Case Name: In the Matter of the Estate of Mattie A. Hamilton, Deceased. M. L. Hamilton, Individually and as Executor, Appellant, v. Lorraine Kenton, Respondent
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1937-07-19
Citations: 190 Wash. 646
Docket Number: No. 26492
Parties: In the Matter of the Estate of Mattie A. Hamilton, Deceased. M. L. Hamilton, Individually and as Executor, Appellant, v. Lorraine Kenton, Respondent.
Judges: 
Reporter: Washington Reports
Volume: 190
Pages: 646–657

Head Matter:
[No. 26492.
En Banc.
July 19, 1937.]
In the Matter of the Estate of Mattie A. Hamilton, Deceased. M. L. Hamilton, Individually and as Executor, Appellant, v. Lorraine Kenton, Respondent.
Shorett, Shorett & Taylor, for appellant.
Todd, Holman & Sprague and Luden F. Marion (Robert D. Allen, of counsel), for respondent.
Reported in 70 P. (2d) 426.

Opinion:
Millard, J.
The last will and testament of Mrs. Mattie A. Hamilton, executed November 25, 1929, named the husband of the testatrix as executor, to act without intervention of tíourt. By that will, Mrs. Hamilton bequeathed thirty-five hundred dollars to Lorraine Kenton, who resides in New Zealand. No mention is made of any indebtedness of Lorraine Kenton to the testatrix or to the marital community composed of the testatrix and M. L. Hamilton. Mrs. Hamilton died January 31, 1930, and her will was admitted to probate February 10,1930.
In his final account as executor of the will of his deceased wife, M. L. Hamilton asserted, as follows, an indebtedness due from Mrs. Lorraine Kenton by reason of a loan alleged to have been made by Mr. and Mrs. Hamilton to Mrs. Kenton in 1925, and claimed the right to deduct the amount of the loan, plus interest, from the bequest due Mrs. Kenton:
"The said Lorraine Kenton is now indebted to the estate in the sum of $1,000 for money loaned to the said Lorraine Kenton by M. L. Hamilton and Mattie A. Hamilton, his wife, during the year 1925, the exact, date of which is unknown to the executor, together with interest thereon from the date of payment to her at the rate of six per cent per annum; that no part of said indebtedness has been paid, and the same is now due and owing to the said estate; that the said indebtedness in the full amount of the principal and interest should be retained by the executor and credited upon the bequest herein referred to, and the balance remaining of the said bequest should be awarded and distributed to the said Lorraine Kenton."
The following written denial to the foregoing portion of the final account was filed by Mrs. Kenton:
"Paragraph VIII improperly recites that there is an indebtedness from Lorraine Kenton to the estate of the sum of $1,000 for money alleged to have been loaned to said Lorraine Kenton by M. L. Hamilton and Mattie A. Hamilton, his wife, during the year 1925, together with interest thereon from the date of payment at the rate of 6% per annum, which sum the Executor claims should be retained and credited upon the bequest of said Lorraine Kenton. Said recitation is improper for the reason that there is no evidence before the Court of the existence of such indebtedness nor any listing of said alleged indebtedness as an asset of the estate; that the same is set forth and claimed for frivolous, scandalous and impertinent reasons. This objector, Lorraine Kenton, denies that any such loan as alleged was ever made or that she is indebted in any sum whatever to decedent or her estate or to M. L. Hamilton."
The hearing on the final account was continued on successive dates from January 22 to October 27, 1936, when the matter came on for final hearing. From the decree denying any offset as a payment upon the bequest to Lorraine Kenton, M. L. Hamilton, as executor and in his individual right (he is residuary legatee and devisee), prosecutes this appeal.
The question presented by this appeal is whether the money claimed by appellant to have been advanced to the respondent was a loan or a gift.
The evidence is summarized as follows: For some years prior to the marriage of the Hamiltons in 1899, Mrs. Lorraine Kenton, who was then a young girl, lived with Mrs. Hamilton. Mrs. Kenton was not related to either Mr. or Mrs. Hamilton. A short time previous to the marriage of the Hamiltons, Lorraine Kenton was married, after which she did not again reside with the Hamiltons. Mrs. Kenton and her husband, sometime between the years 1910 and 1915, moved to New Zealand, where they have since continuously resided.
Appellant testified that a letter was received from the respondent in 1922, wherein Mrs. Kenton stated that she had an opportunity to buy out a competitor for one thousand dollars, and, if the Hamiltons would lend to her the money, she would repay them in six months, "with good interest." Appellant testified that a part of the money was borrowed from Mrs. Hattie Dearborn (a legatee under the will in the amount of one hundred dollars) and her husband to send to Mrs. Kenton. The one thousand dollars, so Mr. Hamilton testified, was sent to Mrs. Kenton in response to her request, and Mrs. Kenton thereafter acknowledged receipt of the money, and stated that she would try to repay it when it was due, but that the loan had never been paid.
Mrs. Dearborn testified that she withdrew from the family savings in the First National Bank of Seattle two hundred dollars, and the money was then lent to Mr. Hamilton, which money, she understood, was to be sent to Mrs. Kenton. Mr. Dearborn, who has been a bailiff in the court of one of the superior court judges for King county during the past ten years, testified that in 1922 the appellant requested of him a loan of two hundred dollars, which loan was made to the appellant. He testified further that, on Sunday following the date the loan was made, he visited the Hamil ton's home, and that Mrs. Hamilton exhibited to him a letter from Mrs.- Kenton, and that, in the letter, which he read, Mrs. Kenton requested a loan of one thousand dollars and promised that she would pay the loan, with interest, within six months.
