2

5. Descent and distribution

84-Use of estate funds, which would go to

widow to pay for deeds to her, not fraud.

Where all of the personal property belonging to an estate would go to the widow in any event, the use of the funds of the estate to pay for quitclaim deeds by the heirs to the widow is not a badge of fraud.

6. Descent and distribution ~84—Administrators owe utmost good faith in dealing with heirs.

The administrators of an estate owe to the heirs the utmost good faith and fair dealing in procuring from them quitclaim deeds conveying their interest to the widow, who was one of the administrators.

Supplemental Opinion.

7. Descent and distribution 12-Under California statutes a widow can dispose, in her lifetime or by will, of property inherited from husband.

Under Civ. Code Cal. § 1386, subd. S, providing that separate property of decedent's spouse, which came to decedent by descent, devise, or bequest, shall go to the children of the spouse or to the next of kin, the surviving spouse may dispose in her lifetime of any part of the property inherited from the deceased spouse, and may even make testamentary disposition of it, to the exclusion of the heirs of the deceased spouse.

8. Descent and distribution 12-Property inherited from spouse descends to spouse's heirs, unless its identity has been lost.

The mere fact that property inherited by decedent from a predeceased spouse has changed its form, because of substitution of other property, does not affect inheritance by the heirs of the predeceased spouse, under the California statutes; but if the property has been so commingled with the survivor's other property that its identity cannot be traced, inheritance by the heirs of the predeceased spouse could not attach.

9. Descent and distribution 12-Widow's half of real estate is not inheritance under Kansas statutes.

The right of a widow, under Gen. St. Kan. 1901, § 2510, to one-half of the real estate in which the husband at any time during marriage had a legal or equitable interest, is not an inheritance, but springs into existence by operation of law, and is not subject to the California statutes governing the descent of property inherited by a widow from her husband. 10. Descent and distribution 12-Widow's right to homestead under California statutes is not acquired by descent.

The widow's right to the homestead set apart to her under the California statutes by the probate court is not a right acquired from her husband by descent.

11. Deeds 61-Delivery with intent to surrender control to third person, to be delivered after grantor's death, is effective.

Where a grantor gave possession of a deed to a third person, with instructions to deliver it to the grantee on the grantor's death, and intended thereby to part with all control of the property during her lifetime, the deed becomes effective to pass the present title to the grantee, leaving the grantor a life estate only, and the third party is constituted a trustee for the grantee.

12. Wills 88 (4)—Reservation of control of deed given to third person for delivery after grantor's death invalidates conveyance.

Where the grantor, who gave a deed to a third person, to be delivered to the grantee after grantor's death, retained the right to control the deed during her lifetime, the conveyance is void as an attempted testamentary disposition without compliance with the required formalities. 13. Deeds 56 (2)—Delivery depends on intent.

The question of completed and effectual delivery of a deed is one of intent, to be gathered from the circumstances under which the attempted delivery was made.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(274 F.)

14. Deeds 56 (1)—Delivery may be constructive, as well as actual.

3

An actual and formal delivery of the deed is never necessary, but delivery may be constructive, if from all the circumstances the grantor has made known his intention irrevocably to part with his dominion and control over the instrument, to the end that it may presently vest title in another.

15. Deeds 61-Authority to agent to sell property and replace it defeats deed given to agent for delivery at grantor's death.

Where grantor gave deeds executed by her to her agent, with instructions to deliver them immediately upon her death, her authority to the agent to sell any of the property in the meantime, if he could do so at a profit, renders the attempted delivery invalid, even though it was accompanied by directions to replace the property sold by other property. 16. Cancellation of instruments ~34 (1)—Delay of six years after record of deeds and possession thereunder held laches, barring attack for want of delivery.

Where the heirs waited six years after acquiring constructive notice of deeds delivered at grantor's death by the recording thereof, and after possession was taken by the grantees and the property was omitted from the inventory of the grantor's estate, during which time the grantees had made improvements on the property and had sold some of it, the heirs were guilty of such laches as bars their right to attack the deed for want of failure of delivery in grantor's lifetime.

17. Equity 87 (1)-Laches does not depend on statute of limitations.

Laches does not depend on the statute of limitations, but may be incident to a term of longer or shorter duration than the statute prescribes. Appeal from the District Court of the United States for the Southern Division of the Southern District of California; Benjamin F. Bledsoe, Judge.

Suit by Louisa Pickens and another against J. H. Merriam and others to set aside quitclaim deeds. Charles F. Fensky and others intervene. Decree for defendants, and complainants appeal. Affirmed.

The complainants are sisters and two of the eight heirs at law of Ferdinand Fensky, deceased, aside from the widow. Fensky died intestate at San Pedro, Los Angeles county, Cal., August 7, 1903, being a resident and inhabitant thereof at the time. He left property, both real and personal, in Shawnee county, Kan., and in Los Angeles and Orange counties, Cal. bell was appointed administrator of his estate in Kansas, and the widow, M. T. CampJeanette Fensky, administratrix of his estate in California. The estate in Kansas, classified for convenience and clarity, consisted of, first, real property; second, a number of contracts executed by Fensky and wife for the sale of real property, by which the purchasers obligated themselves to pay the balance of the purchase money to Fensky; and, third, personal property, consisting in the main of notes and mortgages to secure their payment.

