104 Wis. 500 | Wis. | 1899
Lead Opinion
The following opinion was filed June 22, 1899:
There does not appear to be any serious,, if any, controversy between the parties to this cause. "VYhile- . the attitude of counsel for appellants and respondent is in form adversary, all appear in fact to contend for a declaration by this court that the judgment appealed from is right and binding upon all persons interested in the property and that a sale of it made pursuant to such judgment will entitle the purchaser to an absolute title in fee simple thereto. FTo question seems to be raised by the learned counsel who appears as guardian ad litem for the infant defendants but that the judgment rendered was proper, but-he deems it important that a final adjudication by this court should be had as regards the binding force of the decree.
As to whether the judgment acts on the whole title, it is considered that the owners in being of real estate, for all the purposes of litigation affecting the jurisdiction of the court to deal with the whole title, stand not only for themselves, but for all that may come after them. The rule is universal, and, generally speaking, persons in being having only contingent interests are deemed to be represented by the owners of the precedent estate of inheritance, for the purposes of litigation. To that general rule there are some exceptions not necessary to be noted in this opinion, as they <do not apply to this case. The owner of the life* estate here, and the owners- of the estate in remainder, all being parties, the judgment of the court and its execution will act upon the whole title to the property, binding all persons having vested or contingent interests therein, present or future. It is often said that such is the rule as a matter of convenience or necessity, but suffice it to say that it is a rule of law as inflexibly binding upon property in lands as any principle that has received judicial sanction so long as not to be open to question. Calvert, Parties, 48; Mitford, PL
As to whether the judgment improperly disturbs the suspension of the power of alienation as to the property in question, the creator of the life estate for plaintiff and the estate in remainder for her children had an undoubted right to place the title to his property beyond the power of any person acting for the owners of the estate in remainder to prevent it going to them m specie, and his wishes in that regard must be carried out. so far as possible. It is not doubted but that the powers of a court of equity are ample to prevent the destruction of the estate in remainder under the circumstances of this case. Rather than that the scheme of the creator of such estate shall entirely fail by reason of some circumstance not foreseen by him and provided for, the court may intervene, but only for the purpose of preserving, and so far as necessary to preserve, the property. If it cannot be preserved in the form intended, it may be preserved in its equivalent. It is not the interests of those in remainder, as such interests may appear to the court, that are to be considered and conserved, but their interests as the creator of the estate in remainder provided for them. So the fact, if it be a fact, that it would be for the best interests of the infant owners of the estate in remainder to allow them an immediate benefit therefrom to maintain and educate them, does not warrant a disturbance of the scheme intended to postpone such benefit to a later time. It is the necessity that something shall be done to guard against the danger that the title in remainder may be prevented from reaching
In Bofil v. Fisher, 3 Rich. Eq. 1, upon which much reliance is placed by respondent’s counsel, whether the court possessed equity powers to act under such circumstances as we have in this case, was considered and decided in the affirmative. True, it appears by the statement of the case and some things said in the opinion, that in adjudging the sale in the court below and affirming the judgment on appeal the interests of the life tenant and of the owners of the estate in remainder, as regards immediate enjoyment of the subject of the suit, was considered, but the sole question presented and decided on appeal was whether the court possessed power to bar, by its decree, the unborn and absent contingent re-maindermen. No question as to the proper distribution of the fund arising from the sale was considered or decided.
