John Oaks v. Linda Greer Ball

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2014-CT-00528-SCT
ESTATE OF ROSE GREER, DECEASED: JOHN
OAKS a/k/a JOHN OAKES
v.
LINDA GREER BALL
ON WRIT OF CERTIORARI
DATE OF JUDGMENT: 03/20/2014
TRIAL JUDGE: HON. EDWARD E. PATTEN, JR.
TRIAL COURT ATTORNEYS: JOHN R. REEVES
WILLIAM D. BOERNER
COURT FROM WHICH APPEALED: LINCOLN COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANT: JOHN R. REEVES
JOHN JUSTIN KING
ATTORNEYS FOR APPELLEE: WILLIAM D. BOERNER
BRAD RUSSELL BOERNER
JOE ROBERT NORTON, IV
NATURE OF THE CASE: CIVIL - OTHER
DISPOSITION: THE JUDGMENT OF THE COURT OF
APPEALS IS AFFIRMED. THE JUDGMENT
OF THE LINCOLN COUNTY CHANCERY
COURT IS REVERSED AND REMANDED -
06/01/2017
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
DICKINSON, PRESIDING JUSTICE, FOR THE COURT:
¶1. A provision in a lease stated that upon the lessor’s death, the lessor’s rights—primarily
the right to receive lease payments—transferred to the lessor’s daughter, who was not a party
to the lease. The lessor died, and the question presented under the facts of this case is
whether the provision of the lease or the provisions of the lessor’s will determine the owner
of the lease payments. We granted certiorari because this Court previously has not addressed
testamentary provisions in a contract. Because we agree with the Court of Appeals that the
conveyance was testamentary, and for the reasons stated below, we affirm the judgment of
the Court of Appeals.
FACTS AND PROCEDURAL HISTORY
¶2. Rose Greer leased land she owned in Lincoln County to David and Jene Nunnery.
Section 3 of the lease—which extended until July 31, 2025, in automatically renewing one-
year terms—stated:
In the event of the death of the Lessor, this lease agreement shall not terminate,
rather the rights and obligations of Lessor shall immediately be transferred to
Linda Ball, who will also have the right to receive payments hereunder.
¶3. Greer later executed a will leaving all her property to John Oakes and naming him
executor of her estate. After Greer’s death, Oakes filed a petition in the Chancery Court of
Lincoln County to probate Greer’s will. The chancellor admitted the will to probate and
issued Oakes letters testamentary.
¶4. Oakes—as executor—then filed a complaint for declaratory relief in the chancery
court, asking the chancellor (1) to find Section 3 testamentary in nature and declare it invalid
because it lacked the formalities of a will; (2) to determine whether the lease remained in
effect after Greer’s death; and (3) if enforceable, to determine Ball’s rights and obligations
2
under the lease.1 Ball responded that Section 3 simply assigned Greer’s rights, and that she
was entitled to attorney’s fees and costs.
¶5. At the hearing, Oakes argued the chancellor should declare Section 3 invalid because
it was testamentary in nature and lacked the formalities of a will, and because Ball was not
an intended third-party beneficiary of the lease. Ball argued that she was a third-party
beneficiary of the lease, and that Section 3 was a valid assignment of Greer’s rights and
obligations.
¶6. The chancellor concluded Section 3 was not testamentary and that it effectively
assigned Greer’s rights and obligations. Oakes appealed the chancellor’s decision, arguing
the chancellor had erred by finding that the assignment was not testamentary.
¶7. We assigned the case to the Court of Appeals, which reversed the chancellor’s
judgment, finding that Section 3 was testamentary and unenforceable.2 Ball petitioned this
Court for writ of certiorari, which we granted.
ANALYSIS
¶8. Since at least 1855, we have recognized that when an instrument, however styled,
conveys an interest in property, but “the intention was, that it should have only a future
operation after death,” courts must treat the instrument as a will.3 But until today, our cases
1
The complaint named both Ball and the Nunnerys as defendants. While the
Nunnerys answered and filed a counterclaim alleging Oakes had interfered with their rights
under the lease, the parties later agreed to dismiss all claims by and against the Nunnerys and
to recognize the validity of the Nunnerys’ lease.
2
Estate of Greer v. Ball, 2016 WL 1739052, *4 (Miss. Ct. App. May 3, 2016).
