
    Dillman, Admx., et al. v. Warner, Supt. of Bldg. & Loan Assns., et al.
    
      (Decided June 26, 1935.)
    
      Mr. B. F. Welty, for plaintiffs in error.
    
      Messrs. Mackenzie, Weadock & Weadock, and Mr. B. S. Steiner, for defendants in error.
   Guernsey, J.

This is an error proceeding from the Court of Common Pleas of Allen county.

The plaintiff in error, Lulu Dillman, as administratrix of the estate of Harley W. Dillman, deceased, filed her petition in the Probate Court of Allen county, Ohio, to sell two parcels of real estate of which the decedent was seized at the time of his death, to pay the debts, obligations and costs of administration of decedent’s estate. The plaintiff in error Lulu Dill-man and the defendants in error Paul A. Warner, superintendent of building and loan associations in charge of the liquidation of The Findlay Savings & Loan Company, The Howell Motor Company, The Citizens National Bank of Bluffton, Ohio, E. M. Hostettler, W. W. Dillman, Lillian Dillman, Willard W. Dillman, and John Henry Dillman were made parties defendant to the action.

Tract No. 1 of the real estate described in the petition was occupied as a family homestead by Harley W. Dillman, deceased, his spouse Lulu Dillman, and their children. The Findlay Savings & Loan Company had a mortgage on the homestead, which mortgage was signed by Harley W. Dillman, deceased, and his wife Lulu Dillman. There was a balance due on the mortgage of $1,665.30, which is the first and best lien on the premises'. Tract No. 1 sold for the sum of $2,050, and the proceeds thereof were ordered distributed by the Probate Court as follows:

Taxes ............................... $160.70

Court costs .......................... 50.28

Administrator’s fees ................. 96.00

Attorney fees ....... 96.00

Bonds to Paul A. Warner, as Superintendent of Building &i Loan Associations of Ohio, in charge of the Liquidation of The Findlay Savings' & Loan Company .......................... 1,665.30

Total ..........................$2,068.28

Tract No. 2 described in the petition consisted of a strip of land 15 feet wide off the north side of Lot 99 in the Village of Bluffton, Allen county, Ohio. There were no mortgages' on this tract but certain of the defendants in the action had secured judgments against Harley W. Dillman during his lifetime which were liens on Tract No. 2, as well as on Tract No. 1, the amounts and priorities of such judgment liens being as’ follows:

a. The Howell Motor Company in the sum of $121.39 together with interest at 6% from May 15, 1929, and costs taxed in, the sum of $10.74.

b. The Citizens National Bank of Bluffton, Ohio, in the sum of $486.75 with interest at the rate of 8% per annum from the 31st day of December, 1930, and costs taxed at $9.51.

c. E. M. Hostettler in the sum of $117.50 with interest at 8% per annum.

Tract No. 2 was sold for the sum of $600, in the action in the Probate Court, and the; proceeds ordered distributed as' follows:

Taxes ................................ $85.74

Court costs........................... 14.71

Administrator’s fees .................. 36.00

Attorney’s fees ....................... 36.00

To Lulu Dillman Dower interest in Tract No. 2 .............................. 154.44

The Howell Motor Company........... 130.29

The Citizens National Bank............ 142.82

Total .......................... $600.00

After the sale of the premises and the entry of the orders of distribution mentioned, the case was appealed to the Court of Common Pleas by Lulu Dill-man as' administratrix of the estate of Harley W. Dillman, deceased, and Lulu Dillman.

In the Common Pleas Court the appellants contended that the order of distribution of the proceeds of Tract No. 2 was erroneous in the following particulars : -

First. That Lulu Dillman was entitled to have out of the proceeds of such tract an allowance of $500 in lieu of a homestead.

Second. That Lulu Dillman was entitled to have out of the proceeds of such tract an allowance of $670 under the provisions 'iof Section 10509-54, General Code.

Third. That Lulu Dillman was entitled to have paid to her out of the proceeds' of such tract the sum of $520 allowed to her by the appraisers of the estate for one year’s support for herself and minor children.

Fourth. That Lulu Dillman was entitled to have paid to her out of thei proceeds of such tract a sum of money in lieu of her dower interest therein computed on the aggregate sale prices of the two tracts instead of being computed on the sale price of the second tract.

