Skarda's Will, In re

• Decision Date: 18 June 1975
• Docket Number: No. 9681,9681
• Citation: 88 N.M. 130,537 P.2d 1392,1975 NMSC 31
• Parties: In the Matter of the Last WILL and Testament of A. W. SKARDA, Deceased. Cash T. SKARDA, Petitioner-Appellant, v. Lynell G. SKARDA, Executor-Appellee.
• Court: New Mexico Supreme Court

Page 1392

537 P.2d 1392

88 N.M. 130

In the Matter of the Last WILL and Testament of A. W.

SKARDA, Deceased.

Cash T. SKARDA, Petitioner-Appellant, v. Lynell G. SKARDA, Executor-Appellee.

No. 9681.

Supreme Court of New Mexico.

June 18, 1975.

Rehearing Denied July 16, 1975.

[88 NM 132] Shipley, Durrett, Conway & Sandenaw, Alamogordo, for petitioner-appellant.

Grantham, Spann, Sanchez & Rager, Albuquerque, for executor-appellee.

OPINION

DONNELLY, District Judge.

This is an appeal from the final decree of the District Court of Curry County which approved the Final Account and Report of the executor of the estate of A. W. Skarda, deceased. The proceedings below originated in the probate court and were removed to the district court sitting in probate upon application of Cash T. Skarda, the appellant herein.

During the pendency of the probate proceedings in this case, the appellant filed a separate suit in the District Court of Curry County against Lynell G. Skarda, both individually and in his capacity as executor of the last will and testament of A. W. Skarda. That suit sought relief against other parties praying for an adjudication of certain issues which were in part raised in the probate proceedings in the instant case. From decisions adverse to the appellant in both lower courts, appeals were taken to this court. The appeal in the collateral district court suit has been the subject of a separate opinion of this court. See Skarda v. Skarda, 87 N.M. 497, 536 P.2d 257 (1975).

The decedent, A. W. Skarda, whose estate is the subject of this appeal, died on December 13, 1967, a resident of Curry County, New Mexico. Decedent left a last will and testament dated September 2, 1967, which provided for the disposition of his estate among his three surviving sons, Langdon L. Skarda, Lynell G. Skarda and Cash T. Skarda. The testator was unmarried at the time of his death, having been previously divorced.

Following decedent's death, his last will and testament was filed for probate, and the Probate Court of Curry County, on February 14, 1968, entered its order admitting the will to probate and appointing Lynell G. Skarda as executor. Thereafter, the executor filed an inventory of the assets of the estate, prepared estate tax returns and paid certain debts of the estate. The executor filed his Final Account and Report in the estate on November 2, 1971. Soon after the Final Account and Report was filed, the appellant removed the cause to the district court, sought a stay of estate proceedings until the separate district court suit initiated by him was concluded and filed objections to the proposed Final Account and Report of the executor.

After a hearing following the filing of objections to the Final Account and Report, the district court sitting in probate denied a motion to strike the objections of the appellant, denied appellant's motion for a stay of proceedings and allowed the executor to file an Amended Final Account and Report.

Following the filing of an Amended Final Account and Report by the executor, appellant once more filed objections thereto and sought the removal of the executor. Appellant again pressed his contention that the district court case filed by him should be concluded prior to the estate proceedings in order to permit an adjudication of several issues involved in the probate of decedent's last will and testament.

Subsequent to the hearing on the Amended Final Account and Report of the executor, the court issued its decision approving such report and denying each of the appellant's objections thereto. From the final decree approving the Amended Final Account and Report of the executor, this appeal was taken.

Appellant has asserted nine separate grounds on appeal. The contentions upon which reversal is sought are that the lower court allegedly erred in the following respects: (1) in finding that the decedent's estate was fully administered, that taxes of the estate were paid, and that only specified property remained in the executor's hands for distribution; (2) in approving the executor's acts of paying unfiled claims which were barred; (3) in approving the executor's conduct of borrowing funds on begalf of the estate and finding that the estate was insolvent; (4) in permitting the executor to exercise an option to purchase stock devised in trust by the will of decedent; (5) in not admitting certain documentary exhibits into evidence; (6) in approving the sale of estate assets to the executor in exchange for the executor assuming certain estate obligations; (7) in closing the estate prior to the payment of all estate and succession taxes; (8) in approving the executor's disbursements of estate money for improvements to a building; and (9) in refusing to remove the executor from acting further for the estate.

