ESTATE OF RICKNER

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No. 12621 I N THE SUPREME COURT O THE STATE O M N A A F F OTN I N THE M T E O THE ESTATE O ATR F F MARTHA E. RICKNER, Deceased. Appeal from: D i s t r i c t Court of t h e Tenth J u d i c i a l D i s t r i c t , Honorable LeRoy L. McKinnon, Judge p r e s i d i n g . Counsel of Record: For Appellant : Pedersen and Herndon, B i l l i n g s , Montana Donald Herndon argued, B i l l i n g s , Montana P. Bruce Harper argued, B i l l i n g s , Montana For Respondent: P e t e r L. Rapkoch argued, Lewistown, Montana Submitted: January 17, 1974 Decided :#= 13 1974 Mr. Chief Justice James T. Harrison delivered the Opinion of the Court. This is an appeal from a judgment in favor of the administrator of the estate of Martha E. Rickner. Martha E. Rickner died intestate in April, 1970. On December 26, 1972, John A. Rickner, petitioner and respondent and the husband of deceased (hereinafter referred to as Rickner) petitioned for letters of administration. The petition shows, among other facts, that Rickner believed that the estate would not exceed the value of $10,000 and that deceased was the owner of certain property held in joint tenancy with Rickner. In his petition Rickner sought termination of the joint tenancy. Rickner was appointed administrator of his deceased wife's estate on January 10, 1973. Agnes Birkeland, objector and appellant and the daughter and heir-at-law of the deceased (hereinafter referred to as Birkeland) objected to the issuance of letters of administration. On May 23, 1973, the inventory and appraisement was filed showing that deceased owned real and personal property as a joint tenant with Rickner. Included in the personal property was de- ceased's portion of the seller's interest in that part of a contract for deed, dated November 19, 1969, (hereinafter referred to as contract) which pertained to 147 acres of land owned jointly by deceased and Rickner. On June 5, 1973, Birkeland filed her objection to the inventory and appraisement. The grounds for this objection was that the inventory and appraisement mistakenly appraised the value and character of the deceased's interest in the contract. The contract, wherein deceased and Rickner were sellers, and Sylvan Anderson was the buyer, covered two parcels of agricultural land. 306 acres. One parcel owned by Rickner alone consisted of The other parcel owned by Rickner and deceased, as j o i n t t e n a n t s , comprised 147 a c r e s . The t e r m s o f t h e c o n t r a c t i n d i c a t e t h a t t h e s e l l e r s rec e i v e d $2,000 upon t h e e x e c u t i o n of t h e c o n t r a c t and t h a t a n a d d i t i o n a l $10,000 w a s t o be p a i d t o t h e s e l l e r s w i t h o u t i n t e r e s t on o r b e f o r e December 1, 1969. The b a l a n c e of $ 4 8 , 0 0 O , t o g e t h e r w i t h i n t e r e s t a t 6% p e r annum commencing March 1, 1970, was t o be p a i d t o s e l l e r s i n 20 a n n u a l i n s t a l l m e n t s w i t h t h e f i r s t i n s t a l l m e n t due on o r b e f o r e December 1, 1970. The c o n t r a c t e x t e n d e d t o and became b i n d i n g upon t h e h e i r s , e x e c u t o r s , a d m i n i s t r a t o r s and a s s i g n s of t h e r e s p e c t i v e parties thereto. A w a r r a n t y deed from s e l l e r s t o buyer was t o be p l a c e d i n escrow a t t h e Miners and Merchants Bank, Roundup, Montana. Any n o t i c e t o s e l l e r s t o be s e r v e d p u r s u a n t t o t h e c o n t r a c t w a s t o be s e n t t o Rickner and t h e d e c e a s e d . Rickner s i g n e d t h e c o n t r a c t . Both t h e d e c e a s e d and A t t h e t i m e of d e c e a s e d ' s d e a t h , $48,000 p l u s i n t e r e s t a t t h e r a t