Court Opinion

ID: 6872177
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:02:45.135827+00
Date Added: 2024-06-11T08:50:12.282125
License: Public Domain

WILBUR, Circuit Judge
(concurring in part, and dissenting in part).
I concur in that part of the opinion and order which requires the company to reconvey the property acquired by it through mesne conveyances from Eliza Christian upon the condition that the company be reimbursed for the sum of $30,-000 paid for the property in the manner specified in the opinion. I concur in the reversal of the decree in so far as it affects the lease of March 17, 1905, and the agreement of August 31, 1906, upon the grounds stated in the opinion, except as hereinafter indicated.
I am not in entire accord with the order of' the majority for reasons which I will presently state.
*618In my opinion the agreement of August 31, 1906, from Eliza Christian to, Annie Kentwell, in consideration of her support and maintenance during the balance of her life, purported to convey not only all the rents accruing to Eliza Christian under the lease of 1905 after the contingent remainder of Eliza Christian became vested in 1922 upon the death of her father, as held by the majority opinion, but also all the rents, issues, and profits after the expiration of the lease and until her death.1
The lower court held that this agreement of August 31, 1906, transferred Eliza’s right to the rents, issues, and profits of the land during her lifetime, but held that it should not be construed to convey an interest in the real estate because if so construed the agreement would be invalid under the law of Hawaii which requires a husband to consent in writing to a sale of real estate by the wife.2 The main contention of the guardian is that the contract of 1906 purported to convey all the rents, issues, and profits of the property during the ward’s life, and therefore it was in legal effect a conveyance of land and void under the statute because of a failure of the husband to consent in writing thereto.3 The suggestion in the guardian’s brief that the agreement of 1906 might be limited so as to cover the rents due under the lease of 1905 only is, I think, a mere makeweight added because of his misconstruction of. the first opinion in this case by the lower court. The company contends that the agreement of 1906 conveyed the right to receive all the rents and profits of the property during the life of the ward. To meet the limitation of section 2993 of the Revised Laws of Hawaii (note 2), it argues that the agreement shows that it was not the intention to transfer a life estate in real estate. The difficulty with this argument is that it is a fundamental principle of general application that the conveyance of income and profits of property operates to transfer the property itself. Green v. Biddle, 8 Wheat., 21 U.S., 1, 76, 5 L.Ed. 547; Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 580, 15 S.Ct. 673, 689, 39 L.Ed. 759; Wickizer v. Wickizer, 124 Kan. 818, 262 P. 589; Thompson on Real Property, vol. 1, § 715; vol. 3, p. 704, § 2569; 18 C.J. § 284, p. 306. Under this rule the effect of the conveyance of 1906 was to transfer an interest in real estate. The law requiring the husband to consent to such conveyance was intended to protect the wife and perhaps the husband also. There is no room for an interpretation of the instrument which would limit it to something less than an interest in real estate amounting in this case to a life estate. As the Supreme Court said in Pollock v. Farmers’ Loan & Trust Co., supra, quoting from Coke’s Littleton (page 45), “For what is the land but the profits thereof?” Therefore, the conveyance was invalid under the statutes of Hawaii, section 2993, Rev.Laws, 1925, supra. In view of the fact that my associates hold that the agreement of 1906 conveys the rents-under the lease of 1905 only, I think it is unnecessary for me to point out the different results which would follow from the conclusion that the agreement is void.
With reference to the question of improvements I agree, with the disposition of that question by the majority of the court with these exceptions: I think that after the company acquired title to the contingent remainder of the ward, all improvements made upon the property thereafter should be deemed to be made by reason of the possession and bona fide claim of *619right thereto arising from the deed and also from its rights as cotenant in possession arising from its ownership of an undivided interest in the property derived from the other devisees of the original owner and should not be attributed solely to the right of possession given it by the lease, if valid, which by operation of law merged in the title conveyed by the voidable deed of 1910. In this connection it should be remembered that the right of the ward to the improvements made by the company as tenant while holding under the lease of 1905 arose because the improvements became a part of the land as soon as affixed thereto and that she immediately acquired a contingent interest therein which she conveyed in 1910 and Which vested in 1922 in her grantee. The right of the company to the improvements it placed on the land resulted from the deed of 1910. The provision in the lease that the landlord should own the improvements placed on the land by the tenant was merely a recital of the legal effect of so doing, except, perhaps, as to what might be called trade betterments. Also, assuming that the lease of 1905 is invalid, the following disposition of the case should be made in regard to improvements placed on the property between 1905 and 1910: The improvements placed on the property between 1905 and 1910 were to belong to the landlord in 1930 — the date of the expiration of the lease. Such improvements in effect operated as increased rental. By setting aside the lease the ward receives the benefit of the rental value after 1922 when her right became vested. Any rent paid the landlord between 1922 and 1930 would, of course, be deducted from the value of the use of the premises allowed the ward. While no rent was actually paid the ward for that period, the improvements placed on the property before 1910 on the faith of the lease operated as compensation in part to the ward for the use of the leased property, and to that extent acted as rental for the period from 1922 to 1930. A decree canceling both the deed and lease should allow as a deduction from the value of the use and occupation of the property awarded the ward for her one-third interest in the property between 1922 and 1930 the pro rata value, that is eight twenty-fifths (eight years out of twenty-five) of the increased value of the property due to these improvements. The value of the use and occupation of the property should be determined without reference to the value of the improvements.
The next point to which I direct attention does not affect the result and is mentioned because I prefer to place my concurrence in that result upon the ground now to be stated. I have no doubt that the question of the results flowing from the incompetency of the ward are questions of general law. There is no statute of Hawaii upon .the subject other than that adopting the common law (section 1, Rev. Laws of Hawaii 1935), and no rule of property on that subject. The lower court treated the question as one of general law, citing the decisions of a number of the state courts,4 and both parties treat the matter as a question of general law in *620their briefs, the only difference between them being that the guardian contends that there is a federal rule defining the general law upon the subject which should be followed as an authoritative interpretation of the general law.5 There is no doubt that a decision of the Supreme Court of the United States upon the question of the rule of English common law on that subject as modified by American common law would control our decision thereon, but I believe that the correct rule of the English law so modified is stated in the main opinion approving the holding of the lower court as to the deed in which I concur and that there is no federal rule in conflict therewith.
With reference to the question of whether or not there was a consideration for the ward’s joining in the lease of 1905, I think it is clear that the agreement to pay rental to the owners of the life estate was a sufficient consideration for the covenant for quiet possession by the owner of the contingent remainder. Ashburn v. Watson, 8 Ga.App. 566, 70 S.E. 19.
I concur in the order of reversal and order for a new trial, but dissent from those directions with relation to the decree to be entered upon such new trial in the respects indicated.

