Toombs v. Daniels

TOOMBS, Respondent, Daniels, DANIELS, H. David M. John Luzaich, Amelia Thomas Truman

Daniels, al., Appellants. et Trusteeship

In the Matter of the Agreement

Trust Created under dated March

Declaration Trust Daniels,

1920, by and between John W. Daniels,

Thomas L. Amelia L. Daniels Daniels,

and Frances H. as Subscribers Daniels, D. Thomas Daniels

and Amelia L. Daniels as Trustees.

No. C9-83-89.

Supreme Court of Minnesota.

Jan.

876.61. Interest was denied. The trustees Carol, pay were also directed to and all her, through persons claiming ¼ of the portion income of the trust or such other beneficiaries, due to the as it due becomes annually, but not less than and the same principal upon the fractional share of assigns distribution. as error the approximate- trial court’s to award refusal $1,519,354.49 ly prejudgment in interest. petitioned the trustees had lower trust court for a construction of the instru- Brown, Fleming, M. Bonnie Lawrence C. ment to the that children are effect Daniels, A. H. Minneapolis, for David John beneficiary precluded from status for a Daniels and Amelia Luziach. the determination that the intent of settlors Hannaford, Silver, Alan I. L. St. John specifically to exclude chil- was Daniels, Paul, K. Thomas for David Cluett dren. Daniels, Daniels, Tilden Truman Thomas The trustees denied that Carol had Daniels, Daniels, C. A. William Katherine alleged in her interest the trust Daniels, III, Carolyn Dan- Forrest L. by applicable claim was barred the statute iels. by principles equity, of limitations and Daniels, Jr., Minneapolis, estoppel, for waiver and/or laches. H. John Jones, Daniels, D. Martha Martha Martha agree We that the trust instrument does Shull, Shull, IV, H. John W. Willard C. explicitly exclude children. Moffett, Daniels, Jr., Daniels Christo- Jane agree We also that the trustees have not Daniels. pher W. Daniels and Cedar proven by evidence that intent extrinsic Conn., to exclude chil- Larson, Greenwich, settlors was Lawrence E. dren. We therefore affirm decision of K. and David Daniels. for Jean D. Cluett the trial court remand for a redetermi- but Tinkham, Reister, Thomas Raymond A. interest the income of nation Carol’s Berens, Minneapolis, respon- for J. William trust and the since October dent. interest awarding prejudgment since

