Opinion
No. 33729.
May 29, 1939. Suggestion of Error Overruled June 12, 1939.
1. WILLS.
Under will directing executors to pay testatrix' just and legal debts, burdening land devised with one-half of mortgage debt, and providing that, should testatrix die before April in any year, devisee should be entitled to possession of land immediately after probate of will, taxes due on land for year preceding testatrix' death were payable by estate and not by devisee, since they were testatrix' fully matured "debt" under statutes (Code 1930, secs. 1643, 1675, 3122, 3229).
2. EXECUTORS AND ADMINISTRATORS.
The decision of an umpire named in will that taxes due on devised realty for year preceding testatrix' death should not be paid by estate was not conclusive on devisee where only disagreements between executors concerning any matter or policy in execution of will was directed to be submitted to umpire.
3. EXECUTORS AND ADMINISTRATORS.
Under will naming umpire to settle disagreements between executors concerning any matter or policy in execution of will and expressing desire that executors might act in perfect harmony, power vested in umpire was intended only to bring about harmony between executors, and umpire had no power to construe will except to that extent.
4. EXECUTORS AND ADMINISTRATORS.
The decision of an umpire named in will to settle disagreements between executors concerning any matter or policy in execution of will that taxes due on devised land for year preceding testatrix' death should not be paid by estate was not conclusive on devisee where testatrix directed that executors should pay her just and legal debts, and there was nothing in entire will contrary to that intention (Code 1930, secs. 1643, 1675, 3122, 3229).
5. EXECUTORS AND ADMINISTRATORS.
Taxes or debts on realty which are assessed and become due before decedent's death are payments to be made primarily from the personalty, even though thus to pay them would reduce or defeat specific or residuary legacies.
6. TAXATION.
A devisee of land who paid taxes due for year preceding testatrix' death to prevent a forfeiture of land was not a "volunteer," and he became subrogated to the rights of the state.
7. EXECUTORS AND ADMINISTRATORS.
Though the decisions of an umpire named as such in a will and invested with power to determine questions arising in construing will are looked on with favor by the courts, when an umpire decides contrary to the terms of the will and contrary to the existing statutes and the law of the state with reference thereto, his decision cannot stand.
8. EXECUTORS AND ADMINISTRATORS.
Where testatrix directed executors to pay her just and legal debts, personal estate was sufficient to pay debts, and testatrix manifested no intention that devisee of land should pay taxes due for year preceding testatrix' death, it was executors' primary duty to pay taxes in so far as they constituted a debt of the estate, and payment of taxes by devisee to prevent forfeiture entitled him to recover amount thereof from executors.
9. EXECUTORS AND ADMINISTRATORS. Wills.
Under will providing that, if testatrix should die before April in any year, devisee of land should be entitled to possession immediately after probate of will, rents accruing for year in which testatrix died were also granted to devisee, testatrix having died before April 1, and hence statute providing that rents accruing during year of a decedent's death should be part of personal estate was not applicable, and executors could not offset rents for that year against payment of taxes by devisee (Code 1930, sec. 1643).
10. EXECUTORS AND ADMINISTRATORS.
A devisee of land could not recover drainage taxes paid by him from executors named in will directing them to pay all of testatrix' just and legal debts, since drainage taxes do not become a "debt" of the landowner for which suit may be brought.
APPEAL from the chancery court of Washington county; HON. J.L. WILLIAMS, Chancellor.
Ernest Kellner, of Greenville, for appellant.
The will provides that her executors shall pay the debts of Mrs. Eatherly and devises the land to appellant charged with one-half the mortgage debt on the entire tract of land. These are the only provisions in the will as to the payment of the debts of Mrs. Eatherly.
Sections 1643, 1675, Code of 1930.
The provisions of the will of Mrs. Eatherly that the executors pay all her debts, except, of course, the mortgage debt specifically charged against the land devised to appellant, and the foregoing sections of our code demonstrate the error of the Chancellor in his holding that appellant should pay the taxes on the land devised to him.
The taxes in question were due and owing by Mrs. Eatherly on December 15, 1937.
Sec. 3229, Code of 1930.
The taxes in question were a debt of Mrs. Eatherly recoverably by action against her.
Sec. 3122, Code of 1930.
