Mabry v. Scott

51 Cal.App. 2d 245, cert. denied, 317 U.S. 670 (1942)

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Nature of the Case

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Facts

In 1931, Defendant trust company executed an irrevocable declaration of trust acknowledging receipt of $1.350,000 to be held in trust. The living beneficiaries were the settlor, W.J., husband, and his then-wife, Alzoa, and their four minor children. The trust was to terminate on the death of the last survivor of the six beneficiaries, and the corpus was to go to the husband and wife's then living issue and in default of issue to the living spouses of the four children if any, and otherwise to the settlor's heirs. The trust provided for payment of $15,000 annually to the wife, any remaining income to the settlor and on various contingencies on the death of the husband and wife part or all of the income was to be distributable to the four children. After four months from the creation of the trust, Alzoa filed for divorce from the husband. She then married M.L and the settlor also remarried and had a minor child of that marriage. In 1936, the settlor, husband, filed this suit to set aside the trust on fraud and undue influence. A compromise was reached, and the former wife and husband were each to get $60,000 cash from principal and 75% of the income was to be paid equally to them or their successors until termination of the trust with 25% to be divided among the four children. All parties including contingent remaindermen were represented. The guardians recommended approval of the compromise. The court entered judgment. The trustee objected; it deprived unborn remaindermen of property without due process of law and that the principal was impaired by $120,000.