Keller v. Keller

• Decision Date: 02 March 1936
• Docket Number: Gen. No. 38521.
• Citation: 284 Ill.App. 198,1 N.E.2d 773
• Parties: KELLER v. KELLER ET AL.
• Court: United States Appellate Court of Illinois

284 Ill.App. 198

1 N.E.2d 773

KELLER

v.KELLER ET AL.

Gen. No. 38521.

Appellate Court of Illinois, First District, First Division.

March 2, 1936.

Appeal from Superior Court, Cook County; Joseph Sabath, Judge.

Suit by Marion Keller against Theodore P. Keller and others, as trustees of the estate of Theodore C. Keller, deceased. Decree for plaintiff, and defendants appeal.

Affirmed. Cutting, Moore & Sidley, Edwin C. Austin, Merritt C. Bragdon, and Adlai E. Stevenson, all of Chicago, for appellants.

Jacob J. Chapman and Maurice L. Davis, both of Chicago, for appellee.

MATCHETT, Justice.

This appeal is by defendant trustees from a decree entered July 13, 1935, directing them to apply a portion of the income of a certain trust fund in their hands, otherwise payable to Theodore P. Keller, to the satisfaction of orders entered by the superior court of Cook county against him for the support of his minor children, Lloyd George and Edith Jane, during their minority. The cause was heard upon a stipulation of facts, and the question for our consideration concerns the law applicable thereto.

The summarized facts would appear to be that plaintiff, Marion Keller, and defendant Theodore P. Keller, were married January 17, 1917, and Lloyd George and Edith Jane were born of that marriage. May 17, 1926, Marion Keller sued Theodore P. Keller for separate maintenance in the superior court of Cook county, and May 28, 1927, she filed her amended bill, praying for divorce. June 17, 1927, a decree in her favor was entered as prayed. The decree gave to her the care, custody, and education of these minor children, but no provision was made in the decree for the payment of alimony or for the support of the children. However, the day following the entry of the decree, Theodore P. Keller executed and delivered a trust indenture by which he conveyed to the Northern Trust Company and Marion Keller, as trustees, certain improved real estate situated in Chicago and known as 1245 Jarvis avenue; the express intention being thereby to provide adequate support for the children. At the time of the conveyance the real estate was incumbered by a mortgage for $17,000, and shortly after June 2, 1930, the income became insufficient to pay interest and expenses of upkeep, whereupon the trustees on April 16, 1934, in order to avoid the expense of foreclosure (and with the consent of Theodore P. Keller), conveyed the premises in satisfaction of the mortgage indebtedness. These minor children have lived with plaintiff, their mother, and have been supported by her, she being permitted to occupy one of the apartments at 1245 Jarvis avenue, but as she was unable to pay rent she has been compelled to vacate.

The father of Theodore P. Keller was Theodore C. Keller of Chicago, who died testate September 6, 1930, a resident of Cook county, and leaving a substantial estate. His will created a trust fund from which Theodore P. Keller is entitled to receive an income amounting to approximately $4,400 per annum.

The third paragraph of the will devises and bequeaths all the rest, residue, and remainder of his estate, subject to certain provisions of the first article, to his wife, Jessie P. Keller, and the National Bank of the Republic of Chicago, as trustees for the uses and purposes therein set forth. Paragraph 7 of the will provides for the payment of the income from the trust fund to the testator's children, including Theodore P. Keller, and provides, with respect to the payment of all income: “* * * Such payments to be made in installments, as often as found convenient by my trustees, but not less than twice in each year; each installment to be paid personally to the child entitled thereto, and not to be capable of anticipation or assignment.” The will was executed about three years after the entry of the divorce decree against Theodore P. Keller. The question for determination is whether the court erred in subjecting this income of Theodore P. Keller to the support of his minor children.

