Pioneer Trust Co. v. Thielsen

• Decision Date: 17 June 1953
• Citation: 258 P.2d 788,199 Or. 206
• Parties: PIONEER TRUST CO. v. THIELSEN et al.
• Court: Oregon Supreme Court

Page 788

258 P.2d 788

199 Or. 206

PIONEER TRUST CO. v. THIELSEN et al.

Supreme Court of Oregon.

Argued and Submitted April 1, 1953.

Decided June 17, 1953.

Ray L. Smith, Salem, argued the cause for appellants. With him on the briefs were Bruce Spaulding and Wilbur, Mautz, Souther & Spaulding, Portland.

Robert W. DeArmond, Salem, argued the cause for defendants-respondents Robert B. Thielsen and Jane Thielsen Bacagaluppi. On the brief were Young & DeArmond, Salem.

Before LATOURETTE, C. J., and WARNER, BRAND, TOOZE and PERRY, JJ.

WARNER, Justice.

This is a suit brought by Pioneer Trust Company, a corporation, as trustee under the last will and testament of Jennie B. Thielsen, deceased, for a construction of that instrument. The defendants, Frederick D. Thielsen and Ellen B. Thielsen DeWitt, alone appeal.

Jennie B. Thielsen died July 9, 1934. Her will of April 2, 1932, was duly probated in Marion county, Oregon, and her estate long since closed.

Mrs. Thielsen had four children. They are the defendants H. William Thielsen, Frederick D. Thielsen and Ellen B. Thielsen DeWitt, the latter two being the appellants, and her son, Edward W. Thielsen, who died September 9, 1950. His surviving issue are his son, Robert D. Thielsen, and his daughter, Jane Thielsen Bacagaluppi, hereinafter referred to as Robert and Jane. Both are over the age of 25 years. The children of the decedent's living sons, Frederick and H. William, are also joined as defendants. Mrs. DeWitt has no children.

The will which is the subject of our inquiry consists of six major articles. The First provides for the payment of the estate indebtedness; the Second article devises her Salem residence, her furniture and personal effects and the income for life from stock in a certain life insurance company to her daughter Ellen, with the remainder over to the testatrix' three sons and their heirs; the Third article provides for miscellaneous gifts of furniture and personal effects to friends and relatives; the Fifth article is the residuary clause; and the Sixth article nominates testatrix' executors.

The Fourth article, and the only one with numbered subsections, devises a certain parcel of income-producing real property situated in Salem to Ladd & Bush Trust Company (plaintiff's predecessor) in trust for the uses and purposes therein stipulated. This is the article which gives rise to plaintiff's suit for construction and, because of the justiciable controversy prevailing between the trustee and the appealing defendants concerning the propriety of the construction accorded by the circuit court, becomes the focal point of our interest.

We quote only those subsections of the Fourth article which are relied upon by the parties as giving support to their respective contentions or by us in arriving at our conclusions, and we will summarize the others. In this manner the provisions of the Fourth article will be found to be:

'I give, devise and bequeath to Ladd & Bush Trust Company of Salem, Oregon, an Oregon corporation, all my real property situate at the Northeast corner of Court and Capital Streets in Salem, Oregon, [describing it particularly] said property and the rents, issues and profits thereof being hereinafter referred to as the 'trust estate', In Trust, nevertheless, for uses and purposes as follows:----

'(1) To manage and handle said property; to rent and lease the same, and to collect the rentals therefor, and after making payment of the taxes thereon and the upkeep thereof to pay, as hereinafter provided, the net income from said property to the persons herein specified to take the same, and to convey and transfer the corpus of said trust estate with the accumulations, if there are then any, as hereinafter provided.

'(2) The Trustee shall pay the entire net income received from said trust estate and available for distribution, in monthly or other convenient installments, to my four children, H. William Thielsen, Frederick D. Thielsen, Edward W. Thielsen and Ellen B. Thielsen, share and share alike, during their respective lives; provided, however, that the Trustee shall also pay to my daughter Ellen B. Thielsen the one-half part of said net income distributable to my son Edward W. Thielsen until such time as such payments shall pay and discharge a debt of $1100.00 and interest thereon due to Ellen B. Thielsen from Edward W. Thielsen.

