Morice v. Davidson

J.-This is an appeal from a judgment of the Court of Appeal in Manitoba dismissing appellant's appeal from a judgment of Mr. Justice Adamson in the Court of King's Bench, on an application by the respondent by way of originating summons for the opinion, advice, and direction of the Court.

The late James D. Morice died on 13th October, 1936, leaving an estate which was valued for succession duty purposes at $23,817.75.

This amount included the estimated value of a homestead consisting of farm lands not far from Winnipeg, Manitoba.

Under the provisions of The Dower Act of Manitoba, the widow who is now the appellant became entitled to: (1) a life estate in the homestead; (2) a third of the net value of the estate including the value of the homestead. The appellant took possession of the homestead and operated the farm for something over a year, but it was decided by her and by the respondent (the executor) that it would be advisable to sell this homestead.

Discussions took place as to the proportion of the proceeds which should be received by the appellant in respect of her life S.C.R.J interest. The parties were unable to agree on this but, an In re opportunity for a favourable sale coming up, the parties EMSTE.

agreed to the sale being made, from which sale a net sum of $4,275 was realized. The parties continued discussions as to the proportion of the sale price which should go to the appellant for her life estate.

They were, however, Hudson, J. unable to agree.

The executor made an application to the Surrogate Court of the Eastern Judicial District of the Province of Manitoba for advice as to what amount the widow is entitled to out of the purchase price, but the Judge of the Surrogate Court held that he had no jurisdiction and suggested the parties should try and settle the matter. However, no settlement was carried out and then the executor made the present application.

There were two questions submitted, as follows:

The application was accompanied by an affidavit of the executor by which the above facts were verified, and adding that although he had used every endeavour to complete the administration of the estate, there were certain assets still unsold, the value of which was problematical, and certain other assets which may or may not be collected, and some of which could only be collected in part. There were also filed on behalf of the present appellant affidavits showing the earnings of the homestead during the time in which it was held by the appellant, and also setting out certain facts bearing on her life expectancy. The application was heard before Mr. Justice Adamson who answered the questions as follows:

(1) That the said testator's widow is entitled to receive from the said executor the full amount equal in value to one-third of the testator's net estate as defined in Section 2 (h) of The Dower Act including therein the amount realized from the sale of the homestead 84,200, after the testator's net real and personal property is ascertained in the manner provided in Section 2 (g) of The Dower Act as if the same were a debt e of the testator at the time of his death, and that the same is payable forthwith to her out of the first moneys from time to time coming into the executor's hands and available for distribution, except two-thirds of MomCE the amount received from the sale of the homestead, before any other beneficiaries are paid.

(2) That in ascertaining and computing the value of the net real and personal property of the testator and making the payments to the Hudson J. testator's widow, the values of the unrealized assets and securities should be very conservative, no payments should be made on the basis of doubtful assets and the executor must take every precaution to guard and preserve the interests of the other beneficiaries.

(3) That the widow is entitled to be paid forthwith the sum of $1,400, being one-third of the amount of the sale price of the homestead, and the said sum of $1,400 when paid shall be payment pro tanto on the amount equal in value to one-third of the testator's net estate referred to in paragraph 1 hereof; and in addition the widow is entitled to receive for her life the income of the remaining two-thirds of the said sale price which two-thirds shall be kept intact in the hands of the executor and shall not be distributed until after her death. When the appellant made her election to take the homestead and such election was approved. by the Surrogate Court and she entered into possession, the homestead became her property for life. She could use it or sell or dispose of such life estate as she pleased. It was severed from the estate of the deceased.

When the appellant and respondent agreed to sell the property, they were selling two separate estates: the life estate of the appellant and the remainder of the fee simple held by the respondent as executor of -the estate. The proceeds of the sale belonged to the parties in the proportion which the life estate bore to the remainder. The efforts of the parties to arrive at an agreement for division of the proceeds are evidence of recognition of the legal situation.

In my opinion, the value of the life estate must be ascertained on the basis of $4,275, being the value of both life estate and remainder, and when this is done the appellant will be entitled to be paid the amount fixed as value of the life estate.

It was suggested that we here should fix the amount. I do not feel that we have adequate information to enable us to do that. We have the age of the appellant and the S.C.R.]