In re ESTATE OF Edward Louis GREENAMYRE.
Court of Appeals of Tennessee, at Nashville.
April 16, 2004 Session. Dec. 7, 2005.
111 S.W.3d 877
Permission to Appeal Denied by Supreme Court March 12, 2007.
Joy Buck Gothard, Cookeville, Tennessee, for Anna L. Ham.
Kenneth S. Williams, Cookeville, Tennessee, for the appellees, Jiro Ishibashi and Hideo Ishibashi.
Dale Bohannon, Cookeville, Tennessee, for the appellee, Carol Gibbons.
OPINION
WILLIAM C. KOCH, JR., P.J., M.S., delivered the opinion of the court, in which WILLIAM B. CAIN, J., joined. FRANK G. CLEMENT, JR., J., filed a separate opinion concurring in part and dissenting in part.
This appeal involves a dispute regarding the fate of specific bequests in a will prepared by a college professor without the assistance of counsel. The professor’s mental capacity declined after he prepared the will, and the Chancery Court for Putnam County appointed a conservator for the professor who, with the court’s approval, auctioned off his personal property, including property subject to specific bequests in the professor’s will. After the professor died, his executrix petitioned the trial court to construe several provisions of his will. The trial court heard the matter without a jury and, relying on In re Estate of Hume, 984 S.W.2d 602 (Tenn. 1999), concluded that several of the specific bequests had been adeemed by extinction. The trial court also concluded that the parties attorney’s fees and the court costs should be paid from the intestate funds in the estate. On this appeal, one of the beneficiaries of an adeemed bequest takes issue with the court’s conclusion that she was not entitled to the proceeds from the sale of the property bequeathed to her and that she was not entitled to recover all of her attorney’s fees. The professor’s sole surviving heir at law takes issue with the trial court’s
I.
Edward Louis Greenamyre was an anthropologist who served as a professor in the Department of Sociology and Philosophy at Tennessee Technological University in Cookeville, Tennessee. He studied and conducted extensive research in East Asia and was married to Fusako Ishibashi Greenamyre.
On April 12, 1994, Dr. Greenamyre executed a will that he had apparently prepared without the assistance of counsel. The will named Ms. Greenamyre as Dr. Greenamyre’s sole beneficiary; however, it also contained detailed provisions regarding the disposition of Dr. Greenamyre’s property if Ms. Greenamyre died first. In the event that Ms. Greenamyre predeceased Dr. Greenamyre, the will contained specific bequests to Gretta Guyton Stanger,1 Dr. and Ms. Edmond D. Dixon,2 Henry W. Mannle,3 and Jiro and Hideo Ishibashi.4 The will contained no residuary clause. Dr. Greenamyre named Ms. Greenamyre as his executrix, but he designated Carol Gibbons, a secretary employed in the Department of Sociology and Philosophy, to serve as his executrix if Ms. Greenamyre died before he did.
Ms. Greenamyre died first, and Dr. Greenamyre was eventually placed in The Renewal Center in Carthage, Tennessee. In April 1998, The Renewal Center petitioned the Chancery Court for Putnam County to appoint a conservator for Dr. Greenamyre because he lacked the capacity to manage his resources or to protect himself. The petition identified Dr. Anna Lois Ham of Louisiana, Dr. Greenamyre’s first cousin, as his closest living relative. It also requested that Kelly Tayes of the Office of the Public Guardian for the Upper Cumberland Development District be appointed as Dr. Greenamyre’s conservator. Dr. Stanger also sought to be named conservator.
Following a hearing on May 1, 1998, the trial court appointed Ms. Tayes as the conservator for Dr. Greenamyre’s person and property. The court also appointed Charles L. Hardin as Dr. Greenamyre’s guardian ad litem. On June 25, 1998, Ms. Tayes filed a petition seeking permission to sell Dr. Greenamyre’s personal property at auction. She stated that he owned household goods and furnishings, two automobiles, and other personal property that he would not need in the future. She supported this petition with the affidavit of
Dr. Greenamyre’s personal property was sold at public auction on August 11, 1998. Among the items sold were a 1.8 carat diamond ring,5 a ruby ring,6 a woman’s Rolex watch,7 two men’s Rolex watches,8 and two automobiles.9 The auction grossed $61,692.00 and netted $50,993.30. Ms. Tayes deposited the auction proceeds in Dr. Greenamyre’s checking account at Union Planters Bank. The trial court confirmed the sale on August 28, 1998.
