Case ID: sd_37/html/0046-01.html
Source: Caselaw Access Project
Author: {"author": "SMITH, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

FINKE, Respondent, v. FINKE et al., Appellants.
    (156 N. W. 595.)
    (File No. 3798.
    Opinion filed March 4, 1916.
    Rehearing denied April 11, 1916.)
    1. Quieting Title — Transfers in Trust, Construction of — Findings— Termination of Trus+ — Heath of Trustee, Effect — Interest of Trustee, of Reneficiary.
    Where a deed of trust to an owner of realty, who, with his wife, had conveyed the property to a third person, who in turn, had conveyed to the grantee in the trust deed, which trust deed empowered the grantee to hold, occupy and dispose of the premises for .the use and benefit of his children, who were to hold and en.ioy the same in fee simple “after the death of said trustee,” with a proviso that the trustee and wife were to have a support out of the premises during his life and that of the survivor, and that “said premises shall, at the death of said trustee and his wife,” vest in the children in fee simple, with a further proviso that the trustee shall take no rights or interests in the premises “except those of trustee as herein expressed,” held, (1) That a finding that such transfers were made by .said trustee for tbe purpose of carrying out bis plan of distributing his property to bis children subject to tbe use and enjoyment thereof by himself and wife during their joint lives, was properly made; (2) That said trustee did not intend to vest his surviving wife with a lite estate, carrying, with it the right of possession and use of the premises after his death; (3) That the deed vested a trust estate in said trustee, terminable at his death, which event would vest title in fee simple in his children; (4) That said deed did not vest a life estate in said trustee, he having no interest thereunder except as trustee; (5) That both the trustee and his wife were beneficiaries thereunder only so long as .the trust itself existed; and the wife, although named as the beneficiary, not being a grantee thereunder, ceased to be a beneficiary when the trust was so terminated.
    a. Trusts — Trust Deed — Kepugnant Clauses, Termination of Trust, Construction of.
    Applying the rule of construction of deeds laid down in Novotny v. Danforth, 9 S. D. 301, of carrying into effect the intention of the parties, if it can be done consistently with the language used in the deed, and under Civ. Code, Sec. 1250, providing that the whole of a contract is to be taken together so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others, and Sec. 1261, providing that repugnancy in a contract must be reconciled, if possible, by such an interpretation as will give effect to the repugnant clause, 'subordinate to the general intent and purpose of the whole contract, held, that under a deed of trust vesting the entire trust estate in the grantee, and declaring that the trust should terminate upon his death, and that the children were to hold and enjoy the premises conveyed, in fee simple, “after the termination of this trust by the death of said trustee,” while another clause provided that the premises shall “at the death of said trustee and his wife * * S!, vest in said children in fee simple,” the death of the wife did not terminate tbe trust, nor affect .the rights of the children; neither did it affect the right of the trustee, the surviving husband, under the provision of the deed for “a support out of said premises,” during the lives of the husband and wife “and the life of the sur-v5vor of them,” so long as the trust remained; and .the termination of the trust is not postponed until the death of the husband and wife, but happened upon the husband’s death, and the rights of the children then became effective; that no vacant trusteeship arose on the death of the husband, the deed declaring that the trustee should “take no' rights or interests in said premises, except those of trustee.”
    
      3. Sam© — Trust Deed, Construction of — Purposes, of Trust — Fife Support Under Trust, Fee Simple to Children — Rights of Wife.
    Where a deed of trust, which involved an arrangement for the ultimate distribution of a trustee’s property to his children, provided for its use and occupation by himself and wifp during their joint life and during the life of the survivor, for “their support,” and .that it should vest in the children in fee simple upon his death, held, that the purpose of the deed was to provide a method of distributing the trustee’s property among his children upon his death, reserving the right to the use of the. property for .the benefit of himself, his wife, and family during the life of the trust; and that the premises were charged with the support of the surviving wife, after trustee’s death," for the remaining years of her life.
    4. Sonic — Coarsteiiciiom of Trust Bead — -Intention.—Oral Evidence in Conflict With Language of Deed, Admissibility.
    Whore the effect of oral evidence in the construction of a trust deed is to- show an intent in the grantor to vest a life estate in his wife, in direct conflict with the intent clearly expressed in the deed, such evidence is inadmissible.
    5. Apifealfy — -3"ieviesV“—-Kecoi'd—Evidence as Basis of Findings, Presumption as to Use of Incompetent Evidence.
    Where the record on appeal fails to disclose affirmatively' that incompetent evidence was received, such record remaining unchallenged, the Supreme Court will not presume that the trial court may have based its findings upon incompetent evidence.
    Appeal from Circuit Court, Moody County. Hon. Josiii’ii W. Joniís, Judge.
    Action to quiet title, by Bertha Finke, against Eli Finke and others. From a judgment for plaintiff -defendants appeal.
    Reversed and remanded.
    
