Williams v. Morrison

• Decision Date: 05 June 1951
• Docket Number: No. 47857,47857
• Parties: WILLIAMS et al. v. MORRISON et al.
• Court: Iowa Supreme Court

Page 666

48 N.W.2d 666

242 Iowa 1054

WILLIAMS et al. v. MORRISON et al.

No. 47857.

Supreme Court of Iowa.

June 5, 1951.

Rehearing Denied Sept. 21, 1951.

Jones, Cambridge & Carl, of Atlantic, and Kimball, Peterson, Smith & Peterson, of Council Bluffs, for appellants.

McGinn & McGinn, Addison G. Kistle and Albert McGinn, all of Council Bluffs, for appellees.

THOMPSON, Justice.

This action was brought by Woodman Morford and Roscoe S. Jones, as administrators C. T. A. of the estate of Ed Long, deceased, with whom are joined the remaindermen under the will. Defendants are the heirs at law and the administratrix of the estate of Alice Long, who was the widow of Ed Long and the life tenant by the terms of his will. The action was in form a quieting title proceeding in equity. It is the contention of the plaintiffs that Alice Long, as life tenant having possession of all the property of the estate of her husband, loaned the sum of $12,000 from the corpus of the estate to E. A. Rudolph and S. H. Rudolph; and that a few years later, the Rudolphs having failed to meet the stipulated payments and claiming to be unable to do so, the loan was settled by the conveyance by the Rudolphs of 160 acres of land in Cass county, Iowa, upon which a mortgage had been given by them, as security for the loan, to Alice Long. Alleging these facts, the plaintiffs contend that the real estate in fact belongs to the estate of Ed Long and that it was in fact personalty in said estate; and they ask that title be quieted in the administrators. The defendants deny that the $12,000 which was loaned to the Rudolphs came from the corpus of the Ed Long estate, but assert that it was the money of Alice Long individually. They further contend that there is a misjoinder of parties and causes of action; and that the action was not properly brought in equity, but that it should have been tried in probate, as a part of the proceedings in the Ed Long estate. A statement of the facts shown in evidence becomes essential at this point.

Ed Long died, a resident of Cass county, on August 27, 1926. He left no issue; but his wife, Alice Long, survived, until her death on October 19, 1939. She died intestate, and the defendants herein are her administratrix and heirs at law. The will of Ed Long, after providing for payment of debts and devising in fee simple to Alice Long the homestead in Atlantic and giving her the furniture therein, set up a life estate for her, as follows: 'Paragraph 4. All the rest, residue and remainder of my property and estate, real, personal, and mixed, of which I shall die seized and possessed, or to which I may be entitled at the time of my death, or which I shall own at the time of my death, wherever found or situated, I will, give, bequeath and devise to my beloved wife, Alice M. Long, for and during the term of her natural life, giving to her the right to use and enjoy the real estate and rents and profits thereof during her lifetime, and giving her the right to manage, possess, and control the personal property and to change the form thereof, and to invest and reinvest the same during the term of her natural life, and I exonerate her from qualifying as trustee and from giving any bond in order to be entitled to receive and possess and manage the personal property.'

The will then proceeded to name the remaindermen who should take after the death of Alice Long, and nominated her as executrix without bond. She qualified as such executrix and proceeded to take charge of the property of the estate. That by her conduct she elected to take under the will seems beyond doubt, and it is not contended otherwise. She filed an inventory, but made no reports of her management of the estate during her lifetime. Shortly after her death the present administrators C. T. A. were appointed on October 21, 1939. The petition herein was filed by them on May 21, 1941, with amendments on December 3, 1941, and September 3, 1943. The prayer was that the shares of the plaintiffs in the 160 acre farm be confirmed, that Alice Long be declared to have been a trustee for the remaindermen holding the property in trust for them; that a receiver be appointed; that the administratrix of the Alice Long estate be required to account for the rents and profits since the death of Alice Long; and that title be quieted in the estate of Ed Long. Defendants by their answer raised the question of misjoinder of parties and of causes of action, denied that any of the corpus of the Ed Long estate was used in making the Rudolph loan which was later converted into the 160 acre farm involved in this litigation; and by implication and argument, at least, contend that plaintiffs' only remedy was in probate in the nature of a demand for an accounting in the Ed Long estate, which was still open.

