Summary
In Campbell v. Cason et al., 206 Miss. 420, 40 So.2d 258 (1949) the Court held that where a widow renounced the will of her husband under Section 668, supra, the obligations of the estate and executor would be construed as if the testator had died intestate and cited Gordon, supra.
Summary of this case from Banks v. JunkOpinion
April 25, 1949.
1. Wills — renunciation by widow — unprobated debt secured by mortgage — debt not a charge on the general estate.
An unprobated debt secured by mortgage is not a charge on the estate, and when the widow of the testator has renounced the will, she is not entitled to have the mortgaged debt paid out of the general funds of the estate, but she and son, the only other heir of the testator, take the mortgaged property subject to the mortgage indebtedness.
2. Wills — renunciation by widow, effect of.
When a widow has renounced the will, her rights and the obligations of the estate and its executor will be construed as if the testator had died intestate.
3. Wills — rights of widow who renounces will.
When a testator left as his only heirs his widow and a son the widow on renouncing will is entitled to one-half of the net estate.
4. Executors and administrators — payment out of assets of unprobated secured claim.
A secured creditor is under no obligation to probate his debt and probated debts being the only debts for which the estate as such is liable, the court has no authority to make any special order to pay the secured but unprobated debt out of the assets, besides which mortgaged lands are assets only to the extent of the equity therein.
5. Executors and administrators — liability of estate as to secured probated debts.
A probated debt although secured becomes a debt due by the estate and is an obligation imposed by law not subject to impairment by the will or directions of the testator, as for instance, by an exceptional provision in the will as to "secured debts not due".
6. Executors and administrators — settlement estate not to be delayed by administration of an inconsequential trust fund.
Where the proceeds of a life insurance policy payable to testator's estate is charged as a trust by the will to the extent of the payment of a small monthly sum towards the care and expense of testator's aged father, inconsequential in comparison with the entire net personal estate of the testator, settlement of the estate as respects the award to the widow, who has renounced the will, of her one-half of the net personal estate will not be suspended on account of the said trust fund, and this would remain true even if the trust fund must suffer impairment to effect this end.
7. Executors and administrators — wills — trust fund — impairment by settlement with widow who has renounced will.
When a trust fund has been set up by a will which has been renounced by widow and who consequently takes one-half the net estate including that in the trust fund, and when by the will the trust fund is charged first with payment to specified legatees, not heirs of the testator, and the residue is directed then to be held in trust for the son of the testator, an abatement of the trust fund in order to settle with the widow must first fall upon the residuary estate of the son, who took not as an heir but under the will.
8. Executors and administrators — net rentals collected after testator's death not part of estate.
Rentals on the lands of the testator collected by the executor for two years after the year of the testator's death less upkeep, repairs and the like are not properly part of the estate and should be paid forthwith by the executor equally to the two sole heirs at law of the testator.
9. Executors and administrators — wills — failed trust.
A testator directed that a specified sum be used to bid for designated property when sold by its owners and that should the purchase fail the said sum be given two named sisters of the testator: Held that the sum should not be kept in suspense for a sale which could not be compelled and that instead the money should be paid at once to the two sisters as specific legatees.
Headnotes as approved by Alexander, J.
APPEAL from the chancery court of Tallahatchie County, R.E. JACKSON, Chancellor.
Means Johnson, for appellant.
The only question in issue as to debts is whether or not the indebtedness of the Metropolitan Life Insurance Company, which was not probated, is the debt of said estate and should be paid out of the funds of said estate; and as to whether or not all, or one-half of the probated account of Ben Goodman, and secured by part of the real estate owned by decedent, at the time of his death, should be paid in order to arrive at the net estate to which the widow is entitled.
In order to properly arrive at and determine the issues involved, it is necessary to discuss certain fundamental principles involved regarding the widow's right to have all of the debts of said estate paid in order to arrive at the net value of said estate, and her part thereof. It is our contention that if the debt of the Metropolitan Life Insurance Company is not paid, she will not receive her share of said estate.
The most outstanding decision on this subject matter is the case of Gordon v. James, 86 Miss. 719, 39 So. 18, 1 L.R.A. (N.S.) 461. In that case the court discusses debts of the estate, and the widow's share of said estate, and it is our contention that this case sustains our view in this matter.
It is admitted that the indebtedness of Thomas P. Cason, to the Metropolitan Life Insurance Company, and secured by a Deed of Trust on a part of the lands owned by decedent at the time of his death was not probated; and it was argued by counsel for appellees in the lower court that said debt, not having been probated against the estate of Thomas P. Cason, deceased, constitutes no claim against said estate, and counsel for appellees cites Section 571 of the Mississippi Code of 1942, and the case of Howell v. Ott, 182 Miss. 252, 180 So. 52, which section of the code and citation will be hereinafter referred to.
