Edds v. Mitchell

• Decision Date: 17 January 1945
• Docket Number: No. A-269.,A-269.
• Citation: 184 S.W.2d 823
• Parties: EDDS v. MITCHELL et al.
• Court: Texas Supreme Court

184 S.W.2d 823

EDDS v.MITCHELL et al.

No. A-269.

Supreme Court of Texas.

January 17, 1945.

Error to Court of Civil Appeals of Fourth Supreme Judicial District.

Action by W. H. Mitchell, administrator, against G. H. Edds and others for construction of a will. To review a judgment of the Court of Civil Appeals, 181 S. W.2d 323, affirming a judgment of the district court in part and reversing and rendering in part, both parties bring error.

Judgment of Court of Civil Appeals affirmed.

O. F. Burney, of Floresville, for plaintiff in error.

De Witt Murray, of Floresville, and Mann & Mann, of Laredo, for defendant in error.

W. R. Smith, Jr., U. S. Atty., and J. M. Burnett, Asst. U. S. Atty., both of San Antonio, amici curiae.

SMEDLEY, Commissioner.

The decision of the principal question in this case depends upon the construction of the will of O. D. Rhode, who died in the year 1915.The community estate of Rhode and his wife, Julia E. Rhode, consisted of a homestead and certain other real property and two promissory notes.His will made disposition of his undivided one-half interest in the community property, the relevant parts of the will being as follows:

"Item 3.I will, devise and bequeath to my wife, Julia E. Rhode, all the property, real, personal and mixed, of whatsoever kind and character and wheresoever located or situated, of which I may die seized and possessed, for and during her natural life, with remainder as hereinafter provided.

"Item 4.I hereby appoint my wife, Julia E. Rhode, as independent executrix of this my last will and testament with full power and authority in her to bargain, sell, convey, mortgage, or otherwise dispose of or encumber, all or any part of my property, real, personal and mixed, for any reason, or purpose she may desire in the same manner and as fully and completely as I could do if living, and to use the proceeds of such sale, mortgage, or other encumbrance as she may see fit and deem proper, and if she uses or disposes of all or any part of my property, or the proceeds thereof, she shall in no event be required to account to any one therefor.

* * * * *

"Item 6.If, after the death of my wife, Julia E. Rhode, and the death of said Minerva Hightower, any portion of my estate remains, then the same shall descend and pass to my heirs according to the laws of descent and distribution of the State of Texas, and may after the death of both my said wife, and said Minerva Hightower and not until then be partitioned among those so entitled to receive the same under said laws of descent and distribution."

Minerva Hightower, referred to in Item Six, was a servant, for whom the substitute executor, after the death of the testator's wife, was directed by Item Five of the will to build a small dwelling on land belonging to the estate and to whom he was directed to make a monthly payment of $25 "out of any property or money of my estate remaining after the death of my wife."

The two notes belonging to the estate were collected by the surviving wife, Julia E. Rhode, and the proceeds were consumed by her during her lifetime.Mrs. Rhode did not dispose of the homestead except a small part of the same that was sold to satisfy the bequest made to Minerva Hightower.When Mrs. Rhode died in the year 1941, there were in her possession the homestead and certain personal property consisting of cash, promissory notes, certificates of stock, government bonds, and household furniture.All of this personal property represented proceeds derived from the sale by Mrs. Rhode of the real property (except the homestead) belonging to the community estate.

Mrs. Rhode left a will by which she devised all of her property to the petitioner herein, G. H. Edds, who was her nephew.There is no controversy as to the homestead, the subject matter of the suit being an undivided one-half interest in the personal property in Mrs. Rhode's possession at the time of her death.The issue in the case is thus stated in the stipulation of facts made by the parties:

"The title to the remaining undivided 1/2 interest in such personal property is either owned (subject to the rights of Minerva Hightower under the will of Julia E. Rhode or O. D. Rhode, as the case may be) by George Henry Edds or by the heirs of O. D. Rhode, deceased, within the meaning of Item 6 of the last will of O. D. Rhode, depending on whether, under the terms and provisions of the last will of O. D. Rhode, deceased, when properly construed, Julia E. Rhode became the sole owner of all the proceeds derived from the sale of such community real estate so that the same passed to George Henry Edds under Julia E. Rhode's last will, or whether 1/2 of such proceeds is now owned by the heirs of O. D. Rhode, deceased, under Item 6 of the will of O. D. Rhode; the question set out in this sentence being the controlling issue in this suit."

