Title: Scherf v. Renfroe
Citation: 93 So. 2d 402
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: February 21, 1957

93 So. 2d 402 (1957)
Mary Walters SCHERF
v.
J. W. RENFROE et al.
4 Div. 774.

Supreme Court of Alabama.
February 21, 1957.
Rehearing Denied March 21, 1957.
*403 W. H. Albritton, Andalusia, John C. Walters, Troy, and Albrittons &amp; Rankin, Andalusia, for appellant.
Oliver W. Brantley, Troy, guardian ad litem and for appellees.
*404 GOODWYN, Justice.
This is an appeal from a decree of the circuit court of Pike County, in equity. The case involves the construction of a property settlement agreement made a part of a divorce decree.
Mary Walters Scherf, appellant, and J. W. Renfroe, one of the appellees, were formerly husband and wife. In December, 1948, their marriage was dissolved by a decree of divorce rendered by the Pike County circuit court, in equity, on a bill filed by the wife. A property settlement agreement was incorporated into the divorce decree and approved by the court. The instant case turns upon the construction and effect to be given certain provisions of that agreement. The portions which are germane to the question here are as follows:
The life insurance policies mentioned in paragraph 5 and set out as an exhibit to the agreement are as follows:
At the time the divorce was granted the parties had four minor children, all of whom were placed in custody of the mother. When the present proceeding was instituted the ages of the children were 9, 19, 22 and 24. All of the children were made parties-respondent to the bill.
Both J. W. Renfroe and appellant have remarried and now have children by their second marriages. Mrs. Scherf remarried in 1950.
In her bill Mrs. Scherf alleges that Renfroe breached the property settlement agreement in allowing two of the insurance policies, one for $2,000.00 and one for $10,000.00, to lapse in 1949, prior to appellant's remarriage.
Appellant contends that on lapse of the insurance policies the title to the house vested absolutely in her under the provisions of paragraph 8 of the property settlement agreement.
J. W. Renfroe disclaimed any interest in the property. A guardian ad litem was appointed to represent the minor respondents and he has appeared and filed a brief in their behalf on this appeal.
The question presented concerns the title to the house and lot in Troy which was the home of the parties at the time of the divorce. As we see it the disposition of this property must be based upon the construction and effect given certain clauses of the property settlement agreement, particularly paragraphs 6 and 8.
There appears to be no question that Renfroe breached the contract by failing to pay the premiums on two of the insurance policies, thus allowing them to lapse prior to appellant's remarriage, as alleged in the *406 bill. This brings us to the specific point to be decided: Did absolute title to the real estate vest in appellant on this breach?
Appellees insist that paragraph 8 should not be given effect because (1) it is in conflict with the preceding provisions of the contract, specifically the provisions of paragraph 6, and (2) because it would work an inequitable forfeiture of the rights of the children. These contentions were sustained by the trial court. Having decided that the contract was ambiguous and that paragraph 8 could not be reconciled with the preceding provisions, the court applied the following principles:
We recognize the soundness of these principles, but do not consider them applicable to the contract before us. While the contract is complex, we do not think it it is ambiguous. The provisions of paragraphs 6 and 8, when considered separately and not as part of the agreement as a whole, do appear to be contradictory. But when considered together with the other provisions of the agreement it seems to us that both paragraphs have a definite place in the overall agreement. A contract must be construed as a whole and, whenever possible, effect will be given to all of its parts. The court will look to all of its provisions and the object to be accomplished. Penn Mut. Life Ins. Co. v. Fiquett, 229 Ala. 203, 207, 155 So. 702; Chapman v. Nitrate Agencies Co., 225 Ala. 650, 652, 144 So. 810; 17 C.J.S., Contracts, § 297, p. 707.
The conclusion is inescapable that under the express terms of the contract appellant acquired absolute title to the real estate upon breach of the contract by Renfroe. Although limitations on appellant's title are set forth in paragraph 6 such limitations are subject to the provisions of paragraph 8 which provide, in effect, that these limitations shall terminate in event of Renfroe's failure to perform his agreements.
This brings us to the question whether the provision in paragraph 8 that appellant's title to the real estate should "become absolute notwithstanding anything herein to the contrary" upon a breach by Renfroe operates as a forfeiture which equity will not enforce. The position taken by appellees is that the provisions of paragraph 8 amount to an unconscionable forfeiture of the rights of the children from which equity should grant relief.
The portion of the trial court's opinion which deals with the supposed forfeiture aspect of the contract is as follows:
The power of a court of equity to grant relief from an unconscionable forfeiture is well-established. Humphrey v. Humphrey, 254 Ala. 395, 396, 48 So. 2d 424, 31 A.L.R.2d 315; Dean v. Coosa County Lumber Co., 232 Ala. 177, 182, 167 So. 566; Hunter-Benn &amp; Company v. Bassett Lumber Co., 224 Ala. 215, 218, 139 So. 348; Barton v. W. O. Broyles Stove &amp; Furniture Co., 212 Ala. 658, 659, 103 So. 854; 30 C.J.S., Equity, § 56, p. 393; 19 Am.Jur., Equity, § 88, p. 99. However, we do not think this principle has application to the contract before us.
Appellees recognize that there can be no forfeiture so far as Renfroe is concerned for the obvious reason that he was completely divested of all interest in the property by the very terms of the contract whether he performed the conditions therein imposed on him or not. As already noted, their insistence is that the failure of Renfroe to perform his agreements operated as an inequitable forfeiture of the rights of the children. But the rights of the children are limited by and subject to the conditions of the same contract which gives them whatever interest they might acquire in the property. Before the contract was executed the children had no interest whatever in the property and after its execution they acquired no interest except that given by the terms of the contract. They are not parties to the contract but are conditional beneficiaries thereunder. There is no question that the parties to the contract (the mother and father) could have provided, in the first instance, that title to the property completely vest in the mother immediately upon execution of the contract, for the children, as such, had no title to their parents' property and could not have prevented them from conveying, one to the other, any property either owned. Clearly, then, whatever interest the children might have in the property is by virtue of their *408 parents' separation agreement. And that agreement (paragraph 8) specifically provides that the mother's title shall become absolute, notwithstanding anything in the agreement to the contrary, upon failure of the father to perform any of the agreements therein imposed on him. This provision, it seems to us, is no more than a simple condition subsequent which the parents had the right to include as a part of their separation agreement. We do not think it is a provision for a forfeiture against rights of the children, for their rights are subject to this condition. They could acquire no vested right in the property except on the death or remarriage of their mother during the lifetime of their father (par. 6 (a)); but another condition (failure of the father to pay the insurance premiums) operated to vest absolute title in the mother before her remarriage. And there is no provision for divesting the title out of the mother after the absolute vesting of title in her under paragraph 8.
See, also 17 C.J.S., Contracts, § 319, pp. 741-742.
The decree appealed from is reversed and the cause remanded to the trial court for further proceedings not inconsistent with the views herein expressed.
Reversed and remanded.
LIVINGSTON, C. J., and SIMPSON and COLEMAN, JJ., concur.