Opinion
No. 37624.
November 6, 1950.
1. Equity — equitable conversion — contingent remainders.
Where an ancient plantation of small acreage had been devised to life tenants, with contingent remainders over to devisees not ascertained or in being at the time of suit, and the property is not sufficiently productive to pay the taxes, insurance and repairs thereon, and being in the immediate vicinity of a new oilfield it could be leased for oil for a large amount, without which the property would suffer deterioration or destruction of that which was its only real value, but because of the involvement of the title an oil lease or sale for that purpose could not be secured or made, the court of equity has the jurisdiction and power, in a suit by the life tenants, all adversary parties in interest, born and unborn, ascertained or unascertained, being summoned personally or by publication, to order a sale or lease of the land for conversion into cash.
2. Equity — equitable conversion.
The power above mentioned is broad but should be exercised with caution and only in those cases where the need clearly appears, as in the stated case.
3. Equity procedure — guardian ad litem for unborn persons — harmless error.
The action of the court in appointing a guardian ad litem for unborn persons in the suit aforementioned will not be reviewed on appeal, since such an appointment was harmless and constituted no prejudicial error, if error.
4. Equity — equitable conversion — derivative funds.
The funds derived from any sale or lease of the property in the case stated will stand in lieu of the property and the rights of the parties in the funds will be preserved to the same extent as existed in the property under the will, so that the life tenants for the terms of their lives will be entitled to the interest produced by the funds in accordance with their respective interests under the will.
Headnotes as approved by Holmes, C.
APPEAL from the chancery court of Adams County, R.W. CUTRER, Chancellor.
Coleman Green, for appellant.
Under our present Constitution it cannot be doubted that the chancery court has the jurisdiction and authority to sell the land of a minor in esse for the purpose of reinvestment, even where such interest is a contingent remainder. Sec. 159 (d) gives the chancery court jurisdiction of "Minors' business". The case of Crawford, et al. v. Solomon, et al., 95 So. 686, recognized the authority and jurisdiction of chancery over the property of minors in esse in regard to this same matter: "Chancery court may sell land of minor for reinvestment even where such interest is a remainder . . .".
Under the case of Kelly, et al. v. Neville, et al., 136 Miss. 429, 101 So. 565, however, the Supreme Court went a step further to hold that the chancery court has the jurisdiction to sell the estate of a minor, whether in esse or not in esse, for reinvestment in better paying property.
Appellant contends, and with the Court's permission, will show that the case of Kelly, et al. v. Neville, et al., supra, was an ill considered decision, and should be overruled so as permitting the chancery court to dispose of the interest of unborn children or heirs.
The authority for the above cited case is found in the case note to Heady v. Crouse, 203 Mo. 100, 120 Am. St. Rep. 643, at page 654 et seq. It should be noted here that the subject matter dealt with is the inherent equity jurisdiction to decree sale of land of minors, viz., living minors. Only one case cited here holds that equity has jurisdiction to alienate the contingent title of unborn remaindermen, Bofil v. Fisher, 3 Rich. Eq. 1, 55 Am. Dec. 627. All other cases cited here state that in the United States the weight of authority is to the effect that courts of chancery have inherent power to decree a sale of an infant's real estate. The majority view in this country does not state that chancery courts have the inherent authority to decree the sale of land of unborn children or heirs. Only Bofil v. Fisher, supra, attempts to go contrary to the better rule among the decisions discussed in the American State Reports, supra.
The publisher of American State Reports, 120 Am. St. Rep. 655, states the sounder doctrine, "a court of chancery has no inherent authority to sell the real estate of an infant, or to convert it, upon the ground or idea that it will be beneficial to the infant". Under the better view, having no jurisdiction to sell infants' land, chancery certainly has no jurisdiction to sell land of unborn children or heirs. The English rule follows the sounder doctrine, 120 Am. St. Rep. 655.
Later authority on the question of the sale of infants' land for reinvestment purposes is found in 27 Am. Jur. p. 826: "It has been held that such a sale could be made although contingent interests were vested in persons whose residences and names were unknown, or even in possible children yet unborn."