It is true that the Metropolitan Life Insurance Company could not be compelled to probate its indebtedness against said estate; and it is true that said life insurance company could stand on its security and not participate in the other assets of said estate; but under no circumstances can it be said that it lies within the power of said life insurance company to deprive the widow of her lawful portion of her husband's estate by its refusal to probate its said indebtedness. If such was the law in this state, there are many instances whereby the widow would be deprived of her lawful portion in her husband's estate, and the right of the widow under Sections 668, 669, and 670 of the Mississippi Code of 1942 would be entirely defeated; and such construction would be contrary to the doctrine announced in the case of Gordon v. James, supra.
It is true that under the provisions of Section 571 of the Mississippi Code of 1942 it is provided that the executor or administrator shall not pay any claim against the deceased, unless the same has been probated, allowed and registered; and it is true that this court, in the case of Howell v. Ott, supra, has held that the executor did not have a right to pay a secured claim in case it had not been probated; but notwithstanding the positive mandate of the statute, this court has held in the case of Rainey v. Rainey, 124 Miss. 780, 87 So. 128, that where the will creates a trust for the payment of testator's debts to the extent of the property specifically set apart in the will for that purpose, it was the duty of the executors to pay all the testator's debts to the extent of the proceeds of such property, whether they had been probated or not. In the case of Ridgeway, et al v. Jones the executor paid $180 as interest on a secured indebtedness in order to save the real estate from being sold, and upon production of a voucher therefor, was allowed credit therefor. If the executor, in the face of the statute has a right to pay claims which have not been probated under the facts of the case of Rainey v. Rainey, supra, then certainly the court has a right to enter a decree authorizing and directing the executor to pay the unprobated secured claim of the Metropolitan Life Insurance Company, so that the widow in the case at bar shall receive her just portion of her husband's estate.
The secured indebtedness of Ben Goodman has been probated, registered and allowed within the time, as prescribed by law; and under the provisions of Section 573 of the Mississippi Code of 1942, is due and payable, notwithstanding the due date thereof, and the executor may pay said debt, and the creditors shall accept the payment thereof, whether due or not due, and give a full discharge therefor, upon payment or tender to him of an amount equal to what the debt would have been had it been payable on the day the payment or tender is made. So there can be no question about the probated secured claim of Ben Goodman. He had a right to rely on his security, but he did not, but when he probated said claim it became due and payable, and under provisions of Section 571, it is the duty of the executor to pay said probated claim. All of the attorneys for appellees in the court below admitted that the widow's share, or one-half of said probated claim shall be paid, but solicitors do not file any authority to sustain any such illogical procedure. Their argument is in the teeth of the statute. The statute does not say that the executor shall pay one-half of the probated claim; but the statute says the executor shall pay said probated claim. The widow is entitled to have this claim paid, notwithstanding that the legal effect thereof may release the lands of Robert Gean Cason from the said indebtedness. There may be other remedies as to Robert Gean Cason, but under no circumstances can it be argued in a court of equity that one-half of said claim should be paid. The argument of counsel in the court below is illogical, because in one breath they argue that the claim of the Metropolitan Life Insurance Company shall not be paid because said debt was not probated; and in the next breath argue that notwithstanding the claim of Ben Goodman has been probated, that the executor shall not pay but one-half thereof.
Counsel have overlooked the fact that Ben Goodman is a creditor of said estate. It is certainly to be presumed that when Ben Goodman probated his account he was familiar with the provisions of Section 576 of the Code of 1942, and it is presumed that he knew that he did not have to probate his secured claim, but had a right to stand on his security. He is referred to under said section of said code as a creditor; and by probating his claim he elected to participate in the personal assets of said estate. It is certainly presumed that he knew that the funds of said estate was sufficient to pay his claim, or otherwise he would not have probated said claim. Ben Goodman has rights which cannot be ignored, and when he probated his claim it was the duty of the executor, under Section 571 of the Code of 1942, to pay said claim. We challenge counsel for appellees to cite any authority to support their illogical contention.
