Graham's Estate, In re, 47636

• Decision Date: 05 April 1975
• Docket Number: No. 47636,47636
• Citation: 216 Kan. 770,533 P.2d 1318
• Parties: In the Matter of the ESTATE of William E. GRAHAM, Deceased. James E. GRAHAM, Appellee, v. The HOME STATE BANK, as Administrator de bonis non, Appellant.
• Court: Kansas Supreme Court

Page 1318

533 P.2d 1318

216 Kan. 770

In the Matter of the ESTATE of William E. GRAHAM, Deceased.

James E. GRAHAM, Appellee, v. The HOME STATE BANK, as Administrator de bonis non, Appellant.

No. 47636.

Supreme Court of Kansas.

April 5, 1975.

Syllabus by the Court

1. Ademption is the term used to describe the act by which a specific legacy has become inoperative by the withdrawal or disappearance of the subject matter from the testator's estate in his lifetime.

2. The question of whether or not a disposition by a testator of the subject matter of a specific bequest has worked an ademption of the bequest must be determined in the light of the facts and circumstances existing at the time of testator's death.

3. Where following execution of his will a testator becomes incompetent and his conservator or attorney-in-fact acting under a power of attorney sells the property which is the subject matter of a specific devise and a portion of the proceeds from the sale of the property remains in the hands of the conservator or attorney-in-fact at the time of the testator's death, an ademption ordinarily does not take place. The unexpended proceeds of the sale are impressed with a trust in the hands of the executor and on distribution of the estate should be paid to the devisee in accordance with the specific devise contained in the will.

Michael S. Holland, Holland & Holland, Russell, argued the cause, and Herbert N. Holland, Russell, was with him on the brief for appellant.

Mark Arthur, Jr., Thompson & Arthur, Russell, argued the cause, and Marvin E. Thompson, was with him on the brief for appellee.

PRAGER, Justice.

This case involves a claimed ademption or revocation of a specific devise of real estate where, during the lifetime of an incompetent testator, his attorney-in-fact acting on his behalf under a power of attorney, sold the real estate to provide funds to support the incompetent testator. The facts in the case are not in dispute and essentially are as follows:

(1) William E. Graham was the father of Ralph E. Graham, Vern K. Graham, Glen D. Graham, and Samuel A. Graham.

(2) On the first day of February 1962, William E. Graham executed his Will and Last Testament which was admitted to probate in the Russell County Probate Court on February 23, 1973. The testator provided in pertinent part in the third paragraph on his will as follows:

'Third: After my just debts and funeral expenses have been paid, I give, devise and bequeath all the rest, residue and remainder of my property, whether real, personal or mixed as follows:

'(a) The West Half (W/2) of the East Half (E/2) of Section Twenty-One (21), Township Fourteen (14), Range Thirteen (13), Russell County, Kansas, to Ralph Graham, also known as Ralph E. Graham, to be his absolute property, . . .

'(b) To Vern K. Graham, my home located at 316 Kansas, Russell, Kansas, which is primarily located in Lot 14, Block 113 and the furniture and furnishings if not needed to pay debts and bequests of the estate, . . .'

In the fourth paragraph of the will the testator bequeathed his residuary estate to his three sons, Ralph E. Graham, Vern K. Graham, and Glen D. Graham, share and share alike.

In the fourth paragraph of the will the testator provided in substance that if any of his sons should predecease him, the proportionate share which would have gone to the son had he been alive at the time of the testator's death, should go the heirs of the deceased son's body.

(3) On May 8, 1961, William E. Graham by a power of attorney appointed his son, Ralph E. Graham, his attorney-in-fact. Ralph E. Graham served in that capacity from the date of his appointment on May 8, 1961, until August 12, 1965, the date of Ralph E. Graham's death.

(4) Subsequent to Ralph E. Graham's death, William E. Graham appointed his son, Vern K. Graham, his attorney-in-fact on August 20, 1965. The power of attorney authorized Vern K. Graham to manage all of William E. Graham's property including the power to sell any real estate belonging to William E. Graham. This power of attorney to Vern K. Graham remained in full force and effect from August 20, 1965, until Willam E. Graham's death on January 19, 1973.

(5) William E. Graham was a widower and since 1963 had resided at a rest home at Ellsworth, Kansas. He was approximately 90 years of age when he entered the rest home in 1963. From 1961 until the time of his death William E. Graham was deaf. At his death it was impossible to communicate with him as he could not hear and his eye-sight was extremely limited. After executing the power of attorney to Vern K. Graham on August 20, 1965, the decedent, William E. Graham, ceased to concern himself with business affairs. He was 92 at that time, had been deaf for four years and lacked any real understanding or capacity to take care of his business affairs.