The courts of different jurisdictions are not in harmony on the question of the validity of so-called “spendthrift trusts.” In England, such trusts are held invalid as unlawful restraints on the alienation of property. Brandon v. Robinson, 18 Ves. 429. The courts of some American states have adopted the English rule upon the same reasoning. Tillinghast v. Bradford, 5 R.I. 205, and Smith v. Moore, 37 Ala. 327, are illustrative. The Supreme Court of the United States, however, gave the weight of its approval to the validity of such trusts in Nichols v. Eaton, 91 U.S. 716, 23 L.Ed. 254, the Supreme Court of Massachusetts likewise in Broadway Nat. Bank v. Adams, 133 Mass. 170,43 Am. Rep. 504, and the Supreme Court of Pennsylvania in Overman's Appeal, 88 Pa. 276. These earlier decisions and many others from courts of different jurisdictions are discussed in Professor Gray's treatise on “Restraints on the Alienation of Property,” published in 1883. The author presents with vigor arguments against the validity of such trusts as being contrary to good morals and against public policy. These objections, however, have not generally prevailed in American jurisdictions, which have usually approved such trusts as valid. The Supreme Court of Illinois declared in favor of the validity of such trusts in Steib v. Whitehead, 111 Ill. 247, decided in 1884. From that time the courts of this state have consistently adhered to the view that trusts of this kind are valid, as in Congress Hotel Co. v. Martin, 312 Ill. 318, 143 N.E. 838, 33 A.L.R. 562, where such trust was held valid, although consisting of property far exceeding the amount necessary to maintain the beneficiary according to her station in life. In Hopkinson v. Swaim, 284 Ill. 11, 119 N.E. 985, where such a trust created in favor of a daughter and which provided that the property should be “exempt from the power and control of any husband and from liabilities for any debts or engagements,” was held valid. In Hartley v. Heirs of Wyatt, 281 Ill. 321, 117 N.E. 995, 996, the court said it was not necessary to use the word “spendthrift” in order to create such a trust, nor was it necessary that the writing should contain an express provision against the alienation of the trust property. “If,” said the court, “it appears from the whole will that the testator intended to create such a trust, such an intention will be given effect.” Cases to the same effect are Bennett v. Bennett, 217 Ill. 434, 75 N.E. 339,4 L.R.A.(N.S.) 470;Wallace v. Foxwell, 250 Ill. 616, 95 N.E. 985,50 L.R.A.(N.S.) 632;Jouvenat v. Continental Nat. Bank & Trust Co., 253 Ill.App. 400.

However, in the states affirmatively adhering to the doctrine of the validity of such trusts, there has appeared a determination to limit the cases in which the rule will be recognized by creating exceptions in certain classes of cases, where it is held upon various theories that the rule should not be applied. In 1 Bogert's Trusts & Trustees, § 223, p. 727, the author states: “Great efforts have been made to get courts and legislatures to make exceptions to their doctrine about spendthrift trusts, in favor of certain creditors with peculiarly powerful claims on the sympathy of courts. Restatement of the Law of Trusts, Tentative Draft § 183. To a certain extent these attempts have been successful. Perhaps the most striking example is found in the case of a spendthrift trust for a married man with a wife and children, where there is a failure to support his family, or there has been a divorce with a decree for the payment of alimony by the husband. It has been urged that the duty to support the wife and children is not a debt but a common law obligation placed upon the husband entirely outside contract principles, and attorneys for the wife have also argued that a spendthrift trust for a married man impliedly includes his wife and children as cestuis, so that an effort to get part of the income on their part is not an effort to break the trust but to have it carried out. Some support for these contentions is to be found in the common law decisions.” A large number of these decisions, too numerous to be reviewed in this opinion, are cited in a footnote.

In Restatement of the Law of Trusts, vol. 1, § 157, p. 389, the prevailing doctrine is stated as follows:

“Although a trust is a spendthrift trust or a trust for support, the interest of the beneficiary can be reached in satisfaction of an enforceable claim against the...