Franz v. Schneider

• Decision Date: 12 September 1957
• Docket Number: Gen. No. 11032
• Parties: , 52 A.F.T.R. 331 Joseph J. FRANZ, individually and as Executor and Trustee under the Last Will and Testament of Matilda A. Cunnea Franz, Deceased, Plaintiff-Appellant, v. Charles John SCHNEIDER et al., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 798

144 N.E.2d 798

14 Ill.App.2d 464, 52 A.F.T.R. 331

Joseph J. FRANZ, individually and as Executor and Trustee under the Last Will and Testament of Matilda A Cunnea Franz, Deceased, Plaintiff-Appellant, v. Charles John SCHNEIDER et al., Defendants-Appellees.

Gen. No. 11032.

Appellate Court of Illinois, Second District, First Division.

Sept. 12, 1957.

Gerald Ryan, William E. Raddatz, Jr., Chicago, for appellant.

John J. Black, August B. Black, Morris, for appellees.

DOVE, Presiding Justice.

The instant complaint was filed by Joseph J. Franz, surviving husband of Matilda A. Cunnea Franz, deceased, in his individual capacity and as executor and trustee under the provisions of the last will of said Matilda A. Cunnea Franz. The complaint sought a construction of the will of said Matilda A. Cunnea Franz and made Charles John Schneider, Jr., Dorothy L. Schneider, his wife, Jeannetta A. Schneider and her husband, Charles B. Schneider, and other remote beneficiaries parties defendant. These remote beneficiaries did not participate in the trial, nor have they joined in this appeal.

The record discloses that Mrs. Franz executed her will on January 11, 1955, and on May 4 of the same year died. Her will was duly admitted to probate, and the first paragraph is as follows, viz.: 'First: I direct my Executor hereinafter named to pay all my just debts and funeral expenses, all estate inheritance and succession taxes out of the principal of my estate as soon after my death as may be convenient.' The second clause provided for certain masses for the decedent, and by the third clause the testator gave certain personal items and household goods to her husband, Joseph J. Franz. By the fourth clause she devised two farms in trust, one half for the benefit of her husband and one half for the benefit of her grandnephew, the defendant Charles John Schneider, for his life, and then to his wife, the defendant Dorothy L. Schneider, for her life, and then to her niece, Jeannetta A. Schneider, and Charles B. Schneider for their respective lives. By the fifth and last clause of her will, the testator devised and bequeathed the residuary estate of approximately $161,000 to her husband, Joseph J. Franz. The record discloses that the estate consisted of real and personal property and was of the value of approximately $265,000. Of this sum, $7,000 was in personal property, and the value of the two farms left in trust was $103,000.

The federal estate tax, inheritance taxes and real estate taxes, claims, costs of administration, and fees aggregate between $29,000 and $30,000, and, after applying all of the personal property available toward the payment of the foregoing items, there remained a deficiency of about $21,500. The question arises as to how this deficiency is to be paid and what beneficiaries of the testator must pay the same.

It is the contention of appellant that the two farms which the testator devised in trust must contribute toward the payment of the deficiency in the proportion of the value of these farms to the value of the entire estate, while counsel for appellees assert that by the first clause of her will, the testator meant that all debts, funeral expenses, federal estate taxes and succession taxes were to be paid out of the residuary estate and not from the property which the testatrix placed in trust under the fourth clause of her will. It is further insisted that when the testator used the word 'principal' in the first clause of her will she meant 'residue.'

The prayer of the complaint was that the will be construed and a decree entered finding plaintiff, as trustee under the will, had the power to mortgage the land which the testatrix placed in trust in order to raise funds to pay the portion of the deficiency which he contended should be borne by the defendants Schneider. The chancellor denied plaintiff this relief and directed that the deficiency be borne solely by the residuary estate.

It is first necessary to dispose of a question of pleading. The defendants filed a sworn answer to the complaint admitting that their share in the trust estate which came to them under the fourth clause of the decedent's will was subject to the inheritance tax due the State of Illinois for the share which they would receive and acknowledged that to the extent of this tax they must contribute to the deficiency or exonerate the executor of the estate. Thereafter, the defendants moved the court for leave to file an amended answer, and, over the objection of counsel for the plaintiff, the court allowed the amended answer to be filed. The amended answer denied that any property which the defendants received under the provisions of the will was subject to the Illinois state inheritance tax.

Counsel for appellant insists that the defendants are conclusively bound by their admission in their original answer that they were liable for their share of the Illinois inheritance tax. There is no merit in this contention. Whether the state inheritance tax on the interest which the defendants took under this will had to be paid by them or whether it was a proper charge on the residue of the estate was a question of law. Defendants cannot be bound by their erroneous legal conclusion. The Practice Act (Ill.Rev.Stat., chap. 110, sec. 35(1)) provides that verified allegations shall not constitute evidence except by way of admission. This has been construed to refer to admissions of fact and not admissions of law. Chambers v. Appel, 392 Ill. 294, 64 N.E.2d 511. The same Act further provides that at any time before final judgment, amendments may be allowed changing the defense or adding new defenses, and changing any pleading either of form or substance which may enable the defendant to make a defense. (Ill.Rev.Stat., chap. 110, sec. 46.) To hold, as appellant contends, that defendants were bound by an erroneous conclusion as to the law on a given proposition, would violate the obvious intent of this section of the Practice Act.

By the first clause, as set forth above, the decedent directed her executor to pay all just debts and funeral expenses, all estate, inheritance and succession taxes out of the principal of her estate. The fifth clause of her will was as follows: 'Fifth: All of the rest, residue and remainder of my property, real, personal and mixed, I give, devise and bequeath unto my beloved husband, Joseph J. Franz, absolutely.' The question to be determined in construing this will is what did the testator mean when she directed her executor to pay all of her just debts and funeral expenses, all estate, inheritance and succession taxes out of the 'principal' of her estate.

Counsel for appellees...