On April 21, 1999, Ms. Tayes filed a property management plan reflecting that Dr. Greenamyre’s assets consisted of $329,625.57 in cash and certificates of deposit at Union Planters Bank, First Tennessee Bank, and Regions Bank. In addition, the report stated that Dr. Greenamyre’s monthly income was $3,615.4210 and that his monthly expenses were $2,800.00. Ms. Tayes stated that her intention was to deposit the funds in the Regions Bank savings account and one of the Regions Bank certificates of deposit into a J.C. Bradford money market account as soon as the certificate of deposit matured.11 She also stated that it was her intention to pay Dr. Greenamyre’s expenses from his income and that she planned to use the principal only if Dr. Greenamyre’s income was insufficient to pay his expenses. On May 10, 1999, the trial court entered an order approving this management plan.
Dr. Greenamyre died on December 5, 2000 at the age of seventy. On January 23, 2001, Ms. Gibbons filed a petition in the trial court to probate Dr. Greenamyre’s April 12, 1994 will. On August 20, 2001, Ms. Gibbons filed an inventory valuing Dr. Greenamyre’s estate at $592,594.11. Thereafter, questions arose regarding the fate of Dr. Greenamyre’s bequests to Dr. Stanger, the Dixons, and Jiro and Hideo Ishibashi. Ms. Gibbons also had questions about Dr. Greenamyre’s instructions regarding his funeral and burial expenses, the safe-keeping of his six cats, and a $25,000 contribution to the Twin Cities Buddhist Association.
Dr. Stanger insisted that she was entitled to receive an amount equal to the balance in Dr. Greenamyre’s Union Planters Bank account on May 4, 1998 when the conservatorship was created,12 as well as
Ms. Gibbons also faced one other ambiguity as Dr. Greenamyre’s executrix. Dr. Greenamyre’s will instructed her to use the proceeds of “any travel insurance policy to which I have subscribed or will subscribe in the future” (1) to pay for his funeral and burial expenses, (2) to make a $25,000 donation to the Twin Cities Buddhist Association, and (3) to arrange for the safe-keeping of his six cats. Dr. Greenamyre apparently had no travel insurance policies in force at the time of his death, but his estate contained sufficient funds to pay these expenses.
Accordingly, on March 5, 2002, Ms. Gibbons filed a complaint requesting the trial court to address four questions regarding the construction of the will. She named as defendants all the persons receiving special bequests in Dr. Greenamyre’s will. The first question involved the bequest to Dr. Stanger of “[a]ll cash in any checking account at Citizens Bank held singly or jointly in my name.” The second question involved the bequest of the Rolex watches to the Dixons. The third question involved the bequest of “[a]ny certificates of deposit listed in my name at the time of my death” to Jiro and Hideo Ishibashi. The final question sought the court’s permission to use other funds in the estate to pay for Dr. Greenamyre’s funeral expenses, the safe-keeping of his six cats, and the $25,000 contribution to the Twin Cities Buddhist Association.
On April 3, 2003, following hearings on December 10, 2002 and February 18, 2003, the trial court entered an order construing Dr. Greenamyre’s will. The most significant decision made by the trial court, at least as far as this appeal is concerned, involved the legal effect of the sale of Dr. Greenamyre’s personal property in 1998. Relying on In re Estate of Hume, 984 S.W.2d 602 (Tenn. 1999),13 the trial court concluded that the sale worked an ademption by extinction of the specific bequests of personal property to Dr. Stanger and the Dixons. Accordingly, the trial court determined that Dr. Stanger was only entitled to the $8,474.68 balance in Dr. Greenamyre’s Union Planters Bank account at the time of his death and that the Dixons were entitled to nothing.
The trial court also determined that Dr. Ham was the sole intestate beneficiary and heir of Dr. Greenamyre and that Jiro and Hideo Ishibashi were entitled to the certificates of deposit and their pro rata share of interest on these funds. In addition, the court determined that the costs and the fees of the parties’ attorneys should be paid from the intestate funds in the estate. Dr. Stanger and Dr. Ham have appealed. Dr. Stanger takes issue with the trial court’s conclusion that the bequest to her of Dr. Greenamyre’s personal property
II.