On trial of the cause in the Court of Common Pleas the s'ame orders of distribution were entered as in the Probate Court, and this proceeding in error is brought to reverse the orders of distribution made in the Common Pleas Court. The same contentions are made by the plaintiffs in error in this court as were made by them in the Common Pleas Court.

It will be noted that the controversy in this court is between the plaintiffs in error and the judgment lien holders, and relates to the question as to whether the plaintiff in error Lulu Dillman, widow of the decedent, is entitled to the payment of any amounts in lieu of a homestead or for statutory allowances, prior to the payment of judgment lien holders, and as to whether her dower payable out of the proceeds of the second tract is to be computed on the sale price of both tracts or on the sale price of the second tract. These contentions will be considered in the order mentioned.

In considering these questions it is advisable to keep in mind the rule that under the laws of Ohio an administrator deals solely with the personal property of his decedent unless it becomes necessary to s’ell the real estate of the decedent to pay the debts, obligations and costs of administration of the decedent’s estate, and that the general statutes relating to administration of estates relate to the personal property of the decedent and not to real estate, and that the administration of the real estate is governed by the specific statutes relating thereto.

1. With reference to the widow’s claim for allowance in lieu of a homestead: Her right to a homestead is governed by the provisions of Section 11738, General Code, the pertinent- part of which reads as follows:

“Husband and wife living together, a widow living with an unmarried daughter or minor son, every widow, and every unmarried female having in good faith the care, maintenance and custody of a minor child or children of a deceased relative, resident of this state, and not the owner of a homestead, in lien thereof, may hold exempt from levy and sale, real or personal property to be selected by snch person or his attorney, before sale, not exceeding five hundred dollars in value.”.

The decedent and plaintiff in error, Lulu Dillman, lived together as husband and wife on the premises known as Tract No. 1 in which she was precluded from claiming an interest by reason of the sale of such premises at a price less than the mortgage indebtedness thereon. As the husband is dead, the husband and wife are not now living together and consequently Lulu Dillman does not come within the purview of that part of the section relating to husband and wife living together, and any claim she may have to an allowance in lieu of a homestead is based on her status as a widow. As a widow her claim for exemptions may be asserted only as to claims against her individually and is limited to property which is owned by her in her own right and not property which was owned by her husband during his lifetime. Sterritt, Assignee, v. Lingo, 4 N. P., 366, 6 O. D. (N. P.), 481; 20 Ohio Jurisprudence, 1034, Section 65. Lulu Dill-man is not, therefore, entitled to an exemption in lieu of a homestead in the proceeds of the second tract.

2. The distribution of the proceeds of real estate by an administrator is governed by the provisions of Section 10510-46, General Code (114 Ohio Laws, 460), which is as follows:

“The money arising from the sale of real estate shall be applied as follows:

“1. To discharge the costs and expenses of the sale, including reasonable fees for services performed by attorneys for the fiduciary in connection with the sale, and the commission of the executor or administrator thereon for his administration, or compensation of the guardian for his s'ervices as fixed by the court.

“2. To the payment of mortgages, judgments and tax liens against the ward or deceased person, according to their respective priorities of lien, so far as they operated as a lien on the estate of the deceased at the time of his death or on the estate of the ward at the time the action was commenced; which shall be apportioned and determined by the court, on reference to a master or otherwise.

“3. In the case of an executor or administrator, the remaining proceeds of sale shall be applied as follows:

(a) If the action be to sell real estate to pay legacies, to the payment of legacies with which the real estate of the deceased was' charged;

(b) To discharge the claims and debts of the estate, in the order provided by law;

(c) Whether such executor or administrator was appointed in this state or elsewhere, the surplus of the proceeds of sale must be considered as real estate and be disposed of accordingly.

“á. In the case of a guardian, in the manner and upon the terms approved by the court where he was appointed.”

It will be noted that under this section the payment ■ of mortgages, judgments and tax liens against the deceased person, according to their respective priorities of lien, is made subordinate only to the payment of the costs and expenses of sale and administration, in the order of priority, and that payments to discharge the claims and debts of the estate in the order provided by law are made subordinate to the payment of judgments in the order of priority, and that Section 10509-54, Cfeneral Code, expressly provides that the allowance of the sum of money to the widow under the provisions of such section shall be a charge on all property real and personal, belonging to the estate, prior to the claims of all unsecured creditors of the deceased or of the estate. Beading these sections together it is clear that it was the legislative intent that the sum allowed to the widow under Section 10509-54, General Code, is a charge on the real estate prior only to the claims of unsecured creditors and was' not intended to have priority over the claims of creditors holding judgment liens on the real estate who are secured creditors. Oldfields Syndicate v. American Improvement Co., 260 F., 905. See also Jones, Admr., v. Allen, 6 N. P., 518, 8 O. D. (N. P.), 338; 18 Ohio Jurisprudence, page 752, Section 745.

