COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 59834 GLENN H. WENDELL, ET AL., : : Plaintiffs-Appellants : : JOURNAL ENTRY vs. : and : OPINION AMERITRUST COMPANY, N.A., : ET AL., : : Defendants-Appellees : : : DATE OF ANNOUNCEMENT OF DECISION : JULY 23, 1992 CHARACTER OF PROCEEDING : Civil appeal from : Common Pleas Court : Probate Court Division : Case No. 1005878 JUDGMENT : REVERSED AND REMANDED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiffs-appellants: Joseph P. Tulley GREENE AND TULLEY 38021 Euclid Avenue Willoughby, Ohio 44094 For defendants-appellees, John S. Chapman American Bible Society and SCHNEIDER, SMELTZ, HUSTON & Board of National Missions RANNEY of the United Presbyterian 1525 National City Bank Church: Building Cleveland, Ohio 44114 - 2 - NAHRA, P.J.: Glenn and Clyde Wendell appeal from the trial court's decision in favor of the American Bible Society and the Board of National Missions of the United Presbyterian Church in the United States of America. For the reasons set forth below, we reverse and remand. Glenn and Clyde Wendell filed a declaratory judgment action regarding the will of their grandfather, Harry Wendell. The will was executed on February 23, 1942. Harry Wendell died on May 21, 1942. The will created a trust, with the income to be paid to Harry Wendell's wife Laura, during her life. Laura Wendell also had access to the trust principal for limited purposes. Upon the death of Laura Wendell, the trust income was payable to Harry and Laura Wendell's son, Francis. The will also provided as follows: ITEM XI. After the decease of both my wife and my son, the trust property then remaining in the trust to the extent of Seventy Thousand Dollars ($70,000.00) shall be divided into equal shares for the lawful children of my son, Francis D. Wendell, there now being two minor sons, subject to provisions hereinafter named for their mother. Said children are my grandchildren but herein always referred to as the children of my son. Said trust shall be administered with the same powers incident to the trust set up herein for my said son insofar as applicable, having constantly in view the proper maintenance, education and comfort of the respective beneficiaries. * * * -3- ITEM XIV. When any child reaches the age of thirty-five (35) years, the trust shall determine (sic) and the Trustee shall distribute to such child his or her share of the trust estate originally set up for him or her, in kind; that is to say, in real property, stocks, bonds, mortgages or other securities belonging to the trust estate, according to the absolute discretion of the Trustee, and at such valuations as the Trustee may establish therefor. * * * ITEM XVII. Whatever balance there is in my trust estate beyond Seventy Thousand Dollars ($70,000.00) as set up in Item XI. hereof, I direct my Trustee to convert it into money and I hereby give and bequeath the same, share and share alike, to the American Bible Society now located at Clark Avenue and 27th Street, New York City, and to the Board of National Missions of the Presbyterian Church of the United States of America, now located at 156 - 5th Avenue, New York City. * * * G.C. 10504-5, effective from 1932-1965, provided as follows: Sec. 10504-5. Bequest to charitable purpose or purposes. If a testator dies leaving issue of his body, or an adopted child, living, or the lineal descendants of either, and the will of such testator gives, devises or bequeaths the estate of such testator, or any part thereof, to a benevolent, religious, educational or charitable purpose, or to this state or to any other state or country, or to a county, city, village or other corporation, or association in this or any other state or country, or to a person in trust for such purposes, or municipalities, corporations or associations, whether such trust appears on the face of the instrument making such gift, devise or bequest or not; such will as to such gift, devise or bequest, shall be invalid unless it was executed according to law, at least one year prior to the death of the testator. -4- G.C. 10504-5 was succeeded by R.C. 2107.06, which was repealed in 1985 and found unconstitutional by the Ohio Supreme Court in Shriners' Hospital for Crippled Children v. Hester (1986), 23 Ohio St. 3d 198. Laura Wendell died in 1953. Francis Wendell died in 1986, leaving his widow, Clara, and his two sons, Glenn and Clyde. Ameritrust distributed $70,000.00 from the trust to Glenn and Clyde Wendell pursuant to Items XI and XIV of the will, see supra. A balance of $220,000.00 remained as of 1987. Clyde and Glenn Wendell brought a declaratory judgment action, naming Ameritrust, the American Bible Society, the Board of National Missions of the Presbyterian Church of the U.S.A. and the state attorney general as defendants. The Wendells asked the court to declare the charitable bequests to the American Bible Society and Mission null and void pursuant to G.C. 10504-5, and asked that the trust assets be distributed to the Wendells instead. Ameritrust filed a counterclaim and cross-claim, seeking declaratory relief regarding distribution of the trust assets. The American Bible Society and Mission Board also filed a counterclaim and cross-claim, requesting Ameritrust to pay them pursuant to the will. On motion of Ameritrust, Clara Wendell, the testator's daughter-in-law, was joined