National Bank of Commerce v. Greenberg

• Decision Date: 25 April 1953
• Citation: 31 Beeler 217,195 Tenn. 217,258 S.W.2d 765,38 A.L.R.2d 1337
• Parties: NATIONAL BANK OF COMMERCE v. GREENBERG et al. 31 Beeler 217, 195 Tenn. 217, 258 S.W.2d 765, 38 A.L.R.2d 1337
• Court: Tennessee Supreme Court

Page 765

258 S.W.2d 765

NATIONAL BANK OF COMMERCE v. GREENBERG et al.

31 Beeler 217, 195 Tenn. 217, 258 S.W.2d 765, 38 A.L.R.2d 1337

Supreme Court of Tennessee.

April 25, 1953.

Sam Taubenblatt, Memphis, for bank.

Abe D. Waldauer, Ben C. Adams, Jr., and Arthur H. Friedman, Memphis, for Mrs. Edith Greenberg, Guardian.

Armstrong, McCadden, Allen, Braden & Goodman, Memphis, for Mrs. Bertha Pledofsky, et al.

GAILOR, Justice.

This appeal presents a bill, in the nature of an interpleader, filed in the Chancery Court of Shelby County, by the National Bank of Commerce as trustee under the will of Robert Cohen, deceased, for a declaration of its duties under the will, which created a trust for an infant granddaughter, Eleanor, the child of a deceased son of the testator. The Defendants are Mrs. Edith Greenberg, the legal guardian and mother of Eleanor, who takes if the trust is upheld, and the other Defendants with adverse interest, are the three daughters of the deceased trustor, who take under the will if the trust fails as to the granddaughter. The Chancellor decreed that the conditions imposed had been breached and the right of the granddaughter to take the trust fund had been forfeited. This appeal has been perfected in her behalf by her guardian.

Item 4 of the will of Robert Cohen, which established the trust and states its conditions and details, is:

'I give and bequeath to the National Bank of Commerce in Memphis, Tennessee, as Trustee, the sum of Fifteen Thousand ($15,000) Dollars to be invested in legal securities for the use and benefit of Miss Eleanor Cohen, daughter of my deceased son, Fred D. Cohen, said Trustee will invest said sums and add the income therefrom to the trust fund until payment is made to the said Miss Eleanor Cohen. Should the said Eleanor Cohen marry a man of the Jewish faith at any time after she becomes 18 years of age, then and in that event, the entire trust fund shall be turned over to her and the said trust terminated. If the said Eleanor Cohen remains unmarried at the time she reaches her 25th birthday then one- half (1/2) of said trust fund shall be paid to her by the said trustee and the remainder held until she is thirty (30) years of age, at which time the balance shall be paid to her and the trust terminated. Should the said Eleanor Cohen die before said trust fund or any part thereof is turned over to her, then and in that event said trust fund will then be paid to my three children, Mrs. Bertha Plesofsky, Mrs. Laverne Garlove, and Mrs. Zelda Bairner, share and share alike, or to their heirs, and the trust will then terminate.

'In the event that the said Eleanor Cohen is adopted by any person other than a member of my immediate family, and her name is changed, before she is eighteen (18) years of age, then and in those events, this trust shall terminate and the trust fund will then be paid equally to my three children above mentioned, or their heirs.' (Our emphasis.)

It is stipulated that Eleanor was formally adopted by Herbert J. Greenberg, in the County Court of Cook County, Illinois; that Greenberg is the present husband of Eleanor's mother; that he is not a member of the immediate family of the trustor, Robert Cohen, and that in the decree of adoption, Eleanor's name was formally changed from Eleanor Cohen to Eleanor Cohen Greenberg.

In the brief filed by the guardian on this appeal, this further admission is made:

'It is perfectly obvious that Robert Cohen intended the condition in the last paragraph of Item IV of his will should, to say the least, deter her mother from permitting the child's adoption and change of name by any future husband which she might have. In this sense the condition was simply an in terrorem clause. It is also fairly obvious that Robert Cohen intended that the bequest in trust be forfeited in the event Eleanor Cohen were adopted by a person not a member of the testator's immediate family and her name changed before she attained the age of 18 years. This much of the testator's intentions is clear enough so as to leave very little room for argument.'

The assignments of error make two points which determine the case: (1) That the restraint on adoption, as quoted above from the will, is void as against public policy. (2) That since on account of her infancy, Eleanor could not consent to the adoption, which was, therefore, as to her, involuntary, that she should not be penalized for such involuntary breach of a condition of the trust.

No Tennessee cases have been found which are directly in point on either of these two propositions.

As to the first, we do not find any authority binding on us which justifies an inference that a limited restraint on adoption, such as that expressed in Robert Cohen's will, and disclosed by this record, is contrary to the public policy of Tennessee.

'The meaning of the phrase 'public policy' is vague and variable; courts have not defined it, and there is no fixed rule * * *.' Twin City Pipe Line Co. v. Harding Glass Co., 283 U.S. 353, 357, 51 S.Ct. 476, 477, 75 L.Ed. 1112, 1116.

'In the case of the Nashville Ry. & Light Co. v. Lawson, 144 Tenn. 78, 87, et seq., 229 S.W. 741, this Court discussed at length, and with the citation of many authorities, the grounds upon which a contract may and may not be held void as violative of public policy. From that discussion, if seems clear that the public policy of the State is to be found in its Constitution, its laws, its judicial decisions and the applicable rules of common law. 'Public policy' is practically synonymous with 'public good,' and unless the private contract is in terms of such a character as to tend to harm or injure the public good, public interest or public welfare, or to violate the letter or the spirit of the Constitution, laws, common and statutory, or judicial decisions of the State, it is not violative of public policy nor void on that account.' Home Beneficial Ass'n v. White, 180 Tenn. 585, 588-589, 177 S.W.2d 545, 546.

The provision of a will, or the term of a contract, may be successfully attacked as offensive to public policy, only when such term or provision is detrimental to the public interest or the public welfare or the public good. It must be against 'societal interest,' in the phrase of the Restatement of Law, Property, IV, sec. 438.

So, in the present case, if the prohibition against adoption was so arbitrary and absolute that it gave rise to a probability that the result would be to make the child a public charge, it might be argued with reason, that the prohibition was contrary to public policy. We find no such ground for attack upon the limited restriction made a condition in the will before us here.

Since it is conceded that the trustor intended that Eleanor should not have the benefit of the trust if, as, and when those events should happen which have admittedly happened, and since...