De Korwin v. First Nat. Bank of Chicago

• Decision Date: 01 February 1950
• Docket Number: No. 9958-9960.,9958-9960.
• Citation: 179 F.2d 347
• Parties: DE KORWIN v. FIRST NAT. BANK OF CHICAGO et al. DE KORWIN v. KOCH et al. DE KORWIN v. PRATT et al.
• Court: U.S. Court of Appeals — Seventh Circuit

179 F.2d 347 (1949)

DE KORWIN v. FIRST NAT. BANK OF CHICAGO et al. DE KORWIN v. KOCH et al. DE KORWIN v. PRATT et al.

Nos. 9958-9960.

United States Court of Appeals Seventh Circuit.

December 30, 1949.

Rehearing Denied February 1, 1950.

J. F. Dammann, Chicago, Ill., Edward R. Johnston, Chicago, Ill., Harold V. Amberg, Chicago, Ill., Cranston Spray, Chicago, Ill., Winfield T. Durbin, Chicago, Ill., David A. Watts, Chicago, Ill., Charles T. Martin, Jr., Chicago, Ill., for appellant.

Kenneth F. Burgess, Howard Neitzert, Lloyd S. McClelland, Chicago, Ill., William G. Blood, Chicago, Ill., Thomas Dodd Healy, Chicago, Ill., Charles R. Aiken, Chicago, Ill., Homer F. Carey, Chicago, Ill., Vernon R. Loucks, Chicago, Ill., Howard D. Moses, Chicago, Ill., for appellee.

Before DUFFY, FINNEGAN and LINDLEY, Circuit Judges.

LINDLEY, Circuit Judge.

The issues presented upon these three appeals are essentially the same, namely, (1), whether plaintiff Margaret De Korwin, individually and as executrix of the will of Joseph De Korwin, deceased, has such an interest in the trust estate of Otto Young, deceased, as justifies her maintenance of the cause of action, and, (2), whether defendant First National Bank of Chicago has been acting as trustee of the estate without authority so to do. Each of these questions was resolved in favor of plaintiff by the District Court, which held that plaintiff is devisee of an heir of a vested remainderman and has standing to maintain the suit; that the trusteeship has become vacant, and that defendant bank should account as a trustee de son tort. The facts essential to a thorough consideration of these questions appear in the District Court's opinion reported in De Korwin v. First National Bank of Chicago, D.C., 84 F.Supp. 918. Related details appear in the decision of this court in De Korwin v. First National Bank, 7 Cir., 156 F.2d 858. Consequently we shall not reiterate except so far as necessary to clarify our reasons and conclusions.

Appellants' contention that plaintiff owns no such interest in the estate of Otto Young as endows her with the right to maintain this suit turns upon whether Stanley DeKorwin or Stanley Young, as he was sometimes known, received under the Young will a vested estate. In other words, appellants contend that the District Court erroneously interpreted the sixth clause of Otto Young's will in concluding that it conferred upon the grandchildren of the testator vested rather than contingent remainders. That clause, insofar as pertinent, reads: "Sixth: — When the last survivor of my daughters shall have deceased and the youngest surviving child of my daughters shall have attained the age of twenty-one (21) years all of said trust estate then remaining in the hands of said trustee shall be divided in equal shares between my grand-children, the surviving issue of any deceased grand-child to stand in the place of and receive the share which such deceased grand-child would have been entitled to receive if then living."

We are of the opinion that this clause contains no such clear expression of the testator's intent as to enable a court to say, without resort to precedent or rules of construction, that the remainders thereby created are contingent. On the contrary, since no contingency is expressed in the language of the gift itself, it seems clear that, unless that portion of the clause following the word "grand-children" imports a contingency, the remainders were vested in the testator's grandchildren at the time of his death.

Although appellants argue that the language "the surviving issue of any deceased grand-child to stand in the place of and receive the share which such deceased grand-child would have been entitled to receive if then living" definitely evinces an intent upon the part of the testator that the gifts to her grandchildren should be contingent upon their surviving the termination of the trust, an examination and analysis of Illinois cases dealing with the effect of language substantially like that quoted impels the conclusion that the contention must be rejected. It is true that, prior to 1915, a number of Illinois cases held that the existence of a clause providing that the children or descendants of a deceased remainderman should take the parent's share made the remainder contingent. Bates v. Gillett, 132 Ill. 287, 24 N.E. 611; Spendler v. Kuhn, 212 Ill. 186, 72 N.E. 214; Cummings v. Hamilton, 220 Ill. 480, 77 N.E. 264; Brownback v. Keister, 220 Ill. 544, 77 N.E. 75; People v. Byrd, 252 Ill. 223, 97 N.E. 293; Of these, Bates v. Gillett has since been overruled, in part at least; Dustin v. Brown, 297 Ill. 499, 508, 130 N.E. 859; Crowley v. Engelke, 394 Ill. 264, 272, 68 N.E.2d 241, and the extent to which People v. Byrd can be relied upon is somewhat clouded by the fact that the will there involved was construed on the basis of the law of New York rather than that of Illinois, even though the court held the law of the two states to be the same. And that the view expressed in those cases was not then the settled view of the Illinois court seems evident from the decisions in Siddons v. Cockrell, 131 Ill. 653, 23 N.E. 586; Knight v. Pottgieser, 176 Ill. 368, 52 N.E. 934, and Northern Trust Co. v. Wheaton, 249 Ill. 606, 94 N.E. 980, 34 L.R.A.,N.S., 1150, all decided prior to 1915, in which remainders were held vested despite the presence of a clause providing that the children or descendants of a deceased remainderman should take the deceased parent's share.

