88 N.E.2d 870 | Ill. | 1949
Appellee, Mary Alice Gallagher, individually and as assignee of Alice V. Gallagher, filed her amended complaint in the superior court of Cook County alleging that in 1925, Vincent G. Gallagher, under whom she claims by devise and assignment, together with Frank A. Ostrander and Eli *411 Metcoff, executed a warranty deed and trust agreement whereby they conveyed certain realty to Cicero Trust and Savings Bank, as trustee. The trust agreement provided generally that the trustee shall have power to manage, lease, partition, and, after payment of specified charges and expenses, pay over the proceeds to the three above-named beneficiaries, one fourth to Gallagher, one half to Ostrander and one fourth to Metcoff.
The provisions on which the controversy here arises pertain to the character of title held by the trustee and the manner of disposal of the property and termination of the trust. It was also alleged the trust was invalid because of the absence of a termination date. The defendant, Drovers Trust and Savings Bank, successor to the Cicero Trust and Savings Bank, by its answer, joined in the prayer of the amended complaint. Defendant Eli Metcoff, by his answer, admitted all of the allegations of the amended complaint except that the trust agreement contained no provisions fixing a definite time for the sale of the property, which he denied, averring that the trustee was authorized to terminate the trust or sell the property when so directed by the beneficiaries. He filed a counterclaim, praying that the court find and decree the trust to be valid, ascertain whether there was or was not a present trustee, and order a sale of the property remaining in the trust under the direction of the court and in accordance with the terms of the trust agreement.
Plaintiff moved to strike this answer and counterclaim and Metcoff moved for a judgment on the pleadings and to dismiss the amended complaint of the plaintiff. The court sustained the motion of the plaintiff, overruled that of Metcoff and dismissed his counterclaim. Metcoff elected to stand on his counterclaim and the court dismissed same for want of equity. From this ruling the appeal was taken.
The record discloses the trust agreement provides the trustee is vested with good and merchantable title in the *412 said property, and that the trustee shall have full power and authority from time to time, and at any time, to contract or to sell on any terms consistent with the purpose and intent of the agreement. It provides that the trustee shall not, except as otherwise provided, execute any conveyance or assignment of any contract with reference to any of said real estate except upon the written order or approval of said Vincent G. Gallagher. It is further provided in the agreement that when approved by Gallagher the trustee may contract for sales of land and execute deeds therefor. Gallagher is irrevocably appointed attorney in fact for the other beneficiaries and, in the event of his death or other incapacity or refusal to act, Ostrander and Metcoff, in that order, are appointed to succeed as attorneys in fact with like powers as given Gallagher. It is further provided that in the event of Gallagher's death during the life of the trust no change in selling prices of lots in the subdivision shall be made except on approval of the majority of the beneficiaries. The interest of the beneficiaries is declared to be personal property and in the avails and proceeds of the trust, and the declared intention is stated to be to vest in the trustee the entire legal and equitable title in the land. And it is further provided that neither beneficiaries nor any of them shall have power to terminate the trust other than in accordance with its terms and provisions.
It is alleged in the complaint the trust has become inactive and tax delinquent and the property is in danger of dissipation and loss; that the trust agreement provides no fixed date for termination, nor any imperative duty on the trustee to sell. The complaint prays the court to declare the beneficiaries to be equitable owners of the trust property, and for partition and other relief. Defendant Metcoff in his answer admitted all the allegations of the complaint except that he denied the trust agreement contained no date for sale of the property and termination, and alleged the *413 trustee was authorized to terminate the trust or sell the property at any time when so directed by the beneficiaries. His counterclaim alleged that he is attorney in fact for the beneficiaries by reason of the deaths of Gallagher and Ostrander; that he is willing to direct the trustee to sell the property and distribute proceeds, praying the trust be held valid and that the court direct the sale of the property under the terms of the trust agreement and under the control of the court.
It is the contention of the appellant, Metcoff, that the trial court erred for the reason the lack of a termination date does not invalidate an active trust; that the trust is destructible and therefore did not require a definite time for sale of the property or for termination of the trust, and that the parties here agreed not to partition. It would seem the controlling question in this case is whether under the allegations of the complaint plaintiff is entitled to partition. It is the contention of Metcoff that an active trust is not invalid for lack of a definite date for termination. In support of this proposition he points out the various duties of management and control which are imposed on the trustee, the provisions of the trust agreement which purport to vest both legal and equitable title in the trustee, and urges that the issues of this case are squarely decided by the decision of Smith v. Kelly,
We do not find that the Smith case is controlling here for the reason the committee was vested with the whole ownership of the property with an imperative duty and complete power to sell. In the instant case the trust agreement purports to vest the sole ownership in the trustee, but no imperative duty to sell is imposed on the trustee and no power of sale is given except on direction or approval of Gallagher or his successors. Further, in the Smith case the trust was formed by operation of law and therefore a reasonable time was given to carry it out. Here, *414 we have an express trust and by the terms of the agreement the trust may continue for an indefinite period or forever.
Appellant further contends that the trust here is destructible by direction or approval of beneficiaries through their attorney in fact and therefore no definite date for termination is required. In support of his position he cites the case ofWechter v. Chicago Title and Trust Co.
Appellee contends that no equitable conversion of beneficiaries' interest in their property occurred because the trust agreement imposes no imperative duty on the trustee to sell; and, further, the equitable title being in the beneficiaries, and no time for sale of the property or termination of the trust having been set by the agreement, the beneficiaries are entitled to partition. Appellee places great reliance on the case of Harrison v. Kamp,
Appellee also cites Hazlett v. Moore,
Appellant, Metcoff, contends there was an equitable conversion because the trustee in the instant case was given power to sell and upon direction of Gallagher or his successors the duty became imperative. We find no merit in this contention for the reason this court has repeatedly held that to effect an equitable conversion, the duty and power to sell vested in the trustee must be unconditional and capable of being exercised at any and all times. (Hazlett v. Moore,
Appellee contends that being an equitable owner of an undivided portion of the property she is entitled to partition as a matter of right. (Boddiker v. McPartlin,
Appellee as one of the equitable owners is entitled to partition. The order of the trial court is therefore correct, and is affirmed.
Order affirmed.