Law Commons^™

Rescission - Constructive Trusts - Tracing Misappropriated Funds, Eugene T. Kinder

Michigan Law Review

Defendant, president of plaintiff corporation, misappropriated over $1,000,000 in corporate funds, investing $79,000 thereof in government bonds. With the proceeds from these bonds, defendant set up two corporations, all the capital stock of which was owned by defendant's son and was purchased with plaintiff's money. One Greenslade was hired by defendant, and paid with a part of the misappropriated funds, to experiment with locomotive staybolt testing devices. As a result of the experimentation, Greenslade invented and patented several devices, transferring ownership thereof to one of the two corporations. In a prior action, brought without knowledge of the disposition of the …

Administration Of Estates--Foreign Administrator--Right To Sue In West Virginia, L. R. M.

West Virginia Law Review

No abstract provided.

Trusts--Deposit Of Trust Funds In Trustee's Private Account--Liability Of Bank For Subsequent Misappropriation, N. E. S.

West Virginia Law Review

No abstract provided.

Taxation - Inheritance And Estate Taxes - Powers Of Appointment, William L. Howland

Michigan Law Review

From time immemorial, problems arising from the creation and exercise of powers of appointment have proven enigmatic to the judiciary. These problems are not decadent but still possess an abundance of vitality. The increased complexity of statutes imposing death taxes has tended to foment litigation. These two fertile sources of intricate problems, in combination, have borne the apprehended fruits. The taxation of powers of appointment has created problems of infinite variety, harassing alike the attorney, the judge and the legislator. The questions involved are not simply of academic or theoretical importance. Under our modern death tax statutes the questions are …

Trusts - Apportionment Of Annual Taxes Between Life Tenant And Remainderman, Charles F. Dugan

Michigan Law Review

Annual taxes on real estate in Massachusetts were assessed on January 1 of each year, and were payable on July and October l, The will set up a trust to pay income to the tenant for life, and to pay the principal to the remainderman. The trustees sought to retain sufficient funds out of income to meet the next year's taxes, fearing that the tenant might not live long enough after January 1 to accumulate sufficient income to meet the taxes, and they brought this bill for instructions. The probate court entered a decree sustaining the trustees' contentions. On appeal, …

Descent And Distribution - Inheritance Through Illegitimate Child - Iowa Statute, James W. Deer

Michigan Law Review

This action involved a determination of the heirs of A, a widow, whose deceased husband, B, was an illegitimate child. Three sets of claimants asked for her estate: the legitimate descendants of B's mother, the legitimate descendants of B's father, and the state of Iowa, the domicile of the deceased. The district court awarded the property to the state, as uninherited property, on the ground that the other claimants could not take through an illegitimate. On appeal, reversed. An Iowa statute provided that an illegitimate child could inherit from his mother, and from his father, when …

Trusts - Power Of Settlor-Beneficiary To Terminate Spendthrift Trust, Roy L. Rogers

Michigan Law Review

The plaintiff established a trust fund, the income from which was to be paid to herself for life, remainder as she should appoint by will or in default of appointment to her next of kin. The trust instrument contained spendthrift provisions, and an express provision against revocation. Subsequently the value of the corpus declined, income dwindled to practically nothing, and plaintiff became practically destitute. Held, the trust, failing to accomplish its purpose, may be terminated. Rehr v. Fidelity-Philadelphia Trust Co., 37 Pa. D. & C. 324 (1939).

Trusts - Constructive Trusts - Preferential Claim Against Bank's Assets For Deposits Made After Hopeless Insolvency, James W. Deer

Michigan Law Review

On proclamation by the governor of the so-called bank holiday, the Union Guardian Trust Company was closed as of February 11, 1933. The evidence showed that within nine months of closing the company had made provision for obtaining $2,500,000 by pledging assets, had received loans amounting to $12,000,000 from the Reconstruction Finance Corporation, and was conferring frequently with the officers of· that agency to negotiate an additional $44,000,000 loan. Under the authority of emergency legislation passed after the bank holiday, a conservator was appointed. By the plan of reorganization all the assets of the company were set aside in a …

Some Problems Arising Out Of Deposits To Pay Principal And Interest On Bonds, Paul P. Lipton

Michigan Law Review

Since Lawrence v. Fox contracts students have been puzzled by the numerous and varying relations that may arise when A, the debtor, delivers money to B to pay C, his creditor. Equally puzzling and much more complicated are the rights and relations of the obligor, trustee and bondholders with respect to sums deposited with the trustee to pay principal and interest on bonds.

The insolvency during recent years of many large trust companies that had been named as trustees in indentures securing corporate bonds, having on hand at the time of their failure large sums of money which …

Adverse Possession - Future Interests - Adverse Possession Against Remaindermen, Harold M. Street

Michigan Law Review

The life tenant of the premises in controversy purported to convey a fee title to defendant in 1920 and defendant has been in continuous possession claiming a fee title ever since. The life tenant died in 1931, and in 1938 the plaintiff remainderman commenced an action to clear his title and recover possession. The defendant claimed title by adverse possession on the ground that, since the remainderman had a statutory right to bring a suit to quiet title during the pendency of the life estate, the present action was barred by the ten year statute of limitations on actions to …

Attachment Of Income Of Spendthrift Trust : Schwager V. Schwager

Indiana Law Journal

No abstract provided.