e of 6 % from March 1, 1970, remained u n p a i d . O J u n e 1 4 , 1973, B i r k e l a n d f i l e d and s e r v e d h e r p e t i t i o n n f o r amendment of t h e i n v e n t o r y and a p p r a i s e m e n t , s t a t i n g t h a t t h e i n v e n t o r y and a p p r a i s e m e n t e r r o n e o u s l y r e f l e c t e d t h a t t h e d e c e a s e d had a j o i n t t e n a n c y i n t e r e s t i n t h e c o n t r a c t , t h e whole c o n t r a c t . O J u l y 1 6 , 1973, a h e a r i n g was h e l d i n t h e d i s t r i c t c o u r t of t h e n t e n t h j u d i c i a l d i s t r i c t i n and f o r t h e c o u n t y of F e r g u s . The d i s t r i c t c o u r t a d m i t t e d i n t o e v i d e n c e a copy of t h e c o n t r a c t and h e a r d o r a l argument of t h e o b j e c t i o n . On August 2 0 , 1973, t h e d i s t r i c t c o u r t e n t e r e d i t s f i n d i n g s of f a c t , c o n c l u s i o n s o f law, and judgment which d e n i e d irke el and's o b j e c t i o n and g r a n t e d Rickner's p e t i t i o n f o r t e r m i n a t i o n of j o i n t t e n a n c y . The d i s t r i c t c o u r t concluded "That a b s e n t any e v i d e n c e of i n t e n t t o t e r m i n a t e t h e j o i n t t e n a n c y t h e p r o c e e d s of t h e p r o p e r t y s o h e l d s h o u l d be deemed h e l d i n j o i n t t e n a n c y " and d e c r e e d "That t h e p r o c e e d s of t h e j o i n t t e n a n c y a c r e a g e s o l d was h e l d i n j o i n t t e n a n c y . " There h a s been e x p r e s s e d i n argument some c o n f u s i o n a s t o t h e e x a c t n a t u r e of t h e i s s u e p r e s e n t e d b o t h i n t h e d i s t r i c t c o u r t and f o r r e v i e w h e r e . Simply s t a t e d t h e i s s u e i s : Was t h e d e c e a s e d a t e n a n t i n common a s t o t h e p r o c e e d s of t h e whole c o n t r a c t o r was t h e d e c e a s e d merely a j o i n t t e n a n t a s t o t h e p r o c e e d s of t h e c o n t r a c t r e s u l t i n g from t h e s a l e of t h e j o i n t tenancy property? The d i s t r i c t c o u r t h e l d t h a t t h e d e c e a s e d ' s i n t e r e s t i n t h e c o n t r a c t was t h a t of j o i n t t e n a n c y a s t o t h e 147 a c r e s , and t h u s , t e r m i n a t e d t h e j o i n t t e n a n c y . W e agree with t h e d i s t r i c t court. Birkelandts contention is t h a t the contract is personal p r o p e r t y and t h a t by t h e t e r m s of t h e c o n t r a c t , d e c e a s e d d u r i n g h e r l i f e t i m e had a r i g h t t o r e c e i v e one-half of t h e proceeds being p a i d p u r s u a n t t o t h e c o n t r a c t and t h a t upon h e r d e a t h t h e i n t e r e s t t h a t deceased held i n t h e c o n t r a c t passed t o h e r personal repres e n t a t i v e a s a n asset which s h o u l d be i n c l u d e d upon t h e i n v e n t o r y and a p p r a i s e m e n t a s e s t a t e p r o p e r t y and s u b s e q u e n t l y d i s t r i b u t e d t o her h e i r s . It i s B i r k e l a n d ' s p o s i t i o n t h a t t h e c o n t r a c t c r e a t e d a t e n a n c y i n common as t o t h e whole c o n t r a c t . Rickner c o n t e n d s t h a t t h e p a r t of t h e c o n t r a c t r e l a t i n g t o t h e 306 a c r e s owned by him s e p a r a t e l y was n o t owned by t h e dec e a s e d and Rickner a s t e n a n t s i n common, b u t i s s e p a r a t e p r o p e r t y and t h a t p a r t of t h e c o n t r a c t r e l a t i n g t o t h e 147 a c r e s of l a n d under t h e c o n t r a c t owned i n j o i n t t e n a n c y i s j o i n t t e n a n c y p r o p e r t y and went t o Rickner upon d e c e a s e d ' s d e a t h by r e a s o n of s u r v i v o r s h i p . I n i t s judgment t h e