Graves v. First Nat. Bank in Grand Forks

• Decision Date: 29 June 1951
• Citation: 138 N.W.2d 584
• Parties: Grace Moore GRAVES, Elaine Farren, Eleanor Abbott, and Manvel Moore, Petitions and Appellants, v. FIRST NATIONAL BANK IN GRAND FORKS as Testamentary Administrator of the Estate of Florence J. Henry, Deceased, First National Bank in Grand Forks as Trustee under the Last Will and Testament of Florence J. Henry, Deceased, which is dated
• Court: North Dakota Supreme Court

Page 584

138 N.W.2d 584

14 A.L.R.3d 1205

Grace Moore GRAVES, Elaine Farren, Eleanor Abbott, and Manvel Moore, Petitions and Appellants, v. FIRST NATIONAL BANK IN GRAND FORKS as Testamentary Administrator of the Estate of Florence J. Henry, Deceased First National Bank in Grand Forks as Trustee under the Last Will and Testament of Florence J. Henry, Deceased, which is dated June 29, 1951, the Methodist Church of Hoople, North Dakota, a religious corporation, Respondents.

No. 8239.

Supreme Court of North Dakota.

Nov. 29, 1965.

Syllabus by the Court.

1. A county court, on petition for distribution of an estate pursuant to a proved will, has jurisdiction to determine the validity of a part or all of a will when such a determination is necessary for the proper administration of the estate.

2. A county court, on petition for distribution of an estate pursuant to a proved will, has jurisdiction to determine whether a condition imposed by a trust created by the will makes the trust void, as this determination is necessary for a proper distribution of the estate.

3. A provision in a will requiring the testatrix's niece to divorce her husband and to terminate cohabitation with him as a condition precedent to receiving a trust fund is contrary to public policy, and thus the trust is void. As the trust fund for the benefit of the niece consisted of the residue fo the estate, the niece is entitled to the residue of the estate free and clear of the trust.

Letnes, Murray & Quigley, Grand Forks, for petitioners and appellants.

Stokes, Vaaler, Gillig & Warcup, Grand Forks, for respondent First National Bank in Grand Forks.

Shaft, Benson, Shaft & McConn, Grand Forks, for respondent The Methodist Church of Hoople.

ERICKSTAD, Judge.

This is an appeal from an order of the District Court of Grand Forks County affirming an order of the County Court of Grand Forks County which allowed the final report and account and granted the petition for distribution in the matter of the estate of Florence J. Henry, Deceased. The county court order provided for the distribution of the residue of the property in the estate to the First National Bank in Grand Forks as trustee under the trust provisions of the last will and testament of Florence J. Henry, Deceased.

The will of Florence J. Henry, after first providing for the payment of her debts and funeral expenses and for the purchase of a suitable monument, devised and bequeathed all the rest and residue of her estate to a trustee.

The paragraphs of the will pertinent to this lawsuit read as follows:

SEVENTH: I direct that the trusts established herein shall terminate as soon as my niece, Grace Moore, shall dissolve all legal marriage relationship or cohabitation with one Richard Graves, and after said relationship and cohabitation has terminated, I direct that my said trustee hold my said trust fund, as to both capital and income, for my said niece, Grace Moore, and that my said trustee will transfer said trust fund to my said niece as soon as conditions are fully met.

EIGHTH: In the event that my said niece, Grace Moore, does not dissolve all legal marriage relationship and cohabitation with the said Richard Graves prior to the time of her death, I direct that said trust shall terminate upon her decease and that my said trustee hold the trust fund as to both capital and income for the Methodist Church of Hoople, North Dakota, and direct that said fund be paid over to said Methodist Church of Hoople as soon thereafter as conditions permit and that said trust be terminated.

Following the admission of this will to probate and during the course of the administration of the estate, the defendant First National Bank in Grand Forks, as administrator with the will annexed, filed its final report and accounting and petitioned that the residue of the estate be set over to the bank as trustee, pursuant to the provisions of the will. The petitioners, Grace Moore Graves, Elaine Farren, Eleanor Abbott, and Manvel Moore, alleging to be the heirs at law of the decedent, objected to the granting of the administrator's petition asking for distribution of the estate to the trustee. Their objection was based on the contention that paragraphs designated 'Seventh' and 'Eighth' of the will contained provisions contrary to public policy and that the provisions were thus void. They asked that the court declare a resulting trust in the named heirs at law.