THE PERSONAL PROPERTY SOLD AT AUCTION
Dr. Stanger’s primary argument on appeal is that the trial court erred by relying on In re Estate of Hume, 984 S.W.2d 602 (Tenn. 1999) when it determined that the conservator’s sale of Dr. Greenamyre’s personal property resulted in an ademption by extinction of his specific bequests to her. She insists that the holding of In re Estate of Hume should be limited to its facts and that we should instead adopt the reasoning of two unpublished decisions.14 We have determined that no principled basis exists for refusing to apply the legal reasoning of In re Estate of Hume to this case.
When the Tennessee Supreme Court decided In re Estate of Hume in 1999, it clearly aligned Tennessee with the jurisdictions that follow the strict “identity” theory of ademption by extinction. Stewart v. Sewell, No. M2003-01031-COA-R3-CV, 2005 WL 873304, at *13 (Tenn. Ct. App. Apr. 14, 2005). The Court stated in plain terms that:
Ademption by extinction results because of “the doing of some act with regard to the subject-matter which interferes with the operation of the will.” Balfour, 198 S.W. at 71.15 In these cases:
the rule [of ademption by extinction] prevails without regard to the intention of the testator or the hardship of the case, and is predicated upon the principle that the subject of the gift is annihilated or its condition so altered that nothing remains to which the terms of the bequest can apply. Wiggins v. Cheatham, 143 Tenn. 406, 225 S.W. 1040, 1041 (1920) (emphasis added) (citation omitted). In other words, it only matters that the subject of the specific bequest no longer exists because of “the doing of some act;” it is irrelevant who or what initiates “the doing.” Balfour, 198 S.W. at 71.
In re Estate of Hume, 984 S.W.2d at 604. Citing McGee v. McGee, 122 R.I. 837, 413 A.2d 72 (1980), the court concluded that the “rule that the intent of the testator is irrelevant in ademption by extinction cases is in harmony with the modern holdings found in the majority of states.” In re Estate of Hume, 984 S.W.2d at 604-05.
Dr. Stanger argues that the reasoning of In re Estate of Hume should be limited to foreclosure sales where the testator has defaulted on a loan secured by the property subject to the specific bequest. She insists that this court should instead follow the rule adopted in other states16 and embodied in the
No language in In re Estate of Hume reflects the Tennessee Supreme Court’s intention to limit its holding regarding the legal elements of ademption by extinction. In fact, the court rested its decision on an opinion by the Supreme Court of Rhode Island in a case factually akin to this one. McGee v. McGee, 413 A.2d at 72. In that case, the son of the testator, acting pursuant to his mother’s power of attorney, withdrew funds from a bank account subject to a specific bequest and used the funds to purchase a United States Treasury bond. In reaching its conclusion that the withdrawal of the funds and the purchase of the treasury bond resulted in an ademption by extinction of the specific bequest, the Rhode Island court noted that the concept of ademption by extinction applies to “actions of a testator himself or through his guardian, conservator, or agent.” McGee v. McGee, 413 A.2d at 75.
The authors of the Uniform Probate Code cite McGee v. McGee as an example of the harsh results that can follow the strict application of the identity rule in cases involving ademption by extinction.
In 2004, five years after the Tennessee Supreme Court handed down In re Estate of Hume, the Tennessee General Assembly adopted
Our decision in this case is thus controlled by In re Estate of Hume. This court does not have the prerogative to disregard decisions of the Tennessee Supreme Court. See Payne v. Johnson, 2 Tenn. Cas. (Shannon) 542, 543 (1877). As intermediate appellate judges, we are obliged to follow the directions of the Tennessee Supreme Court, particularly after the “court has given definite expression to its views in a case after careful consideration.” Holder v. Tenn. Judicial Selection Comm’n, 937 S.W.2d 877, 881 (Tenn. 1996). The court’s holding in In re Estate of Hume embodies the principles of the ademption by extinction doctrine that we
Like the trial court, we have determined that the bequest to Dr. Stanger was a specific bequest and, therefore, was subject to ademption by extinction. Based on the law as it stood in December 2000 when Dr. Greenamyre died, we have also concluded that the auction sale of Dr. Greenamyre’s personal property in 1998 amounted to an ademption by extinction of the personal property bequeathed to Dr. Stanger. The subjects of these specific bequests no longer exist. Accordingly, she is not entitled to the net proceeds of the sale of this property.
