Opinion
09-11-1855
GAW v. HUFFMAN.
Baldwin, for the appellant. Patton and Stuart, for the appellee.
He had been counsel in the cause.
1. Testator says, " It is my will and desire that my just debts be paid out of my estate by my executors hereafter mentioned." The debts are not thereby charged upon testator's real estate.
2. Executor having exhausted the personal estate in payment of debts, and being largely in advance to the estate for payment of debts which bound the heirs, is entitled to stand in the place of the creditors whose debts he has paid, and charge the real estate. And the real estate in the hands of the devisees is liable in proportion to its value at the death of the testator.
3. A life estate in lands having been given to the widow in lieu of dower, and being of less value than her dower would have been, her life estate is not to bear any part of the burden of paying the debts.
4. The remainder, after the death of the widow, in the land devised to her for life, having been given to some of the devisees, their proportion of the debts is according to the value of their interest at the death of the testator.
5. The shares of some of the devisees in said remainder, are charged with the payment of certain legacies. The present value of the legacies at the death of the testator is also to be abated from such present value of the remainder, and the proportion of the debts is according to the value of the remainder so ascertained.
6. The legacies charged upon the remainder in the land, are to bear a proportion of the debts according to their value at the death of the testator.
7. The sum which at compound interest will produce the amount of the legacy at the death of the widow, is the present value: And the widow being dead, the period of her death is the time for the payment of the legacy.
8. Advancements made by the testator in his lifetime are not to be taken into the account in fixing the proportion of the debts which each devisee is to pay.
9. Under a mutual mistake as to the proportion of the debts of the testator which a legatee was bound to pay to the executor, the legatee assigned the legacy to the executor for the payment of the amount for which she was supposed to be liable. The assignment will only be allowed to stand as a security for the true amount for which the legatee is liable.
10. The legacy not being payable until the termination of a life estate, and the legatee being very needy; on that ground, too, the assignment will be held only as a security for the amount due from the legatee to the executor.
Robert Gaw died in 1829, having first made his will, which was duly admitted to probat in the County court of Shenandoah. He was a merchant doing business in Woodstock; and owned several houses and lots in the town, and a farm adjoining, called the Brubaker farm.
By the first clause of his will he says: " It is my will and desire that all my just debts be paid out of my estate by my executors hereafter mentioned." After directing that his mercantile business shall be continued for three years, and stating what advancements he had made to certain of his children, with which they were to be charged, he gives to his son Jacob R. Gaw a house and lot and an out lot; to his daughter Rebecca H. Gaw, other houses and lots; to Catharine Smith, a girl who had been raised by him, a house and lot during her life. He gives to his wife Rebecca Gaw one-third of the Brubaker farm during her life; and he gives the other two-thirds of that farm to his daughter Elizabeth Crawford, and his sons John Gaw and Robert Gaw, jr. for the life of his wife; and at her death, he gives the whole farm to them, subject to the following charges, viz: That after the death of his wife, Elizabeth Crawford was to pay Mary Huffman, another daughter of the testator, five hundred dollars, and the like sum to Rebecca H. Gaw; and John Gaw was to pay the like sum to these two daughters; which sums the testator made chargeable on the land. The residue of his estate, including the remainder in the house and lot given to Catharine Smith, he gave to be equally divided among his children; and he appointed Jacob R. Gaw and David J. Crawford his executors.
Crawford, who was the acting executor, seems to have closed his administration prior to 1836. In that year his administration account was settled, and a balance of three thousand one hundred and seventy-one dollars and seventy-eight cents, as of the 5th of February of that year, was reported in his favor. In this account the commissioner allowed the executor's commissions, and Crawford seems to have shared them with his coexecutor.
