Opinion
Decided November 25, 1940.
Liens — Priorities — Life estate with remainder in fee — Vested remainder may be alienated or mortgaged — Partition by one remainderman — Liens on proceeds of sale — Creditors and remaindermen — One remainderman may have lien on entire fee, when.
1. Where a life estate is devised to testator's wife "so long as she remains my widow," and the remainder is left equally to testator's two children, the children take vested remainders in fee, subject to the interest of the widow, which remainders may be alienated or mortgaged.
2. In such case where there is a distribution of stock in kind to one of the two remaindermen, prior to the termination of the widow's life estate, consented to by the Probate Court and all interested parties, and, subsequently, at the end of the life estate there is not sufficient personalty remaining to give a like amount to the other remainderman under the will, such other remainderman, in an action to partition the real estate, is entitled to a lien on the proceeds of the sale in partition up to the amount advanced to the first remainderman, before the fund so obtained shall be divided equally between them; but, where the transfer of the real estate to the persons named in the will has been ordered by the court to be made on the tax duplicate and where the certificate of transfer has been issued and recorded, the lien of such other remainderman is inferior to the liens of creditors against the interest of such first remainderman.
APPEAL: Court of Appeals for Franklin county.
Messrs. Eagleson Eagleson, for appellant, Helen Eastman.
Mr. Ralph Henney, for appellee, Curtis Sohl.
Messrs. Wilson Rector, for appellee, F. Stanley Crooks.
Mr. T.J. Keating, for appellee, Equitable Life Assurance Society.
Mr. Walter R. Snider, for appellee, Theta Kappa Phi Fraternity. Mr. Henry A. Reinhard, for appellees, Morris Clevenger and B. A. Paint Company.
Mr. R.R. Walcutt and Mr. Mac Lee Henney, for appellees, Anna Cunningham and Russell Wirtz.
Messrs. McCleary Madden, for appellee, Blanche Sohl.
This is an appeal from the Court of Common Pleas of Franklin county on questions of law and fact. The action was begun in that court by the filing of a petition by Helen Sohl Eastman against her brother, Curtis Sohl, both individually and as an executor of the estate of her father, Calvin, and of her mother, Cora Sohl, and various lienholders.
It is asserted that Calvin Sohl was seized in fee simple of certain described real estate, and died testate on the 14th of November 1930, leaving Cora, his widow, now deceased, the plaintiff, Helen Sohl Eastman, and the defendant, Curtis Sohl, his only heirs at law; that item II of the will of Calvin Sohl devised and bequeathed to his wife, Cora, all his estate "so long as she remains my widow." In the event of her remarriage, it was provided that she would receive such portion of his estate as is provided by law, and the remainder shall vest in, and be divided equally, between the two children.
It is alleged that Cora, the widow, elected to take according to the provisions of the will, did not remarry and died testate February 5, 1939; and that Curtis was executor of the estates of both his father and his mother. It is alleged that in 1930 an application was filed in the Probate Court by Curtis and Cora, executor and executrix of the estate of Calvin, for an order authorizing them to distribute in kind to Curtis 1388 shares of the common stock of the Cities Service Company belonging to the estate; that all parties interested consented and the distribution was made; that at the time the stock was received it had a market value of about $20,000, and in that amount it is chargeable to Curtis Sohl in the division of the estate; that at the present time all the property remaining in the estate of Calvin does not have a value in excess of the value distributed to Curtis; that by virtue thereof the plaintiff, under the will of Calvin, is seized in fee of the entire interest in the real estate; and that the personal property is sufficient to pay the claims against the estate. She sets up the fact that certain defendants are lienholders, and prays for partition, that the court determine her rights and those of her brother, and that the interests in the premises may be set off in severalty.
Numerous motions were filed and disposed of and the lienholders by cross-petition asserted claims to the property by virtue of mortgages and judgments.
A receiver was appointed and the plaintiff replied to the several cross-petitions, in the main denying the claims asserted. The answer of Curtis Sohl admits certain allegations of the petition, among them the order of the Probate Court authorizing himself and his mother, as executors, to distribute in kind to him the shares of common stock in the Cities Service Company at the then market value of approximately $20,000. However, he denies that the distribution in kind was made to him as a partial distribution of the estate, and alleges that he is seized in fee simple of a one-half interest in the real estate and that his sister is seized in fee simple of the remaining undivided one-half.
Blanche P. Sohl, the wife of Curtis Sohl, sets up her contingent right of dower in the undivided one-half of the premises.
The cause came on to be heard upon the pleadings and on May 24, 1940, the court found that Calvin Sohl died seized of the real estate, and that by his will his widow took a life estate only in his entire estate, and that his two children each took an undivided half interest, subject to the life estate of the widow. The court then found, as to the lien of the claims asserted by the several cross-petitions, in favor of each, substantially as claimed by the lienors, except as to priorities.