Wills-Right Of Creditor Of Heir Of Testator To Contest Allegedly Invalid Will [In Re Duffy's Estate, Iowa 1940]

Washington and Lee Law Review

No abstract provided.

Future Interests-Validity Of A Remainder After A Life Estate With Full Power Of Disposal [Moore V. Holbrook, Va. 1940]

Washington and Lee Law Review

No abstract provided.

Scott On Trusts: A Review, Lewis M. Simes

Michigan Law Review

Professor Scott, in his four volume work on the Law of Trusts, has given us a book worthy to stand beside the two other great American treatises on this subject, the American Law Institute Restatement of the Law of Trusts, and Bogert on Trusts and Trustees. Since the reviews of Professor Scott's book already published have been as numerous as they have been favorable, I shall content myself with discussing it as a whole and shall refrain from detailed comment on its treatment of particular rules. More particularly, I shall attempt to compare it with the two …

Taxation - Federal Estate Tax - Transfers In Which Decedent Had Reserved A Contingent Reversionary Interest - St. Louis Union Trust Cases Overruled, Robert M. Warren

Michigan Law Review

In 1919 decedent transferred property in irrevocable trust, income to be paid to X for life and on X's death, the corpus and accumulated income to be returned to the settlor, if he should then be living; but if he should then be dead, remainder to Y. The settlor predeceased the life beneficiary and the commissioner included the trust property in decedent's gross estate under section 302 (c) of the federal estate tax. The board of tax appeals reversed this determination, and the board was upheld by the United States Circuit Court of Appeals for the Sixth Circuit, …

Public Policies Underlying The Law Of Mental Incompetency, Milton D. Green

Michigan Law Review

Mental incompetency, or legal insanity, has usually been studied in the patchquilt fashion. It appears as a sub-heading of incidental interest in such widely diversified subjects as crimes, contracts, domestic relations, torts and wills. It can, however, be conceived of as a single strand in the seamless web. So viewed, it may appear to wind in and out of the various artificial subdivisions of the law, cutting across each at one particular place or another. And so conceived, it can be studied according to the second and less orthodox method of analysis. Few are the isolated areas in the law …

Taxation - Federal Estate Tax - What Is A General Power Of Appointment Within The Meaning Of The Federal Statute?, John H. Pickering

Michigan Law Review

Decedent exercised her testamentary power to appoint the income of a discretionary trust. The commissioner declared a tax deficiency for failure to include the property subject to the power in the gross estate. The executor appealed on the ground that the power was a special power under Wisconsin law since the trustee could withhold the income from any beneficiary. Held, the power was general since it was exercisable in favor of the donee's estate or her creditors and therefore the exercise of the power was taxable under section 302(f) of the Revenue Act of 1926. Morgan v. Commissioner, …

Trusts-Liability Of Life Tenant And Remainderman For Carrying Charges On Unproductive Property, James D. Ritchie

Michigan Law Review

Testator put certain property, highly productive at the time of his death, in trust, income to his grandaughter for life, remainder over. Subsequently part of the property became unproductive, so that if the income from the rest should have fallen below three per cent and taxes were paid from income, the life tenant would have received nothing. The will authorized the trustee to sell when expedient; although using due diligence, the trustee had not yet sold. In a contest between the life tenant and remainderman, held, taxes accrued since the property became unproductive are payable from principal, not income. …

Future Interests - Class Gift - Distribution Where Fund Is Insufficient To Give Specified Sum To Each Intended Member - Closing Of Class, James D. Ritchie

Michigan Law Review

To each grandnephew and grandniece, "now living or hereafter born during the continuance of this trust" (which was not to last longer than "twenty years after the death of the survivor" of testator's nephews and nieces), there was to be paid from a trust of the residue of the estate $2,000 "as each shall arrive at the age of twenty-five," "as his or her absolute property." At testator's death thirteen nephews and nieces, ranging from nineteen to fifty-five years of age, and nineteen grandnephews and grandnieces, from two months to thirty-two years, were living. Four of the latter group, who …

Trusts-Right Of Divorced Wife Of Beneficiary Of Spendthrift Trust To Reach The Beneficiary's Interest In The Trust For Alimony And Support For Children, W. Wallace Kent

Michigan Law Review

P, divorced wife of D, brought this action for alimony and for support money for her children. The object of the action was to reach the income from a spendthrift trust created for the benefit of D and his present wife and children in the will of D's mother. The will specifically provided that none of the proceeds of the trust were to go to P or her child. Held, the settlor had the right to devise her property in any manner she chose. There is nothing in the statutes or decisions of Wisconsin which forbid …

The Rule Against Perpetuities And The Indiana Perpetuities Statute, W. Barton Leach

Indiana Law Journal

This is the second of two lectures given by Professor Leach at the State Bar Association Institute, held at Indianapolis, January 12, 1940. The subject-matter of the first lecture may be found in an article by Professor Leach on "Powers of Appointment," 24 A. B. A. Jl. 807.