It seems to have been supposed by the parties, that each of the children was bound to pay an equal part of the amount for which Crawford was in advance to the estate; and he having purchased of John Gaw his interest in the Brubaker farm, and thus become liable to pay the legacies left to Mary Huffman and Rebecca H. Gaw, an arrangement was made with them, whereby they conveyed to Crawford so much of their said legacies as would satisfy their proportion of the debt due to him, which was fixed at one-fifth for each of them, and also some debts due to Crawford from them on individual transactions. These arrangements were made whilst Mrs. Barbara Gaw was still alive; and she lived until June 1846.
In January 1848, Mary Huffman instituted a suit in equity against the executors of Crawford and the heirs of himself and his wife, who had died in his lifetime, seeking to recover the legacy left to her by her father, and which had been made a charge upon the interest of Mrs. Crawford and John Gaw in the Brubaker farm. In this suit the other children of Robert Gaw were parties; and Rebecca H. Gaw filed a cross bill in the cause to recover her legacy.
The cause came on to be heard in September 1849, when the court held, that the will of Robert Gaw did not charge his real estate with the payment of his debts; but that Crawford's representatives were entitled to charge the real estate for so much of the amount due to him as was in payment of debts binding the heirs. That the land of each of the devisees was to be charged with the debts in proportion to its value at the time of the testator's death; and the incumbrance of the widow's life estate in any part of it was to be taken into consideration in estimating its value. That the legacies to Mary Huffman and Rebecca H. Gaw were to abate in the proportion which said legacies bore to the value of the two-thirds of the Brubaker farm on which they were charged. And a commissioner was directed to settle the accounts of the executors of Robert Gaw, disallowing commissions, and ascertain the amount which Crawford had paid of debts binding the heirs, and to apportion the same among the devisees according to the principles of the decree. And the commissioner was further directed to state the account between Crawford and Mary Huffman and Rebecca H. Gaw; and the assignments made by them of their legacies to Crawford were to stand as a security for what they respectively owed to his estate. And by consent of the parties, the property devised to Catharine Smith was not to be charged with any portion of the debts, and the bill was dismissed as to her.
The commissioner made his report, from which it appeared that after excluding the credit for commissions, there was due to the executor Crawford on the 3d of June 1846, the date of Barbara Gaw's death, the sum of three thousand four hundred and thirty-five dollars and twenty-seven cents, of which two thousand and seventy-six dollars and sixty-one cents was principal. In ascertaining the present value of the interests in the Brubaker farm devised to the testator's three children, after the death of Barbara Gaw, the value of her life estate was estimated up to the time she actually lived after the death of the testator; and so also in estimating the present value of the legacies directed to be paid at the death of Barbara Gaw. And the sum which at the death of Robert Gaw put out at compound interest would in the first case produce the estimated value of the widow's one-third of the land, and in the other would bring the legacy of one thousand dollars, at the death of the widow, was taken as the present value of the widow's thirds, and the legacies. And deducting the value of the life estate of Mrs. Gaw from the whole value of the farm, the one-third of the balance was the amount of Robert P. Gaw's interest in the farm, and the further deduction of the present value of the legacies from the two-thirds of the farm devised to Mrs. Crawford and Jacob R. Gaw, gave the amount of their interest in it. And having thus ascertained the value of the estate and legacies given to the different children, the debt due to Crawford was ratably apportioned among them.
The commissioner also stated the account between the executor Crawford and the legatees, by which it appeared that there was due on the 3d of April 1850 to Mary Huffman, after charging her with her proportion of the debt due to the executor, the sum of six hundred and twenty-five dollars and eighteen cents, and to Rebecca H. Gaw, after the like charge, the sum of two hundred and sixty-five dollars and forty cents: That Jacob R. Gaw's proportion of the debt due to Crawford was, on the 3d of June 1846, seven hundred and twenty-eight dollars and fifty-five cents, and of Robert P. Gaw, eight hundred and eighty-one dollars and fifty cents, on which there had been a payment, leaving but one hundred and thirty-one dollars and nineteen cents due in June 1846.
The commissioner's report was excepted to, because of the mode in which the present value of the legacies was ascertained; and because the advancements to the children were not taken into the estimate in fixing the amount of the debt to Crawford which each party was to pay.
