181 Iowa 897 | Iowa | 1917
If this were all, we should hold that the tax was due
II. But though the deed, by reserving a life estate, worked liability to the tax, all this could be changed by terminating the reserved estate in the lifetime of the grant- or and changing the grant by adding to remainder the right to immediate possession and enjoyment. See Lamb v. Morrow 140 Iowa 89. The same case is authority for holding that, in determining in this case whether such a change was made, we may take into consideration all that was done and intended.
As part of the same transaction, the parties entered into what is, in form, a lease. At this time, another held an unexpired lease. ■ Appellee, as part of her “leasing,” was permitted to collect .and keep what this tenant paid after the leasing to appellee. The annual “rental” she paid was arrived at by computing five per cent on what the grantors had paid for this land when buying it to give to appellee. The deed is silent as to a lease to grantee, but the lease recites the reservation of a life estate in the deed. The lease has a term of ten years, but provides that, because a life estate has been reserved, the lease shall end when the last of the grantors deceases, if that shall occur before the ten years have run. The last survivor made a will later than the deed and the lease, giving to appellee any sum that may at her decease be due for rent. The parties understood that, if the grantors should in future desire that grantee make them a home on this land, this should be done by her. The last of the grantors surviving was given a home there and died there. While the “fine print” in the lease gives these grantors the usual powers of a landlord, grantee did what no mere remainderman or lessee would do, years before the lease expired, and years before it could be known when the life estate would terminate.
We think the “transaction” was a commutation or exchange of the life estate reserved in the deed and recited in the lease; that the parties estimated that such estate would terminate in ten years, and agreed to substitute for that estate an annuity to be paid by grantee until the last grantor should die, — in effect, that grantees.sold their life estate for $400- a year,, to be paid by grantee out of her own means. Had there been an honest agreement in terms that the life estate was sold to the remainderman, and that, in consideration, the owner of the life estate should be paid a stated sum, with a stated rebate if the seller lived less than ten years, the case would not differ in legal effect from the one we have. It would effect that, in the lifetime of the parties, there was added to the remainder title the right to immediate possession and enjoyment. As we view it, appellee, though originally not so endowed, had later vested in her, and as an addition to the grant in the ■deed, the right to immediate possession and enjoyment, and exercised that right befo're the death of her grantors, and that, therefore, the trial court held rightly that she got nothing by succession upon death of her aunts, and was not liable to a succession tax. — Affirmed.