Colbo v. Buyer

• Decision Date: 30 April 1956
• Docket Number: No. 29420,29420
• Citation: 134 N.E.2d 45,235 Ind. 518
• Parties: edward H. COLBO, Anna Swing, Appellants, v. Jennie BUYER, Zora Colbo, Leslie W. Colbo, Kate Colbo, Benjamin Swing, Appellees.
• Court: Indiana Supreme Court

Page 45

134 N.E.2d 45

235 Ind. 518

edward H. COLBO, Anna Swing, Appellants, v. Jennie BUYER, Zora Colbo, Leslie W. Colbo, Kate Colbo Benjamin Swing, Appellees.

No. 29420.

Supreme Court of Indiana.

April 30, 1956.

Albert H. Cole, Jr., Russel J. Wildman and Albert Harvey Cole, Peru, for appellants.

Louis A. Reidelbach and Lester L. Wilson, Winamac, Irving M. Fauvre, David L. Chambers, Jr., Michael D. Fansler and Michael L. Fansler, Indianapolis, for appellee Jennie Colbo Buyer.

EMMERT, Judge.

Our decision in this case depends upon whether or not the settlor, John H. Colbo, had the power to revoke a trust agreement for 210 acres of land in Pulaski County. The trial court held that he did, and appellants' motion for a new trial questions the sufficiency of the evidence to sustain such a finding.

On October 11, 1930, John H. Colbo, hereinafter referred to as the settlor, was the owner of the real estate in controversy. He was a widower, and his only children were Edward H. Colbo, Leslie W. Colbo, Anna Swing and Jennie Colbo Buyer.

On this date the settlor and his daughter, the appellee Jennie Colbo Buyer, hereinafter referred to as the trustee, executed a trust agreement which had been prepared by the settlor's lawyer. The material parts of the trust agreement follow:

'Agreement.

'This Agreement, made and entered into this 11th day of October, 1930, by and between John H. Colbo, Francesville, Pulaski County, Indiana,

'Whereas, the said John H. Colbo is about to Quit Claim to Jennie Colbo Buyer by a General Quit Claim Deed, the following described real estate: [the description of 210 acres of land, more or less].

'It is agreed that the said Jennie Colbo Buyer is to hold said lands in Trust for the said John H. Colbo during the term of his natural life and in the event of death of the said John H. Colbo, it is agreed by the parties hereto that the said Jennie Colbo Buyer, her heirs or assigns or administrators, is to and will convey or cause to be conveyed by General Quit-Claim Deed (within 60-days after the death of the said John H. Colbo) to Leslie L. Colbo of Climax, Saskatchewan, Canada; Anna Colbo Swing of Francesville, Pulaski County, Indiana, and Edward Colbo of Peru, Miami County, Indiana, each the undivided one-fourth (1/4) interest in and to the above [above] described farm of 210-acres, more or less, and it is futher agreed by and between the parties hereto that the said Jennie Colbo Buyer, her heirs, assigns or administrator, will not sell nor offer for sale nor deed nor encumber said lands during this Trust.'

Contemporaneously with the execution of the declaration of trust the settlor executed a quitclaim deed for this real estate, conveying in to the trustee, which deed was duly recorded October 14, 1930, in the Recorder's Office of Pulaski County.

During the same month the quitclaim deed and the trust agreement were executed, the trustee wrote letters to her brothers Edward H. Colbo and Leslie W. Colbo informing them in general that her father had executed the deed to her, and she had exeecuted the contract so that if anything happened to the settlor the property would be divided equally among the children. She made other statements in some of the letters about the legal effect of the instruments, and in one letter claimed that she and her husband had deeded the real estate back to the father, which deed he was keeping in a lockbox at the Winamac National Bank.

This purported deed of reconveyance was never recorded nor was its existence proved in any way except her statement in the letter. If it was a valid conveyance and the legal and equitable title to the real estate was reconveyed to the settlor, this case should be reversed, for the settlor died intestate and the four children would inherit it equally. Therefore it becomes unnecessary to further discuss the possibility of this reconveyance.

On October 5, 1934, the settlor, the trustee and her husband executed a mortgage on the real estate which was recorded October 8, 1934, but this mortgage was paid in full and released on October 28, 1935, so no rights were asserted under it. Before the execution of this mortgage and no November 21, 1933, the settlor and the trustee and her husband executed the following contract:

'Articles of agreement made and entered into by and between John H. Colbo, Party of the first part and Jennie Colbo Buyer and Clarence C. Buyer, her husband, party of the second part.

'Witnesseth:--That whereas at the time of the conveyance by the party of the first part to party of the second part the following described real estate in Pulaski County and State of Indiana:----

'[Description of real estate.]

'The parties entered into a written agreement whereby party of the second part agreed that in the event of the death of first party that the party of the second part would convey a part of said real estate to the other heirs of party of the first part in consideration of a valuable consideration and by mutual agreement by the parties hereto, said contract is hereby cancelled and hereby declared null and void.'

