No. 14404
IN THE SUPREME COURT OF THE STATE OF MONTANA
1978
KEITH W. HERRIN,
Petitioner and Respondent,
MOLLY BURKE HERRIN,
Respondent and Appellant.
Appeal from: District Court of the First Judicial District,
Honorable Gordon R. Bennett, Judge presiding.
Counsel of Record:
For Appellant:
Small and Hatch, Helena, Montana
Floyd 0 Small argued and Carl Hatch argued, Helena,
.
Montana
For Respondent :
Jackson and Kelley, Helena, Montana
Doug Kelley argued, Helena, Montana
Submitted: December 15, 1978
24
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99
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Filed : : I?$; d_ l
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d~~ Clerk
Mr.J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e
Court .
~ o l l y
Burke H e r r i n a p p e a l s from a d e t e r m i n a t i o n of t h e
D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t , t h e Honorable
Gordon R. B e n n e t t p r e s i d i n g w i t h o u t a j u r y . This a c t i o n
a r o s e when K e i t h W. Herrin p e t i t i o n e d t h e D i s t r i c t Court f o r
a n o r d e r d i r e c t i n g t h a t c e r t a i n payments be made t o him,
p u r s u a n t t o t h e t e r m s of t h e d i v o r c e d e c r e e which d i s s o l v e d
t h e p a r t i e s ' marriage. I n d i s p u t e i s t h e i n t e r p r e t a t i o n of
a p r o p e r t y s e t t l e m e n t agreement, which i n c o r p o r a t e d a s t o c k
purchase-and-sale agreement, and which i t s e l f was incorpo-
r a t e d i n t o a divorce decree.
The f a c t s l e a d i n g t o t h i s d i s p u t e a r e a s f o l l o w s . On
February 1 4 , 1969, p e t i t i o n e r K e i t h W. H e r r i n e n t e r e d i n t o
an agreement w i t h h i s b r o t h e r Gordon R. H e r r i n under t h e
t e r m s of which K e i t h was t o s e l l and Gordon was t o p u r c h a s e
481 s h a r e s of c a p i t a l s t o c k i n H e r r i n Ranch, I n c . Two weeks
l a t e r , on F e b r u a r y 2 8 , 1969, r e s p o n d e n t f i l e d a c o m p l a i n t
f o r d i v o r c e from a p p e l l a n t Molly Burke H e r r i n , t h e n h i s
wife. On June 20, 1969, a p p e l l a n t and r e s p o n d e n t s i g n e d a
p r o p e r t y s e t t l e m e n t agreement which i n c o r p o r a t e d t h e a g r e e -
ment made between r e s p o n d e n t and h i s b r o t h e r . In turn, the
p r o p e r t y s e t t l e m e n t agreement was i n c o r p o r a t e d i n t o t h e
d i v o r c e d e c r e e , e n t e r e d August 1 8 , 1969, under t h e t e r m s of
which r e s p o n d e n t was awarded c u s t o d y of t h e p a r t i e s ' s i x
c h i l d r e n , a l l of whom w e r e minors a t t h e t i m e . The y o u n g e s t
c h i l d , K e i t h W. H e r r i n , J r . , who was b l i n d and r e q u i r e d
e x t r a o r d i n a r y c a r e , d i e d a t age 11, on ~ p r i 6 , 1970.
l As
w i l l become a p p a r e n t , t h e s e l a t t e r f a c t s a r e s i g n i f i c a n t i n
l i g h t of t h e terms of t h e agreements i n d i s p u t e .