III.
THE UNION PLANTERS BANK ACCOUNT
Dr. Stanger makes a similar argument with regard to the money in Dr. Greenamyre’s Union Planters Bank account. While Dr. Stanger stops far short of accusing Ms. Tayes of any wrong doing, she asserts that she is entitled to receive an amount equal to the balance in the account when the conservatorship was established because no financial necessity forced Ms. Tayes to transfer the money to other accounts. For the same reasons that we concluded that Dr. Stanger is not entitled to the net proceeds from the sale of the personal property she would have received under Dr. Greenamyre’s will, we conclude that she is not entitled to receive anything more than the $8,474.68 that was in the Union Planters Bank account when Dr. Greenamyre died.
IV.
THE ESTATE’S LIABILITY FOR DR. STANGER’S ATTORNEY’S FEES
The final issue in this case involves the payment of Dr. Stanger’s attorney’s fees. Dr. Stanger takes issue with the trial court’s decision to award her only a portion of the fees she requested. However, Dr. Ham insists that the trial court erred by requiring the estate to pay any portion of Dr. Stanger’s attorney’s fees. After reviewing the record, we find no appropriate factual basis for differentiating between the services of Dr. Stanger’s attorney and the services of the attorneys representing the other parties in this proceeding. Accordingly, we have determined that the estate should be required to pay the full amount of Dr. Stanger’s attorney’s fees accrued in the trial court. However, we find no basis for awarding Dr. Stanger additional attorney’s fees for this appeal.
Tennessee follows the American Rule with regard to attorney’s fees. Under the American Rule, each litigant must wage its own fight for justice with its own resources, James H. Cheek III, Note, Attorney’s Fees: Where Shall the Ultimate Burden Lie, 20 Vand. L. Rev. 1216, 1221 (1967), and litigants are responsible for their own attorney’s fees no matter “how-ever wrongful may have been the suit, or however groundless the defense.” Corinth Bank & Trust Co. v. Security Nat’l Bank, 148 Tenn. 136, 154, 252 S.W. 1001, 1006 (1923). Accordingly, in the absence of a statute, contract, or equitable rule requiring otherwise, attorneys must generally look to their own clients for their fees. Kline v. Eyrich, 69 S.W.3d 197, 204 (Tenn. 2002); State v. Brown & Williamson Tobacco Corp., 18 S.W.3d 186, 194 (Tenn. 2000); Elliott v. Elliott, 149 S.W.3d 77, 88 (Tenn. Ct. App. 2004).
Will construction cases represent a well-known exception to the American
Dr. Ham first insists that Dr. Stanger is not entitled to have her attorney’s fees paid by the estate because she did not include a specific request for attorney’s fees in her answer as required by
Determining (1) whether filing suit to construe the will was necessary, (2) whether the attorney’s services benefitted the estate, (3) whether the parties’ attorney’s fees should be paid from the estate, and (4) the amount of the attorney’s fees are discretionary decisions. Chaille v. Warren, 635 S.W.2d 700, 703 (Tenn. Ct. App. 1982); Tigrett v. Tigrett, 61 Tenn. App. 172, 203, 453 S.W.2d 100, 114 (1967). The reasonableness of a particular attorney’s fee depends on the facts of the case. Alexander v. Inman, 903 S.W.2d 686, 695 (Tenn. Ct. App. 1995). Accordingly, we review a trial court’s decisions regarding the award of attorney’s fees using the “abuse of discretion” standard of review.