In Hale v. Hale, 146 Ill. 227, the court decided, in effect, that for the purpose of preserving the estate for those ultimately entitled thereto, the court could authorize the conversion of property of one kind into that of another, and the holding of the latter as the equivalent of the former. In Gavin v. Curtin, 171 Ill. 640, also cited by respondent, a case quite similar to the one before us, the court directed a sale of the property for the purpose of preserving the' estate of the life tenant, and that of the remaindermen as well, from being divested by tax liens and a mortgage to which both estates were subject, it appearing that the income from the property was not sufficient to keep down the interest and taxes, and that the improvements were likely to go to waste for want of necessary repairs. The power of equity to furnish an adequate remedy to meet the necessities of the situation was held to be beyond reasonable controversy, but that the remedy in such case should be adapted to,the preservation of the property and be limited to that. In such
Probably no case can be found that goes further than those referred to. The rule they recognize being one of necessity, its scope is obviously limited by the purpose which calls for its application, that of preserving the subject and title of the estate. Eor that purpose the scheme of the creator of the estates may be invaded and varied by changing property which in one form is liable to be lost, into another form not subject to that danger, the property in its new form to be devoted to the same use and to go in the same line, upon the same contingencies, as that for which it was taken in exchange,— not to be distributed and consumed. No necessity of preservation calls for such a remedy as consumption of the property and entire annihilation of the grantor’s scheme.
It follows that the judgment appealed from, so far as it goes beyond providing for the sale of a part of the property to create a fund out of which to guard against those dangers that now menace the title in remainder, and for such invest-' ments of the residue of the fund and such disposition of the property unsold as will prevent a recurrence of such dangers and as far as practicable remedy the impairment of the estate caused by the improvident management by the life tenant, must be modified. There is no justification for distributing the proceeds of a sale 'as was attempted by the judgment appealed from. Ey such judgment the interest of the life tenant is to be computed and paid to her, whereas the scheme of her father entitles her to the income of the whole property for life, subject to those duties in respect to keeping up repairs and keeping down taxes which devolve upon a life tenant by law. The judgment authorizes the division
Just what, from an equitable and business standpoint, looking only to the purpose to be conserved, should be done under the circumstances of this case, is by no means clear; but it is plain that nothing should be done for the purpose of a present distribution and enjoyment of the property, since it was designed to be kept m solido till the time for distribution fixed by plaintiff’s father. The fact that she has imprudently so handled the property as to prejudice her interests and’those of the defendants as well, cannot change her father’s scheme in law or in equity so as to give anything more to her than he designed she should have, or give her that in a different way than he designed she should receive it, to the prejudice" of the estate in remainder. She was entitled to the income of the property during her life and was bound, out of such income, to preserve the property from loss by taxes or want of repairs. Having put it out of her power to perform such duty, and demonstrated most clearly that the interests of those to come after her should he guarded by a stronger hand, the necessity of fortifying
By the Oourt.— The judgment of the circuit court is reversed, and the cause remanded with directions to render judgment in accordance with this opinion.
The respondent moved for a rebearing.
In support of the motion there were separate briefs by Edward 8. Bragg, of counsel for the infant defendants and guardian, and T. W. Spence, of counsel for the respondent.
The motion was granted September 26,1899.
The cause was reargued October 24, 1899.
The following opinion was filed November 7, 1899:
Rehearing
A rehearing was granted in this case on one question, namely, What is the most practicable and just ■method, from a business standpoint, conformable to the law as settled in the decision rendered, of saving the estate from loss without unnecessarily varying the plan of the grantor under which all parties claim ? It needs but little attention to the language of the question to discern that the result of the motion for 'a rehearing was to leave the legal principles, upon which the decision of the court was grounded, ii’revocably closed. Nevertheless counsel for appellants assumed the privilege of going into the whole case in the re-argument, and were permitted to do so; and while what we may say now outside of the question for consideration cannot affect the result, because of the importance of the subject reference will be made to some of the learned counsel’s contentions.
It is said that the only property involved in the action was four lots, not the whole property constituting the estate; that the primary object of the action was to obtain an adjudication respecting the power of the court to authorize a sale of real estate circumstanced like that in question, so as to bar possible remaindermen; that the remainder, after the expiration of the life estate, is vested in the appellants ; that if they were of age they could sell such remain
In the first place the court is by no means bound by the object or objects in view in instituting an action, except so far as such objects are legitimate from a legal standpoint. If there be one object which is legitimate, and it be sought for the purpose of carrying out others not legitimate, however praiseworthy be the motives from a philanthropic or moral standpoint, especially if such other objects affect the interests of infants or persons unknown who are liable, on the happening of a possible contingency, to be interested, it is not only proper, but it is the duty of the court, to so guard its decree upon the primary question, that the effect of it will be in all respects legitimate. It is not within the power of counsel for one party, or both acting together, to tie the hands of the court in the exercise of its equity powers to effect justice as to any question coming within the scope of any subject presented for consideration and decision.
