Opinion
June Term, 1837.
Where a testator directs land to be sold and the proceeds divided, it is not a conversion of the land into personalty out and out, but merely the appointment of a mode of division; and those entitled to the purchase-money take as devisees; and the money is not subject to the payment of debts until the personal estate is exhausted.
WILLIAM LAYDEN died in December, 1834, having duly made his last will and testament, whereof he constituted his daughter, Eliza Curtis, and his friend, Thomas Newby, executors; the last of whom alone proved the will and performed the functions of executor. By the will the testator devised to his wife for life his Sound plantation, and bequeathed to her sundry negroes and other specific chattels; devised to his son, Joseph, in fee, the tract of land called the Clayton tract, and bequeathed to him several negroes specifically; directed that three negro slaves, designated by name, and a tract called the Thomas Barclift tract, should be sold for the payment of his debts; bequeathed certain negroes specifically to each of his two daughters, Mary Jane and Eliza Curtis (wife of the defendant Skinner), and then devised, bequeathed and declared as follows: "It is my wish that the lands called the Dempsey Barclift tract, or say the Broad Neck tract, should be rented out for the benefit of my estate for the term of two years; and also my negro men, Will and Stephen" (the former of whom he had bequeathed to his daughter, Eliza Curtis, and the latter to his son, Joseph), "to be hired out for the term of two years for the benefit of my estate. Item. It is my wish that, after two years, the Broad Neck tract, or say the Dempsey Barclift land, should be sold at six and twelve months credit, by those who purchase the land to give good security, and the moneys to be equally divided between Mary Jane and Eliza Curtis, both my daughters; and, also, if there should be any moneys left after paying my just debts, should be equally divided between my two daughters as above." Thomas Newby, the executor, has filed his bill against the devisees and legatees, setting forth that he has applied the (489) residuary part of the testator's personal estate and all the funds arising from the sales of the negroes and tract of land specifically charged with the payment of testator's debts, and the rents of the Broad Neck tract, and the hires of the negroes, Will and Stephen, for two years; and has sold some of the negroes specifically bequeathed, and applied their proceeds also to the satisfaction of those debts; that he has sold the Broad Neck tract and applied a part of the proceeds of that sale to the satisfaction of debts; and that he has now a balance in his hands which he knows not to whom to pay, because of a controversy between the widow and the son of the deceased on the one hand, and the daughters on the other; the former contending that the proceeds of the sale of the Broad Neck tract ought to be regarded as in the nature of a pecuniary legacy, and therefore liable to abatement before their legacies, which are specific; and the latter insisting that the said proceeds are in the nature of land specifically devised and not liable for debts, except upon a deficiency of the whole personal estate. The defendants have answered. The daughters set up the claim to receive the proceeds of the Broad Neck tract undiminished because of the testator's debts; the widow joins with them in the assertion of this claim; and the son, who is a minor, submits his rights to the protection of the Court.
Kinney for Joseph Layden, the infant legatee.
Devereux for Skinner and wife and Mary J. Layden.
In our opinion, the daughters have clearly the right in this controversy. The general rule is indisputable that the personal estate is the first and natural fund for the payment of debts, and the real estate is not to be made liable thereto, except to supply the deficiency of the personal. It is sought, in this case, to subject the proceeds of the land devised to the daughters, because, by the direction of the testator to sell the land, he turned it, in the contemplation of a court of equity, into personalty, and made it a part of his general personal estate. This (490) position, to the extent to which it is pressed, is untenable. The real estate directed to be sold was, at the time of the testator's death, land. By the will it was to remain land until sold, and it was directed to be sold only for the convenience of division between the devisees. It was impressed with the character of personality so far as was necessary to effectuate the testator's purpose, but no further. Every person taking an interest under a will, in the produce of land directed to be sold, is in truth a devisee, and not a legatee. As he takes from the bounty of the devisor, he must receive what is given, in the quality which the devisor has impressed upon it. The devisor has given, not the land, but the price of the land; and although the trustee is not bound to sell if the cestui que trust will take the land itself, yet the land in the hand of the cestui que trust is, in equity, regarded as personality; and if he die without any act to change its quality, it is personalty as between his heir and executor. The devisor might, if he pleased (see Kidney v. Consmaker, 1 Ves. Jr., 436, and 2d ib., 267) have converted the land into money, out and out, and then, from the whole context of the will, it would have been open for consideration, whether it was made an auxiliary fund for the payment of debts or was thrown into the ordinary fund as a part thereof, or constituted the primary fund in exoneration of the personal estate. But even in these cases the executors take as devisees; it is not strictly a part of the testator's general personal estate, but real assets, applicable in their hands to the payment of debts, because devised to them in trust, to be so applied. And in England, however it may be with us, the proceeds of land so converted are held to be equitable and not legal assets. Barker v. May, 9 Barn. and Cress., 489 (17 Eng. Com. Law Reps., 426). But a conversion of land into money, directed for the benefit of the devisees, creates no charge upon the land for the payment of debts, and does not make the proceeds either legal or equitable assets in the hands of an executor. He holds these (491) proceeds simply as a trustee for the devisees. Gibbs v. Angier, 12 Ves., 413; and see Smith v. Claxton, 4 Mad., 484.
The bill submits to the Court also the quantum of commissions to which the executor is entitled. The ordinary tribunal for deciding on such a question is the County Court; and although when a court of equity is resorted to for the settlement of an estate, it may, as incidental to the exercise of this jurisdiction, determine that question also, it ought to have the materials before it, as far as practicable, to enable it to form an advised judgment. We should require for that purpose an examination, by a commissioner, of the nature and quality of the services rendered by the executor, and a report from him, before we acted upon the subject. This has not been moved for, and we should not direct it without a motion. It will produce costs which neither party may be willing to incur.
It is highly probable that the declaration of our opinion on the main question in controversy will enable the parties to come to a complete settlement. If it should not, either party may hereafter move in the cause as he may be advised.
PER CURIAM. Declare accordingly.
Cited: McBee, ex parte, 63 N.C. 335.