Lincoln Joint Stock Land Bank of Lincoln, Neb. v. Mitchell

• Decision Date: 02 August 1948
• Docket Number: 47218.
• Parties: LINCOLN JOINT STOCK LAND BANK OF LINCOLN, NEB. v. MITCHELL et al.
• Court: Iowa Supreme Court

33 N.W.2d 388

239 Iowa 995

LINCOLN JOINT STOCK LAND BANK OF LINCOLN, NEB. v. MITCHELL et al.

No. 47218.

Supreme Court of Iowa

August 2, 1948

Wright & Kistle, of Council Bluffs, for appellants.

Nichols & Nichols, of Sidney, and Ross, Everest & Johnson, of Council Bluffs, for appellee.

OLIVER Justice.

Testatrix died in 1934 owning the land which had been previously mortgaged to plaintiff. It was not contended her estate was liable for the debt secured by the mortgage.

Her will provides in part:

'Par. 3. Upon the death of my husband I direct that all the residue of my estate be divided equally between my three children namely, Elbert A. Read, Dell Read Sunderland and Henry Read. If any one of them shall have died leaving issue his share shall go to such issue; if he die without issue his share shall be divided equally among those who survive. Each of my children shall file an election with my executors to accept under this paragraph, and until he shall do so Paragraph 4 hereof shall prevail.

'Par. 4. In the event that any one or more of my said children shall reject or renounce the provisions for his benefit as provided in Paragraph 3 hereof, or until he shall file written election to accept under Paragraph 3 hereof with my executors, I give, devise and bequeath such child's share to Dell R. Sunderland, Elbert A. Read and Henry Read in trust for the following specific uses: Said trustees shall hold invest and manage said property for the benefit of my said child so renouncing; said trustee shall pay to my said child for his or her maintenance, convenience and comfort from time to time such sums and amounts as they in their judgment may deem necessary for such purposes.

'a. They may refuse to pay any such sum or amount for any period of years or during the lifetime of such child, if they deem such payments unnecessary.

'b. I direct that said trustees shall buy or sell real estate or any other property and convey title thereto without authority of court, and in the same manner as if said property was their own absolutely.

'c. Six months after the death of such child, said trustees shall pay to his or her legal heirs, per stirpes, all money and property in their possession unexpended under this trust.

'd. The intention being to set up, under paragraph 4 hereof, a separate and distinct trust for each of my said children who may reject or renounce the provision for such child in Paragraph 3 hereof or until he shall file an election to accept under Paragraph 3 hereof.

'Par. 5. I hereby nominate my son, Henry Read, to be the executor of this my last Will and Testament, without bonds.'

None of testatrix' three children elected to take under paragraph 3. Hence each took under paragraph 4.

Plaintiff instituted the foreclosure suit in 1941. Testatrix's husband was then deceased. Among the parties to the foreclosure suit were her son Henry, as executor, her three children as trustees, and said three children and their spouses as individuals. An answer was filed, the cause was tried, foreclosure was adjudged and the property was sold under special execution. In May, 1942, the year for redemption expired and sheriff's deed issued to plaintiff.

In 1943, by supplemental petition and amendment to original petition, plaintiff reopened the suit, brought in testatrix' eight grandchildren and the spouses of those who were married, and prayed they be adjudged to have no right of redemption and its title be quieted against them. See Lincoln Joint Stock Land Bank v. Rydberg, 234 Iowa 1143, 15 N.W.2d 246, 155 A.L.R. 62, in which this procedure was held proper. These grandchildren were sons and daughters of Elbert A. Read, Dell Read Sunderland and Henry Read, testatrix' three children, who were named trustees and beneficiaries in her will. The grandchildren filed answers and cross-petitions asserting that, as remaindermen under testatrix' will, their right to redeem the land had not been extinguished because they had not been made parties to the original foreclosure proceedings. The trial court sustained motions to dismiss and strike these pleadings, holding the remainders were contingent and the remaindermen were not necessary parties to the foreclosure suit and were represented therein by the trustees and life beneficiaries. The grandchildren have appealed.

I. Division c of Paragraph 4 of the will provides:

'Six months after the death of such child, said trustees shall pay to his or her legal heirs, per stirpes, all money and property in their possession unexpended under this trust.'

Appellants contend this created vested remainders in them. The trial court held the remainders were contingent.

A description of remaindermen as 'heirs' of a person not deceased, tends to establish that a requirement for survival exists and is a condition precedent of such interest. Restatement of the Law of Property, § 249. Legal heirs are those who would take under the statute relative to intestate succession. In re Estate of Austin, 236 Iowa 945, 20 N.W.2d 445, 162 A.L.R. 709; Putbrees v. James, 162 Iowa 618, 144 N.W. 607. Unless a contrary intent is found from additional language or circumstances a gift to the heirs of a designated person is to those who would take under the statute applied as of the death of the designated ancestor. Restatement of Property, § 305 and § 308. Strictly speaking a living person cannot have an heir because his heirs cannot be ascertained until his death. Westcott v. Meeker, 144 Iowa 311, 122 N.W. 964, 29 L.R.A.,N.S., 947; In re Estate of Austin, supra.

Appellants contend the term legal heirs was not here used in its strict technical sense but was equivalent to the word grandchildren. They cite Kalbach v. Clark, 133 Iowa 215, 110 N.W. 599, 12 L.R.A.,N.S., 801, 12 Ann.Cas. 647. There testatrix' will gave a life estate to her daughter, remainder to the heirs of three sons and of the daughter. The daughter died. One son of testatrix outlived the daughter. A strict construction of the language would have invalidated the gift of the remainder to the heirs of this son and resulted in partial intestacy. In the Kalbach case and similar decisions, additional language or circumstances indicated the word heirs was not used in its technical sense. In re Estate of Austin, supra; Restatement of Property, § 305 and § 308, Comment i and Illustration 7. However, unless a contrary intent appears the term 'heirs' will be construed technically. Hudnutt v. John Hancock Mut. Life Ins. Co., 224 Iowa 430, 438, 275 N.W. 581; Johnson v. Coler, 187 Iowa 734, 736, 174 N.W. 654; 69 C.J. 209, Wills § 1242. Here neither the language of the will nor the circumstances establish such contrary intent. Hence 'heirs' will be given its ordinary and technical meaning.

In a vested remainder 'the estate is invariably fixed to remain to certain determinate persons'. A remainder is contingent 'where the estate in remainder is limited to take effect either to a dubious or uncertain person or upon a dubious or uncertain event * * *.' Fulton v. Fulton, 179 Iowa 948, 162 N.W. 253, 256, L.R.A.1918E, 1080; Skelton v. Cross, 222 Iowa 262, 268 N.W. 499, 109 A.L.R. 129.

In the case at bar the heirs of each of testatrix' children would be uncertain and unascertainable until the death of such child. Therefore, under the foregoing rules, the remainders were contingent at the time the mortgage was foreclosed. Most authorities support this reasoning and conclusion. The Annotator's note in 131 A.L.R. 712, 721, states:

'Another common illustration of an interest made contingent by reason of uncertainty as to person or persons is afforded by a gift to the 'heirs' of a living person, the general rule being 'nemo est haeres viventis.' Thus, assuming that the word 'heirs' is used in its technical sense, and that the rule is Shelley's Case is not applicable, a remainder to the heirs of a life tenant is generally held to be contingent during the life tenancy.' (Citing authorities).

Among Iowa decisions are Westcott v. Meeker, 144 Iowa 311, 321, 322, 122 N.W. 964, 29 L.R.A.,N.S., 947, and McNair v. Sockriter, 199 Iowa 1176, 1179, 1183, 201 N.W. 102. See also 14 Iowa Law Rev. 80, et seq.

II. The will authorized and directed the trustees to hold, invest and manage the trust property, to buy, sell and convey real estate and other property 'as if said property was their own absolutely', to pay such amounts for the support of the life beneficiaries as the trustees, in their discretion, should determine, and six months after the death of each life beneficiary to pay his heirs the unexpended money and property in the trust (there were separate trusts). Hence the trusts were active. Olsen v. Youngerman, 136 Iowa 404, 409, 113 N.W. 938; 54 Am.Jur. 30 to 33, Trusts § 13 and § 14.

A trustee takes such an estate as is necessary to enable him to perform the trust. Restatement of Trusts, § 88. Meek v. Briggs, 87 Iowa 610, 54 N.W. 456, 43 Am.St.Rep. 410; Keck v. McKinstry, 206 Iowa 1121, 1127, 221 N.W. 851. Since the trust instrument authorized the trustees to sell the land in fee they took the legal title in fee, because to convey a fee the grantor must himself be the owner of a fee. Robinson v. Pierce, 118 Ala. 273, 24 So. 984, 986, 987, 45 L.R.A. 66, 72 Am.St.Rep. 160; Overton v. Wisconsin Tax Commission, 204 Wis. 614, 236 N.W. 526, 528; 54 Am.Jur. 90, Trusts § 98. The trust was executory as to all the beneficiaries contemplated, present and prospective. Taylor v. Brown, 112 Ga. 758, 38 S.E. 66.

Where, as here, the remaindermen are uncertain and unascertained the title abides in the trustee until they have been ascertained. 65 C.J. 542, Trusts § 289. Cushman v. Coleman, 92 Ga. 772, 19 S.E. 46; Sherlock v. Thompson, 167 Iowa 1, 148 N.W. 1035 Ann.Cas.1917A, 1216. ...