80 F.2d 787 | 5th Cir. | 1936
Clark Pease died in November, 1929, leaving a last will and testament, in which he appointed his only son, Myron A. Pease, executor, and provided “that no other action shall be had in the County Court in relation to the settlement of my estate than the probating and recording of this will and the return of an inventory, appraisement and list of claims of my estate.” The will, after providing for the payment of the testator’s debts, and making a bequest to his wife, Lida A. Pease, of all of testator’s household goods, pictures, furniture, jewelry, and automobiles, provided: “All of the remainder of my estate of every character whatsoever, real, personal and mixed, I do hereby will, devise and bequeath unto the Republic Trust & Savings Bank of Dallas, Texas, to be held and disposed of nevertheless in trust in the following manner.” By a codicil to the will the Republic National Bank & Trust Company of Dallas, Tex. (herein referred to as the trustee), was substi
’ In this suit, which was begun in July, 1934, to which the receiver of the City National Bank, the trustee, Lida A. Pease,
Under the decedent’s will, his son became what in Texas is known as an independent executor. Under Texas law such an executor is empowered to sur-, render property bequeathed to one who, under the will, is entitled to receive it, property so surrendered coming to one who so acquires possession of it subject to a lien thereon for debts of the testator. Vernon’s Annotated Civil Statutes Texas, arts. 3461, 3464; Parks v. Knox, 61 Tex. Civ.App. 493, 130 S.W. 203; Wilhelm’s Estate v. Matthews (Tex.Civ.App.) 274 S.W. 251. As to property so surrendered by an independent executor, the decedent’s creditors are entitled to priority over claims against the devisee or legatee in possession which arose or accrued after that possession was acquired. The liability under an assessment against shareholders of a failed national bank is one created by statute against those who were holders of such shares at the date of the bank’s failure, or who transferred their shares within 60 days before the date of the failure, or with knowledge of the impending failure. 12 U.S.C.A. §§ 64, 66. Property surrendered by the independent executor to the trustee did not come to the possession of the latter charged with the liability created by the assessment. That liability resulted from tfye failure of the City National Bank, an occurrence subsequent in time to the taking effect of the will and the surrender to the trustee, and was statutory and incidental to the ownership or holding of shares of the stock of the failed bank. McClaine v. Rankin, 197 U.S. 154, 161, 25 S.Ct. 410, 49 L.Ed. 702, 3 Ann.Cas. 500. The property subject. to that liability is not the entire estate of the decedent who formerly owned that stock, but only the estate and funds in the hands of the testamentary trustee who was the holder of the shares on which the assessment was based. 12 U.S.C.A. § 66. The instant case is unlike the case of Matteson v. Dent, 176 U.S. 521, 20 S.Ct. 419, 44 L.Ed. 571, in that the assessment in question in the cited case was made while National Bank stock stood in the name of its deceased' owner, while in the instant case the stock stood in the name of the trustee when the Bank failed and when the assessment was made. The liability under the assessment having accrued or arisen subsequent to the time when assets of decedent’s estate came to the possession of the trustee subject to a lien in favor of decedent’s, creditors, as to those assets so in the trustee’s possession, the valid claims of decedent’s creditors, including the school district, the beneficiary of a bond on which the decedent was contractually liable, had priority over the claim based on the assessment and against the trustee as the holder of shares of the capital stock of the failed Bank.
Under the will, the bulk of the decedent’s estate went to the trustee, to be held intact, subject only to changes of' investments, during the life of decedent’s, widow, to whom the income from the trust property was to go so long as she lived. The bequests in favor of decedent’s son and daughter, or their, descendants, were, as expressly provided by the will, to vest-‘-‘upon the death of my wife.” Nothing in the will indicates that, during the lifetime of the widow, the Bank stock, th&.
Under the will, the decedent’s son was not, at or prior to the time of the failure of the City National Bank, the equitable beneficial owner of the stock in that Bank which had been owned by the decedent, that stock then being held by the trustee as a part of the trust estate in his custody, the ultimate beneficial sole ownership of which was not subject to be determined prior to the death of the widow. Likewise, the decedent’s daughter had not, at or prior to the time of the rendition of the decree under review, become the equitable beneficial sole owner of the Compress stock; that stock then being held by the trustee as part of the trust estate in his custody, and subject to the liability created by the assessment in question. When the will took effect, acquisition of the Bank stock by the son was contingent, not only upon his surviving the widow, but also upon other events which might or might not occur. The sale of that stock under the power conferred would keep him from getting that stock under the will. He could not get all of that stock if at the time of the division and distribution to be made by the trustee that stock exceeded in value “half of my estate in value then remaining in the hands of said Trustee.” If at that time the Bank stock had no value at all, certainly it was not to be included in the allotment to the son of “half of my estate in value then remaining in the hands of said Trustee.” What had occurred while the widow still was alive demonstrated that ownership of the Bank stock never would be acquired by the son, as, before the arrival of the time when any interest in the decedent’s estate was to vest in the son, that stock by the failure of the Bank had ceased to be an asset of any value, and practically had become nonexistent except as a cause of liability of the holder or owner of it at the time the Bank failed. It seems that the decedent’s son did not, from the time the will took effect, have a vested or assignable interest in decedent’s estate, because the will provided for the interest bequeathed to him being vested upon the death of the widow, and that, in the event of the sou dying during the lifetime of the widow and without any surviving descendant, that interest should go to a class of persons described in the will, in which event that interest would be acquired under the will, not from decedent’s son by descent or bequest. Tifton v. Tifton (Tex.Com.App.) 12 S.W.(2d) 987; Loden v. Burgess (Tex.Civ.App.) 74 S.W.(2d) 304; In re Churchill’s
The decree is affirmed in so far as it accorded priority to debts of the decedent, including the claim reduced to judgment in favor of said school district, and is reversed in so far as it adjudged that the will of the decedent created two trusts, and that the Compress stock be excluded from the assets adjudged to be subject to be applied to said judgment in favor of the appellant, the receiver of the City National Bank.