as a new party. The court also added the estate of Francis Wendell as a new party. The charitable -5- defendants filed a motion for summary judgment, and the Wendells filed a cross-motion for summary judgment. The court granted the charitable defendants' motion insofar as it held that G.C. 10504-05 is unconstitutional. The court also held that the finding of unconstitutionality should be applied retroactively, and that the balance of the trust principle should be distributed to the charitable defendants. The Wendells brought this timely appeal. The American Bible Society and Board of Missions, appellees, assigned two errors pursuant to R.C. 2505.22. I. Appellants' first assignment of error reads as follows: THE TRIAL COURT ERRED TO THE PREJUDICE OF THE PLAINTIFFS-APPELLANTS BY DETERMINING THAT ITS RULING THAT SECTION 10504-5, OHIO GENERAL CODE IS UNCONSTITUTIONAL SHOULD BE APPLIED RETROACTIVELY TO THE LAST WILL AND TESTAMENT OF A DECEDENT WHO DIED IN 1942. State courts have broad authority to determine whether their decisions shall operate prospectively or retrospectively. Great Northern Ry. Co. v. Sunburst Oil & Refining Co. (1932), 287 U.S. 358, Copperweld Steel Co. v. Lindley (1987), 31 Ohio St. 3d 207, 210. The test used to make this determination is found in Chevron Oil Co. v. Huson (1971), 404 U.S. 97, 106-107, and reads as follows: In our cases dealing with the nonretroactivity question, we have generally considered three separate factors. First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, see, e.g., Hanover Shoe v. -6- United Shoe Machinery Corp., supra, at 496, 20 L. Ed. 2d at 1243, or by deciding an issue of first impression whose resolution was not clearly foreshadowed, see, e.g., Allen v. State Board of Elections, supra, at 572, 22 L. Ed. 2d at 20. Second it has been stressed that "we must . . . weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation." Linkletter v. Walker, supra, at 629, 14 L. Ed. 2d at 608. Finally, we have weighed the inequity imposed by retroactive application, for "[w]here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the `injustice or hardship' by a holding of nonretroactivity." Cipriano v. City of Houma, supra, at 706, 23 L. Ed. 2d at 652. (Emphasis added.) See also Anello v. Hufziger (1988), 48 Ohio App. 3d 28 (court applies the Chevron Oil Co. v. Huson test). The first part of the Chevron Oil Co. v. Huson test provides that decisions which are a clear break with past precedent should not be applied retroactively. As the trial court recognized, the instant case overruled clear past precedent when it held G.C. 10504-5 to be unconstitutional. See Kirkbride v. Hickok (1951), 155 Ohio St. 293, in which the Ohio Supreme Court enforced G.C. 10504-5, subsequent to the creation of the testator's will and death in this case. Therefore, the first part of the test indicates that the unconstitutionality of G.C. 10504-5 should not be applied retroactively. The second part of the test is based on Linkletter v. Walker (1965), 381 U.S. 618. In Linkletter, the court held that the exclusionary rule, created in Mapp v. Ohio (1961), 367 U.S. 643, did not require retrospective application. The court concluded -7- that the purpose of the rule would not be advanced by retrospective application because the purpose of the rule was to deter misconduct, and past misconduct could not be corrected. The court noted that the existence of the previous doctrine was an operative fact that could not be erased by the new decision. Linkletter v. Walker, see supra, at 636. In this case, retrospective application will neither further nor retard the purpose of the rule. As in Linkletter, the new rule is a clear break with the past and the past cannot be undone. The third part of the Chevron Oil Co. v. Huston test requires a weighing of the inequity caused by retroactive application, so as to avoid substantial inequitable results. This part of the test relies on Cipriano v. Houma (1969), 395 U.S. 701. In that case, the U.S. Supreme Court held that Louisiana's law giving only property taxpayers the right to vote in elections to approve issuance of municipal revenue bonds was unconstitutional. Because of the significant hardship which would be imposed on cities, bondholders, and others connected with municipal utilities to change the election process, the court did not give its decision retroactive effect. In this case, a probate case, the testator is presumed to have intended that the laws in effect when his will was created would be applied. See, e.g., Central Trust Co. v. Smith (1990), 50 Ohio St. 3d 133; Woods v. Neissen (1983), 11 Ohio App. 3d 62, paragraph three of the syllabus. Accordingly, it would be -8- inequitable to the testator to give retroactive effect to a subsequent determination of unconstitutionality of G.C. 10504-5. In 1942, when Harry Wendell executed his will, G.C. 10504-5 was valid and enforceable. Furthermore, in 1942 the courts had not yet developed the modern constitutional analysis which was subsequently applied in Shriners' Hospital for Crippled Children v. Hester, see supra, at 203. G.C. 10504-5 was enforced by the Ohio Supreme Court as of 1951, and its successor was not overruled until 1986. See Kirkbride v. Hickok, see supra, and Shriners' Hospital for Crippled Children v. Hester, see supra. Accordingly, the trial court erred when it applied its