Reagh v. Kelley

• Decision Date: 01 September 1970
• Court: California Court of Appeals Court of Appeals
• Parties: Charles REAGH, Administrator of the Estate of Bessie Muller, Deceased, Plaintiff and Appellant, v. Lucinda KELLEY, Chaja Levina and William Muller, Defendants and Respondents. Civ. 26871.

Page 425

89 Cal.Rptr. 425

10 Cal.App.3d 1082

Charles REAGH, Administrator of the Estate of Bessie Muller, Deceased, Plaintiff and Appellant, v. Lucinda KELLEY, Chaja Levina and William Muller, Defendants and Respondents.

Civ. 26871.

Court of Appeal, First District, Division 1, California.

Sept. 1, 1970.

Hearing Denied Nov. 18, 1970.

Mack & James, San Francisco, for appellant.

Fred H. Kraft, Oakland, for respondents Kelley and Levina.

William Muller, in pro per.

MOLINARI, Presiding Justice.

Plaintiff, as administrator of the estate of Bessie Muller, deceased, appeals from a judgment in favor of defendants in cross-actions to quiet title in which it was adjudicated that plaintiff had no right, title, or interest in the real property which was the subject of said actions; that defendant Lucinda Kelley (hereinafter referred to as 'Kelley') held title to said real property as trustee under a valid trust, and that defendant William Muller (hereinafter referred to as 'Muller') had a right, title and interest as a beneficiary of said trust. This appeal comes to us on a settled statement pursuant to rule 7 of the California Rules of Court and two exhibits, to wit, plaintiff's exhibit 3 and defendants' exhibit M.

The Facts

Bessie Muller (hereinafter referred to as 'decedent'), mother of Muller, died intestate on June 14, 1956. On October 21, 1963, plaintiff was appointed administrator of her estate. Muller is her sole surviving heir. A document entitled 'Declaration of Trust' (exhibit M) (hereinafter referred to as the 'Declaration') was drafted by Muller, signed by Muller and Kelley, and, a few days before June 1, 1956, was delivered by Muller and Kelley to decedent. Both Muller and Kelley had discussed the contents of the Declaration with decedent. On June 1, 1956, a document entitled 'Grant Deed (Individual)' (exhibit 3) (hereinafter referred to as the 'Deed'), also drafted by Muller, and purporting to convey the subject real property, was executed and delivered by decedent to Kelley and Muller. At the time decedent executed the Deed she had the Declaration in her possession, but did not execute the Declaration. The Deed was recorded on November 16, 1962, but the Declaration was never recorded. From the date of the execution and delivery of the Deed, Kelley and Muller claimed ownership and the right to possession of the property under the terms of the Deed and the Declaration and have paid all taxes thereon. Decedent lived on the property until she was hospitalized with a terminal illness on June 4, 1956, and Muller, who resided with decedent, has continued to reside on the subject property. No accounting has been rendered by Kelley or Muller concerning the affairs of the purported trust.

The Deed

The subject deed provides that Bessie Muller 'Grants to LUCINDA KELLEY, Trustee for CHAJA LEVINA, et cetera, subject however, to the conditions and provisions hereinbelow set forth or noted' the subject real property:

'SUBJECT TO, HOWEVER, that said LUCINDA KELLEY, Trustee for CHAJA LEVINA and other cognated relations, but not my son, William Muller, and excluding him, shall be bound, controlled and regulated by my son, William Muller, in carrying out this trust, and that this trust shall be carried out by aforesaid trustee or her substitutes per the oral instructions of my son, William Muller, to said trustee or her substitutes, as I have orally instructed my son, William Muller, in accordance with my wishes.

'SUBJECT FURTHER, HOWEVER, that the exclusive possession of the said described property herein is reserved unto my son, William Muller, and excepted from this grant or conveyance, and said possession is to remain in my son, William Muller, until final disposition of this trust, and that the said possession aforementioned is to be disposed of as per my oral instructions to my son, William Muller, which instructions are to be communicated to said trustee or her substitutes, until disposition of this trust.'

The Declaration

The Declaration, following Kelley's signature thereon, has appended to it a declaration signed by Muller wherein he states, in essence, that the preceding declaration reflects and represents the instructions, directions, desires, and wishes of decedent which she gave him orally and to which oral instructions reference is made in the deed dated June 1, 1956, executed by decedent, and delivered by her to Kelley as trustee.

The Declaration states that decedent has conveyed to trustee Kelley certain described real property to hold in trust for certain enumerated beneficiaries. The real property described is the same as that described in the Deed. The enumerated beneficiaries are Muller, certain named nieces and nephews, the husband and children of niece Chaja Levina, and any relatives of decedent, to the third degree, 'found living on the Continents of Europe, Asia and Africa within 20 years of the creation of this trust.' The Declaration provides further that if the beneficiaries designated as 'relatives' of decedent are not found within such 20-year period, those that are not found are to be excluded from the benefits of the trust and the trust is to terminate as to any such beneficiary who has not been found within this period. The Declaration then contains provisions purporting to set out the terms, conditions, and purposes of the trust to which we shall hereinafter allude in more detail.

