Lair v. Schnell

WOOD, J.

The will of Nancy Ray Lair, who died on September 7, 1934, was admitted to probate on October 18, 1934. In this will she left all her property, excepting clothing, jewelry and household furniture, to her husband, John W. Lair, as trustee. The will provided that the entire net income

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received from the trust estate should be “paid” to John W. Lair during his life and upon his death the trust estate should go to certain named relatives. Among the provisions of the will are the following:

‘1 This is a trust for maintenance, and I direct that the income from the trust estate be paid to the beneficiaries hereunder by my Executor, beginning from the date of my demise and continuing until distribution of the trust estate to the Trustee, (e) It is my desire that this trust be maintained for the purpose of providing the income therefrom to my said husband as long as he shall live, and I therefore do not desire that any part of my real property be sold by my said trustee, and I direct that the whole thereof be retained in the trust estate, (f) I direct my said trustee to pay all insurance, taxes and assessments against said property before using any of the income therefrom, so as to keep the title to said property clear. ’ ’

John W. Lair, who was named executor as well as trustee, filed a petition in the probate court on July 2, 1936, asking for an order of the court authorizing the execution of a trust deed upon certain real property of the estate to secure the payment of the sum of $850 to be borrowed for the use of the estate in paying the expenses of administration. On July 22, 1936, the court authorized the execution of the trust deed, and in its order directed the executor to execute a deed of trust on the property therein described in favor of John Letoile “on the usual and customary form, wherein the Security-First National Bank of Los Angeles is named as trustee, which said form includes an assignment of rents, to secure the payment of said note. . . . ; that the interest, principal and insurance premiums shall be paid out of the whole estate of said decedent”. The deed of trust was thereafter executed.

The executor presented his final account and petition for distribution on August 17, 1936. This petition was granted by the court by its order on September 10, 1936, in which order the estate was distributed to John W. Lair as trustee in accordance with the terms of the will. No reference was made in the order to the trust deed above mentioned. The first account of the trustee was filed with the court on June 20, 1939. Objections to this account were filed by beneficiaries who were to take the trust estate upon the death of John W. Lair, and upon hearing the report and the objections thereto