In re Hencke's Estate, 33100.
| Decision Date | 15 May 1942 |
| Docket Number | No. 33100.,No. 33101.,33100.,33101. |
| Citation | 4 N.W.2d 353,212 Minn. 407 |
| Parties | In re HENCKE'S ESTATE. FORSTER et al. v. FIRST & AMERICAN NAT. BANK OF DULUTH et al. |
| Court | Minnesota Supreme Court |
Appeal from District Court, St. Louis County; C. R. Magney, Judge.
Proceedings in the matter of the estate of Fred W. Hencke, deceased, wherein the First & American National Bank of Duluth was appointed and qualified as administrator cum testamento annexo and wherein Erna Forster and others filed petitions for orders directed to the administrator. From an order dismissing certain appeals from a probate court order and from a judgment affirming the order on other appeals, Erna Forster and others appeal.
Order and judgment affirmed.
William A. Watts and Lewis, Grannis & Underhill, all of Duluth, for appellants.
Gillette, Nye, Harries & Montague and Wildey H. Mitchell, all of Duluth, for respondent First & American Nat. Bank.
Abbott, MacPherran, Dancer, Zuger & Montague, of Duluth, for respondent Marion Hencke, as representative of the estate of Harriet Hencke, deceased.
Fred C. Elston, of Duluth, for respondents Jewish Orphans Home and others.
On October 25, 1930, Fred W. Hencke died testate in Los Angeles, California, which was his domicile, leaving him surviving his daughter Harriet, his adopted daughter, Marion, his sister Ida M. Barthell of Ann Arbor, Michigan, and numerous remote blood relatives.
By his will, dated May 2, 1930, after directing that his debts be paid, the testator devised and bequeathed his homestead in Los Angeles and his clothing, jewelry, household furniture, furnishings, and the like to Harriet and the residue of his property to the Bank of Italy National Trust and Savings Association, now the Bank of America National Trust and Savings Association, in trust to collect the rents and interest, to pay the net income, and at the termination of the trust to distribute the principal to certain named persons and institutions.
The trustee was directed to pay the testator's sister, Ida M. Barthell, $140 per month during her life but that if her husband predeceased her she was to have in lieu of such provision ½ of the net income from his property located at 122 W. Superior street, Duluth, Minnesota; to pay out of the net income $300 per month to Harriet until she should reach the age of 30 years, after which she was to receive all the net income from the trust estate, except the monthly payments directed to be made to Ida M. Barthell; upon the death of the survivor of Harriet and Ida to distribute the principal and accumulated income to Harriet's issue, and, if she left no issue surviving, to distribute the remainder 1/12 to the Jewish Orphans Home located in or near Huntington Park, California, 1/12 to the Children's Hospital at Los Angeles, 1/12 to the Catholic Orphans Home of Los Angeles, 1/12 to the German Lutheran Church of Los Angeles, and 2/3 to his blood relatives in accordance with the laws of succession of the state of California in force at the date of his will.
The will also provided: "The Trustee may sell, exchange, convey, lease, mortgage, hypothecate, or otherwise dispose of the trust estate, or any part thereof, as to it may seem best, and may substitute other property for any portion thereof sold or otherwise disposed of, and shall loan and reloan, invest and reinvest the trust estate in such securities, properties and investments as, in its judgment, it may deem best for the purpose of securing the maximum of income, consistent with reasonable safety * * *." (Italics supplied.)
Further, it provided: "It is my wish that my property located at 122 W. Superior Street, Duluth, Minnesota, shall not be disposed of during the lives of my daughter Harriet Hencke, and my sister Mrs. Ida M. Barthell."
It also contained a so-called spendthrift provision to the effect that no beneficiary under the will should sell, assign, pledge, transfer or subject to liability either the principal or income of the trust estate.
The will recited that the provision for Ida M. Barthell was made pursuant to the testator's father's request at the time of his death.
The trustee was also named as executor under the will. The executor was not given any of the powers which were given to the trustee.
The will was admitted to probate in Los Angeles, and the executor named was appointed and qualified.
