Board of National Missions v. Smith

• Decision Date: 21 June 1950
• Docket Number: No. 10040.,10040.
• Parties: BOARD OF NATIONAL MISSIONS OF PRESBYTERIAN CHURCH IN THE UNITED STATES v. SMITH.
• Court: U.S. Court of Appeals — Seventh Circuit

182 F.2d 362 (1950)

BOARD OF NATIONAL MISSIONS OF PRESBYTERIAN CHURCH IN THE UNITED STATES v. SMITH.

No. 10040.

United States Court of Appeals Seventh Circuit.

May 24, 1950.

Rehearing Denied June 21, 1950.

Edward M. Burke, Chicago, Illinois, John Sebat, Danville, Illinois, Jones, Sebat, Stipp & Swanson, Danville, Illinois, Loesch, Scofield & Burke, Chicago, Illinois, for appellant.

W. M. Acton, Harvey H. Acton, Danville, Illinois, Acton, Acton, Baldwin & Bookwalter, Donald S. Baldwin, Danville, Illinois, for defendant-appellee.

Before FINNEGAN and SWAIM, Circuit Judges, and BRIGGLE, District Judge.

SWAIM, Circuit Judge.

This is an appeal from a summary judgment dismissing plaintiff-appellant's complaint as to defendant-appellee, Nathaniel C. Smith.

The plaintiff claims that under the ninth paragraph of the will of W. C. Rankin, deceased, it has a remainder interest in an undivided one-half of real property which was "the home of" the testator, W. C. Rankin.

The Rankin will was executed July 19, 1928. On August 18, 1932, W. C. Rankin and his wife, Olive L. Rankin, conveyed the real estate involved by warranty deed to Martha Rankin, a sister of W. C. Rankin. This deed was recorded August 24, 1932. On March 2, 1933, Martha Rankin executed a "Declaration of Trust" wherein she stated that she held legal title to the property in trust for the benefit of Rankin and his wife; that upon the written request of both W. C. Rankin and Olive L. Rankin the trustee would reconvey the property in their lifetime to either of them, as they might direct; and that upon the death of either, she would forthwith and without demand convey the property to the survivor. Concurrently with the execution of the Declaration of Trust and according to its terms Martha Rankin executed, but did not then record, two warranty deeds for the property, one to W. C. Rankin and the other to Olive L. Rankin. She also agreed that upon the death of either she would promptly deliver the deed conveying the property to the survivor. The Declaration of Trust further provided that the trustee would permit the premises to be wholly occupied and possessed by Olive L. Rankin with full power to manage and control the possession thereof until the termination of the trust. For such control and possession Olive L. Rankin was to pay a nominal consideration to the trustee who was to account therefor to W. C. Rankin. The Declaration of Trust was not recorded.

W. C. Rankin died June 16, 1943, and on June 23, his will was probated. On June 28, the deed which Martha Rankin had executed March 2, 1933, to Olive L. Rankin was delivered and recorded.

During all the period prior to his death, Rankin and his wife continued to occupy the premises as their home. After his death, his widow, Olive L. Rankin, remained in possession of the property until September 4, 1943, at which time she delivered possession to the defendant Smith, pursuant to an unrecorded contract of sale for $20,000 entered into between her and Smith on September 2, 1943. A copy of the contract, together with a warranty deed of the same date from Olive L. Rankin to Smith, was placed in escrow with a bank, to be delivered to Smith upon payment of the balance of the purchase price.

When the plaintiff filed its original complaint on November 16, 1944, asserting its remainder interest in the real estate involved, Smith was not named as a defendant. On August 11, 1945, Smith paid the balance of the purchase price and then received and recorded his deed from Olive L. Rankin. Almost four years later, on June 11, 1949, the plaintiff filed an amended and supplemental complaint in which Smith was named a party defendant. Smith then filed an answer to the plaintiff's complaint, together with a motion for summary judgment and an affidavit in support thereof. In this answer Smith contended that he was a bona fide purchaser for value; that the abstract of title showed no interest in the plaintiff at the time that he purchased said property; and that he paid a reasonable and fair consideration for the premises, namely $20,000. The defendant also set out that when he went into possession of the premises and made a down payment thereon, on September 4, 1943, he had no actual or constructive notice of the plaintiff's claim.

The plaintiff insists that Smith's claim to this property is invalid for two reasons. The plaintiff contends that the deed of Rankin and his wife to his sister, Martha, under the trust agreement whereby Martha was to make two deeds, one to Rankin and one to his wife, and after the death of either was to deliver to the other the deed conveying the land to the other, all amounted to an attempted testamentary disposition which was invalid because not executed in conformity with the Illinois statutes governing the execution of wills; and plaintiff also contends that Rankin's will gave his widow only a life estate without a power of disposition.

If the law is against the plaintiff on either of these contentions, the conveyance by Olive Rankin to the defendant Smith is valid and plaintiff must fail in this appeal.

The District Court, without expressly passing on the validity of the deed from Rankin and his wife to the trustee and the deed from the trustee to Rankin's widow, held that Rankin's will gave his widow a life estate with a power to sell and convey the fee and on that ground entered a summary judgment against the plaintiff. The plaintiff insists, however, that the defendant's motion for a summary judgment did not raise the issue of the construction of the will since the defendant's answer and motion were confined solely to the proposition that Olive L. Rankin was in possession and held a clear fee simple record title to the property when the defendant, in good faith and for a fair consideration, purchased said property. The plaintiff, therefore, contends that the District Court committed error in granting defendant's motion for summary judgment on the question of the construction of Rankin's will.

However, Rule 56(c) of the Federal Rules of Civil Procedure, 28 U.S.C.A., provides that: "The judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

In our opinion pleadings before the District Court did show that there was no genuine issue as to any material fact and also showed as a matter of law that the defendant was entitled to a summary judgment on his motion. The fact that the judgment was granted on a reason different from that assigned by the defendant is immaterial, where, as here, the motion was properly granted on the undisputed facts shown and on an issue presented by plaintiff's complaint. On the question of the power given to Olive L. Rankin by her husband's will, the following three paragraphs of the will are pertinent:

"Second: I give, devise and bequeath to my wife, Olive L. Rankin, for and during the term of her natural life, the following described property: My home in Vermilion County * * *.

"Ninth: It is my will and I direct that any life tenant named herein shall use the property devised to them as they see fit, with full power to sell, mortgage, reinvest or use the proceeds as they see fit, giving them and each of them power to make, execute and deliver deed, mortgages, notes, or other necessary papers that may be necessary to carry out their desires in the handling of the property herein devised to said respective life tenants.

"Tenth: Upon the death of the survivor of my wife and sisters, * * * I give, devise and bequeath the rest, residue and remainder of my estate, * * * remaining after the death of the survivor * * * to the Board of National Missions of the Presbyterian Church * * *."

The second paragraph clearly gave to the widow a life estate, and the tenth paragraph...