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Security-First Nat.Bank of Los Angeles v. Rogers

California Court of Appeals, Second District, First Division
May 5, 1958
324 P.2d 908 (Cal. Ct. App. 1958)

Opinion


Page __

__ Cal.App.2d __324 P.2d 908SECURITY-FIRST NATIONAL BANK OF LOS ANGELES, as Trustee of its John Brockman Trust No. S-5453, Plaintiff and Respondent,v.William P. ROGERS, Attorney General of the United States, as successor to the Alien Property Custodian, Defendant and Appellant,Edmund G. Brown, Attorney General of the State of California, et al., Defendants and Respondents.Civ. 22407.California Court of Appeals, Second District, First DivisionMay 5, 1958

Hearing Granted July 2, 1958.

[324 P.2d 909] Dallas S. Townsend, Asst. Atty. Gen. of the United States, Director, Office of Alien Property, Laughlin E. Waters, U. S. Atty., Arline Martin, Asst. U. S. Atty., Southern Dist. of California, Los Angeles, Mary Eschweiler, Atty., Office of Alien Property, San Francisco, George B. Searls, Irwin A. Seibel, Marbeth A. Miller, Attys., Dept. of Justice, Washington, D. C., for appellant.

Brady, Nossaman & Walker, and Walter L. Nossaman, and Charles M. Walker, Los Angeles, for respondent Security-First Nat. Bank.

Ernest C. Griffith, Los Angeles, for respondents Bell, Raithel and du Von.

Fleming, Robbins & Tinsman, Los Angeles, for respondent Edith Brockman.

C. O. Heffernan, San Leandro, for respondents Horoney and others.

Blase A. Bonpane, Los Angeles, for respondent Margaret Bruchmann.

Charles E. Burch, Jr., San Diego, and Robert L. Moore, Los Angeles, Oscar W. Fehsel, Los Angeles, of counsel, for respondents Horace Mann and others.

Sollo, Graham & Califf, Morris D. Coppersmith, Hirsch & Rosenblatt by Leonard B. Hirsch, Beverly Hills, for respondents First Nat. Bank of Rock Island, Conservator of Mildred Bruckmann, incompetent, and Herman Rimmerman, public administrator C.T.A. of estate of Elizabeth Brockman, deceased.

Morris Lavine, H. A. Gebhardt, Los Angeles, for respondent German Beneficiaries.

FOURT, Justice.

This is an appeal from parts of a judgment entered upon a complaint for declaratory and other relief by the trustee of an inter vivos trust.

[324 P.2d 910] The facts are not in dispute. The Security-First National Bank of Los Angeles (hereinafter referred to as the 'trustee') is the trustee of a trust created July 21, 1922, by inter vivos transfer.

The trust instrument was skillfully prepared and provided in part that the properties subject to the trust, among others, were the Robinson Building and the Brockman Building in downtown Los Angeles, and certain ranch properties in Los Angeles county, personal effects and certain stocks and bonds. The trustor reserved a life estate in the trust property, and at his death the furnishings, equipment and personal effect located at specified and personal effects located at specified properties) were given to Margaret Thompson. The Robinson and Brockman buildings were, upon the trustor's death, to be held in further trust for the benefit and ultimate ownership of his nieces and nephews and their issue, and the residue could be converted into cash to the extent necessary to provide for certain (1) death taxes, (2) $200,000 in a fund for Margaret Thompson and her issue, or if none to the beneficiaries theretofore particularly named, (3) $145,000 to certain named individuals and (4) $1,000 to each member of a class of persons, with abatement provisions if there should be insufficient funds to make payment in full, and (5) the residue, if any then existed, to two charities.

The death taxes were paid in 1925 and 1926, the Thompson fund was set up in December, 1925, payments of the amounts to the named individuals and classes of persons were made in 1925 and 1926, and distribution of principal and income to the two charities was made in the aggregate amount of $361,300. Administration of the Robinson and Brockman buildings, carried by the trustee at $5,056,540 and $2,176,000, respectively, has continued to the present time. Receipts from the two last named properties from January 1, 1925 to October 31, 1953, wre $4,351,874.07.

