Opinion
4-5-1955
Jasper Ernest LAIL, as Executor of the Last Will and Testament of Jasper E. Lail, Sr., deceased, Plaintiff and Respondent, v. Robert L. LAIL, also known as R. L. Lail and Pearl A. Lail, also known as Perie A. Lail, Defendants and Appellants. Civ. 20583.
Jasper Ernest LAIL, as Executor of the Last Will and Testament of Jasper E. Lail, Sr., deceased, Plaintiff and Respondent,
v.
Robert L. LAIL, also known as R. L. Lail and Pearl A. Lail, also known as Perie A. Lail, Defendants and Appellants.
April 5, 1955.
Parker Wood, J., dissented.
J. Robert Maddox, Beverly Hills, and Wm. J. Clark, Los Angeles, for appellants.
W. Floyd Cobb, Los Angeles, for respondent.
VALLEE, Justice.
Appeal by defendants from a judgment for plaintiff as executor of the will of Jasper E. Lail, Sr., deceased, in an action for alleged breach of trust and for money had and received. Defendants also appeal from the order denying their motion for a new trial. That order is not appealable, and the appeal therefrom will be dismissed. Defendant Robert L. Lail will be referred to as defendant. Defendant Pearl A. Lail is the wife of defendant Robert L. Lail.
Jasper E. Lail, Sr., died in Beverly Hills on April 17, 1950. He was about 90 years of age. At the time of his death, his wife was 80 years of age. The decedent and his wife had 5 children living at the time of his death--4 sons and 1 daughter. Defendant is the eldest. Plaintiff is his brother.
Decedent lived on a ranch in Texas until 1930. The ranch consisted of 2,960 acres. Included in the 2,960 acres is a section known as section 151. Section 151 was purchased during the years 1910 to 1913 under a contract of sale. Defendant was not living at his father's home at the time. Defendant testified that sometime in 1909 he received a letter from his mother stating that his father had an opportunity to buy a section of land which he had theretofore leased, that his father did not have the money to pay for it, and asked if defendant would pay half, if he would make the first payment his father would make the next, and they would buy it together; he wrote back and 'told them to go ahead and make the deal and let me know how much the amount was to be paid and I would have the money to pay it'; he sent the money to make the first payment which was about $400 (it was $416); the other payments were 'somewhere in the neighborhood of $400 or a little better' (they were four payments of $416 each with 6% interest); he paid half the purchase price by sending checks and money to his father in Texas; he does not remember the exact amount of the purchase price--it was somewhere around $1,800 or $1,900; part of the money was sent in cash and part by check; he does not remember exactly how much money he sent; his 'mother kept track of all I sent.' Title to section 151 was taken in the name of defendant.
In 1930 defendant induced decedent to sell his cattle and horses, lease the Texas ranch, and move to California. Since 1930 the 2,960 acres have been subject to a lease for grazing. The first grazing lease was negotiated by decedent. Thereafter all grazing leases were made by decedent with the advice of defendant. From 1930 until the death of decedent, defendant helped and advised decedent in every transaction in which decedent engaged. In caring for his business and affairs, decedent gave defendant checks signed in blank and defendant filled them in and paid the bills. Decedent obtained cash by giving defendant checks signed in blank which defendant filled in, cashed, and gave the cash to decedent. Defendant never demanded or received any compensation for the services so rendered. For many years prior to and up to the time of his death, decedent had a commercial account in Winters State Bank in Winters, Texas.
On June 6, 1936, while decedent was in Texas and defendant was in California, decedent executed a witnessed last will and testament which contained this provision: 'To my oldest son, R. L. Lail, I give, devise, and bequeath the North One-Half of Section No. 151, Block No. 64, of the H & T. C. Ry. Co. surveys of Taylor County, Texas, in fee simple, because in reality he owns the property and the title of same merely in my name in trust for my use during my life.'
On January 23, 1950 decedent executed another will which revoked 'all Wills and other testamentary dispositions by me heretofore made,' provided for payment of last illness and funeral expenses, and devised and bequeathed the residue 'of my property' to his wife, but made no mention of the declaration in the 1936 will.
