Ako v. Russell

32 Haw. 769, 1933 Haw. LEXIS 13

• Court: Hawaii Supreme Court
• Decided: August 12, 1933
• Docket: No. 2097.
• Status: Published

Opinions

OPINION OP THE COURT BY

BANKS, J.

(Circuit Judge Davis, dissenting.)

This is an original submission under the statute on an agreed statement of facts. On June 14, 1910, Malia Russell, who was then the owner in fee of a certain parcel of land situate in Honokaa, Island of Hawaii, executed the following deed: “This indenture made this 14th day of June, A. D. 1910, and between Malia Russell of Honokáa, Hamakua, County and Territory of Hawaii, of the first part, and Enoka Ako of Honokaa, Hamakua aforesaid, of the second part, witnesseth, that the said Malia Russell as well for and in consideration of the love and affection which she has and bears towards the said Enoka Ako as for the sum of one dollar to her in hand paid by the said party of the second part, the receipt whereof is hereby acknowledged, doth give, grant, bargain, sell, convey and confirm unto Enoka Ako and his heirs and assigns forever all that piece or parcel of land situate at Honokaa; same being those premises conveyed to William Russell, deceased, by deed of Maria Margarida Hardey and Manuel Hardey, of record in the Registry of Conveyances in Honolulu in Liber 286 and on pages 184-185, containing an area of 1.6 acres.

“To Have and to Hold the same granted premises with all and singular the tenements, hereditaments and appurtenances thereunto belonging or in any wise appertaining unto Enoka Ako, his heirs and assigns forever: With These Conditions However, that the said Enoka Ako shall collect and pay over to the party of the first part as long as she lives, all rents, issues, profits, and proceeds arising therefrom as they become due. And after the termination of the life of the party of the first part, then the said rents, issues, profits and proceeds, after the payment of expenses on said premises, shall be divided and paid pro rata among the party of the second part, Henry J. Kalawaia, William H. Russell and George Russell or their heirs and assigns forever.”

After the execution of this deed Henry J. Kalawaia, one of the grantor’s sons mentioned therein, mortgaged the interest he acquired by that instrument to one Koshiro Tofukuji. This mortgage was foreclosed and by the foreclosure the mortgagee acquired the interest the mortgagor had in the property. George Russell, another son, also transferred his interest to Tofukujh Williain H. Russell, still another son, has retained his interest. Enoka Ako, a fourth son, claims that by the deed he acquired a fee simple title to the entire property. The controversy therefore is between Ako on the one hand and Tofukuji and William Russell on the other.

The disagreement of the parties arises out of the construction of this deed. It is contended by Ako, the plaintiff, that Malia Russell, the grantor, conveyed to him for his own use and benefit a fee simple estate in the land described, and that by the first condition, namely, “That the said Enoka Ako shall collect and pay over to the party of the first part as long as she lives, all rents,- issues, profits, and proceeds arising therefrom as they become due,” she merely reserved to herself a life interest. He also contends that the second condition in the deed, namely, “And after the termination of the life of the party of the first part, then the said rents, issues, profits and proceeds, after the payment of expenses on said premises, shall be divided and paid pro rata among the party of the second part, Henry J. Kalawaia, William H. Russell and George Russell or their heirs and assigns forever,’’ is so repugnant to the prior portions of the deed which convey to him a fee simple estate that they both cannot stand and the second condition is therefore void.

If plaintiff’s construction of the deed were the only one of which it is reasonably susceptible there would be much force in this contention. It must be presumed of course that the grantor did not purposely express conflicting intentions. It therefore becomes our duty to examine the entire instrument with the view of ascertaining whether the second condition is in reality repugnant to the granting and habendum clauses or whether it is consistent with them. The rule of construction is thus stated in 18 O.' J. p. 330, § 327: ‘ “In determining the estate created by a deed, the court will, under the modern rules of construction now generally adopted, consider the deed as a whole, without regard to its formal division into parts, the position of its different clauses, or the technical accuracy of the language employed, the purpose sought being to effectuate the intention of the grantor, as gathered from the entire instrument, where it is not contrary to established principles of law.” This rule is recognized in this jurisdiction in the following cases: Nahaolelua v. Heen, 20 Haw. 372; Simerson v. Simerson, 20 Haw. 57; Kaleialii v. Sullivan, 23 Haw. 38; Keelikolani v. Crown Land Commissioners, 6 Haw. 446; Kuuku v. Kawainui, 4 Haw. 515. See also Ihihi v. Kahaulelio, 263 Fed. 817.

It is apparent from the granting clause of the deed that the grantor intended to convey the legal title to Ako. It is equally apparent from the first condition that she intended to reserve to herself during her life the beneficial interest in the property, empowering Ako to collect the rents, issues, profits and proceeds and pay them over to her. The effect of this was to separate the legal title from .the beneficial interest, the former being in Ako and the latter in the grantor. It is also apparent from the second condition that the grantor intended that the property should after her death, which would terminate her equitable interest, go in equal shares to her sons Ako, Henry J. Kalawaia, William H. Russell and George Russell, and their heirs and assigns forever.

