole purpose in establishing the trust and giving it the remainder was to provide for Saidee and Caroline; thus, after they both died and the trust was dissolved, the remainder served no further function. Charles, however, had at least one other obvious purpose that he could achieve only if the remainder survived the dissolution of the Saidee trust. He was clearly concerned about the continuing prosperity and control of the corporation. In his will, he emphasized his trust in Forrest’s business sense but also recognized that Forrest was only 31 years old at the time. He knew that dividing the corporate stock equally between the Forrest and Saidee trusts, as he did, could result in a stalemate, so he gave one share to his lawyer, allowing the lawyer to break any deadlocks. He certainly intended to use the corporate stock to benefit Saidee, Caroline, Forrest, Forrest’s issue, and Caroline’s issue. In doing so, he had to divide the stock among them. Nevertheless, he also made it possible to restore unified control of the company if one or the other had no issue. If Forrest died without issue, the contingent remainder to the Saidee trust would achieve that purpose. If Caroline died without issue, either she or Saidee could appoint the stock in the Saidee trust to Forrest, again achieving that purpose. That, of course, is exactly what Sai-dee did.
If the majority is correct, the unified control that Charles so carefully permitted if Saidee died before Forrest and Forrest had no surviving issue could not last beyond Forrest’s death. Instead, the stock had to be divided and, with it, the corporation. Under the majority’s view, Saidee could not give Forrest control over the shares in the Forrest trust, even though the Saidee trust, over which she had a power of appointment, owned the operative remainder in those shares. The only way that she could preserve unified control, according to the majority, would have been the indirect route of making Forrest her residuary beneficiary, something that would have interfered with her overall estate plan. Excluding the contingent remainder from Saidee’s or *133Caroline’s power of appointment would undercut an important part of Charles’ overall estate plan and would unnecessarily threaten the survival of the business that was his life’s work. On the other hand, a condition of survivorship is entirely unnecessary to achieve Charles’ purpose of providing for Saidee and Caroline. The majority is wrong.
I turn to what happened to the remainder on the dissolution of the Saidee trust. In his will, Charles provided that, on Caroline’s death without issue, “all of the trust fund shall be the property of’ Saidee and that at her death “the fund” was to be divided among her legal distributees unless she exercised her testamentary power of appointment “directing the disposition of such fund[.]” Those provisions show that Charles gave Saidee a power of appointment over every asset in the Saidee trust. The additional statement in Charles’ will that the provisions of the paragraph involved “shall be applicable to the stock in the Corporation * * *, said stock having been heretofore specifically made a part of” the Saidee trust fund simply describes part of the trust corpus over which Saidee had a power of appointment. It does not limit the otherwise broad statement of her power. Because the remainder was one of the assets of the trust, Saidee had a testamentary power of appointment over it.
The more difficult question is whether Saidee effectively appointed the remainder to Forrest. In exercising the power of appointment in her will, Saidee described the assets of the Saidee trust as “shares of preferred and common stock” of the company, an apparently more limited description than Charles had used. She then purported to appoint the “entire assets” of the trust by giving the preferred stock “which is held in the aforementioned” trust to two employees and the common stock “which is held in the aforementioned” trust to Forrest, if he survived her and if he accepted the conditions that she established, as he did. She did not expressly refer to any contingent interest that the Saidee trust may have held in the Forrest trust. However, that remainder was an existing interest in precisely the kinds of stock that she expressly described.
There may be some ambiguity in Saidee’s will about whether she was appointing the contingent remainder as *134well as the stock that the trust actually possessed. Her express appointment of the shares may point in one direction, but her references to the “all of the trust fund” and the “entire assets” of the trust point in the other. What is clear, however, is that she intended to exercise her power to its fullest extent. That action was also consistent with Charles’ apparent purpose in the situation that actually developed. Although the issue may be somewhat close, I would hold that Saidee effectively appointed the remainder to Forrest.
We generally presume that a testator did not intend to die intestate as to any part of the estate. Thus, where it is possible to construe a will in more than one way, we will adopt the construction that avoids having anything pass by intestacy. See Erickson v. Palmer et al, 211 Or 342, 353, 315 P2d 164 (1957); Jorgensen v. Pioneer Trust Co. et al., 198 Or 579, 595-96, 258 P2d 140 (1953). Although that rule does not directly apply to this case, it is useful by analogy. Saidee’s will shows that she intended to exercise her power of appointment to its maximum extent. If she failed to do so effectively, the contingent remainder passed through the trust’s default provision to her legal distributees, that is, her intestate heirs. See Black’s Law Dictionary, 1039 (rev 4th ed 1968).4 Because it is possible to read Saidee’s exercise of the power of appointment as including all of the assets of the trust, including the contingent remainder, and because that reading is the most consistent with her intention, I would adopt it.
Saidee, thus, had a testamentary power of appointment over the contingent remainder, she exercised that power in her will, and Forrest thereby became the owner of the remainder as to the common stock. When he died without issue, that remainder vested in his estate, which is therefore entitled to receive the common stock, while the remainder as to the preferred stock vested in the two employees. Because the majority holds otherwise, I dissent.

 I will refer to each trust by the name of its principal beneficiary. By doing so, I emphasize that each trust existed separately and apart from its beneficiaries and was the legal owner in its own right of the property in the trust; it did not own property simply as an adjunct of the beneficiaries. In contrast, the majority refers to the trusts by a possessive (e.g., “Forrest’s trust”), thereby treating them as in some sense possessions of the beneficiaries rather than as independent entities. That nomenclature may reflect the majority’s unwillingness to give the Saidee trust’s ownership of a contingent remainder in the Forrest trust all of the characteristics that such ownership normally entails.

 Oregon Bank v. Huss, 99 Or App 449, 782 P2d 451 (1989), on which respondent relies, involved a contingent remainder given to a trust that would have been *129created under a will that the trustor subsequently revoked. Thus, the trust did not exist when the remainder was created and could never have come into existence. Because there was no entity that could become the owner of the remainder at its creation, the remainder failed ab initio. That has little if anything to do with this case.

 In the illustration, the remainder is to “B’s children and their heirs,” which is construed to mean B’s children, whether or not they survive B. According to the illustration, C, a child, may convey the remainder and the recipient will be entitled to possession when the remainder takes effect, even if C dies before B. It is hard to see how this typical example is consistent with the majority’s explanation of the literalness criterion. See 167 Or App at 121. There is no principled distinction between “remainder to A” and “the property shall be transferred to A”; they both give A a right to the property. It is clear in the first case that the remainder is effective as to A even if A is no longer alive. Because the remainder is effective in that case, it is also effective in the second case. In contrast, the majority would create a condition of survivorship in every case where the grant does not expressly exclude it.

 Most of those heirs have appeared in this case to assert their rights to the stock.