Case Title: Biss v. PARRISH

Citation: 232 Or. 26, 374 P.2d 382

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1962-09-06T00:00:00Z

Document:
Affirmed September 6, 1962.
*27 W.R. Bradshaw, Klamath Falls, argued the cause for appellant. With him on the brief was David R. Vandenberg, Jr., Klamath Falls.
Robert G. Danielson, Salem, argued the cause for respondents. With him on the brief was Glenn D. Ramirez, Klamath Falls.
Before McALLISTER, Chief Justice, and WARNER, SLOAN, O'CONNELL and LUSK, Justices.
AFFIRMED.
SLOAN, J.
Petitioner brought this proceeding to obtain a determination that one of the bequests of the will of the decedent, Delia Chocktoot Biss, had been adeemed by reason of the extinction of the subject matter of the bequest. Petitioner is the son of decedent and would take the money given by the will as the residuary legatee if it is held that the bequest fails. The persons named in the bequest were petitioner and grandchildren of decedent. The latter have opposed the petition. The trial court held that the bequest had not been adeemed. The petitioner appeals.
The bequest claimed to have been adeemed was:
*28 The will was executed on November 1, 1948. At that time decedent had an account at the Klamath Agency.
In 1954 by Public Law 587, 68 Stat 718, Congress provided for the termination of federal supervision of the property of the Klamath Tribe of Indians and of the individual members of the tribe. The tribe and the members thereof were then possessed of property of great value. The Act cited made provision to prevent improvident wasting of this property. § 15, at page 722, of the Act provided that:
By Public Law 85-132, August 14, 1957, 71 Stat 347, 348, 25 USC § 564n, the Act of 1954 was amended. One of the amendments was:
The Act and the amendment together with the action taken pursuant thereto by the responsible officials in respect to decedent's property are pertinent to decision in this case.
In October 1957, proceedings were initiated to declare decedent in need of assistance in conducting her affairs. It is not clear from the record whether the proceedings were started by a request of decedent or by the officials who were aware of her affairs. The record indicates that the latter was the cause of the proceedings. The record of the findings adopted by the Secretary of Interior in respect to decedent, a part of the evidence in this case, reveals that decedent, Delia Chocktoot Biss was then 76 years of age. That between February 2, 1955, and July 7, 1957, she had spent from her funds in the Klamath Agency account more than $23,000 with "no material benefit to herself resulting from such expenditures." The findings also include a written request of decedent that the "* * * Secretary of Interior establish protection of my property." The findings provide a basis for the determination of the Secretary that decedent was in need of assistance as provided by the Act.
As a result of this determination a trust agreement was entered into between the Secretary, as Trustor, and the First National Bank of Portland, as Trustee, which transferred to the Trustee certain assets described in a schedule attached to the trust agreement which were then being held by Trustor for the benefit of decedent. She was named as the beneficiary of the *30 trust agreement. The trust agreement provided that it would terminate at the death of the beneficiary and the remaining proceeds be delivered to her personal representative for distribution to those legally entitled thereto according to the laws of Oregon. The schedule of assets delivered to the Trustee included this statement: "This includes approximately $56,000 in funds now held by the Secretary's authorized representative, and such other funds that may come under control of the trustor prior to the removal of restrictions pursuant to Section 8 of the Klamath Termination Act (68 Stat. 718) as amended." The schedule of assets included other real and personal property. We are only interested in the fund that was transferred from the Klamath Agency account. Apparently there was $51,344.19 transferred to the bank as Trustee from this account.
In briefs and argument here as well as in the proceedings before the trial court it was said that "* * * Testatrix terminated her account at the Klamath Agency and deposited the funds withdrawn therefrom under a trust with the First National Bank of Oregon which said trust continued to the date of Decedent's death * * *", and that decedent did not, therefore, leave any funds at the Klamath Agency and the bequest naming those funds must fail.
We have mentioned the Act and amendment thereto and the process by which the funds were transferred at some length. We have done so to show that petitioner has proceeded under a misconception of the correct factual and legal background of this transfer of decedent's funds. The only act of decedent was to request that she be given assistance. Pursuant to the authority granted to him by the Act the Secretary thereafter made every determination as to her need *31 for assistance and what should be done with the funds following that determination. The Act gave to the Secretary considerable latitude in deciding what means to employ to protect the funds. It was the Secretary's decision to deposit the funds with a corporate trustee. The transfer was made by the Secretary, not decedent. The Secretary had held the funds as a Trustee but apparently without any restrictions as to decedent's right to expend all of them at her pleasure or demand. Because of his determination that decedent needed aid he was, by the Act, empowered to place the funds beyond the immediate use of decedent except for the funds needed for her care and survival. We consider the facts above discussed to be of importance, for the property bequeathed by the questioned paragraph of the will was not by decedent, sold, destroyed, given away, expended or otherwise put beyond the control of decedent to dispose of by will. The transfer of the funds was one of form only.
