Lenders' Estate, In re

• Decision Date: 18 September 1956
• Docket Number: No. 48941,48941
• Citation: 247 Iowa 1205,78 N.W.2d 536
• Parties: In the Matter of the ESTATE of Anne W. LENDERS, Deceased.
• Court: Iowa Supreme Court

Page 536

78 N.W.2d 536

247 Iowa 1205

In the Matter of the ESTATE of Anne W. LENDERS, Deceased.

No. 48941.

Supreme Court of Iowa.

Sept. 18, 1956.

Crissman & Bleakley, and David G. Bleakley, Cedar Rapids, for appellants.

E. H. Wadsworth and D. M. Elderkin, Cedar Rapids, for appellees.

GARFIELD, Justice.

The most important question on this appeal is whether gifts totaling about $88,000 in value, by testatrix in her lifetime, to her three sisters who were made executrices of her will were in violation of an alleged oral agreement between testatrix and her husband who predeceased her. Following trial to the court in probate it was held such violation was not shown. We affirm the decision.

January 8, 1940, A. W. H. Lenders and Anne, his wife, executed mutual wills. Lenders died in July, 1944, his will was probated August 4, his widow was made executrix and accepted the bequest in her favor of substantially the whole estate, valued at about $40,000. Anne died February 3, 1947, her will was probated in April and her three sisters were made executrices. The issues here arise from objections to their final report and their answers to the objections. Mrs. Lenders' estate was appraised at about $540,000. It consists of gifts from her husband in his lifetime or accumulations therefrom and the bequest under her husband's will.

In four different transactions after her husband's death Anne (testatrix) gave her three sisters money and property valued at about $88,000. None of it came to her under her husband's will. It is these gifts the three objectors who are legatees under Anne's will (Mr. Lenders' adopted daughter and her two sons) and the temporary executor of her estate allege were made in violation of an oral agreement between Anne and her husband.

Subject to a conditional bequest of $1,000 the will of Mr. Lenders provides: 'I give * * * my wife, Anne W. Lenders, providing she shall survive me, all the rest * * * of the property I may own at the time of my death, or to which I may in any manner be entitled, * * * to be hers absolutely * * *.' If his wife should not survive him, his will leaves the 'rest * * * of the property I may own at the time of my death, or to which I may be entitled' to those of 13 named beneficiaries who survive him, in specified amounts, to be diminished or increased proportionately, depending on the size of his estate.

The will of Mrs. Lenders leaves her personal effects to her three sisters and provides, 'I give * * * to my husband, A. W. H. Lenders, providing he shall survive me, all the rest * * * of the property I may own at the time of my death, or to which I may in any manner be entitled, * * * to be his absolutely.' If her husband should not survive her, her will leaves 'the rest * * * of the property I may own at the time of my death, or to which I may be entitled' to the same 13 beneficiaries named in her husband's will, in the same proportions.

The proportionate shares going to Anne's three sisters under her will total slightly less than two fifths (38.8 per cent) of the whole estate, less the personal effects. Thus if Anne had not made the gifts here under attack the sisters would have taken under her will 38.8 per cent of the net amount thereof.

The gifts from Anne to her sisters for which they, as executrices, are asked to account are these:

1) In August, 1944, Anne deposited in a Cedar Rapids bank $25,365 in a joint savings account with her sister Ellen Kanealy. The money was proceeds of life insurance on her husband of which Anne was beneficiary. January 6, 1948, about 11 months after Anne died, Ellen withdrew this deposit, with accrued interest, and divided it among her two sisters and herself.

2) In August and September, 1944, Anne deposited in a Chicago bank $21,000 in a joint account with her sister Katherine Kanealy Miles. The money was given her by her deceased husband's employer, Penick & Ford. Other deposits totaling $35,500 were subsequently added to this account from Anne's own funds. March 5, 1947, a month after Anne's death, there was a balance in this account of $9,950 which Katherine withdrew as her own. She had also previously made two withdrawals totaling $1,822 for herself from this account.

3) Anne elected to leave with Aetna Life Insurance Co. $19,437, life insurance on her husband of which she was beneficiary, naming her three sisters as contingent beneficiaries. Anne did not withdraw this money and at her death Aetna paid $19,516 in equal shares to the sisters.

4) In December, 1946, Anne gave her sister Katherine (Miles) 400 shares of Penick & Ford stock worth $82 a share. In 1926 her husband had given Anne 6,000 shares of this stock.

