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T & W Homes ETC, LLC v. Crotwell

Supreme Court of Mississippi

August 24, 2017

T & W HOMES ETC, LLC
v.
JAMES KENDALL CROTWELL AND TERRY CROTWELL

          DATE OF JUDGMENT: 01/11/2013

         SCOTT COUNTY CHANCERY COURT, HON. MICHAEL H. WARD.

          TRIAL COURT ATTORNEYS: RICHARD MANNING LINGLE SEAN ALBERT SOUTHERN MICHAEL VINCENT BERNIER MICHAEL ALAN JEDYNAK THOMAS D. LEE.

          ATTORNEY FOR APPELLANT: THOMAS D. LEE.

          ATTORNEY FOR APPELLEES: RICHARD MANNING LINGLE.

          BEFORE RANDOLPH, P.J., KITCHENS AND CHAMBERLIN, JJ.

          RANDOLPH, PRESIDING JUSTICE.

         ¶1. In 1973, Gilbert Lum conveyed a forty-acre tract of land by warranty deed to his daughter, Lucille Crotwell, reserving unto himself a life estate in the lands and all mineral interests owned by him. The deed recites receipt of good and valuable consideration and was filed of record. No words of inheritance were contained in the deed. A quarter of a century later, Lum attempted to reconvey one acre of the same forty-acre tract to Richard Prestage. This interlocutory appeal involves an action by Crotwell's heirs[1] against Prestage's successors in title. The chancellor found that Lum had reserved a life estate in the land and minerals only and that he could have conveyed his reserved life estate, but that reading the conveyance as retaining the right to reconvey title in fee simple was repugnant to the granting clause in the conveyance to Crotwell. The Chancery Court of Scott County granted summary judgment to the Crotwells on this issue only. T&W Homes filed this interlocutory appeal.[2]

         FACTS AND PROCEDURAL HISTORY

         ¶2. The facts are not in dispute. On March 13, 1973, Gilbert Lum conveyed, by warranty deed, a forty-acre tract of land to his daughter, Lucille Crotwell. The deed reads:

In consideration of ($10.00) ten and no/100 dollars and other good and valuable consideration, of which is hereby acknowledged, I, Gilbert Lum [address] convey and warrant to Lucille Lum Crotwell [address] the land described as follows . . . . towitt [sic]: the west half of S 1/2 of SE 1/4 of Section 19, Township 7 North, Range 6 East. Containing 40 acres more or less.
All above des[cribed] land subject to all prior oil, gas, and mineral rights, and sales and leases as shown in records of Chancery Clerk's Office in Forest, Miss.
Grantor, however, does hereby expressly RESERVE unto himself a life estate in the foregoing lands coupled with a full and absolute disposition to be exercised by him as though he were the fee simple owner thereof[] also RESERVING unto himself all mineral interest owned by him in said lands for his lifetime.

         The deed was signed by Lum, who personally appeared before a notary public and "acknowledged that he signed and delivered the foregoing instrument on the day and year therein mentioned."

         ¶3. On June 8, 1998, Lum executed a warranty deed for one acre of the forty-acre tract to Richard Prestage, subject to his life estate for the mineral interests of that one acre, in addition to excepting all prior mineral rights.[3] By special warranty deed, Prestage subsequently deeded the same property from himself to himself and his wife, Sheri, as an estate by the entirety with full rights of survivorship.[4] The Prestages then executed a deed of trust in favor of American Title Company, Inc., as trustee for Hurricane Mortgage Company, Inc. This deed of trust ultimately was assigned to HSBC Bank, USA, N.A., as trustee for Wells Fargo Asset Securities Corporation Home Equity-Backed Certificates. On August 10, 2011, Emily Courteau, as Substituted Trustee, conducted a foreclosure sale of this deed of trust. T&W Homes, Etc, LLC ("T&W") was the successful bidder and received a Substitute Trustee's Deed.

