O'Hare v. Johnston

• Decision Date: 22 June 1916
• Docket Number: No. 10422.,10422.
• Citation: 113 N.E. 127,273 Ill. 458
• Parties: O'HARE et al. v. JOHNSTON et al.
• Court: Illinois Supreme Court

273 Ill. 458

113 N.E. 127

O'HARE et al.

v.JOHNSTON et al.

No. 10422.

Supreme Court of Illinois.

June 22, 1916.

Error to Appellate Court, Fourth District, on Appeal from Circuit Court, Fayette County; Thomas M. Jett, Judge.

Bill by Joseph H. O'Hare and another against Helen E. Johnston and another. On appeal from the circuit court, the Appellate Court (194 Ill. App. 153) reversed a decree for complainants, and they bring error. Judgment of the Appellate Court reversed, and decree of circuit court affirmed.John J. Brown, of Vandalia, Murray & Murray, of Carlyle, and Stewart, Bryan & Williams and McShane & Goodwin, all of St. Louis, Mo., and J. G. Burnside, of Vandalia, guardian ad litem, for plaintiffs in error.

Albert M. Kales, of Chicago (William D. Bangs, of Chicago, and Arthur Roe, of Vandalia, of counsel), for defendants in error.

CARTER, J.

This was a bill filed by plaintiffs in error in the circuit court of Fayette county to construe the will of Benjamin F. Johnston, deceased. After the pleadings were settled, the trial court entered a decree construing the will and holding it valid in every respect. On an appeal to the Appellate Court, it was held that the fourth clause of the will was void because it violated the rule against perpetuities, and the decree of the trial court was reversed. The case has been brought here on petition for certiorari.

Johnston died February 2, 1905, 56 years of age, leaving the will in question, which was dated July 2, 1904, and disposed of property valued at about $600,000. He left a widow, Mary B. Johnston, then in her fifty-fourth year; a son, William M. Johnston, 22 years old; and a daughter, Hazel D. Johnston, 18 years old. The daughter was unmarried. The son had been married about a year. The will provided for the payment of testator's debts and an annuity of about $500 to his mother. It gave the wife certain real estate for life with remainder to the son and daughter equally, and certain cash, bonds, and stock amounting to $48,500. The fourth clause of the will reads:

‘Fourth. I hereby direct my executors, hereinafter appointed, to deliver or pay over to the St. Louis Union Trust Company of St. Louis, Mo., a corporation organized and existing under and by virtue of the laws of the state of Missouri, one hundred Gray's Point Terminal Railroad bonds, which they will find among my papers, of the face value of $1,000 each, a total of $100,000, and one hundred Trinidad Electric Railroad Company bonds which will also be found among my papers, of the face value of $1,000 each, a total of $100,000. Should any of said bonds be matured or for any reason paid or sold or transferred by me before my death, I hereby direct my executors to turn over to the said Union Trust Company, in lieu thereof, securities to the value of the bonds above mentioned that have been so paid off, transferred or assigned, or in lieu of said securities to pay to the said Union Trust Company cash to make up the fund above directed to be deposited with said St. Louis Union Trust Company, and I hereby appoint said trust company trustee of said fund and direct that it shall hold said fund for the period of thirty (30) years after my death, and I direct said trust company to keep said fund invested in case any part of it should be paid to it in cash or securities other than above named bonds by my executors, or should any of said Gray's Point or Trinidad bonds be redeemed or paid after my death and before the expiration of the period of said trust, so as to secure the highest rate of interest for safe and conservative investment, and to keep the said fund so invested during the period of this trust. I direct said trust company to pay one-half of the income arising from said trust fund, after deducting its reasonable compensation for acting as such trustee, to my son, William M. Johnston, and one-half to my daughter, Hazel D. Johnston, and that said payments shall be made semiannually. At the expiration of said period of thirty years I direct said trust company to deliver to the said William M. Johnston $50,000, par value, of said Gray's Point Terminal Railroad Company bonds and $50,000, par value, of said Trinidad Railroad Company bonds, or deliver to him the securities or pay to him the cash held by said trust company at that time in lieu of the said bonds, and also to deliver to my said daughter, Hazel D. Johnston, $50,000, par value, of said Gray's Point Terminal Railroad Company bonds and $50,000, par value, of said Trinidad Railroad Company bonds, or deliver to her the securities or pay to her the cash held by it in lieu of said bonds. In the event of the death of either of my said children, William M. Johnston and Hazel D. Johnston, without issue before my death, I direct that the whole of the above named trust fund shall be held for the use of the survivor and the income therefrom paid to the survivor, and in the event of the death of either of my said children after my death and before the expiration of the above named trust without issue, I direct that the income from the whole of said trust fund and the whole of the trust fund itself be paid to the survivor, but in the event that either of my said children die having a child or children, either before my death or before the expiration of the period of said trust, I direct that the income from said trust fund and the principal of said trust fund at the expiration of said period hereby given to its or their parent be paid to said child or children.’

