Lead Opinion
delivered the opinion of the court.
This is а consolidation of two appeals taken to the Supreme Court and by it transferred to this court. (
The plaintiff, Corene Cowdery, appealed from a decree which dismissed her complaint for the construetion of two trusts — an insurance and a testamentary trust created by her father, Edward Gf. Gowdery- — but granted part of the relief sought by her. She later appealed from a supplemental decree, entered after the first appeal had been perfected, fixing* solicitors’ fees and expenses of certain defendants and charging same against the principal or "income of the trust funds created for her benefit. On the second appeal her brother, Chester V. Gowdery, filed a cross-appeal attacking the charging of the fees of the guardian ad litem appointed for him and a part of the fees of the guardian ad litem for certain minors and trustee for persons not in being against the trust fund established for his benefit.
July 20, 1926 Edward G. Gowdery created the insurance trust by assigning to the Northern Trust Company, as trustee, five insurance policies on his life totaling $125,000, to distribute the net income therefrom during the lifetime of his widow, Jennie Van Fleet Gowdery, one half to the widow and the remaining one half in equal shares to his daughters, Louise JJ. Willard and plaintiff, and upon the death of the widow to divide the entire trust estate into two parts as nearly equal as practicable, to transfer and deliver absolutely one of said parts to Louise M. Willard and to retain the remaining part as a trust fund and pay the net cash income therefrom to plaintiff during her lifetime.
September 19, 1929 he executed his will devising the whole of his estate, except certain small bequests, to the Northern Trust Company, as trustee, to distribute the net income therefrom during the lifetime of the widow as follows: To Chester V. Cowdery, his son, $200 per month until he shall attain the age of 40 years, $416.67 thereafter until he becomes 50 years of age, and thereafter the income from a trust fund not exceeding* $200,000; the remainder of the income to the widow; upon her death the trustee was directed to promptly set up a trust fund of $200,000 — or an amount equal to one third of the aggregate principal of the insurance and testamentary trusts if one third of both trusts should be less than $200,000 — and out of the income to pay Chester like sums, dependent on his age, as the trustee was directed to pay him during the lifetime of the widow; to promptly divide the remainder of the trust estate (called the residual trust estate) into two shares as nearly equal as practicable; to convey and deliver absolutely to Louise M. Willard one of said shares, to retain the remaining share as a trust fund and pay the net income thereof to plaintiff during her lifetime.
In addition the trust instruments contained substantially similar provisions for the disposition of principal and income in the event of the death of the respective beneficiaries, as well as substantially similar spendthrift clauses and directions to the trustee in the event any of the beneficiaries should be a minor оr under disability. Advisors to the trustee were appointed for each trust and the trustee was prohibited from investing trust funds or disposing of trust assets without the consent or direction of the majority of the living advisors, unless they failed or refused to give consent or direction within 60 days after written request by the trustee.
Edward Gr. Cowdery died January 13, 1932. His widow died February 2, 1941. At that time the two trust estates exceeded $1,000,000. By March 8, 1941 the trustee had set up a trust fund of $200,000 for the benefit of Chester and had completed plans for the division of the insurance trust fund and the residual trust estate under the testamentary trust, and by March 10 had physically segregated the securities (except securities not exceeding $25,000 in value, then not divisible) and mailed to Louise M. Willard the necessary document to obtain her receipt for her share of the trust funds. Final division was made shortly after this suit was started. None of the parties object to the final division made by the trustee.
March 11, 1941 plaintiff, not being informed as to the action of the trustee in dividing the trust funds, filed her complaint for construction of both trust instruments, making defendants thereto the Northern Trust Company, as trustee, Louise M. Willard, individually and as advisor under the insurance trust (and by amendment, as executrix of the last will and testament of the widow), Charles B. Willard, husband of Louise M. Willard, as advisor under both trusts, Chester V. Cowdery, alleged on information and belief to be incompetent, and other persons having only contingent interests. In this complaint plaintiff charges that the trustee had promulgated a number of fair, equitable and reasonable plans for establishing the trust fund of $200,000 for Chester, and for an equitable and equal division of the remaining securities between itself as trustee for the benefit of plaintiff and Louise M. Willard; that plaintiff is informed and believes Louise M. Willard had rejected each of these plans and threatened to hold the trustee responsible for any declines in the market values of the securities to which she may be ultimately entitled because of any delay, in the division of the trust estates; that the widow, Louise M. Willard and Charles B. Willard were appointеd as advisors to the trustee under the insurance trust, and the widow, Willard and plaintiff were appointed as advisors under the testamentary trust; that the widow was deceased and the remaining two advisors under each trust were acting; that there was great personal animosity between plaintiff and Willard and that he as advisor had arbitrarily refused to consent to the sale of certain securities which could not be divided equally, and thereby effectively and without reason prevented the trustee from making an equitable and reasonable division of the trust estates in accordance with the intent of the settlor; that substantial sums of money were in the hands of the trustee, representing income accrued from the principal of the trust estates during the lifetime of the widow and not distributed during her lifetime; that Louise M. Willard has demanded of the trustee that these sums be paid to the estate of the widow.