Certain paragraphs of the trust are set forth substantially in full herewith, namely paragraphs IX, XII, XIII and XVI:

'IX

'From and after the demise of said Trustor, the two parcels of real property hereinbefore particularly described under and designated as 'Parcel No. 1' and 'Parcel No. 2,' respectively, together with the respective leases thereon, to J. W. Robinson Company, a corporation, and to Shirley C. Ward, an individual, respectively, shall be held in further trust hereunder, subject to the powers of the Trustee hereinbefore expressed, until both of said parcels of real property are finally distributed, as hereinafter provided, but until so finally distributed, all the net rents, incomes and other profits shall be collected and received therefrom and after the deduction of all the charges, expenses and trustee's fees, as hereinabove provided shall be paid quarter-yearly in equal parts, and share and share alike, to each of the following named nephews and their widows, and nieces of said Trustor for and during their respective lives, to-wit:

'Heinrick Bruchmann, the Trustor's nephew, now residing at Vilbel, Germany;

'Thedor Bruchmann, the Trustor's nephew, of Schlesian, Germany;

'Miss Helene Bruchman, The Trustor's niece, of Erbach, Germany;

'Mrs. William Lenz, the Trustor's niece of, Darmstadt, Germany;

'Mrs. Andreas Weigand, the trustor's niece, of Darmstadt, Germany;

'Anton Bruchmann, the Trustor's nephew, now or late residing in Brooklyn, N. Y.

'Friedrich Bruchmann, the Trustor's nephew, now or late residing in Bakersfield, California; (all the foregoing being children of said Trustor's deceased brother, Friedrich Bruchmann);

'Mrs. Lizzie Russell, of No. 915 West 30th Street, Los Angeles, California; and Mrs. Margaret Mann, noth now or late residing in Albuquerque, New Mexico, [324 P.2d 911] (both being the Trustor's nieces, and the children of his deceased brother, Adam Bruchmann);

'Phillip Brockmann, Miss Margaret Brockman, Fred Brockman, Charles Brockman, Mrs. Gertrude Horoney, Mrs. Eva Horoney, and William Brockman, residing Rock Island, Illinois (all being the Trustor's nephews and nieces, and the children of his deceased brother, Jacob Brockman);

'Mrs. Margaret Raithel, Mrs. Gertrude Kerr, Phillip Scherer, Fred Scherer, Miss Katie Scherer and Miss Mary Scherer, all of Rock Island, Illinois, and George Scherer, of Moline, Illinois, being nephews and nieces of the Trustor and the children of his deceased sister, Mrs. Margaret Scherer, also Mrs. Barbara Scherer, widow of the Trustor's deceased nephew, Jake Scherer of Rock Island, Illinois.

'In the event of the death of any nephew at any time, either prior to the date of this Declaration of Trust, or hereafter and during the term hereof, leaving a widow and no issue him surviving, the said Trustee shall pay to such widow, so long as she lives, and does not remarry, all of the net income from said Trust to which her deceased husband would have been entitled had he lived, but from and after her demise or remarriage, whichever event shall happen first, this trust not having sooner termiated, as hereinafter provided, the share of said income to which such deceased nephew would have been entitled had he lived, shall be paid to and increase the income of the other beneficiaries of this trust pro rata and in accordance with their respective interests in such income.

'If any of said nephews shall either heretofore or hereafter die, leaving a widow and also leaving issue him surviving, the whole share of said income which would have gone to such nephew, had he survived, shall be paid wholly to his widow during the life of this trust, but only so long as such widow lives and remains unmarried. From and after the first happening of either her death or remarriage, during the life of this trust, such income shall during the remainder of the term of this trust, be paid to the issue of such deceased nephew, share and share alike, but upon the principle of representation.

'In the event of the death of any of said nieces during the term of this trust, leaving a lawful issue of her body surviving, and in case of a deceased nephew leaving no widow, but issue surviving, the share of said net income from said trust estate which would have gone to the decedent, had he or she lived, shall thereafter go and be paid equally, share and share alike, to the then living lawful issue of any one of thwn who may be then deceased, such issue taking their deceased parent's share, upon the principle of reppresentation, or if there be no such issue living, it shall go to the survivors or survivor of said nieces and nephews, and the issue of any one deceased, such issue taking upon the principle of representation.

'This trust in favor of said Trustor's nieces and nephews and as to the two parcels of real property above described as 'Parcels Nos. 1 and 2,' shall continue and remain in full force and effect for and during the lives of all of Trustor's said nieces and nephews and during the life of the last living or survivor of them, but it shall in any event cease and determine upon and at the time of the death of the last or longest living of the said nieces and nephews, and shall, in no event, extend or continue beyond said time, anything to the contrary herein notwithstanding, except for the purpose of final distribution and settlement by the Trustee.

