author: Mr. Presiding Justice Hebel

text:
    People of the State of Illinois ex rel. Oscar Nelson v. Union Bank of Chicago. Appeal of Roy A. Miller et al., Appellants, v. Harry B. Spellbrink, Successor-Receiver of Union Bank of Chicago, Appellee.
    Gen. No. 41,349.

      Opinion filed January 22, 1941.
    Maximilian J. St. George, of Chicago, for appellants.
    Schuyler & Hennessy and Kirkland, Fleming, Green, Martin & Ellis, both of Chicago, for appellee; Robert N. Golding, of Chicago, of counsel.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

On March 22, 1933, by leave of court first had and obtained, 28 petitioners filed their intervening petition in this cause, alleging that they have claims against the receiver of the Union Bank of Chicago for money had and received together with interest thereon at the rate of 5 per cent per annum from January 2, 1926, and that such claims are trust claims and should be paid in full. These claims vary from $500 to $40,560. Later, Lottie Moran, one of the petitioners, was dismissed as a party to said intervening petition. The receiver filed an amended answer thereto. The matter was referred to a master who, in due course, made his report of the law and the evidence, which report the court approved after overruling all exceptions thereto and dismissed said intervening petition and ordered the receiver to pay the master’s fees and charges of $1,515.90. From this order this appeal was faken by the petitioners.

From the facts as they are related in the petitioners ’ brief, it appears that on April 1, 1925, one, A. S. Alexander, entered into a contract with the Commercial Bank and Trust Company of Miami, as trustee, to purchase 8,884 acres at $375 an acre or a total of $3,317,726.25. The contract provided that when $1,327,090.50 of the purchase price had been paid the bank would execute a special warranty deed for the premises free and clear and take back a mortgage for the balance which mortgage was to contain a clause releasing any of the lands upon the payment of $500 per acre, “provided, however, that all lands lying in any one section should be released at the same time. ’ ’

On August 1, 1925, Alexander assigned this contract to one, Robert Boyland, who was in the employ of a certain Mark Rafalsky of New York. On August 21, 1925, twenty days afterwards, Boyland, for a stated consideration of $100,000, gave four options to purchase out of this land four parcels, totaling about 2,355 acres, to Harry Phelps, Ralph Hartenstein. and Fred Morphett, three employees of one, O. Frank Croissant, a real estate subdivider, with headquarters in Chicago, Illinois. On October 15 and 16,1925, these options were assigned to Frank K. Reilly, one of Croissant’s associates; and on October 20, 1925, Reilly entered into four contracts for deeds with Boyland. In these four contracts Boyland agreed to convey the acreage described in the four options upon the payment of $2,993,250, of which $673,312.50 was acknowledged and the remainder of $2,319,937 was made payable in three equal installments on or before the 21st day of August in the years 1926, 1927 and 1928, and were evidenced by Reilly’s notes. Four warranty deeds were executed by Boyland to Reilly and on October 22, 1925, were deposited with the Palm Beach Bank and Trust Company of West Palm Beach, Florida, with instructions to deliver them to Reilly or his assigns upon proper showing that the deferred installments “have been paid and that the transaction is otherwise complete.” By these four contracts for deeds Reilly agreed to pay Boyland $2,500 per acre for 1,015 acres and $1,500 per acre for 1,345 acres. Boyland under his assignment agreed to pay $375 for this land.

On December 31,1925, Reilly made four assignments of this acreage to Gr. Frank Croissant, trustee. These assignments were filed for record on June 25, 1926, and were recorded on June 29, 1926 in Palm Beach, Florida. This acreage was to be purchased for the purpose of subdividing it into lots to be sold by Croissant, as trustee, to the public at prices which would have netted enormous profits to the syndicate members. In October or November, 1925, this acreage was actually subdivided, contracts for deeds from Croissant as trustee printed, in which Croissant as trustee agreed to convey in fee simple the lots purchased by “a good and sufficient deed,” “title to be shown by abstract of title or Title Guarantee Policy . . . showing title in grantor,” and many lots were sold.

When these option contracts were made Croissant was in -Europe, but before his return his organization began selling units in the syndicate which was to be formed for the development and sale of this Florida acreage described in the options and subsequent contracts. Moneys were collected from syndicate subscribers and deposited in the Union Bank of Chicago and a receipt, referred to as an interim receipt, was given to the syndicate purchasers. This interim receipt was entitled “In re: Trust No. 949,” and acknowledged the receipt in full payment of a pre-organization subscription to a syndicate to be known as G-. Frank Croissant’s Boca-Raton Development, to be organized for the purpose of purchasing acreage in Florida. This receipt — as stated in the briefs — -is an “interim receipt and a permanent receipt will be substituted therefor when prepared and executed. It is understood that if the proposed syndicate is not completed and the land is not purchased by January 2d, 1926, the holder hereof is entitled to the return of the amount subscribed.” This was signed by the Union Bank of Chicago as agent, by Greorge T. Preschern or F. H. Hayes.

Croissant returned to Chicago by October 11, 1925, and an intensive selling campaign was launched under his direction. Advertisements about Boca-Raton acreage appeared in the various Chicago papers, which is quoted as follows:

“The banks handle your money — I don’t.” “One more big point — I will make a contract with this syndicate that my Florida organization of over 500 sales persons — nine Florida offices — will devote their entire time to this proposition until 75% of the total has been sold. And I will back them to the extent of $500,000.00 for sales promotion, including advertising, in five months or less.” The attention of petitioners was directed to these advertisements and they were told by salesmen that all the funds would be deposited with the Union Bank of Chicago, that this bank would handle the money, that Croissant would have nothing to do with the handling of the funds and that if the proposed syndicate was not completed and if the land was not purchased by January 2, 1926, they would have returned to them the money paid by them to the syndicate. In reliance on these representations petitioners purchased the units in the proposed syndicate in varying amounts from $500 to $40,560, and all received their interim receipts from the bank prior to January 2,1926. Attorneys were employed to draw up a trust agreement dated December 15, 1925, by and between the various subscribers, called beneficiaries, and Croissant, in the dual capacity of trustee and manager. This' trust agreement recites that, “the beneficiaries are about to cause to be conveyed to and vested in the trustee, as trustee under the trust agreement,” the acreage in question, in Boca-Raton. Among other 'things this trust agreement provides: that the title to all of the subdivision lots be in the trustee who was to prepare, execute and record a plat of the subdivision lots, and furnish the price schedule at which said lots were to be sold; that the trustee have full power and authority to manage, improve, sell and convey the trust estate or any part thereof, and to partition the subdivision lots; a committee of five persons of whom Croissant was one and George Presehern another, was created to represent the beneficiaries; all notices were to be given to George T. Presehern at the Bank’s address; the beneficiaries were to have an undivided interest, they having subscribed a total of $2,100,000, which was the capital of the syndicate, divided into 4,200 units of $500 each.