The p r o p e r t y s e t t l e m e n t agreement r e a d s i n p e r t i n e n t
p a r t a s follows:
"4. Second P a r t y [ K e i t h H e r r i n ] hereby makes t o
F i r s t P a r t y [Molly H e r r i n ] t h e f o l l o w i n g q u a l i f i e d
o r c o n d i t i o n a l assignment of t h a t c e r t a i n 'STOCK
PURCHASE AND SALE AGREEMENT' between F i r s t P a r t y
and one Gordon T. H e r r i n , d a t e d t h e 1 4 t h day of
February, 1969, t h e s u b j e c t m a t t e r t h e r e o f being
t h e 481 s h a r e s of t h e c a p i t a l s t o c k of H e r r i n
Ranch I n c . , a Montana c o r p o r a t i o n , f o r m e r l y h e l d
by Second P a r t y , a copy of s a i d l a s t mentioned
agreement being h e r e t o a t t a c h e d , marked E x h i b i t A ,
and made a p a r t h e r e o f . The c o n d i t i o n s and q u a l i -
f i c a t i o n s of s a i d assignment a r e a s f o l l o w s . ...
I f t h e s a i d K e i t h W. H e r r i n , J r . , d i e s d u r i n g t h e
term of s a i d agreement, e x h i b i t A h e r e t o , o r w h i l e
t h e r e i s any money o r p r o p e r t y l e f t i n any t r u s t
a f o r e s a i d , t h e n s a i d T r u s t s h a l l c e a s e and a l l of
t h e p r o p e r t y and income and corpus of s a i d t r u s t
s h a l l r e v e r t t o Second P a r t y , and a u t o m a t i c a l l y
be and become h i s s o l e p r o p e r t y . "
The o m i t t e d p o r t i o n r e c i t e s o t h e r c o n d i t i o n s i n a p p l i c a b l e t o
t h e problem h e r e , The c i r c u m s t a n c e s which would have c a l l e d
them i n t o p l a y , a p p e l l a n t ' s d e a t h o r r e m a r r i a g e , never
occurred.
A p p e l l a n t ' s c o n s t r u c t i o n of t h e above i s s h o r t and t o
the point. The a n t e c e d e n t c o n d i t i o n , K e i t h , J r . ' s d e a t h ,
was f u l f i l l e d ; t h u s , c o n s i d e r a t i o n of t h e l a s t c o n d i t i o n of
paragraph 4 became i m p e r a t i v e , A s appellant correctly
s t a t e s , t h e r e was never any t r u s t , such t h a t , upon K e i t h
J r . ' s d e a t h , it should c e a s e and i t s p r o p e r t y and income
r e v e r t t o respondent, The c o n d i t i o n s r e q u i r i n g t h e c r e a t i o n
of a t r u s t , i . e . , a p p e l l a n t ' s r e m a r r i a g e o r d e a t h , never
o c c u r r e d ; a p p e l l a n t n e i t h e r r e m a r r i e d nor d i e d , s o - t r u s t
no
was e s t a b l i s h e d . Because no t r u s t was e s t a b l i s h e d , i t could
n o t c e a s e ; t h e r e b e i n g no t r u s t , t h e r e was no p r o p e r t y and
income t o r e v e r t t o respondent. The payments forthcoming
under t h e terms of t h e s t o c k purchase-and-sale agreement,
c l a i m s a p p e l l a n t , were a s s i g n e d t o h e r p e r s o n a l l y and n o t a s
a t r u s t e e , through t h e p r o p e r t y s e t t l e m e n t agreement.
Because t h e y were s o a s s i g n e d and because no t r u s t was
c r e a t e d , a p p e l l a n t argues t h a t she i s e n t i t l e d t o continue
r e c e i v i n g t h e payments made by Gordon T. H e r r i n under t h e
s t o c k agreement,
A p p e l l a n t a r g u e s t h a t t h e mandate of s e c t i o n 13-704,
R.C.M. 1947, governs t h i s c a s e . There it i s provided t h a t
" [ t l h e language of a c o n t r a c t i s t o govern i t s i n t e r p r e t a -
t i o n , i f t h e language i s c l e a r and e x p l i c i t , and does n o t
involve an absurdity." So, t o o , i s s e c t i o n 13-705, R.C.M.
