Barret's Estate, In re, s. C-360

• Decision Date: 23 January 1962
• Docket Number: C-361,Nos. C-360,s. C-360
• Citation: 137 So.2d 587
• Parties: In re ESTATE of Adele Hart BARRET, deceased.
• Court: Florida District Court of Appeals

Page 587

137 So.2d 587

In re ESTATE of Adele Hart BARRET, deceased.

Nos. C-360, C-361.

District Court of Appeal of Florida, First District.

Jan. 23, 1962.

Rehearing Denied Feb. 22, 1962.

Willard Howatt, St. Augustine, and Bedell, Bedell & Dittmar, Jacksonville, for Mary L. Hart and John A. Hart, Jr.

Dunham & Bennett, St. Augustine, and Lewis, MacDonald & Varian, New York City, for Mary Hart Oliver.

STURGIS, Judge.

This appeal concerns two orders of the County Judge's Court of St. Johns County, entered in the matter of the Estate of Adele Hart Barret, deceased, and relating to the same subject matter. The appellant executors of said estate, hereinafter referred to as the relators, seek reversal of an order which we construe as holding to the effect that certain corporate stock purported to have been issued to and jointly owned by the decedent and her niece, Mary H. Oliver, hereinafter called the respondent, with right of survivorship, was in fact so owned and is not liable for any part of the expenses of administration or of the federal and state inheritance or estate taxes which may be levied upon decedent's gross estate. The respondent niece (appellee and cross-appellant) seeks reversal of a separate order denying her petition to have the probate court fix and require the executors of said estate to pay to respondent's attorney of record a reasonable fee for the services performed by him in and about the proceedings resulting in the first mentioned order. The relators, Mary L. Hart and John A. Hart--executors of the will of Mrs. Barret, deceased--are the mother and brother, respectively, of the respondent, Mrs. Oliver. Mrs. Hart is a sister-in-law of Mrs. Barret.

In 1951 Mrs. Barret, who died in 1959, made gifts of approximately the same value to her niece, Mrs. Oliver, and nephew, Mr. Hart. The gift to Mr. Hart was made outright while that to Mrs. Oliver was made by causing certain corporate stock owned by her or purchased with her funds to be issued jointly to herself and Mrs. Oliver and thereafter so held and owned, with right of survivorship; subject, however, to instructions given by Mrs. Barret to the issuing corporations at the time the joint tenancy was created whereby she retained certain interests therein during her lifetime that were not enjoyed by Mrs Oliver. The subject stock had doubled in market value between the date of issue and the date of Mrs. Barret's death.

In May of 1958 Mrs. Barret executed her will containing the following provision (Paragraph XVII):

'It is my will, and I do so direct, that all costs of administration of my estate, and any federal and state inheritance or estate taxes, shall be borne pro rata by my entire estate, except that none of the property given and bequeathed under Paragraph hereof designated XII [relates to effects of the person, objects of art, silverware, bric-a-brac, portraits, and an automobile] shall be charged with any part of such expenses or other charges.'

The will was admitted to probate on March 26, 1959. Upon qualifying as executors, the relators delivered the subject stocks to Mrs. Oliver. On April 29, 1960, the relators, in their relation as executors of said will and also in their individual capacities as residuary legatees and devisees thereunder, filed a petition in the court of probate to have the quoted provision of the will construed, and in that behalf asserted that by said provision the respondent, Mrs. Oliver, is required to pay a share of the expenses of administration, state inheritance taxes and federal estate taxes, based on the proportionate value of said jointly owned stock to the value of the gross taxable estate of the decedent. The value of the stock is approximately 14.55% of the gross taxable estate. The petition alleges and it is not disputed that said stocks were held by the decedent and the respondent 'as joint tenants, with the right of survivorship, and not as tenants in common.'

The respondent moved to dismiss the petition on the ground that Section 734.041, Florida Statutes 1959, F.S.A., ¹ requires the mentioned expenses and taxes to be paid from the residuary estate of the testator. She also filed an answer resisting the construction and effect which the relators sought to have upon the will, and therein moved the court to fix and require decedent's estate to pay a reasonable fee for the services by her attorneys in the premises.