3
Wall v. Wall, 30 Miss. 91, 96 (1855).
3
have considered only its application to an instrument purporting to be a deed, so this case
presents an issue of first impression. Section 3 of the lease contains language similar to that
which has rendered deeds testamentary. But, unlike the purported deeds we have considered,
this language appears in a contract with other provisions that took effect during the grantor’s
life.
¶9. In Ford v. Hegwood, Justice Robertson, speaking for a unanimous Court, recognized
that our precedent on this issue “is well settled in two complementary lines of cases.”4 First,
when the instrument “contains its maker’s provision that it makes no present conveyance of
an interest in land or otherwise directs that the interest to be conveyed vests in the grantee
only upon the death of the grantor, such an instrument is regarded as testamentary in
character and is enforceable only if made in compliance with our statute of wills.”5 Second,
“where the instrument conveys a future interest in land which vests in the grantee effective
upon delivery of the deed, though reserving in the grantor a life estate, the effect of which
is to postpone only the grantee’s right of possession or occupancy, the instrument is a deed
in law subject to our law appertaining thereto and may be effective notwithstanding failure
to comply with the statute of wills.”6
4
Ford v. Hegwood, 485 So. 2d 1044, 1045 (Miss. 1986).
5
Id. (citing Peebles v. Rodgers, 211 Miss. 8, 50 So. 2d 632 (1951); White v. Inman,
212 Miss. 237, 54 So. 2d 375 (1951); Palmer v. Riggs, 197 Miss. 256, 19 So. 2d 807(1944); Gaston v. Mitchell, 192 Miss. 452, 4 So. 2d 892 (1942); Ates v. Ates, 189 Miss. 226,
196 So. 243 (1940); Tapley v. McManus, 175 Miss. 849, 854–55, 168 So. 51, 52 (1936);
Smith v. Buffington, 176 Miss. 889, 170 So. 816 (1936)).
6
Ford, 485 So. 2d at 1045 (citing Buchanan v. Buchanan, 236 Miss. 751, 756–57,
112 So. 2d 224, 226–27 (1959); Tanner v. Foreman, 212 Miss. 355, 54 So. 2d 483 (1951);
4
¶10. The distinction turns on whether the instrument conveys any present interest to the
grantee.7 It matters not that some additional interest may vest on the grantor’s death. For
instance, we have found that a deed is not testamentary when the grantor retains a life estate
and conveys the remainder interest to the grantee.8 This is so even though the grantee’s
possessory interest will not vest until the grantor’s death because the grantee’s legal interest
vests at the moment of conveyance.
¶11. Under Section 3 of this lease, Greer’s rights and obligations under the lease do not
vest in Ball—the grantee—until Greer’s death: “In the event of the death of the Lessor . . .
the rights and obligations of Lessor shall immediately be transferred to Linda Ball, who will
also have the right to receive payments hereunder.”9 The terms “shall” and “will” denote
future events, and rights that “shall immediately be transferred” upon the occurrence of some
future event are not actually transferred until the future event occurs. So, Section 3 itself
vests no right in the grantee until the grantor’s death and, standing alone, would be
testamentary.
Watts v. Watts, 198 Miss. 246, 22 So. 2d 625 (1945); Graham v. Triplett, 148 Miss. 299,
114 So. 621 (1927); Johnson v. Seely, 136 Miss. 60, 103 So. 499 (1925); Stubblefield v.
Haywood, 123 Miss. 480, 86 So. 295 (1920); Wall, 30 Miss. at 96–100).
7
Peebles, 50 So. 2d at 634.
8
See Tanner, 54 So. 2d at 484 (“The instrument was executed and acknowledged in
the form of a deed and duly delivered and the consideration therefor paid, and by its plain
terms immediately vested the title to the land in the grantee, subject only to the reservation
of the right of possession in the grantor, J. R. Foreman, so long as he lived. The instrument
must, therefore, be given effect as a valid deed.”).
9
(Emphasis added.)
