Opinion
No. 3913.
Decided April 4, 1950.
Although the Probate Court has exclusive, original jurisdiction, over decrees of distribution, the Superior Court may, in the exercise of its equity power, give advice to fiduciaries concerning their duties in administering estates prior to the filing of final accounts and decrees of distribution. The sale by a guardian of the testatrix's real estate and contents of the house to prevent waste, under license of the Probate Court after she was adjudged mentally incompetent but prior to her death, and the conversion thereof into cash, still unexpended, did not operate as an ademption of a general devise of the real estate and house contents.
BILL IN EQUITY, for the construction of the will of Carrie Estelle Bigelow and directions as to the duty of the administrator. Prior to her death the testatrix was mentally incompetent and on May 7, 1944 the said George H. Duncan was appointed guardian. At that time her estate consisted of ten savings bank books with a deposit of $2,000 in each in the joint names of the ward and others and two annuities, which items are hereafter referred to as class A; four savings bank books in the name of the ward amounting to $2,674.45, which will be referred to as class B; and one-half interest in a house and building lot and the contents of said house. The books of class A provided that the dividends should be paid to the ward so long as she lived.
After the deceased was pronounced insane, the guardian under license from the Probate Court sold the real estate and the contents of the house and deposited the proceeds of $2,735.83 in a separate savings account, hereinafter referred to as class C. The purpose of the sale was to prevent waste.
The ward died October 26, 1947. Her will dated December 26, 1919 and a codicil dated November 4, 1935 were duly probated.
At the present time the plaintiff has in his hands the balance of deposits under class B and the class C account intact.
Paragraph three of the will provided as follows:" Third. I give and bequeath all my stocks, bonds, cash, bank deposits, notes and evidence of indebtedness or securities, of whatever nature, not otherwise disposed of. . ." The one-half interest in the house and contents was not specifically given under the will and codicil but would have passed, if still the property of the testatrix, under the residuary clause. This is as follows: "Fourth. All the rest, residue and remainder of my estate, real, personal and mixed, wherever found and however acquired, I give, devise and bequeath. . . ." The beneficiaries under these two paragraphs are not the same.
The administrator asked advice and instructions as follows:
"(1) All expenses of the guardianship were paid out of income from Class A and Class B, and from the principal of Class B. Should these expenses have been allocated to the funds and income derived from Class C proportionally?
"(2) From which of the funds now in the hands of said Duncan should the bills of the estate and the expenses of the administration be paid, from Fund B, Fund C, or from both proportionally?
"(3) Do the proceeds from the sale of the real estate and the contents of the house, sold by said Duncan as guardian, and represented by Class C, go into the Trust Fund created by paragraph third of the will, or into the remainder of the estate to be distributed under paragraph fourth of the will?"
All questions of law raised by said questions were reserved and transferred without ruling by Leahy, J.
John R. Spring, for the plaintiff.
The defendants entered no appearances.
A preliminary question arises concerning the right of the administrator to have the will construed. It was held in Podrasnik v. Trust Company, 92 N.H. 65, that the sole procedure for an executrix who desired a will construed for purposes of distribution was "to file an account of her settlement of the estate accompanied with a petition for a decree of distribution of the balance found in her hands upon the settlement."
It is true that whether a court of equity will advise or direct is a matter of discretion. 33 C. J. S. 1109. In the present case the Superior Court has exercised its discretion in favor of the plaintiff and transferred for ruling so far as the plaintiff may be entitled as a matter of law the questions asked by him.