This assignment No. 5 alleges that the lower court erred in the rendition of the said final decree, in directing in paragraph 3 thereof, that the said executor shall pay to himself, as trustee, in accordance of Item VIII of said will, the net proceeds of said policy of insurance aggregating $21,819.22, and in directing that said trustee shall not make any distribution of said funds until the amount of the liability of said trustee to R.L. Cason shall be determined, because in renouncing said will and electing to take in lieu thereof her legal share of said estate, she was entitled to have one-half of said funds of said estate distributed to her without condition, and the widow's interest in said fund was in no wise contingent upon the liability of said trustee to R.L. Cason. It is wholly illogical to adjudicate that the widow is entitled to one-half of said funds and then provide that her interest in said funds, which has been definitely determined, shall remain in the hands of the trustee upon certain contingencies. The undivided one-half interest in the proceeds of said funds have been adjudicated to belong to the widow; and there is no point in having her funds held in trust upon a contingency. No one knows how long R.L. Cason will live, and it certainly would be a travesty on justice to hold that the widow's share in said life insurance, shall be held from her, until the death of R.L. Cason, and such a decision is in the teeth of the case of Gordon v. James, supra, and the public policy and statutory scheme of the administration of estates. The widow's right in the case at bar is not governed by paragraph VIII of said last will and testament, and insofar as she is concerned, her husband died intestate, and she is entitled to an undivided one-half interest in her husband's estate, after all the debts have been paid, as if said will had never been made; and said final decree, as to the widow is not only contrary to Gordon v. James, supra, but is also contrary to Section 644 of the Mississippi Code of 1942, requiring distribution of the funds of said estate.
The lower court erred in the rendition of said final decree, in not directing the executor to pay to appellant, and Robert Gean Cason, the rents on the lands of said estate for the years 1946, and 1947, for the reason that said executor had no title to said rents for each of said years.
It is our contention under the facts of this case, that the rents on the lands belonging to the widow and Robert Gean Cason, constitutes no part of the assets of said estate. There is nothing in the will which gives the executor express authority to rent the lands of said estate, and if there was, it would not apply to the widow. In our judgment, if the lands are to be rented, the contract therefor should be made by the widow, and the Testamentary Guardian for Robert Gean Cason, and the proceeds paid to the widow and said Testamentary Guardian after deducting taxes and necessary expenses.
The case of Miles et al. v. Fink, 119 Miss. 147, 80 So. 532, supports this contention. See also case of Fidelity Deposit Co. v. Doughtry, 181 Miss. 586, 179 So. 846; and Wright et al v. Wright et al, 160 Miss. 235, 134 So. 197.
H.T. Odom and W.M. Whittington, Jr., for appellee and cross-appellant Scott.
The principal question before the court is as to whether the amount gained by the widow by her renunciation of the will is to be gained at the expense of the residuary legatee, the adopted son, or at the expense of the deceased's father and sisters as beneficiaries of the trust fund established by Item VIII of the will.
It must be remembered that whereas the widow, Mrs. Campbell, takes her one-half interest in the realty as an heir, Robert Gean takes his one-half interest in the realty under the will and subject to the will. It is universally recognized that the common law rules of exoneration of realty may be changed by the terms of the will, and that where the will directs that a devisee take land subject to indebtedness thereon, such devisee is not entitled to have such debts paid out of the personal estate. Gordon v. James, 86 Miss. 719, 39 So. 18; Howell v. Ott, 182 Miss. 252, 180 So. 52. In at least three places in his will, the testator specifically indicated that it was his intention that the devise to Robert Gean Cason of an undivided one-half interest in the land was made subject to existing indebtednesses.
The holding of the court below, that the unprobated Metropolitan debt is not a debt of the estate, and shall not be taken into account in computing the widow's share is fully sustained both by the statutes of this state, and the decisions of this court. There is not doubt that at common law, an heir, which Mrs. Campbell is, is entitled to exoneration, out of the personal estate, of any debts that are a lien on the land. However, we submit that this common law rule has been changed in Mississippi by our statute prohibiting executors from paying unprobated claims. Mississippi Code of 1942, Sec. 571. The holding in Howell v. Ott, 182 Miss. 252, 180 So. 52 is squarely in point, and so long as Howell v. Ott is the law of this State, Mrs. Campbell is not entitled to have one-half of this unprobated claim paid. We particularly call the court's attention to the following language in the opinion in Howell v. Ott. "It would seem a rather strange application to hold that a debt which was not probated, and payment of which was prohibited by law, because not probated and allowed as required by law, could, notwithstanding the failure to probate, be directed to be paid out of the general assets and bequests of personal property or specific legacies. To so hold would defeat the purpose of the statute in prohibiting payment unless probated."
It might be argued that Howell v. Ott is not applicable here, as that case concerned the right of a devisee to exoneration, whereas, Mrs. Campbell takes the land here as an heir, and without reference to the will. Such a contention has already been disposed of by the Supreme Court in the opinion in Howell v. Ott, supra, in the following language: "But it seems clear that when the period has expired, and the claim has not been probated, the property incumbered to secure the unprobated debt must be held subject to the lien by a devisee or the heir at law."