About the first week in January, 1926, petitioners received letters from Croissant, trustee, dated December 31,1925, stating that the permanent certificates were ready at his office and requesting them to bring in and turn over the interim receipts issued by the bank and to sign the trust agreement. All of the petitioners, except Greenlee and Andrews, surrendered their interim receipts and received a certificate signed by Croissant, trustee, dated January 2, 1926, certifying that the petitioner was the owner of a certain number of units in said Croissantania Boca-Raton syndicate and that the certificate was issued under the terms of the syndicate agreement dated December 15.1925, and entitled the holder to the rights and benefits accorded a participant of said agreement but subject to and upon terms and conditions therein stated, that by the acceptance thereof, the holder agreed to be bound by all of the terms of said agreement. This trust agreement was signed by petitioners after the middle of January, 1926, and petitioners executing same were told by representatives of Croissant that the syndicate was completed, the land in Florida purchased, that the title was good in the syndicate, that the syndicate was in a position to sell lots and deliver good title thereto, and that it already had sold many lots, and believing these representations petitioners signed the trust agreement.

The moneys received from the various members of the syndicate for the purchase of units were deposited in account No. 949, and account No. 1073, in the Union Bank of Chicago. Contrary to the representations that the Bank was to handle the money and not Croissant, all funds from these accounts were paid out on the instructions of either Croissant or one of his managers. These withdrawals were approved by either George T. Preschern, trust officer, or Frank H. Hayes, assistant trust officer of the Union Bank of Chicago. The first payment from the trust funds, approved by the trust officer of the Bank, was made on October 17, 1925, for $500,000 to Frank K. Reilly. There was another payment made to Frank K. Reilly on October 19.1925, also approved by the Bank officials in the sum of $60,000. These moneys were used in the purchase of the Florida land. Other payments were made on and after October 24, 1925, and a final disbursement was made on April 27, 1926. All the other disbursements from the two accounts were made to Croissant and to his various managers on account of commissions and, in a few instances, on account of refund of subscriptions. The sum of $5,034.15, was paid for legal fees and expenses, and the sum of $5,000 was a refund to Croissant for attorney’s fees advanced by him. Among these disbursements was also a payment to the Bank of $65, for its fees in handling account No. 949, and the sum of $97.50 for the Bank’s fee in handling account No. 1073; so that at the signing of the trust agreement by petitioners it is claimed by petitioners there was little money of the syndicate in the Bank, and the little that was there was not transferred to Croissant, as trustee, but was transferred to Croissant personally. That is, of the total amount of $1,383,769.32 deposited in trust with the Bank to purchase land in Florida, only $560,000 was used on account of such purchase and the balance paid out for commissions and attorneys’ fees.

It is also claimed by petitioners in their statement of facts that they were not advised until April, 1926, that there was any difficulty either about acquiring the land or raising the necessary funds to pay therefor. The first intimation that petitioners had of any irregularity came in April, 1926, at a meeting of the syndicate members, which was called by Croissant. This meeting was addressed by Croissant, who informed them that there was no selling of lots, that the Bank had failed to get title to the property, but that the Bank was still behind the proposition, and that every subscriber would have his money refunded without loss. It also appears from petitioners’ statement of facts that thereafter Croissant and his organization by letter and personal solicitation endeavored to induce syndicate holders to transfer their certificates and interest in the syndicate for various other subdivision lots being sold by Croissant, and also to accept the repayment of their investments in installments over a period of time by placing the matter in escrow at the Bank. These efforts continued until some time after November, 1929. By the middle of August, 1929, $981,000 of syndicate certificates were purchased and the money returned to the purchaser through the Bank. $326,400 of certificates were held in escrow at the Bank, of which sum $203,497 was paid to syndicate holders, or a total of $1,213,182.06 out of $1,383,769.32 was paid back, leaving $170,587.26 outstanding, a part of which, it is suggested, was no doubt satisfied by the transfer to them of lots in other subdivisions. It further appears that a total of $148,911.19 was returned to the purchasers of lots in Boca-Raton, and various other purchasers were satisfied by having transferred to them other properties where Croissant was able to furnish good title. Croissant had been called to Washington and had been ordered by the United States Attorney General to refund this money.

The Union Bank of Chicago during the month of April, 1926, and thereafter was trustee in 66 trusts in which Croissant was interested. Some of these trusts pertained to subdivisions in and around Chicago. As of October 17,1927, the contract balances on these subdivisions in* the hands of the Bank amounted to $4,591,657.44, and the deferred commission balance due to Croissant at that time amounted to $655,388.80. In addition to this Croissant had certain beneficial interests in the Bank, totaling $167,406. All of these assets were pledged as security by Croissant on a certain note, which Croissant executed in the sum of $100,000. This note was dated September 15, 1927, and, with said pledged assets, was delivered to the Bank and thereupon the Bank credited Croissant with the sum of $100,000, which enabled Croissant to pay back some of the moneys deposited by syndicate holders in the Bank.

The claims of petitioners were not satisfied in full by Croissant nor by the Bank. So petitioners filed their suits in the municipal court of Chicago and also in the superior court of Cook county for the purpose of recovering from the Bank and in some instances from the Bank and Croissant, the moneys paid by petitioners. Later when the Bank went into receivership petitioners filed collectively their claim in that proceeding.

It also appears that each petitioner subscribed to a proposed Florida land syndicate, paid the amount of such subscription to the Bank and received from the Bank an interim receipt signed by the Bank, as agent, acknowledging the receipt of the money “in full payment of a preorganization subscription to a syndicate to be known as Gr. Frank Croissant’s Boca-Raton Development, to be organized for the purpose of purchasing acreage in the State of Florida. ... It is understood that if the proposed syndicate is not complete and the land is not purchased by January 2, 1926, the holder hereof is entitled to the return of the amount subscribed.”

It is, therefore, suggested by the petitioners that, as neither the land was ever purchased nor the syndicate completed, they are entitled to the return of their money, together with interest at 5 per cent from January 2, 1926, to be paid out of the trust funds of the Bank, and that the receiver should give an account to petitioners for the funds it collected from deferred commissions in the 66 land trusts turned over by Croissant to the Bank for the purpose of raising funds to repay syndicate members.