The trial court found as a fact that the $12,000 loaned to the Rudolphs came from the principal of the personalty of the Ed Long estate; but he was of the opinion that plaintiffs' only remedy was in probate, in the nature of a request for an accounting in said estate. Upon that ground he dismissed plaintiffs' petition, and so we have this appeal.

For the sake of clarity, it is pointed out that there are actually three farms to which reference is made and which figure in the evidence in this case. Ed Long died seized of one farm of 240 acres, known as the 'home farm,' which was clear of encumbrance and was the only substantial asset of the estate, either realty or personalty, apparently remaining upon the death of the life tenant, Alice Long. He also owned at his death a second farm of slightly over 135 acres, which was encumbered by a mortgage in the principal sum of $9,000, and which was later taken over by the mortgage holder upon foreclosure. The third farm is the 160 acre tract actually involved in this litigation. Other facts will be referred to in the opinion which follows.

I. It is apparent that a factual question should be first determined. If the life tenant did not use money belonging to the corpus of her husband's estate in making the loan to the Rudolphs, then the litigation is at an end and plaintiffs cannot prevail. The trial court held with plaintiffs on this point; but since the matter is here for trial de novo we are required to examine into this question of fact and to determine whether the conclusion of the able trial judge was right. We are of the opinion that he correctly decided this issue.

We have pointed out that Alice Long, during her lifetime, made no reports to the court, except for the filing of the required inventory and preliminary inheritance tax schedule, and some applications for authority to pay debts. These show total personal property of the estate valued at $21,700.37; but the total of mortgages payable to the estate is placed at a value of $11,000, including interest; while the record shows that the note and mortgage executed by Louisa M. Harris and secured by land in Nebraska were paid on March 5, 1928, in the sum of $13,041.44. The actual value of the personalty was therefore presumably somewhat larger than the inventory showed. The preliminary inheritance tax report referred to estimated debts of the estate, without itemizing them, as being in the sum of $17,500. From this, defendants argue that, there being a difference of only approximately $4,000 between the listed personalty and the debts, Alice Long could not have taken $12,000 from the personalty for the Rudolph loan. However, they are here overlooking the fact that there was included in the total of $17,500 estimated debts the sum of $9,000 represented by a mortgage executed by Ed and Alice Long upon the 135 acre farm to which they had title; which mortgage was foreclosed and was never paid by Alice Long or by the Ed Long estate. Consequently, the personalty of the estate was not diminished by the amount of the mortgage; and since the other debts of the estate, as listed and paid, amounted to no more than $7,000, defendants' position at this point is clearly untenable. There remained ample funds from the personalty to make the Rudolph loan from the corpus of the estate.

The Harris loan, as above noted, was paid on March 5, 1928. The proceeds were deposited by Alice Long, the then acting executrix, in her account as such executrix, in the Whitney Loan & Trust Company in Atlantic. On June 1 of the same year she transferred $12,000 from the executrix account to a savings account in her own name in the same bank; and on June 7th following there was checked from the executrix account to S. H. Rudolph the sum of $5,000 as a loan. On October 1, 1928, Alice Long loaned S. H. Rudolph an additional $5,000, this coming from her savings account to which she had transferred $12,000 on June 1 as above noted. Mr. Rudolph, who was her attorney at the time, as a witness called by plaintiffs, testified that:

'I had examined her account personally and knew what the amount was on deposit at the time, and told her she would have to transfer it from the Ed Long estate to her individual deposit.' Mr. Rudolph further testified that there was an additional loan made some time in the early spring of 1930 for $2,500. He then says: 'I can't recall the date at this time, but there was a note given combining the two original loans in the amount of $12,000.00.' Actually, the $12,000 note and mortgage seem to have been given on February 1, 1930. The Alice Long checking account, into which all funds both from the estate account and her own savings account seem to have been eventually concentrated, shows a check to S. H. Rudolph on February 10, 1930, in the sum of $1,082. Whether this was involved in the $12,000 note and mortgage and the loan of $2,500 was actually made later, as argued by defendants, we do not know. The failure of Alice Long to keep accurate accounts and to make reports to the court as executrix of the estate has left many of these items in confusion. We must accept Mr. Rudolph's...