Nalley v. First Nat. Bank, Medford , 135 Or. 409 ( 1930 )

This is a suit instituted by P.K. Nalley, plaintiff and appellant, for the purpose of procuring a declaratory decree to the effect that he, the said P.K. Nalley, is the owner of an undivided one-half interest in and to certain property described in a certain instrument executed on the 11th day of February, 1928, by William A. Pointer, now deceased, and to impress a trust upon such property.

On said 11th day of February, 1928, the plaintiff and appellant P.K. Nalley was, and, for several years theretofore, had been the husband of defendant and appellant, Anna C. Nalley, now deceased. Said Anna C. Nalley was the daughter of said William A. Pointer.

In December, 1927, said William A. Pointer signed a written instrument, which, by its terms, purports to convey the property in controversy to said Anna C. Nalley. This instrument was not delivered.

On the 11th day of February, 1928, said William A. Pointer executed the instrument under which plaintiff and appellant claims to have become the owner of an undivided half of the property in controversy. That instrument is in words and figures as follows:

"This indenture witnesseth that I, William A. Pointer, a widower, of the county of Jackson, state of Oregon, hereinafter called the grantor, for and in consideration of the sum of one dollar and other good and valuable consideration to me in hand paid by Anna C. Nalley and Peter K. Nalley, wife and husband, of said county and state, hereinafter called grantees, the receipt of which is hereby acknowledged, have sold, assigned, transferred, set over and conveyed, and do by these presents sell, assign, transfer, set over and convey unto the said grantees and to the survivor thereof, that certain claim for $4,000.00 due to me from Gus Godett; and that certain claim for $8,000.00 due to me from Charles Heimroth and wife; and that certain claim for $1,500.00 due to me from J.T. Brewer; and that certain claim for $1,800.00 due to me from C.C. Wheeler; and that certain claim for $400.00 due to me from Grace Gobel; and that certain claim for $800.00 due to me from Gus Godett and all of said claims being secured by escrow agreements now in the hands of the said Anna C. Nalley, and I do hereby grant, bargain, sell and convey unto the said grantees all of my right, title and interest in the real property given to secure said claims as represented by conveyances in said respective escrow agreements.

"The purpose of this conveyance is to substitute and supplant the said grantees for myself, and in my place and stead in the said conveyances so given as security, hereby making and constituting them, the said grantees, the absolute owners thereof.

"The foregoing provisions of this conveyance, however, shall not go into effect or be in force until after my death, nor shall this instrument be recorded before my death, and I do hereby authorize and direct the said grantees, Anna C. Nalley and Peter K. Nalley, immediately after my death shall occur, to pay out of the funds hereby conveyed, or out of other money of my estate, the sum of one thousand ($1,000.00) dollars unto J.C. Cass and his wife, or the survivor thereof, said sum of $1,000.00 being in consideration of the kindly services rendered unto me and unto my deceased wife in time of trouble and need of such sympathetic services, and I do hereby expressly authorize and direct the payment of $1,000.00 therefor, to be so paid by the said grantees after my death as aforesaid.

"To have and to hold the said described property, and all of my right, title, interest or equity in or to the real property given to secure said respective loans unto the said grantees and their heirs and assigns forever.

"In witness whereof, I have hereunto subscribed my name and affixed my seal this, the 11th day of February, 1928.

"Wm. A. Pointer. (Seal)

"Done in presence of:

"W.E. Phipps.

"Mary H. Wilson.

"State of Oregon, County of Jackson — ss.

"This certifies that on this, the 11th day of February, 1928, before me, the undersigned, a notary public within and for the above named state and county, personally appeared William A. Pointer, a widower, to me personally known to be the individual named and described in, and who executed the within and foregoing conveyance, and acknowledged to me that he executed the same freely and voluntarily, for the uses and purposes therein named.

"Witness my signature and official seal hereunto affixed this, the day and date in this certificate above written.

"W.E. Phipps, "Notary Public for Oregon.

"My commission expires Dec. 8, 1928."

In March, 1928, Anna C. Nalley executed a written instrument which by its terms conveyed all her interest in the property in controversy to said William A. Pointer.

In April, 1928, Mr. and Mrs. Nalley were divorced.

Defendant and appellant Anna C. Nalley, by a cross-bill, seeks to have the said instrument executed by her in March, 1928, reformed so that the same shall apply to and convey only her interest in loans, which she acquired by advancing funds when said loans were made.

On the 30th day of June, 1928, William A. Pointer executed a will, which by its terms devised and bequeathed an undivided one-third of his estate to his daughter Anna C. Nalley; an undivided one-third thereof to said P.K. Nalley, and the remaining one-third thereof to said J.C. Cass and wife.

On the 10th day of October, 1928, said William A. Pointer executed another will, which by its terms devised and bequeathed an undivided two-thirds of his estate to his daughter Anna C. Nalley, and the remaining one-third to respondents Cass.

