Katz Inv. Co. v. Lynch, 47775

Decision Date08 May 1951
Docket NumberNo. 47775,47775
Citation242 Iowa 640,47 N.W.2d 800
PartiesKATZ INV. CO. v. LYNCH et al.
CourtIowa Supreme Court

Roy B. Thomson and Donald H. Chisholm, of Kansas City, Mo., and Gamble, Read, Howland, Gamble & Riepe, of Des Moines, for appellant Katz Inv. Co.

Dickinson & Dickinson, of Des Moines, for appellants O. E. Lynch, Jr. and Mary Eileen Lynch.

Parrish, Guthrie, Colflesh & O'Brien, of Des Moines, for Katherine M. Brice et al., appellees.

Fred D. Huebner and Miller, Davis, Hise & Howland, all of Des Moines, for Helen W. Flynn, as executrix of the Estate of Thomas F. Flynn, Jr., and as guardian of Kathe E. Flynn, substituted defendant-appellee.

GARFIELD, Justice.

We think two principal questions are presented upon this appeal. (1) Did the trial court abuse its discretion in entertaining this action and rendering a declaratory judgment? (2) Is the remainder interest purchased by plaintiff contingent, as the trial court held, or vested, as plaintiff and its vendors contend?

Martin Flynn died in 1906 survived by his wife, five sons and three daughters. Paragraphs 1 to 8 of his will made in 1906, duly probated, make certain specific bequests to the widow and seven of the eight issue--all except his daughter Annabelle. Paragraph 9 appoints trustees. Paragraph 10 states 'I hereby give, bequeath and devise to said * * * trustees * * * in trust during the lives of all and any of my eight children * * * The Flynn Block' (and life insurance, notes and dividends amounting to $46,500). We are here concerned with the Flynn Block at Seventh and Locust, Des Moines.

Paragraph 10 of the will also confers rather broad powers upon the trustees in the management of the Flynn Block, including the power to mortgage it if necessary. Three fourths of the net income from the property shall be paid the widow during her life and one fourth to the daughter Annabelle 'or her heirs during the continuance of the trust * * *.' Upon the widow's death her three fourths of 'said net income shall be paid to my said eight children * * *, share and share alike, or to their heirs, until the termination of the said trust, * * *.'

The most important provision of the will now pertinent is subparagraph f of paragraph 10: 'f. Upon the death of all of my said children * * * said trust shall terminate, and the trust estate shall be closed, and all the interest and estate of the said trustees in said trust property shall be extinguished, and the property shall revert and descend to the legal heirs of my said children. * * *.' Paragraph 11 gives the rest, residue and remainder of testator's estate not otherwise disposed of to the eight children, share and share alike.

Before this action was commenced in December, 1947, the widow and six of the eight issue were dead. One surviving daughter was 85 at the time of trial in April, 1949, the other a year or two younger. The daughter Annabelle died in June, 1945, survived by her husband Dr. O. E. Lynch, a son and daughter.

On June 20, 1947, plaintiff Katz Investment Company contracted to purchase for $62,500 the one-eighth interest of Annabelle's heirs in the Flynn Block and the income therefrom, subject to the unexpired term of the trust. The contract states doubt may exist whether the sellers have a vested or contingent interest in the property and provides plaintiff has the right to institute court action to determine that question. If such suit does not result in a decree determining that the sellers have a vested interest plaintiff has the option to declare the contract void.

Plaintiff's action is for a declaratory judgment under rules 261-269, Iowa Rules of Civil Procedure, 58 I.C.A., to determine the meaning and effect of Martin Flynn's will with respect to the Flynn Block, the names of the various owners, the nature of their interests and for such further decree as may be necessary and proper. Testator's two surviving daughters, their issue and the issue of the six deceased daughters and sons are made defendants. (We use 'issue' to mean 'children.')

Plaintiff's petition as amended sets out the facts above mentioned, including copy of the will and contract. Annabelle's (Lynch) heirs admit in their answer substantially all the allegations of plaintiff's petition, state their interests were vested, that they owned 11/32 (1/4 plus 1/8 of 3/4) of the property as well as the income therefrom, rather than merely 1/8, and ask that such interests be determined by the court.

Other defendants allege in their answers that plaintiff is not entitled to maintain the action, it is not properly one for declaratory relief and plaintiff merely seeks the advice of the court, it is prematurely brought, and deny testator's grandchildren obtain any vested interest in the Flynn Block as long as any of his eight children survive. Most of the facts with respect to the will and the relationship of the parties are admitted.

