Comer v. Light
| Decision Date | 11 January 1911 |
| Docket Number | 21,808 |
| Citation | 93 N.E. 660,175 Ind. 367 |
| Parties | Comer v. Light, Administrator, et al |
| Court | Indiana Supreme Court |
Rehearing Denied March 15, 1911, Reported at: 175 Ind. 367 at 378.
From Probate Court of Marion County (8,534); Frank B. Ross, Judge.
Final report by Robert C. Light, as administrator of the estate of Jacob Cruse, deceased, to which Alfred W. Comer and others file exceptions. From the judgment rendered, said Comer appeals. Transferred from Appellate Court under § 1394 Burns 1908, subdv. 2, Acts 1901 p. 565, § 10.
Reversed.
Walter L. Carey, for appellant, and for appellee Sarah J. Cruse.
William Bosson, for appellee Robert C. Light personally, and as administrator of the estate of Jacob Cruse, deceased.
Emsley W. Johnson and Orval E. Mehring, for appellee George W McWhorter.
This is an appeal from a judgment overruling exceptions to the final report of an administrator, and approving such report. The question for determination arises upon the construction of a will, and the order of distribution under it, as affecting the insolvent estate of a deceased beneficiary thereunder. Henry Cruse died December 15, 1903, leaving a will, the material portion of which is as follows:
"I will and bequeath to my beloved wife, Eliza J. Cruse, all money and personal property of every description of which I may be possessed at my death, together with all my real estate situate in Hamilton county, Indiana [describing it specifically], to have and to hold and have the full use and control of the same so long as she shall live; and at the death of my said wife all of said personal property remaining, and all of said real estate shall be sold by my executors, and $ 500 from the proceeds thereof paid to my grandson, Charles L. Cloe, the remainder to be divided equally between my sons and daughters [naming them, of whom Jacob Cruse was one]."
Appellant on October 14, 1905, recovered a judgment against Jacob Cruse, son of Henry Cruse. On December 4, 1905, appellee McWhorter recovered a judgment against Jacob Cruse. Both judgments were in renewal of former judgments. A transcript of each judgment was filed in the office of the clerk of the county in which the real estate of which Henry Cruse died seized was situate. The appellant's judgment became a lien October 16, 1905, and the other judgment, in December, 1905. No execution was ever issued upon either judgment, and no further steps were taken respecting them, until after the death of Jacob Cruse, when, in the form of judgments, they were filed and allowed as claims against his estate. Jacob Cruse died in Marion county, on November 15, 1907, intestate as to all his property, and appellee Light was appointed administrator of his estate June 8, 1908.
Eliza J. Cruse, widow of Henry Cruse, and mother of Jacob Cruse, died in April, 1908. Jacob Cruse at his death left a widow, appellee herein, and three children. Upon the death of Eliza J. Cruse, the executors of the will of Henry Cruse, under the provisions of the will, sold the real estate of which he died seized, and from the proceeds of the sale, $ 1,155.33 came into the hands of appellee Light, as administrator of the estate of Jacob Cruse, who settled the estate as insolvent. He paid the widow $ 500 for her statutory allowance and also paid the expenses of administration, leaving a balance of $ 555.33 for distribution.
Appellee Sarah J. Cruse, widow of Jacob Cruse, claimed that she was entitled to an amount equal to one-third of the proceeds of the sale of the real estate free from claims of creditors, and appellants Comer and McWhorter claimed that they were entitled to satisfaction of their judgment claims in full, as against the costs and expenses of administration, and all other claims except the widow's $ 500. These respective contentions were denied, and the administrator was directed to prorate the fund among the creditors, including Comer and McWhorter, and excluding the widow of Jacob Cruse, upon the theory that the fund was to be treated as personal property from the date of the death of Henry Cruse, and that the judgments were general claims.
In the case of Doe v. Lanius (1852), 3 Ind. 441, it was held that as against the executors under a will directing sale of real estate within one year after the testator's death, and division of the proceeds among named persons, the right of possession and the legal title, until the sale, were in the beneficiaries.