Construing the deed as a whole we think it places no undue strain upon the language employed to say that it indicates an intention on the part of the grantor, to create a trust in which Ako is the trustee and she is the beneficiary, with remainder over after her death to Ako and her other three sons. This conclusion harmonizes the several clauses of the deed and disposes of the plaintiff’s contention. It has been often said that no particular words, such as “trust,” “trustee” or “beneficiary” are essential to the creation of a trust if without their use the intention to create a trust is nevertheless sufficiently manifest. In Colton v. Colton, 127 U. S. 300, the court expressed itself as follows (p. 310) : “The object, therefore, of a judicial interpretation of a will is to ascertain the intention of the testator, according; to the meaning of the words he has used, deduced from a consideration of the whole instrument and a comparison of its various parts in the light of the situation and circumstances which surrounded the testator when the instrument was framed. These rules of construction, indeed, apply to every written instrument, although in deeds and some other formal documents the long usage of the law has, in certain cases, required the use of technical words and phrases to accomplish particular effects. No technical language, however, is necessary to the creation of a trust, either by deed or by will. It is not necessary to use the words ‘upon trust’ or ‘trustee,’ if the creation of a trust is otherwise sufficiently evident. If it appear to be the intention of the parties from the whole instrument creating it that the property conveyed is to be held or dealt with for the benefit' of another, a court of equity will affix to it the character of a trust, and impose corresponding duties upon the party receiving the title, if it be capable of lawful enforcement. No general rule can be stated that will determine when a conveyance will carry with it the whole beneficial interest, and when it will be construed to create a trust; but the intention is to be gathered in each case from the general purpose and scope of the instrument.”

Another contention made by the plaintiff is that if the first condition creates a trust in favor of the grantor the second condition likewise creates a trust in favor of her sons, their heirs and assigns forever, and that if this be true it violates the rule against perpetuities. The two conditions, however, are not similar and are easily distinguishable. In the first condition the trust is created by the conveyance of the legal title to Ako with certain powers and corresponding duties to be exercised and performed for the use and benefit of the grantor.

There is, however, nothing in the second condition which indicates an intention on the part of the grantor that the legal title already granted to Ako shall be retained by him after her death for the benefit of his three brothers. He is given no power after the happening of this event to collect the rents, income, profits and proceeds derived from the land and divide the net remainder between himself and his three brothers. In fact none of the duties or obligations of a trustee are imposed upon him either expressly or by implication. On the contrary, the condition provides that upon the grantor’s death the usufruct shall be divided in equal proportions among her four sons. This clearly indicates the intention not to continue the trust created by the first condition, merely changing the beneficiary, but to give the usufruct in equal parts to her four sons after her death. There is nothing in this condition or elsewhere in the deed which justifies the inference that each of the four sons was entitled to a pro rata share of the income for his life only, or that in the event of the death of one or more of the sons the whole income should go to .the survivor or survivors, thus increasing his or their portions, or that upon the death of the last survivor of .the four sons the land should revert to the heirs of the grantor or vest in the heirs of Ako. The effect of the second condition was to convey to these four sons a fee simple estate in remainder in the land itself.

It is well settled in this jurisdiction and elsewhere that a gift of the rents, issues and profits to be derived from land is a gift of the land itself unless a different intention appears. (Hapai v. Brown, 21 Haw. 499, 505; Christian v. Waialua Agr. Co., 31 Haw. 817, 910; Green v. Biddle, 21 U. S. [8 Wheat.] 1; 2 Tiffany, Real Prop., § 441.) In Green v. Biddle, supra, the court said (p. 74) : “A right to land essentially implies a right to the profits accruing from it, since, without the latter, the former can be of no value. Thus, a devise of the profits of land, or even a grant of them, will pass a right to the land itself. Shep. Touch. 93; Co. Litt. 4 b. ‘For what/ says Lord Coke, in this page, ‘is the land, but the profits thereof.’ ” There is no different intention apparent in the instant case.

H. Irwin for plaintiff. W. H. Smith for defendants.

There is another phase of this case which requires consideration. It appears from the record that on October 29, 1928, Malia Kimura, nee Malia Russell, executed another deed which purported to convey to Ako in fee simple the property in question. At this time the grantor, as we have seen, had only a beneficial interest. This then was the only interest she could convey. She was powerless to divest the estate in remainder already conveyed to Henry J. Kalawaia, William H. Russell and George Russell. The. only effect of this second deed, therefore, was to convey to Ako a right to the rents, income and profits of the land as long as the grantor lived. Upon her death, as we construe the second condition in the first deed, Ako and the two defendants will as joint owners of the fee simple estate be entitled to possession.

Judgment in accordance with this opinion will be signed upon presentation.