In Re Estate of Hume

IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE

FILED
February 1, 1999

FOR PUBLICATION Cecil W. Crowson
Appellate Court Clerk
Filed: February 1, 1999

IN RE ESTATE OF FOSTER HUME, III )
)
THE UNIVERSITY OF THE SOUTH ) DAVIDSON PROBATE
)
Appellant, )
)
) HON. FRANK G. CLEMENT, JR.,
Vs. ) JUDGE
)
)
MEREDITH KLANK )
)
Appellee. ) No. 01-S-01-9709-PB-00182

For Appellant: For Appellee:

J. Richard Lodge, Jr. Norman Gillis
E. Clifton Knowles Nashville, Tennessee
Bass, Berry & Sims, PLC
Nashville, Tennessee John Drummond
Nashville, Tennessee

OPINION

COURT OF APPEALS REVERSED;
CASE REMANDED TO TRIAL COURT. ANDERSON, C.J.
 We granted this appeal to determine whether the probate rule of ademption by

extinction applies to the specific bequest of a house, where the house is sold at

foreclosure before the testator’s death and sales proceeds representing the testator’s

interest are identifiable after his death.

The trial court, emphasizing the testator’s intent as reflected by the will,

concluded that the bequest had not been adeemed because there were proceeds

remaining from the foreclosure sale. The foreclosure sale proceeds were ordered to be

distributed to the beneficiary of the specific bequest. The Court of Appeals affirmed.

After our review of the record and applicable authority, we conclude that the

foreclosure of the house prior to the testator’s death resulted in an ademption by

extinction of the specific bequest and that the foreclosure sale proceeds should have

been distributed to the residuary beneficiary of the estate. Accordingly, we reverse the

judgment of the Court of Appeals and remand the case to the trial court for further

proceedings.

BACKGROUND

Foster Hume, III, a licensed attorney, executed a valid holographic will dated

August 1, 1990. In addition to other bequests, Hume specifically devised his house in

Atlanta to his niece, Meredith Klank (“Klank”), stating in his will, “my Atl. House to . . .

Meredith. (Clank [sic] I believe).” Hume named the appellant, University of the South

(“University”), residuary beneficiary.

Hume purchased the Atlanta house in 1986, subject to a mortgage in favor of

NationsBanc. Hume faithfully made his mortgage payments to NationsBanc until the

late summer of 1991. Because of Hume’s delinquency, NationsBanc sold the house at

foreclosure before Hume’s death on November 12, 1991.

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 The surplus proceeds of $55,745.07, after satisfying the mortgage debt, were

paid to the estate’s Executrix, who took the position that the Atlanta house had been

adeemed and that the proceeds should be paid to the University, the residuary

beneficiary, and not to Klank, the beneficiary of the specific bequest. Klank, claiming

the right to the surplus proceeds, filed an exception to the Executrix’s final accounting in

Davidson County Probate Court. The Executrix moved to have her final accounting

approved.

The Davidson County Probate Court denied the Executrix’s motion and ordered

that the proceeds be paid to Klank. Relying on the lack of proof in the record to indicate

Hume had actual knowledge of the foreclosure proceeding, the court reasoned that

Hume had not voluntarily parted with his house and thus must have intended Klank to

receive it, as indicated by the will.

The Court of Appeals affirmed the trial court, finding that an ademption by

extinction had not occurred in this case for two main reasons. First, the court noted that

“Testator’s only contribution to the foreclosure was his inability or failure to pay the debt

which cannot be presumed to be a voluntary act; and there is no evidence that it was

deliberate or voluntary.” Second, the Court of Appeals distinguished between cases in

which the foreclosure sale was insufficient to satisfy the debt, where an ademption by

extinction would occur, and cases in which the foreclosure sale resulted in surplus

proceeds, where an ademption by extinction would not occur.

We granted the University’s application for permission to appeal.

ANALYSIS

The only issue presented for our review, whether the bequest of the Atlanta

house has been adeemed by extinction, is purely a question of law; thus, our review is

de novo with no presumption of correctness given the judgments of either the trial court

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or the Court of Appeals. E.g., City of Tullahoma v. Bedford County, 938 S.W.2d 408,

412 (Tenn. 1997).

The parties dispute whether the specific bequest was adeemed by the

foreclosure sale and whether the testator’s intent is relevant to the issue. Noting that

the specific bequest at issue involves Hume’s “Atl[anta] house,” not Hume’s interest in

the house, the University argues that the bequest to Klank was adeemed by the

foreclosure sale and that even if Hume’s intent could be discerned from the record, that

intent is irrelevant. Conversely, Klank argues both that the Testator’s intention is

relevant to the present case and that the Testator’s will transferred his interest in the

house, which at the time of his death was represented by the proceeds remaining after

the foreclosure sale.

We begin our analysis by noting that ademption is generally defined as “the

extinction, alienation, withdrawal, or satisfaction of the legacy by some act of the

testator by which an intention to revoke is indicated: the doing of some act with regard

to the subject-matter which interferes with the operation of the will.” E.g., American

Trust & Banking Co. v. Balfour, 138 Tenn. 385, 198 S.W. 70, 71 (Tenn. 1917). Implicit

in Tennessee ademption cases is the notion that the two parts of this definition each

respectively correspond to the two types of ademption recognized in Tennessee,

ademption by satisfaction and ademption by extinction. See, e.g., Rhodes v. Kebke,

179 Tenn. 480, 167 S.W.2d 345 (1943) (ademption by satisfaction case). The present

case involves the issue of ademption by extinction.

