Cornet v. Guedelhoefer

• Citation: 36 N.E.2d 933,219 Ind. 200
• Decision Date: 21 October 1941
• Docket Number: 27630.
• Parties: CORNET et al. v. GUEDELHOEFER et al.
• Court: Indiana Supreme Court

36 N.E.2d 933

219 Ind. 200

CORNET et al. v. GUEDELHOEFER et al.

No. 27630.

Supreme Court of Indiana

October 21, 1941

Appeal from Probate Court, Marion County; Smiley Chambers, judge.

Samuel J. Mantel, Paul G. Davis, Frank B. Ross, and Robert S. Smith, all of Indianapolis, for appellants.

Wymond Beckett and George & Ryan, all of Indianapolis, for appellees.

RICHMAN Judge.

Appellants filed exceptions to the final report of appellee executor. There was a hearing at which evidence including oral testimony was submitted. The court overruled the exceptions and entered judgment approving the report and discharging the executor. Motion for new trial was overruled. All questions in this appeal arise on the assignment of error that the finding of the court is not sustained by sufficient evidence and is contrary to law.

The record discloses that Pauline A. Guedelhoefer died March 1 1935, and on the same day her will was probated and the executor qualified. Inventory disclosed personal assets appraised at $24,599.66. Decedent also owned real estate in Indianapolis the value of which does not clearly appear but exceeded $50,000 and in one of the briefs is stated as $100,000. It appears from one of the briefs that in the absence of a will decedent's estate would have descended one-fourth to her brother, Bernard J. Guedelhoefer one-fourth to her brother, August F. Guedelhoefer, one-fourth in equal shares to her niece Cecelia G. Cornelius, and nephews Harry J. Guedelhoefer and Otto C. Guedelhoefer, Jr. and the remaining one-fourth in equal shares to appellants herein, her niece Madalyn Cornet and her nephew John Cornet, Jr.

The two brothers and Cecelia Cornelius received nothing under the will. The chief beneficiaries named therein were the two appellants and John and Bertha Guedelhoefer, the latter two being the children of August F. Guedelhoefer. These four were the devisees of all the real estate and also the residuary legatees, sharing equally. John Guedelhoefer also received a $5,000 bequest and was named as executor. The other three were bequeathed in equal parts decedent's stock in Railroadmen's Building and Saving Association valued at $4,171.10. There were bequests of $2,000 to Otto and $500 to his brother Harry. Six other nieces and nephews received $500 each. The total pecuniary bequests in specific amounts were $10,800 which included $100 each to three charitable institutions. It was also directed that the executor pay a mortgage on the property of two cousins. The amount, not named in the will, is shown to have been $2,415.70. The only other provision in the nature of a bequest was a direction that the executor pay for certain masses. Payment of $500 to Bishop Ritter evidently covers this item.

Shortly after his qualification the executor took charge of decedent's real estate collected the rents and profits therefrom and commingled them with the proceeds of the personal property. He paid from this one fund decedent's debts, funeral expenses, all administration expense including attorney's and executor's fees, inheritance, estate, property and gross income taxes, expense of repairs on buildings and finally all pecuniary legacies with interest after the first year of administration. March 6, 1937, he filed his final report showing in detail his receipts and expenditures. There was a deficit of $14,466.35 which Bertha Guedelhoefer provided, evidently pursuant to § 6-1150, Burns' 1933, § 3188, Baldwin's 1934, giving bond as provided therein, in order to avoid the sale of the real estate to pay such deficit. The court's order on final settlement declared that for three-fourths of this sum she should have a lien upon the three-fourths interest therein of John Guedelhoefer, John Cornet, Jr., and Madalyn Cornet.

The executor sold the Building and Loan Association stock specifically bequeathed to Bertha Guedelhoefer and the two Cornets, the proceeds going into the general fund.

Cecelia G. Cornelius, belatedly, on March 2, 1935, filed objections to probate of the will and in December thereafter filed suit to contest the will. This action was compromised by the surrender to her of a note executed by her deceased father that had been inventoried as an asset of decedent's estate in the sum of $8,312.10.

So much for the general background of facts. Others will be referred to in connection with the several questions presented by the points and authorities.