Plaintiff asked instruction of the court (1) as to the manner in which the trustee is to make an equitable division of the trust estatеs, including those items which could not be equally divided, (2) as to the manner in which the trustee is to promptly make sales of trust securities and promptly invest trust funds, the trust instruments prohibiting such action by the trustee without the consent of a majority of the advisors, and (3) as to whether the accrued but undistributed income in the hands of the trustee at the death of the widow is the property of the widow’s estate, or of the trust estates and subject to division between Louise M. Willard and the trustee for the benefit of plaintiff.
April 15, 1941 a petition on behalf of Chester was filed by his attorneys, alleging that Chester is a resident of the State of New York, that plaintiff on March 26, 1941 had instituted proceedings in the probate court of Cook county to have Chester declared incompetent and a conservator appointed for his estate; that the proceeding was being contested. The petition submitted to the court the appointment of a guardian ad litem for Chester in this suit. May 6, 1941, on the petition of Chester and motion of plaintiff under the prayer of her complaint, a guardian ad litem was appointed for Chester, the order reciting that the appointment was not to be construed as an adjudication of the incompetency of Chester, and a guardian ad litem for certain minor defendants and trustee of the interests of the issue not in being of plaintiff, Louise M. Willard and Chester was appointed. Thereafter Chester participated in the suit with double representation of a guardian acl litem and counsel of his own choosing.
The trustee in its answer denied that plaintiff was entitled to any relief other than instruction of the court as to the distribution of the accrued and undistributed income at the time of the death of the widow. Later it filed a counterclaim specifying particular instances arising after the institution of the suit when the advisors had failed to agree or one of them had failed to consent or direct the trustee, and asked for instructions of the court in the situations presented. An amendment and supplement to this counterclaim was filed alleging the institution of proceedings in Cook county and in New York to determine the competency of Chester and notwithstanding its belief that Chester is competent to receive the income from the trust, asking instructions of the court as to the competency of Chester and as to whether the income from the trust fund created for Chester’s benefit should be paid to him or expended for his benefit under the provision of the will relating to a beneficiary under disability, and also praying that the court reserve jurisdiction for the purpose of advising the trustee from time to time as to the disposition of the income.
Louise M. Willard and Charles B. Willard filed joint and several answers denying the charges made against them in the complaint and insisting that plaintiff’s request for instructions of the court is frivolous, except as to the accrued and undistributed income at the time of the death of the widow, and that the possible interest of plaintiff in that income- is so small that she should not bе permitted to charge to the trusts the expense of any proceeding in regard to it; that Louise M. Willard, as executrix, was entitled to such income. Later Louise M. Willard filed a counterclaim asking that this income be paid to her, but subsequently withdrew it.
Chester by answer denied that he was incompetent or that a guardian ad litem should be appointed for him. In a counterclaim he again averred his competency; alleged that plaintiff had instituted a proceeding in the probate court of Cook county to have him declared incompetent and a conservator appointed for his estate, which was dismissed on her motion and costs assessed against her; that she also instituted a proceeding in the State of New York; that these proceedings were brought to harass him; that she had threatened to file other litigation involving his competency and the testamentary trust. He prays that the court determine his competency, that the guardian ad litem be discharged, that рlaintiff and all other parties hereto be forever restrained and enjoined from filing or prosecuting any proceedings to determine his competency, except in this proceeding, and that the court retain supervisory jurisdiction of all matters pertaining to the trust fund for his benefit, and for further relief.