It is argued by the attorney for Mrs. Campbell that the effect of the rule laid down by the Supreme Court in Howell v. Ott, supra, is to place in the hands of a secured creditor the power to change the common law rules of exoneration by refusing to probate a secured claim. It should be sufficient to answer such an argument by pointing out that if such is the result of our legislative enactment prohibiting payment of unprobated claims (sec. 571, Mississippi Code of 1942), the correction thereof properly lies within the province of the legislature, and our present statutes should not be modified by judicial legislation.
The holding of the court below, that the unprobated debt to Metropolitan Life Insurance Company should not be paid out of the personal estate, in no way violates the rules laid down in the leading case of Gordon v. James, 86 Miss. 719, 39 So. 18. That case does not touch on the question of the payment of unprobated claims. The James case repeatedly refers to payment of "all debts of the estate," and under our statute, an unprobated debt is not a debt of the estate.
Counsel for the widow is unable to cite any authority for his contention that the widow is entitled to one-half of each specific fund. All of the authorities cited merely repeat the well-known rule that the widow is entitled to one-half of the net personal estate, and do not touch on the point of what personalty shall be used in setting aside her one-half. Actually the question under examination is not one of what personalty shall be used to set aside the widow's half, but rather a question of what gifts under the will shall abate first. In other words, the question is, whether the cash remaining, after Mrs. Campbell takes her one-half, shall be used to establish the trust fund under item VIII of the will, or shall pass to Robert Gean Cason under Item III.
On this point of the relative abatement of the gifts under Item VIII and Item III of the will, it is too well established to require citation of authorities that residuary legacies abate before specific legacies. By the clear wording of the will, Item III is a residuary clause, and the gift of personalty included therein is a residuary legacy. On the other hand, the gift in trust under Item VIII of the will is a specific, or preferred, legacy. The following quotation from Page on Wills (Lifetime Edition) Section 1396, states the generally recognized rule with reference to the classification of the bequest to the Trustee: "A legacy which is payable in money may be specific if it is not payable out of the estate generally, but if it is a fund or a particular thing which is described with sufficient accuracy, and if the legacy can be satisfied only by the payment of such funds. A gift of money which is deposited in a specific bank, or a gift of cash on hand or in the bank, is a specific legacy. A gift of a specific fund, or the gift of the proceeds of specific property, or of a sum of money payable only out of such proceeds, and not out of the estate generally, is a specific legacy, as distinguished on the one hand from a general legacy and from a demonstrative legacy on the other hand."
It is submitted that on the basis of the foregoing, the proper classification of the bequest to the trustee is that it is a specific legacy to the trustee. It is a gift to the trustee of a specific fund, i.e., the proceeds of a specific named and numbered insurance policy. While it is believed that the correct classification of this bequest to the trustee is that it is a specific legacy, it is immaterial whether this legacy to the trustee is classified as specific, demonstrative or general pecuniary legacy. The only purpose of classifying this bequest to the trustee is to establish its relative position as against the gift of personalty made to Robert Gean Cason under Item III of the will. Any one of the above mentioned classifications are superior, in the order of abatement, to a residuary gift such as is made to Robert Gean under Item III of the will. By no stretch of the imagination can the gift to the trustee under Item VIII of the will be construed as a residuary gift.
Any attempt to classify the gift to Robert Gean Cason under Item III as anything other than a residuary gift is certainly a radical departure from the accepted rules of construction. The very definition of a residuary gift is that it is a gift of all property not otherwise disposed of.
"No set form of words is necessary to a residuary clause. Any words which show an intention to dispose of all of testator's estate undisposed of will serve as a residuary clause." Page on Wills (Lifetime Edition) Section 988. Items II and III of the will, by express words, are certainly a disposition of all of the testator's estate not otherwise disposed of, and the fact that Item II is now inoperative because of the widow's renunciation does not change the character of Item III as a residuary clause.
The general rule as to where the loss occasioned by a widow's renunciation of the will falls is concisely stated in 69 Corpus Juris "Wills", Section 2449, as follows: "Holders of Residuary Estate or Heirs. The effect of renunciation of provisions of a will by a spouse and taking under the statute is to reduce the estate available for the payment of legacies, and where the residuary clause is in general terms, the loss falls upon the residuary devisee or legatee, where the testator does not otherwise provide. . . ."
An examination of the cases on this question annotated in 99 A.L.R. 1192 reveals that the great majority decisions from other jurisdictions support the quoted rule.
C. Sidney Carlton and R.H. Henderson, for appellee and cross-appellant Cason.
Does the widow take her interest in the personal property of the estate entirely from the "general fund" or does she take her share (one-half) from the "general fund" and her share (one-half) from the "trust fund" set up in Item VIII of the last Will and Testament?
The answer to this question requires an examination of the will and of its various devises and bequests to determine whether or not any one or any group thereof must abate prior to any others or to any other group.