In the case of Rumsey v. Durham (1854), 5 Ind. 71, it was held that under a will directing a sale of real estate after the termination of the life estate, or the marriage of the widow, such direction of a sale operated as a conversion into money, and that such devise should be treated as if the donation had been in money. The real question in that case was whether there was such a vested interest in a parent who had died after the death of the testator, and before the death of the life tenant, as to let in the child of such parent to inherit; and the equitable rule of conversion, and vesting, at the date of the death of the testator, was invoked in justice to such grandchild, upon equitable considerations. This case was followed in the case of Wilson v. Rudd (1862), 19 Ind. 101, holding that one of the named beneficiaries under the will took a vested interest in the real estate, which was subject to levy and sale; but it will be seen that in that case there was a specific devise of a share in the real estate under the fourth clause of the will, and the same is true of Heilman v. Heilman (1891), 129 Ind. 59, 28 N.E. 310. The case of Wilson v. Rudd, supra, goes further than the case of Doe v. Lanius, supra, warrants. That case did not involve the question of title to the realty, except upon the ground that such a vested interest was superior, on the question of possession, to the right of the executor.
In the case of Simonds v. Harris (1884), 92 Ind. 505, it was held, under a will directing a sale after the termination of a life estate and division of the proceeds, that a share in the land was subject to attachment, which followed the proceeds after sale, following the case of Wilson v. Rudd, supra, but going further than the facts in that case justify.
The case of Ballenger v. Drook (1895), 101 Ind. 172, was one where the interest of a distributee of the proceeds after sale was held to constitute such an interest as was subject to the lien of a judgment, and that the lien took preference in the distribution of the proceeds over the distributee and his grantee. This case followed the cases of Simonds v. Harris, supra, and Brumfield v. Drook (1885), 101 Ind. 190, involving the same will in which it was held that the title to the land before sale was not in abeyance, but in the testator's children, the beneficiaries under the will. This is likewise held in the cases of Indiana R. Co. v. Morgan (1904), 162 Ind. 331, 70 N.E. 368, and Myers v. Carney (1908), 171 Ind. 379, 86 N.E. 400.
In the case of Koons v. Mellett (1890), 121 Ind. 585, 7 L. R. A. 231, 23 N.E. 95, it was held that a judgment was a lien upon lands which had been directed to be sold, and followed the proceeds.
A fair test of the question is whether the executor, during the interim before sale, would be compelled to account for the devised realty; or, if liable to account, whether he would he liable to account for the rents and profits of the realty, or account for it as money. He certainly would not be liable to account as for money, because the amount for which to account could not be known, and he should not account for rents and profits of real estate, because he has no right of possession.
The fiction of law, that under a simple direction to sell and divide the proceeds, conversion into money will be held in equity to have taken place at the date of the death of the testator, and that equity will treat that as done which is directed to be done, and it will be treated as that species of property into which it is directed to be converted, is grounded upon equitable considerations, and is interposed for the purpose of carrying out the intention of testators so far as that can be done within the rules of law, and generally for the purposes of equality, and doing equity between heirs or next of kin, where no other rights intervene, but it has never been understood that a testator can change realty to personalty, or vice versa, by the mere declaration that it shall be one or the other, and an examination of the cases will disclose that the fiction of constructive conversion is grounded upon the proposition that, in the absence of intervening interests or rights, the testator's intention, as it affects the beneficiary, shall control; but when the question as to possession before sale is one between the beneficiary and the trustee of a mere power of sale, the right of the beneficiary is superior; or if the rights of third persons attach or intervene before sale, the fiction is destroyed. For example, before sale, it can scarcely be questioned, in this State at least, that the right of possession is in the beneficiary; that is, that the interest vests in him; if this were not so, the property, and necessarily the right to possession and control thereof, would go to the personal representatives, and the executor would be required to account for it as personalty, which can hardly be claimed. Matter of Hunter (1877), 3 Redf. Surr. 175.
The question has frequently arisen under the Crown's claim to legacy duty under the stamp act, providing that "money to arise from the sale, mortgage or other disposition of any real or heritable estate, directed to be sold, mortgaged or otherwise disposed of," shall be subject to duty. Under this act, it is held that when real estate is...
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