In the second place, the subject of the action, not any particular object counsel may have had in view, fixed the limits of the field which the court had to investigate. What was that subject ? The sale of any particular lot or lots ? Certainly not. ' Obtaining money to satisfy the personal necessities of the respondent and her children ? Certainly not. The power of the court to sell real estate of minors and use the proceeds for their maintenance? Not that. Yet the several questions mentioned have been repeatedly pressed upon our attention, both to support the judgment appealed from and obtain a change of the directions of the court as to the proper decree. The subject of the action was the necessity of a change in the form of property the title and use of, which was vested for life in one person who-appeared as plaintiff, and the residue of the title was vested
In the third place, it is not true that if the appellants were of age they could sell the estate without the aid of the court. They could sell their interests in the estate, that is all. Such interests may never ripen into an absolute title or property the appellants will be entitled to enjoy. That does not seem to have been appreciated, hence the pressing necessities of the respondent, in fact of all the parties to the action, have been urged as a justification for disturbing the scheme of the settlor of the estates by taking property for the benefit of the appellants, and of the respondent as well, which does not now, and may never, belong to either of them. Who can now point to the person who will, ultimately be entitled to the estate in remainder ? What can justify such judicial proceedings as that of taking and using part of it for the benefit of a mere trustee of the title, who, by the happening of any one of several possible contingencies, may be divested of such title and it he vested in another with absolute power of enjoyment and disposal? This court has no such power. It may bar remaindermen as to the particular thing, but cannot extinguish their rights in the equivalent of the property. This is not an action for the adjudication of the rights of either party, represented before the court, in the title to the property, but an action to authorize the preservation of it in the form of an equivalent of property in some other form.
If it were true that if the appellants were of age they, joining with the life tenant, could dispose of the entire property absolutely, the simple question before the court would be whether it is for the best interests of the appellants that their property should be sold and a part of it used for their benefit during their minority. To support the power of a court of equity to do that, no reference to judicial au-
It is said the only relief prayed for not covered by statute is the right to apply the proceeds of the estate in remainder to relieve the necessities of the minors, and to reimburse the respondent for money paid out for their use over and above her income from the life estate; that in the action she tendered a surrender of her power of appointment under the settlor’s deed, and that by such means the several estates can be united and sold and the proceeds appropriated, as held by authorities, ancient and modern. On the first part of the proposition, as we have seen, the scope of the prayer for specific relief in the complaint by no means limits the jurisdiction of the court. On the facts found and the pleadings, the trial court pronounced judgment. A general appeal from that judgment presented to this court the question of whether it was proper on the undisputed facts. Judicial inquiry was not, by any means, circumscribed by the assignment of errors. It was and is limited only by duty to examine and correct the judgment in every respect where legal principles were violated to the prejudice of the appellants or those whom they represent, so far as such violations clearly appear from the record. Appellants are minors standing as the mere representatives of a title liable to pass out of them to others in spite of anything they or the life tenant or the court can possibly do. On the second part of the proposition under discussion, it must be said that we áre not acquainted with any authority, ancient or modern, to support it. Those cited to our attention do not apply, and it is firmly established, both at common law and by statute, that a special power, tó be executed by will, cannot be executed in any other way, or be released or extinguished so as to cut off a taker not participating in the extinguishment and who is entitled to take in case the power be not executed in the manner provided by the donor of the power. The power
In Matter of Bostwick, 4 Johns. Ch. 100, the proposition decided was that when the income of a sum of money is devised to a mother, and the principal sum after her death to her children, the property may, by permission of the court, be broken in upon and used in part for the present education and maintenance of the children, and to pay debts previously contracted by the mother for their past maintenance, where there is an actual necessity therefor that cannot otherwise be satisfied. It will be noted that the title to the principal sum in remainder, in that case, was in the children absolutely. To support the decision, Harvey v. Harvey, 2 P. Wms. 21, was cited, where it was said “the Master of the Polls declared that where a legacy was given to an infant payable at twenty-one, without any devise over, the doctrine indicated was proper.”