5
¶12. But it is undisputed that the lease between Greer—the lessor/grantor—and the
Nunnerys—the lessees—took effect during Greer’s life. Were Ball—the grantee—a party
to the contract itself, we think this case squarely would be analogous to those involving life
estates and remainder interests. Whereas a conveyance of real property subject to a life estate
immediately vests a legal interest in the grantee but a possessory interest only upon the
grantor’s death, so too would a contract to purchase the property on death immediately vest
a contractual interest in the grantee and a right to title to the property at death. In fact, when
we first recognized that a deed could be deemed testamentary, we made a point to explain
that the conveyance was a gift, not a contract, implying that our analysis would have been
different had a contract been at issue.10
¶13. That said, Ball was not a party to the lease. At most, Ball may have been an intended
third-party beneficiary.11 An intended third-party beneficiary “‘may in his own right and
10
Wall, 30 Miss. at 96–7 (citing Moore v. McKie, 13 Miss. 238(1845)) (“The first
feature in it to be observed is, that it purports to be a deed of conveyance, in consideration
of love and affection, and also for a nominal money consideration. In this respect, it should
rather be regarded as a deed of gift, than as one of bargain and sale; and from the statement
of the consideration, it would appear that the money part of it was inserted under the idea
that it was necessary to give validity to it, when the instrument was really intended to be a
gift to his brothers and sisters.”); see also Miss. Code Ann. § 91-7-221 (Rev. 2013).
11
Miss. High School Activities Ass’n, Inc. v. Trail, 163 So. 3d 274, 277 (Miss. 2015)
(quoting Yazoo & M.V.R. Co. v. Sideboard, 161 Miss. 4, 133 So. 669, 671 (1931)) (“In one
of our older cases we articulated a three-part test to determine when a third party qualifies
as an intended beneficiary: ‘(1) when the terms of the contract are expressly broad enough
to include the third party either by name as one of a specified class, and (2) the said party
was evidently within the intent of the terms so used, the said third party will be within its
benefits, if (3) the promissee had, in fact, a substantial and articulate interest in the welfare
of the said third party in respect to the subject of the contract.’”).
6
name, enforce a promise made for his benefit even though he is a stranger both to the
contract and the consideration.’”12
¶14. If Ball was not an intended third-party beneficiary, it is clear she had no vested interest
during the life of the grantor and the chancellor erred by finding that the conveyance was not
testamentary. If she was an intended third-party beneficiary, the answer to that question is
more nuanced. The parties to the contract had vested contractual rights during the life of the
grantor. An intended third-party beneficiary possesses the right to enforce the promise for
her benefit in the contract. That said, the parties to a contract may agree to discharge or
modify promises that benefit an intended third-party beneficiary except when the contract
contains a provision to the contrary or under certain factual circumstances not at issue here.13
¶15. A right is vested when it has “become a completed, consummated right for present or
future enjoyment; not contingent; unconditional; absolute.”14 Because Greer and the
Nunnerys could have modified the lease to remove Ball’s benefit under Section 3, Ball
possessed no vested right in the contract even if she were an intended third-party beneficiary.
So, contrary to the dissent’s view, it matters not that Greer needed the Nunnerys’ consent to
terminate this provision during her lifetime. The relevant question is when the interest vests
in the grantee and whether it may be modified during the grantor’s life, not who has the right
to prevent any interest from vesting. Because Ball, the grantee, lacked a vested right, Section
12
Burns v. Washington Savings, 251 Miss. 789, 795, 171 So. 2d 322, 324 (1965)
(quoting 17 Am. Jur. 2d Contracts § 302, at 722 (1964)).
13
Restatement (Second) of Contracts §311.
14
Vested, Black’s Law Dictionary 1342 (abr. 9th ed.).
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3 must be deemed testamentary in nature and treated as a will.15 The parties agree the lease
failed to comply with the statutory formalities required of a will, so we affirm the Court of
Appeals’ decision to reverse the chancellor’s decision finding Section 3 enforceable.
CONCLUSION
¶16. Because we find Section 3 testamentary in nature, we affirm the Court of Appeals’
decision to reverse the chancellor’s decision that this provision was enforceable. We
reiterate, as noted above, that the chancellor’s ruling below and our ruling today affect only
Ball’s rights under Section 3 of the lease. The parties stipulated below that the Nunnerys’
lease itself is valid.
¶17. THE JUDGMENT OF THE COURT OF APPEALS IS AFFIRMED. THE
JUDGMENT OF THE LINCOLN COUNTY CHANCERY COURT IS REVERSED
AND REMANDED.
WALLER, C.J., RANDOLPH, P.J.,COLEMAN, MAXWELL AND BEAM, JJ.,
CONCUR. KITCHENS, J., DISSENTS WITH SEPARATE WRITTEN OPINION
JOINED BY KING AND CHAMBERLIN, JJ.
