Court Opinion

ID: 3842128
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:11:31.04475+00
Date Added: 2024-06-11T07:40:38.598446
License: Public Domain

Former opinion modified on rehearing September 24, 1935                              ON REHEARING                              (49 P.2d 448)
In Banc.
A rehearing was granted in this matter, based upon petitions of both the appellant and the respondent. The statement in the former opinion contains all the facts in the case, and only brief reference to them will here be necessary.
The appellant contends that all the debts of the decedent, the ordinary expenses of administration, the *Page 31 
allowance given the widow during the first 12 months of administration, and the costs, including attorneys' fees, in (1) the widow's contest of the will and (2) her suit to have a trust declared in her favor in respect to the real and personal property of the estate, should be paid out of the property of the estate other than the farm lands specifically devised to Allingham. The respondent takes the position that all the expenses and disbursements, other than the debts of the decedent and the expenses of his last illness and funeral, should be made a charge against the real property specifically devised to testator's nephew, Allingham.
The first numbered paragraph of the will directs that all the debts of the decedent and the expenses of his last illness and funeral be paid out of his personal property. In the second paragraph the testator refers to the fact that he had executed and delivered in escrow for his nephew, William D. Allingham, who is also the executor named in the will, three deeds covering his "ranch and farm property located in Linn county, Oregon, * * * it being my intention, which I hereby reiterate, that said real property shall go to my said nephew upon my death; and if said deeds are for any reason ineffective to carry out this intention, I hereby will and devise all of said real property to my said nephew, William D. Allingham". By the third paragraph of the will it is provided: "Subject to the foregoing, I give, will, devise and bequeath to my said nephew, William D. Allingham, all the rest, residue and remainder of my estate, real, personal and mixed, wheresoever situate, or of whatsoever kind or nature", in trust for the purpose of paying to the testator's widow, the respondent Olive M. Bose, formerly Olive M. Shepherd, the sum of $400 each six months during the balance of her life or until remarriage, "unless *Page 32 
the trust estate shall be sooner exhausted". This gift in trust for the widow is expressly stated to be in lieu of her dower.
The real property devised to the nephew was appraised at $13,505, the personal property at $6,871.40, and the testator's interest in lots at Albany at $250. In the final account the executor charged himself with the receipt of $6,309.12 in cash. The only debts of the decedent were the expenses of his last illness and funeral, amounting to $574. These latter expenses, it was conceded, should, under the first paragraph of the will, be paid out of the personal property.
There was allowed to the widow by the court for her support during the first 12 months of administration $225 per month, or a total of $2,700.
Within the time allowed by statute the widow initiated a contest of the will, which was determined adversely to her. She then filed a suit to have Allingham, both as executor and as an individual, declared trustee of all the real and personal property of the estate held by him individually and in his capacity as executor, pursuant to an alleged oral contract between the widow and her late husband. The latter suit was also decided against her.
It is the respondent's contention that the provisions of the third paragraph of the will devising and bequeathing "all the rest, residue and remainder of the estate" to Allingham for her use and benefit were in lieu of dower and therefore amounted in effect to a contract between the testator and the widow, and that the property constituting this trust can not be diminished in any respect by the expenses of administration, the widow's allowance or other expenses now sought by the executor to have charged against that part of the estate not specifically devised to the nephew. *Page 33 
Scribner on Dower, second edition, volume 2, § 59, at page 527, thus declares the rule regarding testamentary provisions in lieu of dower:
"A bequest in lieu of dower, accepted by election, is so far based upon a valuable consideration, that * * * it has priority over other legacies, and will not abate with them. The reason upon which this rule is founded, is thus stated: `It is the price put by the testator himself upon that right, and which she is at liberty to accept. Her relinquishment of dower forms a valuable consideration for the testamentary gifts. In this point of view she becomes a purchaser of the property left to her by the will. So, on the other hand, the husband offers a price for his wife's legal right of dower which he proposes to extinguish; and if she agrees to the terms, she relinquishes it and is entitled to the price. It is, therefore, a matter of convention or contract between them; and what she thus becomes entitled to receive is not by way of bounty, like other general bequests; but as purchase money for what she relinquishes, and which, consequently, must be paid in preference to other legacies, they being merely voluntary.'"
