Schmidt's Will, In re, 37515

• Decision Date: 19 June 1959
• Docket Number: No. 37515,37515
• Parties: In re Trusteeship under last WILL and testament of Albert SCHMIDT, deceased, Anna Marie Fuchss, et al. fund. FIRST NATIONAL BANK OF MINNEAPOLIS, trustee, Respondent, v. Frida KIRSCHMANN, Sophie Gut, Louise Gut, and Frida Wolff, a.k.a. Frieda Wolff, claimants, Respondents, William P. Rogers, Attorney General of the United States, as successor to Alien Property Custodian, claimant, Appellant.
• Court: Minnesota Supreme Court

Page 441

97 N.W.2d 441

256 Minn. 64

In re Trusteeship under last WILL and testament of Albert SCHMIDT, deceased, Anna Marie Fuchss, et al. fund FIRST NATIONAL BANK OF MINNEAPOLIS, trustee, Respondent, v. Frida KIRSCHMANN, Sophie Gut, Louise Gut, and Frida Wolff a.k.a. Frieda Wolff, claimants, Respondents William P. Rogers, Attorney General of the United States, as successor to Alien Property Custodian, claimant, Appellant.

No. 37515.

Supreme Court of Minnesota.

June 19, 1959.

Syllabus by the Court

1. The Alien Property Custodian takes only that right, title, and interest which the beneficiary of a trust had at the time the vesting order was issued.

2. The interest of the legatees in the principal fund of the trust was contingent in that who the legatees would be--and just who would eventually become entitled to the fund--could not be determined until some time in the future.

3. A beneficiary must comply with the conditions precedent described by the trust instrument to acquire any rights under it. When futurity is annexed to the substance of the gift and the right to receive the gift is postponed until after and is made to depend on the happening of a named event or condition and the only words of gift are a direction to a trustee to pay and distribute or divide and pay over at a future time or upon the happening of a specified event, the gift is contingent and vests in the future, and the survival of the donee until the time of payment is a condition precedent to his right to receive the gift.

4. The statutory future interests provided for in M.S.A. c. 500 do not include future interests in personal property. Such future interests are still regulated by the rules of the common law in this state.

5. Whether a remainder is vested or contingent depends upon the language employed. If the conditional element is incorporated into the description of, or into the gift to, the remaindermen, then the remainder is contingent; but if, after words giving a vested interest, a clause is added divesting it, the remainder is vested.

6. This court has held that in the absence of statute and within the limits as to perpetuities a donor may dispose of his property as he sees fit, and this includes corpus or principal as well as income.

7. Trusts in personal property as well as in real property have been abolished in this state except as authorized by c. 500 entitled 'Estates in Real Property,' which leaves trusts of personal property free to be created for any purpose possible under the common law.

8. Our statutes referred to herein were never intended to control a testator in respect to the time that a bequest should take effect or vest, the important matter being the intent of the testator gathered from his language taken from the four corners of the will. It is not unlawful to postpone the vesting of the remainder until the life estate ends.

9. The seizure made effective by the vesting order in the instant case did not give the custodian the remainder of the trust corpus at the termination of the trust as a 'right, title, interest and claim' in the trust owned by the remaindermen at the time of the vesting order.

10. The gift of an annuity, in the meantime, may constitute a gift wholly distinct from the disposition of the principal, and if so, will not accelerate vesting.

11. There is no policy of the law which forbids the imposition of a condition to a bequest that if the legatee cannot presently enjoy the gift then another shall take it.

12. The cardinal rule of testamentary construction in this state is to ascertain and give effect to the intention of the testator unless he has attempted to make a disposition of his property contrary to law or public policy.

13. It is a principal quite well recognized and followed in this state that, where a bequest to a class of persons is contingent, the members of the class entitled to take are not determined as of the death of the testator nor as of any time earlier than the vesting of the estate, for it is not to be supposed that the testator intended that the members of the class should be fixed before it is determined that there is to be a bequest.

14. We follow the rule in this state when seeking to arrive at the intent of the testator from the language of his will that rules of construction, derived from experience and found helpful, are not overlooked but they are not technical guides which will be followed to a result contrary to the intent derived from the reading of the provisions of the testator's will as a whole.

15. The beneficiaries of the gift of the corpus under the will of Albert Schmidt were not determined until the termination of the trust; the interests of those beneficiaries were contingent upon their survival to the end of the trust; therefore, the corpus should be distributed according to the terms of the trust, the Attorney General being entitled to none of the corpus.