In February 1948 defendant negotiated an oil and gas lease on 649.1 acres of land described as section 160 belonging to decedent, from which a bonus check of $2,921.58 was received. On receipt of the check, decedent endorsed it, and a joint tenancy savings account, Number 1154, was opened in Bank of America, Wilshire and LaBrea Branch, Los Angeles. Decedent, defendant, and defendant's wife signed the signature card. The signature card provided that any one of them could withdraw funds from the account. Defendant's wife did not withdraw any funds from the account.
In November 1949 defendant negotiated another oil and gas lease which covered section 151 and other parts of the Texas ranch. Prior to December 18th defendant received a bank draft of $10,560 payable to decedent as a bonus for the lease. Decedent endorsed the draft and it was deposited in the Bank of America savings account. The bonus was at the rate of $9 an acre. There was testimony that decedent told defendant to deposit the draft in the Winters State Bank account.
On December 18, 1949, in the afternoon, a meeting was had at decedent's home at which decedent, his wife, all of the children, and some of the sons' wives were present. Plaintiff testified that the purpose of the meeting was to have the children sign something stating the parents did not 'owe anybody any money whatever.' Neither decedent nor his wife said anything at the meeting. Conversation was had about the oil bonus money. Plaintiff asked defendant if he had received the oil bonus check. Defendant said he had and that it was for $10,560. Defendant stated he felt he was entitled to part of the revenue from section 151, to which plaintiff replied, 'That's a deal between you and my father, and whatever my father agrees to is perfectly all right with me.' Defendant was shown a typewritten statement which read that decedent and his wife were not indebted to any of the children in any amount. Decedent and his wife signed the original; defendant's brothers and sister signed the original and 4 copies of the instrument; defendant did not sign. Plaintiff's wife testified that at the request of her mother-in-law she took a typewriter to decedent's home on the morning of December 18th and typed the statement.
On January 6, 1950 decedent signed two checks and gave them to defendant. The first check reads: '16-146 Wilshire-LaBrea Branch 16-146 Bank of America No. 2 National Trust and Savings Association Los Angeles, Calif., Jan 6 1950 Pay to the Order of R. L. Lail $3380/00 Three Thousand Three Hundred Eighty and 00/100 Dollars account #1154 J. E. Lail'
on the reverse side, there appears the following: "Grazing Lease on 320 acres of Section 151 Taylor Co., Texas
20 yrs @ 65 cents Per acre $4160.00 Dec 1-1949 To June 1-1950 @ 75 cents Per acre 120.00 -------- $4280.00 Less Taxes (20 yrs) - 400.00 " 1 Mile fence - 500.00 -------- Balance $3380.00 R. L. Lail [Signed]'
The check is perforated 'Paid 1-21-50.' The second check reads: '16-146 Wilshire-La Brea Branch 16-146 Bank of America No. 3 National Trust and Savings Association Los Angeles, Calif., Jan 6 1950 Pay to the Order of R. L. Lail $2880/oo Two Thousand Eight Hundred Eighty and 00/100 Dollars account #1154 J. E. Lail'
On the reverse side, there appears the following: 'Oil Bonus on 320 acres of Section 151 Taylor Co., Texas 320 acres @ $9.00 Per acre $288000 R. L. Lail [Signed]'
This check is also perforated 'Paid 1-21-50.' All of the handwriting on the two checks, except the signatures, is that of defendant. It will be noted that the checks are drawn on a commercial account. Decedent did not have a commercial account in Bank of America. However, it would appear it was intended that the checks should be charged against the savings account since each check bears the notation, 'account #1154.' The checks total $6,260. This amount was debited to the savings account by Bank of America on January 21, 1950 and paid to defendant.
Defendant testified with respect to the receipt of the two checks that he dropped in to see his parents, and further:
'Q. What was said by your father or mother about this check, if anything? A. Mother asked Dad to settle up with me. She says, 'There is going to be trouble with the rest of the children and I think you better do it now.'
'Q. What did your father say, if anything? A. He said, 'Let's go ahead and figure it out and settle it up.'