There appears to be little, if any, dissent from the foregoing statement of the law. The question here involved, however, is: What in fact was the amount of the property given in trust for the widow's benefit, and what was its nature or character? If, as she contends, this gift comprised all the property of the estate other than the farm lands specifically devised to the testator's nephew, after deducting the debts of the decedent and the expenses of his last illness and funeral from the personal property, then it follows that the real property devised to the nephew must be looked to for the payment of the expenses of administration, including the widow's allowance.
The cardinal and familiar rule in the interpretation of wills is to ascertain from the testamentary words, *Page 34 
construed according to their natural meaning, the intent of the testator, and then give effect to that intent, unless prohibited by some positive rule of law. We therefore must determine what was intended by the testator in his use of the words "rest, residue and remainder".
The terms "residue", "rest and residue" and "rest, residue and remainder" appear frequently in wills. In practice they are used interchangeably and are commonly construed to have the same meaning. The courts in defining these expressions have virtually limited their discussion to interpreting the word "residue" where it appears in combination with the other terms above mentioned. Residue is what remains after paying the legacies of the will and the debts and expenses of administration. It includes the whole estate, of every description, left by the testator, subject to all deductions required by law or by direction of the testator: McDougald v.Low, 164 Cal. 107 (127 P. 1027); Stevens v. Underhill, 67 N.H. 68
(36 A. 370); Phelps v. Robbins, 40 Conn. 250; Quinn v.McDowell, 47 R.I. 314 (132 A. 888); Frelinghuysen v. New YorkLife Insurance and Trust Company, 31 R.I. 150 (77 A. 98, Ann. Cas. 1912 B, 237); In re Richter's Will, 212 Iowa 38
(234 N.W. 285); Old Colony Trust Company v. Smith, 266 Mass. 500
(165 N.E. 657).
This court, with reference to the meaning of "residue" as used in testamentary disposition of property, in Leahy v. Cardwell,14 Or. 171 (12 P. 307), observed:
"As applied to the estates of decedents, residue means all that property which remains after paying charges and debts, and satisfying all the devises and legacies. Blackstone defines it to be the surplus of the testator's estate remaining after all the debts and particular legacies have been discharged. 2 Bl. Com. *Page 35 
514. `The term "residue"', said Carpenter, J., in Phelps v. Robbins, 40 Conn. 264, `as used in wills, ordinarily means that portion of an estate which is left after the payment of the charges, debts, and particular bequests.' (Graves v. Howard, 3 Jones' Eq. 302.) It is the proper ascertainment of these, their payment and discharge, which creates the residue and makes it tangible as such, to be held or received by the party authorized to take it, to be enjoyed, used or applied according to the requirements of the will. And under our practice, what such residue is and in what it consists is ordinarily ascertained and determined when the final account is presented and judicially acted upon by the court. This, then, is the point of time to be ascertained from the record when the residue becomes an entity, and when Eloisa Harvey becomes entitled to the use and control of the residue of the property of whatever character."
There can, of course, be but one residue, that is, what is left after payment of the debts, the specific devises and legacies and the expenses of administration — at least, those expenses ordinarily incident to the probating of an estate. The value, character or description of the residue is in many instances not determinable until the final account is settled.
The respondent, however, contends that the testator did not use the words "rest, residue and remainder" in their common and usual meaning, but in a descriptive sense, and as indicating his intention that all his estate other than the real property devised to his nephew should pass to his widow. In other words, the respondent's theory is that she is in the same position as though the testator had specifically stated that he gave to her certain notes, United States bonds and other personal property, describing them in detail.
We are unable to accept the construction which the respondent places on the will. Deeds had been signed *Page 36 
and placed in escrow by W.H. Shepherd and his wife, the respondent herein, conveying certain farm lands to Shepherd's nephew. Fearful lest it be held that there had not been a valid delivery of these deeds, the testator, after referring to them, states that he reiterates it to be his intention "that said real property shall go to my said nephew, William D. Allingham, upon my death; and if said deeds are for any reason ineffective to carry out this intention, I hereby will and devise all of said real property to my said nephew, William D. Allingham". Then, "subject to the foregoing", he makes provision that "all the rest, residue and remainder" of his property shall pass to his nephew, as trustee, for the purposes hereinbefore outlined.