The defendant calls to our attention that the case results from the failure of a Florida land syndicate, known as Gr. Frank Croissant’s Boca-Raton Development, and that the matter first came before the Federal court in Chicago in September, 1927, when a member of the syndicate filed a bill on behalf of himself and all other members, including the plaintiffs, to wind up the trust and to fix liability. The opinion of the circuit court of appeals (27 F.(2d) 48) summarizes what is described as “an unusually involved and confusing situation.” Counsel for the petitioners, representing some 30 odd individuals who had subscribed money to the syndicate, did not intervene in the Federal court, but instituted suit against the Union Bank and Croissant in the municipal court of Chicago, basing his claim upon a violation of the Blue Sky Law. The case of Orr v. Croissant was brought to this court as a test on that point, and other cases were continued generally pending a decision. The court held that the Union Bank of Chicago was not liable for any violation of the Blue Sky Law (253 Ill. App. 396) and certiorari was denied by the Supreme Court. The statement of claim in one of the 30 cases was then amended to present the theory that the Union Bank of Chicago had undertaken and promised in writing to purchase certain lands and to complete the syndicate by January 2, 1926that it had not done so, and that, therefore, the plaintiff was entitled to recover the amount subscribed. All the other cases were continued generally pending a decision of this theory.

In the case of Moran v. Union Bank of Chicago, which was the test case, this court held in 266 Ill. App. 315, that the Union Bank of Chicago was not liable. Because the decision was to control the disposition of other cases, this court certified questions involved to the Supreme Court. The Supreme Court, in 352 Ill. 503, also held against the contentions of the syndicate member. The Supreme Court of Illinois was under no misapprehension about what it was doing, because in the petition for rehearing, present counsel for the petitioners said: “This Court has already been informed that a great many other cases will be affected by the decision in this case. It is, therefore, most important that not only the ultimate decision of this Court but all the steps which result therein and reasons therefor should be clear and without any doubt. ’ ’ The petition for rehearing was denied by the Supreme Court.

Thereafter, the Union Bank of Chicago went into receivership, and all of the cases which were supposed to be determined by the Moran case were brought up again as claims filed in the receivership case.

The plaintiffs’ present contention is that the Mor cm case differs to such an extent from the record in this case, that the Moran case should not control the disposition of these claims. Neither the master nor the trial judge agreed with this point of view, and therefore this case is now here on appeal.

The petitioners’ first question that is called to our attention is that the land, which was under consideration, was not “purchased” by January 2, 1926, and that under the interim receipts the petitioners were entitled to the amount subscribed by them. The chancellor found — it is contended by petitioners — that on the question of purchase of land and obtaining of good title, it appears most convincingly that the syndicate never had title and that although petitioners made a clearer and stronger case on this point than was made in the Moran case, it does not affect differently the construction of the word “purchased” as construed in the Moran case. Petitioners further suggest that to properly construe the terms “purchased” as used in the interim receipts, it is necessary to consider the facts as they appear in this case; and that the syndicate was being formed to purchase land in Florida to be subdivided and sold by a trustee in fee simple by good and sufficient deeds. The chancellor finds that there was no title in anyone and certainly there was no title in the trustee. He further finds that there was no attempt made to give the trustee a semblance of title, as no deeds by anyone, not even Boyland nor Reilly, were ever executed to the trustee. Petitioners admit as being true that deeds from Boyland to Reilly were executed and placed in escrow, but state that Reilly never executed deeds from himself to Croissant, the trustee, Reilly merely assigning his contracts to Croissant.

As to the suggestion that was made that petitioners have made a stronger case than was made in the Moran case, it is well to have in mind what the Supreme Court said in that case, 352 Ill. 503, which is important to be considered on the questions that are involved in the present appeal. In that case the court said:

“The appellant, however, argues that at the time the syndicate agreement was signed, the land had not been purchased within the meaning of that term as used in the interim receipt. ‘Purchase,’ in its enlarged and legal signification, means every mode of acquisition of an estate known to the law, except that by which an heir, on the death of his ancestor, becomes substituted in the latter’s place by operation of law. (Champion v. Spurck, 302 Ill. 241; Chicago and Eastern Illinois Railroad Co. v. Doyle, 256 id. 514.) A purchase may be made when a contract of purchase is signed. (Dean v. Anderson, 34 N. J. Eq. 496.) Contracts for the purchase of various parcels of land had been entered into and assigned to the trustee under the syndicate agreement when that instrument was signed by the appellant. The acquisition of the title by a conveyance in fee simple was not made a condition precedent to the completion of the syndicate. The evidence fails to disclose noncompliance with the provisions of the interim receipt.” The language just quoted from the Moran case is important as to whether there was a noncompliance with the provisions of the interim receipt, and we quite agree with what was there said, and further, we believe that in the instant case. the evidence fails to disclose noncompliance with the provisions of the interim receipt.

The second question that is called by petitioners to the attention of this court is that the syndicate fund was a special deposit and that any withdrawals except as permitted in the interim receipt were unauthorized. They further contend that the interim receipt, signed by the Bank, promised petitioners, among other things, that they had paid their money for a preorganization subscription to a syndicate “to be organized for the purpose of purchasing acreage in Florida,” and that if the proposed syndicate were not completed and the land not purchased by January 2,1926, they were “entitled to the return of the amount subscribed”; and ■ further suggest that the only reasonable interpretation of this provision is that the syndicate itself was to purchase the land; so that any payment whatever to anyone except to the syndicate itself or to the trustee appointed after the syndicate was completed, was at the Bank’s peril. (Mester v. Quincy Nat. Bank, 163 Ill. App. 645, 647.) And urge that this is the more evident when one considers that the interim receipt, being of the Bank’s own making and choosing, must be construed most strongly against it. Petitioners strenuously contend that the Bank had no right whatever to pay out one penny either for the purchase of the land, or to Reilly, or to Croissant, and that the only party to whom the Bank was authorized to pay any of the trust funds was the syndicate itself, after it had been fully completed. Then again, on this question, we are to consider what was said by the Supreme Court in the Moran case (Moran v. Union Bank of Chicago, 352 Ill. 509), where the following language was used:-

“The final contention is that the withdrawals of funds from the syndicate’s account with the appellee were made without the appellant’s knowledge and that they were therefore fraudulent. The law charges a person with the knowledge he might have obtained by making use of the means afforded him. (Johnson v. Miller, 299 Ill. 276.) If the appellant failed to exercise her right to become informed of the syndicate’s status at the time she signed the agreement and remained silent after she ascertained or had the opportunity to ascertain the facts, she would not be permitted afterwards to complain. (Richter v. Schuett, 314 Ill. 127; Stackpole v. Schmucker, 225 id. 502; Follett v. Brown, 188 id. 244; Naugle v. Yerkes, 187 id. 358; Sutter v. Rose, 169 id. 66.) She approved the project after her trip of inspection in Florida. The trustee was vested with power to collect the money deposited with the appellee and to manage the estate. Manifestly, the evidence discloses no fraudulent action on the part of the appellee.” That language, of course, applies to the facts as they appear in this record. It is apparent that the petitioners had a right, as did the petitioner in the Moran case, to exercise their respective rights to become informed of the syndicate’s status at the time they signed the agreement, and not having exercised those rights, but having remained silent after they ascertained or had the opportunity to ascertain the facts, they would not afterwards be permitted to complain.