(6) On February 9, 1972, Vern K. Graham, acting for his father under his power of attorney, sold the West 1/2 of the East 1/2 of Section 12, Township 14, Range 13, to Mr. and Mrs. Floyd W. Brandenburg for the purchase price of $32,000. The proceeds of the sale were deposited in a bank account maintained by Vern K. Graham for William E. Graham.

(7) The purpose of the sale of this real estate was to obtain sufficient money to provide for and pay the expenses of William E. Graham as a resident of the rest home. Vern K. Graham did not confer with William E. Graham regarding this sale of real estate either before of after the completion of the sale as Vern K. Graham deemed it necessary to sell the real estate to support and provide for William E. Graham. After the sale a portion of the proceeds was used for the payment of bills and expenses incurred in the care of William E. Graham.

(8) William E. Graham died on January 19, 1973. At the date of his death the sum of $21,469.00 was remaining from the proceeds of the sale of the real estate. It was the only cash asset available to the decedent for his care and maintenance at the time of his death.

(9) On January 30, 1973, a petition was filed by Vern K. Graham for the probate of the will of William E. Graham. Vern K. Graham was appointed executor and the will admitted to probate on February 23, in his grandfather's estate claiming

(10) James E. Graham, the appellee, was the sole and only heir of law of Ralph E. Graham. By virtur of the fifth parapraph of the will James E. Graham inherited or acquired whatever rights his father, Ralph E. Graham, had under the third paragraph and the other provisions of the will.

(11) On August 8, 1973, James E. Graham, filed his petition for allowance of demand in his grandfather's estate claiming that he was entitled to the balance of the proceeds from the sale of the real estate not expended in the amount of $21,469.00 in lieu of the real estate which had been specifically devised to his father, Ralph E. Graham, under the third paragraph of the will. This petition for allowance of demand was transferred to the district court of Russell county for determination. In the course of the proceedings the Home State Bank of Russell was appointed administator de bonis non to represent the estate in this litigation. The controversy in this case is over the right of James E. Graham to the balance of the proceeds of the sale of the real estate which was the subject matter of the specific devise to his father Ralph.

The case was submitted to the court on a stipulation of fact incorporating the factual circumstances set forth above. The district court found in favor of the claimant, James E. Graham, and awarded him the unexpended proceeds from the sale of the real estate. The Home State Bank as administrator de bonis non has appealed to this court on behalf of the estate.

The basic presented on this appeal is whether or not the conveyance of the real estate, the subject of the specific devise to Ralph E. Graham, by the testator's attorney-in-fact during the testator's lifetime, resulted in an ademption so as to nullify and render inoperative the special devise to ralph E. Graham. Ademption is a concept peculiar to the law of wills and was defined in In re Estate of Chevalier, 167 Kan. 67, 204 P.2d 748, as follows:

'Ademption is the term used to describe the act by which a apecific legacy has become inoperative by the withdrawal or disappearance of the subject matter from the testator's estate in his lifetime.' (Syl. 2.)

The nature of an ademption and its consequences are fully discussed in an excellent opinion by Mr. Justice Kaul in In re Estate of Snyder, 199 Kan. 487, 430 P.2d 212. Snyder presents a fairly typical example of an ademption of a devise of real estate where the testator during his lifetime voluntarily sells the real estate. In Snyder the will contained a specific devise of a certain ranch to his nephews. Prior to his death the testator entered into a contract for the sale of the ranch. The contract provided for the appointment of an escrow agent and the payment of the purchase price over an extended period of time. The contract had been fully executed at the time the testator died. The issue presented was whether the devisees named in the will were entitled to the proceeds of the sale in lieu of the land or whether there was an ademption resulting from the sale of the real estate by the testator which had the effect of making the specific devise inoperative. We held that there was an ademption of the specific devise and the devisees named in the will were not entitled to the proceeds of the sale. The result reached in Snyder was consistent with Kansas cases under factual circumstances where the testator personally had disposed of specifically devised property during the testator's lifetime. (In re Estate of Hill, 162 Kan. 385, 176 P.2d 515; Taylor v. Hull, 121 Kan. 102, 245 P. 1026, and other cases cited in the opinion.) As pointed out by the appellee in his brief in this case there is little dispute in this jurisdiction, or any other, regarding whether...