Court Opinion

ID: 9740881
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:43:51.595038+00
Date Added: 2024-06-11T07:24:18.315857
License: Public Domain

McCORMICK, J., dissents. I must respectfully dissent to a part of the majority opinion. We agree that the only trust involved is the Philip Trust, as the res of the Marie-Louise Trust was transferred to her prior to the death of either Carolyn or Philip, under the provisions of paragraph 7 of the will of Moise Dreyfus; consequently, in this dissent I will refer only to the Philip Trust. In considering the dispositive scheme of the testator the entire will must be read as a whole. In Weber v. Hawkins, 30 Ill2d 278, 196 NE2d 695, the court said, at page 283: “In construing a will the court’s primary mandate is to give effect to the testator’s intention, but, as the multitude of cases involving will construction indicate, frequently this is a difficult task. The intention of the testator is to be ascertained from the provisions of his will; the intention sought is not that which by inference may be presumed to have existed in the mind of the testator, but that which, by words used in the will, he has expressed.” “The intention of the testator has been called the polar star in construing wills, but that intention must appear from the will itself, in connection with the testator’s property, objects of his bounty and circumstances, . . Miller v. Brinton, 294 Ill 177, 128 NE 370. It is apparent that the only issue this court must determine is whether Philip in his will could make a valid appointment of the principal of the Philip Trust if he predeceased Carolyn, and to whom the trust res should pass in case there was no such valid appointment. I agree with the majority opinion that Carolyn Dreyfus was granted the testamentary power only to direct distribution of the Marie-Louise Trust to Marie-Louise Ros-enthal and to direct distribution of the Philip Trust to Philip Dreyfus, and not to cross-appoint the Philip Trust to Marie-Louise Rosenthal. In the majority opinion it is stated that Phyllis and Diane Dreyfus contend that . . the existence of Philip’s power of appointment was contingent upon his surviving Carolyn; that since Philip predeceased Carolyn there has been a default in appointment; and that therefore they are entitled to the trust estate in accordance with paragraph 9 (a) of the testator’s will which provides that in default of appointment by Philip, his issue (these appellants) would inherit. Paradoxically, they argue that the existence of Philip’s power, which is granted to him in paragraph 9(a), is subject to certain alleged conditions precedent as set forth in the preamble to that sub-section; but that their gift in default of appointment, also set forth in 9 (a) immediately subsequent to the grant of Philip’s power, is not subject to those identical alleged conditions precedent.” It would seem to be undisputed that the trust res must necessarily be distributed to whomever is entitled to it at the time of the death of the last survivor (the last survivor could be either Carolyn or Philip). Paragraph 9 (a) provides that “In the event that my said wife shall predecease me or in the event that my said wife shall survive me and shall fail to direct the distribution upon her death of said trusts, or either of them, then my said Trustees shall thereafter hold and dispose of the trust or trusts not so directed to be distributed, in the following manner, to wit:” Under the circumstances in the case before us Carolyn, the wife of the testator, did survive him and also survived Philip. It is true, as stated in the majority opinion, that under paragraph 9 (a) the testator provided for the continuation of the trust after Carolyn’s death if Philip was still alive. We quote from the majority opinion as follows: “ ‘During each and every year ensuing subsequent thereto [referring to Carolyn surviving the testator and failing to direct distribution] and prior to the death of said Philip S. Dreyfus, the income of the Philip Trust shall be distributed ... to said Philip S. Dreyfus, together with so much of the principal thereof as in the sole discretion of said Trustees they may deem it advisable or expedient so to distribute.’ “The testator next provided for the disposition of the trust estate upon the ultimate termination of the trust at the death of the life tenants: “ ‘Upon the death of said Philip S. Dreyfus, the principal, or so much thereof as may at such time remain in the hands, custody and control of said Trustees . . . shall be divided and distributed as said Philip S. Dreyfus may by his Last Will and Testament validly appoint.’ “After providing that Philip was to have a testamentary power of appointment over the trust estate, the testator then provided for a gift of the trust estate to the Dreyfus appellants only in default of that appointment. The specific language, immediately subsequent to the grant of Philip’s power of appointment, is as follows: “ ‘ [A] nd in default of appointment, to the lawful issue of said Philip S. Dreyfus surviving at the date of his death, share and share alike, per stirpes and not per capita.’ ” The majority opinion further says: “The term ‘in default of appointment’ presupposes that there was a valid power of appointment which either was not exercised at all or which was exercised in a defective manner so as to render that purported exercise void. Therefore, under appellants’ own argument that Philip had no valid testamentary power of appointment because he predeceased Carolyn, there could be no default of appointment.” In support of that contention of the meaning of “default” the majority opinion cites no cases. However, in In re Ball’s Trust, 43 Misc2d 84, 249 NYS2d 924, the settlor of the trust made a trust agreement providing for the payment of a net income for life to his niece, Julia, and that upon her death “ ‘the Trustee shall distribute the principal of the said Trust, together with any accrued income thereon, to such person, persons or corporations, other than and excluding the estate of the said Julia M. Ball, her creditors and the creditors of her estate, as the said Julia M. Ball will appoint in her last Will and Testament; and in default of such appointment/ distribution was to be made to the persons who would be settlor’s distributees under the law of the state of New York had he died immediately after Julia.” Julia, who died in 1963, declared in her will that it was her intention to exercise the power of appointment of the principal of the said inter vivos trust and of the said testamentary trust and that she was exercising the same under the provisions of the residuary clause of her will. In that paragraph she stipulated: “all the rest, residue and remainder of my estate . . . and including specifically the said trust fund[s],” over which she had power of appointment to The First Pennsylvania Banking and Trust Company [her executor] “as trustee for the following purposes: . . .” The purposes enumerated were to pay numerous general legacies to named charities and individuals, and to divide the “balance” of the residuary estate into three shares in trust for a niece and two nephews for life with power of appointment. The court held that this attempted exercise of the power of appointment by Julia was invalid and the distribution should be made as the trust alternatively provided. The court said: “Any appointment attempting to exercise the power beyond its express limitations and which would be violative of donor’s intent must be held to be an unauthorized and invalid appointment and, as such, would constitute in effect a ‘default of such appointment.’ Analogously, it was said in Lowe v. Bankers Trust Co., 270 NY 143, 148, 200 NE 674: ‘An illegal appointment is no appointment.’ ” [Emphasis supplied.] Under the provisions of paragraphs 9 and 9 (a) of the Moise Dreyfus will, there was a default of appointment. Under paragraph 9, Philip’s right to appoint would come into effect only if he had survived Carolyn. The first part of paragraph 9 provides: “. . . in the event that my said wife shall survive me and shall fail to direct the distribution upon her death of said trusts, or either of them, then my said Trustees shall thereafter hold and dispose of the trust or trusts not so directed to be distributed, in the following manner, to wit:” It would seem that the only way paragraph 9(a) could be read is that it refers to what would occur after the death of Carolyn. The preceding clause above quoted deals with that question. Paragraph 9(a) commences: “During each and every year ensuing subsequent thereto and prior to the death of said Philip S. Dreyfus, . . .” If any meaning is to be given at all to the word “subsequent” it must mean after the death of Carolyn. Paragraph 9 (a) further provides that upon the death of Philip the principal shall be divided and distributed as Philip may by his last will and testament validly appoint. Again, the appointment referred to is one which must occur subsequent to the death of Carolyn. It then further provides that in default of appointment the res of the trust shall descend to the lawful issue of Philip surviving at the date of his death, share and share alike per stirpes, and not per capita. The definition of “default” as used in the majority opinion is not in accord with the holding of the court in In re Ball’s Trust, 43 Misc2d 84, 249 NYS2d 924, supra. As correctly pointed out in the majority opinion, “Carolyn failed to direct distribution of the Philip Trust upon her death to Philip Dreyfus and, in fact, could not have done so because Philip predeceased her.” Reading the will as a whole, it is apparent that the testator did not intend to permit an appointment by Philip if he predeceased Carolyn. It is fallacious to say that Philip possessed a testamentary power which was not dependent upon his surviving Carolyn, but rather it was dependent upon Carolyn’s failure to exercise her power. Such a conclusion places a severe strain upon logical reasoning. In the second part of paragraph 9 (a) the testator considers the final distribution of the trust res. He gives to Philip a general power to appoint, subsequent to the death of Carolyn, but then provides that upon