Since 1915, we think, the Illinois cases have uniformly held that such a provision as that under discussion does not prevent the remainder from vesting on the death of the testator but rather fixes the conditions upon which divestiture will occur and the executory gift over, i. e., the gift to the descendants of the deceased remainderman — take effect. Remmers v. Remmers, 280 Ill. 93, 117 N.E. 474; McBride v. Clemons, 294 Ill. 251, 128 N.E. 383; Warrington v. Chester, 294 Ill. 524, 128 N.E. 549; Weberpals v. Jenny, 300 Ill. 145, 133 N.E. 62; Boye v. Boye, 300 Ill. 508, 133 N.E. 382; People v. Allen, 313 Ill. 156, 144 N.E. 800; Smith v. Shepard, 370 Ill. 491, 19 N.E.2d 368. See also Hodam v. Jordan, D.C., 82 F.Supp. 183.

Of course the District Court, in construing the Young will, was bound to follow the law of Illinois as last announced by the Supreme Court of that state, Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487; Vandenbark v. Owens-Illinois Glass Co., 311 U.S. 538, 61 S.Ct. 347, 85 L.Ed. 327. Thus, in determining the effect to be given the clause, "the surviving issue of any deceased grand-child to stand in the place of and receive the share which such deceased grand-child would have been entitled to receive if then living," we think the court below properly relied on the rule announced in Warrington v. Chester, 294 Ill. 524, 128 N.E. 549, and Smith v. Shepard, 370 Ill. 491, 19 N.E.2d 368, rather than that of People v. Byrd, 253 Ill. 223, 97 N.E. 293. The decisions in those cases, considered in conjunction with the settled Illinois rules preferring vested rather than contingent interests, Riddle v. Killian, 366 Ill. 294, 300, 8 N.E.2d 629, and favoring the early vesting of estates, Murphy v. Westhoff, 386 Ill. 136, 140, 53 N.E.2d 931, led the District Court to the conclusion that the remainders involved in the present case were vested rather than contingent. The same considerations seem to us to require this court to affirm the judgment in that respect.

Appellants strongly urge that the words "would have been entitled to receive if then living" reflect an intent upon the part of the testator to make survivorship a condition of the gift to his grandchildren. We think that the language quoted is merely descriptive of the "share" the surviving issue of a deceased grandchild are to take and that it is just another way of saying that the distribution is to be per stirpes. In this connection, it must be observed that, although substantially identical language was used in the will in Warrington v. Chester, 294 Ill. 524, 526, 128 N.E. 549, the Illinois court failed to adopt the construction now urged by appellants. Nor does the fact that the substitutionary gift is to the "surviving" issue of a deceased grandchild enable us to attribute to the testator an intent to make survivorship a condition precedent in the original gift to his grandchildren, an end which could very easily have been attained by the insertion of the word "surviving" immediately before the word "grand-children" in the sixth clause.

Appellants argue that to hold the remainders vested is to frustrate the intent of the testator, as evidenced by a consideration of the entire will. They insist that his central purpose was to keep his estate in the hands of his lineal descendants, and point to the provisions of clauses four and five, which provide for disposition of the income from the testamentary trust, as illustrative of such a purpose. But to argue that the testator, because he limited the enjoyment of the trust income to his lineal descendants, intended to follow the same pattern in disposing of the corpus is to indulge, we think, in a non sequitur. Indeed, the clarity of the language with which the testator expressed his intention to restrict to his lineal descendants the enjoyment of the trust income, in contrast with the language employed by him in disposing of the trust corpus, weighs against appellants' contention that he was attempting to follow the same scheme in both instances. And finally, it must be remembered that the best guide to the testator's intent is the particular dispositive language used by him. Here, that language, though perhaps not as plain as some might desire, is substantially equivalent to that which Illinois construes as creating a vested remainder, subject to divestiture only by death with issue in the period prior to distribution. Knight v. Pottgieser, 176...