determination that G.C. 10504-5 is unconstitutional retroactively. Appellants' first assignment of error is sustained. II. Appellants' second assignment of error reads as follows: THE TRIAL COURT ERRED TO THE PREJUDICE OF THE PLAINTIFFS-APPELLANTS BY FINDING THAT THE ESTATE OF FRANCIS D. WENDELL, DECEASED, AND CLARA WEBBER WENDELL, BENEFICIARY THEREUNDER, HAD RIGHTS IN THE PRESENT CONTROVERSY AND ORDERING THEM MADE PARTIES TO THE PENDING ACTION. Having determined that the charitable bequests are void, we must now determine how to dispose of that portion of Harry Wendell's estate. The will makes no provision for void or lapsed bequests. The charitable bequests were to be made from "the balance" remaining after termination of the trust and after payment of -9- $70,000.00 to Glenn and Clyde Wendell, and there is no other residuary provision. Therefore, the void bequests pass according to the statutes of descent and distribution. See, e.g., Davis v. Davis (1900), 62 Ohio St. 411, paragraph three of the syllabus. However, since the bequests at issue were payable after the deaths of the testator's wife and only son, the question arises whether the testator's heirs should be determined as of the date of his death, or at the end of the life estates. The general rule is that heirs are determined as of the date of death, except where a testator indicates that the heirs are to be determined at a later date. See, e.g., Barr v. Denney (1909), 79 Ohio St. 358; Tiedtke v. Tiedtke (1952), 157 Ohio St. 554. In this case, Laura and Francis Wendell, the testator's wife and son, would have been the testator's heirs as of 1942. However, the will provided that the charitable bequests were to be paid after the end of the life estates for Laura and Francis and after termination of the trust and payment of $70,000.00 to the testator's grandchildren. Determination of the heirs as of 1942 would lead to the absurd result that Laura Wendell, who died in 1953, would receive an interest in the void bequest nearly 40 years after her death. Accordingly, we conclude that the testator's dispositive scheme reflects his intention that his heirs be determined at the conclusion of the life estates. Compare with Barr v. Denney, see supra, where the testator's heirs were determined at the end of a life estate in favor of the testator's wife. -10- At the end of the life estates of Laura and Francis Wendell, Harry Wendell's heirs are his grandsons, Clyde and Glenn Wendell. 1 R.C. 2105.06(A). Accordingly, the trial court erred when it joined Clara Wendell and the estate of Francis Wendell as parties in this case, because they are not entitled to receive any portion of the void charitable bequests. Appellants' second assignment of error is sustained. III. Appellees, the American Bible Society and Board of National Missions of the United Presbyterian Church in the U.S.A. assigned two errors pursuant to R.C. 2505.22. The first assignment of error reads as follows: THE LOWER COURT ERRED IN FAILING TO SUMMARILY DISMISS APPELLANTS' COMPLAINT DUE TO THEIR LACK OF STANDING TO INVOKE THE PROVISIONS OF OHIO G.C. SEC. 10504-5. R.C. 2721.05 provides in pertinent part as follows: Any person interested . . . in . . . the estate of a decedent, . . . may have a declaration of rights or legal relations in respect thereto in any of the following cases: (A) To ascertain any class of creditors, devisee, legatees, heirs, next of kin, or others; (B) To direct the executors, administrators, trustees, or other fiduciaries to do or abstain from doing any particular act in their fiduciary capacity; (C) To determine any question arising in the administration of the estate or trust, including questions of construction of wills and other writings. 1 Where determination of heirs is delayed, the law in effect at the time of the delayed determination applies. Tiedtke v. Tiedtke, see supra, paragraph two of the syllabus. -11- Since we have determined that Glenn and Clyde Wendell have interests in Harry Wendell's disputed charitable bequest, the trial court did not err when it refused to dismiss their complaint due to lack of standing. Appellees' first assignment of error is overruled. IV. Appellees' second and third assignments of error read as follows: THE LOWER COURT ERRED, FOLLOWING ITS INVALIDATION OF OHIO G.C. SEC. 10504-5 ON CONSTITUTIONAL GROUNDS, IN REFUSING TO IMMEDIATELY APPLY SUCH RULING TO THE CONTESTING PARTIES. APPELLANTS FAILED TO SATISFY ANY OF THE TESTS ESTABLISHED BY THE UNITED STATES SUPREME COURT IN ORDER TO AVOID THE IMPACT OF THE INVALIDATION OF OHIO G.C. SEC. 10504-5. We have already determined that the unconstitutionality of G.C. 10504-5 should not be applied to the parties in this case pursuant to Chevron Oil Co. v. Huson, see supra. Appellees' second and third assignments of error are overruled. Reversed and remanded for further proceedings consistent with this opinion. -12- This cause is reversed and remanded for further proceedings consistent with this opinion. It is, therefore, considered that said appellants recover of said appellees their costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. FRANCIS E. SWEENEY, J., and JAMES D. SWEENEY, J., CONCUR. JOSEPH J. NAHRA PRESIDING JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time it will become the judgment and order of the court and time period for review will begin to run. .