The estate in Kansas was finally settled June 6, 1905, and that in California April 11, 1905. Jeanette Fensky, the widow, later died testate as to the Kansas property, being at the time a resident of Los Angeles county, Cal. Letters of administration with the will annexed of the estate in California were issued to J. H. Merriam, one of the defendants, August 14, 1908. On or about October 9, 1908, M. T. Campbell was appointed in Kansas administrator with the will annexed. These estates were both settled in due time. The heirs at law of Ferdinand Fensky, namely Louisa Pickens, Johanna Schutt, Ida Wendt, Augusta Krauss, and Hulda Richter, sisters, Frederick Fensky and Charles Fensky, brothers, and George Fensky, nephew, prior to the settlement of the estates of Ferdinand Fensky, each assigned by quitclaim deed all right, title, and interest in and to all the real and personal property, wherever located, of Ferdinand Fensky, to Jeanette Fensky, the

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

widow, for the consideration of $1,000 each, except Frederick Fensky, to whom the consideration paid was $1,100. These assignments ranged in date from July to December, 1904, except Frederick's, which was executed in March, 1905.

In the settlement of the Ferdinand Fensky estates, both in Kansas and in California, the sales agreements or contracts for sale of real property, entered into prior to the death of Fensky, were treated as real property. As such they would descend to the widow under the Kansas statutes of descent.

It is claimed by complainants that Campbell, the administrator in Kansas, prior to March 30, 1905, remitted to Jeanette Fensky in cash and secured notes, being the proceeds of the assets of Fensky's estate, more than $30,000, and it is further asserted that, by reason of assignments of the heirs of Ferdinand Fensky of their title and interest in the estate to Mrs. Fensky, she was, upon the final account of her administration of the estate in California, awarded the entire estate as the only person entitled thereto; that she sold the real property in California, and realized therefrom more than $26,000; that with the money derived from these sources she purchased numerous parcels of real property in California; that prior to her decease, however, she conveyed, but without consideration, these parcels as designated in the bill of complaint, namely, items 1 and 6 to her sister, the defendant Alma J. Schmidt, items 2, 4, 9, 11, and 12 to her brother, the defendant Eugene Wellke, items 5, 7, and 8 to her sister, the defendant Amanda Katzung, item 3 to defendant Minnie S. Farnsworth, and item 10 to Corrine Loveland; that the defendant Don Ferguson claims to be the owner of item 3; and that after Jeanette Fensky's death the defendant J. H. Merriam became administrator of her estate, and administered a small amount of personal property only, which personalty was distributed to the heirs of Mrs. Fensky, except that $200 was paid to Laura M. Coughlin, which she claimed as a gift from deceased causa mortis.

The plaintiffs complain that the deeds from the heirs of Ferdinand Fensky, whereby they assigned and conveyed all their right, title, and interest in the Fensky estate to the widow, Jeanette Fensky, were procured by the misrepre sentation, deceit, and fraud of M. T. Campbell, the administrator in Kansas, and the widow, whereby they were deceived and misled to their injury in that they were given to understand, and believed at the time and prior to the execution of such deeds, that the contracts for the sale of the real property entered into prior to Fensky's death, were real property, and were legally to be treated as such in the settlement of the estate, and as such descended to the widow, whereas their legal effect was to work an equitable conversion of the realty, and such contracts or agreements constituted personalty in the hands of the vendor, and as well in the hands of his estate, and as such would be distributed to the widow and heirs of deceased. It is further alleged that Campbell, the administrator, failed to account to the estate for certain personal property, namely, a note signed by W. C. Stein, and another by Simms, which notes, or their proceeds were turned over to the widow as her separate property.

It is also further alleged that the deeds made by Mrs. Fensky prior to her decease, to her brother and sisters, and to the defendants Farnsworth and Loveland, were without consideration, and were not delivered until after her death; that the defendant Merriam, well knowing that the real property described in the deeds did not pass thereby, yet nevertheless wholly omitted the property from his inventory of her estate, and settled the estate without accounting therefor; and, further, that he distributed the personalty to the heirs of Jeanette Fensky.

The prayer is that an account be taken of the property of Ferdinand Fensky, deceased, owned and possessed by him prior to his death; that the deeds of release and quitclaim executed by complainants to Jeanette Fensky be annulled; that an account be taken of the property and estate of Jeanette Fensky, and the sources from which the same were derived; that upon final hearing it be determined that all of the property owned by her at the time of her death is distributable among the heirs at law of Ferdinand Fensky; that it be deter

(274 F.)

mined that the deeds from Jeanette Fensky, under which the defendants, except Merriam, claim are invalid and void; that Merriam be required to account for the moneys distributed by him to the heirs of Mrs. Fensky; and for general relief.

