Nolte v. Nolte

• Decision Date: 09 May 1956
• Docket Number: No. 48854,48854
• Citation: 247 Iowa 868,56 A.L.R.2d 854,76 N.W.2d 881
• Parties: , 56 A.L.R.2d 854 Norvin L. NOLTE and Clifford L. Nolte, Appellants, v. Elva S. NOLTE and Elva S. Nolte, Executrix of the Estate of Edward L. Nolte, Deceased, Appellees.
• Court: Iowa Supreme Court

Page 881

76 N.W.2d 881

247 Iowa 868, 56 A.L.R.2d 854

Norvin L. NOLTE and Clifford L. Nolte, Appellants, v. Elva S. NOLTE and Elva S. Nolte, Executrix of the Estate of Edward L. Nolte, Deceased, Appellees.

No. 48854.

Supreme Court of Iowa.

May 9, 1956.

Rehearing Denied May 14, 1956.

Emmert, James, Lindgren & Eller, Des Moines, for appellants.

Edwin S. Thayer, Des Moines, for appellees.

THOMPSON, Justice.

The opinion previously filed is withdrawn and the following substituted therefor.

Edward L. Nolte died testate on February 1, 1954. He left a will, executed on November 24, 1950, the terms of which give rise to the present controversy. The plaintiffs are sons of Edward L. Nolte; the defendant Elva S. Nolte is his surviving spouse. The litigation is of that unfortunate class which so often arises between children of a former marriage and a latermarried wife. Elva S. Nolte is a defendant herein both in her individual capacity and as executrix of the estate. Since the controversy is in substance between the plaintiffs and Elva S. Nolte individually she will be referred to as the defendant.

Item III of the will bequeathed certain personal property of inconsiderable value to the plaintiff Norvin L. Nolte. Item IV gave other personalty, likewise not of large value, to the plaintiff Clifford L. Nolte. Items II, V, VI, and VII are the important parts of the will from which we must make our determination of the issues. They are set out in full herewith.

'Item II. I direct that all my legally enforceable debts, taxes and funeral expenses be fully paid as soon after my death as can properly be done. * * *

'Item V. I give, devise and bequeath to my beloved wife, Elva S. Nolte, all the residue, excepting the specific bequests appearing in Item III and Item IV above, of my personal property of every kind and character wherever it may be located, including money, accounts receivable from my business, subject to the terms of Item VII, car and household goods.

'The gifts, devises and bequests to my beloved wife, Elva S. Nolte, and provisions herein made for her are in lieu of dower or distributive or elective shares. In the event Elva S. Nolte shall predecease me, or in the event she shall elect to refuse to take under my Will, then in either event the gifts, devises and bequests herein made to her or for her shall lapse and the provisions of this, my Last Will and Testament, shall nevertheless be carried out insofar as is possible.

'Item VI. I give, devise and bequeath to Elva S. Nolte, Norvin L. Nolte and Clifford L. Nolte each a one-third (1/3) interest in a certain duplex dwelling located at 3701 Franklin Avenue, in the City of Des Moines, Polk County, Iowa. In the event that any of them shall predecease me, their share shall go to their children, if any, and if there are no children, the property shall be divided equally among the survivors.

'Item VII. I give, devise and bequeath to my wife, Elva S. Nolte, so long as she does not remarry, a life estate in our home at 2313 Beaver Avenue, in the City of Des Moines, Polk County, Iowa, with remainder over after her death or remarriage to my sons, Norvin L. Nolte and Clifford L. Nolte, to be divided equally. In the event of one of my sons becoming deceased, his children shall take his share. If there are no children, the other son shall take the whole.

'At this time the home is being purchased under contract and there is a balance of Twelve Thousand Dollars ($12,000.00) owing. I have been carrying two (2) policies with the Connecticut Mutual Life Insurance Company in the total amount of Seven Thousand Dollars ($7,000.00) in which my beloved wife and sons have been named beneficiaries. However, I have changed the beneficiaries and have now made them payable to my estate.

'I hereby specifically direct that the money from these policies, unless it has to be used for payment of my debts in Item II above, be paid on the contract and the balance over, if any, shall be given as in V above. If the money from the policies is not sufficient to pay the balance on the contract, it is directed that so much of the money as necessary be taken from Item V.'

The only claim filed against the estate, and which is concededly valid, is upon a mortgage note payable to the Des Moines Savings & Loan Association. It was in the sum of $5,257.26 as of May 23, 1954. The mortgage securing it was upon the property known as 3701 Franklin Avenue, Des Moines, referred to in Item VI of the will. It is the source of the payment of this claim and the costs of administration which is disputed here.

