Howard v. Horticultural Fire Relief

Mr. Justice Eakin delivered the opinion of the court. 1, 2. The important question involved on this appeal is in regard to the ruling of the court upon the demurrer, and subsequently upon admission of testimony on the ground that plaintiffs were not the unconditional owners of the title to the property. The proof of loss as incorporated in the complaint is twice set forth. Exhibit B as to the first cause of action shows that the half interest of the property sued for by plaintiff S. T. Howard was purchased by money from the estate of S. T. Howard, deceased. In the second cause of action it is again set forth as Exhibit D in the same language. Plaintiffs say that the complaint affirmatively alleges they are the owners of the property, each of an undivided half interest therein, ‘ contending that this allegation constitutes a prima facie case of ownership; but the allegation is a mere conclusion. The further facts as to the source from which the money came for the purchase of the undivided half interest of S. T. Howard, Jr., are set forth in the proof of loss, and are entirely adverse to the claim [354] that plaintiffs are the absolute owners thereof. From said proof, and this is not contradicted, it conclusively appears that S. T. Howard, Jr., is not the owner in fee simple of the property, but owns it in trust for the benefit of the estate of S. T. Howard, deceased, and he cannot become the owner of the property by reason of his custom of dealing with the property as his own, The title to the property is a legal question. Neither the assertions of S. T. Howard, Jr., nor of J. K. Howard have the effect to deprive the estate of S. T. Howard, deceased, or the widow, of title to the property. The ground of the demurrer to the complaint is that it does not state facts sufficient to constitute a cause of action. A demurrer to the form of the complaint may be waived by pleading over, and this is the character of pleading upon which plaintiff’s counsel are relying: Oregon & C. R. R. Co. v. Jackson County, 38 Or. 589 (64 Pac. 307, 65 Pac. 369). The sufficiency of the complaint can be raised in this court for the first time; and, if demurred to, and the demurrer is overruled, pleading over does not waive it, as shown by numerous Oregon cases: Creecy v. Joy, 40 Or. 28 (66 Pac. 296); Mellott v. Downing, 39 Or. 226 (64 Pac. 393). Nor can the plaintiffs’ case be established by presumptive title where the facts are disclosed as to the source of the money invested. Plaintiffs claim that by the terms of the will they were given full power to use the estate funds as they pleased. J. K. Howard’s admission or statement as to whether the Howard estate claimed any interest in the property cannot bind the estate, cut off the interest thereof, or effect to give title. Counsel insist that the executors of the will, or either of them, can invest or dispose of the property of the estate without consulting the heirs [355] or the widow; but the will cannot be so understood. It provides that on the death of either of the testators the executors act for the deceased; and, in case there is one surviving, the other still retains his title, and can only be deprived of it by his own act. Upon the death of both the testators the executors are given full power in the management of the estate for the benefit of all the legal heirs and children. They may handle it or dispose of it only to the best interests of all concerned. The will throughout shows a trust in the executors and confidence that they will do what is right. It stipulates that they are to keep a correct account of the administration of the estate, and fairly carry out the spirit of the will for the benefit of the estate or the heirs in all things; and, one of the testators being still alive, nothing can be done without the .acquiescence of the survivor. A fourth subdivision of the codicil, bearing date the 24th of August, 1907, provides: “That any and all acts of our said executors, such as deeds, mortgages, leases, sales, investments, etc., must be made, done, and consented to by both of them and by the surviving testator or testatrix to be binding and valid; otherwise the same shall be void.” The court instructed the jury: “The real owner is the person whose money bought it. In this case * *' no investment could be made without the concurrence and consent of the two executors and the widow. Notwithstanding that provision, if one of the executors should invest the money of the estate, the other executor and the widow would have a right to either affirm of disaffirm within a reasonable time after they discovered the investment, but they must exercise that right within a reasonable time. What is a reasonable time I will leave to you to determine.” [356] By the provisions of the will investments must he made, done, and consented to by both the executors and surviving testator to be binding and valid; otherwise the same shall be void. This does not place upon the testator any question of prompt election or affirmation of the act in order to render it void. In this case it appears fully from the testimony that the survivor had no knowledge of the transaction whatever, and therefore had no opportunity to elect, nor is there any testimony upon that question, and the will itself prevents the conclusion which the court adopts that she must be deemed to have approved it. The widow by the terms of the will must act for herself before she can be bound. The executor who acted in this case says that he bought the property on his own judgment, probably meaning thereby to insinuate that it became his individual purchase. He says that he did not consult either the executor or the widow, and his acts could not bind the widow or the estate. There was some question as to plaintiff’s right to dispute this proof of loss, but the effect of that proof does not refute the fact that the purchase was made by said plaintiff as trustee. The defendant had a right to act upon that proof, and evidently did rely upon it in defending this suit, for nowhere until nearly the close of the case was it disclosed that such was not the case; in fact, it is not disclosed at all. J. K. Howard attempts to state that the estate had no claim upon this property, but he cannot determine that matter for the estate, or the heirs, and he admits that he knew nothing about it until shortly before this suit: Finlon. National Union Fire Ins. Co., 65 Or. 493 (132 Pac. 712); Oatman v. Bankers’ Fire Relief Assn., 66 Or. 388 (133 Pac. 1183, 134 Pac. 1033). [357] There was no question made upon the argument as to whether or not the interest of George A. Morse might be affected by the court’s conclusion herein. However, we take it for granted that his interest in the insurance is not affected by this testimony. The case will be reversed as to the interest of S. T. Howard, Jr., and affirmed as to that of George A. Morse; the judgment to be final in this court. Modified. Rehearing Denied. Mr. Justice McBride, Mr. Justice Bean and Mr. Justice Harris concur.