that time. founder W. Daniels was a

John Company Linseed which be- Archer-Daniels AMDAHL, Chief Justice. Compa- came Archer-Daniels-Midland The trustees and other beneficiaries in 1879 ny. Amelia John married jointly Trust Estate the John W. Daniels son, On March had one Thomas. declaratory judgment en- appeal a W. Trust Estate was cre- the John Daniels County by Hennepin District tered W., (who years then 63 by John was ated declaring (27), that Carol Toombs (61), Court age,) Amelia Thomas Frances been, her settlor, trustee, is and has since a each of whom was a 1936, beneficiary of a trust creat- March a Tom and Fran- beneficiary. and a named old), agreement son, (13 in 1920 four sett- ed months was also ces’ Forrest provided H. her John and Ame- trust grandparents, beneficiary. lors: named a L., beneficiary, parents, Thomas L. and his or lia and her that at the of a death administrators, executors, assigns was Frances H. Daniels. Carol awarded her rights. received his or her the sum she would have as bene- would succeed to Frances in made to her H. Daniels to Tom and ficiary gifts was born less certain agreement including special 1923 the trust adoptive parents, trust named $1,558,- H. as a benefi- a total of amended add John to her in paid XI, adopted by provision adop- add Article Tom and Frances. The ciary and to provides, litigation. Article XI provided issue tion order should pertinent part: legal to all purposes, intents and be the or children are any child hereafter petitioners If child of the and Fran- [Tom said Thomas L. Daniels and born to the purpose and for the of inheritance ces] Daniels, wife, such child Frances H. all other incidents and conse- equally shall share in the or children quences, shall if same as she had estate and the income thereof with been born to them in lawful wedlock. named, the six beneficiaries hereinabove John’s wife Amelia died in 1938. Tom’s and the shares of the six beneficiaries wife Frances died March of 1969 and named shall be reduced ac- hereinabove Tom remarried. Tom died in units in- 1977. The cordingly, and the number of Í998, accordingly. years trust is to terminate in after creased settlor, surviving the death of the last Tom. Daniels, Upon the death of John W. entire interest in the trust estate shall be family The entire and the outside trus- added to the share of Amelia L. Daniels impression, tees were under the and fre- and, living, if if she be then she be not quently years, told over the Carol that the living, equal parts shall then be added provisions of unchangeable the trust were surviving to the shares of those then of precluded being Carol from a benefi- beneficiaries, following named to wit: Hence, ciary. given the trustees had never Daniels, Daniels, Thomas L. Frances H. any accounting interest in or of the Daniels, Daniels, L. Forrest John H. up trust until this action. sepa- Tom set a any other children born to hereafter rate trust for Carol because she was not a the said Thomas L. Daniels and Fran- * * beneficiary of the John W. Daniels trust. Daniels; ces H. *. gifts He also made substantial to her for added). (Emphasis provision The repeats the same given reason. But these were not language regard with above exchange any agreement for not to con- death of each of the other settlors then Moreover, test the trust. there was evi- concludes as follows: dence that he also made gifts substantial any the children Thomas [B]ut if of of gave his two sons and the total Tom L. and Frances H. Daniels shall die approach Carol did not the amount she of the before termination leav- would have been entitled to receive had she both, ing spouse a or issue or the surviv- been included in the John W. Daniels Trust. spouse time to time ors such equal shall take in and issue shares the In 1969 Carol became aware that a court principal share of income and to which might phrase construe the “child of” in a such deceased child would have been en- instrument to include chil- living, including if titled amounts Luzaich, dren. She asked Amelia a trust would have been added thereto employee trustee, and current show from the shares of other deceased benefi- the trust instrument. only Amelia showed ciaries if such child has survived. The part of the upon instrument and find- term ‘issue’ shall not include ing the language “hereafter born to” in- children. stead of “child of” Carol concluded she had added). (Emphasis no colorable claim. made She no further power 1923 Amendment revoked all inquiries about the trust except until 1977 amend alter the trust instrument. for one stepmother conversation with her son, David, Tom and Frances had a third early June Daniels in the 1970’s. At that immediately who became a benefi- time June said that she had consulted a pursuant ciary to the amended Article XI. attorney California who concluded that nei- settlor, principal W., John died in ther nor June Carol had claim to the Carol, baby girl, a trust. (1978). Although Luz- 58 L.Ed.2d 130 visit in Amelia S.Ct. After Carol’s Tom, H., and vari- great documentary it true that a deal aich consulted con- attorneys. The of these part substance ous evidence forms the record this largely unknown because (350 exhibits), versations is ease a five-volume trial attorney-client privi- of the the invocation (8 transcript prepared days was also Amelia Luzaich John H. and lege, but both significant A testimony). amount of testi they knew point that from that admitted mony concerns the subscribers’ intent and court would possibility was a that the there disputed