'Upon and at the final termination of this trust as to said 'Parcel No. 1' and 'Parcel No. 2,' said Trustee shall thereupon convey, transfer, assign, set over the deliver the whole of said Parcels Nos. 1 and 2, together with the leases thereon and all undistributed net incomes and rentals therefrom, or any other property into [324 P.2d 912] which they or either of them may have been converted, equally, share and share alike, to and amongst the then living lawful issue of the bodies of all of the said above mentioned nieces and nephews, such issue taking amongst themselves, on the principle of representation, or if none of such issue be then living, then said Trustee shall convey the same to said Trustor's next then living heirs-at-law, according to the laws of succession of the State of California, then in force, excluding, however, said Charles Ott and all of his assigns and heirs-at-law.'

'XII.

'All of the cash and property, real and personal, which shall remain in the residue trust estate after all of the foregoing provisions of this trust having been fully met, and all funds thereinabove mentioned fully provided and all other property conveyed and transferred as above specifically provided in this trust, said Trustee shall pay therefrom so far as same may be sufficient, the following sums to the following persons, to-wit:

(hereat were named fourteen designated legatees)

* * *

* * *

'(15) To Charles Ott, Whose last place of residence known to the Trustor was Silver City, New Mexico, the sum of Ten Thousand Dollars ($10,000.00), upon the express condition precedent, however, that he shall execute to said Trustee in such form as it shall require, a full, absolute and unconditional quit-claim, release, discharge and relinquishment of all his rights, titles, interests, claims and estates of every kind or nature in any amount which he may have or claim in and to the trust estate or to any of the Trustor's estate, or in and to any property which he may own at the time of his demise, and if he shall not execute such quit-claim, release, discharge and relinquishment in consideration of receiving said sum of Ten Thousand Dollars ($10,000.00), said Trustee shall not pay said sum to him, nor any other sum or property in the trust estate directly or indirectly, nor in any event or contingency whatever, and said sum of Ten Thousand Dollars ($10,000.00) shall become a part of the residuum of the trust estate hereinafter mentioned and disposed of.

'Said Charles Ott was legally adopted by said Trustor, but left his home when about fourteen years of age on his own accord and against the said Trustor's wish, and returned to the home of his natural parents. At the time of leaving said Trustor's home, said Charles Ott resumed his natural parent's name, has never sought or received any help, assistance or benefit from said Trustor, has been undutiful and disrespectful to him, and is not entitled to any consideration or participation in said Trustor's property, nor under this Trust. * * *

* * *

* * *

'If sufficient property to pay in full the said amounts shall not remain in the residue of the trust estate after all other provisions in this trust have been fully met, said Trustee shall rotably abate, diminish or reduce the above sums directed to be paid to the beneficiaries in this Paragraph mentioned. If, however, any moneys or property shall remain in said residue of the trust estate after the payment in full of all the sums above provided, said Trustee shall at the time of the demise of said Trustor, convey, transfer and deliver the same equally, share and share alike, to the Los Angeles Orthopaedic Foundation, and the Little Sisters of the Poor, of Los Angeles, both charitable corporations organized under the laws of the State of California.'

'XIII.

'It is an express term and condition of this trust, and a limitation upon the right, title, interest, estate, income or moneys payable to each any every beneficiary hereunder that such rights, titles, interests, estates and incomes of each and every beneficiary shall not be subject to assignment, pledge, mortgage, hypothecation, attachment, execution, judgment, anticipation [324 P.2d 913] or other disposition or impairment, nor shall the same pass to or be paid to any receiver, trustee or officer in bankruptcy, or appointed by any court or otherwise, but same shall be payable, transferable and deliverable solely, only and exclusively to each and every beneficiary hereinabove specifically designated and named, according to the terms of this trust, personally, solely and individually, and the personal receipt therefor from the herein designated beneficiaries entitled to the same shall be a condition precedent to the payment or delivery thereof by said Trustee.' (Emphasis added.)

'XVI.

