Opinion
No. 38810
Decided April 7, 1965.
Descent and distribution — Title to personal property passes to personal representative — Election not to take under will — Relict takes by way of inheritance as if decedent intestate — Specific bequest for creation of trust — Remaining portion of estate sufficient to provide relict with her share — Relict takes her share of net estate, how.
1. The title to personal property of a deceased person passes to his personal representative, his executor or administrator, pending the settlement of the estate, whether he dies testate or intestate.
2. Where the relict of a deceased husband elects not to take under his will, she takes her share by way of inheritance as though it came to her from her deceased husband as an intestate. (Paragraph one of the syllabus of Barlow v. Winters National Bank Trust Co., Trustee, 145 Ohio St. 270, approved and followed.)
3. Where a deceased husband, by his will, made a specific bequest of a certain number of shares of stock in a corporation for the creation of a trust for the benefit of one of his employees, and where the remaining portion of his estate is sufficient, after the payment of all debts and other obligations, to provide his relict, who elected not to take under the will, with the share of his net estate to which she is entitled under the provisions of Section 2105.06, Revised Code, the relict's share of the net estate is an undivided fractional interest in the real estate plus such additional amount of personal property not specifically bequeathed under the will, either in kind or in money, as shall make her total share of the net estate that amount to which she is entitled under the provisions of the statute.
APPEAL from the Court of Appeals for Montgomery County.
This action was commenced by the executor of the estate of Walton M. Riffe in the Probate Court of Montgomery County, seeking instructions concerning the distribution of the assets of the estate.
The decedent died on December 15, 1961. His will which was admitted to probate directed the payment of debts and expenses and then by item II of the will created a trust of "all of the [American Telephone Telegraph] stock that I own * * * at the time of my death" (which was 790 shares). It provided that the income only from this trust should go to his "good friend and business associate, Florence N. Graf." Miss Graf had been an employee of Riffe since 1934.
Item III of the will created a trust of "the rest and residue" and provided that all the income therefrom should go to the wife, Sammie S. Riffe. The trustee of this trust was given discretion to invade the principal for Mrs. Riffe.
The will provided further that if Miss Graf predeceased Mrs. Riffe, or upon the death of Miss Graf, the principal of the trust established by item II of the will for the benefit of Miss Graf was to go into the trust created by item III of the will for the benefit of Mrs. Riffe.
At the time of the proceedings in the Probate Court, both Miss Graf and Mrs. Riffe were living.
Item III of the will provided further that upon the death of Mrs. Riffe the assets remaining in the trust established for her benefit were to serve as an educational fund for the sons and daughters of certain named cousins of Riffe for a period of ten years unless exhausted sooner.
The will provided further that if any balance remained in this educational fund ten years after Mrs. Riffe's death, these remaining assets were to go to the Dayton Museum of Natural History.
It was provided further in the will that, if Miss Graf survived Mrs. Riffe, all the principal of the trust established by item II of the will, upon the death of Miss Graf, was to go to either the educational fund or the museum, depending upon whether Miss Graf died prior to or after the expiration of the ten-year limitation placed upon the educational fund.
The appraised value of the 790 shares of A.T. T. stock which the will directed should be placed in trust for Miss Graf was $109,020. The remainder of the estate was appraised at $272,221.32, and, under the will, after the payment of debts, taxes and expenses, would have gone into the trust created by item III of the will for the benefit of Mrs. Riffe.
Mrs. Riffe, the surviving spouse, exercised her right of election under Section 2107.39, Revised Code, and took against the will.
As a result of her election, she is entitled to receive, under the statute, one-half of the net estate.
The Probate Court determined that Mrs. Riffe, under the statute, would take an undivided one-half interest in the 790 shares of A.T. T. stock which, under item II of the will, were placed in trust for the benefit of the appellant.
The court determined further that the remaining one-half of the shares of A.T. T. stock would be placed in trust for Miss Graf under item II of the will.
The court accelerated the remainder of the item III residuary trust but refused to permit any of the assets of this residuary trust to be used to restore the loss incurred by the trust created under item II of the will, which loss resulted from the court's determination that the surviving spouse was entitled to one-half of the stock which item II of the will directed to be placed in trust for Miss Graf.
The Court of Appeals affirmed the judgment of the Probate Court.
The cause is before this court upon the allowance of a motion to certify the record.
Messrs. Lair, Herkins, Lair Wiseman, for plaintiff-appellee.
Mr. Mathias H. Heck, for defendant-appellee.
Messrs. Turner, Wells, Granzow Spayd and Mr. Robert V. Spayd, for appellant.
One of the assignments of error of the appellant is that the Court of Appeals erred in determining that Section 2105.06, Revised Code, gives the spouse electing under Section 2107.39, Revised Code, an undivided fractional interest in each item of personal property in the decedent's estate.