expert opinions about the con beneficiary. They to be a declare Carol struction of the of the trust in knew that could have instituted also judge’s strument. The trial evaluation of question resolved. legal action to have the credibility testimony of these so. Nor did The trustees chose not to do Hence, extremely significant. witnesses is knowledge even they inform Carol of this “clearly apply we will erroneous” stan Amelia, throughout peri- time though findings dard of review to the factual be od, handling all responsibility had the only clearly low which will be held to be including mak- financial affairs of Carol’s erroneous if we are “left with the definite returns, investments, arranging tax out and firm conviction that a mistake has been attorney key and the having power Balafas, committed.” In re Estate box, control- safety deposit to her and even ling savings children’s accounts. Carol’s also Minn.R.Civ.P. 52.01. See Shortly after her father Tom died 1977, long- realized that she could no by Agree 2. re Trusts Created her father should she or er count on 403, 311 Minn. 250 Harrington, ment with require financial aid and conse- children (1977), delineated the method N.W.2d 163 4, quently commenced this suit on October analysis applied construing when 1979. a trust instrument excludes whether We declared that “the adopted children. the crit Appellants 1. contend that presumption in Minnesota at the time these stipu in this case has been ical evidence was, is, trusts were drafted still lated, undisputed testimo or is contained inherit from kindred adopted children will disputed testimony oral that is ny, or 1 407-408, adopted parents.” of their Id. by the writ “extremely doubtful” rendered Accordingly, Harring 166. 250 N.W.2d at Hence, apply they urge us to ten evidence. firmly proposition that: ton established novo standard of review enunciated de conclusively pre “Adopted are by In re Trust Known as Great Northern any the same 221, sumed to have 225- Properties, 308 Minn. Iron Ore a will or similar docu 302, 305, denied, other children under 26, 429 cert. ment, 530, adopted explicit children are 1001, unless 97 50 L.Ed.2d 612 U.S. S.Ct. 411, by the testator.” Id. at ly N.W.2d 610 excluded appealed, later 263 added).2 denied, (emphasis at 167 (Minn.1978), 439 U.S. 99 250 N.W.2d cert. Harrington not occasioned Coincidentally omission was intentional and the trust at issue in mistake. accident or year the same the Daniels’ was drafted very early declared that This court become irrevocable. trust was amended to posthumous power child to disinherit a The away, right such entirely and the is taken applied by 2. This rule is consistent with the one the father inherit is absolute unless child to regarding pretermitted law statutes and case provision for it ‘in his will or other- has made (1974) re- has § heirs. Minn.Stat. 525.201 * * * ** statute, present *. Under the wise’ essentially the same since 1905. The mained upon that such those who claim the burden statute reads: intentional, establish that omission provide in his will for If a testator omits to fact. any children or the issue of a deceased of his Motz, Whitby 145 N.W. v. 125 Minn. child, they share of his shall take the same (1914). apply to was held to This statute Bakke, would have taken if he had estate which Minn. children in Bakke appears (1928). unless it that such died intestate 220 N.W. 601 task, therefore, 250 N.W.2d at The first is to construe will involved Our Harrington phrases also used the “if phrases in instrument itself. Two the trust decease,” and, any my be born after “if any trust are at issue: “If Article XI of the any my daughter” children be born to said are hereafter born to the child or children “if such after-born child or chil H. L. Daniels and Frances said Thomas 411-12, dren.” Id. at 250 N.W.2d at 168. Daniels,” “The term issue shall not holding Harrington While the did not adopted children.” include specifically phrases, implicit rule on these decision, recent In Re Trusts Our opinion recognition in the is the that the Hartman, 347 N.W.2d by Will Created use of the word “born to” does not exclude (Minn.1984), held that the words adoptees. refer “children” first “child” and The earlier Nash case held that “the grandchildren. We have generation, not to phrase obviously ‘hereafter in born’ was previously held that the word “children” might tended to include those who become adopted children. In Re Trustee includes children of the life tenant before the termi Nash, * * n ship Agreement with Under nega nation of the trust. It does not (1963). possibility tive children.” of the Daniels trust instrument terms 265 Minn. at 122 N.W.2d at 109. Thomas L. state: “if of the children of * * * The first case in Minnesota to hold that die, and Frances H. Daniels shall * * * phrase desig “lawful issue” is a technical leaving spouse or issue the surviv * * nating adoptees belong a class to which spouse By ors of such or issue Holden, was In re Trust Under Will of “issue” refers to the those terms the word 291 N.W. 104 generation, grandchildren i.e. the second Holden court reasoned that grandchil of Thomas and Frances. Those “gives statute to an child the sta clearly are dren who have been body adoptive tus of a child of the explicitly beneficiary excluded from * * * parent. giv The artificial relation is “The term ‘issue’ shall not include status: en the same effect as the natural one. The adopted children.” Since there is no simi adopted child ais lineal descendant.” 