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. In these cases:

[t]he 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

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 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.

Ademption by satisfaction, on the other hand, refers to the situation in which the

testator “gives in his lifetime to a legatee what he had left him in his will.” Rhodes, 167

S.W.2d at 348. In ademption by satisfaction cases, the testator deals with the legatee

in such a way so as to result in an “extinction, alienation, withdrawal, or satisfaction of

the legacy” during the testator’s lifetime. Balfour, 198 S.W. at 71. In such cases, the

testator’s intent is relevant to determine whether the testator’s action regarding the

legatee “amounts to a withdrawal of the gift from the operation of the will.” Rhodes, 167

S.W.2d at 348. Accordingly, a primary distinction between ademption by satisfaction

cases and ademption by extinction cases is that the intent of the testator is relevant to

the former but not to the latter, and that the act of extinction may be the action of

anyone.

This 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. E.g.,

McGee v. McGee, 413 A.2d 72 (R.I. 1980). In McGee, the Rhode Island Supreme

Court defines the rule and persuasively analyzes the policy supporting it. The McGee

court stated with respect to the “in specie” test:

This test focuses on two questions only: (1) whether the gift is a specific
legacy and, if it is, (2) whether it is found in the estate at the time of the
testator’s death. The extinction of the property bequeathed works an
ademption regardless of the testator’s intent.
...
Moreover, under the principles enunciated by Lord Thurlow . . . only the
fact of change or extinction, not the reason for the change or extinction, is
truly relevant. The vast majority of jurisdictions adhere to this rule. This
“in specie” theory of ademption, although it may occasionally result in a

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 failure to effectuate the actual intent of a testator, has many advantages.
Significant among these advantages is simplicity of application, as
opposed to ad hoc determination of intent from extrinsic evidence in each
particular case. This theory further has the advantages of stability,
uniformity, and predictability.

Id. at 76-77 (citations omitted).

The rule of ademption by extinction has been applied in several Tennessee

cases similar to the case before us. For example, in Ford v. Cottrell, 141 Tenn. 169,

207 S.W. 734 (Tenn. 1918), the testator specifically bequeathed certain interests in a

house which he owned at the time he executed his will. Prior to testator’s death, he

sold the house. This Court found that “[a]t the death of the [testator] the specific

property in question has [sic] been sold . . . and was not, therefore, in existence.” Id. at

737. We held that the specific bequest had been adeemed or extinguished and that the

proceeds from the sale of the property during testator’s lifetime formed part of the

general estate. Id.

Just a year earlier, in Balfour, this Court announced “the rule that a specific

legacy is adeemed when there has been a material alteration or change in the subject-

matter, and that the property into which it was converted in such change cannot be

substituted as or for the specific bequest.” Id. at 71. The testator bequeathed life

insurance policy proceeds to his daughter. Prior to his death, the testator collected the

cash surrender values of the policies which he later invested in real estate mortgage

notes. Applying the rule, this Court held that the specific bequest of the life insurance

policy proceeds had been adeemed. Id.

Applying the foregoing rule, we conclude that the specific bequest of the Atlanta

property was adeemed in its entirety by the foreclosure sale regardless of Hume’s

presumed intentions. Much like the specific bequest in Ford, at Hume’s death, “the

specific property in question ha[d] been sold . . . and [i]s not, therefore, in existence.”

Id. at 737. The only difference between the sale in Ford and the sale in the present

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case is the identity of the seller. It is of no significance that a third party and not Hume

initiated the sale in the present case because, as previously stated, the rule of

ademption by extinction applies without regard to the testator’s intentions. Thus, the

foreclosure sale constituted “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. Accordingly, in

our view, the foreclosure sale prior to Hume’s death adeemed the specific bequest of

the house.

We further conclude that the proceeds cannot be substituted for the specific

bequest of the house because “a specific legacy is adeemed when there has been a

material alteration or change in the subject-matter, and . . . the property into which it

was converted in such change cannot be substituted as or for the specific bequest.”

Balfour 198 S.W. at 71. The change in form involved in this case is strikingly similar to

the change in form which resulted in an ademption by extinction in Ford. Just as the

proceeds resulting from the sale of the house in Ford formed part of the general estate,

Id. at 737, so do the proceeds resulting from the sale of the house in the present case.

Accordingly, we hold that the foreclosure sale resulted in such a “material alteration” to

the subject matter of the specific bequest so that the proceeds “cannot be substituted

as or for the specific bequest.” Balfour, 198 S.W. at 71.

CONCLUSION

We conclude that the testator’s intent is irrelevant in deciding the question of

whether a specific bequest has been adeemed by extinction. We further conclude that

a foreclosure sale so alters the form of the specific bequest of a house that an

ademption by extinction results regardless of whether identifiable proceeds remain from

the foreclosure sale. We therefore reverse the judgments of the trial court and the

Court of Appeals and remand to the trial court for further proceedings. Costs of this

appeal are taxed to the appellee.

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 _______________________________
RILEY ANDERSON, CHIEF JUSTICE

Concur:
Drowota, Holder, and Barker, JJ.

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