Gottstein v. Hedges, 39616.

• Decision Date: 13 December 1929
• Docket Number: No. 39616.,39616.
• Citation: 228 N.W. 93,210 Iowa 272
• Parties: GOTTSTEIN v. HEDGES ET AL.
• Court: Iowa Supreme Court

210 Iowa 272

228 N.W. 93

GOTTSTEIN

v.HEDGES ET AL.

No. 39616.

Supreme Court of Iowa.

Dec. 13, 1929.

Appeal from District Court, Cass County; H. J. Mantz, Judge.

Creditor's suit to subject to payment of judgments against defendant Eda Hedges an annual interest charge imposed in her favor by a deed from her father, Peter Hopley, to her brother Wayland A. Hopley. Decree for defendants. Plaintiff appeals. Affirmed.

De Graff, J., dissenting.Parrish & Huston, of Des Moines, and E. M. Willard, of Atlantic, for appellant.

L. R. Forsyth, of Hamburg, and Swan, Martin & Martin, of Atlantic, for appellees.

MORLING, J.

The facts are stipulated. Under date of January 14, 1922, Peter Hopley signed and acknowledged a deed to defendant Wayland A. Hopley of a tract of land “subject to grantee herein, his heirs or assigns, paying to Wayland A. Hopley, Trustee, for the benefit of Eda May Hedges, the sum of $25,000 within ten years after the death of said grantor herein, with interest thereon at five per cent per annum from and after the March first following the death of said grantor herein, payable annually on March first of each year to said Eda May Hedges, during her natural life and at her death the said principal sum of $25,000 shall go to her surviving brothers and sisters, share and share alike, said Wayland A. Hopley being hereby named as the Trustee of said Trust Fund. * * * Said grantee, his heirs or assigns having the right to pay said principal sum to himself as such Trustee at any time before said ten year period. * * * Should said Wayland A. Hopley not survive said Eda May Hedges then at his death the court shall appoint his successor who shall administer said trust fund and pay the net income therefrom to said Eda May Hedges during her natural life as above provided, and at her death said principal of said trust fund to go to her surviving brothers and sisters. * * *” The deed was “delivered * * * to James G. Whitley to be held by him in escrow and to be delivered by the said James G. Whitley to the said Wayland A. Hopley upon the death of the said Peter Hopley * * * said deed was delivered by said James G. Whitley to said Wayland A. Hopley shortly after the death of Peter Hopley (which occurred March 9, 1926,) who accepted said deed.” The deed was recorded May 22, 1926.

Before the date of the deed, two judgments, and after its date, but in grantor's lifetime, a third judgment, were recovered by plaintiff against Eda (May) Hedges and Clarence Hedges in large amounts. Eda Hedges was insolvent for more than five years prior to the trial in May, 1928. Wayland A. Hopley, on May 26, 1926, purchased another judgment against Eda Hedges. The stipulation is “that the said Wayland Hopley claimed the right to retain the sum of $1,250 per annum until said judgment was satisfied;” “that said Wayland Hopley was notified on the ninth day of February, 1928, by Eda Hedges delivering to him a certain document of her intention not to accept the annuities created in her behalf by said deed * * * that this renunciation * * * is the first notice that Wayland Hopley had from his sister Eda Hedges in reference to her intention regarding said annuity and that he never paid her any sum or sums under said annuity; * * * that the said Eda Hedges had never assigned or taken any act in relation to said annuity; * * * that in his capacity as trustee, if such capacity now exists, he (Wayland Hopley) has received no sum or sums of money under the provisions of said deed, either as annuity or principal.” Eda Hedges, on February 9, 1928, executed an instrument by which she did “finally renounce and reject any and all benefits, interest, gifts and annuities which do, may or might accrue to” her under the deed in question “and all provisions of said deed * * * whether the same merely constitute a contract obligation in my behalf or as the beneficiary of a trust, either actual, constructive, resultant or implied.” Original notice in the present suit, accompanied by copy of the petition, was served on Wayland A. Hopley and Eda Hedges July 7 and 9, 1926.