In the inventory of the estate filed February 26,1930, the executor did not list any account receivable from Mrs. Kenton, nor does it appear in his inheritance tax report that he included, as an asset for the purpose of computation of the tax, the indebtedness of Mrs. Kenton. It appears that appellant did not assert the present claim until after respondent and other legatees filed a petition for appellant's removal as executor.
Appellant, subsequent to the death of the testatrix, wrote a number of letters to Mrs. Kenton. In none of those letters did he suggest to Mrs. Kenton that she was indebted to appellant or to the estate. Instead, he assured respondent that she would receive her legacy as soon as he could get the money to pay the legacies.
Mrs. Kenton was not present at the hearing. No testimony was offered on her behalf, either by deposition or otherwise, in denial of the allegations of the final account, although the date of the original hearing on the final account was January 22, 1936, and the date of the final hearing was October 27, 1936.
In its summation of the evidence, the trial court clearly expressed, as follows, the conviction that the loan was made to the respondent, but that the delay from 1922 or 1925 to 1935 constituted such laches on the part of the Hamiltons that the executor should not be permitted to offset the loan against the bequest:
"Well, I had rather some other member of the court had tried this case because of the many years that I have known Mr. Hamilton, but then, I presume, if I disqualified myself on that ground I would have to do it in a good many cases. I am satisfied that he let Mrs. Kenton have this money because he said so, and I also have confidence in his corroborating witnesses, Mr. and Mrs. Dearborn. I do not think that there is any doubt about that, and while I do not think that we ought to be governed by what a layman might call a technicality, nevertheless it does seem to me that there was, legally speaking, negligence, if not the worst kind of laches here. I do not think that any appellate court would ever sustain such an offset as Mr. Hamilton is claiming in this case, and I think, therefore, that I will have to deny.it. Mr. Taylor: So that we can get this clear, Your Honor is recognizing that the loan was made, but that he is guilty of laches? The Court: I do not know whether it was a loan or what it was, but it was fifteen or twenty years ago, and I say that if Mr. Hamilton never asserted until' fifteen years thereafter that it was a loan, at least as far as anybody knows — I say that a man cannot do that and then come in after that length of time and after he has been pressed for the payment of a bequest."
The defense suggested by the trial court of laches or the statute of limitations was not pleaded by the respondent. The only issue presented to the trial court was whether the loan was made by the Hamiltons to Lorraine Kenton.
We cannot agree with the contention of counsel for respondent that the testimony of the witnesses respecting the contents of the letters from Mrs. Kenton to the Hamiltons was incompetent. It is urged that no demand was ever made by appellant upon respondent to produce a copy of any of the letters, which would be the next best evidence, in the absence of the original letter. It is insisted that the giving of notice to produce and failure to produce were conditions precedent to the admissibility of the oral testimony, and, as there was not a compliance with those conditions, the testimony was not competent.
This is not a situation where the sender of a letter endeavors to prove its contents by a copy without hav ing produced or made demand for the original. In the case at bar, the receiver of the letter, after testifying that the letter was lost and that a diligent effort had been made to find it in the place where it would be kept, proved the contents of the letter by secondary evidence.
In State v. Erving, 19 Wash. 435, 53 Pac. 717, while holding that, by cross-examination, the appellant had opened the door to the offending re-direct examination, we also held that the receiver of a letter could testify as to its contents when the proper foundation was laid, as was done in the case at bar, for such secondary evidence. We said:
"The next assignment is that the court committed error in permitting witness Garrison — a brother of the deceased — to testify on re-direct examination to the contents of a letter purporting to have been written by the deceased from Seattle on July 3, 1894. The objection at the trial was that it was not the best evidence. The witness testified that he did not know where the letter was, that he could not produce it in court, that he had no idea where it could be found, and, as we think, laid the foundation for the introduction of the secondary evidence. There is another reason why the ruling cannot be disturbed. On cross-examination the appellant had asked the witness what was said by the deceased in that letter, and thus opened the door to the re-direct examination which followed."
The secondary evidence was admissible to prove the contents of the letters, and in such cases the fact to be established should be proved by a fair preponderance of evidence and with reasonable certainty. The trial court expressed belief in the veracity of the appellant and in the veracity of the two witnesses. Clearly, the appellant sustained the burden of proof that the loan was made by the Hamiltons to Mrs. Kenton.
The trial court's suggested defense of laches or the statute of limitations was not raised by the respondent.
We have heretofore recognized, in cases such as this, the right of the executor to retain sufficient of the bequest to pay the debt, although the debt, is barred by the statute of limitations prior to the death of the testator. In re Smith's Estate, 179 Wash. 417, 38 P. (2d) 244.
If the money received by the respondent was not a loan, it must have been a gift. There was no proof that a gift was made of the money in question to the respondent. Proof of a gift must be by clear and convincing evidence, and the negative inference which follows from the fact that no demand for repayment was made for a period of years, and that the debt was not listed originally in the inventory of the estate, is not the clear, positive proof to establish a gift that is required. The rule is that a gift will not be presumed, but it must be shown by clear, convincing, and satisfactory evidence. Dingley v. Robinson, 149 Wash. 301, 270 Pac. 1018.
The decree is reversed, and the cause remanded with direction to the trial court to allow the right of retainer requested by the appellant.
Main, Holcomb, Beals, Blake, and Geraghty, JJ., concur.