Opinion
No. 26482. En Banc.
February 3, 1938.
WILLS — DEEDS — TESTAMENTARY CHARACTER OF INSTRUMENT. A deed or contract for the life of the lessor, postponing its taking effect until his death, is of a testamentary character and void when not executed as a will, unless some present interest passed at the time of its execution; and a leasehold interest is not such an interest as the above rule requires.
SAME. While the dominant purpose of the maker determines whether an instrument is a contract or a will, the effect and operation of the instrument must be determined by its own terms.
SAME. Where a lease for the life of the lessor or until a guardian or trustee is appointed, for use of the premises as a boys' camp, provided that the property was to become the property of the lessee, an association for boys, upon the death of the lessor and complete performance of its terms by the lessee, the express and reflected intention of the lessor was to withhold the vesting of the fee title in the lessee until after the death of the lessor, no present interest vested other than the leasehold interest which terminated on his death, and the contract discloses no intent to transfer any present interest other than the leasehold interest.
SAME. The provisions in such a lease, in case of insolvency or bankruptcy of the lessee, and for a receiver, together with forfeiture provisions and waiver of performance, sustain the claim that no interest passed to the lessee other than an ordinary leasehold interest.
See 28 R.C.L. 108 (8 Perm. Supp. 6088).
Appeal from a judgment of the superior court for King county, Kinne, J., entered July 20, 1936, in probate proceedings, requiring the executor to execute a conveyance of real property, after a trial on the merits. Reversed.
Poe, Falknor, Emory Howe and Van A. Neher, for appellants.
J. Speed Smith and Henry Elliott, Jr., for respondent.
Kumm Hatch, for amici curiae.
HOLCOMB, BEALS, GERAGHTY, and ROBINSON, JJ., dissent.
ON REHEARING.
For prior En Banc opinion, see 191 Wn. 180, 71 P.2d 6. REP.
By the terms of his will, which was executed January 6, 1933, James B. Murphy, who died September 18, 1934, bequeathed to the Young Men's Christian Association, of Seattle, his private library and five thousand dollars for educational work. After making other devises and bequests, the testator bequeathed the residue of his estate to seven nieces and nephews.
On April 30, 1930 (which was more than four years prior to the date of the death of the testator and approximately thirty-two months prior to the execution of the last will and testament of Murphy), Murphy entered into a contract, designated "lease," with the Young Men's Christian Association, under the terms of which he leased to the latter a tract of land near Bellevue. The tract was not specifically devised in the will, and, if the land constitutes a part of the estate of the decedent, it will pass under the residuary clause.
The term of the lease is
". . . for the period of his [Murphy's] natural life and until his death, or until a guardian or trustee for any cause is appointed of his estate."
Under the rental provision of the lease, the lessee was required and agreed to pay, during the term of the lease, all power, light, heat, water, oil, and other service charges, and all taxes and assessments levied against the leased premises or against any improvements then or subsequently placed upon the leased premises.
The lessee agreed to keep the premises in a good, safe, and secure condition, to conform to all sanitary and health regulations of the state, to indemnify the lessor against accidents occurring on the premises or adjacent roadways, to keep the premises safe for use as a camp ground for boys, to make all necessary repairs, and to reconstruct and rebuild such structures as might become damaged or destroyed or obsolete.
It was agreed between the parties that all improvements placed upon the premises "shall at once become a part of the freehold."
Paragraph 6 of the lease imposes upon the lessee the duty of the care and preservation of the trees and shrubs upon the premises.
The lessee was obligated by the terms of paragraph 8 of the lease to construct, prior to June 15, 1930, an adequate sewage system, an adequate water distributing system, and at least seven summer sleeping cabins for boys.
Paragraph 9 of the lease requires the erection and completion, before June 1, 1931, of a lodge building at a location to be agreed upon between the lessor and lessee, at a cost of not less than five thousand dollars. There are further provisions in this paragraph for the preparation of a baseball ground, a tennis court, and a volley ball court, on or before a designated date.
While, under the terms of paragraph 14, the lessor was not required to place upon the grounds any equipment, structures, or appliances of any nature, he was privileged to do so
". . . if he chooses with consent of the lessee and the same shall be deemed in the nature of a loan of such equipment, etc., is not properly cared for, the same may be removed at any time by him without notice, and this provision shall apply to personal property of every kind and nature which he may place thereon with consent of the lessee, but while such personal property is upon the grounds, the said lessee agrees to use the same solely for the purpose for which it was intended by lessor and shall be responsible for the care and preservation of same."
