Opinion
No. 35768.
January 22, 1945.
1. WILLS.
A deed in trust conveying premises on condition grantees manage property and account to grantor therefor during his life and upon his death to convert corpus into cash and distribute to those who upon death of grantor would be entitled to inherit the real estate, was not invalid as being testamentary in character with grantor or settlor of trust its sole beneficiary.
2. TRUSTS.
A deed in trust, which although voluntary, reserved no power of revocation was not subject to revocation by a subsequent will of grantor.
APPEAL from the chancery court of Tallahatchie county, HON. R.E. JACKSON, Chancellor.
J.W. Kellum, of Tutwiler, for appellant.
In a trust deed, the estate taken by the trustees depends on the purpose of the trust.
Coulter v. Robertson, 24 Miss. (2 Cushm.) 278, 57 Am. Dec. 168, appeal dism. Robertson v. Coulter, 16 How. 106, 15 L.Ed. 864.
Under a deed purporting to grant with certain exceptions, in order to ascertain what is granted the court must ascertain what is excluded in the exceptions because whatever is within the exceptions is excluded from the grant.
Greenleaf's Lessee v. Birth, 31 U.S. 302, 6 Pet. 302, 8 L.Ed. 406.
In a trust deed, the beneficiary has an equitable title coextensive with the title of the trustees.
Boone et al. v. Davis et al., 64 Miss. 133, 8 So. 202; Croxall v. Shererd, 72 U.S. 268, 5 Wall. 268, 18 L.Ed. 572; Blair v. Commissioner of Internal Revenue, 57 S.Ct. 330, 300 U.S. 5, 81 L.Ed. 465.
In a relation of principal and agent, the death of the principal operates as an instantaneous revocation of any agency which is a mere power not coupled with an interest, and "a power coupled with an interest" is a right or power to do some act, together with an interest in the subject matter.
Clayton v. Merrett, 52 Miss. 353; Kolb v. Bennett Land Co., 74 Miss. 567, 21 So. 233.
A trust deed for the benefit of the estate of a deceased person is not valid, because a deceased person is not a "person" recognized by law.
Life Ins. Co. of Virginia v. Page, 178 Miss. 287, 172 So. 873; Simmons v. Spratt, 20 Fla. 495, 1 So. 860.
A person cannot make a conveyance to "those who upon my death would be entitled to my property under the laws of descent of the State of Mississippi" because their title by descent would prevail over and nullify the provision of the instrument of conveyance.
Harris v. McLaran, 30 Miss. 533; West Tenn. Co. v. Townes, 52 F.2d 764.
An instrument which is revocable or which cannot operate in the life of the grantor is not a deed but is testamentary in character.
Cunningham v. Davis, 62 Miss. 366; Simpson v. McGee, 112 Miss. 344, 73 So. 55; Thomas v. Byrd, 112 Miss. 692, 73 So. 725; Knight v. Knight, 133 Miss. 74, 97 So. 481; Ates v. Ates, 189 Miss. 226, 196 So. 243; Gaston v. Mitchell, 192 Miss. 452, 4 So.2d 892.
A clause in an instrument which is capable of two meanings must be construed, if possible, in consonance with the general spirit and objects of the whole instrument.
Heard v. Garrett, 34 Miss. 152.
In a deed, a person cannot be both grantor and grantee.
Williams v. Green, 128 Miss. 446, 91 So. 39.
In an instrument, the word "heirs" is presumed under the law to be used in its technical sense.
Irvine v. Newlin, 63 Miss. 192.
The rule in construction of deeds is that when the language of the deed is clear, definite, explicit, harmonious in all of its provisions, and free from ambiguity throughout, the court looks solely to the language used in the instrument itself, and will give effect to each and all its parts as written. When, however, the language falls short of the qualities above mentioned and resort must be had to extrinsic aid, the court will look to the subject matter embraced therein, to the particular situation of the parties who made the instrument, and to the general situation touching the subject matter, that is to say, to all the conditions surrounding the parties at the time of the execution of the instrument, and to what, as may be fairly assumed, they had in contemplation in respect to all such said surrounding conditions, giving weight also to the future developments thereinabout which were reasonably to be anticipated or expected by them; and when the parties have for some time proceeded with or under the deed, a large measure, and sometimes a controlling measure, of regard will be given to the practical construction which the parties themselves have given it, this on the common sense proposition that actions generally speak even louder than words.
