Opinion
No. 20927
Decided May 31, 1928.
Wills — Devise or legacy lapses, and testator dies intestate as to property, when — Property coming from deceased spouse descends equally to testator's next of kin, when — Executors and administrators — Debt secured by mortgage on realty, payable from personalty, when.
1. Where a devisee or legatee in a will dies prior to the testator, such devisee or legatee not being a child or other relative of the testator within the terms of Section 10581, General Code, and such will contains no residuary clause nor any provision showing any other intention of the testator, such legacy or devise lapses and such testator dies intestate as to such property named in such legacy or devise.
2. Where the property referred to in such lapsed legacy or devise came to the testator from a former deceased husband or wife, within the terms of Section 8577, General Code, and the testator dies without issue and there are no children or the legal representatives of children of such deceased husband or wife, such property descends pursuant to the provisions of Section 8577, General Code.
3. The general rule as to the order in which an intestate's property is liable for the payment of his debts is that the personal estate must first be applied and then the realty; and even though a debt is secured by mortgage on real estate, if it is the personal debt of the intestate it is to be paid primarily out of the personalty.
ERROR to the Court of Appeals of Medina county.
This is a proceeding to reverse the Court of Appeals of Medina county. The facts incident to the same are well stated in the brief of plaintiff in error and may be summarized as follows:
Dorothy M. Wall died April 3, 1923, without issue, and left surviving her a husband, William J. Wall, and an only married sister, Dora M. Baughman, the essential defendant in error. William J. Wall, the husband of the said Dorothy M. Wall, deceased, died February 20, 1926, without issue, and left surviving him an only married sister, Jessie Foreman, necessarily the one important plaintiff in error.
During the time Dorothy M. Wall and William J. Wall were living together as husband and wife, the Wall home, the real estate in the pleadings described, was purchased and the title recorded in the name of Dorothy M. Wall, and was thus of record at the time of her death. After her death and during the lifetime of the surviving husband, April 10, 1923 the title to this real estate was transferred to William J. Wall by affidavit, as permitted by statute and was thus of record at the time of his death.
During his lifetime and after the title to this real estate was transferred to him, William J. Wall, in April, 1923, conveyed this real estate by mortgage to F.L. Harding for $3,000; and in May of 1925 further incumbered this real estate for $1,210, by mortgage conveyance to the Medina County National Bank.
The equity of redemption in neither of these mortgage conveyances was ever taken advantage of during the lifetime of the said William J. Wall; nor by any one for him or his estate after his death for more than one full passing year before this litigation was started. Then in an original action in a court of competent jurisdiction, as plaintiff, the said the Medina County Bank sought foreclosure of the equity of redemption contained in the conveyance to it by William J. Wall, and, as a cross-petitioning defendant, F.L. Harding prayed for the same relief, and both these original parties are now defendants in error.
William J. Wall, during his lifetime and during the lifetime of his wife, Dorothy M. Wall, January 9, 1914, made a will in which he devised all his property to his wife, Dorothy M. Wall. After the death of Dorothy M. Wall, the sole beneficiary under the provisions of said will, and five days after the death of said testator, William J. Wall, February 25, 1926, a court of competent jurisdiction, the probate court of Medina county, Ohio, having jurisdiction of the parties and the subject of the action, admitted this will to probate, and no exception has ever been taken to its probation and no action has ever been brought to contest its validity.
The probate court, after admitting this last will and testament of William J. Wall, deceased, to probate, duly appointed Jessie Foreman as administratrix of the estate of said William J. Wall, deceased, with this, his last will and testament, annexed.
Immediately Jessie Foreman qualified and entered upon her duties as the properly appointed, duly qualified, and acting administratrix of the estate of her deceased brother, William J. Wall, with this, his last will and testament, attached to her letter of appointment, and as such administratrix she paid all his debts from his personal property, except the two notes held by Harding and the Medina County National Bank and secured by the mortgage conveyances made and delivered by William J. Wall during his lifetime.
Jessie Foreman, as administratrix of the estate of William J. Wall, deceased, next entered into a contract with William Jacque, defendant in error, wherein she agreed to sell and convey to him the real estate owned by William J. Wall at the time of his death, subject, however, to the mortgages of Harding and the Medina County National Bank.
Jessie Foreman, as an individual, and as the only heir at law of her dead brother, ratified and approved her contract to sell this real estate as administratrix of the estate of the said William J. Wall, deceased, with the will annexed.
