NO. 93-005

IN THE SUPREME COURT OF THE STATE OF MONTANA

1993

JOSEPH HAYES HAUSEMAN, JAMES JUDD

HAUSEMAN, DEAN M. HAUSEMAN, III, STEVEN

SCOTT HAUSEMAN, and ROBERT CHARLES HAUSEMAN,

Plaintiffs and Appellants,

v.

WILLENE JONES KOSKI, and all other persons,

unknown, claiming or who might claim any

right, title, estate, or interest in or

lien or encumbrance upon the real property

described in the Complaint or any part

thereof adverse to plaintiffs' ownership or

any cloud upon plaintiffs' title thereto,

whether such claim or possible claim be

present or contingent including the person

or persons in possession,

Defendants and Respondents.

APPEAL FROM: District Court of the Eighteenth Judicial District,

In and for the County of Gallatin,

The Honorable Thomas A. Olson, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Ben Berg, Jr. and Rienne H. McElyea, Berg,

Lilly, Andriolo & Tollefsen, Bozeman, Montana

For Respondents:

Lyman H. Bennett, III and Lynda S. Weaver,

Morrow, Sedivy & Bennett, Bozeman, Montana

L

File&

Submitted on Briefs: March 11, 1993

Decided: August 3, 1993
Justice William E. Hunt, Sr., delivered the opinion of the Court.

Appellants Joseph H. Hauseman, James J. Hauseman, Dean M.

Hauseman III, Steven S. Hauseman, and Robert C. Hauseman

(Hausemans), as co-trustees and interested parties, appeal from an

order of the Eighteenth Judicial District Court, Gallatin County,

granting summary judgment in favor of the personal representative

of the estate of Maurice Jones, and finding that the recording of

a revocation of a trust with the clerk and recorder provided

constructive delivery to the co-trustees.

We affirm.

The only issue raised by the Hausemans is whether the District

Court erred in holding that a recordation of a revocation of a

trust agreement effectively revoked the trust.

The facts are undisputed.

On May 1, 1979, Marlyn J. Jones and J. Maurice Jones

(trustor), who were both trustors and co-trustees, executed a

revocable trust which reserved the right to revoke or amend the

trust in whole or in part by an instrument in writing delivered to

the co-trustees. Marlyn died on May 14, 1980, and did not exercise

her power to revoke. On May 31, 1991, trustor signed a revocation

of trust, which his attorney recorded with the clerk and recorder's

office on May 31, 1991. On June 13, 1991, trustor died.

On June 20, 1991, trustor's attorney sent the co-trustees,

Joseph Hayes Hauseman and James Judd Hauseman, a copy of said

revocation via certified mail. Neither of the named individuals

2
received the revocation and the letters were returned to the

attorney's office as unclaimed.

Initially, we discuss the standard of review applied in

summary judgment cases. Rule 56(c), M.R.Civ.P., states that it is

proper to grant summary judgment when there are no genuine issues

of material fact and the moving party is entitled to judgment as a

matter of law. On the cross-motions for summary judgment, the

District Court stated that the parties agreed that there were no

issues of material fact. Our standard of review on questions of

law is whether the district court's interpretation of the law is

correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont.

470, 474, 803 P.2d 601, 603.

The following provision contained in the trust agreement is at

the center of this dispute:

Trustors reserve the right at any time, by

instrument in writing delivered to the Co-Trustees, and

acknowledged in the same manner of conveyance as the real

property and title to be recorded in the State of

Montana, unless acknowledgement be waived by the

Co-Trustee to revoke or amend this trust in whole or in

part. The duties and liabilities of the Co-Trustees

shall under no circumstances be substantially increased

by any amendment here under except by their written

consent. Upon the death of the Trustors, this Trust

shall become irrevocable and not subject to amendment.

The Hausemans argue that trustor did not follow the manner

specified in the trust for delivery of the revocation of the trust.

They also contend that the trust was irrevocable because trustor

died before his lawyer deposited the revocation in the mail. They

maintain that 5 72-23-502, MCA (1987) (Repealed. Sec. 220, Ch. 685,

3
L. 1989), requires that if a trustor reserves the power to revoke

a trust, the power of revocation must be "strictly pursued."

We begin our analysis with the general rule that in the

construction of trusts it is the trustor's intent that controls.