We find nothing in the will to indicate even remotely that the phrase "rest, residue and remainder" should be interpreted otherwise than in its ordinary and generally accepted sense. On the contrary, the testator has expressed, as clearly as words can convey, his intention to devise to his nephew certain lands, unaffected by debts, expenses of administration or charges against the estate, unless the remaining property in the estate is insufficient to pay them.
As already pointed out, the total cash received by the executor was an amount in excess of $6,300. Had the administration of the estate been closed as in the ordinary course of such matters, unaffected by proceedings brought by her, the widow would have received something like $5,000, which probably would have equaled or exceeded the value of her dower interest in the real property. The testator doubtless did not contemplate any protracted litigation. It is not, however, for the court to speculate upon what he might have done if the exact situation which has arisen had been in his mind when he made his will, but to determine the meaning of *Page 37 
the words actually used and to apply that meaning to the facts presented. We therefore hold that all the debts of the decedent and the costs and expenses of administration are chargeable to and should be paid out of that part of the estate not specifically devised to the testator's nephew.
There is a further question as to what part of the estate should be charged with the allowance of $2,700 to the widow and the expenses, including attorneys' fees, incurred by Allingham either as executor or individually. The widow's petition for a monthly allowance of $300 was granted to the extent of allowing her $225 per month. The will did not provide that the bequest to testator's wife should be in lieu of her statutory right to a widow's allowance during the first year of administration, and therefore it must be presumed that the testator had in mind, when making provision for her, that she would, if she desired, claim such allowance. The purpose of the statutory provision as to allowance is to tide over the widow and children for what might be assumed to be the average period of administering an estate. It is one of the charges incurred in the ordinary administration of an estate.
In Smullin v. Wharton, 86 Neb. 553 (125 N.W. 1112), the testator gave to his wife all his personalty, the home property and a lot in Omaha. The rest and residue of the estate he devised to a trustee, to pay out of the same all the expenses of maintaining and administering the trust and to deposit in a bank to the credit of the testator's wife all the net rents, issues and profits derived from the trust property, with the additional provision that the trustee might, on the written request of testator's wife, sell property of the trust estate and either reinvest or deliver the proceeds *Page 38 
thereof to her for her own use. Several matters involved in the administration of the estate and the trust created by the will reached the supreme court of Nebraska, and in the case cited the court was called upon to determine whether or not the lower court had carried out its mandate issued on a former appeal. One of the findings made by the lower court was as follows:
"The `rest and residue' of the estate, which passed into and constituted the trust estate under the devise to Westerfield, trustee, was that which remained after payment of the allowance made by the county court to the widow, and all debts, specific legacies, and expense of administration, and no part of the sum of $20,700, paid to the said Ida M. Wharton as aforesaid, was paid out of the trust estate."
The plaintiffs therein, who were interested in what might remain of the trust estate after the death of the testator's wife, excepted to this finding, contending that the $20,700 had been paid out of the residue. In discussing the question thus presented, the court said:
"What passed into the trust estate under this devise was the `rest and residue' of testator's estate, as that term is used in the will. In that sense the residue is the portion left after the payment of charges, liabilities, and particular legacies. Phelps v. Robbins, 40 Conn. 250; Collins' Appeal, 148 Pa. 139,23 A. 1108. The county court's monthly allowance of $300, a portion of which the widow received, was not a part of the rest and residue within the meaning of the residuary clause of the will, and was therefore not taken out of the trust estate. Crew v. Pratt,119 Cal. 131, 51 P. 44. It was an expense of administration, and not a part of the residue. Nothing in the will indicates a contrary intention on the part of testator. It follows that, on the face of the mandate containing the direction of this court, the trial court did not err in holding that no part of the $20,700 received by Mrs. Wharton was paid out of the trust estate." *Page 39 
In the case at bar the $2,700 allowed by the probate judge to the widow was not taken from the trust fund created for her by the testator. The rest, residue and remainder of the estate which would pass into and constitute a part of the trust fund upon the closing of the estate would be that which would remain after the payment of this allowance to the widow. Had she not asked for and received this allowance, a large one in view of the size of the estate, and one entirely out of proportion to the yearly allowance provided for her in the will, the trust fund would naturally be larger than it now is. In our former opinion we stated that the amount of this allowance was not subject to revision at this time, and we adhere to that holding.