207 children, language relating lar to the lan (citations Minn. at 291 N.W. at 107 guage which remains to be construed then omitted). applies The same rationale to the to the “children hereafter born said designation of “children hereafter born to” Thomas L. Daniels and Frances H. Daniels )> phrase delineating as a technical a class to * * * adoptees belong. Despite testimony by Prof. Hal- adding In the sentence term “[t]he language specif and others that this bach3 children”, adopted ‘issue’ shall not include ically adoptees, excludes we believe the tri proved the draftsman of the Daniels trust holding al court is correct in that the trust gave thought gener- conscious to future explicitly instrument does not exclude adoptees ations of and knew how to ex- adopted than those in children other the explicit language. clude them with Minne- prior specifically class excluded. Our deci country strong sota the leads with its stat- regard adoptees support sions to this utory policy favoring rights the inheritance conclusion. § 259.29, adoptees. of Minn.Stat. subd. provides: phrase held Harrington In we that the body” sufficiently is not ex Upon adoption, “issue of the child shall the become adoptees. plicit adopting persons to exclude 311 Minn. at child of the and article, Minn., 410-11, Rights Harrington, Adopted 3. Prof. Halbach’s at 250 N.W.2d at Therefore, Gifts, under Children Class 50 Iowa L.Rev. 971 he wrote is not too much “[I]t quoted length Harrington specifically in for to ask to address himself [him] proposition unambiguously question finding the that draftsmen’s uses of terms of to before part adoptee art are often habitual rather than that the a exclusion of an is intended.” design to exclude conscious children. Halbach at 980-81 n. 43. attorney legal parents drafting of worked with the in the become the they shall agreement, all duties is his intent the child with the it that most mat- parents and le- them natural ters. W. prior between Because John died to Car- By adoption of the gitimate child. virtue adoption, any ol’s evidence of his intent adoptive the child shall inherit from the from garnered process must be the or their the same as parents relatives drafting the instrument.5 natural child though the child were the only There two documents sub- were * * parents, *. tenuously mitted at trial to which related (1982)(empha- Minn.Stat. W.’s intent: A letter the draft- added). of this sis pro- attorney with comments about the same virtually statute was pur- posed indicating amendment that the the critical was drafted.4 when amendment pose changes Article XI was to specif- to write a There was no need here probate avoid taxes. The inheritance clause, the settlor but if wished ic inclusion things letter “I have taken added: some children, specific a ex- to exclude XI, granted attempting, in Article required. have Even would been clusion provide who shall succeed to the shares day legal research books of were It may deceased beneficiaries. well be that recommending the word children that wishes, carry your I this does not out held to children should be include it glad necessary.” shall be to correct if contrary clearly a intention mani- “unless respond- There is that John W. no evidence Dunnell, by the will.” M.B. Minne- fested ed to this letter. Law sota Probate history In family book written in 4. The John Daniels Trust W. speculated, H. Daniels Carol’s brother John strument, hold, we its does terms contrary position appellant in this specifically exclude from case, purpose of to” the “born beneficiary status. next look We marriage language was to cement the presented try evidence to ascer extrinsic Tom and Frances. He wrote: tain settlors’ intent at the time the possible parents It is also was drafted. view of the instrument L. Daniels and Amelia W. Daniels] [John re family members’ consistent beliefs with witty charming, knew that Tom was ownership gard to and the evidence at trial roving eye. accounts had a some had transferred assets Tom that John the reasons One conclusion is that one of prior establishment of the to the Trust was to for Frances’ inclusion the judge’s that John W. had trial conclusion marriage provide cement to hold the ownership of and beneficial all as control together. Frances her sons With and Tom and Amelia contributed and that sets equal penalties the of a bro- beneficiaries possessed legal certain assets title to but marriage ken would have had a severe ownership or beneficial not control impact on Tom. supported assets is substantial trust Daniels, Piqua therefore, H. “Dear was, John Ones” the evidence. John W. it was he principal settlor and since who L., (1905) adopting parents and relatives shall the their read: § Minn.Revised ch. estate, they been his inherit as if had his adopted Upon such Status of child— parents per- and relatives fact. child of shall becomé the the child him, adopting § ch. shall become his of Minn.Gen.Stat. sons (1923) legal parents, duties with all identical. is almost parents legiti- them natural between adoption, testimony By Tom told her of such he 5. Amelia that child. virtue Luzaich’s mate adopting parents right sitting or inherit from his at his arm shall he father’s remembered though he being the same as were many discussing relatives exclud- their times and Carol’s parents, legitimate child of and shall not such upon died because John ed cannot be relied parents or their his natural relatives owe legal adopted. even born much less before Carol was intestate, and, duty; his death in case of brothers, H., simple John on a misunderstanding