There is no material dispute in the controlling facts. The evidence before us is largely documentary. The trial court held the action is properly one for declaratory judgment, the legal heirs of the testator's children do not acquire a vested interest in the Flynn Block until the death of all of said children, plaintiff therefore acquired only the contingent interest of Annabelle's heirs. Plaintiff and Annabelle's heirs have appealed.

I. Appellees argue with zeal and ability there should be no declaratory judgment because, they say, this is not a proper action therefor and was prematurely brought. Although appellees have not appealed they are entitled to urge here this contention, rejected by the trial court. State v. Central States Electric Co., 238 Iowa 801, 819, 28 N.W.2d 457, 466. See also Pohler v. T. W. Snow Const. Co., 239 Iowa 1018, 1022, 33 N.W.2d 416, 418; Shaw v. Addison, 236 Iowa 720, 734, 18 N.W.2d 796, 803, 804.

Before our Rules of Civil Procedure took effect in 1943 we had no statute or rule in Iowa pertaining to declaratory judgments. See State ex rel. Fletcher v. Executive Council, 207 Iowa 923, 925, 223 N.W. 737; Des Moines City R. Co. v. Amalgamated Ass'n of Street & Electric Ry. Employees, 204 Iowa 1195, 1207, 213 N.W. 264. However, several actions at least somewhat declaratory in nature had long been entertained in our courts. For example, actions to quiet title, to determine boundaries, to construe wills, trusts and contracts. See article by Mr. T. M. Ingersoll, 29 Iowa Law Review 62, 64.

Rule 262, R.C.P., states, 'Any person interested in a contract * * * or a will * * * may have determined any question of the construction or validity thereof or arising thereunder, and obtain a declaration of rights, status or legal relations thereunder.' Rule 264 provides: 'Any person interested as or through * * * devisee, legatee, heir * * * or cestui que trust, in the administration of a trust or the estate of a decedent * * * may have a declaration of rights or legal relations in respect thereto: * * *.

'(c) To determine any question arising in the administration of the estate * * * or trust, including questions of construction of wills * * *.' By rules 5 and 269 plaintiff is a 'person' under rules 262 and 264. Rule 265 states, 'The court may refuse to render a declaratory judgment or decree where it would not, if rendered, terminate the uncertainty or controversy giving rise to the proceeding.'

The above rules are remedial and should be given a reasonably liberal construction. State v. Central States Electric Co., supra, 238 Iowa 801, 819, 28 N.W.2d 457, 466. See also 16 Am.Jur., Declaratory Judgments, section 8; 1 C.J.S., Actions, § 18d(4), page 1023; Rich Mfg. Co. v. Petty, Iowa, 42 N.W.2d 80, 85, which denies declaratory relief where there were special statutory remedies that were exclusive, states, 'Declaratory judgment acts are progressively receiving liberal interpretations * * *.'

It is true, as appellees argue, that declaratory relief will not ordinarily be granted where there is no actual or justiciable controversy between the parties and a mere advisory opinion is sought. Likewise courts frequently decline to pass upon remote, future, or contingent rights which may never arise, at least where there is no present need for such determination or, because of absence of parties or otherwise, the determination may not be final. See 16 Am.Jur., Declaratory Judgments, section 30; 1 C.J.S. Actions, § 18d(6) and (9), pages 1025, 1030; Annos. 68 A.L.R. 110, 117, 118, 87 A.L.R. 1205, 1213 et seq., 174 A.L.R. 880.

The subject is discussed at length in National Shawmut Bank v. Morey, 320 Mass. 492, 70 N.E.2d 316, 321, 174 A.L.R. 871, 877, cited by appellees. There the trial court declined to render a declaratory judgment as to whether remainders were vested or contingent where distribution would not be made until death of a son then only 58 years old 'and quite possibly large portions of the fund will be distributable many years hereafter to persons as yet unborn.' It was held there was no abuse of discretion. No pressing need for a present decision was shown and the merits of the issue as to vested or contingent remainder were not argued upon appeal.

The cited Massachusetts case differs from this in several respects. Here the trial court exercised its discretion in favor of granting a declaratory judgment. This trust terminates upon the death of the survivor of the two living daughters who were 85 and a year or two younger two years ago. It satisfactorily appears all the grandchildren are before the court and are of age. (One defendant is a minor great grandchild who appears by guardian.) If the remainders to the heirs of testator's children are held to vest at the death of each child it is of course possible to determine in whom they are vested except as to the heirs of the two surviving daughters, each of whom now has four children. If the remainders are held to be contingent until termination of the trust it is only a remote possibility that a share of the...

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