'Q. What did you do then? A. We went into the dining room table and sat down to figure out what we thought the amounts were and what he thought the amounts should be.
'Q. What he thought the amounts should be? Did your mother go with you there? A. No.
'Q. Who did the figuring? A. I did. * * *
'Q. Did your father figure it? A. No. Dad never does any figuring. He just takes what is worked out and what he thinks is right and then that is the way it is settled.
'Q. He takes whatever you take to be right? A. Whatever was figured, and if it is satisfactory with him, why, that is the way it went.
'Q. Did you submit your figures to him? A. I did.
'Q. Did he check them? A. He was sitting right there looking at them.
'Q. What happened after you arrived at a figure? A. After we arrived at the figure, I wrote out the check then and put everything on there so that we would have a definite record between the oil lease and the grass lease, and that is why there was two checks made out.
'Q. You wrote out two checks? A. That is right.
'Q. Which check did you write first? A. That I wouldn't remember which one was written first.
'Q. Was there anything said that you can remember now prior to the time that you wrote the checks? A. Well, we were just talking about what we thought, what Dad thought was right for me to have and bring it up to sixty. Dad thought at that time it still would be seventy-five cents for the grass lease. That was what was agreed on on the night of the 18th or day, and he still was in his mind that it was seventy-five cents and he was willing--I told my father, I says, that as long as they were willing, I was willing to cut it down, because I was afraid there might be an oversight and I didn't want one dime--I didn't want to take one dime away from the other children, and make it out sixty-five cents for the lease. The last six months of the lease, then, he said, 'We will leave that stand seventy-five cents because nobody can doubt that.' * * *
'Q. Then you proceeded to write the checks, is that correct? A. After we got it all figured out, why, I wrote the checks out then.
'Q. Did you write the checks together, both checks together at the same time before he signed them? A. Yes, I wrote both checks before they was signed. * * *
'Q. You stated that you carried these checks around with you for several days, is that correct? A. That is right.
'Q. Where did you get those checks that you wrote on? A. We had a little check book that Dad had there in the drawer.
'Q. Your dad had a check book there in the drawer? A. Yes.
'Q. What bank account was that check drawn on? A. On the Bank of America, Wilshire and La Brea.
'Q. I show you Defendants' Exhibit A and Defendants' Exhibit I and ask you if those are the checks to which you have testified? A. They are.
'Q. Can you look at those checks and tell me whether or not they are drawn on a savings account or a commercial account? A. This was drawn on--which I thought at the time when we made out the checks, of course, it was for the record and I didn't give it any thought--I just drew the checks--whether it was a savings or commercial.
'Q. Your father had no commercial account at the Bank of America at that time? A. No. After we found out he didn't.
'Q. Now tell the Court when he got checks on a commercial account. A When I made this deposit and I also brought--just picked up a little check book and I brought the deposit slip back and the book and I handed them all to my father.
'Q. It was the savings account? A. It was the savings account.'
Plaintiff further testified that his father said 'he wanted it all paid before he passed away or anything happened to him'; that the grazing lease 'ranged from $1 down to 52 cents an acre'; and they agreed on 65 cents an acre less taxes and cost of erecting a fence.
Plaintiff brought the action to recover the $6,260 on the theory that defendant was trustee thereof and that it is a part of the estate of decedent. Judgment was for plaintiff, as prayed.
The answer of defendant alleged that property in Texas which stood in the name of decedent was held in trust by decedent for the benefit of defendant and that defendant was the owner thereof. Among other findings, the court found that these allegations were untrue. As will appear, this finding was erroneous and is unsupported by any evidence.
The decedent, in the will of 1936, referring to the north half of section 151, specifically stated that defendant 'owns the property and the title of same merely in my name in trust for my use during my life.' A trust in relation to real property may be declared by a written instrument subscribed by the trustee. Civ.Code, § 852. No particular language or terminology is necessary to declare a trust; nor need the words 'trust' or 'trustee' be used. Neel v. Barnard, 24 Cal.2d 406, 412, 150 P.2d 177. See also De Laurencel v. De Boom, 48 Cal. 581; Garnsey v. Gothard, 90 Cal. 603, 27 P. 516; Moore v. Hoar, 27 Cal.App.2d 269, 81 P.2d 226.
