Opinion
Decided January 25th, 1922.
Property of Decedent — Contract Before Administration — Rights of Legatees — Conflict of Laws — Distribution of Leaseholds.
Even before administration, the legatees under the will of property not required for the payment of debts, had an inchoate title thereto, and could execute a valid and effective contract for the sale thereof, administration, when obtained, relating back to the contract, and the administrator being bound to recognize the vendee's rights under the contract, and to report the sale. pp. 326, 327
Leasehold property situated in Maryland, belonging to a decedent domiciled in Pennsylvania, is, as personal property, to be distributed under the laws of Pennsylvania. pp. 328, 329
A widow's renunciation and election to take as against the will is equivalent to her death, for the purpose of the acceleratino of remainders, unless this contravenes some manifest intention of the testator as expressed by the will. p. 329
Decided January 25th, 1922.
Appeal from the Circuit Court of Baltimore City (STUMP, J.).
Bill by Thomas Hughes, Administrator with the will annexed of George E. Craig, deceased, against Mary W. Craig, Narcissa B. Craig and others. From a decree in favor of said Narcissa B. Craig, the other defendants appeal. Affirmed.
The cause was argued before BOYD, C.J., BRISCOE, THOMAS, PATTISON, URNER, STOCKBRIDGE, ADKINS, and OFFUTT, JJ.
Edward Duffy, with whom was W.J. Zacharias on the brief, for the appellants.
Forrest Bramble, for the appellee.
George E. Craig, a resident of Chambersburg, Franklin County, Pennsylvania, died in the month of September, 1918, after having first made his last will and testament, by which he devised and bequeathed unto his wife, Narcissa Brewster Craig, the income of his estate, both real and personal, during her life or widowhood, and, upon her death or marriage, his estate was to go to his three sisters, Mary W. Craig, Carrie M. Craig and Arianna Craig Jones, subject, however, to the provision therein contained that "at the death of either of my sisters, their share to go to my nephew, Meredith C. Jones, and niece, Aria N. Jones." His nephew, Meredith C. Jones, was appointed his executor, and he thereafter qualified as such executor in the State of Pennsylvania.
His widow, Narcissa B. Craig, renounced the will and elected to take the part of the testator's estate to which she would have been entitled had he died intestate.
It appears from the record that, at the time of his death, the testator was the owner of a leasehold interest in a house and lot of land in Govans, Maryland.
Those entitled thereto under the will of George E. Craig, deceased, including his widow, Narcissa B. Craig, all of whom were adults, determined to sell the said leasehold property in Maryland, and so placed it in the hands of Caughy, Hearn and Company, real estate brokers of Baltimore City, for sale, and it was by them sold to Narcissa B. Craig for the sum of $4,500. To consummate the sale, the executor and the sisters, nephew, and niece of the testator, on the 17th day of October, 1919, entered into a written agreement with Narcissa B. Craig, the widow, by which they sold unto her the property, at and for the sum mentioned, of which $100 was paid in cash, and the balance was to be paid within thirty days thereafter, and upon its payment, the vendors were to convey unto the vendee a merchantable title to the property.
It was afterwards discovered, however, by the parties to the agreement, that it was necessary, in order to pass title to said property, that letters of administration should be taken out in this state, and letters of administration were thereafter issued out of the Orphans' Court of Baltimore City to Thomas Hughes, as administrator in Maryland of George E. Craig, deceased.
After his appointment and qualification, Mr. Hughes proceeded to confirm the action of the parties in the sale of the said leasehold property, and complete the title to the property sought to be conveyed by said parties to the widow, by a sale from him, as administrator, to her, the vendee named in said agreement; and on the 14th of May, he obtained from the Orphans' Court of Baltimore City an order authorizing and empowering him as administrator to sell the said leasehold property, at public or private sale, upon the condition, however, if sold at private sale, it should not be for less than the appraised value. Its value at that time had been appraised at the sum of $4,500.