76 Am. Jur. 2d TIZLQ.Y § 17 (1975). To determine the trustor's intent

we look to the language of the trust agreement. In re Marriage of Hem’n

(1979) 182 Mont. 142, 146, 595 P.2d 1152, 1155. The language of

the trust agreement is clear and unambiguous that trustor reserved

the power to revoke the trust agreement at any time prior to his

death. For a proper revocation, the trust agreement required the

trustor to complete three steps: (1) a writing, (2) delivered to

the co-trustees, and (3) acknowledged in the same manner of

conveyance as the real property and title to be recorded in the

State of Montana.

The parties do not dispute that trustor met the first and

third requirements. The District Court concluded that the second

requirement was met by the filing at the clerk and recorder's

office of the trust revocation. We agree.

The Michigan Supreme Court defined the term "delivery" as

meaning:

It is our view that any act which will accomplish the

purpose of the parties in requiring delivery is

sufficient to give effect to the revocation. It is not

a question of a good or legal delivery. If the purpose

requiring it is accomplished, it is immaterial whether

the instrument of revocation is in the mail or on the

trustee's desk at the time of the donor's death.

Delivery is not essential to complete a revocation unless

made so by the parties in the trust agreement. What was

the purpose of requiring it here? Obviously it was not

4
for the protection of the trustee. The law will do that

regardless of delivery or other notice. It is a fair

inference that, in requiring delivery, the parties

intended to establish the fact of revocation during the

life time of the donor, to make sure the status of the

trust at that time, to cause a surrender of the

instrument, if one were made, so that some stranger or

interested person could not give it vitality by an

unauthorized delivery after his death. Any act of

surrender to that trustee would put the original

instrument of revocation beyond the owner's power to

alter or destroy would accomplish the purpose in

requiring delivery.

Hackley Union National Bank v. Farmer, et al. (Mich. 1931), 234

N.W. 135, 137.

In Hacklev, prior to his death in Germany, the settlor

executed a will and a revocation of a trust agreement. The

instrument was signed and acknowledged. A certified copy was sent

to the trustee with a letter stating that the settlor revoked the

trust. Hacklev, 234 N.W. at 136. The Michigan Court held that

these actions were sufficient to constitute constructive delivery.

After this analysis, the court then ruled that the revocation was

ineffective on other grounds. Hacklev, 234 N.W. at 137.

In Montana, delivery is accomplished by either words, acts, or

both. The law does not require actual handing over of the document

so long as it is handled in a way that unequivocally shows the

intention of the settlor. Carnahan v. Gupton (1939), 109 Mont.

244, 96 P.2d 513; see also, Springhorn v. Springer, et al. (1926),

75 Mont. 294, 243 P. 803.

In this instance, trustor executed a written document revoking

his trust on May 31, 1991. When the revocation was recorded,

5
trustor directed his attorney to deliver notice to the remaining

co-trustees.

The Hausemans contend that 5 70-21-302, MCA, is not applicable

because they are not subsequent purchasers for value. That

argument disregards the purpose of the recording statutes. The

recording statutes import notice to all interested parties in

matters affecting title to real property. 66 Am. Jur. 2d Records and

Recording Laws 5 103 (1973). The trust property at issue is real

property located in Gallatin County. As co-trustees, the Hausemans

are interested parties to the realty. All co-trustees received

constructive delivery when the revocation of trust was recorded

with the Gallatin County Clerk and Recorder. We hold that

§ 70-21-302(l), MCA, imparts constructive delivery of the contents

of the revocation instrument. We hold that the District Court did

not err in granting summary judgment in favor of Ms. Koski.

We affirm.

Justice

We concur:

6
Justice Fred J. Weber specially concurs as follows:

I concur with the holding of the majority opinion for the

reasons set out in that opinion and also for the reasons set out in

this special concurrence.

The Revocation of Trust was executed by J. Maurice Jones both

as Trustor and as one of the Co-Trustees. The following are the

key paragraphs of that Revocation of Trust:

Under the provisions of said Trust and specifically

paragraph II thereof the undersigned as the remaining and

sole Trustor and Trustee of said Revocable Trust

Agreement, by and through these presents and does

herewith revoke, cancel and terminate said Trust in all

of its particulars, conditions, and circumstances to the

effect that from and after the date of this revocation

said Trust shall be at an end, terminated and of no

further force and effect and the grant of the said real

property to the Trust also terminated and of no further

force and effect with said property to revert and remain

in my name.

