Stanley v. U.S. Nat. Bank of Portland

• Decision Date: 25 March 1924
• Citation: 224 P. 835,110 Or. 648
• Parties: STANLEY ET AL. v. UNITED STATES NAT. BANK OF PORTLAND ET AL.
• Court: Oregon Supreme Court

224 P. 835

110 Or. 648

STANLEY ET AL. v. UNITED STATES NAT. BANK OF PORTLAND ET AL.

Supreme Court of Oregon

March 25, 1924

Department 2.

Appeal from Circuit Court, Coos County; John S. Coke, Judge.

Suit by Cornelius C. Stanley and others against the United States National Bank of Portland and another, in which George Parks Stanley and Harriet Cornelia Woodward intervened. From a judgment for plaintiffs and interveners, the named defendant appeals. Affirmed.

A. D. Platt and H. G. Platt, both of Portland (Platt & Platt, Montgomery & Fales, of Portland, on the brief), for appellant.

J. P Kavanaugh, of Portland (T. W. Hughes, of Portland, on the brief), for interveners.

John H Hall, of Portland, for respondents.

McCOURT J.

This is a suit to quiet title to 160 acres of growing and standing timber and to an undivided one-half interest in and to 680 acres of land, all situated in Coos county, Or. The land and the timber in suit are assets of the estate of Lemuel C Stanley, deceased. The plaintiff Wm. H. Stanley and the defendant F. S. Stanley are sons of the above-named Lemuel C. Stanley, deceased, and each is a devisee and legatee under the last will and testament of the decedent. The plaintiffs Cornelius C. Stanley, Wilbur Stanley, and Mildred Cave are all children of Wm. H. Stanley and are also devisees and legatees under said will. The interveners, Geo. Parks Stanley and Harriet Cornelia Woodward, are children of the defendant F. S. Stanley, and claim to be devisees and legatees under said will.

Lemuel C. Stanley died in the state of Wisconsin in 1909, leaving an estate appraised at the sum of $438,579.53, consisting of personal and real property in the state of Wisconsin and real property in the state of Oregon. The defendant F. S. Stanley was named as sole executor of the last will and testament of Lemuel C. Stanley, to act as such executor without bonds or other security, and by the terms of the will the executor thereof was directed and empowered to take and have full power and control of all the assets and properties of the estate, and to hold and invest the same as in his judgment would be for the best interests of all concerned, with full power and authority to sell, dispose of, and convey any property of which the testator might die seized or possessed, as such executor might deem for the best interests of the estate. The executor was also directed to provide for the specific legacies created by the will and pay the same to the legatees named therein out of the assets of the estate, at the times designated in the will and in accordance with the directions thereof.

Among the assets of the estate were the lands above referred to, in which the decedent at the time of his death owned an undivided one-half interest. The standing timber above mentioned was purchased by F. S. Stanley with funds of the estate of Lemuel C. Stanley, while acting as executor of the will of the latter.

The will of Lemuel C. Stanley was probated in Wisconsin in November, 1909, and thereupon F. S. Stanley qualified and entered upon his duties as executor of said will. As such executor defendant F. S. Stanley assumed the control and management of all the assets of the estate, and continued to administer the same until April, 1917, at which time it was ascertained that he had failed and neglected to provide for or pay any of the legacies created by the will, except those made to himself, and that he had wasted and misappropriated a large portion of the estate, whereupon he was removed from the office of executor, and plaintiff E. M. Bradford was appointed administrator of the estate with the will annexed.

The will of Lemuel C. Stanley, deceased, was not offered for probate in the state of Oregon, and no administration of the estate, ancillary or otherwise, thereof, has been instituted in this state. At the time of the death of the testator his estate included money and other personal property to a large amount, and considerably in excess of the sums required to pay debts, funeral expenses, and all specific legacies.

A brief summary of the legacies and bequests and directions to the executor contained in the will of Lemuel C. Stanley, deceased, is as follows:

First. Direction as to the payment of debts and funeral expenses.

Second. Legacy to his son F. S. Stanley of $50,000.

Third. Legacy of $50,000, the income only to his son Wm. H. Stanley during his life and at his death the sum to be paid to his children or their survivors, the plaintiffs Cornelius C. Stanley, Wilbur Stanley and Mildred Cave, the living children of Wm. H. Stanley.