The county court, however, granted the petition for distribution to the trustee, and it was from the order allowing the final report and accounting and granting the petition for distribution to the trustee, pursuant to the terms of the will, that the petitioners appealed to the district court. On appeal to the district court, the order of the county court was affirmed. The case was tried by the district court on the submission of briefs and on the record as contained in the county court.

As no testimony was taken in county court, the only thing before us is the will.

In granting the petition for distribution, the county court held that a trust was created by the terms of the will, requiring the granting of the petition for distribution of the residue of the estate to the trustee, and that construction of the trust provisions of the will was not within the jurisdiction of that court. The district court apparently adopted the same view in affirming the county court. Following this reasoning, neither of the courts reached the question of whether the trust provisions of the will were contrary to public policy and thus void.

Section 111 of our State Constitution, as it relates to the question before us, reads as follows:

The county court shall have exclusive original jurisdiction in probate and testamentary matters, the appointment of administrators and guardians, the settlement of accounts of executors, administrators and guardians, the sale of lands by executors, administrators and guardians, and such other probate jurisdiction as may be conferred by law; provided that whenever the voters of any county having a population of two thousand or over shall decide by a majority vote that they desire the jurisdiction of said court increased above that limted by this constitution, then said county court shall have concurrent jurisdiction with the district courts in all civil actions where the amount in controversy does not exceed one thousand dollars * * *.

In a 1912 decision this court held that the county court had no jurisdiction to determine adverse claims and quiet title to certain real property. The court therein said:

* * * [W]e are convinced that, in conferring upon county courts and justices of the peace concurrent jurisdiction with the district courts in certain cases, the framers of our Constitution had in mind merely those cases formerly designated as actions at law, as distinguished from suits in equity, and wherein is directly involved a sum in money or personal property not exceeding a stated amount. * * *

Mead v. First Nat'l Bank, 24 N.D. 12, 138 N.W. 365, at 366.

In a very recent decision of this court we said:

It is true that this court has held, in effect:

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(3) That county courts have no equitable jurisdiction. Muhlhauser v. Becker, 74 N.D. 103, 20 N.W.2d 353; In re Randall's Estate, 77 N.D. 69, 40 N.W.2d 446; State ex rel. City of Minot v. Gronna, 79 N.D. 673, 59 N.W.2d 514.

In re Edinger's Estate, 136 N.W.2d 114 (N.D.1965), at 119.

In Edinger's Estate our court, in effect, held that the county court did not have jurisdiction to determine the validity of an antenuptial agreement.

The petitioners, in support of their contention that the county court has jurisdiction to construe the trust provisions of the will, refer this court to the following:

Where the construction of the will is necessary to distribute the estate to the parties entitled thereto, it is clear the county court would be required to construe the will; but its jurisdiction is limited to what is necessary to administer the estate. * * *

In re Le Page's Trust, 67 N.D. 15, 269 N.W. 53, at 55.

A further reading of that opinion discloses the following additional language:

The county court has no jurisdiction over an action which is clearly one for equitable cognizance. It is not vested with equity powers. Mead v. First National Bank, etc., 24 N.D. 12, 138 N.W. 365. If, during the administration of the estate, it is necessary to determine contract rights or have the county court aided by an equitable action, resort is had to the district court for the determination of these matters. The relations between the two courts in this respect are set forth in Johnson v. Rutherford, 28 N.D. 87, 147 N.W. 390, and Honsinger v. Stewart et al., 34 N.D. 513, 159 N.W. 12. If the construction of a trust created by will be necessary to aid the administration of the estate, the jurisdiction of that action is in the district court, and in determining such matters the provisions of the will may be examined.

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* * *

In the administration of the estate the property is turned over to the trustee. The county court determines the property intrusted to him and its amount, as it determines the portions going to heirs and legatees. When this is done and the trust transferred, the estate of the decedent is no longer concerned. The trustee administers the trust according to the terms set forth in the will. A court of equity controls his acts. The jurisdiction in the administration of the trust is in the district court, which any person interested may invoke during the administration of the trust * * *.

In re Le Page's Trust, supra, 269 N.W. at 56-57.

In reversing the judgment of the district court, which had determined that the construction of the trust provisions of a will by the county court during the administration of an estate was binding upon the district court for the reason that no appeal had been taken from the said court order, our court said:

The judgment is...