In the order of allowance it is provided that the amount thereof is set apart out of the property of said estate independent of the trust fund mentioned in the will and "that said allowance shall be in addition to the amount set forth in the will of the deceased for the benefit of the said widow, or in addition to dower right of the said Olive M. Shepherd, provided she elects to take the dower and not take under the will". It is contended by the respondent that this order specifically charges the real property devised to the nephew with the payment of the $2,700. We do not so construe the order. The payment of the $2,700 to the widow would not affect her right, upon the turning over of the residue to the nephew as trustee, to receive from him $800 per year as long as the trust fund would be sufficient to pay the same, or until her death or remarriage. Undoubtedly that was the purpose of the provisions to which attention has hereinbefore been directed. Had the court intended to make this a charge against the property specifically devised to the nephew, it surely would have so stated in its order. Moreover, any attempt *Page 40 
on the part of the probate court, in view of the wording of the will, to make the widow's allowance a charge against the property so devised would have been erroneous and subject to be set aside on this appeal.
After receiving the monthly allowance of $225 for one year, the respondent could have rejected the provision for her in the will and claimed her dower right in the real property of the decedent. She then could have ascertained the approximate value of the residuary estate. She sought, however, by every means conceivable, to acquire all of the estate, rather than to rely on her statutory right.
Coming now to the question of whether the costs and expenses, including attorneys' fees, incurred by the executor in upholding the will against attack, should be paid out of the estate or borne by the beneficiaries under the will, we find a lack of harmony in the decisions of the courts of this country. In some states it is held that no duty is imposed upon the executor named in the will to take any steps to defend it, and that it is the duty of those who claim under the will to bear the cost of any litigation testing its validity. This is based on the theory that the value of the estate itself is in nowise affected by having the will upheld and that the beneficiaries are the parties principally concerned.
In other states it is held that once the will has been probated in common form it then becomes the duty of the executor to defend it against attack, and that any reasonable expense incurred by him in this effort, including attorneys' fees, shall be paid out of the estate. Many decisions allow the executor to charge such expense to the estate if the will is upheld, while others charge the cost to the executor personally if the contestants are successful. In some states statutes provide that the beneficiaries shall be named as defendants in *Page 41 
any contest, and based upon such law the courts hold that the cost of defending the will shall be borne by the beneficiaries individually rather than by the estate. We need not here go into further detail concerning the holding of the various courts, beyond calling attention to annotations accompanying the following cases: In re Hentges' Estate, 86 Neb. 75
(124 N.W. 929, 26 L.R.A. (N.S.) 757); Wilson v. Wilson, 188 Ky. 53
(221 S.W. 874, 10 A.L.R. 780); and Butt v. Murden, 154 Va. 10
(152 S.E. 330, 69 A.L.R. 1048).
With reference to the question of whether or not the services rendered by the executor in defending the will were of value to the estate, the supreme court of the state of Washington in ReStatler's Estate, 58 Wash. 199 (108 P. 433), observed:
"The appellant next contends that the respondent's services were without value to the estate, and, hence, since the claim is based upon benefits to the estate, there can be no recovery. Considering the estate as an entity apart from the interest of its beneficiaries, it is probably a legitimate argument to say that it can make no difference whether the property is taken by one set of claimants or by another. But we do not understand that this is what is meant by benefiting the estate. The contest is made by one set of claimants against another, and the benefit derived therefrom inures to the successful claimants, and this we think is the benefit contemplated by the rule".
Standard Encyclopedia of Procedure, volume 26, at page 302, thus treats the matter:
"Most, but not all, authorities agree that after a will has been admitted to probate it is the duty of the executor to use reasonable efforts to maintain it against attack and that if he does so in good faith even though unsuccessful, he should not be personally taxed with the costs and his reasonable expense including attorneys' fees should be allowed out of the estate. His good *Page 42 
faith is made a test of the executor's right to reimbursement, and the matter is one resting in the sound discretion of the court. The fact that the beneficiaries were represented by counsel does not prevent an allowance to the executor, even though they have notified the executor in advance not to employ counsel."
In the case of In re Johnson's Estate, 100 Or. 142
(196 P. 385, 1115), it was said by this court:
"It is very common, in the proceedings for the contest of a will, especially where doubtful questions are settled, to provide for the costs to be paid from the proceeds of the estate. * * * The usual objection to paying costs from an estate in a proceeding to contest a will is where the contestant is unsuccessful and such a provision might tend to promote litigation. Here the situation is different. The will was probated in common form, and it was to the interest of all concerned that the question be finally settled and adjudicated."