The Restatement says: 'A trust may be created by '(a) a declaration by the owner of property that he holds it as trustee for another person; * * *' Rest., Trusts, § 17.
Nossaman says that a transfer in trust 'may be effected by a declaration on the part of the trustor that he holds the property in trust.' Nossaman, 1 Trust Administration and Taxation, 39, § 41.
Pomeroy says: 'The written evidence of the trust which will satisfy the statute may come from the grantor,--the one who intends that a trust shall be created for a certain beneficiary,--* * * he may declare himself a trustee, and that he holds the land in trust, without conveying the legal title.' 3 Pomeroy's Equity Jurisprudence, 5th ed., 1001, § 1007.
Scott says: 'A trust can be created without a transfer of the property. The owner of property can by a declaration of trust make himself trustee of the property for others. Such a trust is valid even though the settlor receives no consideration for declaring the trust. No transfer of the property is necessary for the creation of such a trust, since the purpose is that the settlor himself shall continue to hold the property, no longer, it is true, for his own benefit, but for the benefit of others. * * * Where the owner of property wishes to make himself trustee of the property for another, the simplest method of accomplishing his purpose is to execute an instrument declaring that he holds the property in trust.' 1 Scott on Trusts, 136, § 17.1. See also Lynch v. Rooney, 112 Cal. 279, 44 P. 565.
The rule is well settled that where the owner of land gratuitously declares himself trustee for another in writing, a valid trust is created; no consideration is necessary. 1 Scott on Trusts, 178, § 29; Taber v. Bailey, 22 Cal.App. 617, 622, 135 P. 975. In Taber v. Bailey, supra, it is said, 22 Cal.App. at page 620, 135 P. at page 977: 'When one expresses the intention to hold the legal title but that another should have the beneficial interest, the implication necessarily follows that the former intended to create a trust.'
In order that the trust be valid and enforceable the beneficiary need not express acceptance or even be informed of the transaction. Booth v. Oakland Bank of Savings, 122 Cal. 19, 25, 54 P. 370; Cahlan v. Bank of Lassen County, 11 Cal.App. 533, 540, 105 P. 765.
Scott also says: 'A statement in a will as to the existence of an oral trust may be a sufficient memorandum of the trust, even though the will is later revoked.' 1 Scott on Trusts, 273, § 47. Bogert says: 'Often a person attempting to make a will recites in the instrument over his signature that he was at the time of the execution of the instrument the trustee of a trust, created by virtue of a transaction taking place before the attempted making of the will. The failure of the attempted will, or its later revocation, does not prevent the use of the paper as an admission of the existence of a trust, sufficient to make a trust or realty or personalty enforceable.' 1 Bogert, Trusts and Trustees, 473, § 102.
In Keith v. Miller, 174 Ill. 64, 51 N.E. 151, 153, a will of a wife read: "I also give and bequeath to my dear relatives above named a certain tract or parcel of land which belongs to my husband, J. A. Keith, and myself, after we are done with it * * *."
The court said that, 51 N.E. 154: 'The question of revocation, or whether those wills were valid and operative as wills, is immaterial, but the real question is, was there evidence in writing, manifested and proved by these wills, of the existence of a trust?'
and held that a declaration of trust was 'manifested and proved.' In Hiss v. Hiss, 228 Ill. 414, 81 N.E. 1056, it was held that a revoked will which stated that certain realty had been conveyed to the maker in trust for the payment of an annuity sufficiently manifested the existence of a trust. See also In re McAuley's Estate, 184 Pa. 124, 39 P. 31; Innis v. Michigan Trust Co., 238 Mich. 282, 213 N.W. 85, 86. Cf. Rest. Trusts, § 330, Comment j.