'If and in the event that this trust shall, for any reason, or at any time prior to its final termination fail, in whole or in part; or said Trustee shall be unable, for any reason whatsoever, to pay any portion of the net income and/or the trust estate, in accordance with the terms hereof, and to the beneficiaries hereinabove designated and entitled to receive the same, said Trustee shall, at the time of the failing of this trust, in whole or in part, or its inability to pay the income and/or principal, in whole or in part, to the beneficiaries designated herein and entitled to receive the same, in accordance with all the express terms of this trust, forthwith convey, transfer and deliver such part of the income and/or trust estate so failing, to the beneficiaries and in accordance with all the provisions hereinabove specifically named, set forth and expressed in Paragraph IX of this Declaration of Trust, anything to the contrary in this trust notwithstanding.' (Emphasis added.)

The trustor died in 1926. Of the twenty-four named Paragraph IX beneficiaries, seven are still living. Five of the twenty-four were citizens and residents of Germany, and all five are now deceased. Three of the five left surviving issue, now living, who are citizens or residents of Germany. The other two German beneficiaries left no surviving issue.

Mrs. Thompson, the income beneficiary of the Paragraph XI trust is still living, but without issue. She was 63 years of age in 1953.

Since April 3, 1940, the trustee has not paid any income to any of the German beneficiaries, either because of interrupted communications due to war conditions, or due to the provisions of Executive Order 8389, as amended, or because of the vesting orders issued in 1949 and 1952 by the Attorney General with respect to the trust. The trustee has impounded such funds and as of October 31, 1953, the trustee held sums in the accounts of the German beneficiaries aggregating about $275,000.

The trial court found with reference thereto as follows:

'From April 3, 1940 and continuously thereafter, plaintiff, either because of interrupted communications due to war conditions or to the provisions of Executive Order 8389 as amended (Finding XII), or because of the provisions of Vesting Orders 13539 and 19000 (Finding XI), has not paid, and until June 24, 1953 has been unable to pay, any portion of the net income of the Trust in accordance with the terms of the instrument declaring the Trust and to the beneficiaries therein designated and entitled to receive the same, insofar as said beneficiaries are German nationals. Instead, the Trustee has impounded such income and has accounted therefor, as of Cotober 31, 1953, by holding for disposition according to the Judgment in these proceedings the balances shown in Impound Accounts described in subparagraphs (1) through (10) of Finding X.'

In 1949 and 1952, the Attorney General, acting under the authority of the Trading With the Enemy Act (40 Stats. 411, as amended, 50 U.S.C.A.Appendix, § 1 et seq.), executed Vesting Orders Nos. 13539 and 19000 respectively. Under these orders he vested in himself 'for the benefit of the United States * * * all right, title, interest and claim of any kind or character whatsoever' of the German beneficiaries [324 P.2d 914] 'in and to and arising out of or under' the trust.

On July 29, 1952, the trustee filed its complaint for declaratory relief asking, among other things, for instructions regarding the distribution to be made of the funds which had been impounded for the account of the German nationals, and for compensation and the manner of apportionment.

On June 24, 1953, General License No. 101 was issued (18 Fed.Reg. 3687; 8 C.F.R. § 511.101). The General License removed the foreign funds freezing controls over transactions and property previously blocked by Executive Order 8389, 12 U.S.C.A. § 95a note, with some exceptions with which we are not here concerned. General License No. 101 did not purport to have any effect upon property which had already been vested by the Attorney General.

By a stipulation the parties agreed to certain matters and agreed to disagree on certain others, and submitted the matter to the court for answer. If it is determined that no interest in the trust was vested in the Attorney General, it then becomes unnecessary for this court to comment or pass upon many of the matters determined by the trial court, for the Attorney General is the only appellant.

The trial court properly construed all of the provisions of the trust together, so as to give effect to the entire document.

The appellant contends that the fact that beginning in 1940 and thereafter, payments could not be made to the German beneficiaries did not cause their interests to fail, and the Attorney General sets forth (a) that neither the interruption in communications, the 'freeze' order, the out-break of war, nor the Trading With the Enemy Act brings about a failure of an existing trust or of an interest in a trust merely because it is for the benefit of an enemy beneficiary; (b) that Paragraph XIII is a common spendthrift provision and nothing more; (c) that Paragraph XVI does not impose any condition upon the interests previously created (that it is the 'residuary safety valve' for gifts which otherwise failed); (d) that the judge's reading of the trust declaration required it 'to perform extensive surgery on Paragraph XVI.' Further, that the interests of the German beneficiaries are subject to the seizure powers conferred by the Trading With the Enemy Act; that the seizure orders were comprehensive enough to reach all of the rights of the German beneficiaries in the trust, including the right to income and corpus distributable after the end of the war; that the German beneficiaries had no standing to participate in the proceedings below on the issue of construction, and therefore were not entitled to counsel fees, and by the same token the Attorney General was so entitled to such an allowance.

