Olson's Estate, Matter of, 9218

• Decision Date: 09 March 1981
• Docket Number: No. 9218,9218
• Citation: 51 Or.App. 135,624 P.2d 657
• Parties: In the Matter of the ESTATE of Ellen M. OLSON, Deceased. George DIXON, Appellant, v. Joan M. LINDSETH, Respondent. ; CA 16628.
• Court: Oregon Court of Appeals

Page 657

624 P.2d 657

51 Or.App. 135

In the Matter of the ESTATE of Ellen M. OLSON, Deceased.

George DIXON, Appellant, v. Joan M. LINDSETH, Respondent.

No. 9218; CA 16628.

Court of Appeals of Oregon.

Argued and Submitted Nov. 24, 1980.

Decided March 9, 1981.

Nick Chaivoe, Portland, argued the cause and filed the brief for appellant.

Jeanyse R. Snow, Astoria, argued the cause and filed the brief for respondent.

Before RICHARDSON, P. J., and THORNTON and BUTTLER, JJ.

BUTTLER, Judge.

Petitioner appeals from an order approving, over his objections, the respondent personal representative's final accounting and proposed distribution of the assets of decedent's estate. Petitioner's objections were: (1) that an inter vivos transfer of $3,000 by decedent to her grandson, Lloyd, constituted an ademption by satisfaction, by virtue of which Lloyd is entitled to nothing under the residuary clause of the will, and (2) that a long-term bank note, purchased by decedent's guardian prior to her death with proceeds from the sale of her house, should pass under the will as a "cash" asset. The trial court overruled petitioner's objections. We affirm.

Decedent and her husband executed a joint will on February 15, 1960, which remained in effect after the prior death of decedent's husband. That will provided in part:

"THIRD: On the death of the survivor of us, all of the real and personal property of which such survivor shall die seised or possessed, is given, devised, and bequeathed by us and by such survivor as follows:

"A. To George W. Dixon son of Ellen M. Olson, and Lloyd R. Dixon grandson of Ellen M. Olson, and Loretta J. Banta granddaughter of Ellen M. Olson, to be divided equally among them: one-half (1/2) of whatever cash assets the survivor of us may possess at the time of his or her death. The remaining one-half (1/2) of the said cash assets to be divided equally among Roger Olson and Carl Peterson, nephews of Carl P. Olson.

"B. To Lloyd R. Dixon, grandson of Ellen M. Olson, all the rest, residue and remainder of the estate of the survivor of us."

The parties agree that at the time the will was executed decedent and her husband wished their house and furnishings to go to their grandson, Lloyd, and their cash assets to be divided among a group comprised of their children, grandchildren and nephews, including both petitioner and Lloyd. To this end, decedent's will, as quoted above, provided for specific bequests of her "cash assets," petitioner and Lloyd each taking a one-sixth share; the residuary clause, without mentioning, but necessarily including, the house and furnishings, left "all of the rest, residue and remainder of the estate" to Lloyd. If decedent had owned the home and furnishings at the time of her death, there would be no dispute; but she did not.

In 1972, after her husband's death, decedent was adjudged incompetent and respondent was appointed guardian of her person and estate. Shortly thereafter, decedent moved into a nursing home and, in May, 1974, after decedent refused to allow the house to be rented, the guardian sold the house and furnishings, netting $15,387.72. In July, 1974, the guardian invested $10,000 of the proceeds from the sale in a long-term bank note due in 1989. From some of the remaining proceeds from the sale, decedent requested her guardian to make gifts of $3,000 to Lloyd and $500 to petitioner. The guardian sought and obtained court approval to make the gifts. In support of her petition for such authority, the guardian filed an affidavit which stated in pertinent part:

"I further depose and say that the Ward, my aunt, has advised me that she wishes to make an immediate gift to her grandson, Lloyd Dixon, in the sum of $3,000, and a gift to her son, George Dixon in the amount of $500.00. I further depose and say that she has advised me that she and my uncle, at the time he was living, had originally intended to leave the house to her grandson, Lloyd Dixon. However, when she could no longer live in it and she would not permit it to be rented, it had to be sold and she feels that she definitely wants to leave this sum of money to Lloyd Dixon at this time.

"I further depose and say that she also wishes to give her son, George Dixon, the sum of $500.00 at this time.

"I further depose and say that the Ward, Ellen Dixon Olson, has advised me that she wishes to make these gifts, that she has the donative intent and wants to make the gifts at this time." ¹

Decedent died on October 21, 1978, leaving a net estate of $4,758.93 in cash and the $10,000 long-term bank note, the testamentary character of which is in dispute, but no real property. Respondent, as personal representative, accounted for the bank note as a non-cash asset within the meaning of the will, which should be distributed to Lloyd as residuary legatee. As noted above, petitioner's objections to that final accounting were overruled.

Petitioner first contends that the $3,000 inter vivos transfer to Lloyd was not a gift, but constituted an ademption by satisfaction. While no Oregon cases deal with the doctrine of ademption by satisfaction, it is described in the treatise, 6 Bowe-Parker, Page on Wills (Rev. ed. 1962), as follows:

"In modern law, the term ademption has two distinct meanings. It is used with reference to the act of the testator in paying to the legatee, in the lifetime of the testator, a legacy which the testator has given to the legatee by will, or in satisfying such legacy by giving, in place thereof, something of value. (Footnote omitted.) This is sometimes spoken of as ademption by satisfaction. (Footnote omitted.) * * * Id., at 241, § 54.1.

"* * * * *

"Whether a gift...