Crown Co. v. Cohn

• Citation: 88 Or. 642,172 P. 804
• Parties: CROWN CO. v. COHN ET AL.
• Decision Date: 21 May 1918
• Court: Oregon Supreme Court

172 P. 804

88 Or. 642

CROWN CO. v. COHN ET AL.

Supreme Court of Oregon

May 21, 1918

Department 2.

Appeal from Circuit Court, Multnomah County; Harry H. Belt, Judge.

Action by the Crown Company against Emma Cohn and others individually and as trustees of Clara Friendly, deceased. From decree rendered, plaintiff appeals. Affirmed.

This suit was commenced December 8, 1915, by the Crown Company, a corporation, formerly the Crown Trust Company, against Emma Cohn, Celia Friendly, Laura Rosenthal, Julius C. Friendly and Seymour C. Friendly, individually and as trustees of Clara Friendly, deceased, to rescind their lease of real property, which demise contained an option to purchase the land, and to impress thereon a lien for the improvement thereof, on the ground that the defendants were powerless to grant such authority. The cause, being at issue, was tried and from the evidence received the court made findings of fact, and, based thereon, decreed, October 5, 1916, that by their mother's deed the defendants as trustees then took and at all times thereafter held unrestricted power to lease sell, and convey the land; that their deed therefor, which was tendered to the plaintiff, would, if it had been accepted, have conveyed an unincumbered title in fee simple; that if within 60 days therefrom the plaintiff paid $200,000, the stipulated consideration, and $750, the monthly rent of the premises from October 1, 1915, with interest on the latter sums at the rate of 8 per cent. per annum as agreed upon, the defendants should execute to it a deed containing the covenants specified in the demise, and that the plaintiff need not look to the application of the purchase money; that if such payments were not made within the time limited, then and in that event the defendants were to recover possession of the real property and the deferred installments of rent and interest thereon at the rate indicated, and thereupon the plaintiff should be strictly barred and foreclosed of all right, title, claim, interest, and estate in and to the land and the lease thereof; and that the defendants should have leave to apply, from time to time, at the foot of the decree, for such other and further orders as were or might be necessary in the premises. From this decree the plaintiff appeals.

Jay Bowerman, of Portland (Fulton & Bowerman, of Portland, on the brief), for appellant. Earl C. Bronaugh and Jerry E. Bronaugh, both of Portland (Bronaugh & Bronaugh, of Portland, on the brief), for respondents.

MOORE J. (after stating the facts as above).

The evidence shows that on the day first hereinafter stated, the grantor was the owner in fee of the real property described in a deed, which, omitting her signature and seal, the names of the witnesses to the conveyance, and the usual acknowledgment thereof, reads:

"This indenture made and entered into this 10th day of February, 1909, by and between Clara Friendly (widow) of Portland, Multnomah county, Oregon, party of the first part, and Emma Cohn, Laura Rosenthal, Celia Friendly, Julius C. Friendly, and Seymour C. Friendly, children of the said Clara Friendly, parties of the second part, as trustees, witnesseth: That the said party of the first part for and in consideration of the sum of ten dollars to her in hand paid, the receipt whereof is hereby acknowledged, does hereby bargain, sell, assign, transfer and convey unto the said Emma Cohn, Laura Rosenthal, Celia Friendly, Julius C. Friendly and Seymour C. Friendly, as trustees, the parties of the second part herein, all the following bounded and described real property, to wit: Lots one (1) and eight (8) in block two hundred and fifty-four (254) in the city of Portland, Multnomah county, state of Oregon, together with all and singular the tenements, hereditaments and appurtenances thereunto belonging. To have and to hold the same unto the said parties of the second part in trust for the following uses, to wit:

"First. To take possession of said property, manage and control the same, lease, mortgage, sell or convey the same, and to reinvest the proceeds thereof in such other property or securities as to my said trustees shall be deemed advisable, and to pay over to me such sum or amounts of money as may be necessary for my support and maintenance during the term of my natural life, and for the payment of all my just debts, and to borrow money for my support, should the same be necessary, and to hold and pledge said property as security for the same.