Considering the matter as to whether the German nationals were necessary or proper parties, we quote from the well considered Memorandum Opinion of the trial court:

'We note without further comment that the Attorney General apparently waived the point he now raises when he filed his answer without demurring specially, and without raising the issue by his answer, assuming he could have done so.

'One of the principal issues before the court as raised by the Attorney General's answer, among others, is whether the Attorney General not only had power to, but did as a matter of law acquire all the interests the German nationals had in this trust. This is the first point argued in the Attorney General's brief * * *. His premise with respect to the right of the German nationals to appear here assumes the correctness of his answer to the very issue this court must decide.

'We may grant that proceedings to vest enemy property in time of war are in the interest of the United States, but they are nonetheless confiscatory. As said by the Trustee in reply to the Attorney General's contention: 'To eject the vestees as parties would be to silence completely [324 P.2d 915] one full set of protagonists who should be given their full day in court' * * *. Even an alien enemy belligerent charged with violations of the law of war is entitled to access to the courts on a contention properly raised under the laws of the United States. See Ex parte Quirin, 317 U.S. 1, 24-25 [63 S.Ct. 2], 87 L.Ed. 3, 10-11. So here, the German nationals must have the right to contest the Attorney General's position.

'The objection that the German nationals whose interests are involved are not proper parties and may not be heard is without merit and is overruled. See Olsen v. Superior Court, [276 P.2d 168, rehearing granted].'

The trial judge, in answering other contentions of the attorney general, set forth in his memorandum, among other things, the following, with which we agree:

'The basic question then is: What interests in the Brockman trust, either as to income or as to corpus, have been vested by the Attorney General?

'There is no substantial question here as to the powers of the Attorney General as Alien Property Custodian, as stated by him in his brief of March 17, 1954 * * *. We are here concerned with the legal effect of the Trading With the Enemy Act, as amended, and the official acts of the agencies of the Government in the exercise of those powers.

'But for the legal effect of the provisions of paragraph XIII and XVI of the Declaration of Trust, it seems clear that the Attorney General would have become entitled to the distribution of the interests of several German nationals. * * *

* * *

* * *

'It is my judgment that these provisions of the Declaration of Trust effectively deprive the Attorney General of any right to participate in the income or corpus of the Brockman Trust.

'All parties agree on the cardinal rule of construction, as stated by the Attorney General, that a will or any other dispositive instrument must be given effect in accordance with the intention of the donor as found in the language of the instrument. * * * This being so, the provisions of paragraphs XIII and XVI must be construed together so as to give effect to the dispositive provisions of the Declaration.

'As of April, 1940, the Trustee found it impossible to deliver 'solely, only and exclusively' to them the money then payable to certain German nationals, and to take a 'personal receipt therefor' as required by paragraph XIII. In this connection it should be observed that this requirement of personal delivery is a limitation imposed on the Trustee in addition to the restrictions imposed on the beneficiaries with respect to the power to assign, etc. Accordingly, the Trustee created the first of the impound accounts. All payments by the Trustee to all German nationals and those claiming under them by reason of the provisions of paragraph IX of the Declaration were completely blocked by the advent of war in December, 1941, and by the regulations thereafter made pursuant to the Trading With the Enemy Act.

* * *

* * *

'* * * The trust was created in 1922. Wherther or not the trustor was motivated by the difficulties in transmission of funds or property to German nationals by reason of World War I is wholly beside the point, although that was quite likely the case. Reading together the provisions of paragraphs XIII and XVI and having in mind their necessary relation to paragraph IX, it seems plain that, whatever his motive, he provided quite adequately for the distribution of all shares of both income and corpus which could not for any reason be paid or distributed to any one or more of the objects of his bounty, be they Germans or Americans. In doing so he provided against the then anticipatory confiscation of the shares of the German nationals in the event of a second war with [324 P.2d 916] Germany just as effectively as though he had spelled it out in precise language. Cf. Harvard Trust Co. v. Attorney General, 329 Mass. 79, 106 N.E.2d 269. No other interpretation of the language of paragraphs XIII and XVI is reasonable; the phrase 'for any reason whatsoever', in paragraph XVI would seem to be as allinclusive as is possible in our language.

