Ford v. Newman , 77 Ill. 2d 335 ( 1979 )

MR. JUSTICE MORAN

delivered the opinion of the court:

This case involves a determination of the beneficiaries under a trust in which the plaintiffs, Robert Freeman Ford and the Bank of Pontiac, are cotrustees. The appellants-defendants (defendants) are the two adopted children of Tod Ford III, a named trust beneficiary, now deceased.

On July 16, 1969, the plaintiffs filed a complaint which averred, in part, that the defendants have no interest in the corpus or income of the trust. The circuit court of Livingston County entered summary judgment for the plaintiffs. The appellate court affirmed, with one justice dissenting. (64 Ill. App. 3d 528.) We granted the defendants leave to appeal.

On December 31, 1941, Lillian Ford Timken executed an irrevocable inter vivos trust in New York, the place of her domicile. The corpus of the trust consisted, principally, of Illinois realty. The substance of the trust provision which is pertinent to this appeal follows. One-half of the income from the trust was to be paid to the settlor’s two sons, Robert Freeman Ford and Tod Ford III, during their respective lives, and, upon the death of either, his share of the income was to be paid “to his lawful issue him surviving,” during their respective lives. If either son died “without leaving lawful issue him surviving,” his share of the income was to be paid to the other son or “to [the other son’s] lawful issue him surviving,” during their respective lives. The trust also specifically provided for “any issue of either of said beneficiaries [Tod Ford III and Robert Ford] not now in being.” The settlor appointed herself and her two sons as trustees. Both sons lived in California at the time of execution of the trust, and that is where the defendants were adopted.

The circuit court found that the settlor’s actual intent was to exclude adopted children. The appellate court affirmed the judgment, finding that Illinois law was applicable and that, under Illinois law, defendants were not included as beneficiaries.

Defendants urge that the settlor’s actual intent was to include adopted children in the term “lawful issue.” While defendants raise other arguments, we find, in fact, that resolution of the case can be made on the determination of the settlor’s actual intent.

Our object is to ascertain and give effect to the intention of the settlor. The evidence that we may consider to determine this intent is governed by the law of the forum, Illinois. (See Restatement (Second) of Conflict of Laws sec. 138 (1971); People v. Saiken (1971), 49 Ill. 2d 504, 509, cert. denied (1972), 405 U.S. 1066, 31 L. Ed. 2d 796, 92 S. Ct. 1499; People v. Kirkpatrick (1953), 413 Ill. 595, 597.) Under Illinois law, intent is to be ascertained, if possible, from the language of the instrument itself. Continental Illinois National Bank & Trust Co. v. Clancy (1959), 18 Ill. 2d 124, 127; Erwin v. Kruse (1959), 17 Ill. 2d 364, 370; Storkan v. Ziska (1950), 406 Ill. 259, 263.

In the case at bar, the settlor did not expressly refer to adoptees in the instrument. She did, however, with the aid of counsel, utilize the term “lawful issue,” to refer to the issue of her two sons. We must examine how, on the date of execution, the law defined “lawful issue” as the settlor employed that term.

The law which we must examine is that under which the settlor considered the trust provisions. She did not expressly designate which State’s law was to apply. Absent such an express designation, it is only reasonable to conclude that she expected that the laws of either New York — where she had long been domiciled and where the instrument was drawn and executed — or the laws of Illinois — the situs of almost all the realty which comprised the corpus of the trust — to apply. Examination of the laws in effect in 1941 in these two States reveals that a like result is reached under either.

New York had the following statutes in effect at the time of execution of the trust:

“1. ‘Foster parent’ shall mean a person adopting and ‘foster child’ shall mean a person adopted.” (N.Y. Dom. Rel., art. VII, sec. 109(1), eff. Feb. 17, 1941 (Supp. 1942).)

And, in pertinent part,

“As respects the passing and limitation over of real or personal property dependent under the provisions of any instrument on the foster parent dying without heirs, the foster child is not deemed the child of the foster parent so as to defeat the rights of remaindermen.” (N.Y. Dom. Rel., art. VII, sec. 115, eff. Apr. 13, 1040 (Supp. 1942).)

See New York Life Insurance & Trust Co. v. Viele (1899), 161 N.Y. 11, 55 N.E. 311; In re Accounting of Leask (1910), 197 N.Y. 193, 90 N.E. 652.

At the same time, the following statute was in effect in Illinois:

“A child lawfully adopted is deemed a descendant of the adopting parent for purposes of inheritance, except that the adopted child shall not take property from the lineal or collateral kindred of the adopting parent per stirpes or property expressly limited to the body of the adopting parent.” (Ill. Rev. Stat. 1941, ch. 3, par. 165.)

See Miller v. Wick (1924), 311 Ill. 269.

Under the law of both States, adopted children were deemed not to be included as “lawful issue” of the settlor’s sons within the trust provision in this case. Thus, the legal meaning attributed to the language used served to exclude adoptees, absent other evidence of a contrary intention.

Our careful examination of the record reveals no such evidence of a contrary intention on the part of the settlor. After first looking to the language of the trust instrument itself, we may consider the surrounding circumstances at the time of execution of the trust. (Continental Illinois National Bank & Trust Co. v. Clancy (1959), 18 Ill. 2d 124, 127.) The record here discloses that the defendants were not adopted until more than a year after the date of the instrument. The defendants allege, however, that the settlor knew that the adoptive parents, Tod and his wife, were incapable of having natural children. In support thereof, defendants correctly point out that Tod and his wife were 36 and 38 years old, respectively, at the time of the trust’s execution and had been childless since their marriage in 1929. But any knowledge by the settlor of their child-bearing capabilities at the time in question is not substantiated by the record. In fact, in a deposition taken in preparation for this case, Tod’s wife stated that she herself did not know that she was incapable of having natural children until sometime after she and Tod had adopted their first child, which, as stated, did not occur until more than a year after the settlor executed the trust.

For the foregoing reasons, the judgment of the appellate court is affirmed.

Judgment ajfirmed.