It is also well to consider what the Supreme Court said in the Moran case, in passing upon the question of the rights of the parties after signing the syndicate agreement and accepting the participation certificate:

“The primary question presented is whether the appellant, by signing the syndicate agreement and accepting the participating certificate, and thereby becoming a member of the syndicate, is precluded from retracing her steps and demanding that the sum of money for which the interim receipt was issued be refunded to her by the appellee. The affirmative of that proposition is maintained by the appellee while the appellant asserts the opposite and insists that her execution of the syndicate agreement - and acceptance of the beneficial certificate do not operate to prevent recovery by her in the present action.” The petitioners suggest that notwithstanding the execution of the syndicate agreement and acceptance of the participating certificates they are permitted to recover in this action. However, we are not in accord with this suggestion. As the Supreme Court said, the petitioners having signed the syndicate agreement and accepted the participating certificates, thereby becoming members of the syndicate, they are precluded from retracing their steps and demanding that the sum of money for which the interim receipt was issued be refunded to them.

The third contention that is made by petitioners is that they are not barred from maintaining their action on the interim receipt. As we have already indicated in this opinion, following the conclusion of the Supreme Court in the Moran case (supra), the acceptance of the participating certificates, after signing the syndicate agreement and becoming members of the syndicate, precluded the petitioners from retracing their steps and demanding the return of the money for which the interim receipts were issued. We are unable to further consider that question, other than what we have already said. The only suggestion that is offered by petitioners is that it is most clear from this record that at the time petitioners accepted the trust certificate and signed the trust agreement they did not have “full knowledge of what occurred, ’ ’ that they had no knowledge thereof at all and had not then “learned of the fraud” practiced upon them, that they had'no inkling of the Bank’s breach of trust. That, of course, is not of particular aid upon the questions involved here. At the time the syndicate agreement was signed and the participating certificates accepted, the petitioners had full opportunity to investigate and learn the facts as they were, and having acted as they did and having taken no steps for some time afterward, they will not be permitted afterwards to complain, when at the time no complaint was ever made except as stated in the record. As we have indicated, when the syndicate members signed the trust, agreement and accepted the participating certificates, they gave up any rights which they might have had under the interim receipt, as settled by the case of Moran v. Union Bank of Chicago, 266 Ill. App. 315, as well as the Supreme Court in Moran v. Union Bank of Chicago, 352 Ill. 503.

There is some question called to our attention that the date of the signing of the agreement in the Moran case is not clear, and, therefore, it may have been prior to January 2, 1926, the date mentioned in the interim receipt. The suggestion of the appellee is that this argument is to persuade this court that Mrs. Moran had signed before the date of performance, in which event there would have been no default to be waived. It appears clearly that Mrs. Moran signed pursuant to a letter dated December 31, 1925. There was not time for this letter to be delivered by mail to Mrs. Moran and for her to get down to the office and sign by January 2. Counsel for petitioners stated in his brief in this court in the Moran case, that after Mrs. Moran received this letter, she signed, “probably the end of the first week of January, 1926.”

There is a suggestion by petitioners that the escrow agreements admit liability on the part of the Bank. The agreements provided that the Bank acted solely as escrow agent, the syndicate member having accepted Croissant’s offer to repurchase the member’s interest in the syndicate. It seems obvious that all members signing admitted, by doing so, that they had no claim against the Bank, but only against Croissant, and this suggestion, we believe to be an answer to petitioners’ contention.

There is also a statement made by petitioners that the Moran case does not contain the facts that in April, 1926, there was no selling of lots in Boca-Baton, the appellee replying that this must be an inadvertent statement, because Mrs. Moran testified that Croissant stated at a meeting in April, 1926, “that there wasn’t any selling; that there was no need of pretending that there was.”

To the contention of petitioners that the Bank failed to get title, the appellee states that it was not shown in the Moran case, nor in the instant case, that the Bank failed to get title, and it is urged that, in the Moran case, title was by contract with a down payment, delivery to be made when the balance was paid. The same thing is true in the case at bar. Croissant made it perfectly clear that the only thing wrong was that the money ran out; that the syndicate started out with a capital of $2,100,000, with which it was to engage in an enterprise requiring $7,865,000, and the members must have had in mind the chances they were taking. As this court said in the Moran case (266 Ill. App. at 323), “it is unfortunate that all syndicates are not successful. ’ ’

The petitioners suggest that the Bank was back of the proposition and that there would be no loss, and the appellee in reply states that the same contention was made in the Moran case, and that, in both that case and the instant case, the statement was made by Croissant, not by an agent of the Bank, and that, of course, the Bank cannot be bound by any such remark.

There are other questions that were raised, but, in view of the conclusion that we have reached as stated in this opinion, it will be unnecessary to take up each one. There is, however, one other contention of the petitioners that they are entitled to an accounting from the receiver of the Bank as to the collateral which Croissant deposited with the Bank to secure his loan, made to help repay syndicate members. As security for this loan Croissant turned over to the Bank certain beneficial interests' totaling $167,406 and deferred commissions in 66 land trusts totaling $655,388.80. Petitioners contend that they are entitled to have the benefit of any amount collected by the Bank over and above $100,000, advanced to Croissant, and further suggest that it might well be that the Bank collected out of these deferred commissions and beneficial interests more than enough to pay the $79,750 of claims of petitioners, and further that Croissant has not received any moneys from! any of these trusts. The appellee answers this contention by stating that from the facts in this record, it is apparent that the Bank must account to Croissant for the collateral which he deposited to secure his loan, and suggest that the court consider by what rule of law do the petitioners acquire the right to have the Bank account to them for the property of Croissant, they holding no judgment against Croissant, nor holding any assignment of interest, and this not being a garnishment proceeding. The point is not of much practical importance because Croissant testified that “a lot of these deferred commissions at the Union Bank just evaporated,” and so the appellee receiver contends that the petitioners are not entitled1 to an accounting, under the facts as they appear in this record, and we quite agree with this contention. It does not appear that petitioners have any judgment against Croissant, nor do they have an assignment of interest. Their claim in the instant case is against the Bank and not against Croissant. We are, therefore, of the opinion that there is nothing in this claim that would justify the court in reversing the trial court for error in this particular.