On the 25th day of January, 1929, said Pointer executed still another will by the terms of which he devised and bequeathed to his daughter Anna C. Nalley one-half of his estate, and to respondents Cass, or the survivor, the remaining one-half.

On January 30, 1929, said William A. Pointer died in Jackson county, Oregon, at the age of eighty-five years; and subsequently the will last above mentioned was admitted to probate.

On June 13, 1930, Anna C. Nalley, defendant and appellant, died in Jackson county, Oregon, and on September 30, 1930, by an order of this court, plaintiff and appellant, P.K. Nalley, as administrator of her estate, was substituted for her as party defendant and appellant.

The county court entered a decree dismissing plaintiff's amended complaint and the cross-complaint of defendant Anna C. Nalley, and declaring defendant B.E. Harder, as executor, to be the owner of the property in controversy. During the course of the trial, a partial transcript of testimony taken by W.J. Looker, at the instance of the attorney for Mr. Pointer, in a proceeding in the county court, was received in evidence over the objection of plaintiff and appellant. This proceeding had been instituted by defendant and appellant Anna C. Nalley for the purpose of having her father William A. Pointer declared to be an incompetent and having a guardian appointed for him. Mr. Looker, the stenographer who took the testimony, though doubtless most proficient, was not appointed by the court for that purpose and was in no sense an official court reporter. Moreover, the proper foundation was not laid for the use of his notes to refresh his memory while testifying. This partial transcript of testimony should not have been received in evidence. Our view of the record, however, renders its admission harmless.

It is contended by respondents that there was no delivery by Pointer to the Nalleys of the instrument dated February 11, 1928. Upon that question, Mr. Nalley testified, directly and positively, to the effect that such delivery was made. As to the actual passing of the instrument from the hands of Mr. Pointer to those of the appellant Mr. Nalley, he, Mr. Nalley, is corroborated by Mr. Phipps. The instrument itself was taken to the bank. The testimony of the officials of the bank was negative. The conservatism which properly actuates good bankers, when contemplating the uncertainty which attends litigation, caused these officers, when apprised of the imminence of this litigation, to decline to surrender the documents involved until so directed by a court having jurisdiction of the controversy.

The statement of Mr. Pointer in his last will, to the effect that he retained possession of the instrument in question, if given the effect of a denial that he delivered the same to Nalley, when considered in the light of his advanced age and his vacillating course, is not sufficient to counterbalance the probative value of the direct testimony of Mr. Nalley and Mr. Phipps.

It is also contended that the instrument is testamentary in character, and therefore superseded by the last will and testament which has been admitted to probate. This contention is based upon the following clause in the instrument:

"The foregoing provisions of this conveyance, however, shall not go into effect or be in force until after my death, nor shall this instrument be recorded before my death, and I do hereby authorize and direct the said grantees, Anna C. Nalley and Peter K. Nalley, immediately after my death shall occur, to pay out of the funds hereby conveyed, or out of other moneys of my estate, the sum of one thousand ($1,000.00) dollars unto J.C. Cass and his wife, or the survivor thereof, the sum of $1,000.00 being in consideration of the kindly services rendered unto me and unto my deceased wife in time of trouble and need of such sympathetic services, and I do hereby expressly authorize and direct the payment of $1,000.00 therefor, to be so paid by the said grantees after my death as aforesaid."

We are called upon to determine the effect of the statement in the instrument in question that "the foregoing provisions of this conveyance, however, shall not go into effect or be in force until after my death." We construe it to constitute a reservation of a life estate in the grantor and not to be testamentary in its nature.

In this case the subject of the transfer is personal property. A remainder in personal property properly may be created by deed: Allen v. Hendrick, 104 Or. 224 (206 P. 733); 18 C.J. 306, § 286, note 52.

The respondents cite the case of Sappingfield v. King, 49 Or. 102 (89 P. 142, 90 P. 150, 8 L.R.A. (N.S.) 1066), to the effect that language similar to that employed in the case here limiting the taking effect of a deed conveys no present interest, but renders the instrument testamentary and therefore revocable. An examination of the authorities at the present time convinces the writer of this opinion that the weight of authority is not now in harmony with the statement of that phase of the law which is set forth in the Oregon case just mentioned. Most, if not all, of the American authorities on the subject are collated in a note to be found in 11 A.L.R. at page 69 et seq. and at page 92 et seq. The following are subsequent cases upon the subjects:Watts v. Lawrence, 26 Wyo. 367 (185 P. 719; 188 P. 34); Peltv. Dockery, 176 Ark. 418 (3 S.W.2d 62); North v. North, (Tex.Civ.App.), 2 S.W.2d 481; Willis v. Fiveash,297 S.W. 509 (reversed on other grounds 1 S.W.2d 585); Turner v.Montgomery, 293 S.W. 815; Nobell v. Town of Beaver,133 Okla. 247 (271 P. 420).