Plaintiff answered the counterclaim, questioning the jurisdiction of the chancery court to determine Chester’s competency, admitting the institution of proceedings in the probate court of Cook county, stating that same was dismissed because of Chester’s objection to the jurisdiction, admitting that proceedings were begun in New York but alleging that Chester fled the jurisdiction of that State so that a hearing could not be had, denying threats to institute further proceedings and setting up facts purporting to justify her conduct in other litigation mentioned in Chester’s counterclaim but which appears to have no relevancy to this suit.
On a hearing before the court and a jury, in which plaintiff, standing on her objeсtion to the jurisdiction of the court, refused to participate, Chester was found to be competent and capable of managing and caring for his own affairs. This was followed by a hearing on the issues as to the construction of the will, at which the only witness was an officer of the trustee, who was first called by plaintiff for cross-examination and later as a witness on behalf of the trustee. May 25, 1942 a decree was entered finding the equities to be with the defendants and counterclaimants and dismissing the complaint as amended for want of equity. By this decree the court determines that the accrued and undistributed income as of February 2, 1941, the date of the death of the widow, after deducting certain fees and expenses allowed to the trustee, should be paid Over to Louise M. Willard as executrix of her mother’s will, gives directions to the trustee as to trust assets as to which the advisors had not agreed, finds that Chester was, on March 11, 1941 and at the date of the decree, mentally competent and capable of managing and earing for his own affairs and directing the trustee to pay to him the net income which from time to time he is entitled to receive under the testamentary trust, discharges the guardian ad litem for Chester, restrains and enjoins the parties to the proceeding from instituting or maintaining any proceeding relating to the competency of Chester or his right to collect the income from the trust established for his benefit unless leave of court should first be obtained, and retains exclusive jurisdiction to determine any such mattérs that may arise in the future. The court also retained jurisdiction to entertain and determine petitions, if any, of the parties, their counsel, guardians ad litem and the trustee of interests of persons not in being, in respect to expenses, including compensation for services — such petitions, if any, to be filed within 10 days.
From this decree plaintiff appealed, denying jurisdiction of the superior court to hear and determine Chester’s competency and its рower to permanently enjoin the parties from causing inquiry to be made into Chester’s mental condition in the future and to retain exclusive jurisdiction of that matter, denying the right of the court to construe the will as to any matter urged in the complaint and at the same time dismiss the complaint for want of equity. Plaintiff also argues that the court should have determined that the accrued and undistributed income in the hands of the trustee at the death of the widow belonged to the trust estate.
June 4,1942 plaintiff filed her notice of appeal from the decree, and defendants acknowledged receipt of a copy of such notice. On. the same-day the trustee, Chester and his guardian ad litem filed petitions for the allowance of attorneys’ fees and expenses. On the following day the remaining defendants, the guardian ad litem for certain minors and trustee for persons not in being, filed petitions for similar allowances. On the hearing of these petitions, plaintiff, objecting to the jurisdiction of the сourt to proceed after the appeal from the original decree had been perfected, did not cross-examine any of the witnesses or offer any evidence. July 31, 1942 a decretal order or supplementary decree was entered fixing and allowing fees and expenses, including attorneys’ fees, to the trustee, Louise M. Willard, individually and as executrix of the last will of her mother, Chester, the guardian ad litem of Chester, and the guardian ad litem for certain minors and trustee for persons not in being, and charging the greater part of such fees and expenses to the principal and income of the trust funds for plaintiff’s benefit. An appeal from the supplemental decree was perfected. On that appeal plaintiff denied the jurisdiction of the court to determine the matter of fees and expenses after perfection of the first appeal, and also attacked the allocation or charge of the allowances made. Chester cross-appealed, attacking the charging of allowances to the guardians ad litem and the trustee for persons not in being against the trust fund established for his benefit. These appeals were taken by plaintiff to, the Supreme Court on the theory that, the court being without jurisdiction to determine the competency of Chester or to fix and allow the fees and expenses after the first decree had been perfected, a construction of the constitution was involved and plaintiff’s constitutional rights violated. The appeals were consolidated in the Supreme Court and later transferred to this court.