In the language of Chief Justice Rugg of the Massachusetts Supreme Judicial Court, in the case of Crocker v. Crocker, 230 Mass. 478, 120 N.E. 110, 5 A.L.R. 1617 (1918): "It is not for the court to speculate as to what the testator might have done if the exact situation which has arisen had in truth been in his mind when making his will, but to determine the meaning of the words actually used, and apply that meaning to the facts presented. The effect of the waiver by the widow and the assertion of her statutory rights is to reduce the estate available for the payment of the legacies. Other legatees must lose as a result of her action. The consequence, in the absence of expression of testamentary intent to the contrary, is that the loss must fall upon the residuary legatees because no definite sum or specific legacy is given to them. They take whatever is left undisposed of by other provisions. Firth v. Denny, 2 Allen 468, 471; Pace v. Pace, 271 Ill. 114, 120, 121, 110 N.E. 878."
We find the following statement in 69 C.J. 1145, Section 2449: "The effect of renunciation of provisions of a will by a spouse and taking under the statute is to reduce the estate available for the payment of legacies, and where the residuary clause is in general terms, the loss falls upon the residuary devisee or legatee, where the testator does not otherwise provide." It appears clear from the language of the will that Robert Gean Cason is a residuary legatee, at least insofar as the legatees under Item VIII of the will are concerned.
Robert Gean Cason claims his interest in the estate from Item III primarily, although there are other specific devisees and bequests to him. Item III is his principal source of interest in the estate. The provisions of that item are as follows: "Except as to said $25,000.00 Life insurance policy hereinafter mentioned, I devise and bequeath unto my adopted son Robert Gean Cason, an undivided one-half interest in and to all my estate of whatever kind, real personal, and mixed, subject however to the conditions, limitations, and control hereinafter provided."
Note the exception contained in this item: "Except as to said $25,000.00 life insurance policy". The plain and ordinary meaning of this exception is that the proceeds of the policy are a specific fund which is to be treated in a specific way and are given a preference over the remainder of the estate. It is useless, we think, to go into a long involved discussion of just what sort of bequest the $25,000.00 insurance policy — specific, pecuniary, specific pecuniary, general pecuniary, or demonstrative. It is clearly a preferred bequest over the devises and bequests contained in Item III. The testator certainly desired to take care of his minor, adopted son. We would be the first to admit that that desire is proper. But it is no particularly unusual situation that because of the shrinkage of an estate, or because of the renunciation of a will, the desires of a testator are defeated or interrupted. "It is not for the court to speculate as to what the testator might have done if the exact situation which has arisen had in truth been in his mind when making his will, but to determine the meaning of the words actually used, and apply that meaning to the facts presented."
Here Thomas P. Cason made certain bequests in Item VIII of the proceeds of a life insurance policy, and made his son and his widow he devisees and legatees of the residuum of his estate. His widow renounced the will, and proceeds to take under the statute. Since her share encompasses all of her residuary devises and legacies under the will — and more — the share of his son is the residuum of the estate after the payment of the Item VIII legacies.
Since his share is the residuum — and in the absence of expression of testamentary intent to the contrary, it is inescapable that the loss must fall upon the residuary legatee, Robert Gean Cason.
It matters not whether the widow takes one-half of the general fund and one-half of the trust fund — the legatees under Item VIII are entitled to have their legacies restored from the share of the residuary legatee in the general fund.
It is not for this court to speculate what Mr. Thomas P. Cason would or might have done if he had had in mind the situation caused by the renunciation of his will by his widow. This court must apply the words used by the testator to the facts of this case as they are after the widow's renunciation, and not to the facts the testator might have had in his mind at the time of the drafting of the will. The effect of the renunciation of the widow and the assertion by her of her statutory rights is to reduce the estate available for the payment of the other legacies. Since the estate has been reduced from which the other legacies may be paid, some legatee or legatees must be disappointed and their legacies reduced. As there is an absence of testamentary intent to the contrary, the loss must fall upon the residuary legatee, the adopted son of the testator. No definite or specific legacy is given to him. He takes what is left after the payment of the legacies under Item VIII — this under the express wording of his devise and bequest under Item III.
It was argued below that to permit the widow to realize her entire one-half out of the General Fund Account would completely exhaust this fund, which, under the will was intended to provide a substantial legacy to the minor, Robert Gean Cason. It is stated that such was not the result intended by the testator.
We reiterate that the intention of the testator in that regard is immaterial — but it is immaterial not because of any act of any legatee or devisees under Item VIII, but because of the renunciation of the will by the widow.
It is likewise true that under Item III (under which any payment from the General Fund Account to Robert Gean Cason would be made) still provides a substantial devise to him, as it includes an undivided one-half interest in both the Tallahatchie County plantations. He is by no means left destitute or unprovided for, but on the other hand, he is the owner of very substantial properties.