d i s t r i c t c o u r t r e l i e d on H e w i t t v. Biege, 183 Kan. 352, 327 P.2d 8 7 2 , 875. I n t h e H e w i t t c a s e Ray and Pearl Biege, husband and w i f e , owned l a n d i n j o i n t t e n a n c y and s o l d it under c o n t r a c t , p l a c i n g t h e c o n t r a c t , t o g e t h e r w i t h a w a r r a n t y deed t o t h e p r o p e r t y , i n escrow. The escrow a g e n t was t o d e p o s i t t h e monthly payments i n a j o i n t a c c o u n t of t h e sellers. The c o n t r a c t c o n t a i n e d no p r o v i s i o n a s t o t h e n a t u r e o f t h e s e l l e r s ' i n t e r e s t s i n t h e r i g h t t o r e c e i v e payments. Mrs. Biege d i e d w h i l e t h e c o n t r a c t was s t i l l i n e f f e c t . The Kansas c o u r t s t a t e d t h e i s s u e t o be whether s u c h c o n t r a c t c o n s t i t u t e d a s e v e r a n c e of t h e j o i n t t e n a n c y and h e l d t h a t mere change i n t h e form of t h e p r o p e r t y i s n o t c o n c l u s i v e proof of t h e i n t e n t t o s e v e r t h e j o i n t t e n a n c y . The e x e c u t o r s of P e a r l B i e g e ' s e s t a t e c l a i m e d t h a t t h e c o n t r a c t of s a l e n o t s p e c i f y i n g o t h e r w i s e c r e a t e d a t e n a n c y i n common. The Kansas c o u r t , a f t e r n o t i n g t h a t under t h e Kansas s t a t u t e a j o i n t t e n a n c y may be c r e a t e d i n p e r s o n a l a s w e l l a s r e a l property, said: " * * * I t a p p e a r s t o u s much more l o g i c a l t o s a y t h a t when a l l j o i n t t e n a n t s concur i n an a c t and none d i s s e n t t h e r e h a s been no h o s t i l e o r a d v e r s e a c t which would t e r m i n a t e t h e t e n a n c y . Changing t h e form of t h e p r o p e r t y i s a n a c t u n r e l a t e d t o t h e holders' s t a t u s a s j o i n t tenants. J o i n t tenancy i s a r e l a t i o n s h i p between c e r t a i n p e o p l e who have a s a r e s u l t of t h a t t e n a n c y c e r t a i n r i g h t s i n t h e - I f under o u r s t a t u t e j o i n t t e n a n c y res. may be had i n b o t h p e r s o n a l t y and r e a l t y , t h e r e i s no r e a s o n t o a l t e r t h e p e r s o n a l r e l a t i o n of j o i n t t e n a n c y b e c a u s e of a n a c t done j o i n t l y t o t h e property. " I t would a p p e a r t h a t i n view o f o u r s t a t u t e a j o i n t t e n a n c y i s s e v e r e d o n l y i n t h e manner i n which i t was c r e a t e d , i . e . , by c l e a r i n t e n t of t h e p a r t i e s . * * *" I t h a s l o n g been e s t a b l i s h e d by t h i s Court t h a t a c o n t r a c t f o r t h e s a l e of r e a l p r o p e r t y c o n v e r t s t h e s e l l e r ' s i n t e r e s t from a n owner o f r e a l p r o p e r t y t o t h a t of a n owner of p e r s o n a l t y , t h i s b e i n g t h e d o c t r i n e of e q u i t a b l e c o n v e r s i o n . Kern v. R o b e r t s o n , 92 Mont. 283, 12 P.2d 565; S t a t e v . K i s t n e r , 132 Mont. 437, 318 P.2d 223; McDonald v . Hoffman, 133 Mont. 65, 320 P.2d 357. S e c t i o n 36-108, R.C.M. 1947 p r o v i d e s t h a t a husband and w i f e may h o l d p e r s o n a l a s w e l l a s r e a l p r o p e r t y i n j o i n t t e n a n c y . The e f f e c t of t h e d i s t r i c t c o u r t ' s h o l d i n g i s t h a t t h e p r o c e e d s o f t h e s a l e of j o i n t t e n a n c y p r o p e r t y p u r s u a n t t o a c o n t r a c t a r e owned i n j o i n t t e n a n c y , i n t h e a b s e n c e of an a g r e e ment t o t h e c o n t r a r y . I n a d d i t i o n t o Hewitt, t h e d i s t r i c t c o u r t a l s o r e l i e d on Lawrence v . Andrews, 84 R . I . 