Lumbard, Chief Judge, Anderson, Circuit Judge and Blumenfeld, District Judge*fn*
BLUMENFELD, District Judge:
The plaintiffs in this diversity suit for imposition of a constructive trust upon assets originally part of a trust established in 1931, now held by defendant-trustees under a 1942 trust agreement claimed in a first count, and for reformation of that 1942 trust deed against certain beneficiaries thereof claimed in a second count, appeal from a judgment of the United States District Court for the Southern District of New York, Bonsal, J., dismissing the complaint for failure to state a claim upon which relief can be granted. At the same time, Judge Bonsal also denied the plaintiffs' ancillary petition for an interlocutory injunction staying state court proceedings by the trustees seeking approval of their final account and an order for final distribution of the 1931 trust assets. We affirm the judgment dismissing the first count and the denial of the ancillary petition, but reverse the dismissal of the second count and remand it for further proceedings.
The plaintiffs asserted separate claims in separate counts to an interest in the assets of the 1942 trust. In the first count the plaintiffs sought to impose a constructive trust upon certain assets once held in a trust established in 1931 by Wm. P. T. Preston, Sr., hereafter the grantor. It was to last until the death of the survivor of the grantor and his then wife, Fanny B. Preston. Consistent with the purpose of that trust to satisfy the grantor's marital obligations to Fanny as worked out in a separation agreement, it provided that a certain amount of the income from the trust was to be paid to Fanny "until the death, as herein defined, * * * of said Fanny B. Preston." A separate paragraph in the trust indenture provided that the above quoted expression "shall for all purposes be deemed to mean the natural death of said Fanny B. Preston or her intermarriage after the date hereof with any person other than the Grantor, whichever of said events shall first occur." Also included in the indenture was a provision for distribution on the termination of the trust of $1,000,000 from the principal to the issue of the grantor and Fanny, and the balance as the grantor might appoint by his Will in default of which it was to be distributed to his issue living at his death per stirpes. The trustees were empowered to terminate the trust at any time and return portions of the corpus to the grantor, subject to a proviso that the principal could not be reduced below a value of $2,000,000 without the written consent of Fanny.
They were divorced in May 1931 and Fanny married Edwin D. Morgan in 1934. The grantor also remarried.
In 1942 Fanny Morgan, after bargaining negotiations with the grantor, consented in writing to a return of a portion of the corpus to him in an amount which reduced the principal of the trust to $1,535,259.29. In exchange for Fanny's consent, the grantor, in accordance with the agreement they had reached, immediately paid her $4,000 in cash and created a trust (the second 1942 trust) which provided her with $2,000 annually for life; also, he irrevocably surrendered and renounced his power of appointment over the remaining corpus of the 1931 trust and obtained the surrender by the trustees of their power to terminate the trust. The effect of these surrenders was to guarantee to the plaintiffs an interest in the remainder of the 1931 trust corpus, over their $1,000,000 preference. And, in addition, Wm. P. T. Preston, Sr. created another trust (the first 1942 trust) which provided $2,400 per year each for the plaintiffs*fn1 and gave to them the entire corpus if the grantor left no issue by his second wife. This last mentioned trust is the subject matter of the plaintiffs' second count and will be considered more fully later.
First we consider the trustees' return of principal to the grantor from the corpus of the 1931 trust.
The question presented is whether Fanny B. Morgan was legally capable of giving written consent to a reduction of the trust corpus to an amount less than $2,000,000. In deciding that she was, Judge Bonsal considered all of the documents relating to these transactions as well as affidavits which were submitted to him by the parties in connection with the defendants' motion pursuant to 12(b) and 56(b), Fed.R.Civ.P., for a summary judgment of dismissal of the claim. In a reasoned opinion, reported in D.C., 273 F. Supp. 329, which recites the pertinent provisions of the 1931 trust in haec verba, he held that the definition in the trust indenture stating that Fanny B. Preston's subsequent remarriage would be deemed to be her death related only to the provisions concerning her right to receive income and the use of her life as a measuring life of the trust, in both of which the phrase "death as herein defined" was used and that, contrary to the plaintiffs' contention, she was not so "dead" as to preclude her from consenting to the reduction of the principal of the trust, if she felt it would be in the interest of her children to do so. We agree.
For the purpose of measuring the term of the trust and the time during which she was to receive benefits from it, the termination of her existence in an unmarried status, as well as in being, could appropriately be defined fictitiously by a legal draftsman as "death." The phrase "death as herein defined" was not used in juxtaposition to the provision in a different clause of the trust indenture under which the power of the trustees to terminate the trust as to any part should be "subject always to the proviso that without written consent of said Fanny B. Preston [to] such termination * * *" the principal should not be reduced below $2,000,000. Surely her marital status was not intended to preclude her from consenting to a reduction of the principal upon conditions which she believed would benefit her children. The inability of a dead person to give consent results not from a legal impediment attaching to a particular status; it results from the complete impossibility of performing any act. In 1942, she was alive and obviously she could have given her consent to what was done.
No claim was made of undue influence, coercion or fraud by any of the defendants, and it was conceded that there was none. Thus, there was no need to go beyond a construction of the 1931 trust indenture to determine that the first count ought to be dismissed for failure to state a claim on which relief could be granted.*fn2
We do not find it necessary to consider the additional grounds of the defendants' motion for summary judgment, to wit, res judicata, improper venue, and failure to join indispensable parties. Therefore, we do not review the District Judge's decision that the judgments of the Supreme Court of the State of New York entered in 1943 and in 1957 approving successive accounts of the trustees under the 1931 trust barred the plaintiffs' claim ...