Munson v. First Trust & Savings Bank

WOOD, J. Petitioner, one of the beneficiaries of a testamentary trust, appeals from an order denying his petition for instructions to the trustee.

In accordance with the terms of the will of Spencer M. Munson, the decree of distribution in his estate directed the trustee as follows: to pay to Maude McEwen, during her lifetime, the sum of $125 per month; to pay the balance of the income from the trust estate, after deducting certain expenses, in equal monthly installments to Edward H. Munson and Harry R. Munson, sons of the decedent, during the life of Maude McEwen; that in the event that either Edward H. [69]Munson or Harry B. Munson shall die prior to the death of Maude MeEwen, then the income to which such deceased son would have been entitled shall be paid to the “heirs at law of such deceased son living at the date of the death of Spencer M. Munson, according to the laws of succession in the State of California”; that upon the death of Maude MeEwen to divide the corpus of the trust estate equally between Edward H. Munson and Harry B. Munson; and that the “heirs at law of any deceased son to take their parent’s share by right of representation. ’ ’

Maude MeEwen is still living. Edward H. Munson died subsequent to the decree of distribution, leaving two sons and two daughters surviving him who were living at the date of the death of Spencer M. Munson.

Included in the property of the trust estate is a note in the amount of $23,500 executed by Edward H. Munson. A creditor’s claim for the amount of the note, which was filed by the trustee herein against the estate of Edward H. Munson, was allowed and approved. The representative of the estate of Edward H. Munson paid $169.54 to the trustee in part payment of the creditor’s claim, and then advised the trustee that no further payment could be expected.

The trustee herein rendered the fifteenth annual account and requested permission therein to “charge the note off as worthless, and make no further accounting of said asset.” Petitioner herein filed objections to the fifteenth annual account and alleged that the “indebtedness should continue to be carried as an asset of said trust estate until the termination of the trust, at which time the share received by the heirs of said Edward H. Munson, deceased, should be charged with the balance due upon said indebtedness.” The court made an order on June 30, 1944, settling the fifteenth annual account and denying the trustee permission to charge off the balance due on the note; and ordering that the trustee “carry said note as an asset of said trust estate until the termination of the trust”; and ordering “That the question of whether said note of Edward H. Munson shall be charged against the interest of any certain beneficiary or beneficiaries of said trust be and the same hereby is reserved for determination at the time of final distribution of the trust estate.”