Title: In Re Estate of Wernet
Citation: 226 Kan. 97, 596 P.2d 137
Docket Number: 50,267
State: Kansas
Issuer: Kansas Supreme Court
Date: June 9, 1979

226 Kan. 97 (1979)
596 P.2d 137
In the Matter of the Estate of Maggie L. Wernet, Deceased.
No. 50,267

Supreme Court of Kansas.
Opinion filed June 9, 1979.
Gary C. Hagan, of Hutchinson, argued the cause and Arthur H. Snyder, of Hutchinson, was with him on the brief for appellant Clifford F. Fry.
Michael T. Mills, of Mills &amp; Mills. of McPherson, argued the cause and was on the brief for appellant Wilbur Dean Fry.
William L. Mitchell, of Mitchell and Henry, of Hutchinson, argued the cause and was on the brief for appellee Gerald L. Fry.
W.Y. Chalfant, of Branine, Chalfant, Hyter &amp; Hill, of Hutchinson, argued the cause and was on the brief for appellee LeRoy F. Fry.
Arthur C. Hodgson, of Hodgson &amp; Kahler, of Lyons, argued the cause and was on the brief for appellee Kenneth J. Nelson, Administrator C.T.A.
The opinion of the court was delivered by
HOLMES, J.:
This is an appeal by several parties from orders of the district court in the probate proceedings in a testate estate. The administrator c.t.a. filed a petition in the probate court for construction of the will of Maggie L. Wernet, deceased, for instructions as to the proper distribution of the assets in the estate and for other relief necessary to complete the proper administration of the estate.
Maggie L. Wernet died testate on April 11, 1976, a resident of Rice County. Her will, executed June 9, 1958, was admitted to probate May 27, 1976. The executrix named in the will declined to serve and Kenneth J. Nelson was appointed and qualified as administrator c.t.a. Following his appointment he filed a petition for construction of the will and other relief which was transferred to district court under K.S.A. 59-2402a, since repealed.
In view of the conflicting positions of the parties on appeal and the issues raised thereby, the last will and testament of Maggie L. Wernet will be set out in full. It reads:
Signatures of the testatrix and witnesses and the attestation clause, all in proper order, are omitted.
The five nephews, Gerald L. Fry, LeRoy F. Fry, Wayne A. Fry, Clifford F. Fry and Wilbur Dean Fry, all survived their Aunt Maggie. The home of Mrs. Wernet described in paragraph 2 of her will was sold prior to death and the real properties described in paragraphs 3, 4 and 5 were still owned by her at death. The indebtedness of Wilbur and Gerald described in paragraph 7 had not been paid in full and, although the exact amount still owed has not been finally determined, it is shown by the inventory and appraisement as being $19,000 owed by Wilbur and $17,000 owed by Gerald. Both concede the debts are valid and enforceable although the final amounts are yet to be determined. The inventory and appraisement also shows LeRoy as owing $10,000 and Wayne $5,000. The validity of these debts is not disputed although they also are subject to final determination as to the *101 exact amounts. The loans to Gerald were in 1957 and 1971, LeRoy in 1959, Wayne in 1959 and Wilbur in 1956. These debts are properly shown as assets of the estate, as interest and possibly some principal has been paid and no question of the bar of the statute of limitations is raised.
Clifford is shown as owing the estate $15,300 for loans received in 1957 and 1958. It is conceded that Clifford paid no interest or principal for more than five years prior to his aunt's death.
The total appraised value of the estate is shown on the inventory as $333,261.05 and is as follows:
The real estate devised to Gerald, LeRoy and Wayne accounts for $180,250.00 and the remaining property totals $153,011.05, making it obvious that the desire of Mrs. Wernet, as expressed in paragraph 6 of her will, cannot be carried out. Faced with these realities, the administrator c.t.a. filed his petition for construction of the will and other relief.
Gerald, LeRoy and Wayne contended in the court below that the specific devises of real estate in paragraphs 3, 4 and 5 were clear and controlling and that they should each receive the real estate devised to each of them. Clifford and Wilbur contended paragraph 6 of the will was controlling, that each nephew should receive the same amount from the estate after payment of all debts, taxes (except Kansas inheritance taxes), costs of administration and cash bequests listed in paragraph 8 and that the real estate should be charged with the debts, etc., and legacies or be sold if necessary to effect such an equal distribution. In addition, Clifford contended that the $15,300.00, shown on the inventory as being owed by him, was actually an advancement received *102 prior to the making of the will and that as it was not mentioned in the will, any indebtedness which he might otherwise have owed was cancelled. In the alternative, he argues the debt, if not an advancement, is barred by the statute of limitations and therefore is not collectible from or chargeable as an offset to him.
The trial court made the following findings of fact and conclusions of law:
"FINDINGS OF FACT
is devised to LeRoy F. Fry and shall be his property.
"CONCLUSIONS OF LAW
Wilbur and Clifford have appealed from the findings, conclusions and orders of the trial court. The administrator c.t.a., renews his request for instructions on administering the estate.