      Rice & Demon, for Appellant.
    
      Ira P. Blewitt, and Krause & Krause, for Respondent.
    (2) To point two of the opinion, Appellant cited: Novotny v. Danforth, 9 S. D. 301 at 306; Civ. Code, Secs. 928, 932, 1250, 1256, 1259. Appellants submitted, as -to the interest of plaintiff, that: It was not the intention of Finke to grant to his wife, the plaintiff, any estate in said premises, but to secure to her a support during her natural life, charging said premises with such support, and cited: Wallace v. Foxwell, 250 Ill. 616, 50 L. R. A. (N. S.) 632 at 642; Dee v. Dee, 212 Ill. 338, 72 N. E. 429; Armstrong* v. Barber, 239 Ill. 389, 88 N. E. 246; Beverlin v. Casto, 62 W. Va. 156, 57 S. E. 411; Winthrop v. Clinton, 196 Pa. St. 472, 79 Am. St. Rep. 729; Webster’s Dictionary; Opinions of Justices, 13 Fla. 687.
    Respondent cited: Civ. Code, Sec. 937; 13 C'yc. 669, Text 6 and pp. 670-1, 677-8; Myers v. Cullum, 152 Ind. 700, 51 N. E. 918; Rollins v. Davis, 96 Ga. 107, 23 S. E. 392; Warren v. Webb, 68 Me. 133; Support for Rife, — Life Estate; Williams v. Owen (Ind.) 18 N. E. 389; Murphy v. Merritt, 3 Jones (N. C.) 37; Keeler v. Wood, 30 Vt. 242.
   SMITH, J.

Plaintiff and Frederick C. Finke were married about 20 years prior to the beginning of this action. Finke was al that time a widower, the father of seven children. Plaintiff was a widow and the mother of four children. Three children were born to the plaintiff and Frederick C. Finke. His ten children are the defendants in this action. In January, 1895, Frederick C. Finke acquired title to three quarter sections of land in Moody county. In November 1897, he conveyed the premises in controversy, being two quarter sections of said land, by warranty deed in which the plaintiff joined, to one Haugeberg, and some weeks later, in December, Haugeberg, by a warranty deed, conveyed the two quarter sections to Eli Finke, who is one of the defendants in this action. In March, 1899, Eli Finke conveyed the premises to Frederick C. Finke by a warranty deed, com taining provisions which constituted it a trust, -which deed is hereinafter referred to. In April, 1904, Frederick C. Finke conveyed to his wife, the plaintiff, the third quarter section of land upon which they then resided, being the homestead' of the.parties. In October, 1912, Frederick C. Finke died intestate. _ Plaintiff brought; -this action to quiet title in, herself as his. widow, to an undivided one-third o-f the 320 acres conveyed to. Frederick C. Finke, her deceased husband, by the trust deed, alleging that the several deeds purporting to create .s.uch a trust were in fraud of plaintiff’s rights ■ and -therefore inoperative and left the estate in her husband. Trial to; the court. Findings, of fact and conclusions of law were made.by the trial court, upon which, the judgment was. entered, from, which the defendants appeal.