As authority for this statement, the publishers of American Jurisprudence cite: Hale v. Hale, 146 Ill. 227, 33 N.E. 858; Kent v. Church of St. Michael, 136 N.Y. 10, 32 Am. St. Rep. 693; Faulkner v. Davis, 18 Gratt (Va.) 651, and also Bofil v. Fisher, supra.
Both Hale v. Hale, supra, and Kent v. Church of St. Michael, hold that a court of chancery, by virtue of its general jurisdiction over minors, has the power to authorize trustees to sell the land of unborn minors for the purposes of reinvestment. They both deal with a trustee's powers and not the court's. Neither of these two cases hold that a court of equity has the jurisdiction to decree a sale of the lands of unborn minors or heirs.
Faulkner v. Davis, supra, is annotated in the 120 Am. St. Rep. 565, and holds: "In Virginia, a court of equity has not, under its general jurisdiction as guardian of infants, inherent authority to sell their real estate whenever it is for their advantage to do so. Its jurisdiction to sell the real estate of infants on the ground of infancy merely is derived from the statutes."
In addition to the following case, Bofil v. Fisher, supra, which is contrary to the weight of authority, and which so far as appellant is able to ascertain, is the only decision of its kind in this country, the Mississippi Court in Kelly v. Neville, supra, attempts to rationalize its opinion from an erroneous interpretation of our Constitution. Our present Constitution, which had been adopted at the time that Kelly v. Neville, supra, was decided, gives the chancery court full jurisdiction of (a) All matters in equity, (c) matters testamentary and of administration, and (d) minors' business, Sec. 159 of the Constitution of Mississippi. Appellant contends that none of these provisions of the Constitution give chancery courts jurisdiction over the sale or lease of an unborn infant's or heir's land for the purpose of reinvestment.
The chancery court in England has no jurisdiction to sell or lease the lands of unborn children or infants, 120 Am. St. Rep. 655; that we follow the English law can be seen from the case of Smith v. Everett, 50 Miss. 575: "Equity jurisprudence generally embraces the same matters of jurisdiction and modes of remedy as exist in the courts of England."
Barnes v. McLeod, 165 Miss. 437, 140 So. 740, decided after the case of Kelly, et al. v. Neville, et al., 101 So. 565, holds: "Chancery courts have only such jurisdiction as is expressly conferred by Constitution. (Const. 1890, #156, 159-161)."
In view of the holding of Barnes v. McLeod, supra, stating that the chancery courts have only such jurisdiction as is expressly conferred by Constitution, and since the court's jurisdiction is as to "all matters in equity", appellant contends that Barnes v. McLeod, supra, and Smith v. Everett, supra, should be construed together and the jurisdiction of the chancery court should be interpreted as meaning that the chancery court of Mississippi has jurisdiction to the same extent as the chancery court of England, except that our chancery court has the additional jurisdiction granted to it by the Mississippi Constitution. At any rate, appellant contends that additional jurisdiction of our chancery court, if found different from that of England, should be of the type that has some substantial merit and reason behind it, and not additional jurisdiction based on an "odd case" such as the Mississippi Court adopted in Kelly v. Neville, et al., supra, from the case of Bofil v. Fisher, supra.
The Mississippi decision of Kelly, et al. v. Neville, et al., supra., held that Sec. 159 (c) of the Mississippi Constitution was a basis for its decision that the chancery court has the inherent power to sell the estate of a minor for reinvestment in better paying property, whether the minor be in existence or an unborn remainderman.
In the case of Kelly v. Neville, supra, the estate of the testator had been closed when the proceeding was brought to sell the land of the remaindermen, in esse, and not in esse. We say, therefore, that this authority for the Court's decision in Kelly v. Neville, supra, was entirely without merit.
