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Evidence of use of real estate and testator's intent necessary to determine elements in real estate bequest.

Charles A. Bogar was the sole specific beneficiary in the will of his brother, Thomas E. Bogar. The current case was an appeal of the construction of the will. Specifically, Charles Bogar argued that the probate court erroneously concluded that a specific bequest of "the real estate (the Property) ... together with all contents of said real estate" does not include farm equipment and vehicles located on the Property. This decision effectively allowed those items to pass to residual beneficiaries.

After Thomas Bogar's death, an inventory and appraisal provided a valuation of all personal property found and located at the Property. The inventory and appraisal also included an itemized appraisal of the personal property. The last will and testament contained only two bequests, one specific and one residual. The specific bequest stated:
   I give, devise, and bequeath to my brother, CHARLES A.
   BOGAR, if he shall survive me, the real estate at [the
   Property], Salem, Ohio, together with all contents of
   said real estate, if owned by me at the time of my death.

The parties stipulated that the Property included 31 acres, a house and out buildings and that Thomas Bogar was "the owner of all tools, farm equipment and machinery, all farm vehicles, all lawn and garden equipment, and all of the contents of all of the outbuildings and garage building located at the premises."

The residual clause stated:
   All the rest, residue and remainder of my property
   whether real, personal or mixed and whosesoever situated
   which I may own or have the right to dispose of at
   the time of my death, I give, devise and bequeath to
   niece, JENNIFER BOGAR, and MARK BAKER, share and
   share alike or to the survivor or survivors of them.

During administration of the will, a dispute arose as to the correct interpretation of the phrase "all contents of said real estate." Charles Bogar interpreted that phrase to include all the personal and other property physically located on the real estate on the date of death. However, Baker, a residual beneficiary, argued that the phrase should be interpreted to include only household goods and personalty. The probate court agreed with Baker. According to the judgment entry, the estate's appraiser valued Thomas Bogar's tangible personal property at $99,705; intangible personal property at $624,811; and real property at $173,070, for a gross estate value of $915,586. The appraisal divided the tangible personal property into three categories: (1) trucks-auto-farm equipment; (2) shop tools-miscellaneous; and (3) heated shop. The probate court found that all the personal property in the category of trucks-auto--farm equipment ("vehicles and farm equipment") passed through the residual clause of the will. The probate court stated that no evidence showed the decedent intended to include the vehicles and farm equipment in the specific bequest to his brother. The court reasoned that "any item such as a motor vehicle or specialized farm vehicle or equipment would be excluded from being considered personalty items due to the fact of their very nature of increased value and the ability to title such items."

The probate court's reliance on the term "personalty" was based on an earlier case, McAlpin v. Obenour. McAlpin held that a specific bequest of "all my personal property located in the room now occupied by me" did not include certificates of deposit or checks, even though the certificates and checks were in that room. Because the probate court found that there was almost no case law addressing the evidentiary standard to be used in will interpretation cases, the court adopted the reasoning in McAlpin, relying upon the fact that there was no extrinsic evidence presented that showed the intention of the decedent. The probate court also relied on a New York case, Ball v. Dickson, in which the court held a bequest of "all the personal property in the house and in the other buildings on said premises" did not include promissory notes, certificates of deposits, and bank passbooks which were, at the time of the will's execution, in the safe at the dwelling.

Based on this case law and no other evidence regarding decedent's intent, the probate court defined "contents of said real estate" as "all household goods, personal property furnishing [sic], including all contents of the outbuildings which are typically found in a home environment." As previously stated, the probate court determined that motor vehicles, and specialized farm vehicles and equipment were excluded from the specific bequest because they were of "increased value" and because of "the ability to title" these items. Charles Bogar appealed the probate court's decision.

In its review, the appellate court noted that a court cannot rewrite a will, stating "A court has no power to make a new and different will for a testator in contravention of the language employed in the will." The appellate court found that while the phrase "the real estate located at [the Property], Salem, Ohio together with all contents of said real estate" is not ambiguous on its face, it does appear that an examination of all the property located at the Property on the date of death creates ambiguity given the specific nature of that personal property.

The appellate court also found that the probate court mistakenly relied upon and extrapolated from the McAlpin and Ball cases. It noted that in those cases the property in dispute consisted of certificates of deposit, checks, promissory notes, and bank passbooks, which were merely representative of the goods sought by the parties, i.e., money. Because the funds represented by the checks, promissory notes and passbooks were not physically located at or on the bequeathed premises, the funds did not fall under the definition of "contents." The appellate court concluded that McAlpin and Ball did not apply to the determination of the word "contents" in the present case, because the property in dispute--farm equipment, trucks and other vehicles (tangible personal property)--differs from money (intangible personal property) at issue in those cases.

The court went on to state that automobiles, while they may be garaged at or parked on the real estate, by their very nature may not necessarily be "contents" of the real estate. The question here is whether the testator intended these to be "contents of said real estate." Trucks and farm equipment, however, present a more difficult question. Bogar contended that trucks and farm equipment fall within the practical definition of "contents of said real estate," because the real estate at issue is a farm. However, neither party offered any evidence to establish whether the real estate is an operating farm, or whether the trucks and farm equipment are necessary to the function or maintenance of the real property. Evidence of this nature is necessary to determine the intent of the testator. The court found that although trucks and farm equipment may be included in "all contents of said real estate" (especially if on a functioning farm), there was insufficient evidence in the record to conclude the probate court erred in excluding them from the specific bequest.

The appellate court reversed the judgment of the probate court and remanded the case with instructions that the probate court consider extrinsic evidence regarding the practical use of the trucks and farm equipment identified in the appraisal, whether the testator intended the automobiles to be "contents of said real estate," and any additional evidence as to the intent of the testator.

Bogar v. Baker

Court of Appeals of Ohio

Seventh District, Mahoning County

September 21, 2017

2017 WL 4220083

Scott B. Mueller, JD, is a partner in the St. Louis office of the firm Stinson Leonard Street LLP. His legal practice concentrates in real estate and banking litigation. He is a frequent speaker and presenter at continuing legal education seminars and has spoken on issues such as recession-related title defects, mechanic's liens, title insurance fundamentals, landlord and tenant law, mediation, and presenting evidence in real estate cases. He is licensed to practice in the state and federal courts in Kansas, Missouri, and Illinois. Mueller's article, "Is Equitable Subrogation Dead for Lenders and Insurers in Missouri," was published in the Journal of the Missouri Bar. He is a member of the City of Webster Groves's City Plan Commission. Contact:
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Title Annotation:Recent Court Decisions on Real Estate and Valuation
Author:Mueller, Scott B.
Publication:Appraisal Journal
Geographic Code:1USA
Date:Jan 1, 2018
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