Under the first point relied upon for reversal, appellant claims error on the part of the trial court in finding that the estate had been fully administered, all taxes paid, and nothing remained to be accomplished other than the distribution of certain property. The principal basis of the claim is appellant's assertion that a number of transfers consummated by decedent shortly before his death should have been inventoried and distributed as assets of the estate.

Appellant maintains that the various transfers carried out by decedent prior to his death constituted a basis giving rise to the imposition of resulting or constructive trusts in favor of the estate of decedent, and that such trusts should have been inventoried as assets of the estate.

The trial court rejected appellant's contention that resulting or constructive trusts were created and in Finding of Fact No. 17, found that the objections filed by appellant were without merit and should be disallowed. Further, the trial court found, in Findings Nos. 14 and 15, that the executor made certain disbursements of estate funds and paid certain debts and expenses of the estate and that such payments were reasonably necessary to preserve and protect the assets of the estate, and the creditors advancing such funds took the position of and were subrogated to the right of the executor to reimbursement.

In the face of the attack upon these findings by appellant, we must determine whether the evidence supports the findings. The duty of an appellate court where findings of ultimate facts are properly challenged, is to examine the evidence and ascertain whether it supports the findings. Martinez v. Trujillo, 81 N.M. 382, 467 P.2d 398 (1970); Trigg v. Riebold, 79 N.M. 399, 444 P.2d 584 (1968). The evidence must be viewed in its most favorable light to support the findings. Trujillo v. Romero, 82 N.M. 301, 481 P.2d 89 (1971). On appeal, every reasonable intendment and presumption is resolved against appellant and in favor of the validity of the proceedings in the trial court. Cochran v. Gordon, 77 N.M. 358, 423 P.2d 43 (1967). A judgment or decree of the trial court is to be upheld if it can be supported by correct legal principles, even though the trial court may have based its decision in whole or in part upon other principles. Morris v. Merchant, 77 N.M. 411, 423 P.2d 606 (1967).

Applying the above principles, we affirm the judgment of the trial court in upholding the actions of the executor and the trial court's findings that the Amended Final Account and Report of the executor should be approved and the estate closed.

Appellant's contentions asserting the existence of constructive or resulting trusts were first asserted at the time of the hearing upon the Amended Final Account and Report of the executor, and at a time when claims alleging the existence of such trusts were subject to bar by the statute of limitations. Section 23--1--4, N.M.S.A.1953, applicable to the claim of such trusts, provided a four year statute of limitations for all actions not otherwise specifically provided. Decedent died on December 13, 1967, and the executor qualified on February 14, 1968. The date of final approval of the Amended Final Account and Report was November 20, 1972. At that date, the estate had no way of compelling the imposition of the alleged trusts and the trial court correctly held that the property in question was not a part of the estate. Moreover, it is apparent that the trial court's findings could also be upheld upon the basis of presumptive gifts by decedent to his children and others by such transfers made prior to his death.

Points 2, 3 and 4 asserted by appellant relate to the manner in which the executor handled and discharged the debts of the decedent. The contention is made that, since no claims were filed by the creditors, these debts became barred by virtue of § 31--8--3, N.M.S.A. 1953.

It is the rule in New Mexico that all claims not filed with the estate and notice given of hearing thereon within the time prescribed after the first publication of the notice of appointment of the executor or administrator are barred as a matter of law. In re Estate of Welch, 80 N.M. 448, 457 P.2d 380 (1969). There are, however, certain well-recognized exceptions to this rule.

The requirement of filing, notice and hearing of claims against an estate does not apply to expenses of administration. In re Kenney's Estate,41 N.M. 576, 72 P.2d 27 (1937). Nor does the non-claim statute require a secured creditor to file a claim in the estate when such creditor does not look for payment of his debt from the general assets of the estate, but only to the security for the debt itself. In re Estate of Tarlton, 84 N.M. 95, 500 P.2d 180 (1972); In re Kenney's Estate, supra; Shortle v. McCloskey, 38 N.M. 548, 37 P.2d 800 (1934).

The trial court found, however, that the debts incurred by decedent prior to his death were paid as a cost of administration and not as claims against the estate. The evidence indicates that prior to decedent's death, he incurred a number of substantial debts, including a debt of decedent and others to the First National...