NO. 93-005
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993
JOSEPH HAYES HAUSEMAN, JAMES JUDD
HAUSEMAN, DEAN M. HAUSEMAN, III, STEVEN
SCOTT HAUSEMAN, and ROBERT CHARLES HAUSEMAN,
Plaintiffs and Appellants,
v.
WILLENE JONES KOSKI, and all other persons,
unknown, claiming or who might claim any
right, title, estate, or interest in or
lien or encumbrance upon the real property
described in the Complaint or any part
thereof adverse to plaintiffs' ownership or
any cloud upon plaintiffs' title thereto,
whether such claim or possible claim be
present or contingent including the person
or persons in possession,
Defendants and Respondents.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Thomas A. Olson, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Ben Berg, Jr. and Rienne H. McElyea, Berg,
Lilly, Andriolo & Tollefsen, Bozeman, Montana
For Respondents:
Lyman H. Bennett, III and Lynda S. Weaver,
Morrow, Sedivy & Bennett, Bozeman, Montana
Submitted on Briefs: March 11, 1993
L Decided: August 3, 1993
File&
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Appellants Joseph H. Hauseman, James J. Hauseman, Dean M.
Hauseman III, Steven S. Hauseman, and Robert C. Hauseman
(Hausemans), as co-trustees and interested parties, appeal from an
order of the Eighteenth Judicial District Court, Gallatin County,
granting summary judgment in favor of the personal representative
of the estate of Maurice Jones, and finding that the recording of
a revocation of a trust with the clerk and recorder provided
constructive delivery to the co-trustees.
We affirm.
The only issue raised by the Hausemans is whether the District
Court erred in holding that a recordation of a revocation of a
trust agreement effectively revoked the trust.
The facts are undisputed.
On May 1, 1979, Marlyn J. Jones and J. Maurice Jones
(trustor), who were both trustors and co-trustees, executed a
revocable trust which reserved the right to revoke or amend the
trust in whole or in part by an instrument in writing delivered to
the co-trustees. Marlyn died on May 14, 1980, and did not exercise
her power to revoke. On May 31, 1991, trustor signed a revocation
of trust, which his attorney recorded with the clerk and recorder's
office on May 31, 1991. On June 13, 1991, trustor died.
On June 20, 1991, trustor's attorney sent the co-trustees,
Joseph Hayes Hauseman and James Judd Hauseman, a copy of said
revocation via certified mail. Neither of the named individuals
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received the revocation and the letters were returned to the
attorney's office as unclaimed.
Initially, we discuss the standard of review applied in
summary judgment cases. Rule 56(c), M.R.Civ.P., states that it is
proper to grant summary judgment when there are no genuine issues
of material fact and the moving party is entitled to judgment as a
matter of law. On the cross-motions for summary judgment, the
District Court stated that the parties agreed that there were no
issues of material fact. Our standard of review on questions of
law is whether the district court's interpretation of the law is
correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont.
470, 474, 803 P.2d 601, 603.
The following provision contained in the trust agreement is at
the center of this dispute:
Trustors reserve the right at any t i m e , b y
instrument in writing delivered to the Co-Trustees, and
acknowledged in the same manner of conveyance as the real
property and title to be recorded in the State of
Montana, unless acknowledgement be waived by the
Co-Trustee to revoke or amend this trust in whole or in
part. The duties and liabilities of the Co-Trustees
shall under no circumstances be substantially increased
by any amendment here under except by their written
consent. Upon the death of the Trustors, this Trust
shall become irrevocable and not subject to amendment.
The Hausemans argue that trustor did not follow the manner
specified in the trust for delivery of the revocation of the trust.
They also contend that the trust was irrevocable because trustor
died before his lawyer deposited the revocation in the mail. They
maintain that 5 72-23-502, MCA (1987) (Repealed. Sec. 220, Ch. 685,
3
L. 1989), requires that if a trustor reserves the power to revoke
a trust, the power of revocation must be "strictly pursued."
We begin our analysis with the general rule that in the
construction of trusts it is the trustor's intent that controls.
