Farber's Estate

Opinion by Williams, J., Testator died September 5,1900. His wife, executrix under his will, died October 8,1916, without filing an inventory or account. Louis Goerlitz, executor under her will, was cited by the administrator d. b. n. c. t. a. of Farber to file an account of his decedent’s executorship. The account showed a debit of $6,200, received from the sale of two pieces of real estate, one in February, 1905, and the' other in April, 1915, and claimed credit for $7,077.60. Stark filed exceptions, which were dismissed by the court after surcharging the accountant with $664.67, as to which vouchers had not been submitted. Stark appealed from the decree. Farber’s will provided (1) that his debts be paid; (2) that his burial lot be ornamented and cared for; (3) that certain real estate be given his wife absolutely; (4) that she should have a life estate in “the remainder of my estate”; (5) that any property remaining at her death was to be divided among his nieces and nephews; (6) that his wife should have power to “sell and convey any and all......real estate, if in her discretion, it appears to be for the best interest of my estate......”; and appointed her executrix. [85] The widow having the power of consumption, so much only, of the personal estate as remained at her decease was to be accounted for; and as the heirs acquiesced without complaint in the fact that no inventory was filed by her, and it being admitted that the exceptant could not prove any personal estate came into the possession of the accountant, the debit column will be taken as correct; particularly as the law is that “where a person has two funds to draw upon for living expenses, one his own individual estate, and the other from the estate of another in which he has a life interest with power to consume, in the absence of evidence to the contrary, there is a presumption that he would expend the latter before drawing upon the former”: Moschzisker, J., in Richey’s Est., 251 Pa. 324, 328. Clause 6, of the will, gives a power to sell for the best interest of the estate. The expenses of administration and several debts of record had to be paid. Where it is necessary to sell to carry out the purpose of a will, there is a conversion into personalty, as of the time of the sale, and the fund loses its identity as realty: Watt’s Est., 168 Pa. 431, and see Battenfeld v. Kline, 228 Pa. 91. The sale was made to pay the expenses of administration, which are a charge on the real estate: Reynold’s Est., 195 Pa. 225. If the executrix advanced money to pay debts of the decedent, the lien of which had been lost through failure to comply with the statute, accountant cannot claim credit for such sums: M’Curdy’s App., 5 W. & S. 397. It is not clear from the record which credits belong in this class. If the lien was properly preserved, accountant is entitled to credit: Bentley’s Est., 196 Pa. 497. It will, therefore, be necessary for the court below to reexamine the account and surcharge accountant with the payments of debts of George Farber, the lien of which had not been preserved. Appellant contends Mrs. Farber borrowed $500 to pay debts, and duplicated the item by claiming credit for paying it back. The record does not disclose such trans [86] action. On the contrary, counsel for exceptant admitted at the audit that the $500 claim was a debt of the decedent. A number of items for repairs, insurance, interest on encumbrances, and municipal improvements were claimed as credits. A life tenant must preserve the demised estate in as good condition as it is received, natural depreciation excepted. Many of the credits claimed are for what Paxson, J., termed, in Datesman’s App., 127 Pa. 348, 359: “trifling improvements and repairs.” The general principle there expressed is that “the life tenant cannot of his own motion improve the remainder-men out of their estate.” For permanent improvements, adding to the value of the inheritance, a life tenant is only rateably liable, especially if assented to or acquiesced in by the remaindermen: Wright’s Est., 234 Pa. 580; Hoyt’s Est., 236 Pa. 433. To determine the apportionment of the expense between the life tenant and remaindermen, the equities must govern, and the credits claimed are, in many cases, inequitable in view of the fact that Mrs. Farber received more than $7,000 in rentals in the sixteen years of enjoyment of the income. The life tenant had an insurable interest in the property : Louden v. Waddle, 98 Pa. 242, as had the remaindermen : 16 Cyc. 632. A life tenant may insure with the consent of the insurer, in the interest both of remainder-men and himself, and holds the funds in excess of his insurable interest in trust for the remaindermen: Welsh v. London Assurance Corporation, 151 Pa. 607. The value of the estate insured in this case was the life tenant’s interest, plus that of the remaindermen. Mrs. Farber received the benefit of the protection of her life interest, and should, therefore, be surcharged with a portion of the cost equal to the premiums which would have protected her insurable interest. The interest upon encumbrances was properly charged to the estate, as accountant claimed no credit for interest [87] on funds advanced to administer the estate, substantially equal in time and amount to tbe encumbrances. Tbe credits claimed for money paid for municipal improvements were properly charged against tbe estate in remainder, but tbe life tenant received tbe benefit of them in rentals during her enjoyment of tbe estate, and should be surcharged with interest thereon. Tbe accountant represents decedent as executrix, and not as life tenant, but tbe court can work out tbe equities arising from tbe dual capacity in which Mrs. Farber served, and prevent further proceedings. Tbe decree is reversed, and tbe record remitted with direction to reopen tbe account, classify tbe credits claimed, and surcharge accountant with tbe items improperly included in tbe account.