Hull v. Rolfsrud

• Decision Date: 28 May 1954
• Docket Number: No. 7414,7414
• Citation: 65 N.W.2d 94
• Parties: HULL et al. v. ROLFSRUD.
• Court: North Dakota Supreme Court

Page 94

65 N.W.2d 94

HULL et al. v. ROLFSRUD.

No. 7414.

Supreme Court of North Dakota.

May 28, 1954.

Rehearing Denied July 1, 1954.

Syllabus by the Court.

1. Privity is the mutual or successive relationship to the same rights of property. If it is sought to bind one as privy by an

adjudication against another it must appear that at the time he acquired the rights or succeeded to the title it was then affected by the adjudication. If the right was acquired by him before the adjudication, then the doctrine cannot apply.

2. In construing a will the intention of the testator must be given effect as far as possible.

3. If a testamentary trust suspends the power of the alienation of property beyond the time permitted by the statute against perpetuities in force at the time of the creation of the trust such trust is invalid.

4. To constitute the equitable conversion of real property into personal property under Section 56-0522 NDRC 1943, there must be an unequivocal direction in the will to make a sale of the real property.

5. Power to exchange or sell and reinvest the property of the trust, keeping the trust intact, does not remove restraints on alienability.

6. When a testator's primary and dominant purpose is completely expressed in the trust provisions of the will, independent of any provisions that are void as against the statute on perpetuities such portion expressing the primary intent of the testator will be held valid so as to carry out the testator's intention as far as possible.

7. While Section 59-0314 NDRC 1943 vests the whole estate of a trust in the trustees for the execution of the trust, the beneficiaries take a vested interest in the trust where the language of the testator indicates such was his intention.

8. Where there is a direction in the will that upon the death of the life tenant the income is to be paid to the remaindermen until they reach the age of 30 years when conveyance of the trust is to be made, the interest of the beneficiary vests at the testator's death.

9. Where beneficial interests in the trust have vested in the beneficiaries they may alienate such interests unless restrained by the terms of the trust.

10. Where the beneficiaries of a trust, two of whom are also the trustees, join in the transfer of trust property to a third party the third person takes the property free of the trust.

Mackoff, Kellogg, Muggli & Kirby, Dickinson, for plaintiffs and appellants.

Eugene A. Burdick and Burk, McIntee & O'Connell, Williston, for defendant and respondent.

GRIMSON, Judge.

This is an action to quiet title to the Northeast Quarter (NE 1/4) of the Southwest Quarter (SW 1/4); East Half (E 1/2) of the Northwest Quarter (NW 1/4) and Lot Two (2) of Section Nineteen (19), Township One Hundred Fifty-two (152), Range Ninety-six (96), McKenzie County, North Dakota. The plaintiffs, as trustees, claim title to this property under a trust established by the last will and testament of one J. Y. Hull, and the final decree issued thereon by the county court of McKenzie County. The defendant makes a general denial, claiming the invalidity of the trust included in the final decree and setting forth his title under a quitclaim deed covering said property, signed by the legal heirs of J. Y. Hull, who also are the beneficiaries of the alleged trust and include the plaintiff trustees. In a counterclaim based on the quitclaim deed the defendant asks that the title be quieted in him and the plaintiffs' claims be adjudged null and void. The district court found for the defendant and plaintiffs appealed demanding a trial de novo.

The first issue raised by the plaintiffs is that the defendant has no right to make a collateral attack upon the final decree of distribution. They state, correctly, that a final decree of distribution is of equal rank with the judgments of other courts and has the same immunity from collateral attack. Joy v. Elton, 9 N.D. 428, 83 N.W. 875; Fischer v. Dolwig, 29 N.D. 561, 151 N.W. 431; Krumenacker v. Andis, 38 N.D. 500, 165 N.W. 524; Knight v. Harrison, 43 N.D. 76, 174 N.W. 632; Dolphin v. Peterson, 63 N.D. 792, 249 N.W. 784.

It is generally held that a judgment cannot be collaterally attacked by a party to the action or by one in privity with a party. 49 C.J.S., Judgments, Sec. 413, page 817; Lamb v. King, 70 N.D. 469, 296 N.W. 185; 31 Am.Jur. Judgments, Sec. 581, p. 179; Tuttle v. Tuttle, 48 N.D. 10, 181 N.W. 898. Plaintiffs caim that the defendant is in privity with them by reason of the quitclaim deed he received from the heirs of J. Y. Hull and under which he claims.