Carol’s and David as to which Daniels, agreed language. and Amelia Luzaich all on During was relevant cross- type that the same cross-examination examination John H. admitted that from family speculation gossip had been 1969 when he read the first trust instru- many years. There is no other evidence of brought, ment to suit 1979 when was he adopted children. It W.’s intent as impression was under the mistaken that highly unlikely is he even considered their phrase: term “The ‘issue’ shall not daughter-in-law, possibility since his Fran- adopted applied include children” to Carol ces, time, healthy young was at the succeeding generations. rather than to babies, two already had delivered was Centuries of law case common law have capable having more natural children.6 right established the of a settlor or testator The evidence as Tom’s intent was dispose property his or as he or largely hearsay. frequently He told Carol she deems fit. In re Trusteeship See un part and others that she was not of the Agreement Mayo, der with Appellants insist that estate. Tom 95, (1960)(“One “everyone used the had always words un- highest give court’s duties effect to adopted derstood chil- and intended gathered the donor’s dominant intention as contrast, dren were not beneficiaries.” whole.”) from the as a instrument But in testimony by there Amelia Luzaich was case, the trustees have not established cross-examination to the effect that Tom at preponderance of the evidence that times he asserted that wished Carol was a the subscribers to the trust had the intent beneficiary. agreed All of the witnesses to exclude an child.7 adopted always adopted daugh- treated We hold that Carol Toombs is equal ter as other every to his children in beneficiary entitled to status under the way. terms of agree- the John W. Daniels trust evidence of intent to exclude ment. children as beneficiaries is even less com- applicable The statute of limitations pelling regard to Amelia and Frances. to this action is Minn.Stat. Amelia was alive when (6) (7),as follows: sections or and she did not alter her will which left her jewelry in the who were to take the residue of her ly estate to her and share her, defined to his “child alike.” “child,” “children,” son will. Tom or if he or Frances’ was left Amelia’s will predeceased * * * specifical- “issue,” estate, share years: Except actions shall be commenced within six code ^[*] otherwise where the ^[*] prescribes, ^[*] uniform ^[*] commercial ^[*] following ^[*] (6) finding ground include children. The fraud, For relief on the below that the four subscribers did not which case cause of action shall intend to exclude children of Tom not be deemed to have accrued until clearly sup- and Frances as discovery by aggrieved beneficiaries party ported by evidence. constituting fraud; substantial of the facts (7)

