Coston v. Portland Trust Co.

• Decision Date: 19 November 1929
• Citation: Coston v. Portland Trust Co., 131 Or. 71, 282 P. 442 (Or. 1929)
• Parties: COSTON v. PORTLAND TRUST CO. ET AL.
• Court: Oregon Supreme Court

282 P. 442

131 Or. 71

COSTON v. PORTLAND TRUST CO. ET AL.

Supreme Court of Oregon

November 19, 1929

In Bank.

Appeal from Circuit Court, Multnomah County; Louis P. Hewitt, Judge.

On petition for rehearing. Denied.

For former opinion, see 278 P. 586.

Jerry E. Bronaugh, of Portland, for appellants.

Oren Richards, of Portland, for respondent Coston.

Crum Murdoch & Dusenbery, of Portland, for respondent Portland Trust Company.

Tom Garland, of Portland, in pro. per.

Ridgway Johnson & Kendall, of Portland, amicus curiæ, for Trust Companies' Association of Oregon.

McDonnell Brown, of Portland, for intervener.

COSHOW C.J.

The appealing defendants have petitioned for a rehearing. An argument in favor of a rehearing has been presented by Trust Companies' Association of Oregon as amicus curiæ. It must be remembered that defendant Portland Trust Company did not appeal and will be considered satisfied with the decree of the circuit court. Coast Engine & Machine Works v. Barbee et al. (Or., decided July 16, 1929) 279 P. 264; Davis v. Davis, 123 Or. 667, 263 P. 914; Adams v. Kennard, 122 Or. 84, 96, 222 P. 1092, 227 P. 738, 253 P. 1048; Ontario Advancement Co. v. Stevens, 113 Or 564, 231 P. 127; Johnson v. Prineville, 100 Or. 105 118, 119, 196 P. 817; Crumbley v. Crumbley, 94 Or. 617, 186 P. 423; Caro v. Wollenberg, 83 Or. 311, 163 P. 94. "It is the duty of every judicial tribunal to determine rights of persons or property which are actually involved in the particular case before it. As the Supreme Court had occasion to say in California v. San Pablo & Tulare Railroad, 149 U.S. 308, 314, 13 S.Ct. 876, 878 (37 L.Ed. 747): 'The court is not empowered to decide moot questions or abstract propositions, or to declare, for the government of future cases, principles or rules of law which cannot affect the result as to the thing in issue in the case before it. No stipulation of parties, or counsel, whether in the case before the court, or in any other case, can enlarge the power, or affect the duty, of the court in this regard.' " Panama R. Co. v. Johnson [C. C. A.] 289 F. 964, 972. We cannot, therefore, consider the interests of any defendants excepting Mary Jane Herron, Ruth E. Peck, Vaughn Anstine, and John Anstine who appealed.

In their behalf it is earnestly contended that the trust was valid and should have been sustained. The brief of learned counsel as amicus curiæ is quite lengthy and manifests much industry examining and searching authorities. Much is written therein besides the points decided.

Stress is placed on the language and terms used in our opinion. Notwithstanding the word "deed" is used in its broad sense as clearly appears from the context, rather than in its restricted meaning as a conveyance of real property, much labor and time is expended in order to prove that the writer of the former opinion was wrong in his conclusions as well as unfortunate in his choice of words. The former opinion mentions several times that the trust deed was not recorded. The context clearly shows reference is thereby made to the agreement expressing or declaring the trust. A deed is defined as, "A written instrument under seal, containing a contract or agreement which has been delivered by the party to be bound and accepted by the obligee or covenantee." 1 Bouv. Law Dict. 811. The trust agreement in the instant case answers the description perfectly.

The deed conveying the land from the trustor to the trustee was an ordinary conveyance without any conditions, qualifications, or trust provisions. We learn that it was intended as a trust from extraneous evidence entirely. The reservations in the arrangements between the contracting parties in favor of the trustor were secret. The word "trust" or "trustee" does not appear in the conveyance. In the expression "that the trustor held every indicia of ownership" too much is expressed. But in this connection it must be admitted that the conveyance to the trustee was impliedly excepted. The opinion states that the trustee held only the naked legal title. Every indicia of ownership was secretly retained by the grantor excepting the bare legal title. The record also discloses that not only did the trustor reserve secretly the right to revoke the trust, and to dispose of the property, but also that she did actually dispose of the property, after executing the deed and trust agreement, by her last will and testament which has been duly probated. Plaintiff is the duly appointed administrator of said trustor's estate with said will annexed.

