No. 81-385
IN THE SUPREME COURT OF THE STATE OF MONTANA
1982
IN THE FWTTER OF THE ESTATE OF:
GILLJF: V. WOOTEN, Deceased.
Appeal from: District Court of the Fourth Judicial District,
In and for the County of Missoula
Honorable James B. Wheelis, Judge presiding.
Counsel of Record:
For Appellant:
Moses Law Firm, Billings, Montana
Charles F. Moses, Billings, Montana
Victor F. Valgenti, Missoula, Montana
For Respondent:
Lawrence V. Johnson, Hamilton, Montana
Boone, Karlberg & Haddon, Missoula, Montana
Allen E. Cone, Los Angeles, California
George Goodrich, Missoula, Montana
William Rossbach, Missoula, Montana
Milodragovich, Dale & Dye, Missoula, Montana
Submitted on briefs: March 5, 1982
Decided: April 30,1982
Filed: ApR 3 0 1982
q m 9 m 9-P s C w b '
4
Clerk
Mr. J u s t i c e John C . Sheehy d e l i v e r e d t h e Opinion of t h e C o u r t .
R o b e r t J. G r a f f t , S r . , a p p e a l s from an o r d e r o f t h e
D i s t r i c t C o u r t of t h e F o u r t h J u d i c i a l D i s t r i c t , Missoula
County. The o r d e r removed G r a f f t a s p e r s o n a l r e p r e s e n t a t i v e
of t h e e s t a t e of G i l l e V . Wooten and d e c l a r e d t h a t G r a f f t
had o n l y a l i f e e s t a t e i n c e r t a i n r e a l p r o p e r t y which Wooten
w a s i n t h e p r o c e s s o f s e l l i n g a t t h e t i m e of h i s d e a t h .
G i l l e Wooten, a n a t t o r n e y , made and e x e c u t e d a h o l o g r a p h i c
w i l l on F e b r u a r y 1 3 , 1976. The p e r t i n e n t p r o v i s i o n s of t h e
w i l l are s e t f o r t h below:
"Third Paragraph
" I nominate, c o n s t i t u t e , and a p p o i n t Robert
J. G r a f f t , S r . t o a c t a s and t o be my
E x e c u t o r , t o s e r v e w i t h o u t bond. I f he f a i l s
o r ceases o r i s u n a b l e t o a c t , t h e n I a p p o i n t
t h e F i r s t N a t i o n a l Bank of M i s s o u l a , Montana
as E x e c u t o r .
" F o u r t h Paragraph
" I g i v e d e v i s e and bequeath a l l o f m l a n d and
y
improvements t o m f r i e n d , R o b e r t J. G r a f f t ,
y
S r . , f o r h i s whole l i f e t i m e . I a l s o g i v e and
b e q u e a t h t o him a l l of m p e r s o n a l p r o p e r t y ,
y
i n c l u d i n g m i n t e r e s t i n c a t t l e , and a l l s t o c k
y
h e l d by m e i n any and a l l c o r p o r a t i o n s which I
have a t t h e t i m e o f m d e a t h .
y
"Sixth Paragraph
" I g i v e d e v i s e and bequeath t h e r e m a i n d e r
i n t e r e s t i n m l a n d a t t h e t i m e of R o b e r t J .
y
G r a f f t , S r ' s . death, i n equal portions t o t h e
Audubon S o c i e t y , Ducks U n l i m i t e d , and t h e
National Wildlife Federation.
"Seventh Paragraph
" I g r a n t m y Executor f u l l power t o a c t f o r t h e
betterment of m e s t a t e without order of Court,
y
i n c l u d i n g s a l e of p e r s o n a l and r e a l p r o p e r t y . "
G i l l e Wooten d i e d i n Missoula County, Montana, on
F e b r u a r y 2 2 , 1976. On March 2 5 , 1976, R o b e r t J . G r a f f t ,
S r . , was a p p o i n t e d p e r s o n a l r e p r e s e n t a t i v e of t h e e s t a t e .