Paragraphs 16 and 17 of the lease read as follows:
"It is further covenanted and agreed that if the lessee shall become either insolvent or a bankrupt, or if a permanent receiver is appointed over lessee, or the said lessee fails to function as a going concern, this lease immediately terminates and ends without any notice of election or act or rescission on the part of the lessor; and it is further covenanted and agreed that if any portion of the said premises is taken for roadways, it shall not affect the validity or continuance of this lease and in such event the award for the land taken and damage to the remainder will go to and become the property of the lessor and the award for the injury or destruction of any building will go to the lessee herein; and that if the whole of said premises or so much thereof as shall render the remainder unfit for camp purposes, is taken by eminent domain, the awards for the land taken shall go to the lessor and the awards for injuries or taking of the buildings and improvements shall go to and become the property of lessee, and lessee will be permitted to salvage any buildings or structures upon any remaining portion of said premises not taken, and this lease shall thereupon terminate and end.
"Lessee further covenants and agrees that it will not without the written consent of the lessor sublet the whole or any part of said premises, nor assign this lease, nor any interest therein, nor permit the title of the lessee to be transferred from the lessee involuntarily or by operation of law and will not, without such written consent, encumber the said lease-hold interest, or any part thereof, and that if consent is once given by the lessor to assign or encumber this lease-hold estate, as in this paragraph provided, the lessor shall not thereby be barred from afterwards refusing to consent to any further or other assignment or encumbrance. The lessor covenants and agrees that he will not encumber his interest in the fee of said premises and will not sell or encumber his ownership of this lease; and further covenants and agrees that if he shall sell or encumber his interest in the said premises or the said lease-hold, or in any property attached thereto or connected therewith, or if he becomes insolvent or bankrupt, or if a conveyance or encumbrance of the interest of the lessor in said premises or any property attached thereto or connected therewith, is made by operation of law, or if any conveyance, transfer or encumbrance thereof arises by virtue of the ownership of the said lessor either involuntarily or voluntarily, then in the event of anyone of the foregoing contingencies relating to the Bankruptcy encumbrance, or transfer of lessor's title, the title to said leased premises shall forthwith vest in and become absolute in the lessee, free of any and all claims, attempted transfers or encumbrances of the said lessor, his representatives or assigns, and a suit in equity may be immediately instituted by the said lessee to quiet its title to said lands and premises for or on account of, the breach of this covenant by lessor."
Paragraph 18 provides that any waiver of any of the terms or provisions of the lease must be in writing and can be proved only by a written instrument and not by parol evidence; that any waiver of any one breach of the lease by the lessee shall not be deemed or construed as a waiver of any subsequent breach of the same or any other provision of the lease; that any failure on the part of the lessor to exercise any right under the lease, or to promptly declare a forfeiture, or to promptly take advantage of any breach of the terms of the lease, shall not be construed as a waiver of any such right or such terms or conditions, nor of any breach thereof; that delay on the part of the lessor in promptly claiming any breach of the lease is not to be construed as an extension of time for the performance of any of the conditions or covenants to be performed by the lessee; that indulgences granted by the lessor or forbearance in enforcing any of the provisions of the lease shall not estop the lessor from later claiming such right.
". . . nor shall it be used in construing the lease more favorably to the lessee, and it is covenanted and agreed that the lessor, although he has not exercised his right under this lease for a period of time, may at any time thereafter strictly and rigidly enforce the same, to all intents and purposes as if no leniency had been shown by him."
The lessor and his agents were given by the terms of paragraph 19 the right at any time to enter upon the leased property for the purpose of ascertaining whether the lessee was performing its part of the agreement. It is further stipulated that the lessee will not contract any debt for labor or material which may become a lien against the interest of the lessor in the premises, and that the lessee will and can not contract or create any mortgage lien against the interest of the lessor in the leased property, or against the lessor's interest in the improvements placed upon the leased premises.
Paragraphs 23 and 24 read as follows:
"Time is the essence of this lease in reference to all matters to be done and performed by the said lessee and especially in reference to the preservation of the trees, and the said grounds, and this lease shall be strictly construed against the lessee and if the lessee shall fail to fully keep and perform any of the covenants or provisions herein contained, and to be performed by it, then the lessor may, with or without process of law, re-enter the said premises, take possession thereof and remove all persons representing the lessee therefrom and remove personal property belonging to the lessee and store the same in some public warehouse at the expense of the lessee and this lease shall be fully terminated and ended, and the said lessee can never thereafter assert any right or privilege hereunder, lessee waives all notice of default required by statute, or otherwise.