Petitioners for rehearing seem to overlook the expression in the former opinion that the arrangement between the trustor and trustee is valid as between them, but invalid as to creditors.

As the case stands here, it is a contest between Coston as administrator, and Mary Jane Herron and the other beneficiaries of the alleged trust. In other words, shall the beneficiaries of the trust agreement be preferred to the creditors of the trustor? We think the decedent trustor intended that her creditors would be paid out of her property, otherwise she would not have executed her last will and testament as and when she did. If the position taken by appellants with regard to the trust agreement and deed be sound, would the decedent trustor have executed her last will and testament as and when she did? The beneficiaries of her alleged trust and the devisees and legatees of her will are identical. If they receive under the deed, shown to have been given in trust by the trust agreement, her creditors will remain unpaid. If those same parties receive under the will, as the writer believes beyond doubt the decedent Netta A. Garland intended, her creditors will be paid and her beneficiaries receive all that they are entitled to. The court should not be an instrument of injustice by preventing creditors from collecting from an estate the just obligations owing them by the decedent. Particularly is this true when the conduct of the decedent, as shown by her last will and testament, indicates that she intended her creditors to be paid. To hold otherwise is to do dishonor to the name of the decedent. The decedent was an attorney and would not have executed her will if her arrangement with defendant trust company had been sufficient to pass the property absolutely to that company for the benefit and use of the appealing defendants.

Or. L. § 10169, voids all deeds of gift and conveyances, as well as all transfers or assignments, verbal or written, of goods and chattels, or things in action, made in trust for the person making the same as against the creditors, existing or subsequent, of such person. It is argued, however, that said section 10169 relates to personal property only. No reason has been assigned, or can be, why a secret trust in favor of the grantor of real property should not be void as to creditors as well as a secret trust in favor of the transferor of personal property. It is contended that inasmuch as the compilers for a long time have entitled this section "Transfers of Personal Property, When Void," therefore said section refers only to personal property; but both of the expressions "deeds of gift" and "conveyances" are applicable to the transfer of the title to real property and are not properly used in designating the transfer of personal property. The statute in question is an old one. It was passed January 16, 1854. It was section 11, title 2, in the chapter entitled "An act relating to fraudulent conveyances" (chapter 1, p. 525), in the statutes of Oregon of 1854-55. Title 1 of said chapter is devoted to fraudulent conveyances dealing exclusively with land and the rents and profits of lands and charges upon land, or the rents and profits thereof. Title 2 deals with both land and goods and chattels. Section 11 is intended to cover every form of property, both real and personal. Title 3 of the chapter covers general provisions relating to titles 1 and 2 of said chapter. Section 32 of title 3 of said chapter reads as follows: "The term 'conveyance,' as used in this chapter, shall be construed to embrace every instrument in writing, except a last will and testament whatever may be its form, and by whatever name it may be known in law, by which any estate or interest in lands is created, aliened, assigned or surrendered." In the same statute as compiled by Deady and Lane entitled General Laws of Oregon from 1843 to 1872, the corresponding section to said section of General Laws of 1855 reads as follows: "The term 'conveyance,' as used in Titles II, III and IV of this chapter, shall be construed to embrace every instrument in writing, except a last will and testament, whatever may be its form, and by whatever name it may be known in law, by which any estate or interest in lands is created, aliened, assigned or surrendered." Section 57, title 4, chapter 6, Misc. Laws, Gen. L. of Oregon, 1843-1872. The word "conveyance" appears only once in said title 3, and that is in section 45 thereof. Said section 10169 is identical with section 45 of said title 3 by Deady and Lane. The section defining the word "conveyance" as used in Or. L. is section 10176 thereof. There has been no material change in the language of these sections since the enactment of the statute in 1854. Why the Legislature should have specifically referred to the title relating to personal property when defining the word "conveyance," unless it intended that the word "conveyance" as therein used related to real property, has not been explained, nor can it be. That said title is devoted mainly to personal property is not questioned. There is no doubt about the statute referring to personal property. That is not a controverted question. But that it was intended to refer to real property...