Subsequently, on February 24, 1931, proceedings were had in the probate court of St. Louis county under Mason St.1927, §§ 8759-8762, in which the will was admitted to probate as a foreign will and the First and American National Bank of Duluth was appointed and qualified as administrator c.t.a.
No trustee under the will was appointed either in California or in this state.
The decedent believed he was a rich man, but subsequent events have shown that he was mistaken. His California estate was appraised and inventoried at a sum in excess of $97,600, of which $91,000 was real estate which was lost through mortgage foreclosures. The net estate was insufficient to pay the costs of administration and claims, among which were two judgments, one in excess of $6,900 in favor of one Finnall as assignee, and another in excess of $4,300 in favor of one Forster.
It turned out that the decedent was not the sole owner of the Superior street property in Duluth. In a rather complicated litigation, Ida M. Barthell claimed that decedent as trustee under his father's will held their father's stock of a corporation which owned the Superior street property in trust for his and her benefit; that decedent wrongfully in breach of trust acquired title to the property in his own name and that she was entitled to be restored to her rights. Pursuant to stipulation, the litigation was settled by the entry of judgment, which so far as here material decreed that the First and American National Bank be appointed successor trustee of decedent under his father's will; that as such trustee it was entitled to 495/1000 of the property in trust; and that as such trustee it pay to Ida out of the income therefrom the sum of $140 per month for 15 months and any excess to itself as administrator c.t.a. of decedent. By the stipulation made part of the judgment, Ida waived and released all her rights under decedent's will. Instead of the entire Superior street property which decedent devised, his trustee as the result of the litigation with Ida took only 505/1000 thereof.
The Superior street property is a valuable piece of city property free from encumbrance and under long-term lease about to expire in a few years. It yields $270 per month rent, which includes the rent on the fractional 505/1000 interest and all rent in excess of $140 per month paid to the bank as successor trustee of the 495/1000 interest. The lessee pays the taxes.
Administration was had on decedent's estate in the same manner as in the case of a resident decedent. On February 24, 1931, the day decedent's will was admitted to probate here, the probate court, pursuant to statute, by order of which due notice was given, limited the time within which creditors could file claims until August 24, 1931. No claims were filed. On July 24, 1937, approximately five years and eleven months after the period for filing claims had expired, the California judgment creditors, Finnall and Forster, appeared and filed their petitions for an extension of time within which and for leave to file their claims here. On December 21, 1937, the probate court denied their petitions.
Afterwards, Finnall and Forster filed petitions for an order directing the decedent's representative c.t.a., as ancillary administrator in Minnesota, to transmit to the domiciliary representative in California sufficient funds to pay their claims.
The California representative also filed a similar petition for an order directing the Minnesota representative to sell the decedent's real estate in St. Louis county, Minnesota — the Superior street property — and, after payment of the expenses of administration here, to transmit to the domiciliary representative in California the proceeds of such sale and the rents from said land amounting to over $13,000, which at the time consisted in part of cash and in part of United States securities, in which the same were invested pending administration.
On January 12, 1933, Harriet died in Los Angeles testate without living issue. Her representative here petitioned the probate court to direct the decedent's representative c. t. a. to pay to her the sum of $6,345.68 as the amount due to Harriet during her lifetime as a legacy in the form of an annuity.
On June 9, 1939, the probate court made an order in all things granting the petition of Harriet's representative and denying the petitions of the California representative, Forster, and Finnall, to transmit local assets to the domiciliary representative in California.
From this order, separate appeals to the district court were taken by decedent's representative c. t. a., the California representative, Forster, Finnall, and each of the California institutions which were to receive 1/12 in remainder. The district court dismissed the appeals of Forster and Finnall. From the order of the district court, separate appeals were taken by Forster and Finnall. Judgment was entered in the district court on the other appeals affirming the probate court. The California representative appeals from the judgment.
Pending the appeal Harriet's representative died. The application to substitute her administratrix c.t.a. as a party respondent is granted.
The assignments of error are reducible to the following contentions: (1) That it was the duty of the ancillary representative in Minnesota to sell the decedent's real estate under order of the probate court and transmit the proceeds to the domiciliary representative in California; (2) that the rents from the real estate are personal property and as such should be so...
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