"Second. Upon my demise, after deducting from said trust estate any sum or sums of money which may have been borrowed or advanced thereon by my said trustees or any of them with six per cent. interest thereon, my said trustees shall hold all the rest and residue of said property or the proceeds thereof in trust for the use and benefit of my said five children, Emma Cohn, Laura Rosenthal, Celia Friendly, Julius C. Friendly and Seymour C. Friendly, share and share alike, during the term of their and each of their natural lives, and shall pay over to my said children, in manner aforesaid the rents, issues, profits and income from said property, or the proceeds thereof during the term of their and each of their natural lives.

"Third. Upon the death of any of my said children, without leaving issue then living the share or interest belonging to said deceased child, under this trust, shall immediately vest in and be enjoyed by all my remaining children, then living, share and share alike.

"Fourth. Should any of my said five children above named, die leaving issue, then my said trustees shall pay over to said issue such part or portion of the income of my said estate hereby conveyed in trust, which the parent of such issue if living, would be entitled to receive under this trust, during the life or lives of such issue, or until the termination of the trust estate as hereinafter limited.

"Fifth. Upon the death of the last surviving child of my said five children above mentioned the trust estate hereby created shall terminate, and all property, rights, interests and effects of said estate shall immediately vest in the issue of any and all of my said five children, if any, then living, and to their heirs and assigns forever, in fee simple absolute, to be held and enjoyed by them per stirpes and not per capita.

"Sixth. Should there be no living issue of my said five children, or of any of them, upon the death of the last surviving child of my said five children, then the estate, rights, interests and effects of the said trust estate hereby created and the whole thereof, shall immediately vest in the heirs at law of such last surviving child of my said five children, in fee simple absolute, and this trust estate shall terminate.

"Seventh. The trustees hereby appointed under this indenture or a majority of them shall have power to do and perform any and all acts and things necessary and proper in the management and performance of their said trust, and upon the death of any of said trustees, all the powers hereby created, shall immediately vest in the surviving trustees, and said trust shall be carried on and be executed by the said surviving trustees, or a majority of them, in the same manner and to the same extent as is herein provided for all of said trustees above named, until the death of the last surviving trustee, when the trust estate hereby created shall terminate as above provided.

"In witness whereof I have hereunto set my hand and seal the day and year above written."

Mrs. Friendly died January 22, 1910, leaving surviving her sons and daughters, the defendants herein. No other disposition of the real property so described having been made, Emma Cohn on May 23, 1911, commenced a suit in the circuit court of the state of Oregon for Multnomah county against her brothers and sisters to obtain a construction of such deed, setting forth in the complaint a copy thereof and alleging that her mother intended to invest the grantees therein named with full power to lease, mortgage, sell, and convey the premises, as well after the grantor's death as prior thereto, and to invest and reinvest the proceeds arising therefrom in other property or securities; that the real property has a frontage of 50 feet at each end thereof on Tenth and Eleventh streets, respectively, and 200 feet thereof borders on Stark street; that the buildings on those lots were old and of little value, for which reason they produced but small income; that the lots are of great value and the taxes annually levied thereon exceed the income derived from the premises; that the trustees have no funds with which to improve the premises, and if the real property remained in its then condition, the taxes levied and the municipal assessments imposed thereon would soon consume the entire trust estate, which property was in danger of being lost; that the lots could readily be sold for a large price and the proceeds derived therefrom be invested in other property or securities to the great advantage of the several beneficiaries; that as a trustee and beneficiary, the plaintiff has endeavored to cause a part of the land to be sold, but had been unable to procure a purchaser, because of the asserted uncertainty of the terms of the trust:

"That neither of the children of said Clara Friendly has any living issue and there is no person or persons beneficially interested in said estate, except the plaintiff and the defendants herein."

The prayer of the bill was for a construction of the grantor's intent as evidenced by the trust deed; that it might be decreed that the trustees were vested with full and complete power to sell the lots and every part thereof, but if any doubt on that subject existed, the court, by virtue of its plenary authority to administer trust...