"It is further covenanted and agreed that if the said lessee shall fully perform the terms of this lease and the said lease is in good standing at the time of the death, or the appointment of a guardian or trustee, of the lessor's estate, then in that event the said lands and premises shall become the property of the said lessee and if the said lessee is in possession at the time of the death of the said lessor or at the time of the appointment of a guardian or a trustee, it shall be conclusive proof against the lessor, his representatives and his estate that the lease is in good standing. It is understood on behalf of the lessor that the services to be rendered and the work to be performed, and the expenditures to be made by the said lessee in the fulfillment of the provisions in this lease, is a sufficient consideration for the passing of the title of the said lands and premises to the lessee upon the death of the lessor, or sooner upon the appointment of a guardian or a trustee, and said transfer and passing shall not be regarded as a gift or devise, but for a good and sufficient consideration, and the executors or administrators or personal representatives of said lessor are hereby authorized, directed and empowered upon his death, or sooner upon the appointment by his deed or otherwise of a guardian or a trustee to manage his estate, to execute any and all conveyances which may be necessary and proper to vest in the said lessee."
The Young Men's Christian Association went into possession of the property in question at the time of the execution of the lease, and has been continuously in possession at all times since that date.
The Young Men's Christian Association filed a petition in the probate proceeding, in which petition it prayed for a decree directing the executor to execute and deliver to it a deed to the premises in question. The demurrers of the executor and several of the residuary legatees to that petition were overruled. Thereafter, answers were filed in behalf of the residuary legatees and in behalf of the executor. As an affirmative defense, the residuary legatees pleaded numerous violations of the terms of the lease. Before the introduction of any evidence, the affirmative defense was stricken by the trial court, on the motion of the petitioner. Trial to the court resulted in a decree requiring the executor to make the conveyance of the property to the petitioner. Three of the residuary legatees have appealed from that decree.
Counsel for appellants urge that paragraph 24 of the contract between the decedent and the respondent is testamentary in character, and, as the contract was not executed with the formality required for a valid will, the provisions are not enforceable.
[1] Where the provision of an instrument, in the form of a deed or contract, postponing its taking effect until after the death of the grantor, is construed as passing a present interest in the grantee, the instrument is a deed or a contract. Where, however, the provision postponing its taking effect until after the death of the grantor is construed as passing an interest not to take effect until the death of the grantor or maker of the instrument, the instrument is testamentary in character, notwithstanding that, in form, it may be a deed or contract. That is to say, the rule is that an instrument containing a provision postponing its taking effect until after the maker's death, which passes an interest that is revocable and ambulatory, is testamentary in character. Annotations, 11 A.L.R. 39; Annotations, 76 A.L.R. 640; Young v. O'Donnell, 129 Wn. 219, 224 P. 682.
Paragraph 24 of the lease provides that, at the time of the death of the lessor, the said lands and premises shall become the property of the said lessee. Manifestly, the vesting of title in the respondent is conditioned upon Murphy's death. Unless some present interest passed to the respondent at the time of the execution of the lease, the provision in paragraph 24 is testamentary in character and, of course, is not enforceable unless executed with the formality required by the statute for a will.
[2, 3] We should be mindful of the fact that the transfer of the leasehold estate to the respondent is not the passing of such an interest as is required by the foregoing rule. That the lease terminated absolutely the very instant of Murphy's death, is too clear for argument. The leasehold interest which passed to the respondent passed by virtue of the leasing contract and not under the provisions of paragraph 24 of the contract. Patently, the present interest required to be transferred to the respondent, within the meaning of the rule, is an interest which will survive the death of the grantor.
The leasehold interest taken by the respondent as lessee was the same interest which it would have received if paragraph 24 had not been a part of the contract. Paragraph 24 does not provide, expressly or impliedly, that Murphy is obligated to make a will in behalf of the respondent or to devise the land in question to it. The paragraph provides that the property is to become, on the death of the lessor, the property of the respondent. This is the same direction that would have been given in an instrument expressly named as, and intended by the maker to be, a will.
Murphy provided by paragraph 24 that the services to be rendered and the work to be performed by the respondent in the fulfillment of the provisions in the lease constituted a good and sufficient consideration for the transfer of the property to the respondent: "Transfer and passing shall not be regarded as a gift or devise but for a good and sufficient consideration."
Counsel for respondent argue that, in the determination of whether an instrument is a contract or a will, the dominant purpose of the maker, as manifested in such instrument, must control. 68 C.J. 619. It must be borne in mind, however, that whether an instrument is a will, a deed, or a lease, depends upon the effect and operation of such instrument, to be determined by its own terms.
It is argued that there is no doubt that it was the intention of Murphy to convey to the association the land described in the lease upon compliance with the condition therein stated; that Murphy's intention, as expressed and reflected in the entire leasing contract, was to withhold the vesting of the fee title in the association until after the death of the lessor [Murphy]; and that the agreement between Murphy and the association is valid as a contract, as it contemplated performance, in part at least, during Murphy's lifetime, and vested some quantum of present interest in the association. A sufficient answer to that argument is that no present interest in the property vested in the respondent.
