In Re Estate of Wernet ( 1938 )

This action was commenced in the Probate Court by Sophia Wernet, the widow of Louis J. Wernet, deceased testator. Her complaint is found within her motion therein filed, which prays that the executor of her husband's estate may be directed and ordered to pay her the full sum of $3,600 set off to her for her year's support by the appraisers of her husband's estate. All parties interested were made parties to this demand. Minor defendants answered in the general form pursued by guardians adlitem. These papers constitute the pleadings in the cause. Since the commencement of the action Sophia Wernet has died. Her executor, who has been substituted in her stead, now prosecutes this appeal on questions of law.

The will of the testator in part contains the following provisions, after the direction of payment of debts and the making of a specific bequest and devise to his widow:

"The balance of my estate, both real and personal, and of every nature whatsoever, and wheresoever situate, I do give, bequeath and devise to Urban A. Wernet, * * * in trust however, for the uses and purposes hereinafter named, to wit:

"During the life of my wife, Sophia Wernet, shall receive all the income arising from my estate, whether the same shall arise from rentals, interest upon money or dividends upon stocks, and shall be chargeable with the expense arising against the estate. Said trustee shall hold, manage and control said property during the continuance of the trust with power as to real estate, to improve, lease, rent and with the consent of my wife, Sophia Wernet, sell and convey the same or any part thereof in exercise of his discretion."

The amount of the personal estate was small and insufficient to pay the year's allowance. The amount of the real estate is considerable as was also the income therefrom. One parcel of realty consisting of forty-four and one-half acres, after the testator's death, was found to be located in natural gas producing territory. Thereupon the widow and the executor leased this tract. A well was drilled thereon which produced considerable income, profit or royalty. Out of the sums so received by the executor, he paid to the widow a sum approximately equal to the year's allowance. Checks issued for these payments were marked "income."

It was contended by the executor in the Probate Court that the widow possessed a life estate in the gas-producing tract and the sums paid her as income were in fact a part of the corpus of the estate and not income. From these two premises it is argued that the widow had been paid the amount of her allowance. The Probate Court adopted this theory and so held. Of this judgment the appellant now complains.

From the terms of the will, as quoted, it clearly appears that Sophia Wernet did not take a life estate in the estate's realty. The realty was devised to the executor in trust and he qualified as such trustee. The will further provided that, at the expiration of the trust, he should convey "all of my estate then remaining" to testator's residuary devisees. A life tenant possesses legal title. The widow received but an equity therein. She was not entitled to occupancy, nor could she, without the executor's consent, lease, alienate or convey a legal title therein, all of which are attributes of a life estate. We think it aptly held in Schwan, Exr., v. Meinert, 56 Ohio App. 336,10 N.E.2d 951, that a trust estate or equitable interest in real property and a life estate cannot exist in the same property at the same time.

The appellees point to Fourth C. Trust Co. v. Woolley,31 Ohio App. 259, 165 N.E. 742, and kindred cases, which correctly hold that when a life tenant removes gas from the ground, after the death of the prior owner, the product or income derived therefrom is realty, a part of the corpus of the estate. We agree that this is ordinarily sound law, in a proper case, but we are unable to perceive its application to the matter in controversy, for the reason that the widow is not a life tenant.

Clearly, if one desires by will to create a trust in realty during another's life, in favor of that other, he may do so; and, if a testator desires, he may engraft upon that trust such beneficial interests therein in the recipient's favor as he may choose. The testator in this instance had in mind that all others entitled to share in his bounty were to be postponed in enjoyment until the death of his wife. He directed his executor to pay "all the income arising from my estate" from whatever source, to his wife. The word "income," as here used, is an all embracing term, for if realty produces royalties, it produces income. We perceive no difficulty in reaching this conclusion.

In McClintock v. Dana, 106 Pa., 386, a testatrix devised realty to her executor in trust for the benefit of her daughter for life, and after her death the corpus of the estate was to go to the daughter's children. The executors were empowered to lease or sell realty. They leased certain coal lands, which were unopened when the testatrix died. Coal was removed from the land and a profit was thereby obtained therefrom. The court held in the syllabus "that the rent or royalty thus received was payable by the trustees to the daughter as cestui que trust for life, as ``income' of the estate within the meaning of the will," for the reason that the terms of the will extended her right of enjoyment beyond that of a mere life tenant.

A like understanding of the exception to the generally accepted rule is to be found in Eager's Gdn. v. Pollard, 194 Ky. 276,239 S.W. 39. We quote the second paragraph of the syllabus:

"Royalties derived from oil wells opened upon land after the death of the owner and not in pursuance of a contract executed by him are usually considered as a part of the corpus and not as income between life tenants and remaindermen, but when opened in pursuance of an express or implied power conferred by his will they are not distinguishable from those opened after his death in pursuance of his contract and royalties derived therefrom are considered as income, unless the will provides otherwise."

It follows that the Probate Court's judgment must be and the same is reversed. Coming now to enter the judgment which the trial court should have entered, it is ordered that appellee executor, out of his trust estate, pay to the appellant executor the year's allowance set off to testator's widow.

Judgment reversed.

MONTGOMERY, P.J., and LEMERT, J., concur.

ON MOTION to dismiss.