The “abuse of discretion” standard is a review-constraining standard of review that calls for less intense appellate review and, therefore, less likelihood that the trial court’s decision will be reversed. State ex rel. Jones v. Looper, 86 S.W.3d 189, 193 (Tenn. Ct. App. 2000); White v. Vanderbilt Univ., 21 S.W.3d 215, 222-23 (Tenn. Ct. App. 1999). Appellate courts do not have the latitude to substitute their discretion for that of the trial court. Henry v. Goins, 104 S.W.3d 475, 479 (Tenn. 2003); State ex rel. Vaughn v. Kaatrude, 21 S.W.3d 244, 248 (Tenn. Ct. App. 2000). Thus, a trial court’s discretionary decision will be upheld as long as it is not clearly unreasonable, Bogan v. Bogan, 60 S.W.3d 721, 733 (Tenn. 2001), and reasonable minds can disagree about its correctness. Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001); State v. Scott, 33 S.W.3d 746, 752 (Tenn. 2000). Discretionary decisions must, however, take the applicable law and the relevant facts into account. Ballard v. Herzke, 924 S.W.2d 652, 661 (Tenn. 1996). Accordingly, a trial court will be found to have “abused its discretion” only when it applies an incorrect legal standard, reaches a decision that is illogical, bases its decision on a clearly erroneous assessment of the evidence, or employs reasoning that causes an injustice to the complaining party. Perry v. Perry, 114 S.W.3d 465, 467 (Tenn. 2003); Clinard v. Blackwood, 46 S.W.3d 177, 182 (Tenn. 2001); Overstreet v. Shoney’s, Inc., 4 S.W.3d 694, 709 (Tenn. Ct. App. 1999).
The trial court’s decision to require the estate to pay the fees of the four attorneys who participated in this case reflects its conclusions that the suit to construe Dr. Greenamyre’s will was appropriate, that the work of all the attorneys benefitted the estate, and therefore, that the estate should be required to pay all or a portion of the parties’ attorney’s fees. These conclusions are supported by the record.
Deciding whether a party’s attorney’s fees should be paid by the estate does not necessarily hinge on the success of the party’s claims. See First Am. Nat’l Bank v. Cole, 211 Tenn. 213, 222, 364 S.W.2d 875, 879 (1963); Howell v. Stroud, 1 Tenn. App. 301, 312–13 (1925). The controlling question is whether the entire estate benefitted from the efforts of the party’s lawyer. Dr. Stanger’s participation in the suit to construe Dr. Greenamyre’s will benefitted the estate even though she did not prevail. Her claims have now been definitively resolved, and her attorney aided materially in that resolution. Now that the questions regarding Dr. Greenamyre’s will have been laid to rest, Ms. Gibbons may distribute the assets and close the estate without further controversy or dispute.
The final issue involves the portion of Dr. Stanger’s attorney’s fees that should be paid by Dr. Greenamyre’s estate. Dr. Stanger’s attorney submitted an affidavit establishing that his fees and expenses amounted to $9,807.92; however, the trial court, without explanation, directed the estate to pay only $6,751.62 of the requested fee. Based on the record before us, we find that the trial court erred by failing to direct Dr. Greenamyre’s estate to pay all of Dr. Stanger’s legal expenses in the trial court.
Four attorneys were involved in this litigation. All four attorneys submitted fee requests to the trial court and requested the court to find them reasonable and then order that these fees be paid from the intestate funds in Dr. Greenamyre’s estate. The trial court found that the fees requested by three of the four attorneys were reasonable and directed that they be paid from the estate.23 However, the trial court
We have already pointed out that the success of a party’s claim is not the sole factor for determining whether an estate should pay that party’s legal expenses in a suit to construe a will. By awarding Dr. Stanger’s attorney a portion of his requested fee, the trial court necessarily determined that the efforts of Dr. Stanger’s attorney benefitted Dr. Greenamyre’s estate. The trial court never concluded that the attorney’s fees requested by Dr. Stanger’s lawyer were unreasonable and never explained the legal or factual basis for its decision to award Dr. Stanger’s attorney only a portion of his requested fee. Accordingly, we find that the trial court erred by directing Dr. Greenamyre’s estate to pay only a portion of Dr. Stanger’s attorney’s fees in the trial court.
Dr. Stanger also insists that this court should require Dr. Greenamyre’s estate to pay the legal expenses she incurred on this appeal. While we have the authority to award attorney’s fees on appeal, we decline to do so in this case. The trial court’s order properly addressed the ademption by extinction issue raised by Dr. Stanger. Thus, this appeal was primarily intended to benefit Dr. Stanger.
V.
