Corwin v. Rheims

• Decision Date: 21 May 1945
• Docket Number: No. 28210.,28210.
• Citation: 390 Ill. 205,61 N.E.2d 40
• Parties: CORWIN et al. v. RHEIMS et al.
• Court: Illinois Supreme Court

390 Ill. 205

61 N.E.2d 40

CORWIN et al.

v.RHEIMS et al.

No. 28210.

Supreme Court of Illinois.

March 21, 1945.

As Modified on Denial of Rehearing May 21, 1945.

Appeal from Superior Court, Cook County; John J. Lupe, Judge.

Suit by Nathaniel S. Corwin and others against Marie L. Rheims, the International Hotel Company, and others, for directions as to trustees' duties under certain trust instruments and for approval of a contract made by the trustees with the Hotel Company and others. A cross-complaint was filed on behalf of Gertrude Libbey and others and, from a decree granting first-named defendant relief, she appeals, and, from part of the decree and certain orders denying leave to file an amended and supplemental answer, the Hotel Company and others cross-appeal. Motion to dismiss the appeal.

Motion denied and decree affirmed.

GUNN, J., dissenting.

Scott, MacLeish & Falk, of Chicago (Leland K. Neeves, of Chicago, of counsel), for appellant.

Fink & Meier and Mayer, Meyer, Austrian & Platt, all of Chicago (Sherwood K. Platt, of Chicago, of counsel), for appellees.

Orr, Vail, Lewis & Orr and Gustav E. Beerly, all of Chicago (Warren H. Orr, of Chicago, of counsel), for cross-appellants.

MURPHY, Justice.

The appeal in this case is prosecuted to reverse a decree of the superior court of Cook county which decreed the title to lots 10 and 11, block 115 in School Section addition to the city of Chicago to be vested, a two-eighths in appellant, Marie L. Rheims, and the remaining three-fourths in appellees Gertrude Libbey, Maida Backus, Mildred Loring Wilson and Anna Louise Clapp, all interests subject to a 99-year lease. Appellant contended that by the terms of two trust instruments hereinafter referred to she was the sole owner, while appellees contended that the will of Maude Hanley Branca vested the title in the beneficiaries named. A cross appeal is prosecuted by the parties and their privies who by assignment have succeeded to the interest of the original lessee in the 99-year lease. They seek to reverse that part of the decree and orders which denied them relief from a rental operating agreement which was to supplement the rental terms contained in the 99-year lease.

Facts pertinent to the title issue are as follows. On and prior to November 2, 1885, Mary E. Hanley, a widow, owned the fee-simple title to said lots. On said date, she executed a lease demising said lots to Frederick E. Eames, for a period extending from November 2, 1885, to November 2, 1984. The rental for the first ten years was fixed at $9,000 per annum and for the remainder of the 99-year period at $12,000 per year. As an additional consideration, lessee was to pay the taxes.

On November 14, 1893, Mary E. Hanley conveyed said lots, subject to the lease, to Daniel A. Loring, Sr., in trust. This deed of trust will be referred to as trust instrument No. 1. The granting words were in the form of a common-law warranty deed and purported to convey the title to the lots, subject to the lease, to Daniel A. Loring, Sr., in trust for the use of Maude Hanley, Dora Blodgett and William A. Hanley, children of settlor. The trustee was empowered to collect the rents and income from said property, deduct necessary expenses, and distribute the balance in equal shares to the three children. It provided that if any child should die leaving lawful issue, the share of such deceased child should go to such lawful issue in equal shares and if any child should die without leaving lawful issue, then such share should go to the surviving children of the settlor. The trustee was given power to sell the lots subject to the 99-year lease, the proceeds of such sale to become the corpus of the trust fund, subject to the same terms as were provided in reference to the income from the lots. Four persons were named as successor trustees in the event of the death of trustee Daniel A. Loring, Sr. The powers conferred on the successor trustees were limited to the collection and distribution of the rents. It expressly provided that they should not sell, mortgage, or in any way encumber the property during the continuance of the lease. It contained restrictive provisions preventing any child from assigning or encumbering his interest in the income ‘during the term of the aforesaid lease.’ It provided that ‘In the event of the death of all three of said beneficiaries, then the income of said property is to be divided equally among the legal heirs of said beneficiaries by said trustee or his successor.’