In the words of Gordon v. James, 86 Miss. 719, 39 So. 13: "The husband executes his will subject to the law in force when it takes effect; and, therefore, his devisees cannot complain. He might have cut off his heirs without any token of remembrance. Not so with his wife. Her right is paramount. It depends not upon his kindness, much less his caprice."
Since the loss occasioned by the renunciation of the widow must fall upon the adopted son, we submit that the trust fund set up in Item VIII cannot be used to complete the widow's one-half interest in the personalty until after the exhaustion of the general funds or the "General Fund Account."
The 6th and 10th numbered paragraphs of said Item VIII of the Last Will and Testament constitute the bequests herein in which R.L. Cason is interested. These paragraphs read as follows: "(6th) At the death of my father R.L. Cason, pay all of his funeral expense, Dr. bills, Drug bills, and grocerie bills if any payable, all bills not to exceed $500.00.
"(10th) To pay my Sister, Mrs. Effie Cason Scott, on the 1st of each month following my death the sum of $35.00 to be used as she deems necessary for the living expense of my father R.L. Cason, until his death, also pay his Doctor bills, and drug bills on the 1st day of each month as long as he lives."
It is obvious from examination of these bequests that it is impossible to determine at this time the pecuniary amount thereof. In fact it will be impossible to determine the liability of the estate thereunder until the death of the said R.L. Cason.
Examination of the other bequests in said Item VIII show that the liability of the estate thereunder is presently determinable except as the residuum to Robert Gean Cason under paragraph 12th of said Item VIII.
It is our position, that until the final determination of the liability of the estate to R.L. Cason, by his death, (or by full compromise settlement thereof by the parties at an earlier date) it is impossible that any distribution be made to the other legatees under said Item VIII.
It may be possible, however, to make a partial distribution to R.L. Cason prior to that time.
In the event the position of R.L. Cason that he is a preferred legatee under said Item VIII be sustained full payment may be made to him of all sums devised and bequeathed to him as and when they become due.
In the event the position of other parties to this litigation be sustained that R.L. Cason is entitled to no preference, a partial distribution may be nonetheless made to R.L. Cason. After the total amount to be paid to the trustee for distribution under the terms of said Item VIII, there are several possible alternatives.
The most feasible appears to be based on the following set of facts. If there be sufficient money in the hands of the trustee to make payment of all the bequests in Item VIII except the residuum disposed of by paragraph 12th thereof, and except the bequest to R.L. Cason in paragraphs 6th and 10th, payment may then be made to R.L. Cason (as provided by the will) up to the balance in the trustee's hands above such amounts and up to the accrued liability to R.L. Cason.
When such payments to and for R.L. Cason equal the amount of such balance above the other bequest, no further payment may be made to him or for him until the determination of the full liability to him by his death. Upon such determination, the various legatees under said Item VIII, including R.L. Cason, must have their bequests abated proportionately.
It should be noted that R.L. Cason is an elderly man past 80 years of age and that he is in dire need of allowance to him of the amounts devised and bequeathed to him under the Last Will and Testament of his son. It appears that some distribution should be made to him at this time, or otherwise the entire intention of the testator in making these bequests to him will be defeated. These bequests were made for the purpose of helping the father of the testator to live comfortably through his late declining years and the intention of the testator should, it appears be given full scope, force, and effect in this regard.
T.P. Cason died November 13, 1945, leaving as his only heirs at law his widow, appellant here, and his adopted son. He left a will whose details will be later disclosed. His widow renounced the will, and the litigation here seeks a determination of her legal share of the estate.
Pertinent provisions of the will are as follows: "Item I. I direct that my funeral expenses, and all my just debts that shall be properly probated against my estate, as provided by law, shall first be paid, except secured debts not due."
Item II left an undivided one-half interest in his entire estate to appellant, his wife, "Except as to my Southeastern Life Insurance Company Policy."
Item III make a similar provision for his son with the stated exception.
Item VIII bequeathed the proceeds of the aforesaid policy, payable to his estate, to a trustee with authority and directions to use same for the benefit of named legatees. The residue of such proceeds were set up as a trust for the education of his son. Relevant provisions under the trust will be hereafter discussed.
(Hn 1) Part of the estate consisted of a valuable plantation against which there was a debt secured by a deed of trust thereon in favor of the Metropolitan Life Insurance Company in the sum of $22,500. Appellant contends that, in view of her renunciation, this secured indebtedness was subject to payment out of the general funds of the estate. This debt was not probated, despite pressure upon the mortgagee to do so. The chancellor held that the debt was not a charge upon the estate, but that the widow and the son took their undivided interests therein cum onere. With this conclusion we agree.