1 3 3 , 122 A.2d 132. A s urged by B i r k e l a n d , t h e r e i s a u t h o r i t y which i s c o n t r a r y t o t h e p o s i t i o n t a k e n by t h e d i s t r i c t c o u r t . E s t a t e , 247 Iowa 1380, 78 N.W.2d See I n r e B a k e r ' s 863 and Buford v . Dahlke, 158 Neb. 3 9 , 62 N.W.2d 252. I n Montana t h e r e i s no c a s e d i r e c t l y i n p o i n t , b u t it i s t h i s C o u r t ' s opinion t h a t t h e b e t t e r l i n e of reasoning i s t h a t f o l l o w e d by t h e d i s t r i c t c o u r t , and i n t h e a b s e n c e o f an a g r e e ment t o t h e c o n t r a r y , p r o c e e d s of a s a l e of j o i n t t e n a n c y p r o p e r t y pursuant t o a c o n t r a c t a r e held i n j o i n t tenancy. Mere change of form t h r o u g h e q u i t a b l e c o n v e r s i o n d o e s n o t a u t o m a t i c a l l y change t h e n a t u r e of t h e i n t e r e s t . I n t h e i n s t a n t c a s e , however, t h e r e a p p e a r f a c t s not p r e s e n t i n t h e above c i t e d c a s e s , f o r h e r e t h e c o n t r a c t n o t o n l y i n c l u d e d p r o p e r t y h e l d i n j o i n t t e n a n c y , b u t it a l s o i n c l u d e d p r o p e r t y owned s o l e l y by R i c k n e r . Having e s t a b l i s h e d t h a t de- c e a s e d ' s i n t e r e s t i n t h e p r o c e e d s of t h e c o n t r a c t w a s t h a t of j o i n t t e n a n c y as t o t h e 147 a c r e s h e l d i n j o i n t t e n a n c y , a b s e n t a c o n t r a r y i n t e n t i o n , it is only l o g i c a l t o conclude t h a t t h e d e c e a s e d ' s i n t e r e s t i n t h e p r o c e e d s of t h e c o n t r a c t r e s u l t i n g from t h e s a l e o f t h e 307 a c r e s owned s o l e l y by ~ i c k n e ri s t h e same a s t h e d e c e a s e d ' s o r i g i n a l i n t e r e s t , which i s no i n t e r e s t a t all. B i r k e l a n d , however, a s s e r t s t h a t d e c e a s e d was a n e q u a l p a r t y t o t h e c o n t r a c t and r e l i e s upon t h e f o l l o w i n g f a c t s : both R i c k n e r and d e c e a s e d were named p a r t i e s t o t h e c o n t r a c t a s sellers; b o t h acknowledged r e c e i p t of t h e i n i t i a l payment; payments w e r e made t o b o t h o f them by making payments t o t h e i r escrow a g e n t ; d e c e a s e d w a s one o f t h e p a r t i e s t o whom n o t i c e s c o n c e r n i n g t h e c o n t r a c t c o u l d be s e n t ; d e c e a s e d bound h e r s e l f t o t h e r e l e a s e o f h e r dower i n t e r e s t i n a l l t h e r e a l p r o p e r t y which i s t h e s u b j e c t of t h e c o n t r a c t ; and, t h e c o n t r a c t was b i n d i n g upon t h e h e i r s , e x e c u t o r s , a d m i n i s t r a t o r s and a s s i g n s . I n a d d i t i o n , Birkeland contends t h a t c o - s e l l e r s a r e e i t h e r sellers a s j o i n t t e n a n t s o r t h e y a r e s e l l e r s a s t e n a n t s i n common. B i r k e l a n d f u r t h e r con- t e n d s t h a t s i n c e t h e r e i s no e x p r e s s d e c l a r a t i o n a p p e a r i n g i n t h e c o n t r a c t t o i n d i c a t e an i n t e n t t o c r e a t e a j o i n t t e n a n c y p r o p e r t y i n t e r e s t , t h e d e c e a s e d ' s i n t e r e s t t h e r e i n must be h e l d t o be a t e n a n c y i n common. W e r e f e r t o t h e c a s e o f Moxley v . Vaughn, 148 Mont. 30, 35, 416 P.2d 536, wherein Cora Read Pew was t h e s o l e owner o f real property. property. She e n t e r e d i n t o a c o n t r a c t f o r t h e s a l e of t h e C h a r l e s E . Pew, h e r husband, j o i n e d i n t h e e x e c u t i o n of t h e c o n t r a c t . Payments p u r s u a n t t o t h e c o n t r a c t were t o be made t o an a c c o u n t upon which e i t h e r Cora Read Pew o r C h a r l e s E. Pew