In disposing of the petition the court first entered the order challenged by the relators, in which it was found:

'* * * that Section 734.041, Florida Statutes directing the procedure to be followed by the Personal Representative in paying all estate, inheritance, succession and death taxes, imposed upon the estate of a decedent does not apply in the estate of Adele Hart Barret, deceased because the decedent in Paragraph XVII of her Last Will and Testament provided therefor; and * * * that the language of said paragraph of said Last Will and Testament is not ambiguous and that the meaning thereof is clear, when considered in the light of the generally accepted language used when speaking of inheritance, succession and death taxes imposed upon the Estate of a decedent * * *.'

The executors of Mrs. Barret's will (the relators herein) were thereupon ordered to pay all costs of administration of the Barret estate and any federal and state inheritance or estate taxes levied thereon from the entire estate coming into their hands to be administered, except certain property given and bequeathed under provisions of the will with which we are not concerned.

Thereafter an order was entered denying respondent's motion for the imposition of a reasonable attorney's fee, to be paid out of the funds of the estate, for the services of respondent's attorney in said proceedings, and this action forms the basis for the separate appeal by Mrs. Oliver, which the parties in this court treat as being in the nature of a cross-assignment of error.

The points of law involved may be stated thus:

(1) Whether Section 734.041, Florida Statutes 1959, F.S.A. (see footnote 1) affords the testator a means by which to require the owner of property passing outside the will to contribute ratably toward the payment of taxes imposed upon and the expense of administration upon testator's estate?

(2) Whether the subject corporate stock in the hands of the respondent, Mrs. Oliver, is to be treated as part of the Barret estate and as such charged with a proportionate share of the taxes imposed upon said estate and the costs of administration?

(3) Whether the court of probate erred in denying Mrs. Oliver's motion concerning the payment by the Barret estate of a fee for the services performed by Mrs. Oliver's attorney in this proceeding?

We have determined that the first and second points must be resolved in the negative and that the third point must be resolved in the affirmative. It follows, therefore, that the order challenged by the relators must be affirmed and the order challenged by the respondent must be reversed with directions.

For the purpose of this discussion it is conceded, as relators state, that inclusion of the subject stocks in decedent's gross estate for tax purposes increases by approximately $30,000 the amount of tax payable; further, that the taxable value of said stocks is approximately the same as the value of a share in the Barret estate which passes under the will to one of the beneficiaries, Mrs. Mary Hart, who is also one of the relator-executors of the will, and that unless the respondent is required to contribute ratably to the payment of said taxes and expenses of administration according to the proportion which the value of the stock bears to the gross estate for federal tax purposes, Mrs. Hart's share in the estate will necessarily bear approximately 50% of such taxes and expenses. We fail to perceive, however, what effect these circumstances have upon the construction to be given to the quoted provision of the will. It is elemental that as between several beneficiaries of a will, disparity alone in the value of the share received by each does not afford a basis for a special construction to be placed upon a provision of the nature in suit. The rule is more obvious when applied to a disparity between the value of property passing under the will as compared to that which passes outside its purview. The latter, in the absence of overriding statutory provisions, may not be subjected to debts of the estate, howsoever arising.

The relators, relying on Section 734.041, Florida Statutes 1959, F.S.A. (footnote 1), contend that the maker of a will is thereby authorized to require that such part of the non-probate estate as is subject to estate tax shall bear a prorata share thereof. They also contend that independent of the statute a testator may require the expenses of administration upon his estate to be paid out of non-probate assets, but cite no authority for this proposition or specific provision of the will in suit having that intendment; apparently resting this contention on the theory that a codicil to the will raises the implication that the testatrix intended the costs of administration to be paid in whole or in part out of the non-probate corporate stock which passed to the respondent by the 1951 inter vivos gift. The statute does not have the contended effect and relators' position regarding payment of the costs of administration is also unsound. It is true that a codicil to the will liberalized and broadened provisions for the benefit of Mrs. Hart and expressed testatrix's devotion to her; but assuming arguendo that testatrix had power by will to subject respondent's stock to obligations of the estate (a position to which we do not subscribe), the fact remains that there is nothing in the will or codicil more concrete than the mentioned factors on which to found an intent of the testatrix to have the stock that passed to Mrs. Oliver outside the will bear any part of the...