The sufficiency of the. evidence to sustain the findings- of fact is not, questioned by appellants. The trust -deed referred to is made a part of the findings. The only question presented upon •this-appeal-is whether the conclusions of-law and the judgment are sustained by the findings, of fact. The trial' court found:

“That the several conveyances described in findings III, IV, and V -hereof (being the several deeds above referred to) were made in -good faith and without intent' to. defraud the plaintiff herein or any one else, and1 were sufficient to transfer the title to said lands, and same were so; made and -by -said Frederick C. Finke so caused to be made, with the intent and for the purpose of carrying out his plan of distributing 'his property to1 his children, .subject to the use and enjoyment thereof by and to himself and his wife, the plaintiff, for and during their natural lives and to 'the 'survivor for life, and that the said Fredrick C. Finke had and retained exclusive’ possession and control of all the said lands' and premises with the rents, issues, and profits thereof unto himself', from the time he acquired title thereto in January, 1895, to the time of his death.”

As conclusions- of law, the court found -that plaintiff was the owner' of a life estate in the iand in controversy under the terms and provisions of the trust deed, -and .became entitled to possession thereof on tlie -death -of her husband, and to the rents, issues, and profits, thereof during -her natural life, and to a decree q¡uieting -title 'in:'her'to a life-estate,--and that the defendants were entitled '£6! á décree qúiéíihg title in each of -them to an undivided one-tenth- of the remainder' in' fee. Upon -the findings and conclusions ■judgment was entered, -awarding plaintiff immediate and ex-cTifeive .possession of the premises, and confirming in her a life •éstate 'with the -right to the issues, rents, and profits thereof, during-her natural'life.

"T-hle deed purports to- convey title in fee to- Frederick C. fíinké^ hi's .heirs arid assigns, and after the granting clause, contains 'the following provisions : ''

“In trust, .nevertheless, and to and for the tuses, interests and ■purposes hereinafter limitecl,' described and declared, that is to sayj .-in ‘trust, '.to him-, -the said grantee,' to hold, occupy arid dispose of said premises' entirely for "the use arid benefit of [his children and .they] to -be the beneficiaries of this’ trust in equal proportion, 'and to hold and enj-o-y ’said premises ' in fee'(-simple after the 'termination of -this, trust by the death- of said trustee; but, provided 'further, that said trustee and h-i-s wife," Bertha Finke, are to have a support out of said premises, during" their natural lives- and the life of the survivor of them, and said premises shall, at the death of said trustee and his wife, Bertha, vest in said children in fee simple, and in equal interest to each and all. And it is further .provided and declared, as a condition and; incident of this conveyance that said trustee shall have the right to occupy said premises and control and conduct the same according to his judgment and at any time in his judgment that it may be for the interests of said children, and of said estate, to sell and convey any portion or all of said premises, he shall have the right, power and authority to sell, assign and convey the same, oir any part thereof, ■by proper deeds of conveyance, without any further authority than is herein conferred, and any conveyance made by him in pursuance of this trust, and the power herein given and conferred," shall vest complete, full and perfect title in his grantees in fee simple; but the proceeds of any and all such conveyances shall be held, used and disposed of for the interests and to the sole use of the children for whom this trust is created. It is hereby expressly provided and understood .that said trustee shall take no rights or interests in the said premises except those of trustee as herein expressed.”

Counsel for both appellants and respondent concur in the view that the proper rule o.f construction applicable to this instrument in that announced by this court in Novotny v. Danforth, 9 S. D. 301, 306, 68 N. W. 749, 751.

“In construing deeds, asi well as other written instruments, it is the duty of the court to1 carry into effect the intention of the parties, if it can do so consistently with the language used in the deed.” Perry v. Bowman, 151 Ill. 25, 37 N. E. 680; Civ. Code, § 928.

Section 1250, Civ. Code, provides:

”The whole of a contract is to be taken together, so as to- give effect to every part, if reasonably practicable, each clause helping to interpret the others.”

Section 1259, Civ. Code, further provides:

“Particular clauses of a contract are subordinate to its gén-eral intent.”

Section 1261, Civ. -Code, provides:

“Repugnancy in a, contract must be reconciled, if possible, by such an interpretation.' as will give some effect to the repugnant clause, subordinate to- the general intent and purposes of the whole contract.”

