Estate of Horton

California Court of Appeal Sep 28, 1970 No. 10154Published

Before: Brown (Gerald)

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Holding. The court held that a trial court does not abuse its discretion by approving a stipulated settlement between charitable beneficiaries and an individual trust beneficiary, provided there is no evidence of fraud, collusion, or abuse of trust management. The Attorney General lacks veto power over such private contractual compromises and cannot challenge the settlement absent a showing of mismanagement.

Issues

Whether a court abuses its discretion by approving a stipulated settlement between charitable and individual trust beneficiaries without the Attorney General's consent.
Whether the Attorney General has the authority to veto a compromise agreement entered into by charitable beneficiaries regarding their trust interests.
Whether a stipulated settlement involving charitable trust assets constitutes an impermissible diversion of funds.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Agreements settling litigation are favored by the courts.”

“We are cited no statutory or case law authority placing the Attorney General in the position of a super administrator of charities with control over, or right to participate in, the contractual undertakings of the charities.”

“Absent a showing of fraud, collusion or other factor demonstrating an abuse of trust management by the charities, we hold the court below did not abuse its discretion in allowing the compromise and signing the stipulated order.”

11 Cal.App.3d 680 (1970) 90 Cal. Rptr. 66 Estate of VIOLETTA L. HORTON, Deceased.

ROBERT B. BURCH, JR., as Trustee, etc., et al., Petitioners and Respondents,

RICHARD LEE BRADLEY, Claimant and Respondent.

THOMAS C. LYNCH, as Attorney General, etc., Objector and Appellant.

Docket No. 10154. Court of Appeals of California, Fourth District, Division One.

September 28, 1970. [682] COUNSEL

Thomas C. Lynch, Attorney General, Carl Boronkay and John C. Hamilton, Deputy Attorneys General, for Objector and Appellant.

Truce, Veal & Jackson, Harlan K. Veal, Todd & Toothacre, Rod M. Toothacre and John R. Wingert for Claimant and Respondent.

Vincent E. Whelan for Petitioners and Respondents.

OPINION

BROWN (Gerald), P.J.

The Attorney General appeals from an order instructing trustees, amending orders of distribution nunc pro tunc and [683] modifying a testamentary trust under the cy pres doctrine, which the court entered following stipulation of an individual life beneficiary of the trust and four charitable beneficiaries.

The testamentary trust involved in this litigation was established by a will drafted in 1949 and admitted to probate in 1958. The will directed payment of $40,000 a year to the individual beneficiary, respondent Richard Lee Bradley, for the term of his life. Upon Bradley's death, the residue and remainder of the trust was to be paid, one third to Stanford University to find the cause and cure for poliomyelitis, one third to the Claremont Colleges for educational purposes, one sixth to the First Church of Christ Scientist for religious and charitable purposes and one sixth to the Society for Crippled Children of San Diego County for the furtherance of their work.

Estate of Horton

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OPINION

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