"An instrument, however, although partly or wholly in the form of a contract, is testamentary in character, and operative, if at all, as a will, where it is to have no operation during the party's lifetime, and disposes or attempts to dispose of his property at his death, and not before." 68 C.J. 619, § 238.
We should not lose sight of the rule that, whether the instrument is, in form, a deed or a contract, if the transfer of the property depends and is conditioned upon the death of the grantor and no present estate passes, the instrument will be held to be a will. If such instrument is not executed with the formality the statute requires for a will, such instrument is unenforceable. The contract discloses no intention on the part of Murphy to transfer to the respondent any present interest other than the leasehold interest, and that interest terminated at Murphy's death.
[4] Paragraph 16 of the lease provides that, in the event of the insolvency or bankruptcy of the respondent, or if a permanent receiver is appointed over it, or if the respondent fails to function as a going concern, the lease shall immediately terminate. Those provisions, together with the forfeiture provisions in paragraph 23 and the provisions against waiver in paragraph 18, sustain the position of counsel for appellants that whatever passed to the respondent lessee was nothing other than an ordinary leasehold interest. However repetitive, it should be stressed that a reading of the lease clearly discloses that the lessor did not intend to vest in the lessee prior to his death any interest or estate other than the leasehold interest which terminated at the time of Murphy's death.
In United States Trust Co. v. Giveans, 97 N.J.L. 265, 117 A. 46, the deceased and Mary E. Giveans executed an instrument, reading as follows:
"We, Jane C. Wrigley and Mary E. Giveans, have on this day purchased a safe made by the American Safe Company of Anderson, Indiana. Number of safe is 7169, under the following agreement: Upon the death of either one the safe and personal contents becomes the property of the other, cash, bank books and bonds,c.
"JANE C. WRIGLEY. (Seal) "MARY E. GIVEANS. (Seal)
"Signed, sealed and delivered in the presence of Susan I. Gliff, Robert W. Patterson."
An action was instituted by the executor of Mrs. Wrigley's will to replevy the safe and its contents mentioned in the foregoing instrument. The question on the appeal was whether, upon the death of Mrs. Wrigley, the above quoted agreement had the legal effect of transferring her title to the contents of the safe to Mrs. Giveans. In holding that the agreement, in which the language is almost the same as the language of Murphy in paragraph 24 of the lease, had no such effect, the court said:
"For the respondent it is argued that the agreement made between Mrs. Wrigley and the defendant is not a contract founded upon a consideration, but this is not so, because upon the death of either party to it the safe and contents were to be the property of the other; each in consideration of acquiring the other's property undertook to give up hers at death.
"But, nevertheless, the document could not operate to transfer any title to the contents of the safe to the defendant, for the obvious reason that it was a contract in the nature of a will; it was a contract which attempts to dispose of property after death, after the manner of a will, without being executed as a testament in conformity with the statute of wills."
See, also, Reed v. Hazleton, 37 Kan. 321, 15 P. 177, which sustains the rule that, if the instrument passes a present interest, it is a deed or a contract, although the right of possession may not accrue until some future time; but if it does not pass any interest or right until the death of the maker, it is testamentary.
On July 25, 1907, Dillie S. Aldrich executed her last will and testament. On August 1, 1907, she executed and delivered the following written instrument:
"`For the sum of one dollar and other valuable consideration, I hereby transfer to Ozetta Marshall my library, of which she is to take immediate possession.
"`At my death she is to have my sewing machine, table silver, dishes, table linen, and any and all other personal property I may have in my possession at the time of my death.'"
A month later, Mrs. Aldrich died. The plaintiff, in Taylor v. Wilder, 63 Colo. 282, 165 P. 766, who prior to her marriage was Ozetta Marshall, instituted an action in which it was contended that, under the above quoted instrument, she became and was the owner of all the personal property of which Dillie S. Aldrich died seized or possessed. The court held, as to the library, it was plainly the intention of the maker that the transfer should be effective immediately, but that, as to the other property, it was manifestly the intention of Mrs. Aldrich that no interest should pass until her death, and that the latter provision was therefore testamentary in character and was unenforceable because not executed as a will. The court said:
"Under this proposition it is essential to determine whether the writing in question is in reality a contract or only testamentary in character, or in part the one, and in part the other.