We affirm the trial court’s conclusion that the specific bequests of personal property to Dr. Stanger were adeemed by extinction and that Dr. Stanger is entitled only to the funds in Dr. Greenamyre’s Union Planters Bank account when he died. We reverse the trial court’s order directing Dr. Greenamyre’s estate to pay $6,751.62 of Dr. Stanger’s attorney’s fees and direct the court to enter an order directing the estate to pay Dr. Stanger’s attorney’s fees in the amount of $9,807.92. We remand the case to the trial court with directions to enter the order heretofore required and for whatever other proceedings may be required. We also direct that the costs of this appeal be taxed to the Estate of Edward Louis Greenamyre for which execution, if necessary, may issue.
FRANK G. CLEMENT, JR., J., concurs.
FRANK G. CLEMENT, JR., J., concurring and dissenting, in part.
The majority has provided a well reasoned opinion, based upon a strict interpretation of In re Estate of Hume, 984 S.W.2d 602, 605 (1999), concluding that the sale and reorganization of other assets and bank accounts by the court appointed conservator effected an ademption by extinction of several of Mr. Greenamyre’s testamentary bequests. I, however, submit a strict interpretation of Hume is not required.
Being fully aware of the strictures of the longstanding doctrine of stare decisis et non quieta movere embodied in Payne v. Johnson, 2 Tenn. Cas. (Shannon) 542, 543 (1877), I am of the opinion the material facts of this case and those of In re Estate of Hume are so disparate they permit this
Another example of distinguishing the facts is In re Estate of Rutledge, No. 85-338-II, 1986 WL 6063 (Tenn. Ct. App. May 29, 1986), wherein the court was presented with two ademption issues. One pertained to real property devised in the will, which had been disposed of by the testatrix. The other pertained to personalty disposed of by the conservator for the testatrix without the knowledge or consent of the testatrix. The Rutledge court treated the dispositions differently, holding that the acts by the testatrix caused an ademption, yet the acts by the conservator did not.
The relevant provisions of the Rutledge will directed the Executrix to sell all real property, and after the payment of expenses, give the residue of the proceeds to named beneficiaries. The will also specifically bequeathed personal property—diamond ring, dinner ring, silver service, certificates of deposit, household furnishings, etc. to other named beneficiaries. As the petition to construe the Rutledge will revealed, all of the property bequeathed or devised in the will had been sold prior to the testatrix’ death. As a consequence, the estate consisted of cash and certificates of deposit. The trial court found the testatrix sold her real property and transferred money from bequeathed designated bank accounts to other investment instruments. It also found the conservator sold the diamond ring, the dinner ring, the sterling silver service, and the household furnishings bequeathed in the will. Based upon these findings, the trial court held an ademption had occurred as to the property disposed of by the testatrix, but the transactions by the conservator did not cause an ademption. As a consequence of these findings and holding, the trial court ordered the executrix to pay the respective legatees the amount for which the personalty was sold, which was affirmed by this
Based upon the recognized practice of distinguishing the facts in ademption cases, we may distinguish the significant factual differences between Mr. Hume’s and Mr. Greenamyre’s estates. Unlike Mr. Greenamyre, Mr. Hume was sui juris at all times. Additionally, the ademption in the Hume estate was a direct result of an act and omissions by Mr. Hume. The devised property was voluntarily encumbered by Mr. Hume while he was sui juris, the default on the note secured by the property occurred while he was sui juris, the foreclosure occurred while Mr. Hume was sui juris, and he remained sui juris until his death.
The facts of Mr. Greenamyre’s case are entirely different. Mr. Greenamyre was not sui juris at any time material to the issues. Most significantly, he was a ward of a conservatorship for his person and property when the disputed transactions took place. Moreover, Mr. Greenamyre had no involvement, direct or indirect, in the transactions. All sales and transfers2 of the assets at issue were the acts of a court-appointed fiduciary, a conservator, without the knowledge or consent of Mr. Greenamyre. In fact, it was legally impossible for Mr. Greenamyre to object or consent to the transactions because Mr. Greenamyre was previously declared a disabled person subject to a conservatorship.
It is, or should be, of significance that the ademption at issue was not the result of any act or omission by Mr. Greenamyre.3 Indeed, Mr. Greenamyre’s only act or omission relevant to the issue was to fall victim to infirmities of age, which necessitated that he be placed in a nursing home and have a conservator appointed to handle all of his legal and personal affairs.