Prior to his death, Gille Wooten owned 880 acres of
land in the Rattlesnake Creek drainage near Missoula,
Montana. At the time of his death, 350 acres of this land
[which portion is hereafter referred to as the Gilroy tract]
was subject to a contract for deed, dated October 7, 1975,
in which Wooten was the seller and Joan Gilroy was the
buyer. This contract was current and not in default on the
date of Wooten's death. After Wooten's death, however, the
buyer failed to make the payment due on April 2, 1976. This
default resulted in litigation in which judgment was entered
on March 7, 1978, terminating Gilroy's interest in the
contract and the real property.
On November 20, 1978, Grafft, as personal representative,
filed in the District Court a petition for construction of
will and sale of real property, wherein he prayed inter
alia, that the Court:
"2. Determine the rights and interest of
all parties in and to the proceeds of any sale
of land exceeding estate indebtedness.
"3. Determine the nature of the interest passing
as personal property to Robert J. Grafft, Sr.,
with respect to the contract for sale of the land
executed by the decedent during his lifetime and
cancelled thereafter.
"4. Authorize the Personal Representative to
advertise and offer for sale all real property
involved in the above-entitled estate for the
highest price obtainable and in the course thereof
to negotiate with and to solicit and accept bids
from prospective purchasers upon the condition that
final sale shall be subject to Court approval."
The issues on appeal are narrower than the relief prayed
for in the petition would indicate.
On May 6, 1981, in response to a petition filed by the
remaindermen charities, the District Court ordered Grafft
removed as personal representative of the estate.
In a separate order dated May 6, 1981, the Court
concluded that Wooten intended all of the land, including
the Gilroy tract, to pass as a remainder interest to the
charities. Without so stating, but by necessary implication,
the District Court ruled that Wooten, at the time of his
death, held the Gilroy tract as real property rather than as
personalty.
The Court stated:
". . . The Court in search for the intent of
the testator must consider all the background
facts and the surrounding circumstances at the
time he executed the will; then reading the will
in its entirety, must endeavor to take from
the words the meaning which the testator tried
to put into them. MCA 72-11-305 (1979).
"4. The decedent intended to devise specific
categories of his estate assets: cash, land,
and personalty. It is noteworthy that his
description of personalty specifically includes
his interests in cattle and stock, and does not
refer to his interests in land. This is significant,
for it shows that the decedent in his mind had
different ideas about his estate assets. The
decedent's failure to refer to his interests in
land shall not defeat his intent. The decedent
intended for his land to pass as a remainder
interest to the Charities. Although the decedent
owned only a Seller's interest in [the Gilroy
tract], his use of the word 'land' establishes
the intent that all land in his estate pass to
the Charities for the obvious reasons .. .
"5. The power given the Personal Representative
to act for the betterment of the estate ..
. is
in effect identical to that granted all personal
representatives by MCA 72-3-613 (1979). Thus, no
special power was given to the Personal Representative
to benefit himself as the life tenant. Any sale
of the land shall result in the proceeds being held
in trust for the remaindermen, and the income (before
principal) being used to satisfy charges to the
estate. "
Grafft raises two issues on appeal:
1. Did the District Court err in removing Grafft as
the personal representative of the estate?
2. Did the District Court err in holding that the
Gilroy tract, in which Wooten had a seller's interest,
should pass as a remainder interest to the charities?
We affirm the District Court on the first issue and
reverse on the second.
In its order removing Grafft as personal representative,
the District Court stated:
"In regard to the Charities' petition to remove
and/or surcharge the Personal Representative,
it is apparent that the Personal Representative
is unable to effectively divorce his duties as
Personal Representative from his interest as the
life tenant in the estate. The Charities' petition
alleges frequent misuses of funds by the Personal
Representative which haven't, in their entirety,
been explained satisfactorily.
"It is hereby ordered that Robert J. Grafft, Sr.,
is relieved of the remainder of the duties as
Personal Representative."
Grafft contends that this statement by the District
Court does not satisfactorily set forth the basis for his
removal as personal representative and that some further
finding must be made by the District Court. We do not
agree.
It was not necessary for the District Court to include
in its findings of fact a11 of Grafft's alleged transgressions
as personal representative. Findings of fact which ascertain
ultimate facts and sufficiently conform to the pleadings and
the evidence to support the judgment are regarded as sufficient,
though not as full and complete as might be desired. Holloway
v. University of Montana (1978), 178 Mont. 198, 203, 582
P.2d 1265, 1268.
