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Stephenson v. Stephenson

October 28, 1957

VALERIE SCHRAMM STEPHENSON, PLAINTIFF-APPELLANT,
v.
GRANT T. STEPHENSON, JR., AND HOWARD E. STEPHENSON, DEFENDANTS-APPELLEES.



Author: Schnackenberg

Before LINDLEY, SCHNACKENBERG and PARKINSON, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

From a judgment of the district court dismissing plaintiff's complaint for declaratory judgment and to quiet title, plaintiff appeals.

Defendants' answer, denying that an actual present controversy has arisen between the parties, having been filed to the complaint, a trial was had in which certain affidavits herein referred to were admitted as evidence by stipulation of the parties.

The affidavits of Charles G. Heimerdinger and Henry D. Costigan, California attorneys connected with a law firm representing plaintiff, and William P. Wentworth, a member of an investment firm in California, and certain allegations of the complaint admitted by the answer establish, inter alia, the following facts:

Grant T. Stephenson and Irene Eldred Stephenson were married on December 29, 1906. Three children (all now adults) were born of the marriage: defendants Grant T. Stephenson, Jr., and Howard E. Stephenson, and Irene Clara Stephenson. Grant and Irene, the husband and wife, were divorced on June 9, 1922. The judgment of the Circuit Court of Milwaukee County, Wisconsin, in the divorce action, dissolved the marriage, gave custody of the children to the wife, provided for her support by giving her for life (or until remarriage) the income from certain trusts to be created from funds to be obtained from trusts theretofore created for the husband's benefit by his parents, provided for an adjustment of the rights of the wife upon remarriage, directed the wife to support the children during their minorities, appointed First Wisconsin Trust Company trustee of the support trusts, directed the husband to make a will in a described form and enjoined any change in that will which would interfere with the support trusts, and confirmed in the husband title to the balance of his property, free of all claims of the wife.

The divorce decree provided that First Wisconsin, as trustee of the support trusts -

"* * * shall hold the amount so received by it in trust, to invest and reinvest the same and pay over the income thereof when and as received to the said plaintiff (the wife) annually during her life, and at her death to pay over the principal thereof to the said defendant Grant T. Stephenson (the husband), or his assigns, if he be then living, and in the event that he shall have died prior to the death of the plaintiff, then to such person or persons as he shall by his last will and testament, duly admitted to probate, appoint, and in default of such appointment, to his heirs or legal representatives."

Irene, the first wife, now 72 years old, has never remarried. She is entitled to the income from the trust property during her life.

Grant, the husband, married plaintiff on October 31, 1932. There are no children of this marriage. Grant moved to California and on November 14, 1934 he executed there a will in favor of plaintiff. She says in her brief that this will is not precisely in the form attached to the divorce decree but since it does not interfere with the support trusts, it is not in violation of the decree.

Grant died in California on January 29, 1951 and his 1934 will was duly admitted to probate there. In due course the remainder interests in the support trusts were distributed to plaintiff. She is now 57 years old and has no children.

Plaintiff attempted to sell the remainders. She then sued one of the children, Irene Clara Stephenson, to quiet title and obtained a default judgment. The other children are the defendants in this action, the purpose of which is to establish plaintiff's title to the trust remainders, which (she says) will "permit the sale of those remainders to go forward".

The complaint, asserting diversity jurisdiction, was filed in the district court on November 4, 1953. It recites the facts about the creation of the support trusts, alleges that the defendants claim an interest in the trust remainders, denies that any such interest exists, alleges that there is a controversy between plaintiff and defendants within the meaning of the Declaratory Judgment Act,*fn1 alleges that the claim of defendants has cast a cloud on plaintiff's title, rendering it unmarketable, and prays for a judgment quieting her title to the trust remainders and declaring that defendants have no interest therein.

In a written opinion*fn2 the district court expressed its conclusion, inter alia, that plaintiff had not presented a case or controversy within the meaning of the Declaratory Judgment Act. Its order of dismissal followed.

Plaintiff relies upon the district court's jurisdiction to quiet title under the "traditional powers of an equity court * * * and under the law of Wisconsin which recognizes equity jurisdiction to quiet title to personal property". She ...


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