At the time the will was executed the testator owned real estate described in Item VII of the will as 2313 Beaver Avenue, Des Moines, which he was purchasing through a contract. There was an unpaid balance on the contract, to which reference was made in the last paragraph of Item VII. But before his death he had sold this property and had in the course of the transaction fully paid the balance on the contract. He had apparently between the time of executing the will and his death acquired a parcel of realty described as Lot 28, Hazelwood (except that part deeded for street purposes to the City of Des Moines) as shown by the official plat. This tract was not disposed of by the will and so became intestate or descended property.

The trial court found the proceeds of the two life policies described in Item VII, paid to the executrix in the sum of $7,035.57, to be exempt from payment of debts and charges, and to be the individual property of Elva S. Nolte under the terms of Item V. It found that the descended real estate should first be sold and the proceeds applied upon the costs and then upon payment of the claim filed. The order of abatement of bequests and devises in the will thereafter was held to be this: second, the two-thirds interest of the plaintiffs in the specifically devised real estate, described as 3701 Franklin Avenue; third, the one-third interest of Elva S. Nolte in the same realty; fourth, the general bequest of non-exempt personal property to Elva S. Nolte provided in Item V; and last, the specific bequests to the plaintiffs given in Items III and IV, these to abate equally. Plaintiffs appeal from the judgment holding the proceeds of the insurance policies to be exempt and that they were not subject to debts and charges before other property of the estate, and from the order of abatement of the bequests and legacies as fixed by the court. Defendant appeals from some parts of the order of abatement.

I. Without doubt the most important controversy concerns the holding that the life insurance proceeds are exempt, and are not subject to payment of charges and debts before other property of the estate must be resorted to. Section 511.37, Code of Iowa 1954, I.C.A., so far as material here, provides:

'A policy of insurance on the life of an individual, in the absence of an agreement or assignment to the contrary, shall inure to the separate use of the husband or wife and children of said individual, independently of his creditors.' To the same effect is section 635.8, Code of Iowa 1954, I.C.A. It is the defendant's contention, with which the trial court agreed, that by virtue of these sections the insurance proceeds are exempt, and by Item V of the will the entire sum thereof was given to her, as a part of the residuum of the personal property of the estate. We are unable to agree with the able trial court in its solution of this problem.

This court has held that a testator may dispose of the proceeds of life insurance by will. Miller v. Miller, 200 Iowa 1070, 1074, 1075, 205 N.W. 870, 873, 43 A.L.R. 567; In re Estate of Clemens, 226 Iowa 31, 34, 282 N.W. 730, 732. Proceeding one step further, we held that the testator might likewise make the proceeds of life policies payable to his estate, subject to his debts. In re Estate of Caldwell, 204 Iowa 606, 610, 215 N.W. 615, 617. In other words, the maker of a will may eliminate the exemption that would otherwise obtain in favor of his widow and heirs, and make the proceeds of the policies subject to all or any specified debts or charges of his estate.

But if he desires so to do, he must make his intention clear. An intent to waive the benefit of exemption laws must be clearly expressed. In re Will of Grilk, 210 Iowa 587, 589, 231 N.W. 327, 328; In re Estate of Caldwell, supra, at pages 608 and 609 of 204 Iowa, at page 617 of 215 N.W.; 35 C.J.S., Exemptions, § 105, page 135. Nor will mere formal words in a will, such as "I will and direct that all my just debts * * * be first paid out of my estate", found in the will under analysis in In re Will of Grilk, supra [210 Iowa 587, 231 N.W. 328], be sufficient to show a clear intent to waive the exemption and subject the otherwise exempt property to payment of debts. See also 69 C.J., Wills, section 2506; In re Estate of Hazeldine, 225 Iowa 369, 380, 280 N.W. 568, 574; In re Estate of Galloway, 222 Iowa 159, 160, 161, 269 N.W. 7, 8.

The question that must be resolved here is whether Edward L. Nolte did, in sufficiently clear and explicit terms, indicate his intent that the proceeds of the life insurance policies payable to his estate should be subject to payment of his debts. In all matters pertaining to the construction and meaning of wills the treasure sought by the courts is the intent of the testator. Wright v. Copeland, 241 Iowa 447, 452, 41 N.W.2d 102, 105; In re Estate of Ritter, 239 Iowa 788, 797, 32 N.W.2d 666, 671, 2 A.L.R.2d 1301; De Koster v. Roggen, 229 Iowa 938, 942, 295 N.W. 440, 442; In re Estate of Flannery, 221 Iowa 265, 271, 264 N.W. 68, 71. These rules of law being kept in mind, the question to be decided here becomes one of construction. Does the language used, particularly in Item VII, amount to a clear expression of intent to make the insurance proceeds liable for debts of the decedent? The question is not free from difficulty; but we think a fair construction...