Martin v. Barger

Parker, J. The plaintiff seeks to recover judgment against the defendants for a balance of $187.25, alleged to — 673 — be due upon a promissory note executed and delivered by them to Elizabeth Hart, deceased, during her lifetime. The defendants claim that the entire indebtedness evidenced by the note has been discharged by the terms of the will of Elizabeth Hart, the original payee. Judgment was entered in favor of the defendants on the pleadings, and the plaintiff has appealed. The facts appearing by the pleadings may be briefly stated as follows: Elizabeth Hart died on September 13, 1903. Sometime prior to her death, the defendants became indebted to her in the sum of $1,300. This indebtedness was evidenced by the promissory note sued upon in this action. Interest was provided for therein at the rate of eight per cent per annum. Thereafter Elizabeth Hart made a will whereby she made a bequest to the respondent John A. Barger, her son, as follows: “I give and bequeath to my son, John A. Barger, the sum of one thousand dollars, to be paid as follows: Said sum to be credited on a promissory note I now hold against him for the sum of thirteen hundred dollars, provided, however, that in case I survive my said son, then said sum of one thousand dollars is to be equally divided among my children hereinafter enumerated.” After her death this will was admitted to probate in the probate courts of Cedar county, Missouri, and Thayer county, Nebraska. In the course of the administration of the estate, on December 1, 1905, the probate court of Cedar county, Missouri, ordered the administrator to credit upon the note the $1,000 specified in the bequest to Barger in the will, which was then done accordingly. Prior thereto there had been paid upon the note certain sums which, together with the $1,000, would pay the entire amount of the indebtedness, if the credit of the $1,000 be considered as made upon the date of the death of Elizabeth Hart, September 13, 1903. It is only because of the accumulation of interest after that date that any sum would be due upon the note. After the — 674 — credit of $1,000 was so made upon the note, it was sold by the administrator in pursuance of an order of the probate court of Cedar county, Missouri, and appellant thereby became the holder thereof. It was not necessary to use any portion of the bequest made to Barger for the purpose of paying claims against the estate, bequests, or expenses of administration. The note matured long before appellant became the holder thereof. It is not claimed that he is an innocent holder so as to free the note from defenses the respondents may have thereto. Appellant alleges in his reply: “Such proceedings were had in the matter of said estate in the probate court of said Cedar county, Missouri, that said promissory note was on the first day of December, 1905, duly credited in the sum of one thousand dollars in payment and satisfaction of the bequest made in said last will and testament of said Elizabeth Hart, deceased, and said promissory note was then, by order of said court, ordered to be sold, and was duly sold to plaintiff. ... “That thereafter such proceedings were had in each of said probate courts that the estate of said deceased within their respective jurisdictions was duly probated, all the debts against said deceased and the expenses of administration of said estate were duly paid, and the residue of the property of said Elizabeth Hart, deceased, was distributed in pursuance of said last will and testament and in accordance with the terms thereof. That the bequest of one thousand dollars made therein to the defendant Barger was duly paid and credited on the promissory note set out in plaintiff’s first cause of action herein, on the first day of December, 1905, in the due and legal course of the administration of the estate of said deceased in said Cedar county, Missouri. . . ; “That the order of said probate court of said Cedar county, Missouri, providing for the sale of said promissory note as alleged in plaintiff’s complaint, and the final orders of distribution of said estate, or either of them, have not been made void or in any manner modified, or appealed from by defendant Barger, or at all, but the same and each of the same are in full force, effect and virtue. . . .” It is contended by counsel for appellant: (1) that the Orders of the probate court of Cedar county, Missouri, were — 675 — in effect a final adjudication that the respondent Barger is not entitled to receive credit upon the note for the $1,000 as of the date of the death of Elizabeth Hart; and (2) that in any event such bequest was a general bequest and payable as such in course of the administration of the estate, and that this would result in the interest upon the note continuing to run until the $1,000 was actually credited upon the note. Was there such an adjudication by the probate court as renders the defense here invoked by respondents unavailing to them? Let us notice the real purport of the orders relied upon by appellant as constituting such adj udication, assuming that they are properly pleaded in the reply. The order for crediting the $1,000 upon the note was apparently not an order of distribution. The payment of claims and expenses of administration, and the final distribution of the estate, occurred after the order for the credit was made. There are no facts pleaded showing that respondent Barger accepted this credit as of the date it was actually made on the note, nor are there any facts pleaded showing that, by the terms of the order, it was assumed to thereby adjudicate the legal effect of the credit. We think that, so far as this order is concerned, its effect must be determined by the terms of the will, and that it did not amount to a construction of the will. Neither did the order for the sale of the note, after the credit of the $1,000 made thereon, amount to a construction of the will. An order made by a probate court for the sale of a note assumed to belong to an estate is far from an adjudication of the obligation of the maker thereon. The reply alleges that, after the payment of debts and expenses of administration, “the residue of