"It is elementary that the legal character of instruments of this kind depends upon whether the maker intended that ownership or interest should before his death pass from himself and vest in the other party upon the execution of the paper, or whether such ownership or estate should pass only upon his death; and this in turn depends upon the provisions of the instrument, which may be aided by circumstances attending its execution. And the rule is that whatever may be the form of the instrument, or the circumstances attending its execution and delivery, if the intention of the maker was that it should become effective only after his death, it is a will, but, if presently effective, it is a contract. And it is immaterial what the maker calls the instrument for the law fixes its character and effect. The rule is well stated in Powers v. Scharling, 64 Kansas 339, 343, 67 P. 820, as follows:
"`In determining whether an instrument be a deed or will, the question is, Did the maker intend to convey any estate or interest whatever to vest before his death and upon the execution of the paper? 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.
"`If, however, the testator (the maker of the instrument) intended that the grant should take effect upon the execution of the instrument as to certain of his property then in possession, and as to certain other of his estate not until his death, the instrument, having been properly executed, would be a contract, and irrevocable as to that part in possession and to which it was intended to vest the title, and testamentary as to the residue; .. .'
"Examining the instrument here involved, we are certain that the maker thereof intended that it should be effective immediately in passing ownership of the library, and as to all other property therein mentioned, not until her death. The express words of the first clause of the instrument are immediately effective and pass a present interest. This is not true, however, as to the property covered by the second clause. On the contrary, it is clearly evident that no interest therein was intended to pass until the death of Mrs. Aldrich. She never parted with the right to deal with such property as she pleased. Had she attempted to dispose of it, or to use the money in the banks said to be a part thereof, Mrs. Taylor could not have interfered. This demonstrates that the instrument was not intended to become operative at once so as to vest ownership of such property in Mrs. Taylor . . .
"A deed or bill of sale must take effect upon its execution or not at all. It is unnecessary that it convey or pass an immediate interest in possession; but it must become effective in passing the interest or estate at its execution. A will is quite the reverse and can only operate, that is, become effective in passing an interest, after death. And an instrument may, as to one part, be a contract of sale, and as to another part, a will. Robinson v. Schly and Cooper, 6 Ga. 515. So we hold the second clause of this instrument testamentary in character; but the instrument, not being executed in the manner and form required in the execution of a will, is non-effective."
In Knight v. Knight, 133 Miss. 74, 97 So. 481, W.T. Knight executed an instrument, reading as follows:
"`For and in consideration of the sum of ten dollars to me this day cash in hand paid, the receipt of which is hereby acknowledged and for the further consideration of love and affection which I have for my two daughters Corneil Carmack Knight and Dorothy Thomas Knight, who are now both minors, I convey and warrant to them and their children after them, a remainder interest in certain tracts or parcels of land situate in the county of Tunica and state of Mississippi, the same being more particularly described as follows: [Description of land omitted.]
"`But this deed is made under the following conditions, to wit:
"`That I, Woodson T. Knight, reserve for my benefit and for the benefit of my assigns a life interest in all of said lands and the possession, use and occupation of the same during my life after which this conveyance is to go into effect and my said daughters at the time of my death are to become possessed of an indefeasible title in fee simple to all of said lands with remainder interest in their children at the time of their death.
"`Witness my signature this the 7th day of Sept., 1917. [Signed] W.T. Knight.'"
The question presented by the appeal in that case was whether the instrument was a will or a deed. In holding the instrument to be testamentary, the court said:
"In determining whether an instrument is a deed or a will the controlling question is: Did the maker intend to convey any estate or interest whatever to vest before his death and upon the execution of the writing? Or, on the other hand: Did he intend that all the interest and estate in the land attempted to be conveyed should take effect only after his death? If the former, it is a deed; if the latter, a will. It is wholly immaterial whether he calls it a will or a deed, for the instrument will have operation according to its legal effect: Wall v. Wall, 30 Miss. 91, 64 Am. Dec. 147; Thomas v. Byrd, 112 Miss. 692, 72 So. 725; Simpson v. McGee, 112 Miss. 344, 73 So. 55, 11 A.L.R. 4; Cox v. Reed, 113 Miss. 488, 74 So. 330, 11 A.L.R. 5; Kelly v. Covington, 119 Miss. 658, 81 So. 485.
"In the first paragraph of this instrument the maker, W.T. Knight, attempts to convey to his two daughters `and their children after them' the remainder interest in his lands. Then in the last paragraph, following the description of the lands, he reserves to himself the use and occupation of said lands during his life (quoting from the instrument), `after which this conveyance is to go into effect and my said daughters at the time of my death are to become possessed of an indefeasible title in fee simple to all said lands with remainder interest in their children at the time of their death.'
"Although the maker probably intended to reserve to himself the use and occupation of his lands for the period of his life with remainder in his daughters to take effect before his death, the instrument plainly fails to so provide. On the contrary it provides in unmistakable terms that the interest attempted to be conveyed to his daughters shall not take effect until after his death. In other words, no interest was conveyed to his daughters which was to take effect before the death of the grantor. He parted with nothing to take effect during his lifetime; he could have at once conveyed a fee simple title to some one else. Therefore his daughters got nothing.