We have been cited to and have referred to treatises on the history and changing concepts of the law of ademption. We find no reason to repeat what has elsewhere been thoroughly told, analyzed and criticized. The best of these are: Page, Ademption by Extinction: Its Practical Effects, 1943, Wisc L Rev 11; Mechem, Specific Legacies of Unspecific Things, 1938-39, 87 Pa L Rev 546; Ademption and the Testator's Intent, 1960 (note) 74, Part 1, Harv L Rev 741; 4 Page, Wills (3d ed) 1941, Chapter 43, page 354, et seq.; Atkinson, Handbook of the Law of Wills, (2d ed) 1953, page 741, et seq.
The numerous case authority, like the writers just cited, recognize the difficulty the courts have encountered in struggling with the question of ademption. In summation, it can be said that the early English *32 cases followed Roman law and looked to the intent of the testator at the time he sold or altered the property previously bequeathed. If it appeared that he did not sell or alter the property with an intent to avoid the bequest then the bequest was not adeemed. In the cases of Asburner v. MacGuire, 1786, 2 Bro CC 108, 29 Eng Rep 62, and Stanley v. Potter, 1789, 2 Cox Eng 180, the intent theory was abruptly terminated. In Stanley v. Potter, supra, Lord Thurlow pronounced the much quoted doctrine that:
"This view has been adopted by the great majority of American courts.[*] The theory that ademption by extinction depends on the intention of the testator has generally been discarded or forgotten;[*] and the test of ademption is on whether or not the thing which was *33 bequeathed is in existence at testator's death and belongs to him at that time." Page, Ademption by Extinction, supra, 1943 Wisc L Rev 19, 20. (Footnotes omitted.)
1-2. Professor Page in the same treatise, and the other writers cited, observe that the courts then devised other means to avoid the harsh result that frequently followed from rigid adherence to the rule.
And see the careful study of Warren, History of Ademption, 1939-40, 25 Iowa L Rev 290. It appears that the concept of a demonstrative legacy was invented to escape the necessity of adeeming a legacy. If it is found that the legacy is demonstrative rather than specific, it will not be adeemed. In re Preston's Estate, 1937, 157 Or 631, 73 P2d 369. In this case the bequest must be considered a specific one. It does not follow, however, that the bequest must be adeemed.
3. Two other exceptions are now followed by most of the courts. One is in the situation where the testator becomes mentally incompetent after the execution of the will and his guardian or conservator sells the property subject to a bequest in the will. The leading case on this exception is Wilmerton v. Wilmerton, 7th Cir *34 1910, 176 F 896, cert den 217 US 606, 30 S Ct 696, 54 L Ed 900. It was held that the disposal of the property by a conservator did not adeem a bequest. The opinion by Spalding, J., in Walsh v. Gillespie, 1959, 338 Mass 278, 154 NE2d 906, presents a very able discussion of this question and analyzes the conflicting views of the courts. The decision follows the majority rule and held an ademption did not occur. These, and like cases, carry persuasion in our own case. Although there is no showing here that the decedent Biss was not mentally competent when the funds were transferred, as we have seen the manner and the method of the transfer of the funds were beyond her control. For all intents and purposes it was just as though the funds had been transferred by a guardian.
4. Of greater significance to our case, however, is the exception that change of form only and not of substance does not adeem a bequest. "If property which is specifically devised or bequeathed remains in existence, and belongs to the testator at his death, slight and immaterial changes in its form do not operate as an ademption.[*]" 4 Page, Wills, supra § 1523, 375. (Footnote omitted.) "Changes of form, if not substantial, do not cause an ademption." Atkinson, Handbook on Wills, supra § 134, 747. The same exception is discussed and many cases cited in the article by Professor Page in the 1943 Wisc L Rev, supra, and by Professor Mechem in the Pa L Rev treatise, supra.
In this case we think that the change in the funds was scarcely even one of a change of form. The fund was placed in different hands and subject to some but not complete restriction. The trust agreement provided means by which decedent could have terminated the trust. Otherwise the fund was identical. True the *35 fund was invested by the Trustee in its common trust funds but the fund was at all times identifiable and reverted to the administrator with the will annexed immediately upon decedent's death. The fund was substantially the same as that actually mentioned in the bequest at all times and, as stated, was available at death to be subject to the bequest.
The facts of this case are distinctly unique. Similar cases would be rare. We think that the facts do not support petitioner's contention that the bequest was adeemed and the decree is affirmed.