The will of Mrs. Eatherly directs her executors to pay her debts. Section 1675, Code of 1930, makes it mandatory upon an executor or administrator to pay all taxes due on the property of an estate. Section 1643, Code of 1930, makes the personal estate of a decedent, if sufficient, as in this case, primarily liable for the debts of a decedent, whether he died testate or intestate, in the absence of a direction to the contrary, as the mortgage indebtedness against the land devised to appellant in this case.
The general rule as to the order in which a decedent's property is liable for the payment of his debts is that the personal estate must be first applied, and then the realty, and the application of the rule in a particular case is not prevented by the fact that it will result in depriving legatees of participation in the estate.
It is very generally considered that, even though a debt is secured by a mortgage or other lien on land, if it is a personal debt of the decedent, it is to be paid primarily out of the personalty, although the personalty cannot be applied to relieve land of a lien which does not involve any debt of decedent.
Taxes or assessment on realty, if assessed or becoming due before decedent's death, are payable primarily from the personalty, but those accruing subsequently are a charge on the land.
24 C.J. 460, sec. 1262; Gordon v. James, 86 Miss. 719; Anderson v. Gift, 156 Miss. 736; Gidden v. Gidden, 176 Miss. 98; Tonnar v. Wade, 153 Miss. 722.
I concede, of course, that a testator may, as Mrs. Eatherly did, designate and appoint an umpire to settle disagreements in the administration of his or her estate, and that the decision of an umpire so appointed is final, subject, of course, to certain well defined restrictions.
So far as I have been able to find there is no decision of this court squarely in point on the question. However, there are certain related principles which have been definitely decided by this court.
A testator may dispose of his property as he wishes if it does not violate law.
Low v. Bank, 162 Miss. 53; Holcomb v. Holcomb, 173 Miss. 192.
The intention of the testator (construing the will as a whole) is the polar star for inquiry.
Low v. Bank, 162 Miss. 53.
Under either one or both of these principles the contention that the decision of Judge Wasson is final and binding on the appellant is manifestly unsound.
69 C.J. 124, sec. 1166; Pray v. Belt, 1 Peters 670.
I concede, of course, that the decision of Judge Wasson, although it does not assign any ground therefor, was made in utmost good faith, however, I respectfully submit and earnestly urge (a) that it is contrary to the plain intention of the testator in that it attaches a condition to the devise to Wilson R. Eatherly not attached by the testator: (b) it contradicts the clear provision of the will that the executors pay all the debts of the testator except the mortgage indebtedness against the devise to Wilson R. Eatherly; and (c) it violates our statute and the decisions of our court that the lands of a testator cannot be resorted to for the payment of debts (unless specifically charged therewith) until the personalty is exhausted.
Although not an issue, the Chancellor held that if the taxes on the land devised to the appellant should be paid by the executors, thereby and under the provisions of section 1643, Code 1930, the appellant would be liable for rent of the land devised to him for the year 1938. With utmost deference to the learned Chancellor, I am frank to admit that I do not follow his reasoning in this holding, and I assert that Section 1643, Code 1930, does not sustain the same.
Under the provision of the will creating the devise, if, as she did, Mrs. Eatherly should die before April 1, the appellant was to have possession of the land as soon as the will was admitted to probate. Therefore, regardless of the liability or not of the appellant for the payment of the taxes on the land for the year 1937, he could not be liable for rent of the land for the year 1938.
G. Ramsey Russell and Wynn, Hafter Lake, all of Greenville, for appellees.
Immediately upon the death of Mrs. Annie P. Eatherly on January 11, 1938, the lands devised to Wilson R. Eatherly became the property of Wilson R. Eatherly, the appellant, and Wilson R. Eatherly became the owner of those lands within the meaning of Section 3122.
Beach v. State, 178 Miss. 336, 173 So. 429.
Wilson R. Eatherly then was personally responsible and liable for the payment of those taxes and being so personally responsible his obligation to pay those taxes was primary. The payment by Wilson R. Eatherly of the taxes for the year 1937, on the lands devised to him, therefore, was a payment of his own personal obligation. Therefore, having paid his own obligation, the appellant is not entitled to reimbursement of this payment from the appellees, or from any other person.
The appellant relies upon Section 1643 and 1675 of the Mississippi Code of 1930. Section 1643 is not in point in that it simply provides that the property of the decedent shall stand charged with payment of all debts and funeral expenses and expenses of settlement of the estate. We have already assumed, for the purposes of argument, that Mrs. Eatherly was responsible for the payment of these taxes and that the taxes constituted a debt against her estate.