"We hold, under the rule laid down in the above authorities, that this instrument is a will and must fail because not executed and attested according to our statute of wills. The court below so held."
In the case at bar, the contract quite clearly discloses, as stated above, the intention on the part of Murphy to transfer to the respondent, after his death, the property in question, in the event the respondent carried out its part of the contract during the life of Murphy, and if Murphy had not, as he had a right to do, canceled the contract. The contract does not disclose any intention on the part of Murphy to transfer to the respondent any present interest other than the lease-hold interest, and that interest terminated the instant Murphy died. An apt authority is Glover v. Fillmore, 88 Kan. 545, 129 P. 144. The facts in that case are as follows:
A widow entered into an agreement for maintenance by which she furnished land for the joint use and occupancy of herself and a distant relative. Under that contract, she had the right to use and make her home in the house on the land during her life. This distant relative, one Glover, was to occupy and cultivate the land, keep it in reasonable repair, pay the taxes, and provide for and maintain the other party in health and sickness in a comfortable manner, and in lieu of clothing, to pay her one hundred dollars on January 1st of each year following the execution of the agreement. Mrs. Patterson covenanted that, upon her death, the agreement should stand for, convey, and vest in Glover, the fee simple title as if a good warranty deed upon sufficient consideration had theretofore been made. She retained the option to terminate the contract upon the failure of Glover to carry out his part of the contract, in which case Glover was to surrender possession to Mrs. Patterson. Before the land could be occupied, Mrs. Patterson died. Glover assisted for a few weeks in her care, and he brought her remains for burial to the neighborhood where the land was located, paying the medical and funeral expenses.
Following Mrs. Patterson's death, Glover conveyed the land to his father, who, as plaintiff, brought an action against the heirs of Mrs. Patterson to quiet title to the property. The trial court held that the agreement was void, and in affirming the judgment, the supreme court of Kansas said:
"The plaintiff argues that the instrument disclosed an intention on the part of Mrs. Patterson to vest a present interest in the real estate in the plaintiff's grantor, and that regardless of technical rules of construction such intention should be given effect and control. The defendants insist that the instrument is testamentary in character and void for failure to comply with the statute regarding its attestation, or that it is an executory contract for future possession. We think the agreement itself and the statements shown to have been made by Mrs. Patterson indicate quite clearly her intention that in case he carried out his part of the contract during her life the property should then be his, but that it should be hers to all intents and purposes so long as she lived. She might have conveyed the property to him and taken back an agreement for her support, or she might have contracted therefor and made or agreed to make a will leaving the property to him at her death; but what she did was to contract in the way already set forth, and it does not appear that any present estate passed; and if the instrument is testamentary in character it cannot be upheld as a will for the reason that the statutory requirements touching execution and attestation were not complied with.
"In Reed, Ex'r, v. Hazleton, 37 Kan. 321, 15 P. 177, the contract provided, among other things, that Ricket should retain full possession of the land during his lifetime and make such improvements as he felt able to make; that Hazelton should properly care for and see to his wants in health and sickness, Hazelton to have his home with Ricket, `and after the death of the said Henry Ricket, of the first party, the right and title of the north half of the northwest quarter . . . shall vest in said John Hazleton, of the second party.' (p. 322.) This part of the contract was held to be testamentary, the rule being announced that if the instrument passes a present interest it is a deed or a contract, although the right of possession may not accrue until some future time, but if it does not pass any interest or right until the death of the maker it is testamentary."
In the annotation under subd. (k) on page 100 of 11 A.L.R., are collected cases in which instruments of the kind similar to the one in the case at bar are held to be testamentary. In the cases under that subdivision of the annotation, emphasis is placed upon the provisions in the instrument that the transfer shall be conditional upon the survivorship of the grantee. Those cases have to do with natural persons. Similar in principle is the case at bar, in which is an analogous provision in paragraph 16 of the lease, under the terms of which the lease terminates in the event of the insolvency or bankruptcy of the respondent lessee, or the appointment of a receiver for it, or its failure to function as a going concern. This buttresses the position of counsel for appellants that there was no intention on the part of Murphy to transfer presently any interest whatever, except the ordinary leasehold interest flowing from the lease as a lease.
In Young v. O'Donnell, 129 Wn. 219, 224 P. 682, we held that a deed from an old man to his son is of a testamentary character and conveys no present interest, although, in consideration of caring for the grantor until his death, where the deed provides that it is effective only after the death of the grantor, that the grantor reserves absolute dominion and control during his life, and that the deed is to be null and void in the event of the death of the grantee prior to the decease of the grantor. The conveyance in the case cited provided that, in the event the grantee died before the grantor, the deed should be null and void; that the deed was to take effect only after the death of the grantor.