Sumter Lumber Co. v. Skipper, 183 Miss. 595, 184 So. 835. Caldwell Caldwell, of Charleston, for appellees.
The sole question in this case is whether or not the deed of trust executed by J.T. Sevier to the appellees is valid so as to vest the title in the trustees for the purposes therein set forth. If this conveyance is valid, then the title was irrevocably placed beyond the reach of the grantor and his attempt to devise the property to appellant is of no effect.
All authorities agree that the chief difference between a deed and a will lies in the fact as to when it is to take effect and not its form. If a present interest passes to the taker, it is a deed, but if it does not pass a present title, but in the future, it is a will and testamentary in character.
McDaniel v. Johns, 45 Miss. 632; 28 R.C.L. 58.
In determining whether an instrument be a deed or a will, the main question is, did the maker intend to convey any estate or interest whatever, to vest before his death and upon the execution of the instrument, or, on the other hand, did he intend that all the interest and estate should take effect only after his death? If the former, it is a deed, if the latter, a will; and it is immaterial whether he calls it a will or a deed, the instrument will have operation according to its legal effect.
Wall v. Wall, 30 Miss. 91; Knight v. Knight, 133 Miss. 74, 97 So. 481.
A will differs from a conveyance in that a conveyance takes effect and is irrevocable on delivery, whereas a will, although delivered, is not effective until the death of the testator and in the meantime is revocable.
Federal Land Bank v. Newsom, 175 Miss. 114, 161 So. 864.
We conclude that the trust deed passed a present interest and is not a will or testamentary in character.
Unless a power to revoke or modify is expressly reserved, or the creation of the trust is affected by fraud, duress, or mistake, the settlor has no power to revoke or modify the trust, even though it was created without consideration.
Anderson v. Love, 169 Miss. 219; 151 So. 366, 153 So. 369; Nelson v. Ratliff, 72 Miss. 656, 18 So. 487; 26 R.C.L. 1207; 1 Perry on Trusts, Sec. 104.
A voluntary trust deed properly executed, with knowledge of the nature of the act, without reservation of power to revoke is irrevocable, and the grantor cannot extinguish it by getting a reconveyance from the trustee, unless fraud or mistake is shown, for no act of the trustee can affect the right of the cestui que trust adversely. Nor will a different rule be applied merely because the fund has got back into the settlor's possession. The fact that a trust is created without consideration, and is, in effect, the gift of land, does not change the rule.
26 R.C.L. 1207.
A voluntary trust once clearly established cannot be modified or controlled by subsequent declaration on the part of the donor.
Boone v. Davis, 64 Miss. 133, 8 So. 202; Carradine v. Carradine, 33 Miss. 698; Garneau v. Garneau (R.I.), 9 A.2d 15, 131 A.L.R. 450; Guaranty Trust Co. v. Harris, 267 N.Y. 1, 195 N.E. 529; Curran v. Davis (Canada), S.C.R. 283; Botzum v. Havana National Bank, 367 Ill. 539, 12 N.E.2d 203; Harris Tr. Savings Bank v. Morse, 238 Ill. 232, 91 A.L.R. 104, Note; Underhill v. United States Trust Co., 227 Ky. 444, 13 S.W.2d 232, 91 A.L.R. 109; 26 R.C.L. 48, 1207, 1208; 65 C.J. 348, Sec. 121; 1 Restatement Law of Trusts 322; 2 Restatement of Law of Trusts 984, 985, 990, 1039.
Argued orally by J.W. Kellum, for appellant, and by J.H. Caldwell, Jr., for appellees.