Dallas S. Townsend, Asst. Atty. Gen., Director, Office of Alien Property, J. Clifford Janes, Acting U.S. Atty., Kenneth G. Owens, Asst. U.S. Atty., St. Paul, George B. Searls, Irwin A. Seibel, and Paul J. Spielberg, Dept. of Justice, Washington, D.C., for appellant.

Walter U. Hauser and John H. Farley, Dorsey, Owen, Barker, Scott & Barber and Robert E. Kaul, Minneapolis, for respondent.

NELSON, Justice.

Albert Schmidt died testate February 7, 1937. His last will and testament bearing date May 22, 1929, was duly admitted to probate on March 29, 1937, by order of the probate court of Hennepin County. The testator placed a sum in trust under the second paragraph of his will as follows:

'Second: I give and bequeath the sum of One Hundred and Thirty-five Thousand Dollars ($135,000.00) in cash and/or securities selected by my Executor out of my estate, at their value as appraised in the probate of my estate, To Arthur J. Lampert, of St. Paul, Minnesota, and First Minneapolis Trust Company * * * as Trustees, and unto them and their successors in trust for the following uses and purposes, namely: to invest and reinvest the same, and to make the following payments, from the net income, if sufficient, and if not, then also from principal, namely:

'(a) The sum of * * * ($900.00) per annum in quarterly installments unto Anna Marie Fuchss, of Eisenach, Germany, granddaughter of my deceased sister, Sophie Saalfeld.

'(b) The sum of * * * ($900.00) per annum in quarterly installments unto Mrs. Frida Kirschmann, of Trunsbach by Hersfeld, Germany, daughter of my deceased sister, Sophie Saalfeld.

'(c) The sum of * * * ($900.00) per annum in quarterly installments unto Sophie Gut, of Montabaur, Germany, daughter of my deceased sister, Mrs. Else Duntze.

'(d) The sum of * * * ($900.00) per annum in quarterly installments unto Louise Gut, on Dusseldorf, Germany, daughter of my deceased sister, Mrs. Else Duntze.

'(e) The sum of * * * ($1,800.00) per annum in quarterly installments unto my sister, Mrs. Frida Wolff, now of Hersfeld, Germany. All of said payments shall be made during the time hereinafter limited.

'In the event of the death of any of said beneficiaries during the continuance of this trust, or prior to my decease, then the payment hereinbefore provided for such deceased beneficiary shall thereafter be made to her issue, if any, taking by right of representation, or failing such issue, to the remaining beneficiaries in equal shares, or to their issue, taking by right of representation.

'At the end of twenty (20) years after my decease, or upon the death of the last survivor of said named beneficiaries, if they shall all die before the expiration of said twenty (20) year period, this trust fund as then constituted and remaining in the hands of my said Trustees shall go and be distributed in equal shares to said named beneficiaries, or to the then living issue of such beneficiaries who may then be deceased, taking by right of representation, and the trust shall thereupon terminate.

'If at the time hereinbefore fixed for the termination of this trust, none of said beneficiaries should be living, and there should be no issue any of them surviving, then the trust fund remaining in the hands of my said Trustees shall be by them transferred, set over and delivered to my then living heirs at law, determined according to the intestate laws of the State of Minnesota then in force.

'If at the end of any year during the term of said trust there shall be any income left, after making the payments as hereinbefore provided, such net income shall be added to the principal and invested and reinvested as herein provided for principal, and shall be distributed at the time provided for distribution of principal hereunder as a part of the principal of said trust fund.

'If at the time hereinbefore provided for the termination of said trust and the distribution of the trust fund, it shall amount to less than * * * ($135,000.00) fair value, As then determined by my said Trustee, they shall, before making distribution of said principal, add sufficient property from the residue of my estate (held by them in trust under paragraph Fourth of this my Will) to bring the amount of the trust fund for distribution up to the fair value of * * * ($135,000.00), as determined by my said Trustees.' (Italics supplied.)

The residue was placed in trust under the fourth paragraph of the will and the corpus of the residue made payable at the end of the trust period to an American, subject to the conditions in the second paragraph.

When the United States declared war on Germany, the Trading with the Enemy Act (50 U.S.C.A.Appendix, § 1 et seq.) became operative to permit seizure of enemy property. On March 11, 1942, the president established the Office of Alien Property Custodian by Executive Order No. 9095, which was amended by Executive Order No. 9193, July 6, 1942, and Executive Order No. 9567, June 8, 1945 (50 U.S.C.A.Appendix, § 6 note p. 43). On August 21, 1946, the Alien Property Custodian executed Vesting...