Having considered all of the facts, as well as the law and authorities that had any bearing on the questions involved, we are of the opinion that the court did not err in dismissing the intervening petition that was filed by the petitioners, and, therefore, it will be affirmed.

Affirmed.

Denis E. Sullivan and Burke, JJ., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Continental Illinois National Bank and Trust Company of Chicago, Trustee under Article Third of the Last Will and Testament of William H. Reid, Deceased, Appellee, v. Martha Kane et al., Ap-pellees. Continental Illinois National Bank and Trust Company of Chicago, Executor of Last Will and Testament of Caroline Whittlesey Reid Reynolds, Deceased, and Henry James Reynolds, Appellants.
    Gen. No. 41,384.

      Opinion filed January 22, 1941.
    McCulloch, McCulloch & McLaren, of Chicago, for certain appellant; Frank H. McCulloch and Ned P. Veatch, of Chicago, of counsel.
    Baker, Holder & Hagstrom, of Chicago, for certain other appellant; Joseph C. Hagstrom, of counsel.
    McKinney, Folonie & Grear, of Chicago, for certain appellee; Thomas M. Kavanagh and C. Oscar Carlson, both of Chicago, of counsel.
    Adamowski, Sallemi, & Crowley, of Chicago, for certain other appellees; Benjamin S. Adamowski, James V. Sallemi and Joseph B. Crowley, of counsel.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This is an appeal by the defendants, Continental Illinois National Bank and Trust Company of Chicago, as executor of the last will and testament of Caroline Whittlesey Beid Beynolds, deceased, and Henry James Beynolds. The appeal is from a decree entered by the court in an action brought by the Continental Illinois National Bank and Trust Company of Chicago, as trustee under the last will and testament of William H. Beid, deceased, for the construction of said will, and for advice and direction of the court with respect to the distribution of the property remaining in trust upon the death of Martha Kane, who is still living, and for advice and direction with respect to the distribution of surplus current income of said trust.

The court determined by its decree that William H. Beid did by his will devise and bequeath his entire estate and that no part thereof is intestate; .that by the first paragraph of paragraph (f) of Article Third of said will and by the first clause of Article Fifth thereof, said testator created in Caroline Whittlesey Reid, Lucy Reid Milner, Mary Alma Reid, Lafa C. Reid, and Lyman Reid a vested remainder in the corpus of the trust estate established by said Article Third remaining after the death of the last survivor of the annuitants mentioned in paragraph (c) of said Article, and a vested remainder in the surplus income of said trust estate remaining after the payment of the annuities provided to be paid by the provisions of said paragraph (c), subject only to the rights of the persons mentioned in paragraph (d) of said Article Third, or the survivor of them, to receive said surplus income during the lifetime of the persons named in said paragraph (d), which said vested remainder in said corpus and said vested remainder in said surplus income vested in said persons on the death of said testator; that by the proviso contained in the second clause of said Article Fifth the testator created a condition subsequent upon the happening of which said vested remainder in the corpus of said trust estate was to be divested or partially divested, but that said condition subsequent, by reason of the death of all of said residuary legatees during the lifetime of Martha Kane, who is the last survivor of said annuitants and who is still living, has failed to happen and can never happen and said condition, therefore, falls; that until the death of Martha Kane, the plaintiff, as trustee, shall, from time to time, distribute the income of said trust estate not required for the payment of the annuity payable to Martha Kane to the persons and in the proportions hereinafter set forth, and that upon the death of said Martha Kane the trustee shall pay over and deliver the principal of the trust estate established under said Article Third, less the trustee’s proper fees and expenses, to the persons and in the proportions hereinafter set forth, namely:

(a) One third thereof to Continental Illinois National Bank and Trust Company of Chicago, as executor of the last will and testament of Caroline Whittlesey Reid Reynolds, deceased;
(b) One thirtieth thereof to Paul C. Milner;
(c) One thirtieth thereof to Wilma R. White;
(d) One thirtieth thereof to Rachel M. McConahey;
(e) Two thirtieths thereof to Madeleine W. Milner;
(f) One sixth thereof to Joseph W. Reid;
(g) Two sixths thereof to Continental Illinois National Bank and Trust Company of Chicago and Frank F. Taylor, as executors of the last will and testament of Lafa C. Reid, deceased.

The decree was entered on the findings of the court.

Answers to the bill of complaint were filed by defendants, Continental Illinois National Bank and Trust Company of Chicago, as executor of the will of Caroline Whittlesey Reynolds, deceased, Henry James Reynolds, Wilma R. White, Madeleine W. Milner, Rachel M. McConahey, Paul C. Milner, and Frank F. Taylor, and Continental Illinois National Bank and Trust Company of Chicago, as executors of the last will and testament of Lafa C. Reid, deceased, which answers, together with the amended Answer of Joseph W. Reid, and the bill of complaint constitute the pleadings in this case.

The theory of Continental Illinois National Bank and Trust Company of Chicago, as executor of the last will and testament of Caroline Whittlesey Reid Reynolds, deceased, and Henry James Reynolds, appellants, is as follows: Article Third of the will directs that absolute legal title to certain securities be taken by Illinois Trust and Savings Bank, as trustee, for the principal benefit of Mrs. C. C. Sturtevant, Mrs. Elmira Dustin, and Martha Kane, who is still living. Said trustee was directed to pay them certain annuities, which were to be paid from the trust income and the corpus, if the income should prove inadequate. Upon the death of the last surviving annuitant, when the trust has served its purpose, the trustee is directed to distribute what might then remain of the trust corpus to testator’s wife,- brother, and sisters, or the survivors or survivor of them, all of whom had been provided for by other provisions of the will, and all of whom are now dead. It is evident that William H. Reid’s main purpose in setting up the trust was to provide for said annuitants until the death of the last survivor of them and that he made no gift or provision for distribution of any part of the corpus of the trust fund to take any effect until the death of the last survivor of them. The corpus that may remain in said trust at the time of the death of the last surviving annuitant, Martha Kane, who is still living, is directed to be paid to persons now deceased, and is therefore lapsed and intestate personal property. Likewise the surplus income after payment of the annuity to Martha Kane is directed to be paid to persons now deceased, and therefore is also lapsed and intestate personal property. The intestate personal property of William H. Reid should be distributed to Continental Illinois National Bank and Trust Company of Chicago, as executor of the last will and testament of Caroline Whittlesey Reid Reynolds, deceased.