On page 43 of the record is found the procedure which the appellees used to make unborn heirs or children defendants to their petition. Appellees by publication of citation notice sought to make, "any and all persons, whether in esse or not in esse, having or claiming any right, title, claim or interest, in law or equity, in the land dealt with in the case now before the court", defendants to their petition. Appellees further moved the court to appoint a guardian ad litem for any and all parties not in esse, claiming any interest in said property. The chancery court approved the motion and appointed a guardian ad litem to all parties not in esse. In other words, the court appointed a guardian ad litem for unborn heirs or children. Appellant says that this procedure by the court was without authority and void, that under our "publication statute" the unborn heirs or children were not made proper defendants, and that under Sec. 1309 Code 1942, the court had no authority to appoint a guardian ad litem for unborn heirs or children.
Appellant says that "unknown heirs" as used in the Mississippi statute Sec. 1855 Code 1942 means, and can only mean, unknown living heirs, and does not include unborn nonliving heirs.
Robinson v. Miller, 148 N.E. 317, in which a similar statute is construed, holds: "Section 7 of the Chancery Act, which provides that in all suits in chancery and suits to obtain titles to land, if there be persons interested in the same whose names are unknown, it shall be lawful to make such persons parties to such suit or proceedings by the name and description of unknown owners or unknown heirs or devisees of any deceased person, refers only to persons in being. It has no application to persons not in being, but who may be born in the future, or may never be born. The capacity to sell or be sued exists only in persons in being, and not in those who are dead, or have not yet been born, and so cannot be brought before the court."
Therefore the citation published by the appellees, so far as it cited persons not in esse is utterly void and without effect, and the persons, infants, or heirs not in esse, are not properly before the Court.
Laub, Adams, Forman Truly, for appellees.
The weight of reliable authority supports the decree as rendered by the chancellor in the instant case. The general rules are very clearly set out in 33 Am. Jur. Sec. 265 and following. "Sec. 265: Power of Equity Court to Order Sale in Fee, with Reinvestment of Proceeds. — There has grown up in the last century in a group of American cases a doctrine, the boundaries of which are not yet completely defined, under which a court of equity, in the exercise of inherent equity powers, will order a judicial sale under supervision of the court, of the entire fee or title of real property in which present interests such as life estate, and future interests such as vested or contingent remainders, executory limitations, etc., have been created, with subsequent reinvestment of the proceeds of such sale for the benefit of the holders of the respective interests in the property sold. This exercise of equity power is independent of statutes, and has been exercised, thus far, in cases where at least some of the holders of future interests either lack capacity or are as yet unborn, are amply represented in the proceedings and will be benefited by such sale and reinvestment . . ."
Perhaps the most clear-cut case in this regard, the facts of which are very similar to those of the instant case, is that of Gavin v. Curtin, 171 Ill. 640, 40 L.R.A. 776. In answer to the same proposition that is raised by the appellant in the instant case, the Court held as follows: "The question remaining to be determined is whether the decree is binding upon any child or children that may be born to the defendant in error. It is a general rule that all parties having an interest in the subject matter of a proceeding must be made parties to the proceeding and be brought before the court either as complainants or defendants. In this case all parties in being who have such interest are before the court and bound by the decree. But it is suggested that in the event a child or children be born to the said Suzanna Curtin, such child or children will be seized of a remainder in fee, and that the decree will be ineffectual to protect those purchasing under it against the right of such child or children. Such possible child or children of the said Suzanna Curtin, not being in esse, cannot, of course, be made parties to the proceeding and unless the decree may be made to operate against them if they ever come into existence, the condition presented is that the rights and interest of persons in being are to be sacrificed and lost upon the sole ground that it is possible that others may come into being and become interested in the subject matter of the litigation. . . . The proceeding is for the purpose of saving and preserving the property rights of all those interested or to become interested therein under the will. In that purpose all the parties before the court are alike interested. The parties in esse have the same incentive and interest to accomplish the same purpose as move and possess the parties not in esse, if they were in being. The possible persons not in esse are therefore represented by the parties before the court, and, if they ever come into being, will be bound and concluded by the decree."
It is respectfully submitted that the facts of the instant case are practically on all fours with the facts and the holdings of the case of Kelly, et al. v. Neville, et al., 136 Miss. 429, 101 So. 565.
