Holter v. First National Bank & Trust Co. of Helena

MR. JUSTICE ANGSTMAN:

This appeal by Phillip Jeffries Barbour, a minor, is taken from a judgment declaring that he must divide equally with the respondent, James Anton Barbour, also a minor, the interest of their deceased mother in the Clara Holter Kennett Trust. Both boys appear by guardians ad litem. The problem in the case is the proper interpretation of a trust deed and arises out of the use therein of the word “issue” and the fact that James is an adopted child.

The allegations of the complaint are admitted; no factual questions arise. The sole question is whether James, the adopted son, is entitled to a share in the distribution of the trust property-under the terms of the trust deed.

The trust in question was established October 7, 1929, and it provided that the trust property be transferred upon the death of the survivor of the trustor and the two named trustees, brothers of the trustor “to such among the children of said Norman B. Holter and Aubrey M. Holter, respectively, as may be living at the death of first party hereto, and to the issue of any such child of either said Norman B. Holter and Aubrey M. Holter who may have died before first party hereto leaving issue him or her surviving-, such issue to take per stirpes the share of the parent and not per capita.”

Marian Holter, a niece of the trustor, married in 1931, becoming Marian Holter Barbour. In 1938 she adopted James, and in 1939 she bore Phillip. She died in 1946, survived by these two boys who are the parties represented in the present action. The trustor died in 1951, the surviving trustee died in 1957, and the trust was then ready for distribution.

Subsequent to the making of the trust agreement, in 1941 Clara Holter Kennet made her last will and in the residuary clause left the remainder of her estate to the children of her brothers “and to the issue of any of said nieces and nephews of mine who may die before my death, leaving issue him or her surviving, such issue to take per stirpes the share of the parent, and not per capita. It is my will that wherever I have used the term “issue” herein in contemplation of the child or children of my niece or nephew or descendcmts of theirs, such term shall include the lawfully adopted child or children of any such niece or nephew of mine or of his or her descendants.” Emphasis added.

The admitted allegations of the complaint, the will and the trust deed which were made exhibits thereto, constitute the record presented to the district court. Upon this record that court decreed:

“That both James Anton Barbour and Phillip Jeffries Barbour shall be considered within the meaning of the term ‘issue’ as used in the trust agreement dated October 7, 1929, and therefore the remaining property of the trust created thereby insofar as said James Anton Barbour and Phillip Jefferis Barbour are concerned shall be transferred one-twelfth (1,/12) to James Anton Barbour and one-twelfth (1/12) to Phillip Jefferis Barbour free of the trust created by said trust agreement. ’ ’

In it search for the meaning of this trust deed, as with any document, this court is limited to the language of the deed as illuminated by the circumstances surrounding its execution, unless we find it ambiguous or uncertain. R.C.M. 1947, secs. 93-401-13, 93-401-14, 93-401-15, 93-401-16, 93-401-17, 93-401-18.

This court has held that the word “issue” in its commonly accepted sense means issue of the body and not an adopted child. In re Kay’s Estate, 127 Mont. 172, 260 Pac. (2d) 391; In re Miller’s Trust, 133 Mont. 354, 1958, 323 Pac. (2d) 885. This is the rule elsewhere. Thus in Fidelity Union Trust Co. v. Potter, 8 N. J. Super. 533, 539, 73 A. (2d) 625, 628, the court said:

“The donor limited the distribution of the trust fund among his daughters’ ‘issue.’ Generally, the word ‘issue’ does not include an adopted child. The question, however, is essentially one of intention, which may be gathered from a construction of the entire instrument and an examination of the surrounding circumstances. ’ ’

In the Miller case we followed the rule stated in Brunton v. International Trust Co., 114 Colo. 298, 164 Pac. (2d) 472, 477, where the court, in part, stated: “In the case of its rights under a will or trust, we say there is a presumption in favor of the adopted child being included with children of the blood when the instrument is executed by its adoptive parent, but a presumption against it being entitled to take when the instrument is made by one other than the adoptive parent. ’ ’

The presumption alluded to is a rebuttable one. It is apparent that the time when the beneficiaries of the trust, in question here, must be ascertained is at the death of the survivor of the trustor and trustees. Here that date was 1957 when the last trustee died.

When the trust was created in 1929, Marian Holter was not yet married. The adoption did not take place until in 1939 which was seven years after her marriage in 1931. At the time of the adoption she had not yet given birth to her natural son.

Hence when the trust was created Marian Holter had no children, either natural or adopted.

Respondents contend that the presumption above alluded to is overcome by evidence to the contrary. This contention must be sustained.

Under section 93-401-13 evidence of the circumstances under which the trust was made may be shown to explain ambiguities therein.

But appellant takes the position that the trust is clear and unambiguous and hence that there is no room for extrinsic evidence to show what was intended.

It is our view that the trust agreement is ambiguous and subject to explanation by parol.

Before this court settled the question in the Kay and Miller eases, supra, there was doubt as to whether the word “issue” included an adopted child. The Kay case was decided in 1953 and the Miller case in 1957. The fact that a good argument could have been made on either side of the question, before these cases were decided, was sufficient to show that the term carried with it an ambiguity. Little Rock Junior College v. George W. Donaghey Foundation, 224 Ark. 895, 277 S. W. (2d) 79, 82, 51 A.L.R. (2d) 806.

Likewise in the answer of appellant he sought judgment granting relief from all uncertainty. This implies that he and others thought there was uncertainty in the language employed. As said in the Little Rock Junior College ease, supra,. “Where there is an ambiguity in a deed, extrinsic evidence is admissible, not to contradict or vary the terms of the deed, but to place all the facts, circumstances, and position of the parties before the court to the end that the true intent of the grantor may be determined. ”

Again in that case, the court said: “The ties ..which connect the testator with his legatees, the affection subsisting between them, the motives which may reasonably be supposed to operate with him and to influence him in the disposition of his property, are all entitled to consideration in expounding doubtful words and ascertaining the meaning in which the testator used them.”

Here it is a fair inference from the language used in the will that the testatrix had developed an affection for the adopted son of Marian Holter. she had the same regard for the adopted son as for her natural son and in her mind the word “issue” when applied to those who should share in her property included the adopted as well as the natural son of Marian Holter. To all intents and purposes the trustor stood in the same relationship to the adopted son of Marian Holter as to the natural son just as did the adoptive mother by virtue of section 61-134. And it would be preposterous to say that the trustor meant to include the adopted son of Marian Holter as “issue” in the will but not as “issue” under the trust.

Nor is there- any merit in the contention of respondents that subsequent declarations of the trustor are not relevant to show the meaning of the word “issue.” Compare In re Nicol’s Trust, 3 Misc. (2d) 898, 148 N.Y.S. (2d) 854.

Accordingly the judgment is affirmed.

MR. JUSTICES ADAIR and BOTTOMLY concur.