Plaintiff's argument is: “The so-called renunciation was not a renunciation in the sense that renunciation is usually interpreted, because the grantee had accepted the deed which by its terms bound him to pay Eda Hedges a certain annual income. His acceptance of the grant with the reservation immediately vested in Eda Hedges a definite, certain, ascertainable property. This being true, the legal effect of the renunciation was a release or waiver in favor of the reversioners, the other heirs of Peter Hopley, who under the deed took upon the death of Eda Hedges. * * * the reservation in the deed in favor of Eda Hedges created in her an equitable interest in the land. It was a burden upon the land, attached to it, an equitable mortgage, which the grantee, Wayland Hopley, assumed to pay when he accepted the deed. * * * An absolute interest was established in favor of Eda Hedges and under the equitable proceedings her right and interest therein are reached by the lien therein established. * * * The $1,250 per year was intended by Peter Hopley, the grantor, to be a provision against want to his daughter, Eda. It was for her maintenance and support, and she acquired a mortgage or an equitable interest in this land when it was accepted by the grantee. * * * Eda Hedges had a property, a right and interest that was accessible to the lien under the statute, in equitable proceedings. If it was reached, then her renunciation does not avail her nor does it avail the reversioners anything.” Acceptance vested in Mrs. Hedges at once the interest payable to her. * * * She can waive, release or renounce as she desires and extinguish her right to the property, but not to the detriment of a creditor who had under equitable proceedings instituted by way of section 11815 of the Code of 1927 fastened upon this property an equitable lien before she renounced. * * * A covenant in a deed of a grantee is of much deeper legal import than any legacy in a will, because not a legatee is present in this case to make an acceptance, but the grantee of the deed did accept the land and thereby accepted for the beneficiary. * * * It took no express acceptance by Mrs. Hedges to make it good.”

[1][2][3] The provision made in the deed in favor of the judgment debtor was as to her a gift. We need not pause to discuss the question of who would take the gift in the event of renunciation by the donee. A gift, however created, whether by will or inter vivos, is wholly inoperative unless accepted by the donee. Cases post; 28 C. J. 643. A creditor of the donee has no such interest, legal or equitable, as to enable him to control the right of the donee to refuse acceptance or renounce the gift. Funk v. Grulke, 204 Iowa, 314, 213 N. W. 608;Schoonover v. Osborne, 193 Iowa, 474, 187 N. W. 20, 27 A. L. R. 465;Robertson v. Schard, 142 Iowa, 500, 119 N. W. 529, 134 Am. St. Rep. 430;Piekenbrock v. Knoer, 136 Iowa, 540, 114 N. W. 200;In re Stone's Estate, 132 Iowa, 136, 109 N. W. 455, 10 Ann. Cas. 1033. While acceptance of a gift which is beneficial to the donee and which imposes no burden upon him may be presumed (Kneeland v. Cowperthwaite, 138 Iowa, 193, 115 N. W. 1026;In re Bell's Estate, 150 Iowa, 725, 130 N. W. 798; 28 C. J. 672), the presumption prevails only in the absence of evidence of renunciation (Mahoney v. Martin, 72 Kan. 406, 83 P. 982). The donee may, notwithstanding the presumption, renounce the gift, and thereby nonacceptance is proved. Gray v. Nelson, 77 Iowa, 63, 41 N. W. 566, and cases above cited. The gift in the present case would, in view of the judgments against the donee, be of at least doubtful benefit to her. There might be various reasons (whether morally good or bad is legally immaterial) why she should prefer that its benefits go to her brothers and sisters or other heirs of her father rather than to her creditors. It is not argued that the delay in renouncing is such as to be evidence of acceptance. The record does not set out the original answer in this suit of the judgment debtor. By her substituted answer, she pleads the renunciation. The renunciation is fully established. The grantee in the deed, while by its acceptance he bound himself to pay the $25,000 and the interest to whoever would under the law be entitled to it, could not by his agreement to pay it bind the judgment debtor to an acceptance of the obligation as one to pay her or bind her to acceptance of it as a gift to her.

Affirmed.

ALBERT, C. J., and EVANS, FAVILLE, KINDIG, WAGNER, and GRIMM, JJ., concur.

STEVENS, J., not participating.

DE GRAFF, J. (dissenting).

I respectfully dissent to the pronouncement made by the majority as to the interpretation of the facts and the law as applied to the facts. This is an action in the nature of a creditor's bill. The plaintiff was a judgment creditor of the defendant Eda Hedges, and when he commenced his equitable action in conformity to section 11815 et seq., Code 1927, he thereby, “effectually secured by the filing of a bill in chancery,” an equitable lien, “for it has long been the settled doctrine in equity that the filing of such a bill in chancery has the effect of creating a specific equitable lien upon the thing or property sought to be subjected to the execution, for the reason, perhaps, that the commencement of such a suit operates as a lis pendens notice, and stops all successful alienation of the property * * * and keeps it within the control and jurisdiction of the court.” Bridgman & Co. v. McKissick et al., 15 Iowa, 260, loc. cit. 265. The plaintiff's equitable lien is not only reinforced but recognized by the very terms of our statute. Section 11817, Code 1927. The plaintiff therefore by the commencement of his equitable action, secured a right which the law could not give him, and this is the very foundation and origin of equity jurisprudence. The plaintiff thereby had a superior claim to...