Estate of Ruhland, Matter of

• Decision Date: 21 March 1990
• Docket Number: No. 89-22,89-22
• Citation: 452 N.W.2d 417
• Parties: In the Matter of the ESTATE OF John RUHLAND, Deceased. Elizabeth M. MEYLOR, Appellant, v. Doris RUHLAND, Renee Ruhland Hilger, William Ruhland, Michael Ruhland and Kyle Ruhland, Appellees. Doris RUHLAND, Renee Ruhland Hilger, William Ruhland, Michael Ruhland and Kyle Ruhland, Plaintiffs, v. Arthur N. RUHLAND, Benedict J. Ruhland, Anthony M. Ruhland, and Lorina Ruhland Droessler, Defendants.
• Court: Iowa Supreme Court

Page 417

452 N.W.2d 417

In the Matter of the ESTATE OF John RUHLAND, Deceased.

Elizabeth M. MEYLOR, Appellant, v.Doris RUHLAND, Renee Ruhland Hilger, William Ruhland, Michael Ruhland and Kyle Ruhland, Appellees.

Doris RUHLAND, Renee Ruhland Hilger, William Ruhland, Michael Ruhland and Kyle Ruhland, Plaintiffs, v.Arthur N. RUHLAND, Benedict J. Ruhland, Anthony M. Ruhland, and Lorina Ruhland Droessler, Defendants.

No. 89-22.

Supreme Court of Iowa.

March 21, 1990.

Charles F. Knudson of Knudson Law Firm, Marcus, for appellant.

William S. Sturgis, LeMars, and Joe Cosgrove, Yaneff & Cosgrove, Sioux City, for appellees.

Considered by HARRIS, P.J., and SCHULTZ, LAVORATO, SNELL, and ANDREASEN, JJ.

SNELL, Justice.

This is a proceeding to construe the joint will of John and Elizabeth M. Ruhland.By this will a forty-acre farm in Plymouth county was devised.In paragraphs eleven and twelve, John's wife Elizabeth was devised a life estate in the forty acres.The disposition of the remainder interest forms the basis for this law suit.

Petitioner, Elizabeth M. Meylor, daughter of testators John and Elizabeth, claims that she succeeded to the title upon the failure of the preceding remainder estate in her brother, Francis.The heirs of Francis claim the remainder arguing that the remainder to Francis did not depend on his surviving the life tenant.The trial court held that the remainder interest to Francis was a vested remainder subject to complete divestment.Elizabeth M. Meylor, petitioner, has appealed.

John Ruhland died in 1959; his son Francis died in 1971.John's wife, Elizabeth Ruhland, died in 1986.This proceeding for will construction is brought in the John Ruhland estate.

Paragraph eleven of the will provided:

I John Ruhland hereby devise unto my wife, Elizabeth M. Ruhland, if she survive me, a life estate in all my real property during her lifetime, she to have the use, possession, rents and profits therefrom as long as she lives and be charged with the payment of the taxes.

Paragraph twenty of the will provided:

I John Ruhland do hereby devise the remainder interests in the following described real estate, to wit; the northwest quarter (N.W. 1/4) of the northwest quarter (N.W. 1/4) of section thirty-five (35) in township ninety-one (91) north range forty-five (45), west of the 5th p.m., in Plymouth County, Iowa unto my son, Francis L. Ruhland providing he pay to my daughter, Elizabeth M. Meylor the sum of nine thousand ($9000) dollars within two years after the death of my wife, if she survive me, at the time of my death if my wife shall die first.In case my son Francis L. Ruhland shall fail to pay said nine thousand dollars to my said daughter within two years after said date of death of the survivor of us, then and in that case I devise the aforesaid real estate unto my daughter, Elizabeth M. Meylor absolutely and in fee simple, subject only to the life estate of my wife.

Other paragraphs of the will left property to the testator's other four children, all of whom survived the life tenant.No legal question is presented to us regarding property left to them.The heirs of Francis L. Ruhland tendered the sum of $9000 to Elizabeth M. Meylor after the death of Elizabeth M. Ruhland, which has been rejected pending the outcome of these proceedings.

In support of her position, Elizabeth makes three main arguments.First, that the payment of $9000 was a condition precedent as opposed to merely a charge or lien on the real estate, thus making the remainder a contingent remainder which was destroyed on the death of Francis before the termination of the life estate.Second, the language of the will demonstrates that the right to make payment was "personal" to Francis, to be performed by Francis only, thus imposing a condition precedent of survival.Third, the scheme of distribution shows the testator's intent that the property goes to Elizabeth M. Meylor rather than to the heirs of Francis.In response the heirs of Francis claim that the remainder to him was vested at the death of John Ruhland.They also assert that it is immaterial whether the remainder is contingent or vested because a contingent remainder has long been recognized as inheritable and devisable.They also claim that the will does not evidence an intent that only children of the testator shall take to the exclusion of heirs of the children.

