Fiske's Trust, In re, 36325

• Decision Date: 02 July 1954
• Docket Number: No. 36325,36325
• Parties: In re FISKE'S TRUST. PETERS et al. v. UELAND et al.
• Court: Minnesota Supreme Court

Page 906

65 N.W.2d 906

242 Minn. 452

In re FISKE'S TRUST.

PETERS et al. v. UELAND et al.

No. 36325.

Supreme Court of Minnesota.

July 2, 1954.

Syllabus by the Court.

1. Payments in the nature of annuities for support ordinarily are personal to the beneficiary entitled thereto under terms of a trust; settlor of trust may limit income benefits therefrom to person of his choice to the exclusion of creditors and others.

2. Trust instrument must be construed to carry out main objective of settlor therein as disclosed by its terms. Words used therein must be given their ordinary meaning unless it given their they were otherwise used or that an unreasonable or absurd result will follow therefrom.

3. Period during which annual payments from trust income, or deficiencies therein, are to be paid from trust is governed by intention of settlor therein. Where trust specifies they are 'for the lifetime' of a beneficiary, they are limited to such period, and deficiencies therein may not be discharged from income thereafter accruing.

4. Language of trust instrument under consideration here considered and Held to clearly evidence the general objectives and intent of settlors as outlined.

5. In line therewith, subdivisions First and Third of paragraph I of trust Held to express settlors' intent that annual payments provided for Alice V. Fiske were to go to her only 'during the term of her natural life' and that deficiencies therein were to be made up and paid 'to said Alice V. Fiske' only from trust income accruing prior to her death.

6. Limitation as aforesaid is further evidenced by paragraph II of instrument which provides for termination of trust upon death of survivor of settlors, their children, and those of their grandchildren named therein, at which time distribution of principal must be made, notwithstanding existence of deficiencies in payments to be made Alice V. Fiske during her lifetime.

7. $4,281.69, net trust income accumulated but unpaid at death of Alice V. Fiske, Held payable to her estate to make up deficiencies due at her death, since such sum was derived from trust income which accrued during her lifetime.

Robert J. Flanagan, Charles S. Bellows and Best, Flanagan, Rogers, Lewis & Simonet, Minneapolis, for appellants.

Pierce Butler and Doherty, Rumble & Butler, St. Paul, Marcus G. Sundheim, Minneapolis, Sigurd Ueland, Minneapolis, for respondents Timothy Fiske and Harriet S. Ueland.

David R. Brink and Dorsey, Colman, Barker, Scott & Barber, Minnapolis, for respondent First Nat. Bank of Minneapolis.

THOMAS GALLAGHER, Justice.

We are asked to construe certain provisions of an Inter vivos trust executed by Douglas A. Fiske, a Minneapolis attorney, and Alice V. Fiske, his wife, on September 1, 1923, the trust in part constituting a settlement in lieu of alimony in divorce proceedings then pending between them, and in part constituting a disposition of the trust property for the benefit of the parties and their children. The divorce was granted Alice V. Fiske October 10, 1923, the terms of the trust becoming a part of the decree.

The corpus of the trust consists of certain real estate known as the Fiske building at the northwest corner of Nicollet avenue and Eleventh street in Minneapolis. It was then subject to a lease for 100 years from April 1, 1920, which yielded $12,500 per annum net, and which by its terms called for increased rentals from time to time so that ultimately it was intended to result in net income of $23,600 per annum.

Douglas A. Fiske was 56 years and Alice V. Fiske 53 years of age when the trust was executed. They then had two children--a son, Torrance, 31 years of age, and a daughter, Lois Fiske Peppard, 29 years of age. Torrance was then a widower with no living child. Lois had two daughters--Lois (now Lois Hutchins) and Alice (now Alice McIntyre), respectively three years, and eight months of age.

The paragraphs of the trust material to the question to be determined here are as follows:

'(I)

'The said parties of the second part (the trustees) * * * shall hold said property during the lives of the said Douglas A. Fiske and the saie Alice V. Fiske * * * and during the lives of Torrance Fiske and Lois Fiske Peppard, children of said first parties, and during the lives of Lois Peppard and Alice Torrance Peppard, children of said Lois Fiske Peppard, and during the life of the survivor of said six (6) persons last above named; and shall * * * apply the net annual rent, income and profits from said trust estate and property, as follows, to-wit:

'First: Twelve Thousand Dollars ($12,000) such net annual income shall be paid over annually by the trustees to Alice V. Fiske, one of the parties of the first part, During the term of her natural life, such annual payment of said Twelve Thousand Dollars ($12,000) to be made in equal monthly installments of One Thousand Dollars ($1,000) each, on or before the fifteenth (15th) day of each month, During the term of her natural life; if in any year during the life of Alice V. Fiske the net annual income from said trust estate is not sufficient to pay the said Alice V. Fiske the sum of Twelve Thousand Dollars ($12,000.00), then, and in such event, any deficiency in such payment shall be paid to said Alice V. Fiske out of the net income from said trust estate thereafter accruing, until all such deficiencies so accruing shall be paid to said Alice V. Fiske.