Section 1675 is not pertinent for the reason that it simply imposes upon the administrator or executor the duty to pay taxes on land belonging to the estate.
In all the cases that we have examined in regard to this point, the facts were that it was necessary to carry on the administration of the estate for some period of time holding both real and personal assets in the estate. Specifically in such a situation, it would be the duty of the executor or administrator to pay the taxes accruing against the real and personal property in order to protect the estate and the creditors of the estate. Moreover, in none of the cases decided under this section is there any intimation or decision that if executor or administrator should pay such taxes he would not be entitled to reimbursement from the devisee of the lands for any sums paid out for taxes upon such lands.
There are no cases in this state where the exact question at issue has been determined. We respectfully submit that neither equity nor justice will be served if the appellant, who was benefitted under the will of the deceased, Annie P. Eatherly, to the extent of a valuable section of land, should be allowed reimbursement from the estate of Annie P. Eatherly for taxes already paid by him upon the lands devised to him.
Assuming further, for the purposes of argument, that under our statutes, and the decisions of this court, the deceased, Mrs. Annie P. Eatherly, was personally obligated for the payment of the 1937, taxes upon the lands herein involved, and further that Wilson R. Eatherly was not liable as owner of said lands under the provisions of Section 3122, Miss. Code of 1930, for the payment of 1937, taxes thereon, we submit that the opinion and decision of Judge Wasson, named by the testatrix, Mrs. Annie P. Eatherly, in her will as umpire in the event there should be a difference of opinion on any matter between her executors, was final and binding.
Unless the decision of an umpire does violate a clear rule of law or does depart from the clear intention of the testatrix, the decision of such an umpire is final and binding and not subject to review by the courts.
Assuming, for the purposes of argument, that the appellant is correct in his contentions that the appellees should indemnify him for payment of 1937, taxes on the lands devised to the appellant, still his recovery must be limited to amounts paid out for taxes other than drainage taxes. Drainage taxes do not constitute a personal obligation on the land owner and therefore do not come within the rule of law which the appellant seeks to apply to the present case.
Nickey v. State, 167 Miss. 650, 145 So. 630.
By the same token, separate school district taxes do not and cannot constitute a personal debt against the testatrix or against the estate of the testatrix and therefore the appellant cannot claim indemnity or contribution therefor from the estate of the testatrix.
Argued orally by J.A. Lake, Jr., for appellees.
This is an appeal from a decree of the chancery court disallowing and denying the probated claim of the appellant, Wilson R. Eatherly, for taxes paid on February 1, 1938, by the appellant, which he claimed in his petition was the debt of the decedent and payable out of the funds of her estate. On January 11, 1938, Mrs. Annie P. Eatherly died testate. Appellees, Eustis H. Winn and John C. Bridges, were named in the will as executors and the will had been probated prior to February 1, 1938.
For the reason that a decision of this case requires an examination of the will, certain items thereof, and digest of others, are as follows: "Item 1. I desire that all my just and legal debts be paid as soon after my death as possible by my executors hereinafter named, but to be paid as hereinafter directed."
In Item two there was bequeathed to Virginia Eatherly Owens certain jewelry.
"Item 3. I give to Edward C. Hargrave the sum of $3,000.00, which sum shall be paid to him by my executors after all my debts shall be paid."
Item four devised a certain store building to Cary M. Payne.
Item five devised to Raburn Eatherly a one-third interest in certain real property.
"Item 6. I am the owner of the major portion of Sections 17 and 18, Township 19, Range 8 West, Washington County, Mississippi, which lands are subject to the lien of a deed of trust executed by W.R. Eatherly and myself on the 28th day of December, 1925, for the use of First Joint Stock Land Bank of New Orleans, and which deed of trust is of record in the office of the Chancery Clerk of said county in Mortgage Book 209, page 111, et seq., and there is now owing and secured by said deed of trust about the sum of $30,000.00. I hereby devise to Wilson R. Eatherly, son of L.R. Eatherly and Lois Eatherly, all that portion of said Section 17, Township 19, Range 8 West, which is included in and described in said deed of trust; however, said land so devised shall be and is hereby specifically charged with one-half the amount owing to said First Joint Stock Land Bank of New Orleans, and said one-half of said debt shall be paid by said Wilson R. Eatherly. Possession of said land shall be delivered to said Wilson R. Eatherly at the end of the year in which my death may occur, unless my death should occur prior to April in any year, then, and in that event, that is, if I should die prior to April in any year, he shall be entitled to possession of said land immediately after the probate of this will." (Italics ours).