Appellees filed their bill against appellant praying cancellation of the purported devise in the will of J.T. Sevier to appellant as a cloud upon appellees' title to certain lands, as evidenced by a prior deed in trust to them from the said J.T. Sevier. Appellant filed answer and also a cross-bill which set up the alleged invalidity of the deed in trust as a conveyance of the title in fee. This attack was based upon the contention that the deed was testamentary in character, and that the grantor or settlor of the trust was its sole beneficiary. Demurrer to the cross-bill was sustained and the prayer of the original bill was granted, confirming the title in the appellees as trustees and canceling the testamentary devise to Mrs. Bryant.
The deed in trust is as follows:
"This indenture, made this 7th day of December, A.D. 1939, by and between J.T. Sevier (a single man), of Tallahatchie County, Mississippi, party of the first part, and Robert T. Sevier, of Madison County, Tennessee, and Henry W. White, Jr., of Knox County, Tennessee, as Trustees, parties of the second part, Witnesseth:
"That the party of the first part, for and in consideration of One Dollar ($1.00) cash to him in hand paid, receipt of which is hereby acknowledged, and of the covenants and undertakings hereinafter imposed upon and assumed by the parties of the second part, has granted, bargained, sold and conveyed, and does hereby grant, bargain, sell and convey unto the said parties of the second part the following described real estate, to-wit:
"A certain farm containing approximately 275 acres, situated in the First Judicial District of Tallahatchie County, Mississippi, and more particularly described as follows: SW 1/2; (sic) W 1/2 of SE 1/4 and SE 1/4 of SE I/4 Section 35, Township 25, Range 1 East, less five acres out for road. To have and to hold the same, together with all improvements thereon, and the rights, privileges and appurtenances thereto belonging, or in any wise appertaining, together with all livestock, farming implements and machinery now located thereon, unto the said parties of the second part, their successors and assigns, in fee simple.
"This indenture is, nevertheless, in trust for the following uses and purposes, and none other, viz.:
"(1) The party of the first part, being aged and infirm in body, and desiring thereby to provide for his comfortable support during the remainder of his life, and for the care and preservation of his estate, does hereby create and establish in the parties of the second part this trust, to the end that:
"(a) The parties of the second part are to receive, take charge of, and manage the aforesaid properties, paying from the income therefrom, if sufficient for that purpose, all taxes, assessments and charges against the same, together with the expense of the operation thereof, and upkeep and repairs, accounting to and paying over to the party of first part the surplus income or profits therefrom, or so much thereof as in the opinion and discretion of the parties of the second part is needful, necessary or suitable for the comfortable support and well being of the party of first part during the remainder of his natural life; and said property is further charged with the reasonable and necessary expense of the burial of the party of the first part.
"(b) That in the event, in the discretion of the parties of the second part, it should become necessary or advisable at any time to sell said property, or any part thereof, for purposes of reinvestment, or in order to defray the expense of the support and maintenance of party of the first part, or the upkeep and maintenance of the remainder of said property, the parties of the second part are vested with full power, authority and right to sell, transfer and convey said property, or any part thereof, by their deed; and purchasers from said parties of the second part are hereby relieved and excused of the obligation of looking to the application by parties of the second part of the proceeds of any such sale.
"(c) The parties of the second part shall at frequent intervals, and at least once in each twelve months, give to the party of the first part a full and accurate accounting of all receipts and disbursements of this trust, and of how they have executed the same.
"(d) The parties of the second part shall, as soon as is reasonably possible after the death of the party of the first part (but as to this the second parties are to exercise their discretion) convert into cash all of the corpus of this trust not theretofore disposed of or consumed, and the proceeds therefrom, together with any unexpended income from the trust, shall be distributed by parties of the second part to those who upon the death of the party of the first part would be entitled under the laws of descent of the State of Mississippi, to inherit the real estate of the party of the first part; this distribution to be made after the parties of the second part have first discharged all estate and inheritance taxes, both State and Federal, which may then exist against the estate of the party of the first part or against the property herein conveyed.
"(e) The parties of the second part are excused from taking and filing oath, giving bond, filing inventories, statements or settlements with any court or tribunal, insofar as party of the first part may lawfully waive same.