The courts of Arkansas, California, Indiana, Kentucky, Kansas, Maine, West Virginia, South Carolina, South Dakota, Wyoming, and Wisconsin construe instruments containing similar restrictions as deeds. In Alabama, Georgia, Pennsylvania, Mississipi, Missouri, Illinois, Iowa and Texas, the decisions are conflicting.

The courts of Oklahoma, Nevada and Michigan hold that instruments with similar restrictive clauses convey no present interest and are testamentary.

While in the case of Sappingfield v. King, supra, the restrictive language is similar to that employed in the instrument now under consideration, it is not the same. InSappingfield v. King, the instrument construed to be testamentary in its nature, contains this clause:

"This deed is made with the full understanding and upon the condition that the same shall take effect from and after the death of the grantor."

In the case at bar, the restrictive clause relates only to "the foregoing provisions" of the conveyance. The habendum clause follows; and cannot properly be construed to have been rendered entirely nugatory by the restrictive clause if any other reasonable construction can be given to the instrument.

As stated, Anna C. Nalley seeks reformation of that certain instrument executed by her in March, 1928. The testimony on that phase of the case is not of such clear and convincing nature as to justify a decree of reformation.

As was well said upon oral argument in this court by counsel for appellant Anna C. Nalley, this is a question of fact and involves a consideration of the testimony upon that point.

Concerning the execution of the instrument in question, Anna C. Nalley testified as follows:

"Q. Tell the court how you happened to make that instrument and what the intent was at the time that instrument was made.

"A. Well, often in making loans there would be two or three thousand short, two or three hundred or two or three thousand and there would be one hundred or such a matter, and I would just go and get the money out of my pocketbook and turn in on it and thought nothing at all about it, and when the interest was due father got the interest. I didn't say anything about it at all.

"Q. Did you — go ahead.

"A. One day father came in the house after mother's death (he was living with me), and he said to me: ``Anna would you mind giving me the life estate in all my property?' I said, ``I certainly wouldn't.' He said: ``Well, then how much is it?' and I told him it was $1900. He said: ``All right, I will just give you Gus Godette's loan, which is $2,000.' I said: ``All right.' He said: ``That isn't counting the interest or anything, but I just feel I want the control of it through my lifetime.' He said: ``It is yours anyway.' I said: ``It is perfectly all right with me.' So, he said, ``The next time you go down town' — which I didn't go down town very often, — ``you stop in at Mr. Phipps' office and sign the agreement.'

* * * * * "Q. And what was the understanding at the time that instrument was signed, or what did you intend to convey?

"A. To convey the difference that I had in those loans.

"Q. You never intended at that time to convey over all your right in that property? A. I should say not.

"Q. Do you know whether Mr. Pointer intended that at the time?

"A. Well, he didn't talk that way."

With reference to the same matter Mr. W.E. Phipps testified thus:

"Q. Tell what he (referring to Mr. William A. Pointer) said he wanted done.

"A. Well he said that he had demanded of Mrs. Nalley that she convey back this property to him. He said that she had an interest in a lot and also that her name appeared in those loans and that the reason of that was that she had supplied some of the money to make up the loans and that he had left these loans to her and that she was to convey all of the property to him * * *

"Q. Well, Mr. Phipps, was anything said there at the time by Mr. Pointer that he wanted all of her right, title and interest in that property turned back to him. A. No.

"Q. What right did he want? A. He wanted the right of the property that was claimed by her by virtue of the amounts of money she had put in these loans.

"Q. Approximately how much money was that? A. As I recall, some $1,800 or $2,000.

* * * * * "Q. He knew at that time also that he had property, taking into consideration whether Mr. Nalley or Mrs. Nalley, or Mr. Pointer owned it, aggregating nearly $20,000. A. Yes. If the court will pardon me — I did dictate the paper and it was written out and I really thought it was broader than the intentions of the parties was."

As against this showing, we have the subsequent declaration of appellant Anna C. Nalley in a petition for a guardian for her father "that the said William A. Pointer has an estate situated and being in said county and state consisting of personal property to-wit: Cash and real estate, mortgages and securities of the value of $20,000."

This apparent inconsistency in the position now assumed by appellant Anna C. Nalley with that which she assumed in the guardianship proceeding materially weakens the unsatisfactory showing reflected in the above quoted excerpts of testimony.

It follows that the decree of the lower court should be and is hereby modified in that instead of declaring that defendant and respondent D.E. Harder, as executor of the estate of William A. Pointer, deceased, is the owner of all the property described in exhibit A of plaintiff's complaint, and that said plaintiff and appellant has no interest in or to said property, it should be and is hereby ordered, adjudged and decreed that plaintiff and appellant P.K. Nalley is the owner of an undivided one-half of said property and that the defendant and respondent B.E. Harder, as executor aforesaid, is the owner of the remaining undivided one-half thereof, and, except as hereby modified, the decree of the lower court is affirmed. Appellant P.K. Nalley to recover of and from respondent Harder, as executor, his costs and disbursements here and in the lower court.

COSHOW, C.J., RAND AND ROSSMAN, JJ., concur.