Raahauge v. Raahauge

PEEK, J.

Appellant Victor Raahauge, one of the cotrustees of a testamentary trust established by the terms of the will of Gertrude Raahauge, deceased, filed his petition in accordance with the provisions of section 1120 of the Probate Code for an order confirming and approving the purchase of corporate stock. Objections were filed by his cotrustee and two of the beneficiaries of the trust, which objections denied

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that the shares should be placed in the corpus of the trust or that title to the shares should be taken in the name of the two cotrustees. In addition to the foregoing, the objectors alleged that the petitioner had purchased the shares for himself and-the objectors as their agent and not for the trust. After a hearing on the issues so raised the trial court entered judgment denying the petition and further declaring that the five beneficiaries of the trust were each the owners of one-fifth of the shares individually. The judgment further ordered the two cotrustees to transfer and deliver to each beneficiary the share so adjudged to belong to him. Petitioner appeals from the judgment so entered.

The petition alleges that in accordance with the terms of decedent’s will 4,000 shares or four-fifths of the corporate stock of the Mare Island Perry, a California corporation, was distributed to the trustees who were empowered to purchase additional shares of stock of said company as they deemed expedient. The petition further alleged 'that with the express consent of all of the beneficiaries of the trust he entered into negotiations for the purchase of 2,000 additional shares of stock of said corporation, and that he did so purchase the same for $22,500; and further that all of the beneficiaries agreed that the shares so purchased should be placed in the trust and title taken in the name of the cotrustees. The petition further averred that at the time of the purchase there were no funds in the trust estate with which to effect a purchase and therefore each of the beneficiaries furnished his proportionate share out of his personal funds in accordance with the agreement that the shares would be placed in and become a part of the trust corpus. The petition concluded with an allegation that the petitioner believed that said purchase was for the best interest of the trust and sought an order approving the purchase and declaring that said stock may become and now is a part of the corpus of the trust to be administered in accordance with the trust provisions.