'(3) Upon the respective deaths, either before or after my death, of my said sons my Trustee shall convey and transfer in fee to the surviving issue of such deceased son, per stirpes, freed from this trust, the one-third part of the trust estate; provided such issue has attained the age of twenty-five years, and the Trustee shall continue under this trust the respective proportionate shares of such of said issue as shall not then have attained the age of twenty-five years, paying to said issue the income of their respective proportionate shares of the trust estate until they arrive at that age, and upon such issue respectively attaining the age of twenty-five years, the Trustee shall transfer and deliver in fee and free from this trust, to such issue their respective proportionate shares of said trust estate; provided, however, that no issue born to any of my children after the date of this will shall share in the trust estate or the income therefrom, and if there be such issue so born after this date, then I give to each of such issue and direct that there be paid from my trust estate to each thereof the sum of One Dollar ($1.00).

'(4) Should any of my said sons die either before or after my death leaving no surviving lawful issue born to such son, then and in that event the right herein given to such deceased son and his issue shall pass to and be the property of my daughter Ellen B. Thielsen and my surviving sons, share and share alike, subject, however, to all the provisions and limitations herein provided for in the event that all my said sons should leave issue; provided, however, that should my daughter, Ellen B. Thielsen die leaving no issue, then her interest herein, on said contingency, shall be paid and delivered to the surviving issue of such of my sons as shall die leaving issue entitled to participate in this trust.

'(5) [This subsection renders the several beneficial interests unassignable and places them beyond the reach of the beneficiaries' creditors.]

'(6) The Trustee may, in its discretion, pay to, apply or use for the benefit of any of the aforesaid issue of my children while under the age of twenty-five years such amounts from principal or income of their respective shares as it may deem advisable for the proper education, maintenance and support of such issue, or any of them, and to provide for such issue in sickness or distress.

'(7) The Trustee shall not sell or convey, except in discharge of this trust and on the termination thereof the trust estate or any part thereof without the consent of a majority of my children living at the time of such proposed sale, but if only two be living then the Trustee may, in its absolute discretion, sell the trust estate or any portion thereof with the consent of one. In the event of the sale of said real property prior to the time of the termination of this trust, then my Trustee shall take and receive the purchase price and invest and reinvest the same in such securities and/or property as in its judgment shall be safe and sound, and the net income therefrom shall be paid and applied and the corpus distributed in the same manner and to the same persons as hereinbefore provided for distribution. * * * [Here provisions follow exonerating the trustee for and authorizing investments in securities, none of which are here questiond.]

'(8) [This subsection avoids conflict with the rule against perpetuities.]

'(9) It is my purpose and intention in creating this trust to provide for the members of my family in the shares and proportions and on the contingencies herein referred to, that is to say, to provide an income for my three sons and daughter during their lives and to provide for the distribution thereafter of the corpus of this trust estate to the issue, born prior to the date of this will, of said sons, and if any of said sons shall die without issue that my daughter Ellen B. Thielsen shall participate with my surviving sons in the income of the share that otherwise would have gone to the son so deceased, and to provide for the ultimate distribution of said trust property to the issue born at this time of my said sons.'

This appeal resolves the controversy into one between the children of the testatrix' deceased son Edward, on the one hand, and her son Frederick and daughter Ellen, on the other. The position of her other son, H. William, is one of apparent neutrality.

The defendants, Robert and his sister Jane, as the sole surviving issue of Edward W. Thielsen, contend that under subsection 3 they are now entitled to the distribution of a one-third part of the corpus in fee, freed from the trust estate created by their grandmother's will.

Frederick Thielsen and Mrs. DeWitt claim that the will, by subsection 2, devised to them and their brothers, Edward and H. William, a life estate in trust with the income to be divided equally among the survivors of Jennie B. Thielsen's four children. They lean heavily upon subsection 9 to supplement their position.

If the position of Edward's children is correct, then the corpus of the trust estate and the income therefrom will be progressively diminished as each son of the testatrix dies and leaves issue surviving who are 25 years or older. If, however, the thesis of the appellants should prevail, then the corpus will remain intact until the death of the testatrix' last remaining child, with progressively increasing moieties of income accruing to each surviving child upon the prior death of any of testatrix' children.

In interpreting the language of a will, a liberal construction is applied in...