Citizens Nat. Bank of Whitley County v. Stasell

• Decision Date: 14 August 1980
• Docket Number: No. 3-280A61,3-280A61
• Parties: CITIZENS NATIONAL BANK OF WHITLEY COUNTY, and Giovanna Martin, Appellant (Plaintiff Below), v. Leonard STASELL et al., Appellee (Defendant Below).
• Court: Indiana Appellate Court

Page 587

408 N.E.2d 587

CITIZENS NATIONAL BANK OF WHITLEY COUNTY, and Giovanna Martin, Appellant (Plaintiff Below), v. Leonard STASELL et al., Appellee (Defendant Below).

No. 3-280A61.

Court of Appeals of Indiana, Third District.

Aug. 14, 1980.

John S. Bloom, Bloom, Bloom & Fleck, Columbia City, for appellant.

Jeanne S. Miller, Miller & Miller, New Haven, for appellee.

STATON, Judge.

The appellants, Citizens National Bank of Whitley County and Giovanna Martin, appeal a negative judgment to the quiet title action and accounting for rents and profits instituted in the court below. Appellants urge the following issues for our review:

(1) Whether the trial court properly applied the doctrine of equitable election;

(2) Whether the trial court required the correct burden of proof with respect to the doctrine of equitable election;

(3) Whether the trial court properly construed the will of Eva Martin; and,

(4) Whether the introduction of certain evidence was proper.

We affirm.

I. Facts

This Court, recognizing the plethora of evidence contained in the record, lists only those facts pertinent to the resolution of the issues herein raised. Eva Martin, her sister Inez Smith, and her two brothers, Leonard Stasell and Harold Stasell, inherited as tenants in common a 240 acre farm upon the death of their mother in 1950. At that time Eva Martin was married to Charles Martin and remained married to him until her death in 1952. Eva Martin, her sister and two brothers, agreed to a voluntary partition of the farm which was to be effected through the use of a strawperson, Josephine Fogel. Eva Martin was to receive the 60 acre tract of land here in dispute with Harold and Leonard Stasell to receive the balance of the 240 acres and Inez Smith to receive cash.

On August 27, 1951, the four cotenants transferred all of their interest in the farm to Josephine Fogel by quitclaim deed clearly marked: "This deed is made for the sole purpose of reconveying said real estate by the grantee herein." On September 17, 1951, Eva Martin executed a will devising "the 60 acres of land which came to me by descent from my deceased mother . . ." to Charles Martin (her husband) for life with the remainder to the children of her brothers and sister. Eva Martin's will left the residue of her estate to her husband Charles Martin. ¹ One week after the execution of the will, on September 24, 1951, Josephine Fogel as strawperson-grantor conveyed the 60 acres here in dispute to Charles Martin and Eva Martin as husband and wife. Eva Martin died one year later on September 16, 1952.

Pursuant to an agreement made before her death, Eva Martin's brothers, Harold and Leonard Stasell, farmed the 60 acres then held by Eva and Charles Martin. After Eva Martin's death her brothers (and after their retirement another defendant-appellee) continued to farm the 60 acres according to the terms of the same agreement and sent a portion of the net proceeds to Charles Martin. This arrangement continued until, approximately, the commencement of this action in the court below (April 22, 1977).

In 1961 Charles Martin married Giovanna Martin (plaintiff-appellant) to whom he remained married until his death on July 20, 1975. The Citizens National Bank of Whitley County (plaintiff-appellant) was appointed the personal representative of Charles Martin's estate. The plaintiffs-appellants (hereinafter referred to, where appropriate, as Bank) instituted an action in the trial court below to quiet title in the 60 acres in Giovanna Martin and for an accounting of rents and profits. The defendants-appellees in this action are the sister and brothers of Eva Martin, Inez Smith and Harold and Leonard Stasell, and their children (hereinafter referred to collectively as Stasell). The trial court, applying the doctrine of equitable election, quieted title to the 60 acres in Stasell.

II. Doctrine of Election

Because of the interdependence of the issues and the reasoning required in their resolution, we consolidate Bank's first three allegations of error and state them as follows: With respect to the doctrine of election, the trial court erred in its interpretation of Eva Martin's will, its application of the doctrine, and in the burden of proof required of Stasell.

