Court Opinion

ID: 8835982
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:24:09.088035+00
Date Added: 2024-06-11T17:05:04.029863
License: Public Domain

GILBERT, Circuit Judge
(after stating the facts as above).  The appellant points to the provisions of the agreement which declare positively that he is the owner of the full and absolute legal title in and to the property conveyed to him, and that no duty imposed upon him shall affect such title, and to the absence of any provision of the agreement creating an interest in the property in favor of the beneficia*259ries therein named, and contends that no trust was created, and that the covenants by him to make the payments to the beneficiaries were simply contractual obligations undertaken by him as part of the consideration of the conveyance of the properties to him, which obligations were extinguished by the subsequent agreement of August 16, 1917, and it is contended that', so long as the legal title stood in the appellant there could be no beneficial interest in the appellees. Section 863 of the Civil Code seems to us to meet and answer the latter contention. It provides:
“Except as hereinafter otherwise provided, every, express trust in real property, valid as such in its creation, vests the whole estate in the trustees, subject only to the execution of the trust. The beneficiaries taire no estate or interest in the property, but may enforce the performance of the trust.”
While it is true that the conveyance and the contract gave to the appellant absolute title in fee simple, and the assurance of title is therein emphasized and reiterated, other provisions in the contract sufficiently indicate that the intention was to charge the title with a trust. Thus it is provided that the appellant should devote and apply his best energies, judgment, and ability to the advantageous and successful management of the property, that he was to account for the proceeds thereof, that he was to turn over to each of the beneficiaries a fixed sum of money, and that the source of those payments was to be the property so conveyed to him. The beneficiaries so mentioned were the brothers and sisters of Minerva H. Roberts.
As against the existence of a trust it is argued that there was want of subject-matter of a trust, that the payments to the beneficiaries were to be made only out of the net income within a year after the death of Minerva H. Roberts, and -that until the occurrence of her death there was nothing to which a trust could attach. The appellant cites Molera v. Cooper, 173 Cal. 259, 160 Pac. 231, a case in which the defendant, owing the plaintiff $1,000 on a note, agreed to hold that sum in trust for third parties, and thereupon the plaintiff released the note. It was held that there was no trust, since the defendant did not actually have the $1,000 in her possession at the time of the release of the note, and that a mere promise to obtain money and thereupon hold it in trust does not create a trust, at least not until the money is obtained. But in the present case the corpus of the trust is the property conveyed to the appellant. Prom that estate profits were to be made, out of which beneficiaries were to be paid, and to the management of the estate, with that end, among others, in view, the appellant bound himself by his agreement. Section 857 of the Civil Code, in subdivision 3, authorizes the creation of express trusts to receive rents and profits of real property and to pay them to, or apply them to, the use of any person.
But the appellant contends that the payments for the beneficiaries were not provided to be made wholly out of the profits of the estate which was conveyed at the time of the original agreement, that there was a provision that they might be paid out of any property which might.subsequently be conveyed to the appellant by the last will and testament of Minerva Hu Roberts, and there could be no ascertained *260subject-matter of the alleged trust until after her death. A sufficient reply to this is the allegation of the appellant’s answer that no property of any kind was ever devised or bequeathed to him by the last will and testament of Minerva H. Roberts.
It is contended that section 857 of the Civil Code includes provision for all permissible trusts in the state of California, and that the agreement in this case comes within none of them unless it be subdivision 1, which recognizes an express trust to sell and convey real property and to hold or reinvest the proceeds; but it is said that, in order to comply with that provision, the power to sell must be imperative, and that here it is not imperative, and it is further said that, where real and personal property have been intermingled, the entire trust is void, if the trust as to real property is void. The Supreme Court of the state does not so construe the section, nor does it hold that, to bring a trust within the provision of subdivision 1 of section 857, the power to sell must be imperative. In Estate of Aldersley, 174 Cal. 366, 163 Pac. 206, the court upheld a trust in which the power to sell was given, if deemed advisable, or if it became necessary. A similar view of the section was taken in Aldersley v. McCloud, 35 Cal. App. 17, 24, 168 Pac. 1153. Other decisions in point are Keogh v. Noble, 136 Cal. 153, 68 Pac. 579; Janes v. Throckmorton, 57 Cal. 368.
It follows, from the view which we have taken of the contract and conveyance of August 13, 1909, that the trust provisions thereof could not be revoked, as they purport to be, by the agreement of August 16, 1917. Kopp v. Gunther, 95 Cal. 63, 30 Pac. 301. Section 2280 of the Civil Code provides:
“A trust éannot be revoked by tbe truster after its acceptance, actual or presumed, by the trustee and beneficiaries, except by the consent of all the beneficiaries, unless the declaration of trust reserves a power of revocation to the truster, and in that case the power must be strictly pursued.”
No right of revocation was reserved in the original agreement.
The appellant cites section 1559 of the Civil Code, which provides that a contract made expressly for the benefit of a third person may be enforced by him at any time before the parties thereto rescind it. But that section cannot apply to a case where a right is vested in a cestui que trust. More v. Hutchinson, 187 Cal. 623, 203 Pac. 97, is not authority to the contrary. In that case one corporation took over the assets of another corporation, and agreed to pay a note owing by the latter to a bank. The court held that a contract 'for the benefit of a third person requires an acceptance by him, that until his acceptance is in some manner manifested no rights in his favor can arise, and that until then the contract amounts to a mere offer. But in the case of a trust agreement it is not necessary that the beneficiary accept the trust. His acceptance will be presumed. Cahlan v. Bank of Lassen County, 11 Cal. App. 533, 105 Pac. 765; Cartwright & Bro. v. United States Bank & T. Co., 23 N. M. 82, 167 Pac. 436; Booth v. Oakland Bank of Savings, 122 Cal. 19, 54 Pac. 370.
It is admitted that the deed and the agreement here in question are to be regarded as one instrument, Tyler v. Granger, 48 Cal. 259. Such an instrument is testamentary in its nature only when from its terms it appears that the intention of the maker was that it should *261not be operative as a conveyance or disposition of property or any interest, present or future, until his death. But if, as in the present case, the instrument according to its proper legal effect passes at the time of its execution a present interest or title in the property to a third person, although it may be only an interest in a future estate, it is a present conveyance and not a will. Tennant v. John Tennant Memorial Home, 167 Cal. 570, 140 Pac. 242; Hellman v. McWilliams, 70 Cal. 449, 11 Pac. 659.
The decree is affirmed.