First Citizens Nat'l Bank for Will Wray vs. Janice Wray

This case involves a trust. The decedent established a trust in his will. His son-in-law and a bank were designated as co-trustees. A parcel of property with a home was placed into the trust. The trust allowed one of the beneficiaries, the decedent's grandson, and his wife to live in the house at no charge. The beneficiary and his wife divorced, and as part of their marital dissolution agreement, the beneficiary gave his ex-wife his possessory interest in the home, at no charge. The son-in-law/trustee died, leaving the bank as the sole trustee. The bank required the ex-wife to begin paying rent; she declined. The bank then filed the instant lawsuit against the ex-wife for past rent from the time they first requested rent from her, and also a declaratory judgment permitting the bank to sell the home. The trial court found that the trustees ratified the terms of the MDA between the beneficiary and the ex-wife, allowing her to remain in the home rent-free until the trust expired. The bank appeals. We reverse, finding that the trustees could not ratify the MDA, a contract to which the trust was not a party.