1947, a p p l i c a b l e ; t h a t s t a t u t e r e a d s i n i t s e n t i r e t y , "[wlhen
a c o n t r a c t i s reduced t o w r i t i n g , t h e i n t e n t i o n of t h e
p a r t i e s i s t o be a s c e r t a i n e d from t h e w r i t i n g a l o n e , i f
p o s s i b l e ; s u b j e c t , however, t o t h e o t h e r p r o v i s i o n s of t h i s
chapter." According t o a p p e l l a n t , t h e c l e a r and e x p l i c i t
language of t h e i n s t r u m e n t d i c t a t e s t h a t s h e c o n t i n u e r e -
c e i v i n g t h e payments, The c o n d i t i o n s r e q u i r i n g c r e a t i o n of
a t r u s t never came t o p a s s ; because t h e r e was no t r u s t ,
r e v e r s i o n of i t s corpus i s a n i m p o s s i b i l i t y .
The D i s t r i c t Court judge acknowledged t h a t Molly H e r r i n
"contends t h a t c o n d i t i o n 5 a c t u a l l y r e q u i r e s a t r u s t t o have
been c r e a t e d t o e n t i t l e p e t i t i o n e r [Keith H e r r i n ] t o t h e
payments." Relying on s e c t i o n s 13-707 and 13-702, R.C.M.
1947, r e q u i r i n g c o n s i d e r a t i o n of t h e document a s a whole and
requiring t h a t its interpretation give e f f e c t t o the p a r t i e s '
i n t e n t i o n a s it e x i s t e d a t t h e t i m e of c o n t r a c t i n g as e v i -
denced by t h e language of t h e i n s t r u m e n t , Judge Bennett
concluded t h a t it was d r a f t e d f o r t h e b e n e f i t of t h e boy,
K e i t h , J r . , n o t t h e a p p e l l a n t , and t h e r e f o r e t h a t , because
t h e c h i l d had d i e d and was no l o n g e r i n need of i t s bene-
f i t s , t h e payments were t o be made t o r e s p o n d e n t h e r e i n .
The c o u r t determined t h a t :
" I n l i g h t of t h e whole s e p a r a t i o n agreement,
i t i s c l e a r t h a t a t t h e time t h e agreement
was c r e a t e d , t h e p a r t i e s i n t e n d e d t h a t t h e
assignment be f o r t h e b e n e f i t of K e i t h , J r . ,
and i f he d i e d , t h e purpose of t h e assignment
would f a i l and t h e payments were t o r e v e r t
back t o t h e p e t i t i o n e r [Keith H e r r i n . ] There i s
no i n d i c a t i o n t h a t t h e p a r t i e s i n t e n d e d t h e pay-
ments t o be f o r t h e b e n e f i t of t h e r e s p o n d e n t
[Molly H e r r i n ] c o n s i d e r i n g t h e language of t h e
e n t i r e i n s t r u m e n t and t h e c o n d i t i o n s i n para-
graph 4."
I n r e a c h i n g t h a t c o n c l u s i o n , t h e judge r e l i e d on t h e
f o l l o w i n g i n t e r p r e t a t i o n of t h e p r o p e r t y s e t t l e m e n t agree-
ment under c o n s i d e r a t i o n :
"The q u a l i f i c a t i o n s and c o n d i t i o n s a s i n t e r -
p r e t e d by t h i s Court a r e :
"5. I f Keith, Jr., d i e s e i t h e r during t h e
term of t h e s t o c k purchase and s a l e agreement
o r w h i l e t h e r e a r e a s s e t s i n any t r u s t c r e a t e d
p u r s u a n t t o paragraph 4 , --l p r o p e r t y
then a i
p u r s u a n t - -e s t o c k purchase -- agree-
t o th and s a l e
ment, - - - c o r p u s and income i n any
- and a l l t h e
t r u s t p u r s u a n t t o paragraph 4 r e v e r t r - -t o the
petitioner." (Emphasis addea.)
The emphasized p o r t i o n of t h e above i s troublesome.