(Hn 2) In adjudging this and all other findings of the chancellor, we must construe the rights of appellant, and the obligations of the estate, and its executor, as if T.P. Cason had died intestate. Gordon v. James, 86 Miss. 719, 39 So. 18, 1 L.R.A., N.S., 461; Code 1942, Section 668. (Hn 3) Under this statute, together with Section 670, the widow would be entitled to one-half of his net estate. It remains to ascertain the extent of such interest.
(Hn 4) The insurance company, being a secured creditor, was free to stand upon its security and was under no duty to probate its debt. Howell v. Ott 182 Miss. 252, 180 So. 52, 181 So. 740. The estate is liable only for debts duly probated. Code 1942, Section 571. Appellant contends, however, that the Court is vested with authority to direct the payment of debts constituting charges against these lands though the executor may not do so, citing Gordon v. James, supra, and Rainey v. Rainey, 124 Miss. 780, 87 So. 128. The cases, however, deal with testamentary charges against lands for the payment of debts. Nor is the expression "except secured debts not due," in Item I, adequate to exempt such debts when probated from liability of the estate. The lands here were assets only to the extent of the equity therein. The widow is entitled to a one-half interest in this equity. By denying any obligation upon the estate to discharge this debt, or any part thereof, it would seem that the divisible portion of the cash assets and personalty are therefore undiminished, and under ordinary circumstances it would be available to the widow for liquidation of the debt, thereby producing the same result. However, it is argued that this situation is subjected to complexity by the fact that the son's devise of one-half interest in the lands was made a factor. It is asserted by appellee that the object of appellant's claim is to procure exoneration of the son's interest. We are unmoved by any considerations save those obligations and restrictions imposed by law.
(Hn 5) Likewise, we find no merit in the contention that the exception in Item I as to "secured debts not due" operates to alter the obligation of the estate to pay the probated claim of Ben Goodman representing a balance due under a secured claim. This obligation of the estate is imposed by law, and is not subject to impairment at the will of a testator. As stated in Gordon v. James, [ 86 Miss. 719, 39 So. 21], her renunciation is an "election between the provision made for her by the will of her husband and the law of the land." No condition may encumber the duty of the executor to pay this probated claim in full except a deficiency in the available assets of the estate, which contingency here appears absent.
It is next assigned as error that the decree directed the executor to pay to himself as trustee the entire proceeds of a life insurance policy issued by the Southeastern Life Insurance Company upon the life of T.P. Cason and made payable to his estate. These proceeds constitute a trust fund under Item VIII of the will, as hereto fore stated. The provisions of such trust, immediately relevant, are Paragraphs 6 and 10, in view of the direction in the decree that the trustee "shall make no distribution of any of the funds growing out of said insurance policy until the amount of liability of the said trustee to R.L. Cason under subdivisions 6 and 10 of Paragraph VIII of said will shall have been determined."
These paragraphs are as follows: "(6th) At the death of my father R.L. Cason, pay all of his funeral expense, Dr. bills, Drug bills, and grocery bills if any payable, all bills not to exceed $500.00." And, "(10th) Pay to my Sister Mrs. Effie Cason Scott, on the 1st of each month following my death the sum of $35.00 to be used as she deems necessary for the living expense of my father R.L. Cason, until his death, also pay his Doctor bills, and drug bills on the 1st day of each month as long as he lives."
(Hn 6) The net proceeds of this policy are $21,819.82. The final account of the executor reveals a substantial net personal estate. R.L. Cason is at this time of advanced age. The limit of benefits to him are funeral expenses and outstanding accounts of his at his death, not to exceed $500, and a maximum subsistence of $35 per month during his life. These contingent liabilities are inconsequential in comparison with the net personal estate of the testator. We see no practical necessity for suspending a settlement of the estate, particularly an award to the widow, pending ascertainment of these liabilities. In this, we are not in accord with the learned chancellor.
(Hn 7) The net personal estate above the funds in trust appear adequate to satisfy an award to the wife of her one-half interest in such net personal estate without impairing the trust fund. However, if this be not the case, she is nevertheless entitled to one-half of the net personal estate even though the trust fund must suffer impairment to effect this end.
The son, it must be noted, is a residuary legatee or cestui que trust under Item VIII, Paragraph (12), which is as follows: "After the amounts herein stipulated have been disbursed the remainder of said life insurance, shall be set up as a trust fund for my adopted son, Robert Gean Cason, . . . ." None of the beneficiaries under the trust with exception of the son are legal heirs of the testator. Their interests are subject to ratable abatement if such need should arise. Yet, all such beneficiaries are specific legatees and the abatement must first fall upon the residuary estate of the son under this item. The chancellor was correct in holding that the son took, not as an heir, but under the will.