This instrument was never recorded, and the settlor's other children did not become advised of its existence until after the settlor's death.

The trust agreement fully satisfied the requirements of § 56-601, Burns' 1951 Replacement, as to being evidenced by a writing signed by the party creating the trust. Other applicable sections of "An act concerning trusts and powers" (Chapter 113, Acts 1852) are as follows:

'A grantor of lands reserving an absolute power of revocation shall be deemed an absolute owner, as regards creditors and purchasers.' Section 56-610, Burns' 1951 Replacement.

'Every power, beneficial or in trust, shall be irrevocable, unless an authority to revoke it is reserved in the instrument creating the same.' Section 65-613, Burns' 1951 Replacement.

It was not necessary that the deed contain the terms of the trust. Nesbitt v. Stevens, 1903, 161 Ind. 519, 522, 69 N.E. 256. The fact that there was no consideration moving from the beneficiaries to the settlor, with the exception of the trustee who was also a beneficiary, did not invalidate the trust. Copeland v. Summers, 1893, 138 Ind. 219, 224, 35 N.E. 514, 37 N.E. 971; Ellison v. Ganiard, 1906, 167 Ind. 471, 79 N.E. 450; Crawfordsville Tr. Co. v. Elston Bank & Tr. Co., 1940, 216 Ind. 596, 25 N.E.2d 626. Nor does the fact that the trust agreement was not recorded invalidate it. Ellison v. Ganiard, 1906, 167 Ind. 471, 79 N.E. 450, supra.

The trust agreement and the settlor's deed constituted one transaction, done under the advice of the settlor's counsel. There is nothing ambiguous in the terms of the trust, and the two instruments constituted one integrated transaction. Under such circumstances the parol evidence rule prohibits any attempt by the parties to add to, vary or change the terms of the trust.

'Under the parol evidence rule, if the manifestation of intention of the settlor is integrated in a writing, that is, if a written instrument is adopted by him as the complete expression of his intention, extrinsic evidence, in the absence of fraud, duress, mistake or other ground for reformation or rescission, is not admissible to contradict or vary it. On the other hand, if the meaning of the writing is uncertain or ambiguous, evidence of the circumstances is admissible to determine its interpretation. * * * It is only where there is an equitable ground for reformation or rescission, such as fraud, duress, undue influence or mistake, that such evidence is admissible.' 1 Scott, Trusts, § 38, pp. 226, 227.

'If a declaration of trust is in writing, oral evidence to show that the terms of the trust were different from those appearing in the writing will clearly be inadmissible under the parol evidence rule.' 1 Bogert, Trusts and Trustees, § 51, p. 373.

'Where a trust is created and the manifestation of intention of the settlor with respect to the trust is integrated in writing, that is, is adopted by the settlor as the complete expression of his intention, and there is no provision in the trust instrument as to the power of the settlor to rovoke the trust, the trust is not revocable by the settlor, although he received no consideration for creating the trust.' 2 Restatement, Trusts § 330(b), p. 985. See also Brunson v. Henry, 1894, 140 Ind. 455, 39 N.E. 256. Nor is this court at liberty to rewrite the trust agreement any more than it is at liberty to rewrite contracts. Downey v. Mayr, 1932, 95 Ind.App. 179, 182 N.E. 872.

The trust agreement was in the nature of a family settlement, which the law favors. Hadley v. Kays, 1951, 121 Ind.App. 112, 128, 98 N.E.2d 237. The provisions in favor of the beneficiaries were advantageous to them, and the law should and does presume an acceptance on their part. Henderson v. McDonald, 1882, 84 Ind. 149, 153. Upon the execution of the instruments, the settlor's children became vested with an equitable remainder in fee, and in the absence of fraud or mistake the trustee could not repudiate the trust as to any beneficiary without his consent. Copeland v. Summers, 1893, 138 Ind. 219, 35 N.E. 514, 37 N.E. 971, supra; Terre Haute Trust Co. v. Scott, 1932, 94 Ind.App. 461, 467, 181 N.E. 369; Rottger v. First-merchants' Nat. Bank, 1933, 98 Ind.App. 139, 152, 184 N.E. 267.

The appellee, Jennie Colbo Buyer, asserts that she is the owner in fee simple of the real estate upon the authority of Ewing v. Wilson, 1892, 132 Ind. 223, 31 N.E. 64, 19 L.R.A. 767. The facts in this case resulted in several appeals to this court: Ewing v. Jones, 1892, 130 Ind. 247, 29 N.E. 1057, 15 L.R.A. 75; Ewing v. Carson, 1892, 130 Ind. 597, 29 N.E. 1061; Ewing v. Lemcke, 1892, 130 Ind. 600, 29 N.E. 1061; Ewing v. Torign, 1892, 130 Ind. 600, 29 N.E. 1061; Ewing v. Lutz, 1892, 131 Ind. 361, 30 N.E. 1069; Ewing v. Bass, 1897, 149 Ind. 1, 48 N.E. 241. The relevant portions of the trust deed are set out in Ewing v. Jones, 1892, 130...