'Nor did the trustor anticipate or provide for succession to the interest of any beneficiary by a stranger to the Declaration of Trust, particularly by confiscation under the war powers of the United States. Paragraph XVI provides that if for any of the reasons there stated there is a failure of the trust or an inability of the trustee to pay then, at the time of such failure or inability, the Trustee shall pay or distribute the share of the trust affected thereby 'to the beneficiaries and in accordance with all the provisions hereinabove specifically named, set forth and expressed in Paragraph IX of this Declaration of Trust, anything to the contrary in this trust notwithstanding'. The Trustee suggests that, in order to effectuate the true intent of the trustor as concerns the nephews and nieces under paragraph IX, the word 'other' will have to be added before the word 'beneficiaries' in the phrase from paragraph XVI quoted immediately above. * * * The Attorney General will have none of this * * *, although on at least two other occasions he seems to recognize that a proper construction of paragraph XVI calls for a recognition of persons 'other' than the German nationals as the beneficiaries entitled to take upon the happening of the condition stated in paragraph XVI precluding payment or distribution by the trustee to the German nationals. * * * The Trustee's interpretation is necessary in order to avoid an absurdity.

'The real basis for the Attorney General's whole argument appears to be that the German nationals had vested interests as donees, that is a present fixed right either of present or future enjoyment * * *, and that as Custodian he is not acting by or on behalf of the enemy beneficiaries, but 'is simply substituted for them in all respects under the trust, occupying as to all the property rights vested in him [under the Trading With the Enemy Act], precisely the same position they would have had had the vesting orders not issued' * * *. He says that 'the only question which can be raised here is whether the gifts which have been vested [in the German nationals] can be divested by virtue of the operation of a condition subsequent', such as that found in paragraph XVI. * * *

'The issue thus stated must be decided adversely to the contentions of the Attorney General. If the donor's language in paragraph XIII, requiring personal receipts, and that in paragraph XVI providing for the gift-over when payment to a named beneficiary cannot be made for any reason whatsoever, are to be 'given an interpretation which will make it operative, rather than one which will render it inoperative' * * *, I find it impossible to conclude that payment to the Attorney General of the 'vested interests' of the German nationals as they become due and payable, 'as a matter of law, constitutes payment to the aforesaid [German] beneficiaries.' * * * It seems to me that those interests were effectively divested, as a matter of law, by virtue of the provisions in paragraphs XIII and XVI. The case might be otherwise only if paragraph XIII stood alone.'

In our opinion the trial judge stated the matter concisely and properly and was correct in adding the word 'other' in order to identify the takers of the gift-over. It is clearly implied, and makes clear the obvious intent of the trustor. There are many cases in this state to the effect that such implementation is proper. See, Ephraim v. Metropolitan Trust Co., 28 Cal.2d 824, 834, 172 P.2d 501; Brock v. Hall, 33 Cal.2d 885, 206 P.2d 360, 11 A.L.R.2d 672; In re Estate of Blalock, 95 Cal.App.2d 463, 213 P.2d 100.

[324 P.2d 917] We are of the belief that the provisions of Paragraph XVI, when considered with all of the other terms of the trust, is not a simple 'residuary safety valve,' but rather is a definite part of the trustor's dispositive plan, namely, a provision for gifts-over applicable to certain interests created by Paragraphs IX and XI.

A thorough reading of the entire trust convinces us that John Brockman intended that the gift-over apply to secondary as well as primary beneficiaries. See, II Scott on Trusts, 2d ed. (1956), Transfer of Interest of the Beneficiary, Topic 3, Restrictions on voluntary and involuntary transfers, and particularly §§ 150, 157.4.

In the Harvard Trust Co. v. Attorney General case, supra, the decedent left a will creating a testamentary trust. Some of the beneficiaries of the trust were Germans. Article IV of the trust provided (106 N.E.2d at page 270):

'If there is any portion of the Trust Property which the Trustee is unable to distribute as hereinbefore provided I direct and charge the Trustee when such inability is established to distribute such portion of the Trust Property to my then heirs-at-law, the division to be by right of representation.'

The trustee (in the Harvard case) was unable to distribute to the Germans for the reason that by virtue of a vesting order the interests of the Germans were vested in the Alien Property Custodian, the predecessor of the Attorney General. It was held that the Attorney General was not entitled to the interests of the Germans, but that their shares should be distributed to the heirs-at-law. In deciding the matter the court said in part (106 N.E.2d at pages 271-272):

'* * * Thus there is presented for decision the question whether the German nationals were given interests which could survive the vesting order and pass to the custodian.

