Jackman's Estate, In re

• Citation: 122 N.W.2d 910,255 Iowa 410
• Decision Date: 16 July 1963
• Docket Number: No. 50979,50979
• Parties: In the Matter of the ESTATE of Sadie F. JACKMAN, Deceased.
• Court: United States State Supreme Court of Iowa

Page 910

122 N.W.2d 910

255 Iowa 410

In the Matter of the ESTATE of Sadie F. JACKMAN, Deceased.

No. 50979.

Supreme Court of Iowa.

July 16, 1963.

McMahon & Cassel, Algona, for appellant, Emmett C. Jackman.

Linnan, Lynch & Straub, Algona, for appellee, St. Thomas Church.

Robert F. Culver, Emmetsburg, for executrix.

THORNTON, Justice.

This is an application in probate to determine the assets properly includible in the estate of Sadie F. Jackman, deceased, and to direct the disposition of assets not includible. The application brought by the executrix in probate is reviewable on errors and not de novo. In re Estate of Rahfeldt, 253 Iowa 432, 112 N.W.2d 858; and In re Estate of Shivvers, 240 Iowa 93, 100, 34 N.W.2d 632.

The contest is between appellant, Emmett C. Jackman, a stepson of decedent Sadie F. Jackman, claiming as a remainderman under the will of P. C. Jackman, deceased, and appellee, St. Thomas Church, residuary beneficiary under the will of decedent, Sadie F. Jackman, a life tenant under P. C. Jackman's will. The trial court held Emmett C. Jackman was estopped from claiming the unidentified assets in the hands of the executrix, that Sadie F. Jackman found it necessary to use some of the funds derived from the sale of bank stock for her personal needs and identifiable funds, certificates of deposits, held in the name of the P. C. Jackman estate in the sum of $4,649.10, constituted the remainder interest, such were the property of appellant and all other assets listed in the application were assets of the Sadie F. Jackman estate. There is sufficient evidence to sustain the trial court on the issue of estoppel, and as to the identifiable property in the hands of the executrix, except as to one certificate of deposit in the sum of $1,000 held by decedent Sadie F. Jackman at the time the P. C. Jackman estate was closed and which she cashed on September 26, 1958, when the record shows as a matter of law she had ample funds on hand for her necessary care and support.

P. C. Jackman died March 1, 1953. In Item Two of his will he left his widow, Sadie F. Jackman, a life estate in all his property, and provided:

'* * * Said provision is made for my said wife, for her lifetime, in order that she may be properly cared for, and that she may have the care and support that she deserves. The entire income from my said property is to be hers, to use as she may need, or see fit, and, in the event that the income from said life estate is insufficient to properly care for her, then, my executors hereinafter named and appointed, are directed to sell or mortgage necessary portions of my said property, as may be required to carry out the terms and provisions of this bequest and direction.'

Emmett C. Jackman, son of P. C. Jackman, was given the remainder interest in 120 acres of land and in capital stock of the Iowa Trust & Savings Bank of Emmetsburg, Iowa. A stepson, James W. Fay, (son of Sadie F. Jackman) was given the remainder interest in 80 acres of land and stock in a hotel company (this hotel stock does not appear in estate proceedings of the P. C. Jackman estate). Item Eight of the will directed all taxes levied against the estate either by the Federal or State governments be paid from the residuary part thereof. Item Nine provided:

'At the termination of the life estate created in ITEM TWO hereof, I direct that all funds and monies held by my Executors, or their successor or successors in office, shall be divided as follows: Two-Thirds (2-3rds) to my son, Emmett C. Jackman of Estherville, Iowa, and One-Third (1/3rd) to my stepson, James W. Fay of Emmetsburg, Iowa.'

In Item Ten Sadie F. Jackman and Emmett C. Jackman were nominated executors without bond. Emmett C. Jackman and James W. Fay were directed to manage and operate the real estate. It was directed that James W. Fay be attorney for the executors. All were to serve without compensation.

I. The will gives the widow a life estate. The income was hers to use as she may need or see fit. In other words it was hers absolutely. The executors were given the power and duty to invade the corpus of the estate, they could sell or mortgage such as may be required when the income was insufficient to properly care for the widow. The bequests of capital stock subject to the life estate were specific bequests, the devises of real estate subject to the life estate were specific devises. The direction in Item Eight to pay taxes from the residue of the estate would properly include Iowa inheritance taxes. Though our inheritance tax is not a property tax but upon the right of succession. In re Estate of Millard, 251 Iowa 1282, 1291, 105 N.W.2d 95, 101. This is an expression of intention by the testator and followed by Sadie F. Jackman either acting solely or with Emmett C. Jackman as executors in the payment of inheritance taxes in the sum of $478.67.