"`. . . and the grantor herein reserves to himself a life estate in the above premises, and is to have and to use and to retain absolute control until the death of the grantor.'"
The subsequent conveyance of the identical premises, in consideration of love and affection and a nominal consideration, to his daughter further evidenced the intention of the grantor, as well as the understanding of the grantee, that no present interest was by the deed conveyed to the son. That case lends some support to the position of appellants, although it could have been decided on the ground of failure of consideration.
The direction of Murphy in the lease to his executor to exact the necessary conveyances to vest title in the respondent lessee is a recognition on the part of Murphy that no title was to vest until his death. Such a direction, however, does not render inapplicable the rule upon which the appellants rely.
In In re Losch's Estate, 264 Pa. St. 58, 107 A. 375, a paper signed by the deceased giving his home to his housekeeper for special favors and services, and ordering his executor after his death to sign a deed and deliver it to her, was held testamentary in character, because what was to be done to make it effective had to be done by the executor. That paper reads as follows:
"`I will give my home Furnished as it now is all of 619. Linden st. to my present housekeeper who is now takeing care of me to Angelina Kern. For special favors and honest kind work and good service she has done for me during the last three month and before. she shall have my home which I promised to her. Also for the last three years past for staying with me. to the end of my life. I name and order my executor James Kressler. lawful to sign said Deed over to in her name. and after my death to hand and deliver said same deed to her. Angelina Kern. Witness my hand and seal. (Signed) Charles Losch (Seal). In the presence of Angie Kern.'"
In holding the writing to be testamentary, the court said:
"The paper signed by the decedent, which appellant insists is a contract to be specifically enforced, is clearly testamentary: Wilson v. Van Leer, 103 Pa. 600; Megary's Est., 206 Pa. 260. It vested no present interest, but only appointed what was to be done after the death of the maker, and this is the test of its character . . ."
We are familiar with the holding in In re Griswold's Estate, 113 Neb. 256, 202 N.W. 609, 38 A.L.R. 858, cited in Gostina v. Whitham, 148 Wn. 72, 268 P. 132, that, if a promissory note or any other written contract is supported by a sufficient consideration, the fact that performance is postponed until after the death of the promisor does not, of itself, give to the instrument a testamentary character so as to require execution in accordance with the statute of wills.
The citation is inapposite. We agree that the fact that a promissory note is, by its terms, payable at or after the death of the maker, does not give that note a testamentary character so long as it creates or recognizes a present indebtedness or obligation.
"Where, however, an instrument, although in form a bill or note, is intended to have no operation until the death of the maker, it is not contractual, but of the nature of a will; . . ." 68 C.J. 619, § 239.
We deem what we have said is a sufficient answer to the argument of counsel for respondent respecting the restriction in paragraph 17 of Murphy's right to sell or encumber the fee, and obviates necessity of discussion of the point made by counsel for appellants — in support of which Fowler v. Wyman, 169 Wn. 307, 13 P.2d 501, is cited — that paragraph 17, by which Murphy imposed a restraint upon his right to alienate his interest, renders the instrument void.
Read as a whole, the contract in question neither transfers nor reveals any intention on the part of the decedent to transfer to the respondent any interest whatever in the premises, other than the leasehold interest, prior to his death. The determinative question of whether Murphy transferred to the respondent any present interest, other than the leasehold interest, in the property, is answered in the negative.
The decree is reversed.
STEINERT, C.J., MAIN, BLAKE, and SIMPSON, JJ., concur.
For the reasons stated in the former prevailing opinion, reported in 191 Wn. 180, 71 P.2d 6, not necessary to repeat, this opinion is wrong. The cases relied upon by the majority are misapplied to such an instrument as that before us in this case.
The judgment should be affirmed.
BEALS and GERAGHTY, JJ., concur with HOLCOMB, J.
I regret that the majority have concluded that it is legally impossible to sustain the carefully conceived plan of the great-hearted man who, not being so fortunate as to have had a son or sons of his own, was yet willing, throughout a long life, to give so much time and effort toward the spiritual and physical development of the sons of others. The result of the majority opinion is doubly distressing because it carries with it the necessary inference that Mr. Murphy did not possess the legal ability to draft an instrument which would lawfully carry out the purpose he had in mind. It is my opinion that the principles of our law neither require nor justify the result reached by the majority, and that the instrument, condemned by the majority as testamentary in its nature, is, what it was quite obviously intended to be, a valid and enforceable contract.