Therefore, as Trustor I herewith grant, bargain,

assign, transfer, and convey the said Trust to myself as

an individual of the above described property to the

affect that the title shall no longer be vested or reside

in said trust but shall henceforth be in my name

individually.

Under the first paragraph, Mr. Jones demonstrated his clear intent

as both the sole surviving Trustor and as one of the Co-Trustees to

terminate the Trust so that it would be of no further force and

effect after the date of the Revocation of Trust which was May 31,

1991. In the first paragraph he emphasized that by stating that

the Trust terminated and was of no further effect so that the

property reverted to and remained in his name.

In the final paragraph, Mr. Jones conveyed the property to

himself. As one of three Co-Trustees, this certainly transferred

7
an interest by .virtue of the execution and recording of the

Revocation of Trust. It established his intent to have the title

to the property in his name individually.

As a result of the wording of the Revocation of Trust, Mr.

Jones effectively transferred all of his interest as a Co-Trustee

to himself individually.

Paragraph IV of the Trust Agreement provided in pertinent part

as follows:

IV

. . . [T]he Co-Trustees shall also distribute to the . .

. surviving Trustor, such portion, or all the principal,

of the Trust property as the . . . surviving Trustor,

from time to time may request in writing . . . .

Under that provision, Mr. Jones as surviving Trustor could require

the Co-Trustees to distribute to him all of the principal of the

trust property. The only requirement in order to do so is that he

make his request "in writing." The provisions of the Revocation

and Conveyance are sufficient to meet the requirements of Paragraph

IV. He clearly directed the Co-Trustees to distribute to him

individually all of the principal of the trust property and did so

in writing.

I conclude that the surviving two Co-Trustees were therefore

obligated under the provisions of Paragraph IV to complete the

transfer to Mr. Jones of all of the principal of the Trust.

I join in the opinion that the District Court did not err in

granting summary judgment in favor of Ms. Koski.
Justice Karla M. Gray dissenting.

I respectfully dissent from the opinion of the majority.

The majority, having begun with the general rule that the

trustor's intent controls in the construction and interpretation of

trust agreements, departs from this rule in performing its

analysis. I cannot agree.

Here, the trustor established three separate and independent

requirements necessary to effectuate a revocation: (1) a writing:

(2) delivered to the co-trustees; and (3) acknowledged in the same

manner of conveyance as real property and title to be recorded in

the State of Montana. It is clear that a writing was made and that

the attempted revocation of trust was recorded; thus, the first and

third requirements set forth by the trustor to revoke the trust

were met.

The majority concludes that the recordation equals delivery,

thus merging two separate requirements into one; on this basis, the

majority concludes that the second requirement also was met.

Because the trustor's intent to establish three separate

requirements for an effective revocation is clear and one of those

requirements was not met, the majority has departed from the

"trustor's intent" rule. It also has departed from the applicable

Montana statute that a power of revocation must be strictlv

pursued. Section 72-23-502, MCA (since repealed, but specifically

made controlling over trust instruments executed prior to October

1, 1989).

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Furthermore, the majority's reliance on Hacklev and Carnahan

to reach its result is flawed. As quoted by the majority, Hacklev,

234 N.W. at 137, states that "[dIelivery is not essential to

complete a revocation unless made so bv the oarties in the trust

aareement." (Emphasis added.) Here, delivery was specifically

required in the trust agreement. Moreover, it was a stand-alone

requirement unrelated to the separate recordation requirement.

It is also my view that Carnahan is inapposite here. The

issue in Carnahan was whether certain actions concerning a grant

deed constituted delivery under a statute specifically relating to

constructive delivery of a deed. It did not interpret a trust

agreement, any statute relating to trust agreements, or the general

rules regarding trustor's intent and strict construction of efforts

at trust revocation. Therefore, it is inapplicable to the case

before us.

I would reverse the District Court and hold that, the

trustor's stated intent not having been met, the attempted

revocation was not effective.

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August 3, 1993

CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the

following named:

Ben Berg, Jr. & Rienne H. McElyea

Berg, Lilly, Andriolo & Tollefsen

910 Technology Blvd., Ste. A

Bozeman, MT 59715

Lyman H. Bennett, III Jt Lynda S. Weaver

Morrow, Sedivy & Bennett, PC.

P.O. Box 1168

Bozeman, MT 59771-1168

ED SMITH

CLERK OF THE SUPREME COURT

STATE OF MONTANA