Chester’s competency first became an issue in this case when plaintiff alleged his incompetency and the need for a guardian ad litem. He denied the allegations and in his counterclaim asked the discharge of the guardian ad litem, who had been appointed without a finding of incompetency. Where there has not been a judgment fixing the mental status of the person alleged to be incompetent, the court necessarily has the power to determine all facts essential to a proper adjudication upon the need for such guardian. This is fundamental. As said in Dodge v. Cole,
On the appointment of a guardian ad litem the question to be determined is the ■ capacity of the person whose fitness is challenged to intelligently choose counsel and consult and advise with him in the conduct of the litigation, or, capacity to manage and care for the particular business or matter involved. Here the jury was required to determine whether Chester was, at the commencemеnt of the suit and continuously since, to and including the day of the sanity hearing (a period of more than a year), mentally competent and capable of managing and caring for his own affairs. The question submitted was proper, but if it imposed too high a standard plaintiff cannot complain of this or of the ultimate finding of mental competency. In view of the history of Chester appearing in the record, it was the duty of the plaintiff to suggest his incompetency and offer all proof of the matter reasonably available. Having made the suggestion of incompetency she is in the position of a petitioner in a sanity hearing in the county or probate court under the statute. She is not a party aggrieved who is permitted to appeal. Sanborn v. Carpenter,
However, she has an appealable interest in that part of the decree which restrains the parties to this suit from instituting or maintaining any proceeding relating to the competency of Chester unless leave of court is had, and which retains exclusive jurisdiction to determine that question in the future. This provision opens up the much broader question of the right of a court of chancery to adjudicate generally upon the sanity of a person for the purpose of commitment or appointment of a conservator of the person or property. By the common law the power of control over the persons and property of lunatics and idiots belonged to the king as parens patriae and was exеrcised by him through the lord chancellor, not in his character of chancellor or by virtue of the general powers of the chancery court, but under a separate and distinct commission under the sign manual from the crown. The chancellor, upon petition or information, granted a writ to inquire into the party’s mind and, if found non compos, generally committed the care of his person to some friend, called the committee, and the management of his estate to an heir, designated as committee of his estate. Errors in these proceedings were redressed by writ of error in the regular courts of law and not in the House of Lords as on appeal from a court of equity. After adjudication the chancellor acted in the superintendence of the lunatic’s custodians or committee by virtue of his general equity powers. In this country the State succeeded to the power of the king as parens patriae, and under our form of government the power is exercised by the courts only through legislative enactment. Dodge v. Cole,
By section 18 of article 6 of the constitution our county courts are given original jurisdiction in the appointment of guardians and conservators and the settlement of their accounts. Like jurisdiction is given the probate courts under section 20 of the same article. By chapters 85 and 86 of the Illinois Revised Statutes, as they existed when the decree was entered, jurisdiction over the person of insane persons not charged with crime was vested in the county courts. It appointed conservators of the person and the probate court appointed conservators of the property of the incompetent. In considering these constitutional and statutory provisions this court in In re Estate of Reisenhus,
Chester defends that part of the decree which restrains the parties from instituting or maintaining any proceedings "relating to his competency by asserting the inherent right of the court to protect itself and litigants from a multiplicity of actions and harassing and vexatious litigation over the same subject matter. Patterson v. Northern Trust Co.,
It appears from the sworn answer of plaintiff to the counterclaim and the exhibits attached to and made a part thereof (without traverse in Chester’s reply) that Chester is a mental defective who never finished grammar school; that from the age of 34 to 46 he was an inmate or student in an institution in New York chartered to permit the harboring of mentally deficient children, and paying for his accommodations and care $250 per month; that in the institution he was under the supervision and guidance of Eudolph S. Fried, owner and manager, and was raising poultry, painting sheds and buildings, taking care of the lawn and doing anything he wanted to do; that in the proceedings for the probate of his father’s will in 1932 a guardian ad, litem was appointed for him (admitted by counsel); that after the institution of the proceedings in Cook county for the appointment of a conservator Chester’s attorneys served notice for the taking of depositions of certain persons, including Fried in New York; that Fried was not produced as a witness, and representations were made that he would testify in the hearing in Cook county; that later plaintiff’s counsel was advised that Fried would not appear in the probate court of Cook county; that plaintiff then asked for a continuance to take Fried’s deposition; that Chester filed a petition in the Cook county proceedings attacking plaintiff’s right to institute the proceedings because of her lack of residence and alleging that he, Chester, was a resident of the State of New York and that he had no property except the income from a testamentary trust which contained a spendthrift clause and further provided that in the event any beneficiary was under a disability the trustee “shall itsеlf expend the income so payable ... to any such person under disability in whatever way the Trustee shall think best for his . . . support, maintenance and/or education instead of making payment thereof . . . to a legally appointed conservator of such person under disability”; that plaintiff then filed a motion alleging her residence in Chicago, admitting Chester’s residence in New York and asking dismissal of the proceeding for want of jurisdiction because of the nonresidence of the respondent; that the proceeding was dismissed at plaintiff’s cost; that proceedings were instituted in New York by service of a writ on Fried to produce Chester before the court for examination; that on receipt of this writ Fried called Chester’s attorneys in Chicago, who requested that Chester call them hack; that Fried, knowing that Chester was leaving, went to New York City and had not seen Chester since; that the New York proceeding was dismissed later without prejudice.