Trusts - Investments - Participation Mortgages - Common Trust Funds, William F. Andersen

Michigan Law Review

A corporate trustee had operated a trust estate described by the court as "a joint trust fund." Mortgage investments were made in the name of the trustee and the individual estates were issued participation certificates. While not appearing on the public records, the trustee's files disclosed the interests of the beneficiaries. Because of the world-wide depression, losses were suffered and the beneficiaries of one such trust sought to surcharge the trustee for those losses. The trustee had acted in good faith and in accordance with accepted trust practices. Held, that this did not constitute a breach of trust, and …

Problems Of The Successor Trustee As To Claims Arising Out Of Self Dealing Purchases, Kingsley A. Taft

Michigan Law Review

Although, under certain circumstances, the beneficiaries also may be able to enforce them, it is well settled that a successor trustee has the power to assert and enforce claims against his predecessor trustee for breaches of trust by the predecessor. Generally, wherever the circumstances are such that certain action or inaction by beneficiaries would bar them from taking advantage of a particular remedy if they were not under any incapacity, such action or inaction by the successor trustee will likewise be a bar. Therefore, in considering what remedies are available to the successor trustee and what activity or inactivity of …

The Rule In Shelley's Case In Washington, Harry M. Cross

Washington Law Review

As a state grows in age and the accumulations of private capital within its boundaries increase in size and number, problems of future interests in property law become of greater importance. Propertied individuals seek to extend control over their accumulations beyond their deaths, whether wisely or not is here unimportant. Washington is reaching this stage of maturity and its lawyers consequently will be more frequently confronted with the difficulties in creation of future interests. One of the major pitfalls facing the lawyer in this field is the rule in Shelley's Case which by its operation defeats the effort of a …

Trust Investments In West Virginia, V. K. K.

West Virginia Law Review

No abstract provided.

Evidence Of Survivorship In Common Disaster Cases, John E. Tracy, John J. Adams

Michigan Law Review

Almost daily, newspapers recount the details of another automobile accident or airplane crash in which numerous persons are killed--a common disaster. And determination of survivorship in common disaster cases presents some of the most vexing problems that lawyers and judges meet. Lawyers must search for evidence, frequently hard to obtain, and then must face difficult questions of relevancy, materiality, and probative value, since in almost all cases where any evidence is available it is wholly circumstantial. Judges must decide preliminary disputes over who shall bear the burden of proof, and then must rule on the sufficiency of evidence, which is …

Joint Tenancy - Right To Transfer By One Party - Right Of Survivorship, John H. Pickering

Michigan Law Review

In two recent cases the Supreme Court of Michigan has had occasion to pass upon the doctrine of survivorship in joint tenancies. In one case the deed ran to father and son as joint tenants and contained a covenant that neither would sell without the written consent of the other. The father conveyed his interest without the son's consent and died. The court held that the deed created a joint tenancy, that since the restrictive covenant was void as a restraint on alienation and repugnant to the grant, the joint tenancy was severed by the father's conveyance, and therefore the …

Contracts - Wills - Third Party Beneficiary Contract As Testamentary Disposition, Harold M. Street

Michigan Law Review

The defendant executed a bond and mortgage to one Catherine McCarthy Jackman. Subsequently the parties entered into an extension agreement wherein it was provided that in the event of the death of the mortgagee prior to the .maturity of the mortgage, the interest and principal were to be paid one-half to a brother of the mortgagee and one-half to the heirs of a deceased sister. After the death of the mortgagee prior to the maturity of the mortgage, the plaintiffs (the brother and heirs of the deceased sister) claimed a right to the payment of interest as third party beneficiaries. …

Insurance - Gift Of Life Insurance Policy, Robert A. Solomon

Michigan Law Review

The employer insured his employees under a group insurance plan. Each employee was given a certificate evidencing his personal insurance. The master policy contained a provision that no assignment should be binding until the original or duplicate of the certificate was filed at the insurer's home office. It was established by the evidence that there had been a manual delivery of one of the certificates by an employee. The insurance company paid the amount 0£ that particular certificate into court. Held, in an action by the plaintiff, the alleged donee, against the estate of the insured, the named beneficiary, …

Trusts - Spendthrift Trusts - Beneficial Interest Held Not Attachable To Make Good Liability As Trustee, W. Wallace Kent

Michigan Law Review

Janet Jones was an inactive trustee and one of the beneficiaries of a spendthrift trust. Because of lack of good judgment on the part of her co-trustee, and without any moral fault on her part, Janet was charged with liability for a large sum. Her surety, who paid the succeeding trustee, took an assignment of the rights of the trust estate against Janet Jones and demanded that the trustee pay to it all the income, past, present and future, which the trust instrument gave to such beneficiary. The trustee brought this action for instructions. Held, as the trust estate …