While the Probate Court has exclusive, original jurisdiction of decrees of distribution (R. L., c. 360, s. 7), this does not prevent the Superior Court from giving advice to a fiduciary concerning his future handling of an estate. So far as the Podrasnik case holds otherwise, it is overruled. "If the probate court has jurisdiction to construe a will or deed of trust, as an incident of its authority to pass upon accounts, or make a decree of distribution, it is not to be doubted that the superior court still has the frequently exercised power to advise a fiduciary as to the law governing his future conduct of the trust." Rockwell v. Dow, 85 N.H. 58, 67. This jurisdiction of the Superior Court is due to its equity powers. "Matters affecting the conduct of fiduciaries which have not been definitely placed by statute within the exclusive jurisdiction of probate courts are still cognizable in equity." Wentworth v. Waldron, 86 N.H. 559, 561.
The following are some of the cases in which an executor (or adm'r w. w. a.) was given advice involving the construction of a will previous to the filing of a final account and a petition for a decree of distribution. Franklin National Bank v. Gerould, 90 N.H. 397; McAllister v. Elliot, 83 N.H. 225; Blaisdell v. Coe, 83 N.H. 167; Glover v. Baker, 76 N.H. 393; `Chase v. Moore, 73 N.H. 553; Gardner v. Gardner, 72 N.H. 257; Goodhue v. Clark, 37 N.H. 525. Moreover, a decree of direction and advice concludes the parties upon all points that were adjudicated. McAllister v. Elliot, supra.
It may be noted that Laws 1947, c. 90, provides an alternative remedy which in certain cases may be more expeditious for ascertaining requested instructions.
The plaintiff in his brief states: "The real question at issue is the construction of the will with reference to the real estate, and the contents of the house, which at the time of the testatrix's death had been converted into cash by the plaintiff as guardian and deposited in savings banks." Do the proceeds pass under the third or the fourth paragraph of the will?
Although the authorities elsewhere are divided, it has been settled in this jurisdiction that the guardian of an insane or incompetent testator cannot convert the subject matter of a specific devise or bequest so as to work an ademption thereof. Morse v. Converse, 80 N.H. 24. The conflict in authority is said to be due to the fact that some courts have ruled that the intention of the testator must control so that ordinarily there would be no ademption, while others have said that the true test is whether the property bequeathed remains in specie. 57 Am. Jur. 1090. Without considering evidence of intention other than that found in the will and in the nature of the change, the court said in the Morse `case, supra, 26: "it is clear that there can logically be no ademption of the legacy unless the change is itself of such a character as to establish a change in testamentary intention. Consequently a change of which the testator was ignorant and which he did not authorize is not evidence of a change in such intent." Accordingly, it was held that there was no ademption so far as the proceeds of the subject of the specific legacies could be traced.
The view taken in this jurisdiction has support elsewhere. Wilmerton v. Wilmerton, 176 Fed. 896; In re Cooper's Estate, 95 N. J. Eq. 210. "If the proceeds of such sale [a sale by the guardian of an insane testator], collection, etc., have not been expended for the benefit of the testator and can be traced, it is generally held in the United States that the sale, collection, and the like by the guardian does not adeem a specific devise or legacy; and that the devisee or legatee takes the proceeds as far as they can be traced." 4 Page on Wills 388.
Although the above authorities relate to a specific devise or legacy, whereas the gift of the real estate and contents of the house in the present case was general, a similar result should be reached. If the same reasoning is followed as in the Morse case that there was no ademption of the proceeds that could be traced because there was no intention of the testatrix to that effect, it would result here that there would be no ademption of the house and contents because there was no intention of the testatrix that there be any change in the gift under the residuary clause. The beneficiaries intended should take rather than those under a different paragraph. The administrator is advised in answer to the third question that the funds of class C belong in the remainder of the estate to be distributed under the fourth paragraph.
The legacy of cash and bank deposits under the third paragraph was gift of specific property according to its kind or class. Malcolm v. Malcolm, 90 N.H. 399, 401. As such it should not be "charged with any part of the expenses of administering the estate" (ib.) that may be satisfied from the residue. The bills of the estate and the expenses of administration should be paid from class C funds.
In answer to the first question, there is nothing to indicate that the guardianship expenses were not properly paid from funds of class B.
Case discharged.
All concurred.