76 Am. Jur. 2d TIZLQ.Y § 17 (1975). To determine the trustor's intent
we look to the language of the trust agreement. In re Marriage of Hem’n
(1979) 182 Mont. 142, 146, 595 P.2d 1152, 1155. The language of
the trust agreement is clear and unambiguous that trustor reserved
the power to revoke the trust agreement at any time prior to his
death. For a proper revocation, the trust agreement required the
trustor to complete three steps: (1) a writing, (2) delivered to
the co-trustees, and (3) acknowledged in the same manner of
conveyance as the real property and title to be recorded in the
State of Montana.
The parties do not dispute that trustor met the first and
third requirements. The District Court concluded that the second
requirement was met by the filing at the clerk and recorder's
office of the trust revocation. We agree.
The Michigan Supreme Court defined the term "delivery" as
meaning:
It is our view that any act which will accomplish the
purpose of the parties in requiring delivery is
sufficient to give effect to the revocation. It is not
a question of a good or legal delivery. If the purpose
requiring it is accomplished, it is immaterial whether
the instrument of revocation is in the mail or on the
trustee's desk at the time of the donor's death.
Delivery is not essential to complete a revocation unless
made so by the parties in the trust agreement. What was
the purpose of requiring it here? Obviously it was not
4
for the protection of the trustee. The law will do that
regardless of delivery or other notice. It is a fair
inference that, in requiring delivery, the parties
intended to establish the fact of revocation during the
life time of the donor, to make sure the status of the
trust at that time, to cause a surrender of the
instrument, if one were made, so that some stranger or
interested person could not give it vitality by an
unauthorized delivery after his death. Any act of
surrender to that trustee would put the original
instrument of revocation beyond the owner's power to
alter or destroy would accomplish the purpose in
requiring delivery.
Hackley Union National Bank v. Farmer, et al. (Mich. 1931), 234
N.W. 135, 137.
In Hacklev, prior to his death in Germany, the settlor
executed a will and a revocation of a trust agreement. The
instrument was signed and acknowledged. A certified copy was sent
to the trustee with a letter stating that the settlor revoked the
trust. Hacklev, 234 N.W. at 136. The Michigan Court held that
these actions were sufficient to constitute constructive delivery.
After this analysis, the court then ruled that the revocation was
ineffective on other grounds. Hacklev, 234 N.W. at 137.
In Montana, delivery is accomplished by either words, acts, or
both. The law does not require actual handing over of the document
so long as it is handled in a way that unequivocally shows the
intention of the settlor. Carnahan v. Gupton (1939), 109 Mont.
244, 96 P.2d 513; see also, Springhorn v. Springer, et al. (1926),
75 Mont. 294, 243 P. 803.
In this instance, trustor executed a written document revoking
his trust on May 31, 1991. When the revocation was recorded,
5
trustor directed his attorney to deliver notice to the remaining
co-trustees.
The Hausemans contend that 5 70-21-302, MCA, is not applicable
because they are not subsequent purchasers for value. That
argument disregards the purpose of the recording statutes. The
recording statutes import notice to all interested parties in
matters affecting title to real property. 66 Am. Jur. 2d Records and
Recording Laws 5 103 (1973). The trust property at issue is real
property located in Gallatin County. As co-trustees, the Hausemans
are interested parties to the realty. All co-trustees received
constructive delivery when the revocation of trust was recorded
with the Gallatin County Clerk and Recorder. We hold that
§ 70-21-302(l), MCA, imparts constructive delivery of the contents
of the revocation instrument. We hold that the District Court did
not err in granting summary judgment in favor of Ms. Koski.
We affirm.
Justice
We concur:
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Justice Fred J. Weber specially concurs as follows:
I concur with the holding of the majority opinion for the
reasons set out in that opinion and also for the reasons set out in
this special concurrence.
The Revocation of Trust was executed by J. Maurice Jones both
as Trustor and as one of the Co-Trustees. The following are the
key paragraphs of that Revocation of Trust:
Under the provisions of said Trust and specifically
paragraph II thereof the undersigned as the remaining and
sole Trustor and Trustee of said Revocable Trust
Agreement, by and through these presents and does
herewith revoke, cancel and terminate said Trust in all
of its particulars, conditions, and circumstances to the
effect that from and after the date of this revocation
said Trust shall be at an end, terminated and of no
further force and effect and the grant of the said real
property to the Trust also terminated and of no further
force and effect with said property to revert and remain
in my name.