Moreover there is considerable compel evidence To enforce a trust a trustee family account, in the record that neglected members’ to he has where convictions status discharge about Carol’s were based or claims to have by 6. Tom and Francis Daniels had by preponderance two sons it is established evidence 1923 when the became trust irrevocable. For- meaning." that a some testator intended other 8, 1919, 16, January July rest was Minn., born and died 408, Harrington, at 311 250 N.W.2d at 28, 1921, 1967. John was born October and is (quoting, 166 In re Trust Created Will of appellants one of the herein. Patrick, 888, (1960)) added). (emphasis 890 7. "The words of a will should be construed in precedents accordance with and statutes unless

809 it, repudiated has The trial court found that fully performed or a fiduci * * relation; ary relationship existed between *. Carol and the trustees. There is support substantial judge ap- to have The trial court seems finding. in the record for this In addition amalgam of the two subsections plied an having relationship a familial with two appli- holding the statute of limitations trustees, given complete Carol had a trust does to an action to enforce cable control of her financial affairs to Amelia discovery begin not to run until fiduciary Luzaich. A relationship exists of trust. breach reposed “when confidence is on one side argue The trustees that under Minn.Stat. resulting and there is superiority and influ 1(7), the statute of limita- other; ence on the and the relation and begins run the trustee has tions when legal, duties involved in it need not be but repudiated They the trust relation. claim moral, may social, domestic, merely or repudiated the trust relation was personal.” Equitable v. Stark Assur. Life was day of Carol’s when she Society, 205 Minn. 285 N.W. trust. As- apportioned no interest (1939) (citations omitted). 470 We have running the statute suming the was “Disparity expe also declared: of business minority, obliged was during tolled her she rience and invited confidence could abe year of at- bring her action within one legally sufficient finding basis for a fiduci taining majority, in her * * ary relationship *.” Murphy, 307 Alternatively, the trustees claim that Minn. at 240 N.W.2d at 512. Both her claim in put was on notice of Harley Amelia Luzaich and Hyre, an earli Amelia Luzaich 1969 when she first asked deceased, legal training er trustee now had instrument so if she could see the trust and had read the and the Harrington Nash began of limitations to run that the statute greater decisions. The trustees had access time. at that to facts and resources and had con sulted about Carol’s status. As attorneys general ignorance rule is that held, knowledge, the trial court com does not involve of a cause of action which relationships, with the confidential bined continuing negligence trespass or or fraud fiduciary duty led to a to reveal to Carol prevent running of the statute does facts material to her beneficial interest. City Rapids limitations. v. See Coon Inc., Minn. Engineering, 283 The time when fraud reason Suburban (1969); ably Dalton v. Dow should have been discovered is also a 167 N.W.2d 493 Co., question Murphy, Minn. of fact. Minn. at Chemical begins (1968). 6-year period Judge Fitzgerald N.W.2d at constituting run when the facts fraud were found that from when Carol first or, instrument, diligence, asked to see the trust until discovered reasonable Delay in dis the trustees knew there was a chance should have been discovered. covering may might fraud when a that a court declare be excusable benefi relationship ciary, they go The exist but chose not to confidential exists. to court to fiduciary relationship ques is a determine status and never ence of a Carol’s House, Country facts. Murphy tion of fact. informed her these Carol was Inc., reasonably relied ad Minn. 240 N.W.2d 507 found to have on the Murphy family declared that if a vice of the trustees and her and to The court duty fiduciary knowingly intentionally- giv fiduciary existed the could have never misrepresentation up beneficiary for fraudulent en as a or inten liable “be though tionally delayed bringing even there no evi suit. She saw an by silence real attorney of fraudulent statements or of inten after her father died and she dence longer ized she could no count on him for tional concealment.” 307 Prosser, (citing support should she encounter financial dif N.W.2d at 512 W. The Law § (4th 1971)). Upon being ficulties. advised she had a of Torts ed. tionship parties as well as the brought suit. between claim, immediately she fiduciary aspects dictate such a rule which relationship between fiduciary of view fraudulent than to demand and their more fair and reasonable the trustees silence, misrepresentation the statute in ev proof of fraud or misrepresentations Minn.Stat. under ery of limitations case. begin to run (6), did not section subd. limitations Similarly the statute of attorneys to by her advised Carol was until over the various income distributions as to bring this action. run as to each distribu years began to Moreover, Minne there are 6. particu right to receive the tion when the is a continu holding that a trust cases sota Warner, See repudiated. payment lar was statute of relationship such that (statute commenced to run 236 F.2d at 862 begin run until the does limitations wrongful repudiation of the upon each right demand plaintiffs of the accrual committed); Sip it was trust at the time the trust. Jones accounting or enforce an pell Hayes, v. 69 N.Y. 189 Misc. Hammond, 209 N.W. 864 168 Minn. v. (statute (N.Y.Sup.Ct.1947) of S.2d against an executor or’ (1926). An action defendants began limitations to run when his accrues bondsman an administrator installment, quarterly thus failed to make decree of distribution. of the final on the date obligation, recovery repudiating the trust Casualty New Amsterdam rns v. Bu due more any payments that became (1939); Co., 285 N.W. 205 Minn. the commencement of years than 10 before Ganser, 86 N.W. v. 83 Minn. Ganser barred). Accordingly, we hold action was Eighth Court Circuit limitations as to each that the statute of in an action applied Minnesota law Appeals prior to Octo distribution of trust income express an managing advisor of against the 4, 1973, had run 1979 when ber First National Bank trust Warner in modified filed suit. Her award should be denied, (8th Cir.), cert. Mpls., 236 F.2d 853 only the made from to include distributions 1 L.Ed.2d 162 S.Ct. 352 U.S. day that forward. held that under (1956). The circuit court statute of limitations law the Minnesota involving 7. In a case a trust April the date of began to run on equitable upon prin is awarded “[i]nterest accounting and distribution the final compensation to the cestui ciples as remaining of the trust to the residu assets him whole.” In Re Trust Under make The ac F.2d at 860-61. ary trustee. 236 206, 226, 15 Koffend, Will of brought more than 6 tion Warner (1944). Interest awarded less than 6 after that date but years § (Supp.1983) is under 334.01 Minn.Stat. had dis after the executors been years for income the ben considered a substitute allegations no charged. Since there were might earned so as to make eficiary have upon practiced any concealment or fraud damages if the amount of him or her whole managing by the advisor the executors if there is an readily ascertainable and plain and since the toll the statute would In the case equitable basis for the award. proving met his burden tiff had not issue, the trial court did not find the facts did not discover withholding equitable wrongful as was statutory peri within rights were based upon which the interest award rationale held to od, of limitations was the statute The evidence at trial was based. The rule enunciated action. bar Koffend there was question on the of whether The statute of limita is correct. Warner withholding of infor wrongful deliberate corpus regard actions on the tions (aside consisted from a mation from Carol Minn.Stat. express trust under of an showing § the trustees had consulted begin 541.05, does not section attorney) mainly handwritten an of with the final date of distribution to run until case, to her Amelia Luzaich had written in notes corpus Amelia was concerned about continuing the rela self nature of