At this juncture in the proceedings, Mr. Hughes learned that the Title Guaranty and Trust Company was examining the title to said property, and when he called upon the officers of that company, he learned from them that Mrs. Craig had, shortly after she purchased the property, sold it to one James P. Dougherty, at and for the sum of $5,600. Upon obtaining this information he was uncertain as to what he should do. A sale of the property was then pending, awaiting confirmation, at $5,600, and he did not feel that he should sell it under the order of the court for the sum of $4,500, and so he wrote Mr. Zacharias, counsel for the executor in Pennsylvania, as well as for all the devisees under the will of George E. Craig, deceased, except Narcissa B. Craig, telling him of what he had learned in relation to the sale to Dougherty. In reply to this letter, Mr. Zacharias told him that his people would decline to stand by the contract, and Mr. Bowers, counsel for Narcissa B. Craig, informed him that he would insist upon the fulfilment of the contract.
In this condition of affairs, Mr. Hughes filed his bill of complaint in the Circuit Court for Baltimore City, setting forth the facts that we have stated and others, asking therein, first, that the court undertake the further administration of the estate in his hands; second, that it pass upon the rights and obligations of the parties to the contract of sale of the 17th of October, 1919, so far as it affects his obligations with reference thereto; third, that it pass upon the rights and obligations of James P. Dougherty, under his contract with Narcissa B. Craig, to the extent, if any, that he must recognize the contractual relations between them; and fourth, for general relief. To this bill the executor and all of the devisees of George E. Craig, including his widow, Narcissa B. Craig, and Dougherty, were made parties defendant.
Answers were filed by each and all of the defendants, and the court, after hearing the evidence in the case, passed the following decree:
"It is thereupon this 1st day of July, in the year nineteen hundred and twenty-one, by the Circuit Court of Baltimore City, adjudged, ordered and decreed that the renunciation by the widow of the testator having been assented to as effective by all parties, therefore the estates in remainder under said will are accelerated so as to become effective by reason of said election of the widow to renounce the will, and said remainders therefore do not await the decease of the widow for their vesting. It is further adjudged, ordered and decreed that the said administrator report to the Orphans' Court of Baltimore City a sale to Narcissa B. Craig, the widow of the testator, for forty-five hundred dollars, pursuant to the contract of October 17th, 1919, mentioned in the bill, and said administrator proceed to make distribution in said Orphans' Court of Baltimore City, under its direction. It is further adjudged, ordered and decreed that the costs of this proceeding be paid out of the estate. And in said distribution the widow shall receive one-half in accordance with the Pennsylvania law as shown by the testimony."
It is from the above decree that the appeal in this case is taken. It is contended by the appellants that, in the disposition of the property to be made by Mr. Hughes, the administrator, no effect should be given to the contract of sale of October 17th, 1919, but that it should be treated as a nullity. In this contention we cannot agree with the appellants.
Those who made the contract were the persons who were entitled, after the payment of the decedent's indebtedness and the costs of the administration of his estate, to the proceeds of the property when sold. They were in a sense its equitable owners, and all being adults, they were capable of making a valid contract.
It is true that a complete title cannot pass to the vendee without administration, but it does not follow from that fact that the contract of sale so made is without force and effect.
In 11 R.C.L., par. 274, it is said: "Since it was a rule of the common law that the title to all the personal property of the decedent was in the executor or administrator, it early became established that the assent of the personal representative was essential to the passing of a complete title of a specific legacy to one named in the will as devisee. It has been said that the assent of the executor to the delivery of the legacy is necessary for his protection against creditors of his testator, and against insufficiency of assets to pay all legacies in full. * * * And neither legatees nor distributees have a right of property in the goods and chattels of the decedent until the assent of the personal representatives is given. Until then they have only an inchoate right in the surplus after payment of debts, * * * the property remaining in the representative. * * * On the giving of assent to the legacy the title passes to the legatees, but the assent creates no new title. It merely perfects the title acquired under that will."