I. Appellees-executrices argue the remedy for breach of an agreement to make mutual wills is an action for damages for breach of contract or for specific performance and the probate court lacks jurisdiction to grant the relief prayed for by appellants-objectors. It is doubtless true appellants might have sued for breach of contract or for specific performance. In re Estate of Earley, 237 Iowa 1069, 1078, 24 N.W.2d 453, 457-458; Annotation 169 A.L.R. 9, 53; 57 Am.Jur., Wills, section 715; 68 C.J., Wills, § 207; 94 C.J.S., Wills, § 122.

If we assume, without so deciding, objectors were in error as to the kind of proceeding adopted this is not ground for dismissal of their objections, but merely for transfer to the proper docket. Since the executrices made no motion to transfer the proceeding from the probate docket any error as to the form of action adopted was waived. Sections 611.7, 611.9, 611.12, Code 1954, I.C.A.

We have repeatedly pointed out the district court in this state is only one court. Before it all proceedings come, whether law, equity or probate. If no motion is made to transfer to another docket the district court, sitting in probate, may hear and determine litigation which could or should have been brought at law or in equity. The point the executrices now raise relates at most to a mere procedural irregularity which they waived, and does not go to the court's jurisdiction. See In re Allen's Estate, 247 Iowa ----, 75 N.W.2d 241, and citations; Williams v. Morrison, 242 Iowa 1054, 1062-1063, 48 N.W.2d 666, 670 and citations.

II. Appellants first assert error in the trial court's ruling Mr. O. N. Elliott was an incompetent witness under section 622.4, Code 1954, I.C.A., which provides in substance, so far as now material, that no one interested in a proceeding may testify to any personal transaction or communication between him and a person deceased, against the executor or survivor of such decedent.

It is clear Mr. Elliott has a direct financial interest in the outcome of the proceeding. Testatrix' will leaves him $15,000, to be diminished or increased according to the size of the estate. It is equally plain he was examined in regard to personal transactions and communications between him and testatrix. Although the executrices are of course parties to the action and Mr. Elliott was examined by objectors, they contend the executrices are not, under the circumstances here, parties who are protected by section 622.4. It is argued the executrices as such are mere nominal parties and the sisters' claim is as donees of gifts from testatrix.

We are clear the executrices as such are entitled to the protection of the statute and Ellen and Katherine are also protected as survivors of testatrix. The joint bank accounts in controversy were paid Ellen and Katherine, respectively, as surviving joint tenants with testatrix. This places them within the protection 622.4 affords a survivor. O'Brien v. Biegger, 233 Iowa 1179, 1211, 11 N.W.2d 412, 426-427, and citations.

We need not determine whether one of the class section 622.4 protects, who is a mere nominal party to an action, may invoke the statute. No holding that he may not do so, where the party is an administrator or executor, has come to our attention. In re Estate of Conner, 240 Iowa 479, 489-491, 36 N.W.2d 833, 839-840, and earlier precedents there cited hold a party to an action whose interest is only nominal is an incompetent witness under 622.4. It would seem from these decisions that a party to an action who is within the class 622.4 protects, although his interest is merely nominal, may invoke the statute.

In any event, we are agreed the executrices are more than nominal parties to this proceeding. It is true, like all executrices, they act in a representative capacity. But this does not make their interest merely nominal. The prayer of the amended objections to their final report asks that the executrices be ordered to account for all moneys and properties testatrix transferred to her sisters after her husband's death, that all compensation be denied them and they be required to return all allowances thus far received. Objectors argue they are entitled to such relief and to a holding the executrices conspired together to appropriate moneys and properties which should go to all the legatees.

After referring to similar contentions that an executor be required to account to certain beneficiaries of a will, In re Estate of Conner, supra, at page 491 of 240 Iowa, at page 840 of 36 N.W.2d, states: 'These examples make it clear the executor was not a mere nominal or formal party to the action but was a real party in interest in his capacity as such.' See also in support of our holding in this division Bell v. Pierschbacher, 245 Iowa 436, 445, 62 N.W.2d 784, 790.

III. Appellants next assign error in the court's failure to find, as their objections assert, there was a confidential relation between testatrix and her sister Katherine K. Miles in which the latter was the dominant person, thereby placing upon Katherine the burden to sustain the gifts to her within such decisions as In re Estate of Lundvall, 242 Iowa 430, 46 N.W.2d 535, and precedents there cited.

In urging this contention appellants are faced with a procedural hurdle it...