Estate of Niehenke, Matter of

• Decision Date: 31 May 1990
• Docket Number: Nos. 9504-5-II,9767-6-III,s. 9504-5-II
• Citation: 791 P.2d 562,58 Wn.App. 149
• Parties: In the Matter of the ESTATE OF Raymond J. NIEHENKE, Deceased. Catherine A. MIDTHUN, Mark J. Niehenke, Robert E. Niehenke, Jerome F. Niehenke, Keith M. Niehenke, and Patrick J. Niehenke, Respondents, v. Elmer GUSKE and Alvin Guske; and Estate of Raymond J. Niehenke, Appellants.
• Court: Washington Court of Appeals

Page 149

58 Wn.App. 149

791 P.2d 562

In the Matter of the ESTATE OF Raymond J. NIEHENKE, Deceased.

Catherine A. MIDTHUN, Mark J. Niehenke, Robert E. Niehenke,

Jerome F. Niehenke, Keith M. Niehenke, and Patrick

J. Niehenke, Respondents, v. Elmer GUSKE and Alvin Guske; and Estate of Raymond J.

Niehenke, Appellants.

Nos. 9504-5-III, 9767-6-III.

Court of Appeals of Washington,

Division 3 Panel Four.

May 31, 1990.

Kelly N. Brown, Irwin, Myklebust Law Firm, Pullman, Wesley Nuxoll, Nuxoll, McBride & Libey, Colfax, for appellants.

Martin G. Weber, Lukins, Annis Law Firm, Spokane, for respondents.

SHIELDS, Judge.

Elmer and Alvin Guske, as beneficiaries of the estate of their uncle, Raymond Niehenke, appeal a superior court order authorizing the children of Francis Niehenke, deceased, to succeed to Francis' option to purchase certain property of the Raymond Niehenke estate under the anti-lapse statute, RCW 11.12.110. We affirm.

Raymond J. Niehenke, a bachelor, died on February 12, 1987. His nephew Francis Niehenke, father of the respondents herein, predeceased him by 7 years.

In Article IV of his last will and testament dated November 17, 1969, Raymond Niehenke gave, devised and bequeathed three options to certain nephews to purchase estate farm property. The sale price to be paid by each optionee for each farm totaled $102,000: "Home Place", $52,000; Johnson place, $27,000; and, Flamoe place, $23,000. The optionee for the "Home Place" was Francis Niehenke; for the Johnson place, Edward Niehenke; ¹ and for the Flamoe place, Alvin Guske. There is no dispute as to the exercise of the options for the Johnson and Flamoe property.

With respect to the "Home Place", the will provided that "[i]n the event my nephew, FRANCIS NIEHENKE, does not exercise said option as hereinafter provided, my nephews, ALVIN GUSKE and ELMER GUSKE, shall have the option to jointly purchase said farmland upon the same terms and conditions." If Alvin and Elmer Guske did not elect to exercise the option, Article IV further stated that the residuary beneficiaries, 11 nieces and nephews named in Article V, would have the right to purchase the property with the sale going to the highest bidder. The sale proceeds of the farms were to be proportionately paid under Article IV to specific charities designated in Article III. When the charitable gifts, totalling $62,500, were satisfied, the balance of the sale proceeds was to be paid equally to the residuary legatees in Article V of the will, "or their respective issue by right of representation."

Francis Niehenke's six children informed the attorney for the estate of their intent to exercise Francis' option under Article IV of the will, as did Alvin and Elmer Guske. Both parties also claimed they were entitled to crop proceeds grown upon the property in 1987 and 1988. This action followed.

Following a hearing on May 6, 1988, the court concluded that since death prevented Francis J. Niehenke from exercising his option, his children succeeded to it by inheritance and operation of the anti-lapse statute, RCW 11.12.110. ² In a subsequent order, the court concluded that Francis Niehenke's children were entitled to the landlord's share of all crops and receipts from the sale of crops, together with the receipts from any government programs and payments in connection with the raising of crops for the years 1987 and 1988. The court held the estate was entitled to be reimbursed for its respective expenditures for real property taxes, fertilizer and fire insurance. This appeal followed.

The issues presented are whether the court erred in concluding Francis Niehenke's children have the right (1) to exercise the option to purchase the "Home Place", (2) to crop proceeds for the years 1987 and 1988, and (3) to an award of fees and costs.

The rule in construing a will is to give effect to the testator's intent, after a careful review of the language of the will and after considering it in its entirety. In re Estate of Bergau, 103 Wash.2d 431, 435, 693 P.2d 703 (1985). A presumption arises in favor of the operation of the anti-lapse statute. In re Estate of Button, 79 Wash.2d 849, 854, 490 P.2d 731, 47 A.L.R.3d 352 (1971) (construing an inter vivos trust). The burden of showing that the statute should not operate is upon the party contending it should not; all doubts are to be resolved in favor of the normal operation of the statute, which is to be liberally construed. In re Estate of Allmond, 10 Wash.App. 869, 871-72, 520 P.2d 1388, review denied, 84 Wash.2d 1004 (1974) quotes 57 Am.Jur. Wills § 1436 (1948) in this regard:

The general rule is that when a devise would be affected by an anti-lapse statute, an intent on the part of the testator to preclude the operation of the statute must clearly be shown.