Therefore, as Trustor I herewith grant, bargain,
assign, transfer, and convey the said Trust to myself as
an individual of the above described property to the
affect that the title shall no longer be vested or reside
in said trust but shall henceforth be in my name
individually.
Under the first paragraph, Mr. Jones demonstrated his clear intent
as both the sole surviving Trustor and as one of the Co-Trustees to
terminate the Trust so that it would be of no further force and
effect after the date of the Revocation of Trust which was May 31,
1991. In the first paragraph he emphasized that by stating that
the Trust terminated and was of no further effect so that the
property reverted to and remained in his name.
In the final paragraph, Mr. Jones conveyed the property to
himself. As one of three Co-Trustees, this certainly transferred
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an interest by .virtue of the execution and recording of the
Revocation of Trust. It established his intent to have the title
to the property in his name individually.
As a result of the wording of the Revocation of Trust, Mr.
Jones effectively transferred all of his interest as a Co-Trustee
to himself individually.
Paragraph IV of the Trust Agreement provided in pertinent part
as follows:
IV
. . . [T]he Co-Trustees shall also distribute to the . .
. surviving Trustor, such portion, or all the principal,
of the Trust property as the . . . surviving Trustor,
from time to time may request in writing . . . .
Under that provision, Mr. Jones as surviving Trustor could require
the Co-Trustees to distribute to him all of the principal of the
trust property. The only requirement in order to do so is that he
make his request "in writing." The provisions of the Revocation
and Conveyance are sufficient to meet the requirements of Paragraph
IV. He clearly directed the Co-Trustees to distribute to him
individually all of the principal of the trust property and did so
in writing.
I conclude that the surviving two Co-Trustees were therefore
obligated under the provisions of Paragraph IV to complete the
transfer to Mr. Jones of all of the principal of the Trust.
I join in the opinion that the District Court did not err in
granting summary judgment in favor of Ms. Koski.
Justice Karla M. Gray dissenting.
I respectfully dissent from the opinion of the majority.
The majority, having begun with the general rule that the
trustor's intent controls in the construction and interpretation of
trust agreements, departs from this rule in performing its
analysis. I cannot agree.
Here, the trustor established three separate and independent
requirements necessary to effectuate a revocation: (1) a writing:
(2) delivered to the co-trustees; and (3) acknowledged in the same
manner of conveyance as real property and title to be recorded in
the State of Montana. It is clear that a writing was made and that
the attempted revocation of trust was recorded; thus, the first and
third requirements set forth by the trustor to revoke the trust
were met.
The majority concludes that the recordation equals delivery,
thus merging two separate requirements into one; on this basis, the
majority concludes that the second requirement also was met.
Because the trustor's intent to establish three separate
requirements for an effective revocation is clear and one of those
requirements was not met, the majority has departed from the
"trustor's intent" rule. It also has departed from the applicable
Montana statute that a power of revocation must be strictlv
pursued. Section 72-23-502, MCA (since repealed, but specifically
made controlling over trust instruments executed prior to October
1, 1989).
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Furthermore, the majority's reliance on Hacklev and Carnahan
to reach its result is flawed. As quoted by the majority, Hacklev,
234 N.W. at 137, states that "[dIelivery is not essential to
complete a revocation unless made so bv the oarties in the trust
aareement." (Emphasis added.) Here, delivery was specifically
required in the trust agreement. Moreover, it was a stand-alone
requirement unrelated to the separate recordation requirement.
It is also my view that Carnahan is inapposite here. The
issue in Carnahan was whether certain actions concerning a grant
deed constituted delivery under a statute specifically relating to
constructive delivery of a deed. It did not interpret a trust
agreement, any statute relating to trust agreements, or the general
rules regarding trustor's intent and strict construction of efforts
at trust revocation. Therefore, it is inapplicable to the case
before us.
I would reverse the District Court and hold that, the
trustor's stated intent not having been met, the attempted
revocation was not effective.
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August 3, 1993
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
Ben Berg, Jr. & Rienne H. McElyea
Berg, Lilly, Andriolo & Tollefsen
910 Technology Blvd., Ste. A
Bozeman, MT 59715
Lyman H. Bennett, III Jt Lynda S. Weaver
Morrow, Sedivy & Bennett, PC.
P.O. Box 1168
Bozeman, MT 59771-1168
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA