Powell v. American Charter Federal Sav. and Loan Ass'n
| Decision Date | 08 April 1994 |
| Docket Number | No. S-92-441,S-92-441 |
| Citation | 245 Neb. 551,514 N.W.2d 326 |
| Court | Nebraska Supreme Court |
| Parties | Romaine POWELL, Personal Representative of the Estate of Mary Bengston, Deceased, Appellee, v. AMERICAN CHARTER FEDERAL SAVINGS AND LOAN ASSOCIATION and Piper, Jaffray & Hopwood, Incorporated, Appellees, and David Michel et al., Appellants. |
Syllabus by the Court
1. Appeal and Error. Regarding questions of law, an appellate court is obligated to reach conclusions independent of those reached by the trial court.
2. Decedents' Estates: Property: Joint Tenancy: States. The determination of whether a decedent's spouse had the capacity to devise to decedent an interest in jointly held property is governed by the law of the state where the real property is situated.
3. Decedents' Estates: Property: States. The determination of the extent of a spouse's capacity to devise personal property is governed by the law of the state in which he or she was domiciled at the time of his or her death.
4. Contracts: Parties: States. The rights and duties of contracting parties are governed by the law of the state with the most significant relationship to the transaction and the parties. The relevant principles a court should consider are the place of the contracting, the place of any negotiations which occurred, the place of performance, the location of the subject matter, and the domicile or residence of the parties.
5. Wills: Contracts: Parties. Although a joint will is a testamentary instrument, it may also be a contract or evidence of a contract between the two parties. The contract may be an agreement to devise, and it may include an agreement not to revoke the wills.
6. Decedents' Estates: Wills: Contracts: Words and Phrases. A contract and a will, although one document, are distinct and separate and are governed by different legal principles. A will is revocable because it is ambulatory in nature and does not become effective until the death of the testator. The surviving testator therefore may revoke the will, but the survivor or the survivor's estate may be subject to an action for breach of the contract.
7. Wills: Property: Joint Tenancy. The fact that joint tenancy property passes to the survivor by title does not prevent the property from being designated as subject to the terms of the will.
8. Decedents' Estates: Property: Joint Tenancy. Real property held in joint tenancy cannot be devised; rather, it passes by operation of law to the surviving tenant.
9. Decedents' Estates: Wills. Although a joint will does not contain any express restrictions on the survivor's use and disposition of estate property, the survivor implicitly agrees that she or he will carry out the testamentary intent of the joint will.
10. Decedents' Estates: Wills: Contracts: Property: Gifts. The contractual duty of the survivor to carry out the testamentary intent of a joint will does not prohibit the survivor from using his or her property for the necessities and comforts of life. The survivor is not prohibited from changing the form of the property and is not prohibited from making reasonable gifts of estate property to third parties.
11. Decedents' Estates: Gifts. Reasonableness of a gift would depend upon the proportion that the value of the gift bears to the value of the estate.
Alan L. Plessman, Lincoln, for appellants.
Con M. Keating, of Bruckner, O'Gara, Keating, Hendry, Davis & Nedved, P.C., Lincoln, for appellee Powell.
David Michel, Robert Michel, and James Michel appeal from a district court order declaring that property held jointly by themselves and decedent, Mary Bengston, was property of her estate and imposing a restraining order against disposing of the property. We reverse the decision of the district court and remand the cause for further proceedings.
This dispute concerns various money accounts and shares, each of which decedent, at the time of her death, owned jointly with one or more of appellants, her brothers.
On April 26, 1983, decedent and her husband executed a single-instrument joint and mutual will. The will was executed in Minnesota, their place of residence. The will provided that "[w]e give, devise and bequeath unto the survivor of us all and any real and personal property owned by us, either jointly or severally, for his or her own use." The will further provided that upon the death of the survivor, "we give, devise and bequeath all of the rest, residue and remainder of our estate of every kind and nature wheresoever situated whether or not owned by us or hereinafter acquired by us including any lapsed legacy" in the following percentages: Thomas Michel, 10 percent; David Michel, 25 percent; Robert Michel, 7 1/2 percent; James Michel, 7 1/2 percent; Eric Schatz, 10 percent; Romaine Powell, 15 percent; Stephen Neighbors, 10 percent; and Leone and Marvin Neighbors, 15 percent. At the time decedent and her husband executed the will, they were joint tenants in certain real property located in Minnesota. Decedent and her husband also shared joint tenant ownership in stocks and certificates of deposit.