'Second: All of the net annual rent, income and profits from said trust property and estate, in excess of Twelve Thousand Dollars ($12,000.00) per annum, plus the amount necessary to make good any deficiencies in the payments in prior years To Alice V. Fiske under Subdivision First of this Subdivision I, shall be paid annually by the Trustees to the said Douglas A. Fiske, one of the parties of the first part, during the term of his natural life, * * *.

'Third: All of the annual net rent, income and profits of said trust estate, except such as is provided to be paid to Alice V. Fiske or Douglas A. Fiske, at the time and for the periods as provided in Subdivision First and Second of this Subdivision I, shall be paid by the Trustees, one-half (1/2) thereof to Torrance Fiske, so long as he survives, and one-half (1/5) thereof to Lois Fiske Peppard, so long as she survives.

'In the event of the death of said Torrance Fiske during the continuance of this Trust, the share in said net annual rents, income and profits from said Trust Estate, which the said Torrance Fiske would have received had he survived, shall be paid, in the event he leaves a wife and issue surviving him, during the continuance of this trust, one-third (1/3) to his wife so surviving him as long as she survives, and two-thirds (2/3) to his issue so surviving him, as long as his issue survive; * * *.

'In the event of the death of said Lois Fiske Peppard during the continuance of this Trust, the share in said net annual rents, income and profits from said Trust Estate, which the said Lois Fiske Peppard would have received had she survived, shall be paid, in the event she leaves a husband and issue surviving her, during the continuance of this Trust, one-third (1/3) to her husband so surviving her as long as he survives, and two-thirds (2/3) to her issue so surviving her, as long as her issue survive; * * *.

'II.

'On the death of the survivor of said Douglas A. Fiske, Alice V. Fiske, Torrance Fiske, Lois Fiske Peppard, Alice Torrance Peppard and Lois Peppard, the principal of said trust estate shall be distributed as follows:

'One-half (1/2) thereof shall be distributed as follows: One-third (1/3) of such half to the widow of Torrance Fiske, if he has left a widow who is then surviving, and two-thirds (2/3) of said half of said trust estate, to the issue of said Torrance Fiske, * * *.

'The other half of the principal of said trust estate, on the death of the survivor of the six (6) persons upon whose lives this trust is limited, shall be distributed as follows: One-third (1/3) of such half to the husband of Lois Fiske Peppard, if she has left a husband who is then surviving, and two-thirds (2/3) of said half of said trust estate, to the issue of said Lois Fiske Peppard, * * *.

'VIII.

'It is the intention that At the end of each year the trustees shall pay over to the beneficiaries entitled to share in the income from said trust estate, their share of the net income payable for such year which is so closing, * * *.' (Italics supplied.)

In the divorce proceedings, the parties entered into a written stipulation which provided:

'The parties hereto agree to forthwith sign and acknowledge in duplicate a Trust Deed, a copy of which is hereto attached and marked Exhibit 'A,' (the trust instrument now involved in these proceedings) * * * and, in the event of the plaintiff procuring a Decree of Absolute Divorce * * *.

'The provisions * * * made for * * * plaintiff (Alice V. Fiske) by the Trust Deed * * * are in lieu of alimony and all other provisions, allowances or interest of any kind in the estate, property and earnings of the defendant, * * *.'

In its decree for divorce the court ordered judgment:

'* * * that the provisions heretofore made for the plaintiff (in stipulation for settlement) have been accepted by the plaintiff and are in lieu of alimony and all other provisions, allowances or interest of any kind of or for the plaintiff in the estate, property or earnings of the defendant; and the plaintiff is barred from all interest or participation in the estate, property or earnings of the defendant, and shall have no further right, title or interest in the estate, property or earnings of the defendant.'

Douglas A. Fiske died January 28, 1928. Torrance Fiske died March 26, 1929, and, having married subsequent to the execution of the trust, left a surviving spouse, Harriet S. Fiske, and a son, Timothy Fiske, formerly known as Scofield Fiske, born August 27, 1928. In 1934 Harriet S. Fiske married Sigurd Ueland...