In Matter of Burke, 4 Sandf. Ch. 618, the facts were that two infant children, living with their father, had an annual
It will readily be seen from the foregoing brief analysis of authorities that they do not. touch the question under discussion here. The distinction between such question and ■the one we have decided here is clearly pointed out in numerous English cases, holding that if there is an estate with a devise over which may take effect on a contingency, •such estate cannot be used for the benefit of the precedent holder without the consent of the contingent devisee or vendee. Greenwell v. Greenwell, 5 Ves. 194; Fairman v. Green, 10 Ves. 45; Lomax v. Lomax, 11 Ves. 48; Errington v. Chapman, 12 Ves. 20; Errat v. Barlow, 14 Ves. 202. In Greenwell v. Greenwell, the object was the same as that sought here. ' The title was in the grandchild to be preserved and, with the. accumulations, paid to him on his arriving at the age of twenty-one, and with like limitations ■over to his sisters in case of his death under that age. The father was dead and the children sorely in need of assistance because of the character and circumstances of the
In Fairman v. Green, the Master of the Rolls said on the same subject, “ The court has not done this except where all the parties who are to have maintenance were equally interested, and if there was a legatee over the court has always taken the consent of such legatee.”
Again in Lomax v. Lomax, the Lord Chancellor said: “If all die under twenty-one and a child not yet in existence should come into existence and attain that age, that child clearly would take the whole, therefore I may give it to-those children (if I grant the prayer) who may never become entitled to it.” And in the same line, in Errat v. Barlow, the’ conclusion was stated, in effect, thus: ‘ If the chance of surviving is equal among all the members of the class, and there is no other interested that upon any contingency can take that will be prejudiced, maintenance, when necessary, may be allowed, but it is impossible to give it where, in any event, the property may belong, ultimately, to other persons.’
The foregoing is the settled law as far back as we find adjudicated cases on the subject. They are in accordance with reason and common sense. Any other doctrine Avould sanction confiscation and render it impossible to settle an estate upon any plan that would, in any reasonable probability, be carried out according to the scheme of the settlor. A failure to keep in mind the distinction between taking the property of an infant and expending it for his benefit, and taking property to 'which such infant has a mere naked legal title, which may go over in possession and enjoyment te-sóme other person, is what has led to most of the difficulties-.
Finally, we are referred to Ex parte Yancey, 124 N. C. 151, as conclusive — so far as the decision of the highest court of one state can be considered' conclusive on a question in the courts of another state — on the point that the life tenant and the holders of the title in ■ remainder may, joining, convey the title, notwithstanding the future birth of a child may add to the class entitled to take under the deed or will after the expiration of the life estate. A moment’s examination of the case shows that the court only held that where all the remaindermen in being are before the court, a sale of a full title may be authorized though-
The foregoing review of authorities cited by counsel to support the contention for a decree allowing a partial distribution and consumption of the property in question, and •citation of authorities to the contrary, with what was said in the former opinion, we apprehend, show clearly the soundness of the conclusion which was reached.