The defendants Merriam, Wellke, Schmidt, and Farnsworth answered. Charles F. Fensky (a, son of Charles Fensky, named in the complaint, now deceased), F. C. Richter (a son of Hulda Richter, named in the complaint, now deceased) and George J. Fensky, one of the persons named in the complaint, were permitted to intervene, and they demand relief substantially as prayed in the original bill. The decree was for defendants, and the complainants appeal.

Francis G. Burke, of Los Angeles, Cal., for appellants and intervener Charles F. Fensky.

J. H. Merriam and Jay D. Rinehart, both of Pasadena, Cal., and Robert B. Murphey and Hunsaker, Britt & Cosgrove, all of Los Angeles, Cal., for appellees.

Before GILBERT and HUNT, Circuit Judges, and WOLVERTON, District Judge.

WOLVERTON, District Judge (after stating the facts as above). It is conceded that real property in Kansas descends to the widow, to the exclusion of the other heirs at law of the husband, and the personal property one-half to the widow and one-half to the heirs; that in California the widow is entitled to one-half of the separate property of the husband, both real and personal, but as to community property that the widow is entitled to three-fourths. It is further conceded that the real property of the decedent in Kansas was subject to distribution under the laws of Kansas, and that the personal property, whether in Kansas or California, and the real property in California were subject to distribution under the laws of descent in California.

The record shows by the inventory of the administrator that Fensky left certain real property, which is described, and which does not seem to have been appraised. This property, without question, descended to the widow.

By stipulation of counsel, it is agreed that prior to April 6, 1903, Ferdinand Fensky and wife executed contracts for sale of realty for about 29 tracts or parcels, and that the amount due on such contracts at the time of the death of Fensky was the sum of $22,965.75. The real estate in California was appraised at $6,200. Of this amount the homestead, valued at $3,000, was set aside to the widow in her own right, leaving for distribution $3,200.

The personalty in Kansas, consisting of notes secured by mortgages, was appraised at $16,630.50. To this should be added $4,297.14 money in hand, aggregating $20,927.64, found in the hands of the administrator, as per his inventory. On final settlement the administrator was directed to turn over to the widow all this property, less taxes and expenses of administration, which were $437.44. This does not include the administrator's charges for administering the estate, which were subsequently adjusted between the administrator and Mrs. Fensky at $1,500, by Mrs. Fensky canceling a note for that amount which she held against him.

1

The personal property in California was appraised at $500, to which should be added $100 as rent collected during administration. The taxes paid and expenses of administration, including allowance to widow, amounted to $1,719.62, of which the widow paid from her own funds $1,119.62. Thus it will be seen, of the property in California, both real and personal, $2,080.38 remained, all of which was turned over to the widow.

This accounts for the whole of the estate of Ferdinand Fensky, unless it be that certain other items should be added thereto, which will now be considered.

[1] The evidence shows quite clearly that the Stein notes, not included in the inventory, were the separate property of Mrs. Fensky. The notes were taken up, and another note given for $2,400, July 15, 1903, covering the whole, and made payable to Mrs. Fensky. This was prior to the death of Fensky. Aside from this, the notes were treated by both Campbell and Mrs. Fensky as her property. As to the Simms note, Simms states that prior to Fensky's death he borrowed money from Fensky. The widow claimed, however, that her husband gave her certain notes prior to his decease, and it will be found that the Simms note was treated by Campbell and Mrs. Fensky from the first as her property. The Kimmerle note was also so treated. Campbell's own note for $1,500 seems to have been so treated, and there is no evidence to the contrary showing it to have been the property of the estate.

The money claimed by plaintiffs on the two bank accounts in California by fair inference belonged to Mrs. Fensky, and so of the money paid to her through Campbell, her agent in Kansas, by the Citizens' State Bank of Kansas. The evidence, therefore, shows nothing to modify materially the foregoing results as to the amount of personalty of the Fensky estate coming into the hands of Mrs. Fensky, both from Kansas and from California, which, together with the balance of the realty, aggregates as nearly as can be ascertained $21,070.58. This takes no note of the contracts of sale. Of this sum the widow was entitled to one-half, and the other heirs each one-sixteenth.

A crucial question involved by the controversy is whether the contracts for the sale of the real property theretofore belonging to Fensky were legally and properly treated in the hands of his estate as real property, and as such descended to the widow. The Supreme Court of Kansas has passed upon the question in consideration of the very contracts here involved. Pickens et al. v. Campbell et al., 104 Kan. 425, 179 Pac. 343. The complainants herein sued M. T. Campbell and his bondsmen in the district court of Shawnee county, Kan., with a view to annulling the final settlement made by Campbell, as administrator in the Fensky estate, and compelling an accounting on the part of him and his bondsmen of the assets of the estate, and, to the end that plaintiffs might share in the result of the accounting, it was sought to set aside the releases given to Mrs. Fensky by complainants. A decree was rendered against the plaintiffs, and they appealed to the Supreme Court. The question determined was whether or not an equitable conversion had taken place by reason of the conditions of the contracts for