Shubert v. Schellie

Per Curiam.

Barbara Weiss, personal representative of the estate of Stanley V. Shubert, deceased, appeals as of right from a judgment granting defendants the proceeds from an escrow account. This case arose when Stanley V. Shubert (hereinafter plaintiff) conveyed by quit claim deed a certain farm and the personal property located on the premises, including a herd of cattle, to himself and defendants, his niece and her then husband, in July of 1974, creating a joint tenancy in that property between himself and defendants. Plaintiff reserved a life estate, including rents and profits, for himself. The relationship between plaintiff and defendants deteriorated, and in 1978 plaintiff brought suit to set aside the deed. Plaintiff was denied relief by the trial court and appealed to this Court.

While the appeal was pending, the parties entered into an agreement to sell some of the cattle in the herd located on the subject premises and to place the profits from that sale into an escrow account to be distributed upon further order of the court or upon resolution of the appeal. On January 8, 1981, in an unpublished decison, Shubert v Schellie, Docket No. 45889, we affirmed the order denying plaintiff relief. Plaintiff died on January 10, 1981, and his estate, through the personal representative of the estate, claimed an interest in the escrow money and any personal property owned by plaintiff. On August 24, 1981, an order was entered delaying the release of the escrow funds until a final determination as to what property had passed by deed. An evidentiary hearing was held and on May 1, 1984, judgment was entered in favor of defendants. The personal representative of plaintiff’s estate contends that this ruling was in error.

Plaintiff deeded the subject property jointly to himself and the defendants, reserving also a life estate in himself. This is commonly known as the "poor man’s will” and is used to avoid probate. This device carries some risk as the grantor relinquishes his ability to later change his mind.

This particular situation is one of first impression in Michigan. The grantor, in a deed creating a joint tenancy, reserved a life estate, inlcuding, all rents and profits from and exclusive use and control of the premises during his lifetime. Due to pending litigation, monies from the sale of cattle were placed in escrow. Plaintiff died in the interim. Shall these monies pass through his estate or to the defendants as joint tenants with rights of survivorship?

At the time of the conveyance of the deed, the herd consisted of 17 cows and a bull. The agreement to sell cattle which was executed by the parties during the pendancy of the prior appeal contained a provision which provided that the herd should not be reduced below 30 head. As plaintiff had reserved his exclusive use and control of all rents and profits, we believe that he was entitled to the monies realized from that sale. Utilizing the standard enumerated in Amator v Amator, 114 Ariz 226; 560 P2d 410, 414 (1977), we find that the defendant’s rights were adequately protected.

As long as the herd size did not fall below its size as of the date the 1974 deed was executed,¹ we cannot say that defendants were harmed. Plaintiff’s reservation of all rents and profits necessarily included the ability to sell the beef cattle, as that is the nature of the business. Indeed, we are hard pressed to determine what, if any, profits could accumulate from a herd of beef cattle if they were not sold. As plaintiff had reserved exclusive use and control, it was his decision as to the amount and time of the sale of any cattle during his lifetime, as long as the herd size did not decrease from its original level.

We agree with Amator, supra, where it was held that it is the overall number of animals, and not whether the original animals from the date of the creation of the interest are still alive, that is important.

Accordingly, when the cattle were sold in 1979, it is clear that plaintiff intended those funds to be utilized within his exclusive control. The escrow account was merely created due to pending litigation. Therefore, we award the funds in the escrow account to plaintiff’s estate.

Reversed. Cost to appellant.

1 We do not address those situations where a decrease in the herd size may be through no fault of the life tenant.