The court further found that the plaintiff had received no part of the estate of Calvin; that Curtis, in 1930, received distribution in kind to the value of $20,000; that there is now no remaining personal property from which the plaintiff can receive an equal amount; and that by reason thereof the plaintiff has an equitable lien to the extent of $20,000 which is superior to the rights of Curtis Sohl, but because of laches on the part of the plaintiff the court found that the plaintiff's equitable lien is inferior to the claim of F. Stanley Crooks and Morris V. Clevenger, but superior to the claims of all other defendants.
The court found that the plaintiff has a legal right to the undivided half of the premises and to hold the same in severalty; that the defendant has a legal right to the undivided half of the premises, subject to the liens, and that the Theta Kappa Phi fraternity is entitled to hold the premises until the expiration of its lease. It was directed that the property be appraised and the commissioners return their finding of the value to the court.
Numerous exceptions were asserted. The plaintiff gave notice of appeal on questions of law and fact from the judgment rendered on the 24th of May 1940, setting up the several judgments appealed from. The lienholders did not give notice of appeal.
The court below in summarizing its opinion concluded, in substance, that the two children received an undivided one-half share in remainder of the real estate, and ordered the partition. The court further held that the two children are entitled to share equally; that Helen has an equitable lien against the share of her brother, Curtis, to the extent of $20,000; that Helen is estopped to assert her lien against certain of the cross-petitioners who have set up mortgages and mechanics' liens; that such mortgages are to be the first lien on the undivided half interest of Curtis, the brother; that upon the sale of the premises, after the payment of the mortgage and the mechanics' lien out of the proceeds of Curtis' share, Helen is entitled to the balance up to $20,000; that after she has received the $20,000, the balance shall be distributed in the order set out by the court to other lienholders and that any balance that may be left shall go to Curtis; and that the fraternity is entitled to hold the premises until the expiration of the present lease. A decree was entered accordingly.
A motion for new trial was filed and overruled.
The plaintiff, Helen Sohl Eastman, filed notice of appeal from the order of the court finding that she had been guilty of laches; that the mortgage and the mechanics' lien are superior to her lien on the undivided half interest of her brother, Curtis; and that the fraternity is entitled to hold the premises until the expiration of the lease.
No other parties join in her appeal, neither do they file separate notices of appeal.
The assignment of errors asserts that the court erred as set out in the notice of appeal.
The court below filed a very carefully considered opinion.
Our view of the matter necessitates a statement of our conclusions, which, while they differ from those of the court below, will ultimately lead to practically the same conclusion.
Calvin Sohl, the father of the two children, died in 1930 leaving a will, the second item of which is as follows:
"I give, devise and bequeath unto my wife, Cora Delkirk Sohl, all my estate, real, personal and mixed of whatsoever kind and wheresoever situated so long as she remains my widow. In the event of her remarriage, I direct that my said wife shall receive such portion of my estate as is provided by law and the remainder of my estate shall vest in and be divided equally between my two children, Curtis and Helen, share and share alike."
The cases of Fetter v. Rettig and Fetter v. Leifer, 98 Ohio St. 428, 121 N.E. 696, hold that under a devise to the wife, "so long as she remains my widow, my entire property both real and personal, wherever it may be situated," the widow took only an estate for life subject to be terminated on remarriage, and not having remarried and being now deceased, the real estate so devised to her passed to the next of kin of the testator as an estate in remainder in fee simple.
The case of Johnson v. Johnson, 51 Ohio St. 446, 38 N.E. 61, holds that under a provision somewhat resembling that of the instant case, the widow took only a life estate in the property with power to consume, and that what remained at the time of her death unconsumed belonged to the remaindermen designated in the will.
In Millison v. Drake, 123 Ohio St. 249, 174 N.E. 776, in an opinion by the court, it is held that under a devise to the wife for life and equally to the children at her death, there is a vested remainder in the children subject to divesting and that a good title is passed by deed of the wife and all of testator's children. It is stated on page 253 that the children of the testator each acquired a vested remainder in the property subject to be divested by the death of any child prior to the death of the life tenant, "and it is also conceded, as it must be, that a vested remainder is an alienable estate in land."
It will be noted that the petition alleges that, by virtue of the advancement and the fact that it is chargeable against Curtis in the division of the estate, the plaintiff is seized in fee of the entire interest in the real estate.
The chapter on partition includes Sections 12026 to 12050, General Code. The first of these sections provides that tenants in common of any estate may be compelled to make or suffer partition thereof in the manner therein provided. It would appear that, if the allegation of the petition to the effect that Helen is seized in fee of the "entire interest in the real estate" is true, she can not call to her aid the chapter on partition for the simple reason that being the owner of the entire fee there is no occasion for partition and that she must seek her remedy in some other appropriate action. However, it is true that if, as a matter of fact, she is not seized of the entire fee, but only an undivided half interest therein, she can have partition under the provisions of the statute, notwithstanding the allegation of her petition.