As to the contention of the appellant that the court had no authority to appoint a guardian ad litem to litigate the interest of unborn children, infants and minors, it is the position of the appellees that the appointment of the guardian ad litem in the instant case was just another step taken in an effort to protect the rights and interests of all parties, whether in esse or not in esse. If the failure to appoint a guardian ad litem in those cases where the appointment of such a guardian is called for and is customary cannot affect the validity of a decree, certainly the appointment of a guardian ad litem in an effort to more fully protect the interests of the parties not in esse will not affect the validity of a decree. See Sec. 1309 Code 1942.
Nowhere in his brief does the appellant cite any authority which is completely adverse to the holding of the lower court in the instant case. In fact all of the authorities cited by the appellant bear out the decree of the lower court in this case and the attempt of the appellant to distinguish his own authorities in such a manner as to make them authorities against the decree of the lower court is futile and without effect.
33 Am. Jur., Sec. 267. "Sale of Fee Where Infants own Future Interests. — In the United States, under the majority rule, courts of equity have full jurisdiction independent of statute, to order the judicial sale of future interests of infants."
L.R.A. New Series Volume 8, page 61, page 62: Citing many cases: "To assert that a court has not the power by its decrees to convey away the fee and to alienate the contingent titles of unborn remaindermen who, from the nature of things, cannot be made parties or be represented in the proceedings before the court, would be to assert a doctrine that would render conditional limitations and contingent remainders an intolerable evil to a growing and prosperous community. Thus to shackle estates without the power of relief, unless every person having a contingent and possible interest could be brought before the court, would be to sacrifice the rights and interests of the present generation to those of posterity. If the whole property of the country were thus situated, it is obvious that all improvements and all advance would be completely checked. Bofil v. Fisher, 3 Rich. Eq. 1, 55 Am. Dec. 627; Hale v. Hale, 20 L.R.A. 247; Gavin v. Curtin, 40 L.R.A. 776."
76 A.L.R., p. 540: "The principle that unproductive property, or property the income of which is insufficient to pay taxes and upkeep, given to one for life, directly or under a trust, with remainder over, may be sold with a view to reinvesting the proceeds, is, from the point of view either of the power of the court or of the right of the parties, recognized with practical unanimity by all the courts which have had occasion to pass upon the question."
See Neely, et al. v. Craig, et al., 162 Miss. 612, 139 So. 835, holding that the chancery court has full power to sell property for reinvestment for infant owners.
This is a suit in equity originating in the chancery court of Adams County. The suit was brought on the petition of the appellees, Samuel H. Lambdin and James Harrison Lambdin, against S.H. Lambdin, Jr., Waldo P. Lambdin, Jane Norvelle Lambdin, Ann Mayrant Lambdin, Mrs. Elizabeth B. Winston, S.L. Winston, Jr., Mrs. Sarah Winston Dicks, Mrs. Louise Winston Sessions, H.L. Winston, Mrs. Margaret Beaird, Everett Craig, Chase Craig, the unknown Heirs-at-Law of Mrs. Mildred Craig, Deceased, Mrs. Marie L. Henderson, DuVal Henderson, Jr., Margaret Henderson DiTucci, Elizabeth Henderson McSweeney, the unknown Heirs-at-Law of J.H. Lambdin, Deceased, the unknown Heirs-at-Law of Mrs. Louisa W. Winston, Deceased, the unknown Heirs-at-Law of Miss Mary P. Lambdin, Deceased, and any and all persons having or claiming any right, title, claim or interest at law or in equity in the property herein involved, and the unknown Heirs-at-Law of any of the parties named as defendants who may now be dead.
Personal service of process was obtained upon the resident defendants, and publication of summons was duly and regularly made for the nonresident defendants, and for those defendants whose whereabouts were alleged to be unknown, and for all other persons, whether in esse or not in esse, having or claiming any right, title, claim or interest, at law or in equity of, in and to the property herein involved. A guardian ad litem was appointed for the minor defendants in esse, and also for all parties unborn who might have any interest, whether at law or in equity, in said property.
