Banfield v. Schulderman

On separate petitions by appellant and by respondents for a rehearing PETITIONS FOR REHEARING DENIED (3 P.2d 116) Appellant has filed a petition for rehearing. In it he asserts that he is in possession of the real property belonging to the estate in his capacity as executor and not as an individual. The writer gained the opposite view from reading the record. At the time this record was made, the question of appellant's claim for a homestead had not been finally determined and yet he was occupying the property in Howe's addition. He testified that he lived upon the property in Franzetti's addition. He was unable to testify with any exactitude as to the amount of rent he had collected, and had made no effort to collect the rent for some six weeks or two months. A suit partitioning part of the realty had been instituted and prosecuted to a decree without recognizing appellant's possession as executor. Moreover, the writer did not think it customary for an executor to take possession of unremunerative real property. For these reasons, it was said in the original opinion that the appellant appeared to be in possession of the real estate in his individual capacity and not as executor.

Under the statute, the executor has a right to take possession of the real property. Sections 11-309, 11-810, Oregon Code 1930.

In the original opinion, it was held that the life tenant is chargeable with the payment of the taxes. This is the general rule. The liability of the life tenant for taxes, however, is limited to the amount of income, if any, such life tenant derives from the realty; and in case such real property is occupied by the life tenant, then to the reasonable rental value thereof. 21 C.J. 957, citing Sheffield v. Cooke, 39 R.I. 217 (98 A. 161, Ann. Cas. 1918E, 961); Newby v. Brownlee, 23 Fed. 320; Nation v. Green, 188 Ind. 697 (123 N.E. 163); Clark v.Middlesworth, 82 Ind. 240; Johnson v. Johnson's Trustee,164 Ky. 724 (176 S.W. 199); Woolston v. Pullen, 88 N.J. Eq. 35 (102 A. 461); Murch v. J.O. Smith Mfg. Co., 47 N.J. Eq. 193 (20 A. 213); In re Menzie's Estate, 54 Misc. Rep. 188 (105 N.Y.S. 925); Crockett v. Crockett, 2 Ohio St. 180; Stone v.Littlefield, 151 Mass. 485 (24 N.E. 592); In re Martens'Estate, 16 Misc. Rep. 245 (39 N.Y.S. 189); Poole v. Union TrustCo., 191 Mich. 162 (157 N.W. 430, Ann. Cas. 1918E, 622).

In appellant's brief on his petition for rehearing, recognition is given to the salutary rule, which, in his capacity as executor in possession of the real property, he should observe that, where the trust estate to whose income the life tenant is entitled consists in part of unimproved property producing no revenue, the life tenant is bound to pay the taxes on the unimproved property from the income derived by him from the revenue-producing property so far as such income extends. (Page 4, Appellant's Brief upon motion for rehearing.) 21 C.J. 937.

Clause III of the will of testatrix is as follows:

"If my cousin, Anna Schulderman, aged 49 years, and now residing with me at Portland, Oregon, shall still reside with me at the date of my death, then and in that case, and in that case only, I give and bequeath unto her my Singer Sewing Machine, and Government Bonds to the par value of One Hundred Dollars, or, one hundred dollars in cash, at the election of the executor of this, my last will and testament, hereinafter nominated and appointed."

Clause IV thereof is as follows:

"To my husband, Charles C. Banfield, aged 50 years, residing at Portland, Oregon, I give and bequeath a life estate in all of the real property of which I may die seized, also, a burial space in the Schulderman Family Cemetery Lot at Riverview Cemetery, in Multnomah County, Oregon; my engagement ring; all cash on hand, and bonds of the United States Government, not herein otherwise bequeathed; also all household furniture, books, pictures, bric-a-brac and works of art not herein specifically bequeathed unto others."

It will be noted that, as to the cash on hand and government bonds, the bequest of appellant is subject to the terms of the conditional bequest to Anna Schulderman. It is, however, a specific bequest. Noon's Est., 49 Or. 286 (88 P. 673, 90 P. 673); In re Wilson's Est., 85 Or. 604 (167 P. 580);Kearns v. Kearns, 77 N.J. Eq. 453 (76 A. 1042, 140 Am. St. Rep. 575); Drake v. True, 72 N.H. 322 (56 A. 749); In reBush's Est., 89 Neb. 334 (131 N.W. 602); Pendergast v. Walsh,58 N.J. Eq. 149 (42 A. 1049); Hamilton v. Hamilton, 75 Misc Rep. 21 (134 N.Y.S. 645); Holcomb v. Mullin, 167 Ark. 622 (268 S.W. 32); Ely v. Nye (In re Daniel's Est.) 192 Iowa 326 (184 N.W. 647); Burnett v. Heinrichs, 95 N.J. Eq. 112 (122 A. 681); In reBeckett's Est., 15 N.Y. St. Rep. 716; Fow's Est., 12 Pa. Co. Ct. Rep. 133; Morehead's Ex'r. v. France, 153 Ky. 44 (154 S.W. 378); Towle v. Swasey, 106 Mass. 100, 106.

The term "cash on hand" embraces money in a solvent bank subject to check. In re Johnston's Est., 190 Iowa 679 (180 N.W. 740). The cash on hand thus bequeathed to appellant is exempt from the operation of an order of sale as long as any property of the estate, not specially devised or bequeathed, remains unsold or unappropriated to the payment of funeral charges, expenses of administration or claims. Section 11-604, Oregon Code 1930.

Appellant quotes from section 11-306, Oregon Code 1930, and argues that, by operation of law, the one thousand dollar note given by him to the testatrix became transmuted into money. (Mason's Est., 42 Or. 177, 70 P. 507), and as such under the will passes to the husband.

Said section 11-306 is as follows:

"The naming any one executor in a will shall not operate to discharge such executor from any claim which the testator had against him, but the claim shall be included in the inventory; and if the person so named afterwards take upon himself the administration of the estate, he shall be liable for such claim as for so much money in his hands at the time the claim became due and payable; otherwise he is liable for such claim as any other debtor of the deceased."

The purpose of this statutory provision is to prevent a debtor of an estate from avoiding payment of his debt by accepting an appointment as executor. A will speaks only from the death of the testator unless a contrary intention is manifest from the language of its provisions. Pape v. United StatesNational Bank, 135 Or. 650 (297 P. 845), and cases there cited. When the testatrix died, the note in question was merely written evidence of a chose in action. It was not cash on hand. Appellant contested its validity, contending that it had been paid; that it was tainted with fraud, and that the statute of limitations had run against it. No promissory note is mentioned in the specific bequest to appellant. We are unable to concur with appellant in his contention to the effect that this note was specially bequeathed. We hold that it was not.

Appellant insists that he should be given credit for premiums paid upon insurance policies. The character of the policies as well as the kind of insurance determines whether the executor may claim credit for such premiums. In the instant case, the record does not disclose whether or not the policies provide that loss, if any, shall be paid to the estate. It is a matter very properly under the supervision of the learned judge of the probate court.

On this appeal, we are called upon to determine whether appellant's petition to sell a portion of the real property should have been granted. Unless and until the personal assets, not specifically bequeathed, have been exhausted, an order ought not to be made to sell real property for the payment of funeral charges, expenses of administration or claims against the estate. In this case, it appears that such personal assets have not been exhausted. In our original opinion, we held that the circuit court was right in denying said petition. As to that order, we adhere to our original opinion.

Respondents have filed a motion for rehearing upon the question of whether the appeal herein should have been dismissed. Permission was given respondents to file a written brief, but none has been filed.

Both petitions for rehearing are denied.