The principle upon which the Hume court applied the “in specie” doctrine was that it matters not that the ademption was a result of an act by the testator. The ademption in Hume was, however, a direct result of an act by Mr. Hume and subsequent omissions by Mr. Hume. The “act” was when Mr. Hume encumbered the real estate, which put the resulting foreclosure
The critical distinguishing factors present in Hume and not present here are legal competency and the ability or lack thereof of the testator to remedy the impending ademption by revising the will. Mr. Hume could have but did not remedy the ademption. Mr. Greenamyre could not; in fact, it was a legal impossibility.
Application of the “in specie” doctrine by the Hume court was logical and equitable, because Mr. Hume, being sui juris could have, but did not, revise his will after the foreclosure. Nevertheless, I am confident the Hume court would not have applied the “in specie” doctrine to Mr. Greenamyre’s set of facts. I submit the apparent broad application of the holding in Hume is the unintended result of the Hume court painting with too broad a brush. It is for such artistry we have the safeguard of obiter dictum.
As the majority noted, it is significant but not controlling that the General Assembly recently expressed its intention that the harsh “in specie” doctrine not apply to persons like Mr. Greenamyre.5 This intent is evident from adoption of relevant parts of the Uniform Probate Code, which favor the “intention of the testator” rule instead of the harsh “in specie” rule when a devise or bequest is sold by a conservator for an incapacitated person who cannot approve or object to the fiduciary’s acts. See
Of course, we are not free to disregard directives when the Supreme Court is speaking directly on the matter before it and is seeking to give guidance to the bench and bar. See Holder v. Tennessee Judicial Selection Comm’n, 937 S.W.2d 877, 881-82 (Tenn. 1996).
(a) A specific legatee or devisee has a right to the specifically gifted or devised property
in the testator’s estate at death or if the property has been disposed of and a contrary intention is not manifest during the testator’s lifetime:
(1) Any balance of the purchase price, together with any security interest, owing from a purchaser to the testator at death by reason of sale of the property;
(2) Any amount of a condemnation award for the taking ... unpaid at death;
(3) Any proceeds unpaid at death on fire or casualty insurance on, or other recovery for injury to, the property; and
(4) Property owned by the testator at death and acquired as a result of foreclosure, or obtained in lieu of foreclosure, of the security interest for a specifically devised obligation.
(b) If specifically devised or bequeathed property is sold or mortgaged by a conservator or by an agent acting within the authority of a durable power of attorney for an incapacitated principal, or if a condemnation award, insurance proceeds, or recovery for injury to the property are paid to a conservator or to an agent acting with the authority of a durable power of attorney for
testator lacks intent to adeem and the opportunity to avoid the effect of ademption by making a new will, and that a contrary rule would allow the guardian, by changing the form of guardianship property, to determine the distribution of the estate. “To permit such ademption,” said the court, “would allow the guardian to destroy his ward’s testamentary plan....” Id. (emphasis added); see also Matter of Estate of Warren, 81 N.C. App. 634, 344 S.E.2d 795 (1986); 84 A.L.R.4th 455 (upholding the pronouncement that the principle of ademption does not apply when the testator becomes incompetent and the subject matter of a specific bequest or devise is sold by a guardian or conservator); Lewis v. Hill, 387 Ill. 542, 56 N.E.2d 619, 622 (1944) (stating the principle arises from the recognition that the sale of property by a guardian or conservator is “in no sense to be regarded as a conveyance by the testatrix”). Several jurisdictions, perceiving harshness in the strict application
an incapacitated principal, the specific devisee has the right to a general pecuniary devise equal to the net sale price, the amount of the unpaid loan, the condemnation award, the insurance proceeds, or the recovery.
(c) The right of a specific legatee or devisee under subsection (b) is reduced by any right the legatee or devisee has under subsection (a).
...
(e) For the purposes of the references in subsection (b) to an agent acting within the authority of a durable power of attorney for an incapacitated principal:
(1) “Incapacitated principal” means a principal who is an incapacitated person;
(2) No adjudication of the principal’s incapacity need occur before death; and
(3) The acts of an agent within the authority of a durable power of attorney are presumed to be for an incapacitated principal, such presumption rebuttable by clear and convincing evidence of capacity.
For the reasons stated above, I respectfully dissent from that part of the majority opinion that upholds the ademption. With that exception, I concur with the majority.