The a c t u a l language of t h e corresponding p o r t i o n of para-
graph 4 does n o t i n c l u d e any r e f e r e n c e t o " a l l p r o p e r t y
p u r s u a n t t o t h e s t o c k purchase and s a l e agreement". That
h a s been i n t e r p o l a t e d by t h e D i s t r i c t C o u r t , Those words
c a n n o t be found i n t h e o r i g i n a l ; n e i t h e r can a n y t h i n g r e -
motely c o r r e s p o n d e n t t o them be found t h e r e . I f t h e lan-
guage of t h e i n s t r u m e n t i s t o c o n t r o l , a s it must a c c o r d i n g
t o s t a t u t o r y r u l e s of i n t e r p r e t a t i o n of c o n t r a c t s , t h i s
i n t e r p o l a t i o n i s improper.
S e c t i o n 93-401-15, R.C.M. 1947, s t a t e s t h e g e n e r a l r u l e
t h a t i n c o n s t r u i n g an i n s t r u m e n t , a j u d g e ' s o f f i c e i s simply
t o a s c e r t a i n and d e c l a r e what it c o n t a i n s i n t e r m s o r i n
s u b s t a n c e , n o t t o i n s e r t o m i t t e d m a t t e r o r omit m a t t e r
inserted. S e e U n i t e d S t a t e s v . Seaboard S u r e t y Co. (D.
Mont. 1 9 3 8 ) , 26 F.Supp. 681, 688, a f f ' d - - Watsabaugh
s u b nom.
i Coo v . Seaboard S u r e t y Co. ( 9 t h
s Cir. 1 9 3 9 ) , 106 ~ . 2 d355.
A c o u r t h a s no a u t h o r i t y t o d i s r e g a r d t h e e x p r e s s l a n g u a g e
used by t h e p a r t i e s . E.g., W i l l i a m s v . I n s u r a n c e Company of
North America (19671, 150 Mont. 292, 295, 434 p.2d 395, 397.
I t i s r e v e r s i b l e e r r o r f o r t h e D i s t r i c t Court t o i n s e r t i n t o
a c o n t r a c t l a n g u a g e n o t p u t t h e r e by t h e p a r t i e s . See
D a n i e l s o n v. D a n i e l s o n ( 1 9 7 7 ) , Mont . , 560 P.2d
893, 34 St.Rep. 76.
I t i s t r u e , a s r e s p o n d e n t emphasizes, t h a t p a r a g r a p h 4
i t s e l f begins with s p e c i f i c reference t o "the following
q u a l i f i e d - c o n d i t i o n a l a s s i g n m e n t " o f payments t o be made
or
by Gordon H e r r i n under t h e s t o c k p u r c h a s e - a n d - s a l e agree-
ment. A p p e l l a n t d o e s n o t c o n t e s t t h a t q u a l i f i c a t i o n s and
conditions w e r e elaborated i n t h e instrument. Two of t h e
conditions, those of a p p e l l a n t ' s death o r remarriage, never
came t o p a s s . The o t h e r c o n d i t i o n , t h a t of K e i t h , J r . ' s
d e a t h , w a s f u l f i l l e d s o as t o a c t i v a t e t h e p r o v i s i o n i n
d i s p u t e here. The s p e c i f i c l a n g u a g e of t h e r e m a i n d e r of
t h a t sentence says " s a i d Trust s h a l l cease". There n e v e r
was a t r u s t . The l a n g u a g e o f t h e i n s t r u m e n t i s " a l l of t h e
p r o p e r t y and income and c o r p u s o f s a i d t r u s t s h a l l r e v e r t " .
Again, t h e r e n e v e r w a s a t r u s t , t h e p r o p e r t y , income and
c o r p u s of which c o u l d r e v e r t t o anyone. The l a n g u a g e of t h e
document c o n t r o l s i t s i n t e r p r e t a t i o n , and a p p e l l a n t ' s i n t e r -
p r e t a t i o n i s c o r r e c t on t h i s p o i n t .