         ¶4. On December 13, 2011, the Crotwells filed a complaint to confirm title, remove cloud on the title, and for ejectment. The parties filed competing motions for summary judgment. The chancellor found that Lum had reserved a life estate only, and that a reservation of the right to reconvey fee simple title was "an illegal and void restraint upon alienation and repugnant to the granting clause of the deed." T&W filed an interlocutory appeal as to this one issue.

         ISSUE

         ¶5. The parties present the issue on appeal as whether the reservation by Lum of a life estate "coupled with a full and absolute disposition to be exercised by him as though he were the fee simple owner" was an illegal and void restraint upon alienation and repugnant to the granting clause of the deed.

         ANALYSIS

         ¶6. Questions of law are reviewed de novo. Morrow v. Morrow, 129 So.3d 142, 146 (Miss. 2013).

         ¶7. T&W argues that deeds containing reservations of life estates with power to reconvey fee simple title are recognized in other states. Each case cited by T&W is not only foreign to Mississippi law, but is factually distinguishable. For instance, in Jamieson v. Jamieson, 912 S.W.2d 602, 604 (Mo.Ct.App. 1995), a widower reserved a life estate with power to "sell, rent, lease, mortgage, or otherwise dispose of said property, during his natural lifetime. Then the remainder in fee to" his children. After executing the deed, the widower remarried and executed a new deed conveying the property to his new wife. Id. In the widower's initial deed, there was no present conveyance; there was no mention of consideration; and the conveyance specified that the children were remaindermen. The Missouri Court of Appeals upheld the second conveyance, finding that the first deed was a mere "gift to the remaindermen, " and thus the widower retained a right to revoke. Id. at 605. In contrast, the deed at issue in the case sub judice effected a then-present conveyance by general warranty deed[5] of real property owned by Lum. After acknowledging receipt of valuable consideration-thus taking this case outside the realm of inter vivos and testamentary gifts-Lum "[c]onvey[ed] and warrant[ed]" the forty acres described in the deed to Crotwell. The deed was signed, delivered, notarized, and filed-putting the world on notice of the transaction. Crotwell was the grantee identified in the deed. She was described in the deed as a contingent remainderman, as posited by the dissent. See Diss. Op. at ¶ 20.[6] The words "remainder" or "remainderman" are not in the deed sub judice. Contra Jamieson, 912 S.W.2d at 604-05.

         ¶8. In Harman v. Hurst, 153 A. 24, 26 (Md. 1931), a father granted property to his daughter, "her heirs and assigns, in fee simple, subject and reserving to myself the right to mortgage or sell." The father then conveyed the property to his attorney, and his attorney reconveyed the property to the father. Id. at 25. The Maryland Court of Appeals upheld the latter conveyances, in part because the deed did not evidence that the daughter had paid any consideration for the initial conveyance. Id. at 25-26 ("A slight consideration may support an agreement made by a parent with a child; but the consideration, however[] slight, must be performed."). The Lum-Crotwell deed reads that consideration was exchanged. On his oath, Lum acknowledged receipt of consideration in the notarized deed, rendering Harmon inapposite and unpersuasive.

         ¶9. Finally, T&W asks this Court to consider Kyle v. Wood, 86 So.2d 881 (Miss. 1956). While Kyle remains good law for the principles of wills and testaments, it offers no guidance to today's case.[7]

         ¶10. In Kyle, J.A. Wood's 1948 will contained the following provision:

I will and give all my property of every kind wherever located to my beloved wife, Mrs. Molly Wood, to have [and] to hold during her lifetime to use, sell and dispose of as she sees fit; and at her death, then such property left to my said wife by me is to be given to my nephew, by marriage, Arthur Kyle.

Id. at 882. J.A. Wood died in 1952. Id. Later that year, Molly conveyed the property to another.[8] After her death, [9] nephew Kyle filed suit against her grantees, complaining that the grant of power in J.A. Wood's will to dispose was invalid. Id. at 882-83. This Court found Molly's conveyance valid:

It thus appears that the rule is well settled by our own decisions, that where a testator gives an estate for life only, with the added power to the life tenant to convey the estate absolutely, the life tenant may defeat the estate of the remainderman under the ...

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