The evidence shows that Mr. Rolfsrud, the defendant, is not related to the parties in any way. He was not made a party to the probate proceedings nor served with any notice of them. Whatever interest he has under the quitclaim deed was obtained by him some three years before the probate proceedings in question were commenced. His rights whatever they are were not in issue in the probate proceedings nor are they derived through any issue decided in said probate proceeding. He had no right of control over those proceedings or right of appeal therefrom.

In 72 C.J.S., Privity, page 958, it is said:

'The word 'privy' is the root of the common word 'privity,' and as a noun is defined as meaning a person who has succeeded to some right or obligation which one of the parties to the act derived through the act or incurred under it; * * *. In order to make a man a privy to an action he must have acquired an interest in the subject matter of the action either by inheritance, succession, or purchase from a party subsequently to the action, or he must hold property subordinately.' (Citing cases.)

In Leach v. First Nat. Bank, Fort Dodge, 206 Iowa 265, 217 N.W. 865, 868, it is said:

'Privity is said to be a mutual or successive relationship to the same rights of property, and if it is sought to bind one as privy by an adjudication against another with whom he is in privity, it must appear that at the time he acquired the right, or succeeded to the title, it was then affected by the adjudication, for, if the right was acquired by him before the adjudication, then the doctrine cannot apply.' (Emphasis supplied.)

To the same effect are the following cases: Gill v. Porter, 176 N.C. 451, 97 S.E. 381: Orthwein v. Thomas, 127 Ill. 554, 21 N.E. 430, 435, 4 L.R.A. 434; Kahn v. Richard L. Walsh Co., 72 Misc. 20, 129 N.Y.S. 137, 139; Central Oregon Irr. Co. v. Young, 107 Or. 39, 213 P. 782, 784. See also 50 C.J.S., Judgments, Sec. 788, page 324; Weed Sewing Machine Co. v. Baker, C.C., 40 F. 56, 1 McCreary 579; See also Sailer v. Mercer County, 77 N.D. 698, 45 N.W.2d 206, 22 A.L.R.2d 988. In Boswell's Lessee v. Otis, 9 How. 336, 13 L.Ed. 164, it is well said:

'No principle is more vital to the administration of justice, than that no man shall be condemned in his person or property without notice, and an opportunity to make his defense.'

The cases cited by the plaintiff involved collateral attacks on judgments by those who had been parties to the action or who had succeeded to the interest of parties after the judgment involved. Tuttle v. Tuttle, 48 N.D. 10, 181 N.W. 898; Lamb v. King, 70 N.D. 469, 296 N.W. 185.

The will involved in this action was made in December 1922 by one J. Y. Hull, a resident of Oshkosh, Wis. He died April 7, 1928. In that will, after providing for the payment of his debts and leaving some personal property to his wife, he bequeathed and devised the residue of his estate, of which the land here involved was a part, to his wife, Esther V. Hull, his son, Lathrop W. Hull, and one A. T. Hennig of Oshkosh, Wis., as trustees, to manage and care for, sell, invest and reinvest said property and to pay the net annual income therefrom to his wife until her death or until she remarried. The trustees were given full power to handle the property and if the income was not sufficient at any time to properly care for his wife they could use any or all of the principal necessary for that purpose.

The will then provided further:

'In case of the remarriage of my wife, I give, bequeath and devise to her an undivided one-third of all the balance, remainder and residue of my said trust estate;

'And the remaining two-thirds thereof, in case of her remarriage, and all of said trust estate in case of her death without remarriage, shall go to and be paid over and delivered to, and I do hereby give, bequeath and devise the same, in such cases, to my three children, Lathrop W. Hull, Gertrude Hull Felker and Ella J. Hull Ewens, equally. Provided, however, that if any of my said children shall not have arrived at the age of thirty years at the time of the remarriage or death of my wife, that then and in such case, the share of such of my children as have not arrived at the age of thirty years shall continue to be held by my said son and said A. T. Hennig, as trustees, or by the survivor of them in the trust, until such child or children shall respectively reach the age of thirty years, when the share of each child arriving at the age of thirty years shall be paid to them, and after the remarriage or death of my wife, such child shall receive the net incomes from their share of the trust fund quarterly, until arriving at the age of thirty years. * * *

'If, at the time of the remarriage or death of my wife, any of my said children above named are not then living, then their share shall go to the survivors of my said children, unless, at the time of the death of said child, said deceased child shall have left children surviving, and in case any one of them die before the remarriage or death of my wife leaving children surviving at the remarriage or death of my wife, then, on such remarriage or death of my wife, such grandchild or grandchildren shall have and receive the proportion or part of the share which would have gone to their parent if then living, viz: if such deceased child of mine shall leave one child surviving...