Eastman v. Kopasz

to take the property in question in partial distribution of the .Canfield estate. The court confirmed the sale under Proi bate Code, section 754, and Kopasz appeals.

Lee Canfield died testate in March, 1948, leaving an estate of approximately $500,000 which consisted of securities, a substantial amount of cash and several parcels of improved and unimproved real estate in Los Angeles and Long Beach. The will left the estate to the surviving spouse, Alice Canfield, and two daughters, Dorothy O. Eastman and Marvel I. Can-field Kopasz. Dorothy Eastman was appointed executrix. During 1948 and 1949 there were disputes ámong thé' three heirs involving money claims against the estate, as- well as efforts by the widow and Marvel to have the executrix removed. On February 24, 1950, an agreement compromising the removal proceeding and all of the claims was entered into by the three heirs. By this agreement the claims were allowed in part and the remaining estate, after creditors’ claims, taxes and administrative expenses, was to be divided one third to each of the parties. Insofar as it concerned claims against the estate the agreement was approved by the court prior to the present proceeding.

In addition to compromising claims, the agreement provided for compromise as to the distributive shares of the parties. At the time the agreement was made the estate was ready for final distribution. The estate consisted of over $70,000 in cash, $95,000 in notes receivable, substantial amounts of stocks and bonds and several parcels of real property including that here involved (which was then. appraised at $42,000). The only reason for delaying distribution was. that the three beneficiaries did not want to take undivided interests in the real property and it was not considered feasible to distribute any part of it in kind. They attempted to solve this problem by inserting in the agreement a section^[1] authorizing the executrix

to sell the real property' and then distribute cash. It was also provided that any of the parties could take trust notes at their appraised values and that the stocks and bonds should be divided equally as far as that was possible, adjustment for odd amounts to be made in cash. Subsequent to the date of the agreement the property in question was reappraised at $38,500. The executrix offered the property for sale and accepted a bid of Mr. and Mrs. Hancock of $35,000. Immediately upon hearing of the proposed sale, appellant John C. Kopasz, as executor of the estate of Marcel I. Canfield Kopasz, who had died in July, 1950, sent a telegram to the executrix informing her that the estate of Mrs. Kopasz would be willing to take the parcel in partial distribution of the Canfield estate at a valuation of $35,001. On the ground the offer was not to pay cash, the executrix rejected it and petitioned the probate court .for approval of the sale to Hancock. Appellant filed timely objection to approval of the sale and also filed a petition for partition before distribution, whereby the Marvel Kopasz estate would get the real property in question at a valuation of $35,001 and the other two heirs would receive a like amount in cash. The sale was approved.

Sales of estate property may be made by an executrix only as directed in the will or as provided for by statute. (Haynes v. Meeks, 20 Cal. 288 , 312.) The only statutory provisions authorizing approval of such sales are Probate Code, section 754^[2] (probate sale), and 1103^[3] (sales on petition

for partition under section 1100^[4] ). The question presented by this appeal is whether the proposed sale would properly be held under section 754 or under section 1103. Respondent contends the former section is proper, appellant the latter.

Under section 754, a sale of estate assets may be made by the executor only where it is to satisfy obligations of the estate or is shown to be for the “advantage” of the estate. In her petition the executrix stated that this sale was necessary in order to “liquidate the estate for distribution.” This is not a ground for a probate sale under section 754, nor was it a fact. In confirming the sale the court found that it was to the advantage of the estate to sell the property. This finding is not supported by the evidence, by which it was shown that the only reason for the sale was to dispose of the property in order to distribute cash. Evidence was introduced to show the property was losing value but this was wholly immaterial under the circumstances and not a sufficient reason for a sale when the estate was ready for distribution without the necessity of a sale. (See Estate of Rawitzer, 175 Cal. 585 , 592 [ 166 P. 581 ].) The court erred in treating the petition as one under section 754, and in finding that a sale would be to the advantage of the estate.

The procedure of section 1103 should have been followed. The heirs by their agreement indicated they wanted the property sold to facilitate distribution of the estate.^[5] None of them wished to take the property at its then appraised value. The executrix should have proceeded at the request of the heirs to petition the court under section 1100, pursuant to which the court may partition the property or order a sale under section 1103. The grounds for the petition would be that the heirs did not want to hold undivided interests in realty and could not agree among themselves as to a division of the property. In proceeding under section 1103 the court