This court further observed, in the instance of In re Will ofHough, 120 Or. 223 (251 P. 711):
"It is the duty of an executor to appeal if in good faith he is satisfied that the will has been improperly rejected. The duty is imposed upon an executor or executrix to execute the will of the testator. The executrix is the sole trustee for all persons having an interest therein and the only legal representative of the estate of the deceased."
Under the procedure which has been adopted and followed in this state the duty is imposed upon the executor after the will has been probated in common form to defend it against attack when he has reasonable ground to believe the will valid; and in such instances it has been the common practice of the court to allow to the executor, whether successful or unsuccessful, if he acts in good faith, the reasonable expense incurred in such defense, including attorneys' fees. It *Page 43 
therefore became the duty of Allingham, when the testator's widow instituted a contest, to make an effort to maintain the will. That he acted in good faith is demonstrated by the fact that the will was upheld by the probate court and the supreme court. The fact that he was a beneficiary under the will did not lessen his duty or his right as executor to have such expense paid out of the estate.
William D. Allingham, however, as an individual, was in reality the only one financially interested in having the will upheld. Had the contest been successful, the widow would have taken all the property that belonged to the estate. Based on the theory that the benefit accruing to the estate from maintaining the will is one that inures to the successful claimants, the shares of the beneficiaries under the will should contribute to the expense of upholding it. In the instant case, were the entire expense of the contest to be paid out of the property included in the residuary clause, the whole burden of defending the will would in effect be borne by the widow, the contestant. The nephew, although profiting by having the validity of the will established, would in that case receive his devise entirely free from any contribution to the cost of litigation. In such event the widow would be charged not only with her own attorneys' fees but would be required to pay those of opposing counsel as well.
The fact that the contestant in this case was the residuary legatee should not affect the question of payment of attorneys' fees for defending the will. Had the contest been brought by some one not a beneficiary under the will but claiming as an heir, it would seem that that part of the estate devised by the testator to his nephew should be charged with some of the expense incidental to maintaining the will. *Page 44 
The costs and expenses, including attorneys' fees, incurred by the executor in this contest should be apportioned between the shares of the two beneficiaries under the will, according to the value received by each of them. The basis of such apportionment should be the appraised value of the real property received by the nephew and the amount that remains for the widow's benefit under the residuary clause. In those states which charge such expenses and attorneys' fees to the estate there seems to have been no decision as to whether they should be paid out of the property included in the residuary clause or apportioned among the shares of the beneficiaries.
Included in the account of the executor herein is an item of $435.75 paid by him to the court reporter for a transcript of the testimony in the will contest. The record does not disclose whether this item is a part of the costs and expenditures awarded the executor in that proceeding. If so awarded against the contestant, then it should be paid from the property covered by the residuary clause. Otherwise, this should be apportioned as are the attorneys' fees in the will contest.
The suit brought by the widow to have a trust declared in her favor was in effect between her and Allingham as an individual rather than as executor. The claim was made therein that he as an individual held title to real property which belonged to the widow under the contract between her and her deceased husband. Allingham in his individual capacity was a necessary party to that proceeding. Costs and expenses, including attorneys' fees, incurred by him in that suit, no matter in what capacity he presumed his defense to be made, should be paid by him and not charged to the estate. *Page 45 
The executor in his final account asks for $1,500 as attorneys' fees for both the will contest and the suit to have a trust declared. In our former opinion we expressed the view that this was a reasonable amount to be allowed. Since, however, we here decide that no claim should be allowed the executor for attorneys' fees in the suit brought by the widow to have a trust declared, the probate court should determine what is a reasonable amount to be allowed as attorneys' fees in the will contest alone.
Counsel for the respondent in their supplemental brief on rehearing for the first time call attention to § 10-320, Oregon Code 1930, providing in what cases a widow may be endowed anew. The question thus sought to be raised is not properly here for determination and we therefore refrain from discussing the matter.
Our former opinion in this case is modified to conform to the views hereinabove expressed. The cause is remanded for further proceedings not inconsistent with this opinion. Neither litigant will recover costs.
KELLY, J., not participating. *Page 46