This succinctly states the facts upon which are founded the four important propositions of law involved in the litigation. The common pleas court of Medina county, in deciding this case, refused:
(1) To foreclose the past-due mortgages of Harding and the Medina County National Bank.
(2) To enforce specific performance of the contract for the sale of this real estate between Jessie Foreman, as administratrix of the estate of William J. Wall, deceased, and William Jacque, subject to these mortgages, though sought by Jacque and approved by Jessie Foreman as an individual.
It decreed:
(3) That Jessie Foreman, as administratrix of the estate of William J. Wall, must sell personal property of William J. Wall, deceased, and use the proceeds to pay the mortgage claims of Harding and the Medina County National Bank.
(4) In conclusion announced that Dora Baughman was entitled to a one-half interest in the real estate of William J. Wall, deceased, in the pleadings described, free and clear of these mortgage liens, though created and established by Wall during his lifetime, and of all taxes and expenses, though valid and subsisting liens against this real property.
On appeal, these propositions were unqualifiedly and without modification approved by the Court of Appeals of the Ninth Appellate District of Ohio in session at Medina, Ohio. A petition in error is now filed in this court to reverse such judgment.
Messrs. Beatty Albietz and Mr. A.D. Davis, for plaintiff in error.
Mr. Frank Spellman, Mr. John A. Weber, Mr. Frank Heath, Mr. Edward Blythin and Mr. Walter D. Meals, for defendants in error.
Two questions are presented by this record: (1) Did William J. Wall die intestate? (2) Shall the personal property in the estate of William J. Wall be subject to pay the debts secured by mortgages on the real estate before selling the real estate to pay such claims?
As to the first proposition, William J. Wall made his will on January 9, 1914, several years prior to the death of himself or wife Dorothy M. Wall, his wife, died April 23, 1923 He succeeded to all her property, including the real estate in question by virtue of Section 8574, General Code. He died in February, 1926. At the time of his death, when the will took effect, the sole beneficiary under the will had previously died. Such will therefore did not become effective so as to invest title to his property in such deceased beneficiary, the record disclosing that she left no living issue or heirs of issue.
It is a general rule that if a legatee or devisee dies before the testator, the legacy or devise lapses. 28 Ruling Case Law, 336; 40 Cyc., 1941; 2 Page on Wills (2d Ed.), 2068, Section 1242. From the sequence of dates above set forth, William J. Wall must have known the result of the lapsing of this legacy, as he made no effort to change his will after his wife's death, and there is nothing in the will to disclose that the testator intended to prevent a lapse. There is no residuary clause in the will; nor does the will show a devise or legacy to a child or relative of the testator, who dying before or after the making of the will, leaving, issue surviving the testator, as provided in Section 10581, General Code, might have prevented a lapse. William J. Wall died intestate as to the property that he inherited from his wife. We therefore find that the real estate in question passes, under Section 8577, General Code, one-half to the sister or the deceased wife of William J. Wall, and one-half to his own sister, Jessie Foreman.
The second question is whether or not the notes secured by the mortgages on the real estate should be paid out of the personal estate of William T. Wall, the same being sufficient to pay all his debts.
We are of opinion that the personal estate of a deceased person is primarily liable for his personal debts, whether they be secured or not. The law contemplates that the debts of the deceased shall be paid by his executor or his administrator out of the personal estate, and as soon as he "ascertains that the personal estate in his hands will not pay all the debts of the deceased, * * * he must apply to the probate court or court of common pleas for authority to sell the decedent's real estate." Section 10774, General Code. In the case of Andrews, Assignee, v. Johns, 59 Ohio St. 65, 51 N.E. 880, in the opinion by Spear, J., at page 76 (51 N.E. 883), it is said:
"It is further contended that in the case of an assignee the sale of real estate is peremptory, while with an administrator it is optional. We know of no such distinction. The statute, Section 6136 [Revised Statutes], does not seem to countenance it, and no decision is cited in its support. We do not believe any can be found. The administrator has no occasion to resort to the real estate unless he ascertains that the personal estate will be insufficient to pay the debts, but if he does ascertain that fact his duty to proceed to sell appears to be just as imperative as in the case of an assignee."
Until it is ascertained that the personal estate of the deceased is insufficient to pay his debts, the real estate belonging to the deceased may not be sold. Wood, Admr., v. Butler, 23 Ohio St. 520.
A decision upon the foregoing two points is determinative of the issues in this case, and the finding and judgment of the Court of Appeals is therefore affirmed.
Judgment affirmed.
MARSHALL, C.J., ALLEN, KINKADE, ROBINSON, JONES and MATTHIAS, JJ., Concur.