Opinion
12-23-1903
HORTON v. HOWELL et al.
Irving E. Salmon, for complainant. W. W. Cutler, for defendant. Mary C. Howell. John M. Mills, for defendants. William S. Howell and others. Charlton A. Reed, for defendants Abram D. Brown and others.
Suit by George E. Horton against Mary C. Howell and others. Decree determining rights of legatees under the will of Barnabas C. Horton, deceased.
Irving E. Salmon, for complainant.
W. W. Cutler, for defendant.
Mary C. Howell. John M. Mills, for defendants.
William S. Howell and others. Charlton A. Reed, for defendants Abram D. Brown and others.
STEVENS, V. C. Barnabas C. Horton, being possessed of personal and real estate, made a will by which he gave certain specific and other legacies. He devised his dwelling house to his daughter Mary, and concluded as follows: "All the rest and residue of my estate, both real and personal, I give, devise, and bequeath to my two daughters, Hannah B. Brown, wife of Abram D. Brown, and Mary C. Howell, wife of George W. Howell, to them, their heirs, and assigns forever, and in case of the decease of either of said daughters before my decease, the share or portion by this item given to such one, shall go to her lawful issue." After his death his executors filed an account in which they are charged with a balance of principal of $771.28, less $65.08 to be deducted therefrom. A legacy of $4,000 remains unpaid, and the question is whether its payment is charged on the residuary real estate, so far as there is no personalty to pay it.
There can be no doubt that, under the language of the residuary clause in question, the residuary real estate is chargeable with the payment of legacies (Corwine v. Corwine, 24 N. J. Eq. 579) if the personal estate be insufficient to pay them (Congregational Church v. Benedict, 59 N. J. Eq. 139, 44 Atl. 878; on appeal, 62 N. J. Eq. 812, 48 Atl. 1117). Here it is conceded that the personal estate has been nearly exhausted in the payment of debts, legacies, and expenses of administration, and that there is not enough left to pay the legacy of $4,000. But the contention is that the exhaustion of the personalty has been caused, not by payment of debts and legacies, but by the expenses of administration, and that some of these latter should not be taken into account in estimating the deficiency. The executors are charged in their account, as approved by the orphans' court of Morris county, with $7,817.23. They are allowed for disbursements $6,708.49. Among these disbursements are included a judgment note, specifically bequeathed, and testator's debts. It is admitted that these, together with executor's commissions and surrogate's fees, should be deducted from the above sum of $7,817.23 for the purposes of the ascertainment. In addition are other items aggregating $2,285.32, which represent the difference between the amount of a mortgage, inventoried at its face value, and the amount actually realized from it. It is too clear for argument that this is a proper allowance. As shown by the result, the testator's estate was not as great, by the sum allowed, as it was supposed to have been. Making these deductions, there is not enough left to pay the $4,000; and consequently, on any rule of construction, the land is subject to the charge of the legacy, and must be decreed to be sold. But counsel's main contention is that in the account are Items amounting to $1,631.72, which represent the cost of a litigation between the executors and one of the heirs; that these items were not within the contemplation of the testator when he made his will; and that therefore he could not have intended to charge them, either directly or indirectly, upon the land. But the same argument would hold good of the personalty. He could not have intended that the fund primarily devoted to the payment of the legacies should be diminished by a litigation not within his contemplation at the time he made his will. I do not know of any principle on which the Court of Chancery can distinguish between the different items of an account, approved by the orphans' court. The expenses of administration are looked upon as incident to the payment of debts and the settlement of the estate. Personette v. Johnson, 40 N. J. Eq. 179; Hattersley v. Bissett, 52 N. J. Eq. 695, 30 Atl. 86. If the testator contemplated that his residuary devisee should have his real estate, so he contemplated that his legatees should have their legacies, with this difference, however: that the legatees were to be preferred. He gave the residuary devisees only that which remained after the legatees were paid. Let it be once conceded, as here it must be conceded(for the proper tribunal has passed upon the question), that the personal estate applicable to the payment of the legacies has been properly and lawfully diminished by the expenses in question; and it follows necessarily that the legacies, so far as there is a deficiency of personal assets, must be raised out of the real estate, for so the will directs. A testator must be held to contemplate that his personal estate, so far as necessary, will be devoted to the payment of expenses properly incurred in its settlement, for such is the law, and such has been the practice from time immemorial; and so "the rest and residue" referred to by the testator in the residuary clause must be taken to be the rest and residue that remains after such expenses, inter alia, have been paid.