Security-First National Bank v. Ogilvie

HANSON, J. pro tem. This is an appeal upon the judgment roll from a declaratory judgment adjudicating that under the terms of a trust the wife during her lifetime had been vested with, and had exercised a testamentary power of appointment to, one-half of the corpus of the trust, and that accordingly the property did not become a part of the husband’s estate. The appellants are the residuary legatees of the husband. The only question involved is whether the terms of the trust are adequate to sustain the holding of the trial court.

The facts which need to be stated here are these: After thirty-two years of married life the wife, Belle Wright, instituted a divorce action against her husband, Reason Wright. A few days thereafter the husband delivered to her, for her signature, an agreement by the terms of which she was to dismiss the divorce áction and accept the financial pro[789]visions set forth therein. Included in the agreement was an undertaking on the husband’s part to transfer to a trustee, to hold for the wife and Douglas Baird Wright, an unadopted boy residing in their household, certain property in the manner set forth in an unexecuted declaration of trust which was annexed to the agreement. It is the construction of the terms of that particular declaration of trust which is here in controversy. The wife accepted the agreement and thereupon the husband transferred to the predecessor of the plaintiff, as trustee, some $38,000 in negotiable bonds, and such trustee executed the agreed declaration of trust. The record discloses that the transfer to the trustee was absolute, and accordingly the measure of the trustee’s duties in respect thereto is as set forth in its written declaration of trust. From and after the execution of the agreement and the declaration of trust the parties resided separate and apart but were never divorced. The husband died in 1922, the wife in 1940, at which later date the unadopted boy was over twenty-five years of age.

The controversy before us turns upon the construction which is to be given to the fourth paragraph of the declaration of trust. We now set forth its language with the understanding, however, that what appears in brackets has been inserted by us merely for our purposes in discussing the paragraph hereafter. With these additions the paragraph reads as follows:

“Fourth: [1] Upon the death of said Belle Wright this trust shall terminate as to one-half of the then corpus of the trust property, in the event Douglas Baird Wright, an unadopted boy, who has for several years past resided with Reason Wright and Belle Wright, is living at said time and at said time has not attained the age of twenty-five years, and the said Trustee shall convey, deliver and pay over said one-half of said corpus unto those persons who shall be appointed by the last will and Testament of said Belle Wright to receive the same, but in the event she fails to make testamentary appointments with respect to said property or dies intestate, then the said one-half of said corpus shall be conveyed, delivered and paid over unto her heirs at law according to the jiresent statute of succession of the State of California. [2] In the event said Douglas Baird Wright has not at the time of the death of said Belle Wright attained the