Item Nine must be construed as a residuary clause. This is compelled by Item Eight. See Moore v. McKinley, 246 Iowa 734, 756-757, 69 N.W.2d 73, 86-87. And avoids partial intestacy, Starr v. Newman, 225 Iowa 901, 905, 281 N.W. 830. The only property to be divided under the provisions of Item Nine is that not specifically devised or bequeathed.

From Items Two and Nine it is clear the testator intended the nominated executors or their successors to hold the property of the estate for the benefit of the widow during her lifetime. As bearing on the above interpretation of the will, see Tague v. Tague, 248 Iowa 1258, 85 N.W.2d 22; Watkins v. Dean, 243 Iowa 599, 52 N.W.2d 498; Lovrien v. Fitzgerald, 242 Iowa 1258, 49 N.W.2d 845; and In re Estate of Whitman, 221 Iowa 1114, 266 N.W. 28.

II. After P. C. Jackman's death March 1, 1953, Sadie F. Jackman and appellant qualified as executors on April 6, 1953. On March 1, 1953, P. C. Jackman's checking account showed a balance of $2,732.05. On the date the executors qualified Sadie F. Jackman transferred the then balance of the account of $1,355.98 to her personal account. Of the checks charged to the account between the date of P. C. Jackman's death and this transfer there is only one identifiable, for funeral expenses of $910.56.

The bank stock bequeathed to appellant was subject to a stockholders' agreement to sell to surviving stockholders. This was done November 3, 1953. The proceeds of the sale, $10,404, were deposited in a checking account in the name of Estate of P. C. Jackman, Sadie F. Jackman and Emmett C. Jackman, executors. Either or both executors were authorized to sign checks. This is the item appellant contends should be paid to him in full as remainderman. He also asks for an accounting under Item Nine.

James W. Fay died June 12, 1956. Mrs. Jackman then employed Mr. Peter Narey, attorney of Spirit Lake, to handle both the P. C. Jackman and James W. Fay estates. The Fay estate is important because both Mrs. Jackman and appellant received property under the will, inheritance taxes were paid on behalf of appellant, both were executors, and a course of dealing with the estate business is shown. An inventory was filed in the P. C. Jackman estate March 7, 1957. The property was appraised. Inheritance tax was paid in the sum of $478.87. A final report was filed showing no accounting whatsoever. An application for certificate of payment of personal taxes filed on the same date showed no taxable personal property for the years 1954, 1955, 1956 and 1957. Both were sworn to by Mrs. Jackman and appellant. The estate was closed December 17, 1957. In the file is an order allowing attorney fees of $835.50 and a receipt therefor. The order also allows fees for the executor in the same amount. There is no receipt for such and appellant testified he did not receive any fees. The James W. Fay estate was handled in the same manner. It was closed on the same date with no accounting. In the Fay will Mrs. Jackman was given all of the personal property and appellant was given the remainder interest in the 80 acre tract which Mr. Fay had received under the P. C. Jackman will, subject to Mrs. Jackman's life estate. The appraised value of the personalty was $3,812.62, of the realty $14,000. We do not have before us the liabilities deductible nor the factor to determine the amount of inheritance tax on the remainder received by appellant, section 450.51, Code of Iowa, 1954, I.C.A., but the record shows as a matter of law Mrs. Jackman paid inheritance taxes in the sum of $1,107.05 which were the obligation of appellant. In speaking of this estate appellant testified, '* * * I did not write any checks as an executor nor did I transact any business of any kind. * * *.' The receipt of the state tax commission, dated November 12, 1957, is in the file showing payment of the inheritance taxes. A deposit slip shows Mrs. Jackman received $2,586.27 from the Fay estate November 26, 1957. There is a check charged to Mrs. Jackman's personal account on November 16, 1957, for the exact amount of the inheritance tax. It would make no difference whether the inheritance tax was paid from Mrs. Jackman's personal account or from the funds she was entitled to in the Fay estate. In any event her funds were used (or a portion of the $10,404 from the sale of the bank stock) for the benefit of appellant. As a matter of law she did not owe any inheritance tax in the Fay estate. A mother's individual exemption is $10,000, section 450.9, Code of Iowa, 154, I.C.A. The tax had to be on the remainder interest devised to appellant and the tax was payable by him. Sections 450.5 and 450.53, Code of Iowa, 1954, I.C.A.; In re Estate of Millard, 251 Iowa 1282, 1291, 105 N.W.2d 95, 101; and In re Estate of Johnson, 220 Iowa 424, 426, 262 N.W. 811. This item was not considered separately by the trial court nor argued here, but it plainly appears as a matter of law from the evidence introduced. It differs from the inheritance tax in the P. C. Jackman estate in the sum of $478.67 (A check for this amount was charged to Mrs....