Within a week after Chester fled from the jurisdictiоn of the New York court his counterclaim in this suit requesting the adjudication of his sanity was presented and leave to file was granted several months later. In the sanity trial Fried was not produced as a witness; Chester’s history as outlined above was not presented to the jury; only witnesses with extremely limited observation of Chester were examined and— plaintiff refusing to participate even by cross-examination because of her erroneous objections to the court’s jurisdiction — Chester was pronounced sane in a pro forma hearing. For this result plaintiff is very much to blame. The facts outlined, however, justified the institution of proceedings to determine Chester’s competency and further show that Chester evaded trial in the probate court of Cook county by keeping Fried unavailable as a witness and by injecting facts which suggested a want of jurisdiction, and that he fled from the State of New York to escape a trial where the jurisdiction could not be questioned and where Fried could hаve been compelled to testify. These facts do not bring this case within the Patterson case, relied upon by Chester. In that case, as shown in Shedd v. Patterson,
Notwithstanding a serious doubt as tо the right of the court to retain jurisdiction for the purpose of instructing the trustee as to the manner of expending income payable to Chester (Tudor v. Firebaugh,
Plaintiff asks the instruction of the court as to three separate matters, one of which relates to the ownership of the undistributed income in the hands of or owing to the trustee at the death of the widow. The trustee and Louise M. Willard by their answers admitted that instruction on this point was necessary. Later, Louise M. Willard, as executrix of the last will of the widow, filed her counterclaim asking for such instruction, but withdrew it. The court construed the trust instrument as to this income and at the same time dismissed the complaint for want of equity. This was error. Hampton v. Dill,
The request for instruction as to the rights and duties of the trustee in the event of disagreement between Willard and plaintiff as advisors, or the failure of one of them to give consent or directions on request of the trustee, was made prematurely because the matters as to which instruction was asked had not arisen. Warner v. Mettler,
The court decreed that the income involved became the property of the widow’s estate and directed the trustee to pay it to the executrix. Plaintiff claims this income should be divided equally between the trustee, as trustee for the benefit of plaintiff, and Louise M. Willard, individually. Each of the parties contending for this income cite and quote Scott on Trusts in support of their claim. In speaking generally of trusts the author says (sec. 238): “Where the income under a trust is payable to a beneficiary for life, he or his personal representative is entitled to the net income accruing up to the time of his death, unless it is otherwise provided by the terms of the trust. This is true even though by the terms of the trust it is provided that the income shall be payable to him at designated intervals and he dies between such intervals. . . . On the other hand, the life beneficiary or his estate is not entitled to income accruing after the time of the last payment and prior to his death, if the settlor has provided, whether in express terms or otherwise, that he shall not receive the income unless he is living at the dates fixed for payment.” Speaking specifically of the death of a beneficiary of a spendthrift trust the author says (sec. 158.1): “Even though it is provided by the terms of the trust or by statute that the interest of the beneficiary shall not be transferable by him or subject to the claims of his creditors, the beneficiary’s interest in such accrued income passes on his death to his personal representatives, if it would so pass in the absence of such a restraint on alienation. The purpose of the restraint on alienation is to protect the beneficiary, and when he dies he no longer needs such protection. The pur-" pose is not to deprive the beneficiary’s estate of the income which was payable to him but which had not been paid at the time of his death. Whatever is thus received by the personal representatives is a part of his estate and is subject to the claims of his creditors. Unless the claims of creditors preclude it, the. beneficiary can dispose by will of his right to the income' accruing up to the time of his death. . . . The personal representatives of the beneficiary of a spendthrift trust are not, of course, entitled to the income accruing up to the time of his death if it is otherwise provided by the terms of the trust.” The spendthrift clauses in the insurance and testamentary trusts are identical and, so far as they relate to income, are as follows: “I hereby further direct that . . . all payments of net cash income from . . . my Trust Estate and/or said respective Trust Funds or any share or part thereof to the respective beneficiaries thereof hereunder shall be made to such beneficiaries in person or upon thеir personal receipt; and I hereby further direct that none of the beneficiaries of my Trust Estate or of said respective Trust Funds or of any share or part thereof shall have any power . . ; to encumber or anticipate the income therefrom or any part thereof, nor shall any such beneficiary have any control over said income or any part thereof until after the actual receipt thereof by such actual beneficiary thereof hereunder; and none of the income arising therefrom shall ever at any time or in any part be subject to the claims of creditors of the respective beneficiaries thereof.” (Italics ours.)
