SULLIVAN v. ALBUQUERQUE NAT. TRUST & Sav. BANK

• Decision Date: 29 December 1947
• Docket Number: No. 5032,5032
• Citation: 51 N.M. 456,188 P.2d 169
• Court: New Mexico Supreme Court
• Parties: SULLIVAN v. ALBUQUERQUE NAT. TRUST & SAVINGS BANK OF ALBUQUERQUE et al.

51 N.M. 456

188 P.2d 169

SULLIVAN

v.ALBUQUERQUE NAT. TRUST & SAVINGS BANK OF ALBUQUERQUE et al.

No. 5032.

Supreme Court of New Mexico.

Oct. 4, 1947.

Rehearing Denied Dec. 29, 1947.

[188 P.2d 171, 51 N.M. 458]

William T. O'Sullivan, of Albuquerque, for appellant.

Simms, Modrall, Seymour & Simms and Martin A. Threet, all of Albuquerque, for appellees.

SADLER, Justice.

We are asked to reverse a judgment of the district court of Bernalillo County dismissing for want of indispensable parties the suit of plaintiff (appellant) seeking an adjudication that certain real and personal property standing in his wife's name at the time of her death was community property rather than her separate estate and, hence, his by right of full ownership.

Evelyn Clark Sullivan, the deceased wife of the plaintiff, died on March 2, 1944, at Albuquerque, N. M., after a marriage to him in the state of New York which had continued uninterruptedly from its date on July 28, 1918, until the time of her death. Soon after the plaintiff's marriage, he entered the Army of the United States and served in World War I. Due to the fact that he was an incompetent upon his discharge from the Army in 1919, and having continued such, some years later and on October 8, 1934, the probate court of Cook County, Illinois, appointed the wife guardian of his estate. As such she collected over a considerable period of time certain veteran's benefit funds, such as monthly pension and compensation or disability benefits, belonging to him.

About the year 1921, during the residence of the husband and wife in Albuquerque, she acquired title to a certain piece of improved real estate, which they occupied as a home; also the furniture, furnishings and household effects therein and, as well, the sum of one thousand ($1000) dollars in cash, at the time of the wife's death, stood to the credit of an account in her name in Albuquerque Trust and Savings Bank in Albuquerque. Following her death, a last will and testament which she executed in her lifetime was probated at Kenosha, in the state of Wisconsin. Northwestern Loan and Trust Company of Kenosha in that state was named executor of the will as well as trustee of decedent's estate and duly qualified as such. Subsequent to the probate of the will and on June 9, 1944, Albuquerque National Trust and Savings Bank of Albuquerque, New Mexico, was appointed ancillary administrator with the will annexed in Bernalillo County, New Mexico, and duly qualified as such. Under the terms of the will the following personswere named either as a legatee, cestui que trust, remainderman, contingent remainderman or trustee, to-wit: Mildred Coulson, Lester F. Clark; Northwestern Loan and Trust Company; Edward Thomas McGuire, an Incompetent; Lillian Clark; Christian Science Benevolent Association of Boston and Theodore Sullivan, the plaintiff herein.

The original complaint was captioned, as to plaintiff, when filed: 'Theodore Sullivan, an Incompetent Person, by William T. O'Sullivan as Ancillary Guardian of his Estate.' William T. O'Sullivan, appearing as attorney for the plaintiff, had succeeded by appointment to ancillary guardianship of plaintiff's estate in New Mexico a short time after the death of the plaintiff's wife, she having filled the office of general guardian of his estate, under an appointment in Illinois, as aforesaid, for approximately ten years prior to her death.

The original complaint consisted of two causes of action, the first alleging that the real estate had been purchased with the proceeds of veteran's benefits of the plaintiff and that, contrary to an understanding between the parties, the title was taken in the wife's name; that it and the furniture, furnishings and household effects, likewise purchased with funds belonging to the plaintiff, constituted his separate estate. It contained the further allegation that the funds deposited in the Albuquerque bank to the credit of plaintiff's wife, as aforesaid, consisted of commingled proceeds of veteran's benefits belonging to plaintiff plus rentals received from said real estate and constituted community property of the two spouses. The defendant bank, as administratorwith the will annexed of testatrix, was charged to have taken wrongful possession of all this property under a claim that it was separate estate of decedent. And as a second cause of action, the plaintiff repleaded all paragraphs of the first cause of action and in an added paragraph set up a confidential relationship to have existed between the parties, the receipt by the wife of the funds aforesaid and their investment in the properties mentioned, taking title in her own name.