While the terms and conditions of the will of Maggie L. Wernet are clear and unambiguous, problems have arisen due to an insufficiency of assets to carry out the clear directions in the will. It is apparent that at the time the will was executed Mrs. Wernet must have had sufficient cash and other assets to effect an equal distribution of her estate when the values of the specific devises to Gerald, LeRoy and Wayne were taken into consideration. Unfortunately, inflation has had a two-fold effect upon Mrs. Wernet's plans; both disastrous. The values of the three parcels of farmland have skyrocketed while her personal estate has, in all probability, been reduced considerably through higher living costs, lower income, fixed values of intangibles and low prices for farm commodities.
With the foregoing factual background, we will turn to the issues raised upon appeal. All parties agree as to the basic rules to be followed in the construction of a will. However, such rules need not be repeated here.
In Johnston v. Gibson, 184 Kan. 109, 334 P.2d 348 (1959), we held:
*104 See also In re Estate of Graves, 203 Kan. 762, 457 P.2d 71 (1969).
Is the will of Maggie L. Wernet ambiguous and is it necessary to apply rules of judicial construction? We think not.
Paragraph 1 of the will directs that debts, funeral expenses, etc., be paid; paragraph 2 authorizes the sale of her home (which was done prior to death); paragraph 3 devises specific real property to Gerald "to be his in fee simple absolute forever"; paragraphs 4 and 5 devise specific real properties to LeRoy and Wayne in the same language; paragraph 6 expresses the desire that all five nephews shall share equally in the estate and recognizing that the values of the real properties are not the same and may change materially makes provision to equalize the share of each nephew by payment of cash sufficient to bring the shares of four of the nephews to that of the one receiving the most valuable piece of real estate; paragraph 7 forgives any interest which might be owed by Wilbur and Gerald on certain existing indebtedness; paragraph 8 provides cash bequests to others totaling $6,000.00; paragraph 9 divides the residue of the estate equally among the nephews and paragraph 10 provides for the appointment of an executrix.
As state in Graves:
The language of the will now before the court being clear, certain and free of ambiguity, we need not consider the application of rules of judicial construction.
All parties agree that in the interpretation of wills the primary function of the court is to ascertain the testator's intent from the four corners of the will and to carry out that intent if possible, and not contrary to law or public policy. In re Estate of Cline, 170 Kan. 496, 227 P.2d 157 (1951). It is at this point that the parties differ. The trial court held, and the appellees contend, that our decision in Graves is controlling; that paragraph 6 of the will does not create a charge upon the specific devises and that the *105 equalization desired by the testator must come from whatever assets are available, if any, other than the real properties.
In Graves a similar situation existed. The testatrix made certain specific devises of real property to her son, Harlan, and daughter, Mary Faye, "To Have and To Hold, forever." She then provided that from her personal estate her daughter Gena would receive property or money sufficient to give her an equal share with Harlan and Mary Faye. After payment of debts, expenses, taxes, etc., there were insufficient remaining assets to provide an amount to Gena equal to the value of the real properties received by Harlan and Mary Faye. The court held that while the intention of the testatrix was clear that her children should share equally, the court could not change her will and assert a charge against the real estate to effect such equalization.
The rules governing charging legacies upon the testator's realty are found in 80 Am.Jur.2d, Wills §§ 1768-70. Real property is not chargeable with the payment of legacies unless the intention of the testator to so charge is expressly declared or arises by clear implication from the language of the will. § 1768. There is no express charge indicated in the Wernet will, therefore the rules governing express charges are not necessary for our analysis. Under some circumstances the intention to charge realty will be implied when personality is insufficient to pay legacies. However, insufficiency of personally alone will not support this implied intention. § 1770. Realty may be charged by implication if when the will was executed there was insufficient personalty to pay the legacies and the testator was aware of that fact. There is no showing that such was the factual situation in the case at bar.
As we said in Graves:
The language of a will must be construed as of the date of its execution and in light of the then surrounding circumstances, although the will speaks at the date of death. Changes in circumstances after execution may not be considered in ascertaining the testator's intent. It is the intention of the testator spoken in the words of his will that govern and not any intention deduced from speculation as to what would have been done had the change been anticipated. 80 Am.Jur.2d, Wills § 1152. Holmes v. Campbell College, 87 Kan. 597, 125 Pac. 25 (1912). For other cases supporting these rules, see Graves, 203 Kan. at 770-1.
Appellants argue that Graves may be distinguished from the present case in that the Graves will provided for equalization from her personal estate while the Wernet will merely provides for equalization from cash. In Graves the devises were "To Have and To Hold, forever" and in the Wernet will "to be his in fee simple absolute, forever." The distinction asserted by appellants would appear to be inconsequential and without merit.
As the will does not provide for a charge upon the realty, we must next look to the statutes to determine the source of funds for payment of debts, costs of administration, taxes (except Kansas inheritance taxes) and related items. (K.S.A. 59-1405.)