(Hn 8) Point is made that funds arising out of rentals from the real estate for the years 1946 and 1947, which were collected and held by the executor, should be paid to the widow and the guardian of the son. We agree. Against the gross collections, there were paid expenses of upkeep, repairs and the like, of approximately $4,034.20, leaving a net balance of about $9,511.80. These funds are not properly part of the assets of the estate, and, no complaint being made as to the correctness or propriety of these expenses of maintenance, they should be paid forthwith equally to the widow and the guardian.
(Hn 9) The cross-appeal urges error by the chancellor in failing to constitute Mrs. Effie Cason Scott and her husband constructive trustees of the Cason homestead in Oglethorpe, Georgia. The contention brings into view Paragraph (2) of Item VIII, which is as follows: "Pay to my sister Mrs. Effie Cason Scott, the sum of $5,000.00 to be used as a bid on the property owned by my brother W.G. Cason, and Mrs. Effie Cason Scott, located at Oglethorpe, Georgia, Macon County, when said property is sold by the W.G. Cason estate Effie Cason Scott, if this bid is accepted, then said lands shall be deeded to Robert Gean Cason, my adopted son. However, my stepmother Mrs. R.L. Cason, shall remain on the property if she so desires, until Robert Gean Cason, my adopted son, shall reach the age of twenty-one years, provided that she shall pay $200.00 per year rent or 4% interest on the above investment, keep buildings in repairs, and pay all taxes assessed by both County, and city." Paragraph (4) thereof states further: "Should the $5,000.00 as above stated fail in making the purchase of said lands, then I direct that same be divided between my two Sisters Mrs. Howard Cason Brock, and Mrs. Effie Cason Scott, (2,500.00) each, as a gift for their love and kindness during my lifetime." Other directions were given upon an assumption that the property would be purchased under a contemplated bidding. There was no direction to purchase this property at all events. The testator could not compel the owners to sell. One of the present owners is Mrs. Effie Cason Scott who is the alternative legatee under Paragraph (4). We are of the opinion that no obligation was or could be imposed upon the owners to sell this property, and that, in the absence of such a sale in accordance with the assumptions of the testator, Paragraph (2) fails, and Paragraph (4) is made operative.
We have dealt with those provisions of the will only which are involved in the assignment and cross-assignments of error. We recapitulate our findings:
(1) In view of the fact that all probated accounts have been paid, appellant as widow of the testator is entitled to an undivided one-half interest in all realty, and a one-half interest in all of the net personal estate.
(2) The widow's interest in the lands secured by an unprobated debt to the Metropolitan Life Insurance Company as well as the son's like interest is to be taken cum onere, that is, subject to such indebtedness.
(3) The probated debt of Ben Goodman is to be paid from the assets of the estate, and the widow and son are tenants in common therein in equal interest, free of such debt, which has in fact been properly paid by the executor.
(4) The net proceeds of the rental from the realty for the years 1946 and 1947 are due and payable forthwith in equal shares to the widow and the guardian of Robert Gean Cason.
(5) In computing the net value of the widow's one-half of the personal estate, the general personal funds of the estate, if sufficient, shall be utilized forthwith to meet this demand. If insufficient, the residuary fund of the trust estate shall be drawn upon to this end.
(6) It is our direction, however, that the integrity of the trust fund and its identity as such be not impaired unless, because of insufficiency of the general net personal estate after payment of lawful charges of administration, there be not ample funds to meet the widow's lawful share.
(7) Against the widow's share, there shall be charged an advancement of $2,500.
(8) There shall be no abatement of the specific legacies, in view of the apparent availability of funds adequate to all other demands, and in further view of our conclusion that any deficiency is to be first charged against the residuary trust in favor of Robert Gean Cason.
(9) Mrs. Howard Cason Brock and Mrs. Effie Cason Scott are specific legatees in the sum of $2,500 each under Paragraph (4) of Item VIII.
(10) There shall be made forthwith a settlement out of the entire estate to the widow, the guardian of Robert Gean Cason, and to the Trustee under Item VIII who shall forthwith make full distribution to all the cestuis que trustent except under Paragraphs (6), (10) and (12). The amounts to be withheld to meet the provisions of Paragraphs (6) and (10) shall be held by the Trustee and payable out of such trust estate when and as needed, but such funds impounded therefor shall not cause abatement of the other specific legacies, but shall be chargeable against the residuary trust funds of Robert Gean Cason.
We have not imposed on ourselves the task of computing the amount of the net personal estate, but our discussion has taken into account the fact that this estate is substantial. Provision is made herein for any contingencies arising out of the possibility that our assumption as to their adequacy is not completely substantiated.
Affirmed in part, reversed in part, and remanded.