Philip’s failure to appoint, the corpus shall go to the then living issue of Philip. In 36 ILP Wills, § 443, it is provided that a testamentary power may be exercised only by the person or persons on whom it is conferred, and must be exercised in the manner prescribed by the donor; that where a testamentary power of appointment is not exercised by the donee thereof the property subject to the power passes to such persons as are designated to take in case of default in the power. In Stern v. Stern, 410 Ill 377, 102 NE2d 104, the court said: “While it is the duty of courts to construe wills as they find them, and not to draft new wills (Illinois Land and Loan Co. v. Bonner, 75 Ill 315; Bond v. Moore, 236 Ill 576,) or conjecture what provisions the testator would have made had he thought of the particular contingency, (First Trust and Savings Bank v. Olson, 353 Ill 206,) courts have nevertheless evolved the doctrine of devise or gift by implication, whereby a gift will be sustained though not made by the will in formal language, when the probability of the intention of the testator to make the gift is so strong that a contrary intention cannot be supposed. Martin v. Martin, 273 Ill 595; Connor v. Gardner, 230 Ill 258; King v. King, 168 Ill 273; Bond v. Moore, 236 Ill 576; City Bank Farmers Trust Co. v. Hentz, 107 NJ Eq 283, 152 A 331; Cary & Schuyler, Future Interests 331, 57 Am Jur 739.” Under, this rule it is improper for either the trial court or a reviewing court to draft a new will for the testator. In effect, that is exactly what the majority opinion does in this case. The interpretation that Philip had no right to appoint the res of the trust until after the’ death of Carolyn is strengthened by paragraph 10 of the Moise Dreyfus will, which provides that the beneficiaries shall not have any vested interest in the trust estate or the income thereof until the same is actually paid over and transferred to them, “nor shall they have any power in any manner to assign, transfer, charge or anticipate the same, or any part thereof, or interest therein, until the same is actually paid over and transferred to them, . . .” In other words, the testator intended by paragraph 9 to provide that Philip should have no power of appointment unless Carolyn had predeceased him. A power to appoint does not of itself vest the donee with any title or interest in the thing to be disposed of under the power, but merely vests in him power to appoint the one to take title. A power of appointment is neither an absolute right of property nor an estate. 1 Page on Wills, § 1.2 states: “The essential idea underlying the concept of the will is that though it is made by a person during his lifetime it does not become binding and has no legal force or operative effect .until his death; nor does it pass any interest in property or create rights in others until the death of the maker, at which time its dispositive effect operates upon the circumstances concerning the extent and the nature of the testator’s property and the objects of his bounty existing at his death rather than at the time the will was executed. . . .’* A will made by a testator while he lives is without force or value, but it begins to speak when he ceases to do so, and is thereafter heard in his stead. Thompson v. J. D. Thompson Carnation Co., 279 Ill 54, 61, 116 NE 648; Levings v. Wood, 339 Ill 11, 13, 170 NE 767; Allen v. National Bank of Austin, 19 Ill App2d 149, 153 NE2d 260. Philip’s will spoke at the time of his death, and under the provisions of paragraph 9 of the Moise Dreyfus will he had no valid power to appoint, because Carolyn was living at that time. Hence, the will of Philip could vest no interest in the trust corpus in Michael Beese Hospital until the date of Philip’s death, and then only if Carolyn had predeceased him. Additionally, Carolyn, who had the power to direct the Philip Trust only to Philip, ceased to have any power over the Philip Trust upon the death of Philip. Under Moise’s will the issue of Philip living at the date of his death had a vested interest in the corpus, defeasible by the exercise of the power of- appointment either by Carolyn or by Philip. However, the exercise of the power presupposes that it be' a valid one. Since neither party did so, the remainder of the trust res vested indefeasibly in the then living Dreyfus children. The will speaks at the time of the testator’s death. It is apparent that it was the intention of the testator that if Philip predeceased Carolyn he could not make a valid appointment, and in default of such appointment, the trust res should be taken by the lawful issue of Philip surviving at the date of his death. Philip having predeceased Carolyn, the appointment by his will of the Philip Trust estate to Michael Reese Hospital was an invalid appointment. The decree of the Circuit Court should be reversed and the case remanded to the trial court with directions to enter a summary judgment in favor of Phyllis and Diane Dreyfus, distributing the res of the trust estate to them share and share alike per stirpes and not per capita, as was provided in the will.