The case of Tabler v. Wiseman, 2 Ohio St. 208, contains an interesting discussion as to the effect of a partition. It is held:
"The proceeding in partition operates upon the possession, dissolves the unity before existing, and enables each of the owners to have, possess, and enjoy his own share of the common estate in severalty.
"It is well settled that such a proceeding does not decide title, or create any new title. It barely dissolves the tenancy in common, leaves the title as it was, except to locate such rights as the parties may have, respectively, in distinct parts of the premises, and to extinguish it in all others."
This statement is elaborated upon on pages 212 and 213 to the effect that before a partition may be had the applicant must show that he is submitted to the inconvenience of a joint possession. Until this is shown, there is no joint possession to sever, and consequently nothing upon which the judgment of the court can operate.
McBain v. McBain, 15 Ohio St. 337, 86 Am. Dec., 478, holds, in paragraph three of the syllabus:
"Parties to proceedings in partition acquire no new title thereby * * *."
See, also, Lawson v. Townley, 90 Ohio St. 67, 106 N.E. 780.
It must appear from these decisions that Helen can not acquire a title to the undivided half interest of her brother through a partition proceeding. All she can accomplish is to have, possess and enjoy her share of the estate in severalty.
A matter that must be given consideration arises from what is designated as an application to distribute assets in kind. In this application the mother and son, as executors of the estate, represented that among the assets were 6388 shares of stock of the Cities Service Company, and it was the desire of the executors to distribute in kind 1388 shares. The executors represented that it would be for the best interests of the estate to distribute the same in kind to Curtis, one of the beneficiaries named in the will. With this application there was filed a consent to such distribution by Helen Sohl Eastman to the effect that she joined in the application and consented to the distribution of 1388 shares of stock of the Cities Service Company to Curtis Sohl and gave her approval.
The entry of the court is under date of December 30, 1930.
It will be observed in this application, as well as at other places, that the distribution to Curtis is designated as a "distribution in kind." There has been some assertion that this distribution to Curtis was not a distribution in kind but was more properly an advancement to be treated as such under the provisions of Section 10503-19, General Code. We do not so find. It was a distribution in kind in anticipation of ultimate distribution of other shares to those who might be entitled thereto. Of course, if the widow was to get her income from these shares, their distribution to her son curtailed her income to that extent. Nevertheless, there was left in the estate 5,000 shares of Cities Service Company from which the daughter might have had a like distribution had she made such an application and had her mother consented thereto. The transaction constituted a distribution in kind and not an advancement.
For almost ten years after the distribution in kind to the son, the widow remained a coexecutor with her son and filed in the Probate Court proper accounts showing the transaction of the executor in reference to the personal property. There was a violent decline in value of not only the Cities Service Company stock, but of other stocks held by the executors. Much of the Cities Service Company stock was sold on a declining market and the proceeds consumed or expended by the widow. The final account shows the estate depleted so far as personal estate is concerned except for a small cash item and that the only remaining portion of the estate, which was originally valued at $273,101.94, is the real estate now sought to be partitioned.
This brings us to a consideration of what may now be done to equalize the distribution of this estate between the two children.
Keever v. Hunter, 62 Ohio St. 616, 57 N.E. 454, holds that when the lands of an intestate descend to his children, there being no personal estate for distribution, the interest of each child in the land is subject to his indebtedness to the intestate. This is not the identical situation as in this case, but the discussion by Shauck, J., throws light upon the proper procedure.
In Lambright, Admr., v. Lambright, 74 Ohio St. 198, 78 N.E. 265, it is held that the administrator has a right to retain out of the distributive share of an heir an amount equal to the debt owing by such heir, and this right exists whether the heir was indebted to the deceased before his death or contracted a liability to the estate thereafter. A debt due from an heir is an asset of the estate and where the distributive portion of such heir is equal to or greater than his debt due the estate, the administrator should charge himself with, and account for, the full amount of the same.
In the case of Fowler v. Lund, 9 Ohio Law Abs., 688, the testator gave the life use of his estate to his widow, who was the executrix. By a residuary clause the estate was to be equally divided at her death between two groups of heirs. The executrix made advance distributions out of the corpus of the personal estate to one group of heirs, and at her death the remainder of the personal estate was worthless. It was held that in a suit for partition of the real estate left by the decedent, the heirs to whom no advance distribution had been made were entitled to have an amount deducted from the proceeds of the sale equal to that paid to the other group of heirs before the avails of the sale could be divided equally between the two groups.
While not exactly on all fours with the case at bar, this case closely approaches the facts here under examination and we deem the solution there reached is applicable to the facts now before us.