The fifth clause of the will directed the conversion of all the rest of the estate, real and personal, into cash, to be divided equally among his wife, son, and daughter. The sixth clause requested his executors to retain his secretary in their employ during the settlement of the estate. The seventh and last clause named his son, William M. Johnston, and George T. Turner, executors. After the will was duly probated, the executors qualified, and the bonds mentioned in said fourth clause were delivered to the St. Louis Trust Company, as directed therein.

The daughter, Hazel, married Joseph H. O'Hare July 18, 1905, and a daughter, Mary Hazel O'Hare, was born to them in 1907. The son, William, died intestate January 20, 1913, never having had any children, and leaving his wife, Helen E. Johnston, his mother and his sister as his heirs at law. May 15, 1913, Hazel D. O'Hare died intestate, leaving her husband and her daughter, Mary Hazel O'Hare, as her heirs at law. Joseph H. O'Hare is the administratorof the estate of his deceased wife, and Helen E. Johnston is administratrix of that of her deceased husband. The trust company paid the income arising from the bonds which it had received under the will to the son and daughter until January 1, 1913, and after the son's death paid the balance earned on $100,000 during the son's lifetime to his administratrix, but refused the demand of the daughter's administrator to pay to him, after her death, the income on the whole $200,000, until the will had been construed by some competent court. This bill was then filed.

The rule against perpetuities has been thus stated: ‘No interest subject to a condition precedent is good unless the condition must be fulfilled, if at all, within 21 years after some life in being at the creation of the interest.’ ‘No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.’ Gray on Perpetuities (3d Ed.) § 201. If the provisions of the will are of such a character that under them a violation of the rule against perpetuities may possibly happen, then the devise must be held void. Quinlan v. Wickman, 233 Ill. 39, 84 N. E. 38,17 L. R. A. (N. S.) 216. The violation of the rule against perpetuities will not be tolerated when the property is covered by a trust, nor will the rule permit limitations of future equitable interests to transcend those of legal interests. Bigelow v. Cady, 171 Ill. 229, 48 N. E. 974,63 Am. St. Rep. 230. A vested interest is not subject to the rule against perpetuities. Gray on Perpetuities (3d Ed.) § 205; Flanner v. Fellows, 206 Ill. 136, 68 N. E. 1057;Lunt v. Lunt, 108 Ill. 307. If the title vests within the period named, it is immaterial whether the person in whose favor the provision was made had the right to possession and enjoyment of the property within that period. Seaver v. Fitzgerald, 141 Mass. 401, 6 N. E. 73.

Counsel for defendants in error insist that clause 4 is void for the following among other reasons: (1) That the ultimate gift to the grandchildren is contingent on their surviving the 30-year period; (2) that the gift is to a class, namely, the grandchildren; (3) that the gift to the testator's children is contingent, by reason of the gifts over, if they die within the 30-year period, coupled with the fact that the gift to the grandchildren is a substitution for the gift to the children, and that, the gift to the children being contingent, the gift to the grandchildren is of the same character; (4) that the separation of the trust fund and the provision for the payment at the end of the 30-year period were for reasons personal to the legatees; (5) that the fact of there being no express restraints on alienation, coupled with the express purpose of creating a special fund for the protection of the legatees, as shown in the will, is an argument in favor of contingency; (6) that the gift over to the surviving child if either child dies without issue in the 30-year period is void for remoteness, and this so breaks up the scheme of the fourth clause that the gift to the grandchildren must also fail; (7) that to hold the fourth clause valid is apt to bring about a result against the clear intention of the testator, viz., the taking of the entire trust estate by the son-in-law, O'Hare, by inheritance from his daughter.

Counsel for plaintiffs in error argue that, under the rules that apply and should control in...