"(f) In the event of the death of either of the parties of the second part before the termination of this trust, the survivor shall have and exercise all of the powers herein conferred upon said second parties.
"(2) The parties of the second part, by executing this instrument, hereby accept the trust herein imposed upon them, and agree to execute the same in accordance with the terms of this instrument.
"In witness whereof, the parties hereto have hereunto set their hands and seals on the day and year above written.
"J.T. Sevier, "Party of the First Part "Henry W. White, Jr., "Robert T. Sevier, "Parties of the Second Part."
The instrument was duly acknowledged and recorded.
The will, executed about a year and a half after the foregoing instrument, is as follows:
"Last Will and Testament of John Turner Sevier.
"The State of Mississippi:
"Tallahatchie County:
"I, John Turner Sevier, of the aforesaid County and State, being over twenty-one years of age, and of sound and disposing mind, make this, my last will and testament. I give, devise and bequeath all my estate and property, real and personal, as follows, to-wit:
"To my half brother, Robert Sevier, I devise the following described real estate situated in the County of Tallahatchie, State of Mississippi, being described as West half of Southwest Quarter of Section Thirty-five, Township Twenty-five North, Range One East.
"To my half nephew, Henry White, I devise the following described real estate situated in the County of Tallahatchie, State of Mississippi, being fully described as Southeast Quarter of Southwest Quarter of Section Thirty-five, Township Twenty-five North, Range 1 East.
"To my dear friend, Mrs. Gertrude Bryant, who has looked after me so faithfully during the latter days of my life, I bequeath all my personal property and also the following real estate situated in the County of Tallahatchie, State of Mississippi, said real estate being fully described as the South half and Northwest Quarter of The Southeast Quarter, and the Northeast Quarter of the Southwest Quarter of Section Thirty-five, Township Twenty-five North, Range One East.
"It is hereby provided that in the event either of the aforesaid parties, Robert Sevier, Henry White, or Mrs. Gertrude Bryant, should contest this will then the devise to the contestant, in this instrument shall be null and void, and his property shall be divided, share and share alike, between the other two devisees named herein; and in the event two of the aforsaid devisees should contest this will, then the devise to such two contestants, in this instrument, shall be null and void, and the property devised to them shall be given to the devisee herein who does not contest this will.
"Mrs. Lille Henry of Charleston, Mississippi, the Chancery Clerk, at this time, of Tallahatchie County, Mississippi, is hereby appointed as the executrix of this will with the authority to serve as such executrix without bond.
"In witness whereof, I have signed, published and declared this instrument as my will and testament, in said County and State, this the 1th day of May, 1941.
"J.T. Sevier "John Turner Sevier."
It is seen that the trustees in the deed are also devisees under the will of part of the estate. Our decision requires an examination of the trust instrument and its validity as creating an irrevocable trust. It is at once evident that paragraph 1(d) creates a class of beneficiaries distinct from and in addition to the settlor J.T. Sevier. He is not the sole beneficiary and the instrument is not testamentary. Restatement, Trusts, vol. 2, p. 1039; Id., vol. 1, p. 322. It reserves no power of revocation and indeed although voluntary was not subject to revocation by the subsequent will. Anderson v. Love, 19 Miss. 219, 237, 151 So. 366, 153 So. 369; 26 R.C.L. "Trusts," Sec. 49; Restatement, Trusts, vol. 2, p. 330. By its very terms the trust instrument both justifies and explains its purpose. It became immediately operative and had been before, and was at the settlor's death being, administered according to its terms. Even if it be assumed that he could during his lifetime revoke the trust, he made no effort and manifested no intention to do so. Nor do we find in the will any provisions inconsistent with an intent, at the time the trust was created, that it should be effective according to its terms. The contentions of appellant for the most part assume that the trust was testamentary and revocable. We shall not therefore seek to analyze nor distinguish the authorities cited.
The decree of the chancellor sustaining the demurrer to the cross-bill and awarding the relief prayed for in the original bill is found correct and is affirmed.
Affirmed.