It would not be equitable nor in keeping with the provisions of the will to permit the brother to receive a distribution in kind of the stock in question and then, upon the death of his mother, when the personal estate has been depleted, receive upon partition the value of his undivided half interest without being required to account for the distribution made to him.
This is in harmony with a memorandum made by the brother and submitted to his sister for her acceptance, but not formally accepted by her. This memorandum is under date of April 1931, and recites that whereas Curtis has received in advance a distribution in kind of $25,000 of Cities Service Company stock from the estate, it is agreed between them that at the time of the division of the estate, Helen is to receive $25,000 from the estate before any division is made, and that the amount remaining after she has received the $25,000 is to be equally divided between them in accordance with the will of their father. This memorandum is in the form of an agreement and, as stated, was not signed by Helen, but is a declaration upon the part of Curtis of his understanding that he is to account upon the final distribution of the estate.
Much of the bill of exceptions is devoted to an attempt made by Curtis to prove that the stock was distributed to him in payment of a claim that he had against his father's estate by virtue of the operation by him and his father of a corporation in which they were both interested. We think he has failed in proving such a claim. He has admitted that it was a distribution in kind and should not now be heard to assert that it was in fact in payment of a debt due to him by his father. This is further borne out by the fact that all the papers in the Probate Court designate it as a distribution in kind and that had it been a claim against his father's estate, he, being the executor, would have been required to prove the claim and have the same allowed by the probate judge before it could be paid. He did not do this, which is more evidence of the fact that the transfer was not made in payment of any prior obligation, but was in fact what it was designated to be, a distribution in kind.
Thus far, we are in harmony with the decision of the court below, but we do not follow the court in reference to the equitable lien in favor of Helen.
It will be observed that soon after the death of the father an application for the transfer of real estate was made by Curtis Sohl, one of the executors, and the court on that application ordered that the real estate be transferred upon the duplicate of the county to the persons named and thereupon the certificate was issued and recorded; a life estate to the widow and one-half to each of the children, subject to such life estate. By this record, it is disclosed that the real estate, at least presumptively, belonged to the two children in fee, subject to the life estate of their mother.
Reliance could be properly placed upon the record and any liens that were acquired, either by virtue of a mortgage by Curtis or by judgment creditors, would attach to the title of Curtis irrespective of the so-called equitable lien of the sister.
Section 10512-4, General Code, provides that remainders, whether vested or contingent, executory interests and other expectant estates are descendible, devisable and alienable in the same manner as estates in possession. Under this statute Curtis had a right to ailenate his estate under his father's will and, of course, that would cover his right to mortgage the same. See, also, Section 10509-186, General Code.
Counsel for appellant have presented in their brief cases which seem at first to support their claim that the equitable lien of Helen is superior to the claim of the lienholders. In Reed v. Ragsdale, 230 Ala. 683, 163 So. 324, it is held:
"Where money of an estate is advanced to one heir, the other heirs have an equitable lien on decedent's land to cover such debt and their lien is superior in equity to that of a judgment creditor of the heir."
See also Peck v. Williams, 113 Ind. 256, 15 N.E. 270, where it is held that creditors of one tenant in common can only enforce their claims against the debtor's interest in the common estate subject to all the equitable interests of the other tenants therein.
See, also, Foltz v. Wert, 103 Ind. 404, 2 N.E. 950, where it is held under a will somewhat similar to the one at bar, that where a distribution is made to the children in different amounts that the rights of some of the heirs could not be impaired by liens acquired on the interest of one without their consent, nor could they be deprived of any right incident to partition.
See, also,
Woodruff v. Woodruff, 3 C.C. (N.S.), 616; Hopkins v. Thompson, 73 Mo. App., 401; McCandless Appeal, 98 Pa., 489.
However, we discover differences that would, in our judgment, make these decisions inapplicable to the case at bar.
We do not believe that the question of laches arises, but are of the opinion that all lienholders who properly secured a lien upon Curtis' share are entitled to be paid out of the fund arising from the sale of his share before the application of any portion of the balance to Helen on account of the distribution in kind. To this extent the decree for partition as entered in the court below will be modified as to lienholders. This would advance the claim of Blanche P. Sohl for inchoate dower; the lien of the Equitable Life Assurance Society; the lien of Anna R. Cunningham and the lien of Russell Wirtz so as to be superior to the lien of the plaintiff.
The court below found that the defendant, Theta Kappa Phi fraternity is entitled to hold the premises until the expiration of the lease set up in its answer. This matter is not discussed by the court, but it appears that the lease was made by the executors for a period of five years which has not yet expired.
We are of the opinion that the lease is valid for its unexpired term upon the half interest of Curtis, but not upon the half interest of Helen. She denied that the lease covered her half interest and no evidence appears to the contrary.
Decree accordingly.
HORNBECK, P.J., and BARNES, J., concur.