The removal of a personal representative for cause is
governed by section 72-3-526, MCA. Within the bounds of the
statute a trial judge should be given broad discretion as to
the grounds upon which he may remove a personal representative,
but the grounds must be valid and supported by the record.
Matter of Estates of Aaberg (1980), 25 Wash.App. 336, 607
P.2d 1227, 1228. The record in the present case contains
references to numerous expenditures of estate funds by
Grafft which are of questionable legitimacy. Not the least
of these is the use of estate funds to finance Grafft's
defense on certain criminal charges.
After viewing the evidence, the District Court concluded
that Grafft's conduct warranted his removal as personal
representative. We find nothing in the record that would
lead us to conclude otherwise.
In resolving the second issue, the District Court
relied on what it believed to be Wooten's testamentary
intent as expressed in his will. The District Court con-
cluded that the "land" referred to in Wootenfs will was
intended by him to include the Gilroy tract, in which Wooten
had only a seller's interest. In other words, the District
Court ruled that the Gilroy tract was meant to pass as real
property under Wooten's will.
We do not find the decedent's intent so clear as did
the District Court. Furthermore, we find that this is a
proper case for application of the doctrine of equitable
conversion. We have applied this doctrine many times in the
past. A suitable example of its operation can be seen in
Kern v. Robertson (1932), 92 Mont. 283, 12 P.2d 565, where
we stated:
"The authorities are in accord that an
enforceable contract for the purchase and
sale of real property passes to the purchaser
the equitable and beneficial ownership thereof,
leaving only the naked legal title in the seller,
as trustee for the purchaser, and as security
for the unpaid purchase price. If the purchaser
dies while the contract is in force and effect,
his interest passes to his heirs as real property.
If the seller dies while the contract is in force
and effect, his interest passes to his personal
representative as personal property, and not to
his heirs." 92 Mont. at 288, 12 P.2d at 567.
A more recent case, In Re Estate of Rickner (1974),
164 Mont. 51, 518 P.2d 1160, states:
"It has long been established by this Court
that a contract for the sale of real property
converts the seller's interest from an owner
of real property to that of an owner of
personalty, this being the doctrine of
equitable conversion. [Citations omitted.]"
164 Mont. at 55, 518 P.2d at 1162.
By our statutes, the property of a person devolves upon
his death to the persons to whom it is devised by his last
-
.
will, section 72-3-101(2), MCA, subject to the requirement
that the devisee survive the testator by 120 hours. Section
72-2-511, MCA. A testamentary disposition, when vested,
cannot be divested unless upon the occurrence of a con-
tingency prescribed by the testator. Section 72-11-331, MCA. A
specific devisee has the right to the remaining specifically
devised property and to any balance of the purchase price
(together with any security interest) owing from the purchaser
to the testator at death by reason of sale of the property.
Section 72-2-516 (2)(a), MCA.
Applying these statutory rules, we find that: the
personal property of the decedent was specifically devised
to Robert Grafft; under Montana law, the right of the decedent
to the Gilroy tract was as a seller under a contract, and so
was personal property; the right to the balance of the
purchase price at decedent's death passed to Robert Grafft
(after 120 hours) as personal property; the decedent's security
interest (the default provisions of the sale contract) also
passed to Robert Grafft; the default of the buyer after
decedent's death was a default in a contract that had by
then vested in Robert Grafft, subject to the administration
of the estate.
This holding is consonant with our pre-Uniform Probate
Code decisions that the interest of a vendor in a contract
to sell real estate is intangible personal property for
purposes of inheritance taxation, and that the character of
decedent's property at the time of his death determines
whether it is real or personal property. In Re ~riebach's
Estate (1957), 132 Mont. 437, 318 P.2d 223.
It is only the circumstance that the Gilroy contract
ended by reason of the default of the purchaser that causes
the problem of ownership here. Had the buyer not defaulted,
but complied with the contract of purchase, the resulting
monies coming to the estate would certainly have accrued to
Grafft as personal property.
We affirm in part and reverse in part and remand this
cause to the District Court with instructions to proceed
with the probate of this estate in accordance with this
opinion. Costs to appellant.
We Concur:
--
Chief Justice