Plaintiff does not contend that the trust declared in the will of 1936 was revoked by the will of 1950. The power to revoke a trust, Civ.Code, § 2280, will not be deemed to have been exercised by a will unless the will clearly indicates an intention to exercise it. A mere devise of the testator's residuary estate will not revoke the trust. This is so even though the devise expressly includes all property as to which the testator has a power of testamentary disposition. Mayer v. Tucker, 102 N.J.Eq. 524, 141 A. 799, was a suit by a trustee against the executor of the settlor's will to recover trust property. The trust was created in 1914. Power of revocation was reserved. In 1924 the settlor, Mrs. Tucker, executed her last will. By the terms of her will, she gave one-fifth of her estate or her husband. The residue she gave to her husband in trust to divide into four equal parts, one of said parts to be held by the trustee for each of her four children. The will contained no revocation of the deed of trust. No revocation of the deed of trust was ever expressly made. It was contended the will revoked the trust. The court held, 141 A. 800, 801: 'We are of the opinion that in the first place there is insufficient evidence either in the will or in the so-called extrinsic circumstances to warrant the conclusion that the execution of the will revoked the deed of trust. In the second place, we consider that the deed of trust could not be revoked by a will, as the right of revocation had to be exercised during the life of the donor. * * * 'In the case of Farnum v. Pennsylvania Co. for Insurance on Lives, etc., 87 N.J.Eq. 108, 99 A. 145, it was held that the general residuary bequest of 'my estate' referred to the testator's own estate, and not property over which she had a power of appointment. * * * 'In the will of Mrs. Tucker, there was no express revocation of the deed of trust. It is not mentioned in the will. * * * 'But, if it was the purpose of Mrs. Tucker to revoke the trust agreement in her will, it seems to us that this purpose failed. In the case of Stone v. Hackett, Ex'r, 12 Gray (Mass.) 227, a similar situation was presented. There one Kittredge appointed a Miss Stone as trustee of a certain portion of his property, the trust estate of he devoted to the purposes specified in the instrument. Kittredge retained 'the right to modify said uses or to revoke said trust.' The question presented was whether the trust was revoked by his will. Mr. Justice Bigelow, writing the opinion of the court, over which Chief Justice Shaw then presided, states this rule on page 232 of the opinion: "A power of revocation * * * does not in any degree affect the legal title to the property. That passes to the donee and remains vested for the purposes of the trust, notwithstanding the existence of a right to revoke it. If this right is never exercised according to the terms in which it is reserved, * * * until after the death of the donor, it can have no effect on the validity of the trust or the right of the trustee to hold the property.' 'The same principle is set out in 26 R.C.L. p. 1206, where it is stated that: "If the right of revocation is not exercised during the lifetime of the donor of other person in whose favor it was reserved, the validity of the trust remains unaffected as though there never had been a reserved right of revocation.' 'The case cited in the footnote to this statement fully support[s] it. In view of this principle, which seems to us to be a sound one, it would seem immaterial whether Mrs. Tucker intended by her will to exercise the power of revocation or not.'
See also Old Colony Trust Co. v. Gardner, 264 Mass. 68, 161 N.E. 801; Irving Bank-Columbia Trust Co. v. Rowe, 213 App.Div. 281, 210 N.Y.S. 497, 500; Syracuse Trust Co. v. Fuller, 140 Misc. 918, 252 N.Y.S. 90, 98; Broga v. Rome Trust Co., 151 Misc. 641, 272 N.Y.S. 101, 108; Barlow v. Loomis, C.C., 19 F. 677.
The validity of the will of 1936 was not challenged. The decedent, by its terms, declared an express trust. He declared that the title of the north half of section 151 was in his name in trust for his use during his life and that defendant was the owner of the property. There is no evidence that the trust was ever revoked. The court erred to the prejudice of defendant in not finding the facts with respect to the will of 1936 and concluding, as a matter of law, that defendant is the owner of the north half of section 151.