811 original adoption in liti- statute involving the trust created a new sta possibility of tus, establishing persons that Amelia These notes reveal between not so gation. against good by case relationship knew Carol had related nature of bring suit once probably parent, and would child if “the same as he had expressed also con- her father died. She them in been born to lawful wedlock.” Act § the trust of 26, 1876, XCI, 6, about the cost to February cern ch. 1876 fiduciary In relation- litigation. 107, view Adop Minn.Gen.Laws See In re the trustees and ship between Carol and (Petition Sherman), Zavasky tion of general rule that interest is to be 451, 573, 241 Minn. 63 N.W.2d 576 upon liquidated damages, we re- awarded (1954). Although early adoption statutes the trial court on issue. We verse right limited the child’s of inheritance from trial court for a therefore remand to the adoptive parents relatives, his and their amount of income dis- determination of the adop since 1905 the child inherits from the plus interest since to which tribution parents tive and their relatives “the same is entitled in addition Carol Daniels Toombs though legitimate he were” the or natu her share of future distributions of trust adoptive parents, ral child of the and the corpus. income adoptive parents and their relatives inherit if they the child’s estate “as had been” part Affirmed in and reversed and re- parents and relatives fact. Minn.Re part. manded in § L., (1905); vised ch. 3616 Minn.Stat. § (1982). Thus, 259.29 since an COYNE, (dissenting). Justice adopted child has been a “child” of the respectfully primary pur I dissent. purview decedent within of the laws of pose analysis served in the of a intestate succession. The law of intestate majority acknowledges, is to ascer as the succession, however, is not determinative give effect to the intent of the tain of the intention of the settlor of a trust. for that intent should settlors. The search instrument; deroga- Because statutes are in begin language of the with the law, majority tion of the common plain and when the trust clear, initially courts took a restrictive end there. In somewhat the search should re view of the status of an child. In Trust Known as Great Northern Iron Ore Minnesota, however, 221, 227, long ago we came to 243 N.W.2d Properties, (1976) denied, family relationship that the the realization cert. 429 U.S. love, product is far more the under- 50 L.Ed.2d 612 97 S.Ct. subse (Minn.1978),standing, recognition the mutual quently appealed, 263 N.W.2d 610 bonds, denied, reciprocal duties and than of the 439 U.S. rt. S.Ct. ce 116, (1978). biological begetting offspring. act of In re my opinion L.Ed.2d 130 Patrick, 259 by Trust Will of the John W. Daniels’ trust Created the settlors (1960). 106 N.W.2d unambiguously expressed in clearly and recognition, adopted corollary As a of that the 1923 amendment to the trust instru posi- same children have been accorded the intention to limit the class of fu ment an children, including not biological tion as biologi ture beneficiaries to the natural or right inherit of intes- only their laws of Thomas L. cal children right also the to inherit Hence, tate succession but H. Daniels. no Frances there is appropriate testamentary provisions. for construction. room Neither is there Youmans, 218 Minn. In re Estate to resort to need extrinsic evidence of 180, 15 N.W.2d Indeed, settlor’s intent. the consideration impermissible. of extrinsic evidence is Id. grant purpose or withhold Where Trusts, Campbell’s In Re respect children is benefits (Minn.1977). clear, presumed it is that the settlor to include chil- law, testator intended Adoption, unknown at common grant. In re Trust Creat- dren within solely a creature of statute. Minnesota’s 812 Patrick, 193, 595, Argetsinger, Minn. McKeown v. 202 Minn. 259 by the

