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Ruby v. Bishop

August 19, 1953

RUBY
v.
BISHOP ET AL.



Murrah

Before BRATTON, HUXMAN and MURRAH, Circuit Judges.

MURRAH, Circuit Judge.

Appellants brought this quiet title and ejectment action as successors to the remaindermen under the will of Lou B. Pasell against the Appellees whose asserted interests are derived from the powers of sale and disposition granted under the terms of the will.

Federal jurisdiction is based upon existing diversity of citizenship and requisite amount in controversy.

The testatrix, Lou B. Pasell, died April 1, 1921 seized of Lots 7, 8, 9 and 10, Block "N", Oak Park Addition to Oklahoma City, Oklahoma. The will devised the property to her husband, Henry Pasell, "to be used and enjoyed by him with the right to sell and dispose of same and use so much thereof, either principal or income, as he may desire during his lifetime, with the direction and provision that if any of said property, or the proceeds thereof, remain in the ownership and possession of the said Henry Pasell at the time of his death that the same then be distributed equally to my two children, Lyda L. Board, my daugher, and Frank S. Ruby, by son, equally, that is, share and share alike."

Holding that the will created a life estate in Henry with powers of sale and disposal and that deeds subsequently executed by him in pursuance of such powers operated to effectively extinguish the rights of the remaindermen, the trial court gave judgment for the Defendants-Appellees, and this appeal is from that judgment.

At the outset the Appellees take the position that when the will is construed according to the applicable canons of construction it must be deemed to have vested a fee simple title in Henry, thereby giving him absolute powers of sale and disposal; and that deeds executed by him are therefore effective to convey good and valid title to the Appellees' predecessors in interest. This position, if tenable, is of course dispositive of the case.

Under the statutory law of Oklahoma "every estate in land which shall be granted, conveyed or demised by deed or will shall be deemed an estate in fee simple and of inheritance, unless limited by express words." Title 16 O.S.A. § 29. And in consonance with the statutory law, Oklahoma follows the general rule of construction that where doubtful words of devise are coupled with clear and distinct powers of absolute disposal, the devisee takes a fee simple title even though there may be subsequent words of limitation over of what remains after the first taker's death, Hicks v. Fairbanks Heirs, Okl., 256 P.2d 169. But these settled rules of construction do not preclude the creation of a life estate with unrestricted powers of disposition and a limitation over to remaindermen if the words used to create the estate are as clear and distinct as those creating the power and remainder. See cases collected in Annotations: 36 A.L.R. 1177 and 76 A.L.R. 1153.

In other words a power of absolute disposal is not inconsistent with a life estate, and a gift of the power to dispose of the whole estate annexed to an estate for life with remainder over confers upon the life tenant plenary power to convey the fee upon the terms of the power granted. Gildersleeve v. Lee, 1921, 100 Or. 578, 198 P. 246, 36 A.L.R. 1166, cited in the Oklahoma case of Miller v. Irey, 150 Okl. 240, 1 P.2d 654.

In its final decree of distribution the Oklahoma County Court distributed the estate to Henry "in fee" and the Appellees contend that the final order of the court constituted a binding adjudication of a fee simple title in Henry. It is true that the decree of the court did use the words "fee simple" in describing the estate devised and distributed, but it did not stop there. It went on in the language of the will to recite that the property in question was distributed in accordance with the provisions of the will to Henry Pasell in "fee simple to be used and enjoyed by him, with the right to sell and dispose of the same, or so much thereof, * * * as he may desire during this lifetime, and * * * if any of the property or the proceeds thereof remain in his ownership or possession at the time of his death that the same become the property of the two children", share and share alike.

When the decree is considered in accordance with the clear language of the will, we think the words "fee simple" must be said to have been inadvertently used to describe the nature of the estate devised. When the phrase is considered in its proper context, it becomes unmistakably plain that instead of extinguishing the rights of the remaindermen under the will the decree undertook to recognize and preserve such rights.

When the critical words of devise are considered in connection with the manifest intention of the testatrix we think they have the clear effect of devising a life estate in the husband with power to sell and dispose of the property for his beneficial use and a limitation over to remaindermen. And, construed in the light of the dual purposes of the testatrix it also seems clear enough that the power of disposal for beneficial use did not include the power to cut off the remaindermen by a gratuitous disposition either by gift inter vivos or by will. Rosenberg v. Baum, 10 Cir., 1946, 153 F.2d 10; King v. Hawley, 113 Cal.App.2d 534, 248 P.2d 491; Pearson v. Orcutt, 106 Kan. 610, 189 P. 160; Stocker v. Foster, 178 Mass. 591, 60 N.E. 407; Parker v. Lloyd, 321 Mass. 126, 71 N.E.2d 889; 2 A.L.R. 1243, 1276, 1317; 27 A.L.R. 1381, 1384, 1388; 69 A.L.R. 825, 830, 837; and 114 A.L.R. 946, 950, 957. We have then a life estate with a conditional power of disposal and a remainder over. Morford v. Diffenbacker, 54 Mich. 593, 20 N.W. 600; Ashbaugh v. Wright, 152 Minn. 57, 188 N.W. 157; Larsen v. Johnson, 78 Wis. 300, 47 N.W. 615.

The Appellants take the position that the powers of sale and disposal for beneficial use created in the will are limited to sale or disposition for a valid consideration, and invoking the rule that the burden of proving a valid exercise of the power rests upon the party claiming thereunder, they assert the Appellees have failed to show that the conveyances by Henry were within the powers of disposition granted under the will. And see Emery v. Emery, 1927, 325 Ill. 212, 156 N.E. 364, 365; Lord v. Smith, 1936, 293 Mass. 555, 200 N.E. 547; Stocker v. Foster, 1901, 178 Mass. 591, 60 N.E. 407.

The rule placing the burden of proof upon the one claiming under a power to show a valid execution is but a recognition of the still broader rule requiring clear and convincing proof of an intention to exercise a power. Lee v. Simpson, 134 U.S. 572, 10 S. Ct. 631, 33 L. Ed. 1038, 72 C.J.S., Powers, § 40(c); 91 A.L.R. 434; 127 A.L.R. 249. And the rule is corollary to another rule of ancient and venerable origin to the effect that if one possessed of an interest and a power makes a conveyance of the subject matter without reference to the power he is presumed to have conveyed only his interest and not to have executed his power. Barnard v. Moore, 71 Colo. 401, 207 P. 332; Mutual Life Ins. Co. v. Shipman, 119 N.Y. 324, 24 N.E. 177; Weinstein v. Weber, 178 N.Y. 94, 70 N.E. 115; Lardner v. Williams, 98 Wis. 514, 74 N.W. 346; Phillips v. Brown, 16 R.I. 279, 15 A. 90; Lister v. ...


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