Kirby v. Western Sur. Co.

• Decision Date: 02 June 1945
• Docket Number: 8736.
• Citation: 19 N.W.2d 12,70 S.D. 483
• Parties: KIRBY v. WESTERN SURETY CO. et al.
• Court: South Dakota Supreme Court

19 N.W.2d 12

70 S.D. 483

KIRBY v. WESTERN SURETY CO. et al.

No. 8736.

Supreme Court of South Dakota

June 2, 1945

Rehearing Denied July 13, 1945.

Boyce, Warren & Fairbank, of Sioux Falls, for appellant.

Tom Kirby, of Sioux Falls, for Western Surety Co.

C J. Delbridge and T. R. Johnson, both of Sioux Falls, for Joe H. Kirby, Tom Kirby, Dan V. Kirby, Alice Kirby Brown, and Ella Kirby, respondents.

RUDOLPH Judge.

By the terms of the last will of Joe Kirby, deceased, the Western Surety Company was named trustee of certain property owned by the deceased at the time he died. This proceeding was instituted by the trustee, Western Surety Company, and seeks the judgment of the court determining its obligations, duties and rights as trustee. Joe Kirby died in 1926 and left surviving him his widow, Ella Kirby, and the following children: Patrick F. Kirby, Joe H. Kirby, Tom Kirby, Dan V Kirby and Alice Kirby Brown. The deceased left a large estate, all of which was disposed of under his will, but this proceeding relates only to the disposition of 1814 shares of the capital stock of the Western Surety Company. This stock in the Western Surety Company was included in the residue devised under the terms of the will and with reference thereto the will provides in paragraph 4 thereof that such residue is given 'to the Western Surety Company as trustee only and for the purposes hereinafter set forth'. Paragraphs 6, 7 and 8 of the will state the conditions under which the trustee is to hold the stock of the Western Surety Company, which paragraphs are as follows:

'Sixth. The Stock in the Western Surety Company of which I may die possessed, as will as all investments from and accretions from earnings not paid to my said beloved wife, shall be retained by the said Western Surety for a period of ten years from and after the death of myself and wife and after the last survival of us and during said period, my said children living, shall have a right to vote in equal shares and proportion said stock, and receive an annual dividend thereon, if the Company can lawfully declare and earns the same, not exceeding Seven per cent. If a greater dividend is declared, the access shall be retained by my said trustee, and be deemed a part of such stock and may be invested in Stock in Western Surety Company or other interest bearing securities.

'Seventh. Upon ten years after the death of the last survivor of myself and wife, I give, devise and bequeath to such of my beloved children above named then living all such Stock in the Western Surety Company and all accretions to-wit: each share and share alike. Provided, however, that if any any charge against any of my said children or their respective spouse are found upon my ledger, such sum shall be a charge against such child's share of said stock and shall be paid to the said Trustee and distributed by said trustee to each of said children then living share and share alike.

'Eighth. It is not my intention that any of my grand children shall receive hereunder any Stock in the Western Surety Company, but the same is to go to such of my children as survive myself and wife, 10 years.'

Prior to the entry of the final decree in the Joe Kirby estate, the validity of the above provisions in the will which required the Western Surety Company to retain the Western Surety stock for a period of ten years after the death of Mr. Kirby and his wife was questioned. The administrator presented to the County Court of Minnehaha County a final account and petition for distribution of the estate. With reference to the Western Surety Company stock this petition, after setting forth the provisions of the will, alleged that such provisions 'are void for the reason that said provisions place a restraint upon alienation contrary to Sections 294 and 295 of the Revised Code of the State of South Dakota for the year 1919' and then petitioned the court to fix the value of the Western Surety Company stock, deduct from such valuation the indebtedness of the several children, and set the stock over to the trustee with the interest of each child in the stock fixed in the light of the deductions made.

In its decree of final distribution the county court determined that the provisions of the will, with reference to the Western Surety Company's stock, were void for the reasons alleged in the petition and then after making deduction for the indebtedness of each child decreed that such stock be assigned to the Western Surety Company as trustee to pay the income therefrom to Ella Kirby during her lifetime and upon her death to be distributed by the trustee as follows:

'To Patrick F. Kirby, 234 shares of the capital stock of the Western Surety Company.

'To Joe H. Kirby 332 shares of the capital stock of the Western Surety Company.

'To Tom Kirby 442 shares of the capital stock of the Western Surety Company.

'To Dan V. Kirby 432 shares of the capital stock of the Western Surety Company.

'To Alice Kirby Brown 374 shares of the capital stock of the Western Surety Company.

'Provided, that if any of said heirs in this paragraph four named should be deceased, then the share of said heir shall be transferred to his lawful heirs, devisees or legatees.'

This final decree was entered by the county court on October...