FILED: May 3, 2000

In the Matter of the Testamentary Trusts
Created Under the Last Will
of Charles F. Berg.
TEMPLE BETH ISRAEL
and ROBISON JEWISH HOME,
fka Jewish Home for the Aged,

Respondents,

v.

CHARLES L. FEISS,

Appellant.

_____________________________________________________________________

TEMPLE BETH ISRAEL
and ROBISON JEWISH HOME,
fka Jewish Home for the Aged,

Respondents,

v.

WILLIAM J. HUTTON,
Personal Representative of the Estate of
Forrest T. Berg,

Appellant.

Appeal from Circuit Court, Multnomah County.

Stephen B. Herrell, Judge.

Submitted on record and briefs April 2, 1999.

Charles L. Feiss submitted the briefs pro se.

Helen Rives Pruitt, Robert D. Greaves and Meyer & Wyse LLP submitted the briefs for appellant William J. Hutton.

Carolyn W. Miller, Sally C. Landauer, Stephen J. Klarquist, Duffy, Kekel,

Jones & Bernard, LLP and Ball Janik LLP submitted the brief for respondents Temple Beth Israel and Robison Jewish Home.

Before Edmonds, Presiding Judge, and Armstrong and Kistler, Judges.

KISTLER, J.

Affirmed.

Armstrong, J., dissenting.

KISTLER, J.

Charles Berg's will established a trust for the benefit of his son. The will provides that if his son dies without issue, the assets in his son's trust will become part of another trust that the will established for the benefit of Charles' wife and daughter. Charles' son died without issue. The wife and daughter's trust, however, terminated before the son died, and the trial court held that the assets in the son's trust reverted to Charles' estate. We affirm.

Charles Berg and his first wife (1) had a son Forrest. Charles and his second wife Saidee had a daughter Caroline. Charles died in 1932. In his will, Charles created two trusts, one for Forrest's benefit and the other for the benefit of Saidee and Caroline. He funded both trusts with the stock of a company he owned. Charles' will directs that, except for one share of stock, half of the stock in the company will be held in trust for Forrest and the other half will be held in trust for Saidee and Caroline. (2) Charles' will also provides that, with two exceptions, the proceeds of any insurance policy on his life will be paid into Saidee and Caroline's trust.

The will directs that the assets in Forrest's trust shall be distributed differently from the assets in Saidee and Caroline's trust. The will provides that Forrest will receive the dividends on the stock in his trust during his lifetime and that, if Forrest dies leaving issue, the trust will continue until the youngest of Forrest's issue reaches 21 years of age, at which time the trust assets will be distributed to Forrest's issue. The will also provides that:

"[i]n the event of the death of my son FORREST BERG without leaving issue, the said stock shall be transferred to and become part of the 'SAIDEE R. BERG AND CAROLINE F. BERG TRUST,' but the said 'SAIDEE R. BERG AND CAROLINE F. BERG TRUST' fund shall be depleted to the extent necessary for the acquisition by said Trustee for the benefit of the widow of FORREST BERG, of an annuity [of $100 a month]."

As noted above, Charles' will directs that Saidee and Caroline's trust will be funded both with half of his company's stock and with the proceeds from certain insurance policies on his life. It directs that Saidee and Caroline will receive the income from the trust during their lifetime. It provides that if Saidee dies before Caroline, the trust will continue for Caroline's life and then for the benefit of Caroline's surviving issue until the youngest of her issue reaches 21 years of age, at which time the assets in the trust will be distributed to Caroline's issue. The will also provides for the disposition of the trust assets if Caroline dies without issue before Saidee. The will states:

"If my said daughter shall die without leaving issue, and my wife shall be alive at such time, all of the trust fund shall be the property of my said wife, and at her death said trust shall terminate and the fund shall be divided among her legal distributees. Provided, however, that in each of the two instances in which I have directed division among legal distributees,[ (3)] such provisions shall be deemed to be applicable only in the event the particular life tenant shall have died without leaving a Last Will and Testament directing the disposition of such fund, it being my intention to confer upon either of such life tenants to whom the clause may be applicable, a power of appointment to be exercised by Last Will and Testament. The provisions of this paragraph shall be applicable to the stock in the Corporation hereinbefore referred to and to dividends thereon, said stock having been heretofore specifically made a part of the 'SAIDEE R. BERG AND CAROLINE F. BERG TRUST' fund."