Mary E. Hanley died in 1909 intestate, leaving the above-named children as her sole heirs-at-law. In January, 1917, the three children executed another trust deed which will be referred to herein as trust instrument No. 2. By way of recital it referred to trust instrument No. 1, the death of Mary E. Hanley, the persons who were her heirs-at-law, and stated that, whereas trust instrument No. 1 ‘failed to provide for the disposition of the property thereby conveyed in case of and upon the death of said beneficiaries * * * except that said instrument attempted to provide for the division of the income of said property, in the event of the death of all said beneficiaries, among their legal heirs; and Whereas, * * * (the parties to this instrument) desire to vest in said Daniel A. Loring, Sr., as trustee the legal title to said property on the terms herein stated; * * *.’ The instrument conveyed the lots to Daniel A. Loring, Sr., subject to the 99-year lease in trust. The trustee was empowered to collect the rents and income from the property and to make distribution. The distribution of the income was to the same persons, each receiving the same interest with the same limitations as was provided in trust instrument No. 1, except that in the event any one of the three children should die leaving lawful issue, such share was to go to such lawful issue per stirpes, rather than in equal shares as was provided in trust instrument No. 1. The power of Daniel A. Loring, Sr., to sell was renewed in trust instrument No. 2. It named successor trustees and limited their power to the collection and distribution of rents, the same as the former trust instrument. It concluded with the following pertinent provision: ‘In the event of the death of all of said beneficiaries the trust hereby created shall cease and terminate, and said property shall be and become the property of the legal heirs of the said Maude Hanley Branca, Dora Blodgett and William A. Hanley in equal shares per stirpes and not per capita, provided said Daniel A. Loring, Sr., shall not then be living, but in case, however, the said Daniel A. Loring, Sr., shall survive the said Maude Hanley Branca, Dora Blodgett and William A. Hanley, then and in that event, upon the death of the said Maude Hanley Branca, Dora Blodgett and William A. Hanley, the trusts created by this instrument shall thereupon cease and determine, and the fee simple absolute of said premises shall be vested in and become the property of the said Daniel A. Loring, Sr., free from all charges and obligations arising by virtue hereof.’ The trustee Daniel A. Loring, Sr., died in 1922 without having exercised the power of sale contained in either of the trust instruments. He did not survive Maude Hanley Branca, or Dora Blodgett, therefore, the contingency upon which he might have become the owner of the fee subject to the 99-year lease did not occur.

William A. Hanley died intestate in 1919, leaving Maude Hanley Branca and Dora Blodgett, his sisters, as his only heirs-at-law. Dora Blodgett died intestate in 1922, a few days subsequent to the death of Daniel A. Loring, Sr. Her only heir-at-law was her sister Maude Hanley Branca. Maude Hanley Branca died testate in August, 1942. She left no husband or descendants. Her only heir-at-law was Marie L. Rheims, the appellant herein. Maude Hanley Branca left a will which was admitted to probate after this suit was started. The will devised said lots as follows: An undivided one-fourth to appellant Marie L. Rheims, and the other undivided three-fourths to appellees. Some of appellees were related to testatrix, but none of them stood in a relationship which constituted them her heirs-at-law.

By mesne assignments, the 99-year lease was assigned to the Artenia Hotel Company in May, 1932, and on March 18, 1942, it assigned the lease to the International Hotel Company. The present holder of the lease and its predecessors in title have used the building on said lot for hotel purposes, which for the past thirty-five years or more has been operated under the name of the Atlantic Hotel. A part of the building used in connection with said business is located on other lots, the title of which is not involved on this appeal.

August 21, 1942, the successor trustees, under trust instruments No. 1 and No. 2, and others instituted this suit, designated as an action to obtain instructions. It set forth the execution of both the aforesaid trust instruments and the terms of the will of Maude Hanley Branca. It contained allegations of fact as to the date of the death of the several beneficiaries named in the trust instruments and their respective heirs-at-law. It was alleged that there was doubt and uncertainty as to the ownership of the lots and as to whom the rents should be paid. It was alleged that when the Artenia Hotel Company became the holder of the leasehold interest, there had been defaults in the payment of the annual rentals and the taxes levied against the lots, and that the trustees had made various concessions with the Artenia Company in reference to such defaults. It was alleged that on September 30, 1941, the defaults totaled $16,550, and that on June 16, 1942, an agreement was reached between the trustees and the holders of the lease relative to the payment of such rental deficiencies. The new agreement was to extend to December 31, 1951. Section 1, part V of the agreement stated that there was a doubt as to the...