On October 15, 1989, decedent's husband died, and the joint will was probated in Minnesota. The only property listed in the inventory of his estate was several stock certificates. The total estimated value of those stocks was $20,190.73. Although appellants stipulated that these stocks were held jointly with decedent, there is no evidence in the record of the actual ownership interests of either decedent or her husband in the stock certificates. The inventory of her husband's estate did not include any real estate property.
After her husband's death, decedent conveyed the Minnesota real property to appellants and herself as joint tenants. Sometime thereafter, the Minnesota real property was sold and the proceeds of the sale were used to purchase the accounts and shares which are the subject of the present litigation. The following constitutes an itemized list of the disputed property, the form of title in which it was held, and the value or extent of such property:
(1) Time access account M. Bengston for David $10,000
and Robert Michel
(2) Time access account M. Bengston or David 36,500
Michel
(3) Time access account M. Bengston for David 33,000
Michel
(4) Time access account M. Bengston for James 33,000
Michel
(5) Time access account M. Bengston or James 36,500
Michel
(6) Time access account M. Bengston for Robert 33,000
Michel
(7) Time access account M. Bengston or Robert 36,500
Michel
(8) Various shares M. Bengston and David 5,697
and Robert-joint tenants
Appellants stipulate that a portion of the money used to purchase these accounts and shares came from the proceeds of the sale of the Minnesota real property. Appellants also stipulate that a portion of the money used to purchase these accounts and shares came from stocks and certificates of deposit which decedent held jointly with her husband. Appellants state that they do not know if money or property decedent inherited through her husband's estate was used to purchase the accounts and shares listed above. Appellants concede that they did not contribute any money to the purchase of the above-listed property.
After her husband's death, decedent moved to Nebraska, where she resided until her death on February 9, 1991. Appellee Romaine Powell was appointed personal representative of decedent's estate.
On June 3, 1991, Powell commenced an action for declaratory judgment in Lancaster County District Court pursuant to Neb.Rev.Stat. § 25-21,152 (Reissue 1989). Powell contends that the joint and mutual will restricted decedent's right to dispose of property she acquired when her husband died, that such property is traceable to the property decedent held jointly with appellants, and that the accounts and shares should be made a part of decedent's estate.
After a stipulated trial, the district court entered an order declaring that the property held by appellants is property of decedent's estate. In issuing its order, the district court made several findings: (1) that by the terms of the joint will, decedent and her husband entered a binding, irrevocable contract to devise which is recognized by both Minnesota and Nebraska law; (2) that Minnesota law applied to the interpretation and enforcement of the contract; (3) that under either Minnesota or Nebraska law, the jointly held real property was subject to the terms of the contract set forth in the joint will; (4) that such property which passed to decedent is traceable to the accounts and shares held by appellants, and therefore (5) that the accounts and shares are subject to the terms of decedent's will regardless of the fact that they were held jointly by decedent and appellants.
Appellants filed a motion for new trial, which was overruled. Appellants timely appealed to the Nebraska Court of Appeals. We granted Powell's motion to bypass the Court of Appeals pursuant to Neb.Ct.R. of Prac. 2B (rev. 1992).
Appellants contend that the district court erred in (1) finding that Minnesota law controlled the validity and construction of the will, (2) finding that the accounts and shares are property of the estate and are controlled by the will, and (3) overruling appellants' motion for new trial.
The issues before us involve only questions of law. Regarding questions of law, an appellate court is obligated to reach conclusions independent of those reached by the trial court. First Nat. Bank v. Daggett, 242 Neb. 734, 497 N.W.2d 358 (1993); Dowd v. First Omaha Sec. Corp., 242 Neb. 347, 495 N.W.2d 36 (1993).
Before we may address the merits of the present action, we must determine which state law governs the issues, Minnesota or Nebraska.
The determination of whether Minnesota or Nebraska law governs the issues raised in the present case is affected by the theories underlying...
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