KITCHENS, JUSTICE, DISSENTING:
¶18. I respectfully dissent. The lease agreement at issue was a contract between Rose
Greer, as lessor, and Jené and David Nunnery (the Nunnerys), as lessees. Lessor and lessees
agreed that Greer would lease the Nunnerys a tract of land for a dairy farm for a period of
twenty-five years. Greer and the Nunnerys also agreed that, in the event of Greer’s death, her
15
The dissent correctly states that “[w]hen ‘individuals seek to accomplish ends
authorized by our law, we are obliged to take upon ourselves a positive attitude that the law
may serve, not thwart, the legitimate aspirations of those individuals.’” Dis. Op. at ¶ 19
(quoting Ford v. Hegwood, 485 So. 2d 1044 – 1046 (Miss.1986). But here the end the
parties sought to accomplish—a testamentary conveyance without the statutory formalities
of a will—is not “authorized by our law.”
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daughter, Linda Greer Ball, would “step into her shoes” and assume the rights and
obligations of lessor, including the right to receive the rental payments. The majority likens
this arrangement to cases that involved failed deeds in which a purported grantor attempted
to convey to the purported grantee an interest in land upon the grantor’s death. See Ford v.
Hegwood, 485 So. 2d 1044, 1045 (Miss. 1986) (collecting cases). This Court has held that
such an instrument is not a deed unless it makes a present conveyance of an interest in land,
for example, a remainder interest. Id. at 1045. If the instrument makes no present conveyance
of an interest, the instrument is testamentary in nature and is of no effect unless it meets the
legal requirements of a valid will. Ford, 485 So. 2d at 1045.
¶19. What the majority misses is that, unlike the cases on which it relies, the lease at issue
is not an instrument by which a grantor attempts to convey real property to a grantee. Greer
did not undertake unilaterally to donate or convey the rental payments to her daughter.
Rather, Greer and the Nunnerys negotiated a contract term requiring that, in the event of
Greer’s death, the Nunnerys would pay rent to Ball, and Ball would assume the duties of the
lessor set forth in the contract formerly performed by Greer. Those duties include paying real
property taxes, paying for posts and wire for fences reasonably needed by the Nunnerys,
inspecting the property, and giving written advance approval (or disapproval) of any
deviation from the Nunnerys’ use of the property as a dairy business. The contractual
language expresses a clear intent and agreement by the Nunnerys to deal with Ball in the
event of Greer’s death. And this Court’s primary purpose when reviewing a contract is to
determine and give effect to the intent of contracting parties. Brothers v. Winstead, 129 So.
93d 906, 913 (Miss. 2014). When “individuals seek to accomplish ends authorized by our law,
we are obliged to take upon ourselves a positive attitude that the law may serve, not thwart,
the legitimate aspirations of those individuals.” Ford, 485 So. 2d at 1046.
¶20. Another consideration undermines the majority’s conclusion that the lease provision
at issue was testamentary in nature. A will may be revoked at any time during the life of the
testator. Trotter v. Trotter, 490 So. 2d 827, 832 (Miss. 1986). Thus, a purported deed that
conveys no interest in land until the grantor’s death is testamentary because it may be
revoked any time before the grantor’s death. Because the dairy farm lease was a contract
between Greer and the Nunnerys, Greer could not have revoked the term assigning the
lessor’s duties to Ball upon Greer’s death. Rather, both Greer and the Nunnerys would have
had to agree to such an alteration. Therefore, this case cannot be likened to the cases finding
a purported deed to be testamentary in nature. In all of those cases, the grantor could have
revoked the instrument at any time prior to his or her death.
¶21. This Court has cautioned restraint in this area, stating that “an instrument . . . should
be adjudicated testamentary in character and subject to the statute of wills only where such
affirmatively and clearly appears from the language of the instrument.” Ford, 485 So. 2d at
1047. We are to resolve doubts in favor of giving effect to the intention expressed in the
instrument. Id. Because the lease provision at issue is not affirmatively and clearly
testamentary in character, I would affirm the chancellor’s finding that the lease provision at
issue was a valid assignment of the lessor’s rights and obligations.
KING AND CHAMBERLIN, JJ., JOIN THIS OPINION.
10