Appellants challenge the judgment approving the report on five principal grounds: first, that the executor wrongfully sold the Railroadmen's Building and Savings Association stock which was specifically bequeathed to them and Bertha Guedelhoefer; second, that he wrongfully took charge of the real estate and collected rents and profits therefrom which belonged to the specific devisees, appellants and Bertha and John Guedelhoefer; third, that he paid in full the general legacies which should have lapsed in whole or in part because of insufficiency of personal assets; fourth, that the inheritance taxes should have been collected from the beneficiaries and not paid out of the corpus of the estate; and, fifth, these payments being erroneous the court should not have charged the real estate with the lien of the claim of Bertha Guedelhoefer for moneys advanced to pay the deficiency between the executor's total receipts (excluding said sum so advanced) and his disbursements.

The law does not require that the estate of a decedent shall be administered through court proceedings. The heirs, or the legatees and devisees after a will has been probated, may by agreement dispense with formalities prescribed by statute which, in the absence of agreement, are binding upon an administrator or executor. In order to confirm the rights of the heirs or of beneficiaries of a will, it is essential that those obligations of the decedent or of his estate which by law are made superior claims against the assets, shall be paid or otherwise settled. In the order of these claims fixed by § 6-1301, Burns' 1933, § 3195, Baldwin's 1934, so far as applicable herein, the executor was required to pay:

'First. The expenses of administration.' Unquestioned items in the final report totalled $11,289.82. This includes a fee of $5,000 for the executor and an equal amount for his attorneys. In connection with these items there was evidence that besides the ordinary routine of administration, disregarding any service rendered in managing the real estate, the executor settled the suit contesting the will, compromised for $2,415.70 the obligation created by Item III of the will to pay the mortgage on property of decedent's cousins which totalled $4,194.18, compromised for $158.97 litigation begun by decedent in her lifetime by which title was confirmed to real estate which the executor says 'was reasonably worth at least Ten Thousand ($10,000) dollars,' settled the claim of John G. Cornet, Sr., against decedent in the sum of $7,500 by offsetting a $2,500 claim of decedent against him. Whether these services were taken into consideration by the court in fixing the fees of executor and his attorneys does not appear but it is significant that the fees were unquestioned by appellants in the exceptions and therefore stand unchallenged as valid first obligations against the assets of the estate.

'Second. The expenses of the funeral of the deceased.' $774.86.

'Third. The expenses of * * * last sickness.' $70.00.

'Fourth. Taxes accrued upon the real and personal estate of the deceased at his death, and taxes assessed upon the personal estate during the course of the administration.' It has been held that taxes accrue on the day the lien thereof attaches. Barnum v. Rallihan, 1916, 63 Ind.App. 349, 112 N.E. 561. Taxes for the year 1934, which became a lien on March 1, 1934, were $1,674.16, and for the year 1935, which became a lien on the day decedent died, were $1,803.94. Personal property tax was $1.89. The federal estate tax was $923.23. We shall refer to the inheritance taxes hereafter.

'Seventh. General debts.' Decedent owed August F. Guedelhoefer on her notes and check $3,875.89. We are unable to say from the report whether any of the items totalling $1,872.89 listed as 'general debts' accrued prior to decedent's death, so we treat them as expenditures of the executor in managing the real estate after he took over.

'Eighth. Legacies.'

We summarize the items which under the seven clauses of the statute must be paid before legacies:

First ................................... $11,289.82

Second .................................. 774.86

Third ................................... 70.00

Fourth [FN1] ... $1,674.16, 1.89, 923.23, 2,599.28

Seventh ................................. 3,875.89

Total ............................... $18,609.85

The inventory shows total personal property of the appraised value of $24,599.66 of which $8,321.10 was used as a consideration to Cecelia Cornelius in settlement of the will contest, leaving $16,278.56 which included the building and savings association stock. For these assets the report shows that the executor realized $16,632.98, which lacked approximately $2,000 of being enough to pay the obligations superior to legacies. This affords sufficient reason for his selling the stock and not surrendering it to the specific legatees. But there was also evidence from which the probate court may properly have concluded that the executor's action in this respect was with the express approval of appellants. They testified otherwise but the fact was for the determination of the trial court and his conclusion on a disputed question of fact will not be disturbed on appeal.

Where there is sufficient personal property to satisfy the charges specified in the first seven...