The appellees’ theory of the case is that William H. Reid by his will intended to and did give to his wife, Caroline Whittlesey Reid Reynolds, his sisters, Mary Alma Reid, Lafa C. Reid and Lucy Reid Milner, and his brother, Lyman Reid, all of his real and personal property; that the interest of such devisees and legatees vested in them immediately upon the death of William H. Reid; that the vesting of the enjoyment and possession of a certain portion of the personal property (in controversy here), which portion was to be determined by the executor, was deferred solely for the purpose of letting in a prior right of named annuitants to receive certain of the income of the withheld personal property for life, and not for any reason personal to Caroline Whittlesey Reid Reynolds, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner, or Lyman Reid; that such vested remainder or interest of Caroline Whittlesey Reid Reynolds, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner and Lyman Reid, was subject to be divested by the death of one or more of them and the survival of one or more of them upon the termination of the trust estate; that Caroline Whittlesey Reid Reynolds, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner and Lyman Reid having all died prior to the termination of the trust, the condition subsequent which would work a divestiture cannot happen; that upon the termination of the trust, the corpus of the trust estate is to be distributed to the heirs or personal representatives of Caroline "Whittle-sey Reid Reynolds, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner and Lyman Reid, and that all of the income over and above that necessary to pay the annuity to Martha Kane, in accordance with the provisions of the will of William H. Reid, since the date of the death of Martha Kane (now the only surviving annuitant) is to be distributed to the heirs or personal representatives of Caroline Whittlesey Reid Reynolds, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner and Lyman Reid. Further, appellees say that the court did not err in determining that fhe surplus income from the trust estate not required for the payment of the annuity to Martha Kane and the property remaining in the trust estate upon her death, less proper fees and expenses, should be distributed to the persons and in the proportion set forth in the decree, because under the Third and Fifth Articles of the will of William H. Reid the said Caroline Whittlesey Reid Reynolds, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner and Lyman Reid, had a vested interest in remainder in the corpus and surplus income of the trust immediately upon the death of William H. Reid, which vested interest was subject to be divested only upon the happening of the conditions subsequent contained in the will — namely the death of all of the annuitants during the lifetime of one or more of said named legatees; and that one .of the annuitants having survived all the named legatees the condition subsequent upon which the vested interest in remainder of the legatees could be divested cannot now happen. The estates of the legatees cannot now be divested. Therefore, the corpus of the trust estate remaining at the death of the last annuitant, Martha Kane, and the surplus income from time to time available should be distributed to the heirs or personal representatives of the legatees.

From the brief of Joseph W. Reid, appellee, it is urged that appellant’s statement of facts is incomplete, and should be supplemented by a statement of the provisions of the will of William H. Reid, and certain other matters not mentioned by appellants. By Article First of the will the executor is to pay all of the debts and funeral expenses; by Article Second, one-third of all the personal property and estate is given and bequeathed to his wife, Caroline Whittlesey Reid Reynolds. Caroline Whittlesey Reid Reynolds is given a life estate in two residences and certain personal property therein contained, and subject to such life estate the premises and goods and chattels are given and devised to Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner and Lyman Reid, or to those of them surviving at the testator’s death; by Article Third, the executor is directed to set apart securities which should in its discretion be sufficient to pay an annuity of $1,500 per annum to Mrs. C. C. Sturtevant; $1,000 per annum to Mrs. Elmira Dustin; and $300 per annum to Martha Kane. Said securities are given to the Illinois Trust & Savings Bank in trust, to pay the annuities out of the income or principal of the trust. The proceeds of Policy No. 60066 of the Travelers Insurance Company of Hartford, Connecticut, are directed to be used for the payment of the annuities so far as they may extend. Any surplus of net income in any year from the trust estate is directed to be paid to Caroline Whittlesey Reid Reynolds, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner, and Lyman Reid or to those of them surviving from time to time in the following manner:

So long as more than three of such persons be living, including Caroline Whittlesey Reid Reynolds, Caroline Whittlesey Reid Reynolds is to receive in each case one third of the surplus income so distributed and the remainder is to be equally divided between Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner, and Lyman Reid, or those surviving.

If only three or any less number of such persons be living, the surplus income is to be equally divided between them.

After the death of Caroline Whittlesey Reid Reynolds, it is directed that Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner, and Lyman Reid, or those of them surviving, shall from time to time receive the surplus income in equal parts.

The last survivor of Caroline Whittlesey Reid Reynolds, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner and Lyman Reid, after the death of all the others is to take the whole of such surplus income. Upon the death of the last survivor of the annuitants, all of the securities and property set apart for the payment of annuities are directed to be “forthwith paid over, conveyed and delivered by my said Trustee as a part of my residuary estate to the persons named and in the proportions specified in Article Fifth of this Will.” Provision is made for the distribution of the income from the insurance policy upon the commutation thereof if any part of the proceeds of the policy remained unpaid at the death of the last annuitant, which provisions are immaterial.

By Article Fourth of the will there is bequeathed to the three sisters of the testator, Mary Alma Reid, Lafa C. Reid and Lucy Reid Milner, the sum of $30,000 each and to his brother, Lyman Reid, the sum of $15,000.

Article Fifth provides: “I give, devise and bequeath all the rest, residue and remainder of my estate, real, personal and mixed, (including all lapsed legacies, and including the property held in trust under the provisions of Article ‘Third’ of this will when the same comes under the operation of this Article and the value of annuities under said insurance policy if commuted as above provided in Article ‘Third’) to the following persons and in the following proportions, to-wit: One-third (1/3) thereof to my wife Caroline Whittlesey Reid; One-sixth (1/6) thereof to each of my three sisters, Mary Alma Reid, Lafa C. Reid and Lucy Reid Milner; One-sixth (1/6) thereof to my brother, Lyman Reid.”