the property of said Elizabeth Hart, deceased, was distributed in pursuance of said last will and testament and m accordance with the terms thereofThere is no other allegation indicating the terms of the distribution, and it is only by inference that the pleadings indicate there was a distribution by order or decree. We will, therefore, assume that whatever order of distribution the court made, it distributed the estate in this — 676 — manner. This language is in effect the same as if the court had distributed the esthte in the exact language of the will, and is therefore not a construction of the will at all, but leaves us to determine the nature of this bequest from the language of the will alone. We are of the opinion that, so far as the pleadings show, there has been no adjudication which prevents respondents from urging the defense here invoked by them. What, then, is the nature of this bequest, and when did respondent Barger become vested with his property right therein. In 3 Pomeroy’s Equity Jurisprudence (3d ed.), we find the following statement of general principles with reference to legacies, their nature and qualities : “Sec. 1130. With regard to their intrinsic nature and qualities, legacies are of three kinds: specific, general, and demonstrative. A specific legacy is a bequest of a specific article of the testator’s estate, distinguished from all others of the same kind; as, for example, a particular horse, or piece of plate, or money in a certain purse or chest, a particular stock in the public funds, a particular bond or other instrument for the payment of money. Whether a legacy is specific depends wholly upon the language of the will. ... A specific legacy only becomes operative in case the very article given continues to form a part of the testator’s estate at the time of his death. In such case the legatee acquires a title to the articles at the death, by virtue of the will, although the payment may be deferred, and must be obtained from the executor. Since his right of property is thus fixed, he is entitled to all income, profits, and proceeds arising or accruing on the article after the testator’s death, and before its delivery or payment to himself.” “Sec. 1132. The terms ‘general’ legacies comprises all those which are not either specific or demonstrative — that is, those which are not gifts of some identical article or fund forming part of the testator’s estate, nor gifts of a sum payable out of such an identified fund. They are, therefore, rather gifts of amounts than of things or pieces of property specially described and identified. . . . The peculiar effect of a general legacy is, that, instead of operating as a voluntary assignment of the identical thing to the legatee, and so taking effect only when the specific thing or fund remains in — 677 — existence as a part of the testator’s estate, it creates an obligation resting upon the executor to pay to the legatee the amount specified, if there are sufficient assets left in the estate.” “Sec. 1133. Demonstrative legacies are a peculiar kind which partake of the nature of both specific and general legacies, and combine the advantages of each. Demonstrative, legacies are bequests of sums of money, or of quantity or amounts having a pecuniary value and measure, not in themselves specific, but made payable primarily out of a particular designated fund or piece of property belonging, or assumed to belong, to the testator. Their effect is peculiar. Although made primarily payable out of a particular fund, these legacies do not fail — are not adeemed — because such fund may not exist as a part of the testator’s estate at his death, but they are then payable out of his general assets, like general legacies. On the other hand, if such particular fund is in existence as a part of the testator’s estate at his death, they are not liable to abatement in common with general legacies, but are entitled to payment under the circumstances in exactly the same manner as true specific legacies.” See, also, notes in 11 Am. Dec. 468 (Walton v. Walton, 7 Johns. Ch. 258), and 11 L. R. A. (N. S.) 55 (In re Snyder, 217 Pa. 71, 66 Atl. 157, 118 Am. St. 900); 2 Woerner, American Law of Administration (2d ed.), § 444. It seems to us that under these rules this must be regarded as a specific legacy. It consists of a gift of a specific thing; that is a specific credit upon a debt due from the legatee to the testator. The thing given can be identified and distinguished from other property of the testator. It did not involve the payment of a sum of money to Barger, either from the estate in general or from any particular funds or property of the estate. This view finds support in, Sholl v. Sholl, 5 Barb. 312; and Wheeler v. Wood, 104 Mich. 414, 62 N. W. 577. In both of these cases the legacies were held to be specific, notwithstanding they were in terms gifts of the amount or sum of certain indebtedness due from the legatees to the donors, like in this case, rather than gifts of the instruments evidencing such indebtedness. — 678 — In Davis v. Crandall, 101 N. Y. 311, 4 N. E. 721, and Smith’s Appeal, 103 Pa. St. 559, we have instances of gifts of certain sums from certain specific funds owing to the testator from third parties, which, gifts were held to be specific legacies. Since we conclude that this is a specific legacy, Barger’s right of property therein became fixed at the time of the death of Elizabeth Hart, and the estate could not thereafter profit by interest upon the note. So far as his rights are concerned, his obligation to the estate was reduced by the amount of the bequest, as if the $1,000 had then been credited upon the note. His property right in the credit was, of course, subject to the rights of creditors of the estate and expenses of administration; this, however, was only a possible charge upon his debt obligation to the deceased, which was found not to exist in fact, in the course of administration. Loring v. Woodward, 41 N. H. 391; Smith v. McKitterick, 51 Iowa 548, 2 N. W. 390; Proctor v. Robinson, 35 Mich. 284; 3 Pomeroy, Equity Jurisprudence (3d ed.), § 1130. The judgment is affirmed. Dunbar, C. J., Mount, Gose, and Fullerton, JJ., concur.