Recognition of the effectiveness of a contrary testatorial intention to exclude the operation of a statute designed to prevent lapses is found in many decisions, but the position is frequently taken that such an intention must be clearly proved and all doubts resolved in favor of the operation of the statute, and that the presumption is in favor of the normal operation of the statute and against any construction of the will having the effect of defeating the enactment.

(Footnotes omitted.) 57 Am.Jur. Wills § 1436 (1948); Nicholson v. Fritz, 252 Iowa 892, 109 N.W.2d 226 (1961).

The initial question is the characterization of the testamentary option. Legal scholars have recognized four types of testamentary options: (1) a personal right to purchase (2) a gift by implication; (3) an option which grants an election; and (4) a bequest on condition.

A personal right to purchase exists if the intent of the testator, as evidenced by the four corners of the will, is to restrict the right to exercise the option to the named legatee only. This type of option remains unaffected by an anti-lapse statute. See In re Estate of Nowell, 607 S.W.2d 792, 18 A.L.R.4th 572 (Mo.Ct.App.1980); ³ see also Valley Bank & Trust Co. v. Williams, 46 Ariz. 20, 46 P.2d 645 (1935); Williams v. Cowan, 226 Ga. 319, 174 S.E.2d 789 (1970); Weitzmann v. Weitzmann, 87 Ind.App. 236, 161 N.E. 385 (1928); In re Estate of Lemke, 216 N.W.2d 186 (Iowa 1974); In re Estate of Sifferman, 603 S.W.2d 30 (Mo.Ct.App.1980); Austin Presbyterian Theological Seminary v. Moorman, 391 S.W.2d 717 (Tex.), cert. denied, 382 U.S. 957, 86 S.Ct. 434, 15 L.Ed.2d 361 (1965); Annot., Testamentary Option To Purchase Estate Property As Surviving Optionee's Death, 18 A.L.R.4th 578 (1982).

The second type of option, a gift by implication to the optionee and his heirs, is found if the testator's intent, as evidenced by the four corners of his will, is to allow the option to be exercised, not only by the named optionee, but also by his heirs. This option is also unaffected by the anti- lapse statute, because the will accomplishes by its own language what the statute was intended to do. See Stern v. Stern, 410 Ill. 377, 102 N.E.2d 104, 28 A.L.R.2d 1158 (1951); ⁴ Miller v. Trigg Cy. Farmers Bank, 312 Ky. 321, 227 S.W.2d 429 (1950).

The third type of option is one which grants an election: a gift, coupled with a privilege to take it in another form. The anti-lapse statute will affect this type of option unless there is evidence in the will to the contrary. See Mason v. Mason, 194 Iowa 504, 188 N.W. 685 (1922). ⁵ Compare In re Ludwick's Estate, 269 Pa. 365, 112 A. 543 (1921) which did not involve an anti-lapse statute.

The fourth type of option is the bequest on condition. The anti-lapse statute will affect this type unless there is evidence in the will to the contrary. The legal effect of this type of option is that the optionee and his heirs take under the will (if the condition is met) and not as vendees. The cases construing this type of option reflect an intent by the testator to garner liquidity in order to make special bequests or to gather additional funds for the residuary legatees, thus, to some extent, equalizing the shares of all of the legatees. See 6 W. Bowe & D. Parker, Page on Wills 51.15 (1962); In re Quigley's Will, 37 Misc.2d 320, 236 N.Y.S.2d 180 (1963). ⁶

In Tuecke v. Tuecke, 257 Iowa 199, 131 N.W.2d 794, 795 (1964), by will, the testator devised and bequeathed a one-third interest in his estate to each of three children. He further provided that his son have the option to purchase the two-thirds interest in the farm not already devised to him for $10,000, " 'and such right or option is herewith devised and bequeathed to him.' " Tuecke, 131 N.W.2d at 795. The son died a few hours before his father. The question was whether the anti-lapse statute would control; the problem was that the farmland was worth considerably more than the option price. The court held the option to be a "valuable property right which was inherited" within the meaning of the anti-lapse statute. Tuecke, 131 N.W.2d at 797. The court further noted 131 N.W.2d at page 797:

It is apparent that he [the testator] wanted Alfred [the son] to have the right to purchase the farmland at a fixed price. But it is thought that he would not have wanted Alfred's heirs to have that same right. It is sufficient answer to point out that if Alfred had survived and had exercised the option, it would, in all probability, have eventually inured to the benefit of his heirs; and the testator must have been aware of this when he made his will. Application of the antilapse statute here gives Alfred's heirs the same rights directly which they would in the course of time have received indirectly if he had lived.

The testator is presumed to have known of the statute.

The court then concluded the will did not manifest a sufficient contrary intent to defeat the application of the anti-lapse statute.

Here, as in Quigley and Tuecke, the testator's will used words of devise and bequest, making a gift of property, upon a condition. Three nephews were given an option to buy a farm at a price determined by...