In September 1850, the cause came on to be finally heard, when the court overruled the exceptions to the report, and made a decree in favor of the legatees against Crawford's representatives, and in favor of the said representatives against Jacob R. Gaw and Robert P. Gaw for the sums reported by the commissioner. From this decree Jacob R. Gaw applied to this court for an appeal, which was allowed.
Baldwin, for the appellant.
Patton and Stuart, for the appellee.
MONCURE, J. I think there is no error in the decree of the Circuit court.
The will of Robert Gaw does not charge his real estate with the payment of his debts. Whether such a charge is created by a will, is always a question of intention depending upon the construction of the whole will. It is so natural to suppose that a man in that solemn act intended to be just, that courts have taken very slight words in a will to imply a charge upon lands. Carr, J. in Downman v. Rust, 6 Rand. 587. " Courts of equity (said Lord Lyndhurst) have always been desirous of sustaining charges by implication for payment of debts, and the presumption in favor of them is not to be repelled by any thing short of clear and manifest evidence (from the will) of a contrary intention." Price v. North, 1 Philips' R. 85. It has therefore been established, as a general rule, that a direction by a testator that his debts shall be paid, charges them by implication on his real estate, either as against his heir at law or devisee. Ram on Assets, ch. 4, § 2, p. 57, 8 Law Libr. 39; Leading Cases in Equity 71, Id. 247. To this general rule there are exceptions; one of which is, where the debts are directed to be paid by the executors. " If the testator directs a particular person to pay, he is presumed, in the absence of all other circumstances, to intend him to pay out of the funds with which he is intrusted, and not out of other funds over which he has no control. If the executor is pointed out as the person to pay, that excludes the presumption that other persons not named are to pay." 2 Story's Equ. Jur. § 1247. When the executor is devisee of the real estate, a charge upon it will be generally implied by such a direction. But this will not be the case where the estate is specifically devised to a person who happens to be one of the executors. And even where the executors are also devisees, a mere general introductory direction to the executors will not operate as a charge if it is manifest from the whole will that it was not so intended. 2 Spence's Eq. Jur. 321, 322, 71 Law Libr. 249, and cases cited.
There is no difficulty in the application of these principles to the case before us. The first clause of the will which creates the charge, if any, is in these words: " 1st. It is my will and desire that all my just debts be paid out of my estate by my executors hereafter mentioned." The words " out of my estate" are the only words in this clause which make it peculiar, or can afford any room for doubt. Strike out these words, and the clause is in a very common form, the construction and effect of which, standing by itself, is well settled. It would charge only the estate in the hands of the executors. I have found no case in which the will contained these words. But I do not think they alter the sense of the clause. They do not mean the whole estate, but that portion of it which would come to the hands of the executors as such; the funds with which they were intrusted, and not other funds over which they had no control. This, I think, would be the true construction of the clause, standing by itself and unaffected by the context. But looking to the context for aid in its construction, there can be no doubt about it. By the 12th clause of the will the testator directs all his personal estate, except merchandise, to be sold by his executors for the payment of his debts, and gives them full power to sell his slaves, if necessary, for that purpose. This was the estate to which the testator doubtless referred in the first clause of his will; and it afforded, in his estimation, an ample fund for the payment of his debts. He had no idea that it would be necessary to sell any part of his real estate for that purpose. If by the first clause of his will he had merely directed his debts to be paid, without more, the implication of a charge upon his whole estate would not have been repelled by the 12th clause. But having directed them to be paid out of his estate by the executors, important light is shed upon the meaning of these words by that clause.
