Court Opinion

ID: 7908986
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:03:45.888255+00
Date Added: 2024-06-11T16:32:31.638595
License: Public Domain

Johnston, C. J.
(dissenting): I am unable to agree with the conclusion that a trust was not created, nor that plaintiff had failed to establish a right of recovery. To mahe a declaration of an express trust it is essential that the trustee intend to create a trust. A valid declaration of trust does not require any particular form of words. Any language is sufficient which shows the intention to create a trust and which definitely designates the property to be disposed of. It is a general rule often stated that the elements constituting a trust are a declaration of words to create it, a subject or fund sufficiently identified, a designated trustee, a transfer of the subject or fund to the trustee to be held and used by him for the benefit of another duly described. (39 Cyc. 34.) Clyde S. Murray, it appears, clearly declared a purpose to set aside a part of the insurance fund for the benefit of his stepson and it was done in terms that were reasonably certain. There was no uncertainty as to the purpose, nor as to the fund itself, no uncertainty as to the trustee, nor any as to the disposition to be made of the fund by the trustee. It is shown that the trustee accepted the trust and agreed to carry it out. He not only gave his promise to the trustor to faithfully carry out the trust, but he promised the guardian of the child that he would faithfully fulfill the duty and use the fund to educate and promote the interests of the child. Some time after the declaration of the trust the trustor unequivocally confirmed the terms and conditions of the gift to his stepson. It is said that the child had no insurable interest in the life of the trustor and could not have been legally named as a beneficiary in the policy, but that is not material since a legal beneficiary was named, and since it was competent for the trustor to prescribe that the trustee should pay the fund or a part of it to one not related to him. A trust in the *735proceeds of a life insurance policy may be declared and the designated beneficiary required to apply or pay over to a third person, a stranger. (Northwestern Masonic Aid Ass’n v. Jones et al., 154 Pa. St. 99; 39 Cyc. 73, and cases cited.)
It is argued that the trustor was at liberty at any time to change the beneficiary named in the policy and to have substituted some one else than the defendant to whom the directions were given, and that this would have destroyed the trust. An executed trust never fails for lack of a trustee; but whatever complications might have arisen, if such a change had been made it is sufficient to say that the beneficiary was not changed, as the defendant was the beneficiary when the insured died. That question, therefore, has no bearing on the question we are considering. (Coyne v. Supreme Conclave, 106 Md. 54.) Nor is there any claim made that the trust or disposition of the fund was in any way inconsistent with the conditions or regulations of the government which issued the policy. And. it cannot be said to have been contrary to any public policy. (Kendrick v. Ray, 173 Mass. 305.)
I conclude that the action taken constituted a valid trust and is enforceable unless it is revocable. (Note in 14 Ann. Cas. 872.) Was the trust a revocable one? It is found that the trustor attempted a revocation just before he died. There was no expression-of reservation of the power of revocation, nor anything said by the trustor of an intention to make the gift revocable. There has been no consent by the plaintiff that the trust might be revoked. It has been said to be:
“A general rule that where a valid and effective voluntary trust has been created and no power of revocation has been reserved, it cannot be revoked by the creator without the consent of the beneficiaries thereunder.” (Note in 38 A. L. R. 941.)
A great number of authorities are cited in support of the proposition. In Miles v. Miles, 78 Kan. 382, 96 Pac. 481, the validity of a trust and the right of revocation were considered. The trust was created by a written instrument executed by Mrs. Miles, transferring property in trust for certain uses and benefits of certain children. The trustee was- required to pay over the rents and profits of the property transferred to the trustor during her life, and then it was to be delivered to the children. Later the mother devised the property to another, and after she died the one to whom it was devised sought to recover the property. There was a contention *736that the trust was executory, but it was held to be an executed or completed trust and when made that it became irrevocable. The court said, quoting from 3 Pomeroy’s Equity Jurisprudence, 3d ed.' § 1001, that “A trust is executed when no act is necessary to be done to give effect to it when the trust is fully and finally declared in the instrument creating it.” In the present case the trust appears to have been complete when the declaration was made. There was nothing more to be done by the creator of the trust to complete it. He had set apart one-half of his insurance for the benefit of the infant plaintiff, and gave the trustee appointed specific directions to carry it out. It is true there was reserved to the trustor the right to use a portion of the insurance to care for himself during his illness, and the sum of $1,870 of the fund was expended for that purpose, but that fact does not impair its character as an executed trust. In Miles v. Miles, supra, the court said:
“Nor does the fact that the donor retained a beneficial interest in the property during her life destroy its character as an executed trust. In Stone v. Hackett, Executor, and others, 78 Mass. 227, the income of the property was to be paid to the donor during his life, and upon his death the principal was to be divided among certain charities. The trust was held valid. In Davis v. Ney, 125 Mass. 590, 28 Am. Rep. 272, a trust was upheld which allowed the donor to receive, not only the income, but such part of the principal as she might need during her life.” (p. 388.)
In the later case of Reddy v. Graham, 110 Kan. 753, 205 Pac. 362, the question arose whether a valid trust had been established. The declaration was partly in writing and partly in parol. A mother made a deed to her son with the direction that the property should be equally divided among her three children, the son being one of them. At the same time a will was prepared and executed by the son in which two-thirds of the property that had been conveyed was devised by the son to the other two children, one-third to each, and the other retained by himself. Later the mother brought an action against her son to set aside the deed and trust, alleging misrepresentation and fraud in its execution and the lack of consideration. It was found that there was no fraud, mistake or undue influence in the execution, and further that no express power of revocation was reserved in the trustor. On the facts it was ruled that the deed and verbal contract created a complete trust without express power of revocation, and it was said:
*737“The rule is well settled that under these circumstances it requires the consent of all the beneficiaries before the creator of the trust can 'revoke it. (39 Cyc. 92, and cases cited in note.)” (p. 755.)
Since the trust declared was executed and complete, and no right of revocation reserved, it follows that the attempt of the trustor to retract the gift was ineffectual. So far as the defendant trustee is concerned it conclusively appears that he made an express and valid promise to pay one-half of the insurance for the education and maintenance of the infant plaintiff, and it is inequitable to allow him to retain the share of the insurance which he agreed to pay to plaintiff. (Christensen v. Christensen, 14 Fed. [2d] 475; Ambrose v. United States, 15 Fed. [2d] 52.)
Dawson and Harvey, JJ., join in the dissent.