Whatever may be the purpose, generally, of restraint on alienation in spendthrift trusts, the terms used in the trust herein involved go further than mere protection of the beneficiary during his lifetime. They exclude control of such income by any beneficiary until same is actually received by the actual beneficiary, not his оr her representative, and bar claims of creditors after, as well as before, the death of beneficiaries. When the settlor directed that none of the income arising from his trust estate or the respective trust funds, or any share or part thereof, shall “ever at any time or in any part be subject to the claims of creditors of the respective beneficiaries,” he precluded the passing of any part of that income to the estate of any beneficiary. The purpose of the settlor was similar to that of the testatrix in Routt v. Newman,
On the 10th day after the entry of the original decree plaintiff filed notice of appeal, with acknowledgment of service by the defendants, thereby perfecting the appeal. Civil Practicе Act, sec. 76 [Jones Ill. Stats. Ann. 104.076]. On the same and the following day petitions were filed by the defendants, guardians ad litem and the trustee for persons not in being, for the allowance of fees and expenses. On the hearing of these petitions plaintiff objected that because of the appeal the court was without jurisdiction to determine and tax the fees and expenses. The trustee likewise objected to the jurisdiction of the court. These objections were overruled and fees and expenses exceeding $12,000 were allowed, the greater part being taxed against the principal and income of the trust for the benefit of the plaintiff. On appeal plaintiff again urges the lack of jurisdiction.
Defendants, including the trustee (forgetting its position in the trial court) argue here that the original decree is not a final and appealable order, and that in any event the proceedings in respect to the fees and expenses were not stayed by the appеal because the appeal has not been made a supersedeas. In support of their contention that the original decree is not a final and appealable order defendants rely principally upon Walters v. Mercantile Nat. Bank of Chicago,
The decree in the present case bears no resemblance to the Walters decree. This decree construed the trust instruments as to all mаtters raised in the complaint and the counterclaim and dismissed the complaint for want of equity. It therefore terminated the litigation between all of the parties on the merits. If it did not, the petitions for fees and expenses have been filed prematurely. The taxing of fees and expenses relates solely to the costs, and no order in respect to these costs can affect the substantive rights of the parties fixed by the original decree. On the other hand, reversal of that decree may have a controlling effect upon the allowance of fees or expenses and the fund or income against which they should be taxed.
Under the Civil Practice Act (sec. 74) the appeal constitutes a continuation of the proceedings in the court below and is perfected by filing a notice of appeal in the lower court, (sec. 76.) The appeal operates as a supersedeas only if and when the appellant shall give and file a bоnd. (sec. 82.) The appeal in this case has not been made a supersedeas. The effect of a supersedeas is to stay the enforcement of the judgment or decree brought to the reviewing court on appeal or writ of error. 3 Am. Jur., Appeal & Error, secs. 535, 536; Simon v. Balasic,
The supplemental decree being a nullity, it is not necessary to consider any of the objections made to this decree.
The two decrees appealed from are reversed and the cause remanded for -further proceedings in accord with this opinion.
Reversed and remanded.
Matchett, J., concurs.
Concurrence Opinion
specially concurs: I think we
should have passed upon the propriety of the order of July 31, 1942, which decreed the payment of attorneys’ fees, etc.