A careful consideration of the entire record satisfies us that the trial court was correct in finding that the various transfers referred to' were made and caused to be made by Frederick C. Finke, with the -intent and for the purpose of -carrying o-u-t his plan of distributing his property to- his children subject -to the use and -enjoyment thereof by himself and his wife, during their joint lives. But a -careful analysis of the various provisions of the deed, which is- set forth in the finding's of fact, leads- us to- the conclusion that the trial -court erred in the conclusion of law that Frederick C. Finke intended to vest his surviving- wife with a life estate, carrying with it the right of possession and use of the premises after his death. The deed unquestionably vested a trust estate in Frederick C. Finke, which was to terminate at his death, and upon his death and the termination of the trust, t-he title in fee simple was, w-e think, intended to vest in his children equally, who thereupon became entitled “to hold and -enjoy said premises -in fee simple.” It is perfectly clear that the trust deed -did not vest a life -estate in Frederick C. Finke, because the deed declares he is granted no interest in the premises except those of trustee. Both Finke and his- -wife are named in the -deed1 as beneficiaries of the trust, bo long only as the trust itself exists. Bertha Finke, although named as -a beneficiary of the trust, was not a grantee in the 'deed, and -she necessarily -ceased- to- be a beneficiary under the trust when the trust itself was terminated -by the -death of her hu-sband. Two of the clauses in this deed are -apparently repugnant. The first provides that the children are—

“to hol-d and enjoy said premises in fee simple after the termination of this trust by the death of said trustee.”

The -second declares that:

“Said premises shall at .the death of said trustee and his wife Bertha, vest in said -children in -fee simple.”

It becomes necessary therefore, if possible, to reconcile these ¡conflicting or -repugnant clauses so as to carry -out and effectuate the general purpose and intent of the creator of the •trust as disclosed by the terms- and language o-f the instrument creating the trust. This- instrument vests the entire trust estate in Frederick C. Finke, and declares that the trust shall terminate upon his death. The death of the -w'ife, Bertha F. Finke, would not terminate the trust, nor would it affect the rights of the children ; neither would it in any manner affect the right of Frederick C. Finke, the surviving husband, to a support “out of said premises,” so long as the trust remained. The rights,, duties, and obligations of the trustee and of-the children would remain wholly intact and unchanged by her decease. It is plain, therefore, that the termination of the trust is not postponed until the death of both husband and wife, but happened upon the death of the huband and not otherwise. But by the term's of the instrument the trust itself ceases, and determines upon his death, and a new situation arises in which the rights of the children become effective under the deed. Appellants’ theory that a vacant trusteeship arises upon the husband’s1 'death cannot be accepted, for the reason that the trusteeship itself ceased and determined when the trust was termin ated by the death of Finke. The deed declares, that:

“Said trustee shall take no rights- or interests in the said premises except those of trustee as- herein expressed.”

But the deed expressely declares that “after the termination of the trust upon the death of the trustee” the children “shall hold and enjoy said premises, in fee simple.”

The trial court found, and we think. correctly, that this instrument was made with the intent and for the purpose of carry out Finke’s plan .of distributing his property to his children, and we are of the view that he intended that the legal title should vest -in his children with the right “to hold and enjoy ■said premises” after the termination of the trust by his death. The declaration in the body of the deed creating the trust is followed by the proviso, which contains the apparently repugnant •clause:

“Said premises shall at the death of said trustee and his •wife Bertha, vest in said children in fee simple.”

This clause contemplates and recognizee the general purpose, to vest the legal title in the children. If the clause of the proviso which says, “and said premises shall at the death of said trustee and his wife Bertha, vest in said children in fee simple,” be construed as intended to postpone the vesting of the legal title in the children until the happening of the death of Bertha Finke, the wife, such clause would plainly be repugnant to the preceding clause in the body of the instrument, which expressly declares that the trust itself shall terminate upon the death of the trustee, and the fee simple, with a right to hold and enjoy, shall thereupon 'vest in the children. Such interpretation would hold that, “upon the death of the trustee and the termination of the trust, the children could net take the fee simple title,” with the right to: hold and enjoy the premises, which right is given- them by express words in the body of the instrument. Upon a careful consideration and analysis of all the provisions of the deed, we are inclined to the view that its primary purpose was to provide a method of distributing his property equally among his own- children upon his death, reserving the right to the use of the trust estate for the benefit of himself, his wile, and family during- the life of the trust, and that the trust was to terminate at his death, and the full legal title, discharged from the trust, was. intended to vest in his children, with the right in them to hold, use, and occupy the premises, which premises were intended to be charged with the obligation of “a support” for the surviving wife for the remaining years of -her life. This interpretation of the instrument, we .think, give© a proper effect to. every clause of the instrument, and reconciles the apparently repugnant clause in the proviso' by making it subordinate to the general intent and purpose of the whole instrument.