It is contended by the appellants and suggested to this court that it is alleged in the complaint and admitted in the answer of all appellees except Joseph W. Reid and is obvious from the language of the will of William H. Reid that in the event, which happened, of the deaths of Caroline Whittlesey Reid, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner, and Lyman Reid prior to the death of the last survivor of the annuitants there is no provision in said will directing the distribution of the corpus that may remain in said trust at the time of the death of the last surviving annuitant and there is no provision directing the distribution of the surplus income of said trust not required to pay the annuity to Martha Kane. Appellants point out, as bearing upon the question in this case, that: (1) What may remain of the corpus of said trust at the time of the death of the last surviving annuitant, who is still living, is given and directed to be paid at that time to persons now deceased and is therefore lapsed and intestate property; (2) similarly the surplus income of said trust after payment of the annuities is given and directed to be paid to the same persons who are now deceased, and is therefore lapsed and intestate property, and that said surplus income will not fall into and become a part of the residue provided for in Article Fifth of said will as the same persons to whom the surplus income would be distributable under Article Third of said will, if they were alive, are the beneficiaries of the residue under Article Fifth; (3) if a testator in the disposition of his property by will, overlooks a particular or unexpected event, which had it occurred to him he would have provided for in all probability, the court will not rectify the omission by implying’ or inserting the necessary clause; and (4) the intestate personal property of William H. Reid, who died leaving surviving him his widow, Caroline Whittlesey Reid, but no descendant should lie distributed to Continental Illinois National Bank and Trust Company of Chicago, executor of the last will and testament of Caroline Whittlesey Reid Reynolds, deceased, formerly Caroline Whittlesey Reid.

Upon this question the appellees in their contention state that the will of William H. Reid contains express provisions directing the vesting in interest of the corpus and surplus income of the trust established under Article Third and unless such vested interest is divested by the happening of one of the contingencies provided in the will the corpus of the trust will vest in possession and enjoyment in the heirs or personal representatives of the legatees upon the death of the last annuitant, and the surplus income when distributed from time to time. The intention of the testator as expressed in his will is controlling. The corpus and surplus income of the trust cannot pass as intestate property if the interest or remainder of the wife, sisters and brother of the testator is vested. Appellees then go on to point out that the testator, having given a vested interest to Ms wife, sisters and brother in the trust estate and having failed to provide for the divestiture of such interest in the event which has here occurred, the remainder passes to the heirs or personal representatives of the legatees, their contention being that the lower court correctly determined that Caroline Whittlesey Reid Reynolds, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner and Lyman Reid under the will of William H. Reid and at the time of his death acquired a vested remainder and transmissible interest in what might remain of the corpus of the trust after the death of the last survivor of the annuitants and in the surplus income of the trust remaining after the payment of the annuities.

As we have already indicated, the appellees urge that the sole question upon this appeal is whether or not the construction placed upon the will of William H. Reid by the chancellor ascertained and gave effect to the true intention of the testator. The appellants contend that in the circumstances which have transpired in the 30 years since the testator’s death, no intention whatsoever is disclosed by the will as to the disposition of the corpus and surplus income thereof. Therefore, they say, the corpus and surplus income became intestate personal property to be distributed to the appellant bank in its capacity as executor of the last will and testament of Caroline Whittlesey Reid Reynolds to be in turn distributed by it, one half to go to Henry James Reynolds, the successor husband of the wife of William H. Reid, and one half to pass under the will of Caroline Whittlesey Reid Reynolds to be applied to the payment of unpaid general legacies.

The appellees contend further that, as the decree of the chancellor found, that the intention of William H. Reid expressed in Ms will was to give all of his property and estate to those persons who were the natural objects of his bounty, his wife, sisters and brother ; that he intended all of his property to pass under his will; that he employed suitable language in his will clearly evidencing his intention that the corpus of the trust estate and the surplus income thereof vested in interest immediately upon his death; that the vesting in possession and enjoyment was deferred solely for the convenience of the funds or estate and not for any reason personal to the legatees; that he intended that no part of his estate was to pass as intestate property, and that he intended that, upon the death of each of the legatees, their vested interest was to pass to their heirs or personal representatives and, unless there were one or more of the legatees surviving to take by way of substitutionary gift, the corpus of the trust upon the death of the last annuitant, and the surplus income as distributed from time to time, was to vest in possession and enjoyment in the heirs or personal representatives of the legatees.

The question that is before us upon this appeal is whether the construction placed upon the will of William H. Reid by the chancellor ascertained and gave effect to the true intention of the testator. As we have indicated, the appellants contend that in the circumstances that have transpired in the 30 years since the testator’s death, no intention whatsoever is disclosed by the will as to the disposition of the corpus and surplus income thereof. Therefore, they say, the corpus and surplus income became intestate personal property to be distributed to the appellant bank in its capacity as executor of the last will and testament of Caroline Whittlesey Reid Reynolds to be in turn distributed by it, one half to go to Henry James Reynolds, the successor husband of the wife of William H. Reid, and one half to pass under the will of Caroline Whit-tlesey Reid Reynolds to be applied to the payment of unpaid general legacies.

In order that we may consider the questions that are before this court in the instant litigation and pass upon the intention of the testator, it will be necessary to consider the several provisions of the will. One of the provisions is Article Third which directed that upon the death of the last survivor of the annuitant “ ... all the securities and property set apart as aforesaid for the payment of said annuities shall be forthwith paid over, conveyed and delivered by my said trustee as a part of my residuary estate to the persons named and in the proportions specified in Article Fifth of this will.” From this provision, and as suggested by the appellees, it is. clearly a direction by the testator to “divide and pay over,” at a future time to persons presently in being and upon the happening of an event certain to happen, funds, payment of which had been withheld from the persons named solely for the convenience of the fund or estate, and not for any reason personal to the beneficiaries or legatees. In the consideration of the provisions of the will to reach the construction which the testator had in mind, it is necessary to consider the above Article. Third together with Article Fifth of the will, which provides, “I give, devise and bequeath all the rest, residue and remainder of my estate, real, personal and mixed (including all lapsed legacies, and including the property held in trust under the provisions of Article ‘Third’ of this will when the same comes under the operation of this Article and the value of annuities under said insurance policy if commuted as above provided in Article ‘Third’), to the following persons and in the following proportions, to-wit: One-Third (1/3) thereof to my wife, Caroline Whittlesey Reid; One-Sixth (1/6) thereof to each of my three sisters, Mary Alma Reid, Lafa C. Reid, Lucy Reid Milner; One-Sixth (1/6) thereof to my brother, Lyman Reid.” From this provision the testator gave, devised and bequeathed all the rest, residue and remainder of his estate to his wife, sisters and brother in specified proportions, and this gift became effective immediately upon his death and the language used in his will then became operative as words of immediate and express gift. The further provision as to the divesting of the interests conveyed by the words of gift does not serve to make the interest of the wife, sisters and brother contingent. From a citation called to our attention in Spits on Conditional and Future Interests in Property, it is said (p. 35); “if, after words importing a gift of an absolute interest, a proviso is added which may defeat it, the remainder is vested subject to divestment on condition subsequent.”

