Herrin v. Herrin

• Decision Date: 24 January 1979
• Docket Number: No. 14404,14404
• Citation: 36 St.Rep. 193,182 Mont. 142,595 P.2d 1152
• Parties: Keith W. HERRIN, Petitioner and Respondent, v. Molly Burke HERRIN, Respondent and Appellant.
• Court: Montana Supreme Court

Page 1152

595 P.2d 1152

182 Mont. 142

Keith W. HERRIN, Petitioner and Respondent, v. Molly Burke HERRIN, Respondent and Appellant.

No. 14404.

Supreme Court of Montana.

Submitted Dec. 15, 1978.

Decided Jan. 24, 1979.

Small & Hatch, Floyd O. Small and Carl A. Hatch argued, Helena, for respondent and appellant.

Jackson & Kelley, Doug Kelley argued, Helena, for petitioner and appellant.

HARRISON, Justice.

Molly Burke Herrin appeals from a determination of the District Court of the First Judicial District, the Honorable Gordon R. Bennett presiding without a jury. This action arose when Keith W. Herrin petitioned the District Court for an order directing that certain payments be made to him, pursuant to the terms of the divorce decree which dissolved the parties' marriage. In dispute is the interpretation of a property settlement agreement, which incorporated a stock purchase-and-sale agreement, and which itself was incorporated into a divorce decree.

The facts leading to this dispute are as follows. On February 14, 1969, petitioner Keith W. Herrin entered into an agreement with his brother Gordon R. Herrin under the terms of which Keith was to sell and Gordon was to purchase 481 shares of capital stock in Herrin Ranch, Inc. Two weeks later, on February 28, 1969, respondent filed a complaint for divorce from appellant Molly Burke Herrin, then his wife. On June 20, 1969, appellant and respondent signed a property settlement agreement which incorporated the agreement made between respondent and his brother. In turn, the property settlement agreement was incorporated into the divorce decree, entered August 18, 1969, under the terms of which respondent was awarded custody of the parties' six children, all of whom were minors at the time. The youngest child, Keith W. Herrin, Jr., who was blind and required extraordinary care, died at age 11, on April 6, 1970. As will become apparent, these latter facts are significant in light of the terms of the agreements in dispute.

The property settlement agreement reads in pertinent part as follows:

"4. Second Party (Keith Herrin) hereby makes to First Party (Molly Herrin) the following qualified or conditional agreement of that certain 'STOCK PURCHASE AND SALE AGREEMENT' between First Party and one Gordon T. Herrin, dated the 14th day of February, 1969, the subject matter thereof being the 481 shares of the capital stock of Herrin Ranch Inc., a Montana corporation, formerly held by Second Party, a copy of said last mentioned agreement being hereto attached, marked Exhibit A, and made a part hereof. The conditions and qualifications of said assignment are as follows. . . . If the said Keith W. Herrin, Jr., dies during the term of said agreement, exhibit A hereto, or while there is any money or property left in any trust aforesaid, then said Trust shall cease and all of the property and income and corpus of said trust shall revert to Second Party, and automatically be and become his sole property."

The omitted portion recites other conditions inapplicable to the problem here. The circumstances which would have called them into play, appellant's death or remarriage, never occurred.

Appellant's construction of the above is short and to the point. The antecedent condition, Keith, Jr.'s death, was fulfilled; thus, consideration of the last condition of paragraph 4 became imperative. As appellant correctly states, there was never any Trust, such that, upon Keith Jr.'s death, it should cease and its property and income revert to respondent. The conditions requiring the creation of a trust, i. e., appellant's remarriage or death, never occurred; appellant neither remarried nor died, so No trust was established. Because no trust was established, it could not cease; there being no trust, there was no property and income to revert to respondent. The payments forthcoming under the terms of the stock purchase-and-sale agreement, claims appellant, were assigned to her personally and not as a trustee, through the property settlement agreement. Because they were so assigned and because no trust was created, appellant argues that she is entitled to continue receiving the payments made by Gordon R. Herrin under the stock agreement.

Appellant argues that the mandate of section 13-704, R.C.M.1947, governs this case. There it is provided that "(t)he language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity." So, too, is section 13-705, R.C.M.1947, applicable; that statute reads in its entirety, "(w)hen a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible; subject, however, to the other provisions of this chapter." According to appellant, the clear and explicit language of the instrument dictates that she continue receiving the payments. The conditions requiring creation of a trust never came to pass; because there was no trust, reversion of its corpus is an impossibility.

The District Court judge acknowledged that Molly Herrin "contends that condition 5 actually requires a trust to have been created to entitle petitioner (Keith Herrin) to the payments." Relying on sections 13-707 and 13-702, R.C.M.1947, requiring consideration of the document as a whole and requiring that its interpretation give effect to the parties' intention as it existed at the time of contracting as evidenced by the language of the instrument, Judge Bennett concluded that it was drafted for the benefit of the boy, Keith, Jr., not the appellant, and therefore that, because the child had died and was no longer in need of its benefits, the payments were to be made to respondent herein. The court determined that:

"In light of the whole separation agreement, it is clear that at the time the agreement was created, the parties intended that the assignment be for the benefit of Keith, Jr., and if he died, the purpose of the assignment would fail and the payments were to revert back to the petitioner (Keith Herrin.) There is no indication that the parties intended the payments to be for the benefit of the...