 The granting part of this instrument, which is set out in the majority opinion in full, omitting certain tautological expressions, is as follows: “Elizabeth R. P. Christian, in consideration of the premises and of one dollar * * * and for other and valuable consideration * * * does hereby * * * sell, assign, release * * * all rents, issues and profits to which she may hereinafter he entitled ® * through or under the lease to the Waialua Agricultural Company * * * or by virtue of being * * * a devisee under the will of R. W. Holt, deceased, together with * * * her right to * * * receive * * * such rents * * * from whomsoever due during the term of the natural life of the said Elina R. P. Christian."

 “Sec. 2993. * * * provided, however, that no sale or mortgage of her real estate shall he valid without the written consent of her husband.” Revised Laws of Hawaii 1925.

 In the guardian’s brief he asserts: “The instrument of 1906 was void for want of written consent thereto of Eliza’s husband,” and asserts after argument on that point that “it is dear, we submit, that Eliza conveyed to Annie a life estate in the lands in question.”

 The lower court in its first opinion, citing numerous decisions of the federal and state courts, quoted and adopted the rule stated in text books on general law: 32 C.J. 742, § 528; in Devlin on Deeds, § 73, and in 9 Am. & Eng. Enc. L., 2d Ed., p. 119; and in Story’s Equity Jurisprudence, §§ 317, 318. It rejected the rule stated in 3 Thompson on Real Property, 1007-1009, § 2848, and in 2 Black on Rescission and Cancellation 718-720, § 254. The lower court stated:
“After much reading and careful thought, we believe the rule that the deed of a grantor who was mentally incompetent to execute it, but whose condition prior to its execution had not been judicially declared and which in contemplation of law was not otherwise known to those dealing with such incompetent, is voidable only i" more strongly supported by reason and justice than the harsher rule that such deed is absolutely and unconditionally void. We also believe that it is . in accordance with sound principles of equity and the highest standards of justice to say that such deed, when judicially attacked, should not be canceled upon the sole ground that the grantor was mentally incompetent but that in determining whether it should be canceled the nature of the transaction in all its aspects and the good or bad faith of those dealing with the grantor in respect to such transaction should be carefully considered. * * *
“When the grantee can be restored to the position it occupied immediately prior to the conveyance, the deed of the incompetent should be canceled even though it was taken in ignorance of the incompetency and even though the consideration paid was adequate.”

 The guardian states in his brief: “The questions involved in this appeal are, in substance, as follows:
“1. As between two rules of general jurisprudence, one prevailing in the courts of last resort of a majority of the states, and the other prevailing in the United States Supreme Court and a majority of the subordinate federal courts, which rule should he. followed by the Supreme Court of Hawaii and the United States Circuit Court of Appeals for the Ninth Circuit in tlie determination of the issues presented in the instant case?”