The first clause then is to be construed as if it had been a mere direction that the debts should be paid by the executors; and in order to ascertain out of what part of the estate it was intended they should be paid, it is only necessary to enquire what part of the estate would come to the hands of the executors as such. The whole personal estate would come to their hands; and that of course was charged by the will, as it was by the law. But none of the real estate would come to their hands or under their control; unless, perhaps, the house and lot devised to Catharine Smith for life, which was directed after her death to be sold, and the money arising from the sale to be equally divided among the children of the testator named in the will. It would be the duty of the executors to make that sale, no other person being appointed by the will for the purpose. Whether the proceeds of that sale would be applicable to the payment of debts under the first clause of the will, is unnecessary to be determined in this case, as no question is raised on the subject. It does not appear what has been done with that property; though the presumption is that the life tenant yet lives and has it in her hands. By consent of parties, the property devised to her for life was not charged with any portion of the debts, and the suit was dismissed as to her. It will be time enough after her death to determine the proper disposition to be made of that property, or the proceeds of the sale thereof. All the other real estate of the testator was given directly to the devisees, without any interposition of the executors, express or implied. A portion of it, it is true, is given to the appellant, who is one of the executors; but is given to him in his own right, and not as executor. And we have seen that where an estate is specifically devised to a person who happens to be one of the executors, it will not be charged with the debts of the testator by a mere direction to the executors to pay them. But certainly the devisee in such case ought to be the last person to complain that the land devised to him was not held to be so chargeable.
It having been ascertained by the commissioner's report in the case, that, after exhausting the personal estate of the testator, there still remained due to his executor David Crawford, on account of debts of the estate paid by him, a balance of three thousand four hundred and thirty-five dollars and twenty-seven cents, including interest to the 3d of June 1846; and it having been ascertained, or conceded, that the said executor had paid more than that amount of specialty debts binding the heirs, he was entitled to stand in the place of the creditors whose debts he had paid, and to charge the said balance upon the real estate of the testator; which was liable therefor in the hands of the devisees, in proportion to the value, at the death of the testator, of the estate devised to each of the devisees respectively. The widow was not chargeable with any thing on account of the said balance in respect to the devise to her; which was in lieu of, and of less value than, her dower. The incumbrance of her life estate was properly taken into consideration in estimating the value of the real estate; and the value of the said life estate was properly ascertained, and deducted from the value of that part of the estate of the testator to which it was attached. Indeed, there was no exception to the report of the commissioner, and no complaint of the decree of the Circuit court in this respect.
I think that the legacies of one thousand dollars each to Mary Huffman and Rebecca H. Gaw, charged upon the two-thirds of the Brubaker farm devised to Elizabeth Crawford and John Gaw, were subject to be abated on account of the balance due to the executor Crawford, and chargeable on the real estate of the testator; and that the portion of that balance for which the said two-thirds were liable, was apportionable between the proprietors of the said legacies and of the said two-thirds, the rate of apportionment being the proportion which the value of said legacies at the death of the testator, bore to the residue of the value of said two-thirds at that period, after deducting therefrom the said value of the legacies. There was at least as much reason in laying the charge upon the said legacies as upon the residue of the said two-thirds of the Brubaker farm. The legacies constituted a part of the subject of the said two-thirds, and were carved out of it. They were certainly not more specific in their nature than was the residue of the subject, and not more entitled to exemption from liability for the debts of the testator.
I think the mode, adopted by the commissioner, of ascertaining the value of the said legacies at the death of the testator, (by ascertaining what amount improved at compound, instead of simple interest, from that time until the death of the widow, when the legacies were payable, would be equal to the amount of the legacies,) was correct. That mode, in its application to such cases, received the sanction of the judges of this court in Wilson v. Davisson, 2 Rob. R. 384.
But I do not see how the mode of ascertaining the value of the legacies at the death of the testator can affect the appellant; as its only object is to ascertain the rate of apportionment between the two legacies of one thousand dollars each, and the residue of the subject on which they are chargeable. The portion of the balance due to the executor Crawford, for which that subject is liable, cannot be increased or diminished by the mode of its apportionment among the different interests in the subject. The only persons affected are the proprietors of those interests; and they do not complain.