The error compels a reversal of the judgment. We cannot say that the same result would have followed had the court found, as it should have, that a trust was declared. The legal title to section 151 was in decedent; the equitable title was in defendant. Defendant did not at any time realize anything from his interest in section 151 unless it was from the settlement he claims to have had with his father. Whether the checks for $6,260 were the result of an accounting by decedent to defendant and a settlement between them of any obligation of decedent to defendant should be determined in the light of the fact that a trust existed in the north half of section 151. For 20 years, while decedent was between 70 and 90 years of age, defendant alone managed and cared for all of his father's affairs without demanding or receiving any compensation. There is no evidence that during that time and up to the present charge defendant took the slightest advantage of his father. The judgment brands defendant a forger and a thief. And it does that contrary to these presumptions: innocence of crime or wrong; private transactions have been fair and regular; a bill of exchange was given for a sufficient consideration; a check is drawn in payment of so much money due to the payee; and when blanks appear in an instrument the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein. Civ.Code, § 3095. The evidence with respect to the meeting of December 18, 1949 is susceptible of inferences unfavorable to plaintiff. The oil bonus had just been received. The other children knew defendant claimed an interest in the revenue from section 151. The parents took no part in the meeting except to sign the written statement. As none of the other children claimed any indebtedness from their parents, all of them signed it. Defendant, who claimed an indebtedness, did not. Plaintiff's wife typed the statement. It is couched in legal phraseology. The record is barren of any evidence of solicitude on the part of any of the other children concerning the welfare of the parents until the oil bonus check was received. We mention these matters as indicative that a different outcome might not have been unlikely had the existence of the trust been found. Considering the entire record, it cannot be said that in the absence of the error with respect to the trust, a different result would have been improbable.
Counsel argue the question whether the testimony of defendant with respect to his contributions to the purchase of section 151 effected a resulting trust. Plaintiff's counsel criticizes defendant's lack of memory as to events which took place between 1909 and 1913--more than 40 years prior to the trial of this action. It is not surprising that defendant was not able to remember the details of what took place 40 years ago. Human memory is far from infallible. The question is not material. The trust results as a matter of law from the will of 1936 and is an express trust. When there is an express trust, the question whether there was a resulting trust is of no consequence. Kingsbury v. Burnside, 58 Ill. 310, 328, 11 Am.Rep. 67; Gates v. Paul, 117 Wis. 170, 94 N.W. 55, 60.
We deem it unnecessary to discuss other assignments of error.
The appeal from the order denying a new trial is dismissed. The judgment is reversed.
SHINN, P. J., concurs.
PARKER WOOD, Justice.
I dissent. In my opinion the written statement by the father that he was not indebted to any of the children in any amount presented a substantial conflict in the evidence. Further, if there was a trust as stated in the 1936 will, the father was entitled to the use of the land during his life, and he was not required to account to defendant. The writing of defendant on the back of one of the checks purported to be an accounting for grazing rental for 20 years; and his writing on the back of the other check purported to be an accounting for oil bonus. --------------- * Opinion vacated 284 P.2d 907. 1 See Kingsbury v. Burnside, 58 Ill. 310, 328-332, 11 Am.Rep. 67; Moore v. Pickett, 62 Ill. 158, 161; Nesbitt v. Stevens, 161 Ind. 519, 69 N.E. 256, 258; DeLeuil's Ex'rs v. DeLeuil, 255 Ky. 406, 74 S.W.2d 474, 476-477; Barrell v. Joy, 16 Mass. 221, 222-223; Urann v. Coates, 109 Mass. 581, 583-585; Bates v. Hurd, 65 Me. 180, 181; McClellan v. McClellan, 65 Me. 500, 504-506; Nolan v. Garrison, 151 Mich. 138, 115 N.W. 58, 61; Winters v. Winters, 165 Or. 659, 109 P.2d 857, 860; Wallace v. Pruitt, 1 Tex.Civ.App. 231, 20 S.W. 728, 730; Holmes v. Holmes, 65 Wash. 572, 118 P. 733, 734, 38 L.R.A.,N.S., 645, Ann.Cas.1913B, 1021; Gates v. Paul, 117 Wis. 170, 94 N.W. 55, 60; Bingen v. First Trust Co. of St.Paul, 8 Cir., 103 F.2d 260, 263-264; 21 Tex.L.Rev. 726.