Of c o u r s e , t h e problem i s t h a t t h e s e n t e n c e c o n t a i n s a n
unspoken p r e s u m p t i o n - - t h a t t h e r e i s o r w i l l be a t r u s t which
w i l l be s u s c e p t i b l e o f c e s s a t i o n and t h e c o r p u s and income
of which s u s c e p t i b l e of r e v e r s i o n . The s e n t e n c e b e s p e a k s
c a r e l e s s draftsmanship. Nonetheless, t h e language of t h e
i n s t r u m e n t b i n d s t h e p a r t i e s , a b s e n t agreement, i . e . , another
c o n t r a c t of s o r t s , t h a t it n o t do s o . I t i s t h e p o l i c y of
t h i s Court n o t t o r e w r i t e c o n t r a c t s f o r d i s g r u n t l e d l i t i g a n t s .
While a c o u r t may i n t e r p r e t c o n t r a c t s which a r e open t o
i n t e r p r e t a t i o n , a c o u r t may - make a new one f o r t h e
not
p a r t i e s and may n o t a l t e r o r amend one which t h e p a r t i e s
themselves have made. E.g., Danielson v. Danielson,
Mont. a t , 560 P.2d a t 8 9 5 , and c a s e s c i t e d t h e r e i n .
W e a r e a i d e d i n o u r d e c i s i o n t o r e v e r s e , a l b e i t some-
what r e l u c t a n t l y , t h e D i s t r i c t C o u r t , by t h e f a c t t h a t i f
a p p e l l a n t i s deemed u n e n t i t l e d t o t h e payments made under
t h e s t o c k agreement, s h e t a k e s n o t h i n g b u t h e r own p e r s o n a l
p r o p e r t y under t h e p r o p e r t y s e t t l e m e n t agreement. Respon-
d e n t s o l d a l l of h i s s h a r e s of t h e c a p i t a l s t o c k of t h e
ranch t o h i s b r o t h e r two weeks b e f o r e f i l i n g f o r d i v o r c e
from h i s w i f e of some twenty y e a r s . The r a n c h was t h e o n l y
s u b s t a n t i a l a s s e t of t h e marriage; it had been t h e p a r t i e s '
home f o r t h e d u r a t i o n of t h e i r m a r r i a g e ; Molly had c o n t r i -
buted t o t h e m a r i t a l u n i t and t o t h e upkeep of t h e r a n c h a s
a homemaker. She h e r s e l f r e c e i v e d no maintenance money; s h e
was n o t awarded t h e f a m i l y home o r any p a r t of t h e r a n c h
p r o p e r t y ; s h e k e p t o n l y h e r own p e r s o n a l p r o p e r t y . While i t
i s t r u e , a s respondent a s s e r t s , t h a t s h e r e c e i v e d money f o r
s u p p o r t of t h e c h i l d r e n and t h a t s h e was a b l e t o r e n t t h e
f a m i l y home f o r a "low" monthly sum, which r e n t a l was de-
ducted each month from t h e payments made by Gordon erri in
under t h e s t o c k purchase-and-sale agreement, t h e p r o p e r t y
s e t t l e m e n t agreement g i v e s nothing t o a p p e l l a n t e x c e p t h e r
p e r s o n a l belongings and, s h e a r g u e s , t h e r i g h t t o r e c e i v e
moneys p a i d under t h e s t o c k agreement.
The judgment of t h e D i s t r i c t Court i s r e v e r s e d . The
payments from t h e s t o c k purchase-and-sale agreement belong
t o a p p e l l a n t h e r e i n ; t h e money p a i d t o t h e D i s t r i c t Court
d u r i n g t h e pendency of t h e a c t i o n below and a l l subsequent
payments a r e t o go t o a p p e l l a n t .
W concur:
e
2&&%- I
ChieY J u s t i c e
-Q Justices
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