o r t h e i r s u r v i v o r c o u l d draw. T h i s C o u r t h e l d t h a t no j o i n t t e n a n c y i n t e r e s t was c r e a t e d i n t h e c o n t r a c t by r e q u i r i n g t h e payment t o be made t o a j o i n t a c c o u n t . I n t h e Moxley c a s e , w e c o n s t r u e d s e c t i o n s 67-308 and 67-313, R.C.M. 1 9 4 7 and w i t h r e f e r e n c e t o t h e s e p a r t i c u l a r s t a t - u t e s s a i d a t page 35: "The above-quoted s t a t u t e s p r o v i d e i n e f f e c t t h a t a t e n a n c y i n common w i l l be c r e a t e d u n l e s s t h e i n t e n t t o c r e a t e a j o i n t t e n a n c y i s c l e a r l y shown. The r u l e of law i s c l e a r , t h e d i f f i c u l t y i s i n applying it. " I n o r d e r t o c o n c l u d e t h a t a j o i n t t e n a n c y was c r e a t e d it must be e s t a b l i s h e d t h a t i t was t h e i n t e n t of t h e g r a n t o r t o c r e a t e s u c h an i n t e r e s t . * * * "The a p p l i c a t i o n of t h e law t o t h i s p a r t i c u l a r c a s e r e q u i r e s c a r e f u l s c r u t i n y o f t h e c o n t r a c t of s a l e o f t h e F u l l e r Avenue p r o p e r t y . I t i s from t h i s i n s t r u m e n t t h a t t h e i n t e r e s t of t h e g r a n t o r must be g l e a n e d . * * * I f a j o i n t t e n a n c y i n t e r e s t i s t o be e s t a b l i s h e d i n t h e c o n t r a c t , and t h e prope r t y s u b j e c t t o i t , e v i d e n c e o f s u c h i n t e n t on t h e p a r t of t h e g r a n t o r must c l e a r l y show from t h e language u s e d . A p r o v i s i o n f o r payments t o be made i n t o a j o i n t a c c o u n t d o e s n o t by i t s e l f operate t o c r e a t e a j o i n t tenancy i n t h e i n t e r e s t b e i n g conveyed. S e c t i o n 67-308, s u p r a , r e q u i r e s an e x p r e s s d e c l a r a t i o n t h a t t h e i n t e r e s t b e i n g c r e a t e d i s t o be a j o i n t t e n a n c y , and i n t h e a b s e n c e of s u c h e x p r e s s d e c l a r a t i o n s e c t i o n 67313, s u p r a , p r o v i d e s t h e i n t e r e s t c r e a t e d , i f any, s h a l l be a n i n t e r e s t i n common. The c o n t r a c t f o r t h e s a l e of t h e F u l l e r Avenue p r o p e r t y d o e s n o t contain an express declaration establishing a j o i n t tenancy i n t h e property being s o l d thereunder. "Thus, no i n t e r e s t having been c r e a t e d by t h e c o n t r a c t i n C h a r l e s E. Pew, t h e v e n d o r ' s i n t e r e s t i n t h e F u l l e r Avenue p r o p e r t y , upon t h e d e a t h of Cora Read Pew p a s s e d i n t o h e r e s t a t e . * * * " (Emphasis s u p p l i e d . ) I n l i g h t of o u r d e c i s i o n i n Moxlev we f i n d no m e r i t i n Birkeland's contention t h a t the s e l l e r s a r e e i t h e r j o i n t tena n t s o r t e n a n t s i n common a s t o t h e p r o c e e d s of t h e c o n t r a c t . There i s no p r o v i s i o n i n t h e c o n t r a c t i n t h e i n s t a n t c a s e showi n g an i n t e n t by d e c e a s e d and Rickner t o c o n s t i t u t e a s e v e r a n c e of t h e j o i n t tenancy. I n a d d i t i o n , t h e r e w a s no i n t e r e s t c r e a t e d by t h e c o n t r a c t i n t h e d e c e a s e d a s t o t h e p r o p e r t y s o l e l y owned by R i c k n e r . The o n l y i n t e r e s t t h a t d e c e a s e d had i n t h e c o n t r a c t was a j o i n t t e n a n c y a s t o t h e p r o c e e d s of t h e p r o p e r t y h e l d i n j o i n t tenancy p r i o r t o t h e s a l e . A c c o r d i n g l y , t h e judgment of t h e d i s t r i c t c o u r t i s a f f irmed. i i W e concur: / I I Chief J u s t i c e

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