In Cecil, Admr. v. Negro Rose, 17 Md. 92, Samuel Owens, the testator, died in 1821, leaving a will, bequeathing a negro girl, Rose, to his wife, Mercy Owens, whom he appointed his executrix. The wife died in 1831, leaving a will, by which she bequeathed the same negro to her daughter, to serve for seven years and then to be free. No administration was granted upon the estate of the testator or testatrix till 1857, when letters thereon were granted to the appellant, who took possession of Rose and her children, who had been going at large and acting as free since 1838. In 1860, Rose and her children, born after the expiration of the said term of seven years, filed their petition for freedom against the appellant. The Court there said Mercy Owens, as legatee, "had a right to negro Rose, which vested upon the death of the testator; her title was derived from the will, and although, to perfect it, an administration was necessary, yet, before administration, she had an inchoate title, which it was competent for her to assign or dispose of by her will. When administration is afterwards had upon the estate, her title or the title of those claiming under her, becomes complete; it relates back to the time of the testator's death."
In Phila. R. Coal, etc., Co. v. Willinger, 137 Md. 52, a collateral assignment of certain stocks of the decedent was made by those entitled to them, or to the proceeds from a sale of them, before any administration was had upon the estate of the decedent. This Court there said, speaking through JUDGE BRISCOE: "The debts of the decedent had been fully paid out of the assets of the estate, or as provided by the audit, and the assignors of the stock, being the equitable owners, had a right to assign it as collateral security for the loan."
The evidence in this case is that the property of the decedent in Pennsylvania was sufficient to pay his debts, and no part of the assets in Maryland was required to pay the same. This gave to the distributees of the estate, those who made the contract, an inchoate right in the proceeds of the sale of the property; and upon the issuance of letters of administration in this State, it was the duty of the administrator, as such, to recognize and respect the rights of the vendee acquired under the contract, and to report a sale made to her of said property, in order that the title, which under the contract was to pass to the purchaser, could thereby be completed.
But it is further contended by the appellants that although leasehold property is regarded by the Maryland law as personal property, whether it belongs to a resident or non-resident, yet when it comes to deciding whether it "is governed by the distribution law of Maryland, or of Pennsylvania, the Court will look solely at its quality as realty, its quality of immobility, and will hold that being immobile, it is subject alone to the sovereignty of Maryland and that this sovereignty will not be yielded."
In Allender v. Sussan, 33 Md. 11, this Court, in speaking of the character of leasehold estate, said:
"For certain purposes under our laws a leasehold interest like the present under a lease for ninety-nine years, renewable forever, may have impressed upon it some of the qualities of real estate, but * * * it is still an estate less than a freehold; it does not descend to the heir but is assets in the hands of the executor or administrator to be administered and distributed by him as other personal property, under the authority of the orphans' court." Williams v. Holmes, 9 Md. 281; Culbreth v. Smith, 69 Md. 454; Devecmon v. Devecmon, 43 Md. 335; and in Noonan v. Kemp, 34 Md. 73, this Court quoting from Lord Loughborough, said:
"`It is a clear proposition,' says Lord Loughborough, `not only of the law of England, but of every country in the world, where the law has the least semblance of science, that personal property has no locality. The meaning of that is, not that personal property has no visible locality; but that it is subject to that law which governs the person of the owner; both with respect to the disposition of it, and with respect to the transmission of it, either by succession or by the act of the party. It follows the law of the person. If he dies, it is not the law of the country in which the property is, but the law of the country of which he was a subject, that will regulate the succession.' `And this doctrine has been constantly maintained, both in England and America, with unbroken confidence.'" Story's Conflict of Laws, sec. 380.
Under the authorities stated the court was undoubtedly right in holding that the distribution of the proceeds of the leasehold property should be under the laws of Pennsylvania, in which state the decedent had his domicile at the time of his death. There was also no error in the court's holding that the renunciation of the widow accelerated the vesting of possession of the remainders and that such vesting of the same did not await her death.
As stated in Randall v. Randall, 85 Md. 439:
"The rule followed by both the English and American courts is, that a widow's renunciation and election to take as against the will is equivalent to her death, unless it contravenes some manifest intention of the testator as expressed by the will."
In this case there is no expression of the testator found in the will manifesting such intention. Davis v. Hilliard, 129 Md. 348. The decree of the court below will therefore be affirmed.
Decree affirmed, with costs.