Statement of the Case

The trial court determined that decedent created a valid inter vivos trust by force of the two instruments. Plaintiff asserts that neither of the instruments was effective to create a valid trust and that therefore, the title to the subject real property remained in decedent's estate. In considering this contention we observe here that the only factual issues tendered to the court below were those surrounding the execution of the two instruments as we have detailed in the statement of facts. No extrinsic evidence was offered or presented as to the meaning of either of the two instruments. Accordingly, the construction and interpretation of the instruments is a question of law. (In re Estate of Platt, 21 Cal.2d 343, 352, 131 P.2d 825; Meyer v. State Board of Equalization, 42 Cal.2d 376, 381, 267 P.2d 257; Parsons v. Bristol Development Co., 62 Cal.2d 861, 865, 44 Cal.Rptr. 767, 402 P.2d 839.) We are, therefore, not necessarily bound by the interpretation made by the trial court. (In re Estate of Platt, supra; Parsons v. Bristol Development Co., supra, at pp. 865--866, 44 Cal.Rptr. 767, 402 P.2d 839.)

Essentials of an Express Trust

In order to constitute a valid trust there must be a competent trustor, an intention on the part of the trustor to create a trust, a trustee, an estate conveyed to the trustee, an acceptance of the trust by the trustee, a beneficiary, a legal purpose, and legal terms. (See Civ.Code, §§ 2216, 2218, 2219, 2221 and 2222; ¹ see In re Estate of Johnston, 47 Cal.2d 265, 270, 303 P.2d 1; In re Walkerly, 108 Cal. 627, 650, 41 P. 772; see Hausfelder v. Security-First Nat. Bank, 77 Cal.App.2d 478, 484, 176 P.2d 84; Williams v. Miranda, 159 Cal.App.2d 143, 152, 323 P.2d 794.) 'The nature, extent, and object of a trust are expressed in the declaration of trust.' (§ 2253.) Such declaration must be reasonably certain in its terms. (Burling v. Newlands, 112 Cal. 476, 484, 44 P. 810.) Accordingly, as to the trustor and the beneficiary, a voluntary trust is created 'by any words of the trustor, indicating with reasonable certainty: (4) An intention on the part of the trustor to create a trust; and, (2) The subject, purpose, and beneficiary of the trust' (see Lefrooth v. Prentice, 202 Cal. 215, 226, 259 P. 947, 952); and as to the trustee, such a trust is created by any words or acts of his indicating with reasonable certainty: 1. His acceptance of the trust, or his acknowledgment, made upon a sufficient consideration, of its existence; and 2. The subject, purpose and beneficiary of the trust. (See Title Ins. and Trust Co. v. Ingersoll, 158 Cal. 474, 482, 111 P. 360.)

In determining whether the language employed in the instrument is too vague and uncertain to create a valid trust, the statutory declarations of sections 2221 and 2222 are to be applied in conjunction with the principle that 'The declaration of trust * * * must be reasonably certain in its material terms; and this requisite of certainty includes the subject-matter or property embraced within the terms, the beneficiaries or persons in whose behalf it it created, the nature and quantity of interests which they are to have, and the manner in which the trust is to be performed.' (Pomeroy, Equity Jurisprudence (4th Ed.) § 1009; Wittfield v. Forster, 124 Cal. 418, 421, 57 P. 219; Lefrooth v. Prentice, supra, 202 Cal. 215, 227--228, 259 P. 947.)

In addition to the foregoing requirements, a voluntary express trust with respect to real property can only be created or declared in California by virtue of the provisions of section 852 ² and Code of Civil Procedure section 1971 ³ by a written instrument subscribed by the trustor Or trustee. (See Doran v. Doran, 99 Cal. 311, 314, 33 P. 929; Smith v. Mason, 122 Cal. 426, 427, 55 P. 143; 48 Cal.Jur.2d, Trusts, § 31.) It is not necessary, however, that all of the conditions and terms of a trust in real property be expressed in a single paper. (Root v. Kuhn, 51 Cal.App. 600, 604, 197 P. 150; Weiner v. Mullaney, 59 Cal.App.2d 620, 631, 140 P.2d 704; Wood v. American Nat. Bank, 24 Cal.App.2d 313, 318, 74 P.2d 1051; Coyle v. Coyle, 212 Cal. 715, 717--718, 300 P. 5; Garnsey v. Gothard, 90 Cal. 603, 607--608, 27 P. 516; Hillman v. Stults, 263 Cal.App.2d 848, 868, 70 Cal.Rptr. 295; Rest.2d Trusts, § 42, Comment f, p 109; Witkin, Summary of Cal. Law, Trusts, § 7, p. 2891.)

In the instant case no contention is made that decedent was not a competent trustor, or that she did not intend to create a trust; nor is any claim made that the purported trust fails for a lack of ...