The law of future interests, while ostensibly one of the least transient areas of law, has still undergone change.On whether intent of the testator is controlling one noted text writer has said:

One thing is clear: that no amount of intent that the legal consequences of a vested remainder will attach to an interest can make it a vested remainder, if certain requisites are absent.Nor will a remainder be contingent merely because a testator has said it is not to vest until a subsequent period.The test is not simply a matter of the intent to bring about the legal consequences of a vested or of a contingent remainder, as the case may be.It is true, the courts frequently say that the difference between a vested and contingent interest is a matter of intent.But, when that statement is made, it means, or should mean, that a remainder is vested or contingent depending on the existence or absence of an intent that there be no condition precedent attached to the limitation.

Simes & Smith, The Law of Future Interests2d ed. p 140 at 125-26(1936).In modern law, there is a dislike for contingent interests because they are thought to restrict alienability.As a result interests are construed as vested rather than contingent whenever possible.SeeFulton v. Fulton, 179 Iowa 948, 951, 162 N.W. 253, 254(1917);Schrader v. Schrader, 158 Iowa 85, 93, 139 N.W. 160, 163(1912).

Yet in Henkel v. Auchstetter, 240 Iowa 1367, 1375, 39 N.W.2d 650, 654(1949), we said:

The favoritism for the vesting of remainders came about in order to nullify the many burdensome technicalities of the feudal system with respect to contingent remainders.Many of the reasons which generated the favoritism have long been nonexistent.It is no longer an important rule of construction, and should not be.As said by Justice Evans in Fulton v. Fulton, 179 Iowa 948, 966, 162 N.W. 253, 258, L.R.A.1918 E1080: "The dominant rule of construction with us is that the intent of the testator, as it is fairly gathered from the will, must prevail."

The "divide and pay-over rule," which held that a testamentary direction rendered a remainder contingent, was the basis for Iowa law for many years.That rule was eliminated by Atchison v. Francis, 182 Iowa 37, 50, 165 N.W. 587, 591(1917).In Lytle v. Guilliams, 241 Iowa 523, 528-29, 41 N.W.2d 668, 671(1950), we said:

The "divide and pay-over rule" is an artificial concept which sheds no light upon the basic question of expressed testatorial intent.In this jurisdiction its use has resulted in frequent confusion and in an incorrect result in the first division of In re Estate of Phearman, 211 Iowa 1137, 232 N.W. 826, 82 A.L.R. 674, and possibly in some other cases.We overrule the doctrine of the first division of the Phearman case and hold the "divide and pay-over rule" should not be given weight in determining the existence of a requirement of survival to the date of distribution.

At common law a contingent remainder failed if the contingent remainderman did not live until the condition precedent had occurred.The principle was stated in Schau v. Cecil, 257 Iowa 1296, 1301, 136 N.W.2d 515, 519(1965): "When one takes only a contingent remainder in real estate conditioned upon the happening of a future event he must live until the event occurs in order to take any interest in the real estate."Upon enactment of Iowa Code section 557.7 the principle was rendered obsolete; the common-law destructibility rule was itself destroyed.SeeDavies v. Radford, 433 N.W.2d 704, 705(Iowa1988).

Although for a time it was uncertain whether Iowa law embraced the "New York Rule," it is now clear that the common-law explanation of the difference between contingent and vested remainders has been the basis for our law.Clarken v. Brown, 258 Iowa 18, 23-24, 137 N.W.2d 376, 379(1965);Henkel v. Auchstetter, 240 Iowa 1367, 1380-81, 39 N.W.2d 650, 657-58(1949).In Lincoln J.S.L. Bank v. Mitchell, 239 Iowa 995, 33 N.W.2d 388(1948), this court stated:

In a vested remainder "the estate is invariably fixed to remain to certain determinate persons."A remainder is contingent "where the estate in remainder is limited to take effect either to a dubious or uncertain person or upon a dubious or uncertain event."

Id. at 1000-01, 33 N.W.2d at 391(quotingFulton v. Fulton, 179 Iowa 948, 957, 162 N.W. 253, 256(1917)).More often than not, however, a discussion in the cases of whether an interest is contingent or vested is irrelevant.The result is the same whether the court finds an interest contingent (i.e., subject to a condition precedent that the taker survive until a certain time) or vested subject to being defeated by death before the time of distribution.In either case, the interest is destroyed when the taker fails to survive.

In light of the foregoing, the emphasis in case analysis should be placed upon determining what language in the dispositive instrument will be construed as imposing a condition of survival.Two primary factors are involved.The first relates to the form of the particular limitation; the second to the construction of the language used therein.An adequate analysis requires taking fact situations and analyzing them separately.

In Lytle v. Guilliams, 241 Iowa 523, 41 N.W.2d 668(1950), the testator willed his real property to his wife for life and that at the death of his wife his real property to be divided among his children as follows:

I will to Harry Roberts all the personal property of my estate that may be remaining at the death of my wife, and all the real property above mentioned;...