The judgment lien creditors are therefore entitled to priority over the claim of the widow Lulu Dillman for the allowance made to her under the provisions of Section 10509-54, General Code.

3. With reference to the claim of Lulu Dillman as widow, for priority of payment as between her and the judgment lien creditors, of her year’s allowance, the allowance made to her is governed by the provisions of Section 10509-74, General Code. This section does not purport to provide that the allowance to the widow shall have precedence over the claims of judgment lien creditors out of the proceeds of the sale of real estate, and consequently the provisions of Section 10510-46, General Code, relating to distribution of such proceeds, govern, and the claim of the widow for year’s allowance is subject and subordinate to the claims of judgment lien creditors from the proceeds of such real estate; and her claim for re-imbursement for funeral expenses of decedent paid by her is' likewise subject and subordinate to the claims of the judgment lien creditors on such proceeds.

4. With reference to the claim of the widow as to the computation of dower. The rights of the widow are governed by the provisions of Section 10502-1, General Code (114 Ohio Laws, 337), which reads as follows:

“A spouse who has not relinquished or been barred of it shall be endowed of an estate for life in one-third of all the real property of which the consort was seized as an estate of inheritance at any time during the marriage, but all such dower interest shall terminate and be barred upon the' death of the consort except:

(a) To the extent that any such real property at any time during the marriage was conveyed by the deceased consort, the surviving spouse not having relinquished or been barred of dower therein; and

(b) To the extent that any such real property at any time during the marriage was encumbered by the deceased consort by mortgage, judgment, lien (except tax lien), or otherwise, the surviving spouse not having relinquished or been barred of dower therein. In the event any of the real property of which the deceased consort was seized as an estate of inheritance at decease was so encumbered, the dower interest of the surviving spouse therein shall be computed on the basis of the amount of the encumbrance at the time of the death of such consort.

“In lieu of such dower interest as terminates and is barred pursuant to the provisions of this section, a surviving spouse shall be entitled to the distributive share provided by the statute of descent and distribution.

“All dower interest-shall terminate and be barred upon the granting of an absolute divorce in favor of or against such spouse by a court of competent jurisdiction within or without this state.

“Wherever dower is referred to in any other section of this act, it shall mean the dower to which a spouse is or may be entitled by the provisions of this section. ’ ’

It will be noted that under this section the dower interest shall terminate and be barred upon the death of the consort except, to the extent that any such real property at any time during the marriage was encumbered by the deceased consort by judgment, the surviving spouse not having relinquished or been barred of dower therein, and that in the event any of the real property of which the deceased consort was seized as an estate of inheritance at the decease, was so encumbered, the dower interest of the surviving spouse therein shall be computed on the basis of the amount of the encumbrance at the time of the death of such consort.

The widow signed the mortgage on the first tract and under paragraph b of the dower statute above set forth, is not entitled to dower in Tract No. 1, so that the only real estate to be considered in computing the dower is the real estate known as Tract No. 2 which was not encumbered by mortgage. However, the three judgment liens above referred to were encumbrances on the tract within the meaning of that section. By the use of the word “any” in paragraph b of the section mentioned, in referring to the real property it is clear that it was the legislative intent that the dower of the widow is to be computed on each tract separately and her dower interest in each tract limited to the proceeds of such tract. The aggregate of the judgment liens on Tract No. 2 exceeded the s'ale price which was $600, and the dower of the widow in such is therefore to be computed on the sale price of that tract. This was the method of computation adopted by the Probate Court and the Court of Common Pleas, and is the correct method.

As the claims of plaintiff in error Lulu Dillman to priority in the distribution of the proceeds of Tract No. 2 were properly disallowed by the Probate Court and the Court of Common Pleas and as her dower was properly computed, and the judgment of the Court of Common Pleas conforms to the law as hereinbefore set forth, the judgment of the Court of Common Pleas will be affirmed at costs of plaintiffs in error.

Judgment affirmed.

Klinger and Crow, JJ., concur.  