United California Bank v. Woody

McCOMB, J. Two beneficiaries of testamentary trusts appeal from a portion of the order settling the trustee’s final account and distributing the trust estate.

Facts: Loula Burns Doane died testate on July 14, 1952. She gave to her trustee $22,000, out of which $6,000 was to be paid to Harold Lloyd Burns at the end of 10 years, with interest at 3 per cent from the date of her death (hereinafter called “Trust A”). Her will provided: “In ease of his death before ten years or if he is still childless—without issue of his own body at the end of the ten years, he is to receive nothing.”

The will also provided that monthly payments from this trust be made to Betty Burns Woody, Leo Henry Burns, and Robert Henry Burns, and that if Betty, Leo, Robert, and Harold survived 10 years “and Harold can qualify,” the balance remaining in the trust should be divided among the four beneficiaries in designated proportions.

The testatrix created another trust of one third of the residue of her estate in favor of Harold (hereinafter called “Trust B”) “to be held in trust for him . . . for a term of ten years, after which it and the accumulated interest is to be paid to him .... But in ease said Harold Loyd [sic\\ Burns dies before the end of the ten years or is still childless— without issue of his body, his one third (%) is to be divided equally between Betty Burns Woody, Leo Henry Burns and Robert Henry Burns.”

The petition for preliminary distribution filed by the executors’ attorney in June 1954 asked that Trust B terminate on July 14, 1962, and the corpus and accumulated interest “be distributed to Harold Lloyd Burns if then living. Should said Harold Lloyd Burns die prior to July 14, 1962, leaving no issue of his body, the said Trustee shall distribute the principal and accumulated income ... in equal shares to Betty Burns Woody, Leo Henry Bums and Robert Henry Bums.”

According to the petition, Harold was to receive the corpus and accumulated income of Trust B at the end of 10 years [70]even though he was childless at that time. This was contrary to the terms of the will.

The petition, however, did follow the terms of the will as to Trust A, stating that, as to the $6,000 plus interest, “should said Harold Lloyd Burns die prior to July 14, 1962, or if he is then without issue of his body, he shall receive nothing. ’ ’