The Court of Appeals relied upon Barlow v. Winters National Bank Trust Co., Trustee, 145 Ohio St. 270, 280. Likewise, the Probate Court relied upon the Barlow case, supra, and the defendant-appellee before this court, in her brief, relied solely upon the Barlow case, supra.
The lower court has applied the rule set forth in the Barlow case to personal property. However, an examination of the Barlow case and the opinion of Judge Hart therein indicates that the rule announced in that case applied only to real estate, and that personal property was not involved. This is clear from the syllabus, and it is equally clear from the opinion of Judge Hart where, at the outset, he said:
"The sole question to be determined is: Where real estate is devised in a childless testator's will to a trustee therein named, and the surviving spouse elects to reject the provisions of the will in her behalf and to take her interest in the estate under the statute of descent and distribution * * * does title to a statutory share in such real estate pass to her in fee simple as an estate of inheritance, subject to the payment of debts of the estate?" (Emphasis added.)
The language in the opinion, at page 280, relied upon by the Court of Appeals is dicta and, even as such, does not support the position of the court below.
Paragraph one of the syllabus in the Barlow case provides as follows:
"Where the relict of a deceased husband elects not to take under his will, she takes her share not by way of a distributive share in money, but by way of inheritance as though it came to her from her deceased husband as an intestate * * *." (Emphasis added.)
Section 2105.06, Revised Code, provides:
"When a person dies intestate having title or right to any personal property or to any real estate or inheritance in this state, such personal property shall be distributed and such real estate or inheritance shall descend and pass in parcenary * * *." (Emphasis added.)
Paragraph two of the syllabus of the Barlow case states the rule with regard to real estate as follows:
"If an estate of such deceased husband consists wholly or in part of real estate, and his widow, as relict, elects not to take under his will but under the statute of descent and distribution, she takes her quantitive share in such real estate as an estate of inheritance, subject to sale, if necessary, to pay the debts of the estate of her deceased husband."
The rule is and has long been that in intestate estates, where heirs take by way of inheritance, they take title to the real estate immediately upon the death of the intestate, and the heirs, rather than the administrator, are directly entitled to real estate rents from the date of death.
The rule with regard to personalty, however, is equally well established that the administrator of an intestate estate, rather than persons who take by way of inheritance, takes title to the personalty and is entitled to collect the income thereon from the date of death.
"It is well established that as a general rule the legal title to personal property of which decedent died possessed does not vest at his death in his next of kin or distributees * * * but vests, for the time being, in his executor or administrator, who is the proper person to follow such property into the hands of others or dispose of it." 33 Corpus Juris Secundum 1341, Executors and Administrators, Section 299.
In DuVall v. Faulkner, 113 Ohio St. 543, at page 545, it is stated:
"* * * the title to * * * personal property of a deceased person passes to his personal representative, his executor or administrator, pending the settlement of the estate, and * * * this is true whether he dies testate or intestate. * * * After the debts are paid, the balance of the personal property is either divided in kind, pursuant to the terms of the will, or is reduced to money and then divided, all in accord with the orders of the Probate Court."
It is clear that Mrs. Riffe is entitled to one-half of the net estate of her deceased husband. She is entitled to an undivided one-half interest in all the real estate which is a part of his estate, and she is entitled to such additional amount as will make the total of her share one-half of the net estate, the additional amount to be made up of personalty or cash proceeds from the sale of personalty.
The question now arises as to what disposition the executor shall make of the A.T. T. stock to which it has title.
It is clear that this stock has been specifically bequeathed to a trust under item II of the will. It is equally clear that the amount of the estate to which Mrs. Riffe is entitled can be entirely met from an undivided one-half interest in the real estate and from personal property which has not been specifically bequeathed under the will.
Section 2113.55, Revised Code, provides:
"Before making distribution in kind of property which is not specifically bequeathed, an executor or administrator shall obtain the approval of the Probate Court or the consent of all of the legatees or distributees whose interests may be affected by such distribution. A distribution in kind may be made to any beneficiary, including an executor, administrator, trustee, guardian, and the surviving spouse." (Emphasis added.)
After the payment of debts, the executor should distribute the 790 shares of A.T. T. stock to the trustee named in item II of the will for the creation of a trust for the benefit of Miss Graf in accordance with the terms of item II of the will. The one-half of the net value of the estate to which the surviving spouse is entitled as a result of her election should be made up of an undivided one-half interest in the real estate, plus distribution to her of sufficient personal property, either in kind or in money resulting from the sale of such personal property, as shall make her share one-half of the net appraised value of the estate. Such a distribution is in accord with the established law of this state and is also in accord with the intentions of the testator as expressed clearly by the terms of his will.
It is not necessary to consider the other assignments of error asserted by the appellant in this cause of action, for the reason that a determination of this single assignment of error is dispositive of this case.
The judgment of the Court of Appeals is, therefore, reversed.
Judgment reversed.
TAFT, C.J., ZIMMERMAN, MATTHIAS, HERBERT, SCHNEIDER and BROWN, JJ., concur.