In Article Third, as is well said in the brief of one of the parties, the testator directs the trustee to look to Article Fifth to ascertain only to whom and in what proportion payment is to be made. Upon the question of the “divide and pay over” rule, the exception is stated in the case of Nicol v. Morton, 332 Ill. 533, at page 540, as follows:

“A bequest of personal property, though made wholly by direction to distribute at the termination of a prior estate, will vest at once, the right of enjoyment only being postponed, where the distribution is not postponed for reasons personal to the legatee but merely to let in prior estates. (Carter v. Carter, supra; Pearson v. Hanson, 230 Ill. 610; Dee v. Dee, 212 id. 338; Scofield v. Olcott, 120 id. 362.) In Easton v. Sail, 323 Ill. 397, on page 417, this court said: 6 The rule is that a bequest contained only in a direction to divide or pay at a future time or upon the happening of a future event does not vest until the time of payment arrives. This rule, however, is subject to an exception that where the division, transfer or payment is postponed, not for any reason personal to the legatee but for the convenience of the estate, as, to enable the application of the property to the use of a prior taker, the gift will be regarded as vesting at the time the will takes effect, the right of enjoyment only being deferred.’ ” The rule as stated in Nicol v. Morton, supra, is supported, as stated, in the cases of Dee v. Dee, 212 Ill. 338; Harvard College v. Balch, 171 Ill. 275 and People v. Allen, 313 Ill. 156. The court in its opinion in Pearson v. Hanson, 230 Ill. 610, made the statement that:

The other branch of the rule is, that if the payment was postponed for the convenience of the property or fund then there is an immediate vesting of the title and the postponement merely respects the time of enjoyment, even though there be no other gift than the general direction to pay or distribute at the appointed time. ’ ’

It is contended by the appellee and is submitted that the direction to the trustee contained in Article Third of the will of William H. Eeid brings this case squarely within the rule so uniformly announced by the Illinois courts. By reason of such rule the interest of .Caroline Whittlesey Eeid Eeynolds, Mary Alma Eeid, Lafa C. Eeid, Lucy Eeid Milner and Lyman Eeid became vested immediately upon the death of William H. Eeid and were estates of inheritance. It is not contended that if one or more of the five legatees survived the last annuitant the surplus income and corpus of the trust would be payable to them under the condition subsequent or proviso of Article Fifth, but as will be hereinafter noted the contingency which would divest the interest of Caroline Whittlesey Eeid Eeynolds, Mary Alma Eeid, Lafa C. Eeid, Lucy Eeid Milner and Lyman Eeid has not and cannot happen so that upon the death of each of those persons their vested interest passed to their heirs.

The familiar “divide and pay over rule,” with its term ‘ convenience of the fund, ’ ’ and the exception to this rule, has been defined to mean several things but is principally instanced as the letting in of a prior gift for life to another. It would appear from the language that was used by William H. Eeid, the testator, that he had no other intention in providing for the setting up of the trust than to defer the vesting in possession and enjoyment only of the corpus and surplus income for the life of the annuitants, and as we have already indicated this was not for any reason personal to the legatees and was solely for the convenience of the fund or estate. In addition to the provision of Article Third of the will of testator directing the trustee to 1 £ divide and pay over” the corpus of the trust, upon the death of the last annuitant, to certain named persons in definite proportions, which standing alone is sufficient to create vested interests in the parties who are before this court, the intention of the testator is clearly expressed when we consider Article Fifth of the will. While this may be a repetition, still it is well to have in mind the words of the will in considering what the intention of the testator was, and this Article Fifth provides:

“I give, devise and bequeath all the rest, residue and remainder of my estate, real, personal and mixed (including all lapsed legacies, and including the property held in trust under the provisions of Article ‘Third’ of this will when the same comes under the operation of this Article and the value of annuities under said insurance policy if commuted as above provided in Article ‘Third’), to the following persons and in the following proportions, to-wit:” and then the will provides for the division of his property to his wife, sisters and brother. This gift became effective immediately upon his death and the language used in his will then became operative as words of immediate and express gift, as we have already stated in this opinion.

In Lachenmyer v. Gehlbach, 266 Ill. 11, the testator, after giving a life estate in all of his property to his wife, directed that after her death all of said property was “to go to my children share and share alike,” the children of a deceased child to take the share of the parent “and should any of my children die leaving no issue, then the share of such deceased child shall be divided equally among my surviving children. ’ ’ The court upon this question said:

“A test which is generally regarded as sufficient to determine the question and which has been generally adopted is stated as follows: ‘If the conditional element is incorporated into the description of or into the gift to the remainder-man then the remainder is contingent, but if, after words giving a vested interest, a clause is added divesting it the remainder is vested. Thus, on a devise to A for life, remainder to his children, but if any child dies in the lifetime of A his share to go to those who survive, the share of each child is vested subject to be divested by its death. But on a devise to A for life, remainder to such of his children as survive him, the remainder is contingent.’ (Gray’s Rule Against Perpetuities, sec. 108.) ” When we examine the will it is apparent that the testator left all his property to those who were closest to him in relationship and were the natural objects of his bounty. It certainly was not the testator’s intention that the property under the conditions as they have developed should go to his wife’s heirs to the exclusion of his own heirs; or that half of the trust property, under the circumstances which have transpired since the testator’s death, should go to his wife’s next husband and the other half to be distributed under his wife’s will. It is contended by appellee that if there be any question of the construction to be placed upon the language of the will where the testator has employed words which might be susceptible of different interpretations, it is well established that in such event it is the policy of the law to hold that the estate is vested. The language used in Mettler v. Warner, 243 Ill. 600, states : ‘£ The law favors the vesting of estates, and in cases where the instrument is susceptible of two constructions the law inclines to favor the construction most favorable to the devisee or grantee rather than the construction which would be against his interest. ’ ’ To the same effect is Hoblit v. Howser, 338 Ill. 328, which approves the rule called to our attention that the law favors the vesting of estates and will construe the terms of a will as creating a vested estate, if possible. Several other cases have been called to our attention by the parties, but we have reached a conclusion as indicated — that the estate was vested in the several persons named in the last will and testament of William H. Reid, and, therefore, under the conditions as appear from this record, the heirs of the several persons named will inherit on the death of the last annuitant, Martha Kane, who is alive. Therefore, from what has been said, we believe that we have passed upon the several questions called to our attention, and we believe that the court did not err in entering the decree which is on appeal here now in this court.

Therefore, the decree is affirmed.

Affirmed.

Denis E. Sullivan and Burke, JJ., concur.