I think the advancements made by the testator in his lifetime to his children were properly not taken into consideration in the apportionment of the balance due to the executor Crawford; and that the said balance was chargeable only on the real estate left by the testator at his death. The only ground for contending that the advancements ought to be considered in the said apportionment is, that they are directed in the will to be accounted for with the executors in the settlement and division of the estate; from which it is inferred that the testator intended to make all his children equal in the distribution of his estate. It is obvious that this direction does not refer to the specific devises of property made to his children respectively, but only to the residue of his estate undisposed of, which, by the 14th clause of his will, he directs to be equally divided among his children; and perhaps also to the money arising from the sale of the house and lot devised to Catharine Smith for life, which, by the 13th clause of his will, he also directs to be equally divided among his children. The executors would have to make the former, and perhaps the latter, of these two divisions; and in making them, he wished the advancements referred to in his will to be accounted for with them. But they would have nothing to do with the real estate specifically devised to some of his children, nor with the sums of money charged on a part of it in favor of his daughters Mary Huffman and Rebecca H. Gaw; and therefore the direction to account for the said advancements with the executors, in the settlement and division of the estate, cannot apply to the said real estate and sums of money, which would not come to the hands of the executors, and as to which no settlement or division would be made. The property advanced by the testator to his children in his lifetime was not a part of his estate at his death; and there is nothing in the will to affect the legal liability of the devisees, which is in proportion to the value of the property devised to them respectively.
In the assignments made by Mary Huffman and Rebecca H. Gaw respectively to David Crawford, they acknowledge themselves indebted to him, each in one-fifth of the balance due to him on his executorial account; and agree that their legacies shall be liable for the payment of the same respectively. Rebecca H. Gaw's due proportion of the said balance was in fact about one-fifth; but Mary Huffman's was much less than a fifth. I think the Circuit court properly regarded these parties as liable only for their due proportions of the balance, notwithstanding the assignments; and properly decreed the assignments to stand as security only for what they respectively owed to David Crawford's estate. The purpose both of the assignors and assignee was to secure only what was really due. They were mutually mistaken as to the proportion in which the devisees were bound to contribute to the payment of the debt, supposing them to be bound equally, instead of in proportion to the value of the estate devised to them respectively, and the assignments were executed under that mistake. They cannot be regarded as voluntary obligations, nor as admissions or compromises of asserted or disputed claims. They were without consideration, and therefore void, as to the excess of one-fifth of the said balance, over what was really due by the assignors respectively. See 1 Story's Equ. Jur. § 120-137, and notes; 2 Evans' Pothier, Appendix, No. xviii.
There are other considerations which render the assignments, and especially that of Mary Huffman, (as to which only the question seems to be material,) void to that extent. The parties were dealing with expectancies; with future, and not with present interests. Legatees, whose legacies were payable on a future and perhaps remote contingency, were dealing, in regard to them, with the person upon whom their payment would devolve. They were indebted to him, and to some extent must have been under his influenee. One of them, at least, Mary Huffman, was in very indigent circumstances. In this state of things, the utmost extent to which the assignments should be permitted to operate, is to stand as security for what is justly due from the assignors to the assignee. 1 Story's Equ. Jur. § 337, 338, 344.
An objection is taken, in the petition of appeal, to the account, as stated by the commissioner, between the coexecutors David Crawford and Jacob R. Gaw. No exception was taken to that account in the court below; and the objection in the appellate court, therefore, comes too late. But I think it is not well founded. It appears to rest only on the ground that David Crawford, who was the acting executor, in a former settlement with his coexecutor gave him credit for five hundred and three dollars and thirty-one cents, one-half of the commission allowed by the County court commissioner, who settled the executorial account. The commissioner of the Circuit court having disallowed the commission to the executors in their settlement of the executorial account, properly disallowed the credit for one-half of the commissions in the resettlement of the account between the executors. It would have been to the last degree unjust that David Crawford should not only render all the services for nothing, but be compelled, out of his own pocket, to pay one-half of the usual commission to his coexecutor, who rendered no service at all.
I am for affirming the decree.
The other judges concurred in the opinion of MONCURE, J.
DECREE AFFIRMED.