The real property involved is described as that tract of land in Adams County, Mississippi, known as Edgewood Plantation, situated in Section 44, Township 8 North, Range, 2 West, which was owned by Miss Mary P. Lambdin in her lifetime, and the respective interests therein of the parties here involved arise under and by virtue of the last will and testament of Miss Mary P. Lambdin, deceased, which was duly probated, and the pertinent provisions of which are the first and second paragraphs thereof, reading as follows: "First: — I give and bequeath unto my sister, Mrs. Louisa W. Winston, the sum of one thousand ($1,000.00) dollars and unto my nephew, Duval Henderson, the sum of one thousand ($1,000.00) dollars, these legacies to be a first charge and lien upon my Edgewood Plantation, in Adams County, Mississippi.
"Second: — Subject to the lien and charge of said legacies to Mrs. Louisa W. Winston and Duval Henderson, I hereby give and devise my Edgewood Plantation, in the Pine Ridge neighborhood, in Adams County, State of Mississippi, as follows and upon the terms, conditions and limitations fully set forth below, to-wit: (1) Unto my two nephews, Samuel H. Lambdin and James Harrison Lambdin, (children of my deceased brother S.H. Lambdin) as equal tenants in common for life, that is to say, unto said Samuel H. Lambdin an undivided one-half share and interest for the term of his natural life and unto the said James Harrison Lambdin an undivided one-half share and interest for the term of his natural life; (2) at the death of my said nephew Samuel H. Lambdin the half share and interest given him as above for life shall become at once vested in the heirs of his body in fee simple; but should he die unmarried and without issue, then the same shall be vested in his brother James Harrison Lambdin (if surviving) for the balance of his life, and if not surviving or at his death in the heirs of his body in fee simple; (3) at the death of my said nephew James Harrison Lambdin the half share and interest given him as above for life shall become at once vested in the heirs of his body in fee simple; but should he die unmarried and without issue, then the same shall be vested in his brother Samuel H. Lambdin (if surviving) for the balance of his life, and if not surviving or at his death in the heirs of his body in fee simple; (4) but should both my said nephews Samuel H. Lambdin and James Harrison Lambdin die without leaving lawful child or children surviving or lawful heirs of the body, then in that event the title to the said Edgewood Plantation shall revert to and become vested in fee simple in those who are then my heirs at law under the present statutes of descent and distribution of the State of Mississippi. It is my intent, purpose and desire by the foregoing provisions to keep the said Edgewood Plantation in the Lambdin family, so far as by law I am permitted to do."
It was shown that at the time of the institution of this suit the administration of the estate of the said Miss Mary P. Lambdin had long been closed and the executor discharged.
The petition alleged that the appellees were the owners of a life estate in said property which they acquired under the aforesaid will of Miss Mary P. Lambdin, deceased, and that the parties named as defendants to this suit were the owners of remainder interests therein. The petition further alleged that the said property consisted of approximately 150 acres of land located about seven miles from the City of Natchez in the Pine Ridge neighborhood in Adams County, Mississippi, and that there was situated thereon an ante-bellum home more than one hundred years old, which was not occupied by the appellees or any of the defendants to the suit. It further alleged that the surface of the land was unproductive and that there was insufficient revenue therefrom to pay the taxes, insurance, and repairs thereon, and that while it was in the immediate vicinity of the Pine Ridge oil field, it was impossible to lease the same for oil, gas, and mineral production because of the involvement of the title arising from the terminology of the aforesaid will of the said Miss Mary P. Lambdin, and further alleged that an offer of $25,000.00 had been made for an oil, gas, and mineral lease on said property, but that the same could not be accepted because of the involvement of the title. The petition further alleged that renewed activity in oil exploration in the vicinity of the property was in prospect, and that it would be impossible to take advantage of any advantageous offers of that nature in view of such involvement of title, and that in the absence of relief in a court of equity, the property would suffer deterioration, and would become wasted and destroyed, and lost to the owners. The petition prayed a decree of the court decreeing the interests of the appellees as life tenants and the interests of the remaindermen in said property be sold or leased in whole or in part and the proceeds thereof held in trust for the benefit of the life tenants and the remaindermen, and further prayed that the title of the life tenants and remaindermen be divested out of them and vested in a commissioner with authority to sell or lease the property in whole or in part, under the guidance and supervision of the chancery court, and hold the proceeds thereof to be dealt with in lieu of the original property under the will of the said Miss Mary P. Lambdin, and that the life tenants be paid the interest derived from such proceeds, and that the corpus thereof be preserved for the benefit of the other parties interested.