Affirmed in part, and reversed in part.
“1. As soon after my death as is practicable, it is my desire that my said Trustee shall, at such times as in its judgment it may determine sell and dispose of all of my property of every character whatsoever, except my capital stock in the City National Bank of Corpus Christi and the Port Compress Company of Corpus Christi (provided said capital stock of said Bank and said Compress Company may also be sold under the terms and conditions arising as hereinafter provided) and that the proceeds of such property so sold by said Trustee shaE be invested and reinvested in such stocks, bonds, notes and other securities as such Trustee may in its judgment determine, including any that may be owned by said Trustee.” * * *
“2. It is expressly agreed that -the annual income from all of my estate of every character whatsoever held by my Trustee hereunder shall quarterly, or as soon thereafter as is convenient, be paid over to my said wife by said Trustee so long as she shaE live and upon the death §f my wife, half of my estate in value then remaining in the hands of said Trustee hereunder shaE vest in fee simple in and thereupon be dehvered by my said Trustee to my son, Myron A. Pease, if then surviving, and if not to his children. Fifteen per cent (15%) of the remaining half of my estate in value shall be paid in cash by said Trustee to my beloved daughter, Marie Pease Crook, which shall .thereupon vest in her in fee simple absolute, she surviving my said wife, 'or to her children in the event my said wife' survives my said daughter; and the remaining eighty-five .per cent (85%) of said half of my estate shaE continue to be held by said Trustee hereunder, and the income therefrom shall by said Trustee thereupon and thereafter quarterly be paid over to my said beloved daughter so long as she shaE live; and upon: her death, she having survived my said wife, or upon the death of my said wife she having survived my daughter, said' income from said eighty-five per cent of said half ,of my estate then remaining in the hands of said Trustee shaE be paid over to the guardian of the child or children of my deceased daughter; share and share alike, until twenty years from the date of the death of my daughter or.wife as the case may be, at which time aE of the estate then remaining in the hands of said Trustee shaE vest in fe'e simple absolute, share and share alike, in the said children of my deceased daughter ■ and shall thereupon be delivered to them, or their guardian; whereupon, this trust shaE in aE things cease and determine.”
“4. If, at the date of the death of my wife, my daughter be dead and leave no bodily descendant surviving her, all of my estate then in the hands of said Trustee shaE vest in fee simple in my said son, if living, or if dead, in his children; if, at the date of the death of my wife, my son bo dead and leave no bodily deseendant surviving him, the whole of my estate hereunder shaE be held and distributed by said Trustee and pass hereunder in the same manner as the half which would go to my said daughter and her children should she and my son both survive my said wife.”
“5. So long as any part of the capital stock of said Compress Company or of said City National Bank of Corpus Christi shall remain in the hands of said Trustee hereunder, the same shall not be sold, only and upon the request in writing of the sale thereof either by my daughter Marie Pease Crook, or by my son, Myron A. Pease, addressed to said Trustee, and said Trustee thereupon, having made such investigation as it may determine, decides that in its judgment said stock, or any part thereof, should be sold. Whereupon, said Trustee shaE have the right to sell aE or such part of said stock at any price it may determine, and invest and re-invest the proceeds thereof as is above provided with regard to the other property of my estate hereunder.”
“6. Upon the death of my wife, I do hereby expressly empower my said Trustee to make the partition of my said estate into two parts in the following manner: (a) Said Trustee shaE appoint three appraisers to appraise my estate, and any action of the Trustee hereunder on such appraised value shall be final and conclusive on all beneficiaries of every character and, upon such appraisement being made said Trustee shall set apart and deliver to my said son at its appraised value capital stock in the City National Bank of Corpus Christi, to the fufi amount of the appraised value of half of my said estate, provided there be sufficient of said capital stock in said appraised value to so satisfy his share; and, provided there should be insufficient of said capital stock of said City National Bank on such appraised value to fuhy pay over to my said son his share of my estate hereunder provided, then the remainder of such value shaE be made up to him by said Trustee delivering or conveying to him such other part of my said .estate at its appraised value, except such
“(b) All of the remaining half of my said estate of every character whatsoever, except the half set apart to my said son by said Trustee shall be held and disposed of by my Trustee as hereinabove provided. The fifteen per cent (15%) in cash to fee paid to my daughter Miall be realized by said Trustee by salé of such part of that half as the Trustee may- determine.”
“7. Said Trustee is hereby authorized and empowered out of the income from said estate to pay all state and federal taxes of every character whatsoever which may be chargeable against it as Trustee, or in any