After Charles' death, Caroline had no children and died before Saidee. Saidee died before Forrest and left a will in which she exercised the power of appointment that Charles' will gave her, although the parties disagree whether Saidee's will either could or did dispose of the contingent remainder in the stock in Forrest's trust. Finally, Forrest died without issue. On Forrest's death, the trustee of Forrest's trust petitioned the trial court for instructions on how the assets in Forrest's trust should be distributed.

Before the trial court, the parties offered three different views of what should happen to the stock in Forrest's trust. First, the personal representative of Forrest's estate argued that Charles' will gave Saidee's trust a contingent remainder in the stock in Forrest's trust, that the will gave Saidee a power of appointment over that contingent remainder, and that she transferred the remainder to Forrest in her will. (4) Second, the residuary beneficiaries of Saidee's will, Congregation Beth Israel and Robison Jewish Home, argued that the contingent remainder is conditioned on the requirement that Saidee and Caroline's trust be in existence at the time of Forrest's death. They also argued that Charles' will did not give Saidee a power of appointment over the contingent remainder and that, even if it did, Saidee did not exercise that power in her will. Finally, Saidee's heirs argued that Saidee's trust was in existence when Forrest died, that the stock in Forrest's trust became part of Saidee's trust, but that Saidee did not exercise her power of appointment over the contingent remainder. It follows, they concluded, that under Charles' will, the stock from Forrest's trust goes to Saidee's legal distributees.

The trial court ruled: (1) that Charles' will did not give Saidee a power of appointment over the contingent remainder in her and Caroline's trust; (2) that Saidee did not "purport to exercise the power of appointment over the contingent remainder interest"; and (3) that because Saidee and Caroline's trust terminated upon the distribution of its assets after Saidee's death, "the contingent remainder from the Forrest Berg Trust to the Saidee/Caroline Trust failed." The court accordingly concluded that when Forrest died, the "assets of the Forrest Berg Trust passed through a resulting trust back to the Estate of Charles F. Berg, where they passed under the residuary clause of Charles' will to the Estate of Saidee Berg, whose Will, through its residuary clause, controls disposition of the assets of the Forrest Berg Trust." It followed, the trial court found, that the assets in Forrest's trust should be distributed equally to the two residuary beneficiaries of Saidee's will, Congregation Beth Israel and Robison Jewish Home.

On appeal, all the parties agree that Charles' will gave Saidee and Caroline's trust a contingent remainder in the stock in Forrest's trust; the will provides that if Forrest dies without issue, the stock in his trust "shall be transferred to and become a part of" Saidee and Caroline's trust. (5) It is also not disputed that Saidee and Caroline's trust terminated before Forrest died; according to the terms of Charles' will, if Caroline dies before Saidee without leaving issue, Saidee and Caroline's trust terminates on Saidee's death. Although the parties phrase the issue in various ways, in our view, the source of their dispute reduces to the question whether the contingent remainder is also conditioned on a requirement of survivorship. Is there implicit in the contingent remainder a requirement that Saidee and Caroline's trust be in existence if and when Forrest dies without issue? (6)

On that question, Forrest's personal representative argues that the fact that the remainder is contingent does not necessarily mean that there is a condition of survivorship. He also notes that the will does not use express terms of survivorship. Saidee's residuary beneficiaries respond that not only had Saidee and Caroline's trust terminated by the time Forrest died but that its purpose--to provide support for Saidee and Caroline--had been accomplished. It follows, they conclude, that the provision in Charles' will directing that the stock in Forrest's trust be distributed to Saidee and Caroline's trust necessarily fails. Although both positions are theoretically possible, the latter fits more closely with the provisions in the will that create the contingent remainder, the inferences that can be drawn from the rest of Charles' will, and extrinsic evidence.

A future interest, by definition, involves a postponement of possession and enjoyment of property. Lewis M. Simes & Allen F. Smith, 2 The Law of Future Interests