Meents v. Comstock

• Decision Date: 11 March 1941
• Docket Number: 45287.
• Citation: 296 N.W. 721,230 Iowa 63
• Parties: MEENTS et al. v. COMSTOCK et al.
• Court: Iowa Supreme Court

296 N.W. 721

230 Iowa 63

MEENTS et al. v. COMSTOCK et al.

No. 45287.

Supreme Court of Iowa.

March 11, 1941

Appeal from District Court, Buena Vista County; G. W. Stillman Judge.

A suit by a trustee appointed by the circuit court of Iroquois County, Illinois, pursuant to the terms of a trust agreement executed by devisees under the will of C. H. Comstock, a resident of Illinois, for authority to sell Iowa real estate for the purpose of carrying out the terms of the trust and a decree of the Illinois court. The trial court dismissed the petition. Plaintiff appealed.

Reversed and remanded.

Edson & Edson, of Storm Lake, Barr & Barr, of Joliet, Ill., and Robert F. Goodyear, of Watseka, Ill., for appellants.

Whitney, Whitney & Stern, of Storm Lake, for appellees George K. Comstock and Aurine K. Comstock, and Lizzie Neuman.

Mack & Mack and Guy E. Mack, all of Storm Lake, for defendants William H. Comstock, Howard C. Comstock, Myron D. Comstock and Carrie A. Redmond.

STIGER, Justice.

The real estate involved in this appeal consists of 572 acres in Buena Vista County, Iowa. A preliminary statement of the history of the trust is essential to a complete understanding of the issues in the lower court.

Charles H. Comstock, a resident of Illinois, died testate in 1907 leaving a widow, who passed away in 1916, three sons and three daughters. The will devised and bequeathed all of the property of the testator to the sons, Clinton, William and George Comstock, in equal shares subject to a charge on all the property in favor of the three daughters, Alice Clifton, Carrie Redmond and Mae R. Zumwalt. The estate consisted of 572 acres of land in Buena Vista County, Iowa, 580 acres in Iroquois County, Illinois, and a grain elevator and other property in Ashkum, Illinois, the home of the testator. The will provided for the appraisement of all the real estate and the appraised value plus the personal property remaining after the payment of the debts and expenses of administration was denominated by the testator " the net amount of my estate." The will bequeathed to each of the daughters during her life and directed the sons to pay a sum of money equal to one and one-half per cent of one-sixth of the net amount of the estate payable semiannually after the final discharge of the executors as long as they lived. Upon the death of a daughter, such payments were to be made to her children until they became 21 years of age, at which time they would be entitled to a sum equal to one-sixth of the net estate. The first payment to the daughters became due in 1914. The will was admitted to probate in Iowa as a foreign will.

After the death of Mr. Comstock the brothers operated the farms and other property inherited from their father as a partnership known as C. H. Comstock Company. Clinton and William resided in Illinois and George Comstock resided in Buena Vista County, Iowa. Clinton Comstock was committed to the hospital for the insane at Cherokee, Iowa, in 1925 and died in 1937. His wife, Julia Comstock, was appointed conservatrix of his estate by an Illinois court and she, as conservatrix, William and George Comstock continued to carry on the partnership.

In September, 1930, the partnership being heavily indebted, George Comstock went to Illinois and employed an attorney to prepare a trust agreement relative to the partnership property. The conservatrix was authorized to sign the agreement by the Illinois court which appointed her.

The trust instrument, which was signed by George and William Comstock and the conservatrix, referred to the will, the charge on partnership property in favor of the sisters and their heirs and stated that a large amount of indebtedness had been created in connection with the operation of the real estate in Illinois and Iowa and the elevator business; that creditors had obtained judgments against the brothers and others were threatening suits; that some of the property had been levied upon and that unless steps were taken immediately to convey the partnership property to a trustee " their entire holdings may be lost to them and this valuable property sold at sales resulting in great loss to them and their creditors. Said first parties (George and William Comstock and Conservatrix), therefore, for and in consideration of the mutual benefits to be received by each of them from the handling of said property by said trustee, and the conveyance by each to said trustee, hereby sell, assign, transfer, convey, set over and deliver to Richard R. Meents, as trustee all of the lands devised to them under the said will of Charles H. Comstock, deceased, and all other lands" etc.

The instrument authorized the trustee, among other powers, to operate all the lands and to sell, rent, lease or mortgage them in such manner that he might deem for the best interest of the trust estate and directed him (1) to pay the charges created by the will in favor of the daughters and (2) the creditors, the remainder to be paid to the owners or partners. It directed the trustee to make application to the Circuit Court of Iroquois County for confirmation of the trust and his appointment as trustee, which court should have jurisdiction of the trust and empowered him " to proceed in any court in Illinois or in the States of Iowa or Indiana, if such be proper and necessary in order to carry out the provisions of this trust."

The agreement provided that the trust should not continue longer than 10 years and should be ended as soon as the purposes and the welfare of the beneficiaries would permit. The appointment of the trustee and the trust agreement were confirmed and approved by the Illinois circuit court on November 15, 1930.

The purpose of the trust was to prevent bankruptcy proceedings and to have the trustee hold and manage the property until the price thereof increased to a degree that would give the brothers an equity in the property after the payment of the claims.

On February 21, 1939, a supplemental decree was entered in the trusteeship pending in the Illinois court pursuant to a supplemental complaint filed by the trustee which directed him to sell the trust property, including the Iowa real estate, for the purpose of carrying out the trust agreement and liquidating the partnership known as the C. H. Comstock Company. This decree of 35 pages thoroughly reviewed the provisions of the will and the history of the trust, found that the " net amount of the estate" of Charles H. Comstock was $155,303.41, one-sixth thereof being $25,883.90; that the amount of payments due the daughters was over $8,000; that there was a large amount of indebtedness and many claims had been filed against the partners in the trust. It found that the heirs of the sisters and creditors were demanding payment of their claims and the sale of the property; that the trust agreement expired in 1940; that it was necessary to liquidate the trust and pay all of the creditors; that if the creditors and the daughters and their heirs " were to attempt to enforce the payments of the amounts due them by judgment, levies, foreclosures, or otherwise, the interests of the said three sons of said Charles H. Comstock would be completely exhausted and that by reason thereof, it is necessary for the plaintiff, Richard R. Meents, as Trustee, to proceed with the orderly liquidation of said estate in order that William C. Clifton and the two sisters, may be paid the amounts due them and something preserved for said creditors and for the said brothers."

The decree ordered that the real estate be sold free of the charges thereon created by the will and directed the trustee to institute proceedings in the District Court of Iowa in and for Buena Vista County for the sale of the Iowa real estate.

The trustee then brought this suit in equity for authority to sell the Iowa real estate and for the distribution of the proceeds under the provisions of the will, the trust agreement and decree of the Illinois court, all of which instruments were made a part of the petition.

The plaintiff, William Clifton, is the sole heir of the testator, Alice Clifton, and seeks the same relief prayed for by the trustee. Clinton Comstock died in 1937. The defendants material to this appeal are the surviving sons of the testator, the heirs of Clinton Comstock and the surviving daughters and their children. George Comstock was the only defendant who resisted the petition to sell the real estate and is the sole appellee.

I.

The trial court, referring to the decree of the Illinois court entered on February 21, 1939, said: " The court finds that the Illinois Court had no jurisdiction of the real estate situated in Iowa, nor the person of the defendant; and the court finds that insofar as said decree attempts to adjudicate the question of the title to the land in Iowa, that the same is void and not entitled to full faith and credit, as the laws of the state of Iowa alone cover the alienation and descent of the title to the real estate involved in this proceeding."

This court is of the opinion the finding that the decree of the Illinois court was void and not entitled to full faith and credit is erroneous.

It is too well settled to require citation of authorities that the courts of a state cannot create an interest in real estate situated in another state; nor can they adjudicate the title or control the devolution of such real estate; that is, the decree or judgment in one state cannot act directly on land in another state. However, it is equally well settled that in cases of trust a court of equity, if it has jurisdiction of the proper litigants, may enforce the trust by a decree in personam directing the conveyance of lands situated in another state. This rule is applicable to the instant case.

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