Respondent's counsel suggest that oral evidence may 'have been before the trial court, disclosing the intent of the grantor to vest in the plaintiff at his death the right to the use and enjoyment of the premises “by the survivor for life.” It is absolutely clear, as we have already observed, that the husband and wife were the direct and equal beneficiaries of the trust during the life of the husband, and that upon the wife’s death the husband would become the sole direct beneficiary of the trust. But he was not, and never could become by the provisions of the deed, vested with a life estate in the premises. It is equally clear that the wife became vested by the deed with the same right as-the husband, so long as the trust continued, and was not the grantee of a life estate, or of any interest in the premises other than as.a-beneficiary of the trust. Respondent’s view involves the contention that the grantor intended to create a life estate in the-wife, wiiieh was to vest in her at his death. Not a singie word is 'found' in the deed! purporting to grant to her any estate in. the premises, either before or after his. deaths or which ’ upon 'the ■htteband’s death changes or enlarges the character of the benefits to which she was entitled as a beneficiary of the trust. As such beneficiary she was entitled to a support, and was given no other right, title,- or interest whatever in the premises, and' there is absolutely nothing in the deed .from. which it might be inferred that the grantor intended to enlarge or change her rights upon the happening.of his death. 'In fact such, intent is negatived by the language of the deed itself. The deed took effect upon his death as..an absolute-and unqualified, grant in fee simple to his children, and, apparently to remove all doubt as to-his intent, dhe- grantor ■incorporated1 ’ into’'the very granting clause itself the" wbrds, “to •‘hold aiid'enjoy .said'premises.” To construe the deed, with the ‘aid ’of oral evidence.o:r otherwise, as granting to the wife.a life estate in the pranises. would certainly change — the whole legal effect of -the grant to • the children: ■ -Its follows tha-t oral testimony ■which-might tend to> show ’an intent in 'the"gr'antor"to' vest a life 'éstáté in the wife upon his ’deafh would be' in direct'.con.flict with the plain language of the deed, for the effect would, be .'to 'vest in -the children a remainder., in fee .simple pnly, and- tcn-posipone -their right “to hold and enjoy the premises” -.until the-■ death' of the -wife, -whereas the grant'itself' fs one' “in 'praeséíiti”'':upbn 'the hap-’periing of "the death of' fhe” grantor.'. It is plain," therefore, that ofial evidence which would entirely change'the "legal effect .of the language, used -in ..the. instrument. itself could not properly- be received to disclose a supposed “intent” of-the-grantor;--, and the .records'before us Tailing t to- disclose -:affiFifiatiVe-ly'"'that -in-comp'etent evidence" was':ih factt feceived''''and remains,'unchallenged _üp¿ñ this appeal, we cannot presume that the ;tfia.v,court; m.ay h-a,ve .basjpd' its findings- upom.evidence-which ,w-as;;in.córqpetent.-; This rcourt-h-as. many-times faeld-dhat, where the -record-iis- -silent as to dlife -evidence'''upon'wliicff-'fiñdings-tó'f fact'abe based,'-iffivill’ be pre-“stjmed that'the findings :afe’%uppbrted by'dam>j3efeit evidence'. But this court ^hás’..néyer,’ held ,'thaff a, finding will, be presumgd-- to ’ be .sustained; by. evidence. yy hick-the ^record,:itself. -.shows; would have ;beeoriticompetentrIt-..fQttows.,bhat ¡counselV.?'contention. vtpOn this -bfiáneh of-the cdse'canifbt b'er'su'staihedl

The conclusions of law and judgment are reversed, and the cause remanded, with directions to the trial court to enter conclusions of law and judgment in accordance with the views herein expressed.