ed Will of (1960). 598, 402, (1938). 195-96, The 106 N.W.2d 890 279 N.W. 404 Nor does simply pre is unqualified adoption attempt impossi- word “children” the the statute biological and ble; to include both sumed of inheri- statute creates adopted The child has adopted children. adopted child and his tance between recognized as a lineal descend long been adoptive parents and their relatives “the Estate, ant, 161 Minn. In re Sutton’s though” “as if” same as or were law, (1925); an heir at Bakke 201 N.W. 925 fact, though they in even are not. related Bakke, 601 175 Minn. 220 N.W. v. (1982). 1 Minn.Stat. (1928); adoptive kin of his and next of Furthermore, although may the law des Argetsinger, 202 parents, McKeown ignate persons entitled to inherit in (1938). N.W. 402 Even ab Minn. 279 intestacy, cases of a testator or the settlor young adoption proceedings, a sent formal trust, will, of a the free exercise of his intended to man was deemed to have been may per limit the benefits of his estate to a descendant of his de take under a will as Trusteeship sons of his choice. In re Cre adoptive facto father. In re Trust Created Fiske, 242 by ated Minn. Patrick, Minn. 106 259 Will of (1954). may designate He the “chil (1960). The terms “issue” and N.W.2d 888 beneficiaries, dren of” the settlor as thus “legal have “lawful issue” or issue” been including adopted both natural and children meaning which held to have a technical beneficiaries; may in the class of or he child, comprehends adopted In re Trust an may designate exclude them. He “the chil Holden, 207 Minn. under Will of settlor, adopted by” the the exclu dren child, illegitimate and an N.W. may children. sion his natural Or Northwestern National Bank Minne designate “the children born to” the settlor Simons, 243, 242 apolis v. 308 Minn. beneficiaries, thus, any literal read (1976). Adopted children are N.W.2d 78 phrase, excluding adopted chil category included in the of “children of” perfectly ordinary dren. may a life tenant and “issue of” “who straightforward. The man on Trusteeship hereafter be born”. In re un speaks grandchil street of his children and Nash, Agreement 265 Minn. der with dren; a reference to his issue would be (1963). recently, 122 N.W.2d 104 More we “issue,” extraordinary. “legal The terms the term “issue of her held that the use of issue,” her body” and “issue of are techni body” further did not without elaboration cal, phrases may common-law well only natural evince an intent to include virtually meaningless be characterized as daughter children of the settlor’s born “Children”, however, lawyers. to all but exclude an child from the bene usage, a word of common as is the term fits of the trust. “To hold otherwise would lawyers non-lawyers to”. To “born policy a cloud this state’s cast over toward phrase alike the “children hereafter born reports to the children and add plain to” X and Y has a and unmistakable case on sham ‘in another mindless based meaning: biological children of X virtually meaningless tent’ manifested Y. phrases.” common-law In re Trusts Cre Harrington, 311 by Agreement ated arriving the intent the settlors of (1977). liberty disregard a trust a court is not at plain language employed in the trust foregoing apparent It is from the instrument, words, to insert or add sub- policy the Minnesota favor of used, other for those stitute words unique power. children is one of Neverthe- on the engraft inconsistent limitations less, may although statute of the trust. No matter how ill-ad- parent terms legal relationship establish public much at odds with child, abrogate vised or how it cannot the laws regard the terms of the it policy are not we by providing nature that those who used must in fact. is fundamental that the words of the blood shall be so ers, meaning it given ordinary their unless both of whom were named the in- clearly appears they were otherwise strument, as trust beneficiaries. When Fiske, Trusteeship In re used. Created Carol was neither of the N.W.2d 906 living then settlors-trustees caused Carol to “children hereafter born to said words among be numbered the trust beneficiaries. L. Daniels and Frances H. Dan- Thomas expressing While the wish that Carol were conveyed ordinary mean- plain iels” beneficiary, frequently Thomas told Carol biological natural or children of —the beneficiary. and others that she was not a Thomas and Frances Daniels—when conclude, I Because am forced to albeit employed them in settlors reluctance, with considerable that the sett- convey unambiguous message to- the same clearly expressed lors their intention to in- clear, no day. meaning Since the there is only biological clude children and issue as indeed, public policy; need to seek intent in I beneficiaries would reverse precluded doing are from so. Id. at we judgment of the district court. 460, 65 N.W.2d at 910-11. That the words were used their ordi- KELLEY, (dissenting). Justice nary sense is confirmed the context join I the dissent of Coyne. Justice they appear. “children The words the children hereafter born to” referred to Frances Daniels. Benefi-

of Thomas and provisions subsequent generations for

cial “issue”,

referred to and concluded with the in-

provision, “The term ‘issue’ shall not majori-

clude children.” While the regards specific exclusion of

ty grand- children from the class of subsequent descendants of Complaint Concerning In re the Honor Thomas and Frances as indicative of an TODD, able John J. Associate Justice intent to include children in the Supreme of the Minnesota Court. them, of children that seems class born No. C9-83-1744. productive me an inference unreasonable Apart ignoring result. of an absurd Supreme Court of Minnesota. children, plain biological reference to majority position attributes to the sett- Jan. include lors an intention to as beneficiaries ORDER

any children whom Thomas and Frances might adopt later at the same while file, proceedings record and Based on the excluding enjoyment from beneficial time presiding herein and because the referee grandchil- any adopted the trust estate judge panel, Judge Nicholas S. the three great grandchildren. dren or It is far more Chanak, to whom this matter was referred likely that the settlors intended to treat 1,1984, pursuant of November to our order regardless adopted children the same panel requested has additional time for the generation they happened to which assignment complete its of referees belong. report, draft its Moreover, although there is no basis IT IS HEREBY ORDERED: evidence, it is- seeking intent extrinsic February panel 1. The shall have until point out that the conduct of not amiss to complete 1985 to its work and submit consistent with an inten- the settlors was report. its tion to limit the class beneficiaries disposition of this son, remaining 2. For the a third biological offspring. When matter, membership David, the entire Court to Thomas and Frances born (11) joined presently constituted immediately Appeals older broth-

Case Details

Case Name: Toombs v. Daniels

Court Name: Supreme Court of Minnesota

Date Published: Jan 25, 1985

Citation: 361 N.W.2d 801

Docket Number: C9-83-89

Court Abbreviation: Minn.