During his lifetime, as is commonly known and as appears of record, Mr. Murphy gave unstintingly of his time and substance to the support of the Young Men's Christian Association. As he grew older, he wanted to do something of a lasting and permanent nature. He owned a tract of land suitable for a boys' camp. A will would not answer his purpose. He wanted the Y.M.C.A. to receive immediate benefit from the property, and, in order that the maximum benefit might at once be obtained, he wanted it to spend considerable funds for improvements. This the Y.M.C.A. could not be expected to do on the faith of a will, which is never effective until death and always subject to revocation. A deed would not answer his purpose, because he wished — for the good of the donee — to retain some semblance of control over the use and development of the property, not necessarily until his death, as will be later shown, but as long as he should remain in possession of his judgment and faculties, and so he resorted to contract.
It is not difficult, from a study of the instrument in question, to reconstruct Mr. Murphy's mental processes. He knew that, if the Y.M.C.A. promised to make certain improvements on the land and to continuously do certain things in reference thereto, in consideration of his promise to give it a deed on, say, January 1, 1935, this would constitute a valid contract which the Y.M.C.A. could enforce. But that would not answer the purpose, because he might live much longer than that. He knew also that it was not necessary to fix a calendar date for the completion of performance in order to give the contract validity, but that the contract would be valid if it was agreed that the Y.M.C.A. should receive a conveyance provided it continued to occupy the land and do the stipulated things until, for example, it secured a definite number of dues-paying members, or until one of its members won a first in the Olympic games, or until the death of A. But such contingencies would not answer his purpose, because they might happen long before he became incapable by death or otherwise; and so, he hit upon an idea — but let him speak for himself, — I quote from the contract which he drew in the form of a lease:
"It is understood on behalf of the lessor that the services to be rendered and the work to be performed, and the expenditures to be made by the said lessee [the Y.M.C.A.] in the fulfillment of the provisions in this lease, is a sufficient consideration for the passing of the title of the said lands and premises to the lessee upon the death of the lessor, or sooner upon the appointment of a guardian or a trustee, and said transfer and passing shall not be regarded as a gift or devise, but for a good and sufficient consideration, and the executors or administrators or personal representatives of said lessor are hereby authorized, directed and empowered upon his death, or sooner upon the appointment by his deed or otherwise of a guardian or a trustee to manage his estate, to execute any and all conveyances which may be necessary and proper to vest in the said lessee." (Italics mine.)
There can be no doubt but that Mr. Murphy realized there might be a claim that the contract was an instrument testamentary in character, and that he deliberately employed the above language to specifically show that it was not. The majority have held that it is, notwithstanding.
I hope I may say, without giving offense, that I have never before known a court to hold that an instrument which, by its express terms, may operate to shift title to property before the death of the maker, was, or could be, testamentary in character. And how definitely and explicitly the instrument declares that the land is not devised, and that title does not pass by virtue of Mr. Murphy's death; but that that event is merely to mark the completion of the Y.M.C.A.'s stipulated performance, and that the Y.M.C.A. shall become entitled to the land, not automatically because of Mr. Murphy's death, but solely by virtue of having given full consideration as per contract, and that accordingly a deed is necessary to pass title! Another man's death might have been used to mark the completion of the Y.M.C.A.'s performance. I know of no legal reason why Mr. Murphy could not use his own death for that purpose.
I think, therefore, that the instrument in question is a good and enforceable contract. Indeed, having Mr. Murphy's purpose in mind, it should be regarded as a clever and constructive piece of legal work. I cannot escape the conviction that Mr. Murphy's plan has failed, not because it was in any way legally deficient, but simply because it was unprecedented. If he was guilty of any lapse in its preparation, it was merely in not taking sufficient account of the fact that the legal mind is invincibly hostile to the new, the strange, and the unfamiliar.
Mr. Murphy was a very able lawyer of the old school, accustomed to arrive at decisions by the studious application of sound legal principles to the matter at hand. We of the current vintage employ a semi-mechanical method. Trained under the case system, we have set up long, long rows of compartments and labelled pigeon holes, and, when a given situation is presented, we run along these pigeon holes until we find one in which cases that appear similar have formerly been filed, and, having found it, straightway thrust the instant matter in, and thus our decision is made. This, I think, is what occurred in this case. No pigeon hole was at hand containing decisions involving an instrument exactly like the instrument in the case at bar, for it is in form wholly new and unprecedented. But since, under its terms, the Y.M.C.A.'s right to a conveyance ripened coincidentally with the death of the maker, it seemed to the majority to be related to that class of instruments which provide that title shall vest upon and by virtue of the death of the maker, and so it was forced into the pigeon hole labelled "Instruments Testamentary in Character." It does not belong there.
In my opinion, the judgment of the lower court should have been sustained.