Miller v. Miller
Decision Date | 04 April 2000 |
Docket Number | P-2325 |
Citation | 734 N.E.2d 738 |
Court | Appeals Court of Massachusetts |
Parties | (Mass.App.Ct. 2000) JAMES MILLER vs. EDWARD A. MILLER, JR., executor. <A HREF="#fr1-1" name="fn1-1">1 No.: 98- Argued: |
Present: Porada, Dreben, & Duffly, JJ.
Executor and Administrator, Accounts, Loan to estate. Interest.
Petition filed in the Essex Division of the Probate and Family Court Department on March 29, 1988.
Objections to the accounts and a petition for removal of the executor were heard by John P. Cronin, J.
Joseph Fitzgibbons for the defendant.
Timothy D. Sullivan for the plaintiff.
This case involves a loan by an executor to an estate that held insufficient liquid assets for the payment of estate taxes. The question before us is whether the executor is entitled to interest on the loan.
Ida Miller died on March 1, 1988, survived by four sons. One of them, Edward A. Miller, Jr., was appointed executor and filed an inventory showing personal property of $1,010 and real estate of $560,000. There were, as a probate judge found, "serious and legitimate difficulties in selling the undeveloped real estate." Because the estate's principal asset was vacant real estate, the executor was unable to obtain a bank loan for the payment of estate taxes that were due nine months after Ida's death. Edward and his friend, Patricia A. Bergeron, lent the estate $54,144.18. Taxes in this amount were paid on November 30, 1988. On that date, as executor of Ida's estate, Edward executed a promissory note to himself and Bergeron providing for interest at the rate of ten per cent per annum.
The real property was sold in 1994, and Schedule B of Edward's "Substituted First Account" as executor shows that, on September 23, 1994, he paid himself and Bergeron "principal and interest due under promissory note from estate dated 11/30/88-loan of funds to pay Massachusetts estate tax" in the amount of $85,715.00. When this account and Edward's second account were presented for allowance, his brother James Miller filed several objections and also sought to remove Edward as executor.
The matter was heard by a probate judge. Edward, James, and Bergeron testified.2 Evidence was also introduced that, had Edward kept the money in the bank, he would have received $30,818.80 in interest, and that, had he not paid the estate taxes until the sale of the property, there would have been penalties and interest owed of $68,785.17.
The judge dismissed the petition for the removal of executor and rejected all of James's objections except for the interest on the loan. The judge concluded:
The judge ruled that, since the executor received a benefit in the form of interest paid totaling $31,570.82, he had to repay that sum to the estate, plus interest, from September 23, 1994, the date of the repayment of the loan. The executor appeals from that part of the judgment which disallows the payment of interest and which orders him to repay that amount plus interest from September 24, 1994. We reverse.
The reliance by James and the judge on Jose v. Lyman, supra, is misplaced. In that case, a coexecutor transferred stock to himself in payment of a debt owed him by the testator, but the account which the beneficiaries sought to revoke showed:
"Cash paid Frank W. Lyman [coexecutor] [on account of] his note by sale of collateral, held by him."
Pointing out that there was nothing in the account to indicate to the beneficiaries that the coexecutor had become the owner of the stock, the court rejected the probate judge's finding that the transfer had been beneficial to the estate: Id. at 280. Moreover, in that case the coexecutor had benefited as the stock which he held rose significantly in value.
In the present case, the advancement of funds by Edward for payment of estate taxes was essential for the protection of the estate. James acknowledged he had no funds to pay the taxes. The judge found that Edward acted in good faith, did not engage in self-dealing, and made the loan to benefit the estate and not to derive any...
To continue reading
Request your trial