"When the danger of loss to the estate shall have been securely fortified against, there is no reason why the equivalent of any of the property that shall have been sold, and the unsold lands, should not be used so as to provide for the respondent and her children so far as such provision may be consistent with a certain preservation of the property for the ultimate takers upon the expiration of the particular estate. Whatever the necessities of the parties may be,, the court cannot break in upon the estate in remainder to relieve them, and cannot sever the life estate from the residue of the title unless it appears that there is no other practical way to administer the property under the circumstances. The fact that where by a deed or will the life tenant and the re-maindermen are left free to convey the entire title, in case of a sale made by order of the court the value of the life interest may be computed upon the basis of the expectancy of life of the life tenant and paid over to such tenant, is not very persuasive in a case like this where the interests of the. parties are not separable without a clear violation of the expressed will of the common benefactor. While the life tenant, in the instant case, is competent to sell her interest so as to separate it from the power of appointment, she has no authority to separate her estate from the estate in remainder,
The directions made as to the decree to be rendered in the court below were not intended to, and did not, differ from the judgment appealed from so far as relates to the mere machinery of selling and conveying the property. That whole subject, as well as the handling of the proceeds of the sale, within the limits of the plan outlined by the decision, was left expressly and plainly to be administered by the trial court. There is nothing in such decision preventing a new loan upon the life estate by permission of the trial court under the directions of the trustee for the purpose of taking up incumbrances bearing a high rate of interest, bought in for the benefit of the estate, or preventing a reduction in the rate of interest on such incumbrances if found to be too high, or changing any mere matter of administration so far as the same relates to the making of a proper deed to carry out the sale, if one shall be made. So in respect to the matters
The subject of what change can properly and safely be made in the manner of handling that portion of the estate which will be represented by the proceeds of the four lots, in case of their sale, and the care of the residue of the estate,.from the directions contained in the former decision, has received the most careful consideration, resulting in a conclusion that the life estate ought not to be separated from the estate in remainder, but that, if respondent desires to- substitute insurance upon her life in reputable level premium insurance companies, payable to the trustee for the remaindermen at her death, in place of her liabilities to the estate, that will accumulate in the hands of the trustee by a carrying out of the directions in such decision, she may properly be allowed to do so to an amount equal to that which would go to her upon a separation of her life interest in the proceeds of the sale of the four lots, if she adequately secures the payment of the premiums upon the policios of insurance, as such premiums fall due, and also secures the remaindermen by a mortgage on her life estate in the unsold property to their trustee, the prompt payment of future 'taxes on the property, and that, in the event of her taking advantage of this privilege, the unsold property should be released from the trust created by the decree. It has been concluded to make an addition to the directions contained in the decision heretofore made, in accordance with these views, thereby practically adopting a suggestion' made by appellants’ counsel on the argument. ■ That will result, if respondent so elects, in giving the trustee for the remainder-men, insurance for such money as may be paid out of the proceeds of the property sold, for her account, a return of the unsold property to the control of the respondent, as life tenant, and in securing to her a net income of about $1,500
By the Court.— The directions for the entry of a decree' in the trial court are changed, by adding thereto that such decree shall further provide, in substance, as follows: The respondent may, at her election, reimburse the estate for the' money paid out for her account by life insurance on her life-placed in reputable level premium insurance companies authorized to do business in this state, to the extent of such portion of the proceeds of the property sold as would go to-ller if the value of her life estate were estimated and paid to her; the sum so used, however, to be considered an investment of property of the estate in which respondent has. a life estate, secured by the life insurance, and not a payment to the life tenant out of it, of the value of such interest. The policies of insurance shall not be accepted, however, by the trustee, unless approved by the court upon the recommendation of the trustee, and the punctual payment., by the plaintiff of the premiums that shall fall due upon the policies, and the future taxes upon the unsold and all the property of the estate, be secured by the life tenant by a mortgage to the trustee upon her life estate in such property, so laid that it will be a first lien on such estate. Upon the insurance being given and accepted, under the conditions named, the unsold real estate shall be released from, the trust created by the decree and the life tenant restored to'the control thereof as such tenant, subject to the obligations incident to that relation to- the property. Upon the insurance premiums and the taxes on all the property of the estate for any year being paid by the life tenant, the trustee shall pay to her the income of the trust fund for such year, less the expenses of administering the trust, but if she shall fail to make any of such payments, the trustee-