The doctrine of equitable election with respect to wills is an obligation imposed upon a beneficiary under a will to "elect" between two inconsistent rights or claims which have been created by the will or by law. See Johnson v. Hicks (1952), 231 Ind. 353, 108 N.E.2d 129; Ragsdale v. Robinson (1942), 219 Ind. 335, 38 N.E.2d 570; Young v. Biehl (1906), 166 Ind. 357, 77 N.E. 406; Cameron v. Parish (1900), 155 Ind. 329, 57 N.E. 547; McGahan v. National Bank of Logansport (1972), 151 Ind.App. 658, 281 N.E.2d 522; Miller v. Smith (1921), 79 Ind.App. 1, 132 N.E. 607; 97 C.J.S. Wills §§ 1237 et seq. (1956). If a testator by his will assumes to dispose of the property of another person who is also made a beneficiary under the will, such acceptance is a confirmation of the terms of the will and operates to estop such person from objecting to the disposition of his own property. Miller, supra. See Ragsdale, supra; McGahan, supra. As stated by the Court in Moore v. Baker (1892), 4 Ind.App. 115, 118, 30 N.E. 629, 629-30:

"The doctrine of election is of equitable origin, and is universally recognized in this country and England. There can be no election unless the testator confers some benefit upon the devisee, and by the terms of the will assumes to dispose of some right of the latter. Election consists in the exercise of the choice thus offered the devisee, of accepting the devise and surrendering that right of his which the will undertakes to dispose of, or retaining such right and rejecting the devise. He cannot have both. If he elects to take under the will, he is bound to give effect to all of its provisions, and perform the burdens attached to his benefit. If one conveys land to A. as a gift, and by the same instrument, or as a part of the same transaction, gives A.'s horse and carriage to B., A. is required to elect whether he will accept the land and give up his horse and carriage, or retain them and reject the land. If he accepts the benefit, he is estopped to deny the donor's right to dispose of his horse and carriage, and by such acceptance the title to the chattels at once vests in B. . . ."

The doctrine of election rests upon the equitable principle that one who claims property under the terms of a will must acknowledge the equitable rights of others under the same instrument. Miller, supra. In Young, supra, the Court stated:

"If a legatee or devisee voluntarily accept the beneficial provisions of a will, he must be held to have ratified and confirmed every part of it, and thereafter cannot be permitted to assert any inconsistent right or claim, however well founded, which would defeat the full operation of such will. . . ."

166 Ind.App. at 360, 77 N.E. at 407. Pomeroy argued:

"I venture the assertion that the only true basis upon which the doctrine can be rested is . . . the grand principle that he who seeks equity must do equity. This principle has ordinarily been regarded simply as furnishing a guide to the courts in their apportionment of equitable relief among the parties in a great variety of cases; but, . . . it is also the undeniable source of certain distinctively equitable doctrines. There is no doctrine more unmistakably and completely derived from this grand principle than that of election. The whole theory and process of election is a practical application of the maxim, He who seeks equity must do equity. A party asserts his claim to certain property; in order that he may obtain any relief, he must acknowledge and make provision for the equitable rights of other parties derived from the same instrument, and to that end must make his election, so that in either choice those rights shall be preserved. The very election which he is obliged to make consists in the 'doing equity' to others which the principle demands. . . ." (Footnote omitted).

2 Pomeroy's Equity Jurisprudence § 465, p. 339 (5th ed., 1941).

In Indiana, the Courts recognize a prima facie presumption that the testator intended to dispose only of his own property in considering whether a will purports to dispose of property owned by a devisee or legatee thereunder. Ragsdale, supra; Cameron, supra. Where an election has been created, however, the testator's intent must be given effect so as to require an election. Young, supra; McGahan, supra. The basic requirement essential to the creation of an election is an intentional disposition of another's property; McGahan, supra, and it is a well established rule that the will must put the devisee or legatee on notice that he must make the election. Johnson, supra; Ragsdale, supra; McGahan, supra. This "notice" of the testator's intent must clearly appear beyond a reasonable doubt from the will itself. Johnson, supra; Ragsdale, supra; Young, supra; Cameron, supra; McGahan, supra.

Both parties in this appeal go to great length arguing the issue of ownership of the 60 acres at the time of the execution of Eva Martin's will since the legal title to this land rested in the strawperson, Josephine Fogel. In fact, Bank states in its brief:

"The controversy regarding the application of law and fact to the instant case is properly reduced to one issue: Who was the beneficial owner of the real estate on the date that Eva Martin drew her will, September 17, 1951?"

These arguments are without weight, however, because ownership of property at the time of the execution of the will creating the election is not relevant to the application of the doctrine of election.

First, it is a well settled rule that a will, by its very nature, is ambulatory and does not operate until the death of the testator. Farmers & Merchants State Bank v. Feltis (1971), 150 Ind.App. 284, 276 N.E.2d 204; Lawrence, et al. v. Ashba,...