Since the will does not "otherwise provide," K.S.A. 59-1405 *107 dictates the order in which assets may be appropriated for lawful demands against the estate. Specific realty devises fit into the sixth and final classification of assets and are not to be appropriated until the first five classifications are exhausted. Moreover, in the absence of anything in the will to the contrary, the burden of federal estate taxes falls on the residuary legatees rather than on specific devises or bequests. In re Estate of West, 203 Kan. 404, 454 P.2d 462 (1969).
We conclude there was no error by the trial court in its finding that the real properties devised to Gerald, LeRoy and Wayne in paragraphs 3, 4 and 5 of the will vest free and clear of any charge for debts, expenses, taxes (except inheritance taxes) or cash legacies contemplated in paragraph 6 of the will.
Appellant Clifford F. Fry claims the trial court erred in finding that his three unpaid notes are assets of the decedent's estate. These notes were incurred from November 18, 1957, to April 30, 1958, and were existing debts when Mrs. Wernet executed her will on June 9, 1958. The appellant contends these notes represent advancements which were cancelled by the decedent's subsequent will containing no mention of any debt due from him.
In support of this contention, appellant cites the cases of In re Estate of Bush, 155 Kan. 556, 127 P.2d 455 (1942), and Baker University v. K.S.C. of Pittsburg, 222 Kan. 245, 564 P.2d 472 (1977). Both of these cases are concerned with the doctrine of ademption. In Bush the debts in question were specifically referred to as "advancements" in the notes evidencing the indebtedness. It might be well to observe that advancement is a misnomer in this case since the term only applies to intestate succession; however, we recognize that ademption and advancement, being analogous, are often used interchangeably. To apply, by analogy, advancement rules the courts require that the testator expressly provide language in the will indicating an advancement was intended. 80 Am.Jur.2d, Wills § 1720.
In the present case, there is no language in the notes that would indicate they were intended to be or considered as advancements. Furthermore, the will does not expressly provide that the notes are to be treated as advancements. Based upon the foregoing, the notes of Clifford F. Fry cannot be considered advancements but rather ordinary unsecured debts. In the alternative, it is claimed that the debts are barred by the statute of limitations.
*108 As unsecured debts evidenced by promissory notes in writing upon which no payments have been made, the statute of limitations would be an affirmative defense in an action against appellant by the administrator c.t.a. K.S.A. 60-511. However, the statute is not a bar to a setoff to the extent of appellant's distributive share. Holden v. Spier, 65 Kan. 412, 70 Pac. 348 (1902).
In Holden, Nathaniel Head died and C.S. Holden was entitled to a share of his estate. Holden had been indebted to the decedent upon a promissory note which was barred by the statute of limitations. The administrator attempted to declare a setoff of Holden's indebtedness against his distributive share of the estate. Holden asserted, among other defenses, the bar of the statute of limitations. This court stated:
The trial court was not in error in its determination that Clifford's indebtedness was not cancelled by the statute of limitations. The court and the administrator c.t.a. were in error, however, in classifying Clifford's indebtedness as an "asset" of the estate and assigning a value thereto. The debt of Clifford neither adds to nor detracts from the quantum of assets owned by Maggie L. Wernet at the time of her death and cannot be considered *109 as an "asset" in determining the total valuation of the estate. Clifford's indebtedness merely affects the method of distribution of the actual assets in the estate and does not add to those assets. The indebtedness of Clifford, together with accrued interest thereon, must be calculated and set off against Clifford's distributive share of the estate, if any.
The final point on appeal is raised by Wilbur. He contends that finding of fact number 8 made by the trial court is incorrect and erroneously directs payment of the $6,000.00 cash bequests in paragraph 8 of the will prior to any payment of cash to Wilbur and Clifford. His point has merit. The trial court in its findings referred to such bequests as "specific bequests" while Wilbur contends they are general legacies.
A specific legacy or specific bequest is defined in Taylor v. Hull, 121 Kan. 102, 245 Pac. 1026 (1926) as:
96 C.J.S., Wills § 1129 (a) (1) states in part:
See also In re Estate of West, 203 Kan. 404.
It is apparent that the cash bequests in paragraph 8 of the will and the gifts of cash in paragraph 6 are all general legacies as no specific fund or source is specified for either. If there will be no residue in the estate the cash equalization bequests in paragraph 6 and the cash bequests in paragraph 8 must be distributed pro rata to the extent possible. K.S.A. 59-1405 and In re Estate of Graves, 203 Kan. 762.
The decision of the trial court is affirmed in part, reversed in part and the case remanded for further proceedings consistent with the foregoing opinion.
SCHROEDER, C.J., dissenting:
I respectfully dissent for the reasons stated in my dissenting opinion in In re Estate of Graves, 203 Kan. 762, 772, 457 P.2d 71 (1969).
PRAGER and HERD, JJ. join in the dissent.