The trial court adopted as its findings of fact the stipulation made by the parties, from which the facts stated herein are taken, and rendered judgment for petitioner, G. H. Edds, concluding that the sale, made by Mrs. Rhode during her lifetime, of the real property belonging to the estate extinguished all right, title and interest that the remaindermen, the heirs of O. D. Rhode, had in the said property, and that they were not entitled to follow the proceeds from the sale and had no right, title or interest therein.

The Court of Civil Appeals reversed the judgment of the trial court and rendered judgment for respondent Mitchell, holding that the proceeds of the sale of the real estate, that is one-half of them, constituted a part of the estate of O. D. Rhode, and passed, subject to administration, to his heirs as remaindermen under his will.181 S.W.2d 323.

The intention of the testator, clearly expressed by Item Three of the will, that his wife should take only a life estate, is a fact of importance in determining the question presented for decision, which, as petitioner in his application for writ of error states, is whether the exercise by the life tenant of the power of sale given by Item Four of the will operated to divest the remaindermen of title to the proceeds of the sale.Important also is the rule established by the decisions in this state and in the great majority of the other states that the added full power of disposition given to the life tenant, like that given in Item Four of the will, does not raise the life estate to a fee.Weir v. Smith, 62 Tex. 1, 9;Caples v. Ward, 107 Tex. 341, 345, 346, 179 S.W. 856;Notes36 A.L.R. pp. 1177, 1180-1218;Note76 A.L.R. pp. 1153, 1154-1166;33 Am.Jur.pp. 484-485, Sec. 21;3 Page on Wills, 3rd Ed., pp. 375-378, Sec. 1117.The power of disposition is not an estate.It is merely authority derived from the will to dispose of the fee.Gildersleeve v. Lee, 100 Or. 578, 198 P. 246, 36 A.L.R. 1166, 1169.It is not inconsistent with or repugnant to the estate for life.33 Am.Jur.pp. 484, 485, Sec. 21.It is not repugnant to the remainder, but when exercised, it defeats the remainder in the property sold or conveyed.Caples v. Ward, 107 Tex. 341, 346, 179 S. W. 856.As said in Grace v. Perry, 197 Mo. 550, 562, 95 S.W. 875, 878, 7 Ann.Cas. 948, 951:

"It must be remembered that the devise is express for life with power to dispose of the fee, and it is a well settled principle of law that a power of disposition added to the life estate is not repugnant to the life estate or to the remainder over.If not exercised, it leaves both estates unaffected by it.If exercised, it defeats the remainder in the property disposed of; the remainder being subject to such defeat, as in this case."

A power that is not an estate but is merely authority to dispose of the fee, that is repugnant neither to the life estate nor to the remainder, and that does not in the addition of it to the life estate raise that estate to a fee, should not, in the mere exercising of it, enlarge the life tenant's estate.But that effect would be given to it, if it were held that the exercise of the power by the life tenant operated to divest the remaindermen of all title or right to the proceeds of the sale.

For the foregoing reasons and others to be stated, and after examining many authorities, we reach the conclusion that when a life estate is expressly created by will and unlimited power of disposition given to the life tenant, with remainder over in whatever part of the estate remains undisposed of at the time of the death of the life tenant, the proceeds of sales made by the life tenant, undisposed of at the time of his death, as well as the unsold part of the very property devised, pass to the remainderman, provided of course, the language of the will does not disclose an intention that the proceeds of sales shall not so pass.

By this construction of a will containing such provisions, full effect is given to the testator's intention.The testator intends that the first taker shall have only a life estate in the property constituting his, the testator's estate, but that the life tenant shall have unlimited power to dispose of the fee; and he intends that so much of the property of his, the testator's, estate as has not been disposed of at the time of the life tenant's death shall pass to the person named in the will as remainderman.Practically considered, the proceeds of sales made by the life tenant are a part of what passed under the will, taking the place in changed form of the property sold, and if they remain in the life tenant's possession until the time of his death they should pass to the remainderman as the property itself would have passed had it not been sold.If it were held that the exercise of the power of sale by the life tenant operated to divest the remainderman of all title or right to the proceeds of the sale, then the life tenant, merely by selling the property in which he has a life estate, thus changing the form of what came from the testator, could in effect enlarge his...