Fourth. A devise to F. S. Stanley of certain real estate in Wisconsin and a legacy of certain personal property.

Fifth. A direction for the purchase of a farm of the value of $5,000, the life use thereof to be in Wm. H. Stanley, and the title at his death to pass to his children.

"Sixth: I give, grant, devise and bequeath all of the balance and residue of my estate of every name and nature, real, personal and mixed as follows:

"To my son, Frederick S. Stanley one-half thereof, and to the said children of my son William H. Stanley herein named, the other half thereof to be paid to them as hereinafter named and provided and under the conditions herein specified. My executor shall take full control of my estate and hold and invest the same as in his judgment will be for the best interests of all concerned and shall pay to the said Lemuel, Cornelius, Wilbur and Mildred Stanley, children of my son William H. Stanley, such part of the income thereof only as he may deem sufficient for their support and education until he or she may arrive at the age of thirty-five (35) years, at which time the part and share herein devised to him or her shall be paid, and said executor may in his discretion pay the same when he or she shall arrive at the age of twenty-five (25) years and in case of either or any of the children of my son William H. Stanley shall die before my decease or before his or her said share is paid then the survivors shall be entitled to his or her share.

"Seventh: It is my desire that the one half of the residue of my estate herein bequeathed and devised to my son Frederick S. Stanley shall be invested by him as he thinks best and the income therefrom to be for his own use during his lifetime and at his death said one-half of the residue of my estate to go to George Parks Stanley and Harriet Cornelia Stanley, children of my son Frederick S. Stanley."

Eighth. F. S. Stanley named as executor, directing that no bond be required and granting him full power and control of all property of the estate, with the right and power to sell all or any part thereof at his discretion.

Ninth. The ninth clause of the will consisted of directions to the executor and expressed further specific limitations as to the manner of handling the half of his estate bequeathed to the children of Wm. H. Stanley and the investment of the specific legacy of $50,000, the income of which was bequeathed to Wm. H. Stanley during his lifetime and the principal to his children at his death.

During the course of his administration of the estate, defendant F. S. Stanley paid himself, without order of court, all the amount of cash and specific legacies bequeathed him under the will, and in addition thereto, according to his own admission, he appropriated and converted to his own use $84,540.70 of the funds of the estate, but the uncontradicted testimony in the record shows that defendant F. S. Stanley, as such executor, in addition to the particular bequests made him by the will, appropriated and converted to his own use out of the estate money and assets amounting to $149,965.01. The amount of the assets remaining in the hands of defendant F. S. Stanley at the time he was removed as executor, as above stated, amounted in value to the sum of $97,758.89, including the real property in controversy in this suit. Defendant F. S. Stanley was at the time he was removed as executor, and is now insolvent.

In March, 1917, the Lumbermen's National Bank of Portland, Or., recovered a judgment against defendant F. S. Stanley in a sum in excess of $30,000, on which there remains unpaid a balance in excess of $12,000. The judgment mentioned was recorded in Coos county in May, 1917, and subsequently the judgment creditor sold and transferred the judgment to the defendant United States National Bank of Portland, Or.

Defendant F. S. Stanley did not file an answer or make any defense in the suit. The facts above stated are not controverted.

Under the issues formed by the pleadings of the parties, it is claimed by the plaintiffs that under and by the will of Lemuel C. Stanley an undivided one-half of the real estate in Coos county, Or., vested in them, and the interveners claim that under and by the will the other undivided one-half vested in them, subject to a life estate in F. S. Stanley. Defendant bank claims that F. S. Stanley, under the will, was vested with a fee, and not merely a life estate, in an undivided one-half of the lands mentioned, and that its judgment thereafter became a lien thereon.

In support of their right to maintain this suit, plaintiffs and interveners urged in the court below, and renew the contention here, that the misappropriation of the assets of the estate by F. S. Stanley while acting as executor to an amount largely in excess of the value of his share of the estate, in view of his insolvency, is deemed in equity a full satisfaction of his right and claim to such share, and works an extinguishment of his title in and to the remaining assets, both as against himself and his judgment debtor.

On the other hand, the defendant bank insists that the principle which plaintiffs and interveners seek to invoke is...