Decrees pro confesso were taken against such of the defendants as failed to answer, and the adult defendants answering admitted the allegations of fact in the petition, but denied the power of a court of equity to render the decree prayed for, and denied the right of the life tenants to receive the interest on the proceeds of the property if sold or leased as prayed for.
The guardian ad litem for the living minors and the guardian ad litem for the unborn minors answered, neither admitting nor denying the allegations of the petition, but entrusting to the court the interests of the minors whom they purported to represent. The case was heard on an agreement of facts, and upon oral and documentary evidence adduced at the hearing. The proof fully sustained the allegations of the petition. At the conclusion of the hearing the trial court entered its decree finding that all parties in interest had been duly and legally served with process and were properly before the court, and that the court had full jurisdiction both of the parties and of the subject-matter, and further found that the facts as alleged in the petition were true, and that the petitioners, who are the appellees here, were entitled to the relief prayed for, and having so found granted the prayer of the petition.
The appellant, S.H. Lambdin, Jr., who was one of the defendants in the court below, prosecuted this appeal, and proper service of process in this court was obtained on all parties appealing from the decree of the court below.
The appellant assigns as error, (1), that the court was without jurisdiction of the suit, and had no jurisdiction of the subject-matter to adjudicate and dispose of the interests of unborn children, and, (2), that the court erred in appointing a guardian ad litem for unborn persons, and was without jurisdiction to appoint a guardian ad litem for unborn children, and, (3), that the court erred in decreeing that upon the sale or lease of the corpus of the estate, and the conversion of the lands into personalty, and the reinvestment of funds derived therefrom, the appellees are entitled to any payment from said funds for the term of their lives or the life of the survivor of them.
(Hn 1) Appellant, by his first assignment of error, challenges the jurisdiction of the court to render the decree entered in the court below, and particularly the power and jurisdiction of the court to adjudicate and dispose of the interest of unborn children. The power of a court of equity to enter said decree under the established facts and circumstances in this case has been upheld by this Court in Kelly v. Neville, 136 Miss. 429, 101 So. 565, and that decision was approved in the case of Riley v. Norfleet, 167 Miss. 420, 148 So. 777, 781, wherein the Court said: "The power of a court of equity on a plenary bill, with adversary interest properly represented, to sell contingent remainders in land, under some circumstances, though the contingent remaindermen are not then ascertained or in being, as, for instance, to preserve the estate from complete or partial destruction, is well established." We are asked by the appellant to overrule the case of Kelly v. Neville, supra, but this we are unwilling to do. However, (Hn 2) the power which this decision recognizes in a court of equity is broad and should be exercised with caution and only in those cases where the need clearly appears as in the case at bar.
(Hn 3) The appellant contends further that the trial court erred in appointing a guardian ad litem for unborn persons. It is unnecessary to inquire into the right or power of the court to make the appointment since in our opinion the appointment was harmless and therefore constituted no prejudicial error.
(Hn 4) It is next contended by the appellant that the court erred in decreeing that upon a sale or lease of the property, and the conversion of the same into personalty, and the reinvestment of funds derived therefrom, the appellees as life tenants are entitled to the payment of the interest derived from such funds for the term of their lives, or the life of the survivor of them. We find no merit in this contention. Since the court had the power and jurisdiction to render the decree entered in the court below, it follows necessarily that the funds derived from any sale or lease of the property will stand in lieu of the property, and that the rights of parties under the will with respect to said funds will be preserved to the same extent as existed in the property. Hence, the life tenants will become entitled to the income or interest from said funds in accordance with their respective interests under the will.
We are accordingly of the opinion that the decree of the court below must be affirmed.
Affirmed.
The above opinion is adopted as the opinion of the Court, and for the reasons therein indicated the case is affirmed.