The plaintiff prayed (1) that a decree be entered declaring all said property and funds to belong to him and calling upon defendant bank, administrator as aforesaid, to account to plaintiff therefor and for the rents and profits thereof; or, in the alternative, (2) that a trust be impressed upon all of said property in plaintiff's favor to the full extent his funds could be shown to have been wrongfully invested therein-and for general relief.

The answer of the Albuquerque Trust and Savings Bank as administrator with the will annexed consisted largely of general denials but with an affirmative plea, nevertheless, showing disposition of allfunds received from the government of the United States for support of herself and husband and for expenses of guardianship. It further alleged that she had fully and finally accounted in the guardianship proceeding in Illinois up to and including the 31st day of January, 1944, and that there were no funds whatever on hand unexpended belonging to the plaintiff on said date.

In the meantime, an offer to purchase the real estate involved together with the household furniture, furnishings and personal effects in the residence located thereon for the stated price of $5500 less a realtor's commission of five (5%) per cent. having been made, a written stipulation, signed by or on behalf of Albuquerque National Trust and Savings Bank, ancillary administrator aforesaid and Theodore Sullivan, Incompetent, by attorneys thereunto duly authorized and approved by the court, was filed with the papers in the case. Under its terms the real estate and personal property were to be sold and converted into cash and the net proceeds held by the bank as ancillary administrator, subject to the condition that:

'* * * said net proceeds shall be treated as though they were the real and personal property unsold and such rights as the incompetent and his Ancillary Guardian may be determined to have, shall be by all parties treated as transferred to said net proceeds to the end that the purchasers may receive a clear and marketable title.'

At this stage of the proceedings below, Albuquerque National Trust and Savings Bank, then the sole defendant, moved a dismissal of the complaint filed because of the absence of indispensable parties, to-wit, the parties hereinabove named as either a legatee, cestui que trust, remainderman, contingent remainderman or trustee whose interests would be adversely affected, it was said, should the claim of sole ownership by Theodore Sullivan, Incompetent, of the property and estate assertedly left by testatrix be established. Following argument on the motion, and on Marcy 13, 1946, an order sustaining same was entered by Judge Henry G. Coors, senior judge of the Second Judicial District, then presiding in the trial of said cause. The order granted the plaintiff twenty days within which to amend by bringing in as defendants the parties held to be indispensable, in default whereof the complaint was to stand dismissed.

The next day after entry of the order sustaining the motion to dismiss, an amended complaint was filed in which all parties held indispensable were joined as parties defendant. Except to join the added parties as defendants and to institute the suit in his own proper person as plaintiff rather than as an incompetent by the ancillary guardian of his estate, the amendedcomplaint in its allegations was substantially the same as the original complaint. The defendant, Albuquerque National Trust and Savings Bank, answered the amended complaint. The remaining defendants who had been joined as indispensable parties by the amended complaint, all appeared specially and joined in a motion to quash service of process on each and to dismiss the complaint for lack of jurisdiction over subject matter of the suit and of the persons of said defendants. This motion wasduly argued and on January 16, 1947, the court entered its order quashing service of process on the non-resident defendants which had been made by personal service outside the state and dismissing the complaint as to all defendants. This appeal followed.

We think the trial court erred in holding that the absent and non-resident defendants were indispensable parties to an adjudication of the plaintiff's claim to ownership of the personal property in the possession of testatrix at the time of her death. This consisted of the furniture, furnishings and household effects as well as the sum of one thousand ($1000) dollars in cash standing to the credit of her account in Albuquerque Trust and Savings Bank when she died. See York v. American Nat. Bank, 40 N.M. 123, 55 P.2d 737; 34 C.J.S., Executors and Administrators, § 740b, p. 766, and 21 Am.Jur. 904, §§ 939 and 940, Id. The author of the text in American Jurisprudence last cited, states:

'An executor or administrator usually is deemed to represent the beneficiaries entitled to the personal estate in all suits and actions in reference thereto to such an extent that it is unnecessary that they be joined as parties.'

As to the real estate, a different rule prevails. In litigation affecting the title to, ownership of, or interest in, real estate the heirs and devisees are usually regarded as indispensable parties. 34 C.J.S., Executors and Administrators, § 741, p. 768; 21 Am.Jur. 902; Cf. Burguete...