'Article IV makes the gift to 'my then heirs-at-law' operative upon the trustee's inability 'to distribute as hereinbefore provided.' Inasmuch as the trustee is able to make payment to the Attorney General in lieu of the German nationals there is, of course, no impediment to a physical transfer of the funds as prescribed by clause 2 of section 4 of article III. But we are of opinion that such an interpretation of the words 'unable to distribute' would not effectuate the intent of the testatrix. It seems to us that by employing these words she was anticipating events of the sort that might disable her distributees under article III from personally benefiting under the will. Though her use of words could have been more apt, we think that this interpretation carries out the general design of the will, namely, to provide for such as could personally take under the will. See McGrath v. Ward, D.C.D.Mass., 91 F.Supp. 636. A contrary construction would limit the operation of that clause to a very narrow field.

'This view is strengthened when the words 'unable to distribute' are considered in the light of the circumstances attending the execution of the will. The testatrix was of German ancestry. Her testamentary dispositions disclose a dominant purpose to benefit her German relatives most of whom resided in Germany. She had lived through World War I, during which the property of German nationals was seized under orders similar to that here involved. It is not unlikely that she knew of this. Although the war clouds had not started to gather in Europe in 1933 when the testatrix made her will, Hitler was rising to power in Germany and the international outlook was disquieting, to say the least. While she may not have actually contemplated World War II and the concomitant seizures by the Alien Property Custodian, it is not improbable that she had in mind the possibility that the objects of her bounty might be prevented from personally taking under the [324 P.2d 918] will for one reason or another, and that article IV was inserted to provide for such a contingency.'

The court also said (at page 272), 'Cases may arise where the intent of the testator is so apparent from the will as a whole that the defect will be supplied by the court by implication in order to effectuate that intent, [citing cases], but this case is not one of them.'

The appellant has also indicated dissatisfaction with the judgment as it pertains to the American beneficiaries, but none of the Americans are appellants and the Attorney General is in no position to take advantage of errors, if any, affecting other parties. In re Estate of Thramm, 80 Cal.App.2d 756, 766, 183 P.2d 97.

The Attorney General has cited for our consideration the recent California cases of In re Estate of Zuber, 146 Cal.App.2d 584, 304 P.2d 247; In re Estate of Neumeister, 146 Cal.App.2d 290, 304 P.2d 67, and In re Estate of Schneider, 140 Cal.App.2d 710, 296 P.2d 45. However, in none of these cases was there a gift-over, and therefore they are not in point.

As to the Attorney General's claim for attorney's fees, we deem it to be without merit. His purpose was not to sustain the trust, but rather to destroy a part of its terms and his position is antagonistic to a definite segment of the beneficiaries.

We think that he is not entitled to fees. See, In re Estate of Marre, 18 Cal.2d 191, 114 P.2d 591; In re Estate of Bullock, 133 Cal.App.2d 542, 284 P.2d 960; Dingwell v. Seymour, 91 Cal.App. 483, 267 P. 327.

Furthermore, appellant is a public officer and his compensation is fully provided.

We find no error in the record.

The judgment is affirmed.

WHITE, P. J., concurs.

The opinion herewith has been signed by only two justices. The reasons for the third member of the court not participating are that prior to the time of the oral argument Justice Doran, formerly of this court, had retired, and the vacancy thereby created had not, as of that time, been filled. All counsel, excepting Morris Lavine, stipulated at the oral argument that the person who might be appointed to fill such vacancy could participate in, but not write the opinion in this case. Although a transcript of the oral argument was prepared and available to all members of the court, Mr. Lavine has, since the vacancy was filled, refused to stipulate that other than the two justices who heard the oral argument could participate in the decision.


Summaries of

Security-First Nat.Bank of Los Angeles v. Rogers

California Court of Appeals, Second District, First Division
May 5, 1958
324 P.2d 908 (Cal. Ct. App. 1958)
Case details for

Security-First Nat.Bank of Los Angeles v. Rogers

Case Details

Full title:SECURITY-FIRST NATIONAL BANK OF LOS ANGELES, as Trustee of its John…

Court:California Court of Appeals, Second District, First Division

Date published: May 5, 1958

Citations

324 P.2d 908 (Cal. Ct. App. 1958)