Item seven devised to Luther M. Winn certain land.
Item eight provides for a marker to be placed at the head of her grave.
"Item 9. All the rest, residue and remainder of my estate, of every description, I devise and bequeath to my granddaughter, Anne Hargrave Bridges. I suggest that she sell, as soon as may be practicable, the lands in Washington County, Mississippi, known as `Oakwood Plantation.'"
"Item 10. I hereby nominate and appoint John C. Bridges and Eustis H. Winn executors of this will, with full power and authority to carry out all the provisions herein contained. And I do direct that they shall not be required to enter into any bond nor to make any report or accounting to any court of any of their acts as such executors. In case either of them shall die or refuse to act as such executors, then the survivor or other one shall act fully herein. And said executors are herein and hereby authorized and empowered to make a renewal of the deed of trust hereinbefore mentioned, or to borrow money with which to pay off the debt secured by said deed of trust and to execute a deed of trust on the lands conveyed by said deed of trust hereinbefore mentioned for the purpose of securing a sufficient amount to pay off said deed of trust and the cost and expense of obtaining a loan.
"In the event of any disagreement between said executors as to any matter or policy in the execution hereof, such disagreement shall be submitted to Ben. F. Wasson for his opinion or decision, and the opinion or decision of said Ben F. Wasson, in writing, shall be decisive of such agreement and they shall act in accordance therewith. However, it is my desire and hope that said executors may be able to, and will, act in perfect harmony in all matters with which they may have to deal."
This section further provided that Winn, as executor, should be compensated, and that John C. Bridges should not receive compensation because his wife is the principal beneficiary therein. This will was executed December 11, 1937. Subsequent to the time of the will and before January 1, 1938, the testatrix executed two codicils which in no way affects the question herein involved.
By his petition, the appellant alleged that he had paid the taxes for the year 1937 on Section 17 devised to him, amounting to $971.75, and had duly probated his claim therefor against the estate of said testatrix; that the executors refused to pay the claim and that he had paid the taxes due on the land devised to him in order to protect his interests therein. The probated claim shows that drainage taxes amounting to $97.36 are included therein.
The executors, the appellees here, answered the motion and set up that under the terms of the will the executors had disagreed as to whether said taxes should be paid or not, and that pursuant to the provision of Item ten of the will, said disagreement was submitted to Ben. F. Wasson and he had rendered a written opinion that said taxes should not be paid by the estate of Annie P. Eatherly, that said decision was a final and complete determination of the question, and binding upon all the parties. The executors further set up that under Section 3122, Code 1930, the taxes became a personal debt owed by Wilson R. Eatherly immediately upon the death of Annie P. Eatherly, and that, if the decedent were liable for any portion of the taxes, it would only be one-half thereof. The oral evidence offered on the trial of the case showed that the personal property was sufficient to pay the debts, and that this claim herein issued had not been paid.
Winn, one of the executors, testified that he desired to pay the claim, and Bridges did not. They submitted this difference to the umpire, Wasson, who gave a written opinion that the claim should not be paid. The opinion of Wasson was not offered in evidence, but there was no objection to the oral evidence as to its contents.
The chancellor held: (1) that from all the provisions of the will, the testatrix did not intend to burden the land devised to her granddaughter with the taxes against the land given to petitioner; (2) that the decision of the umpire was binding on the appellant; and (3) that under Section 1643, Code 1930, the rent of lands accruing during the year of the death of the testatrix, for the year 1938, was an asset of the estate, and, if the executors were compelled to pay taxes, they could require Eatherly to pay rent for the land for the year 1938.
At the time of her death, the testatrix herein owed the state and the taxing power the taxes due on the land for the preceding year, 1937. The taxes were a lien against the land on and after January 1, 1937. She retained and had possession of it during that entire year. These taxes were due and owing by Mrs. Eatherly on and after December 15, 1937. See Section 3229, Code 1930. The taxes were a debt accrued against Mrs. Eatherly at the time of her death and prior thereto, and she was subject to an action for debt. Section 3122, Code 1930.
In no uncertain terms, the will herein directs the executors to pay her just and legal debts, and there is no provision of the entire will that in the slightest degree indicates that she had any intention to impose a tax burden upon any of the lands devised by her to the several parties named in the will. The provision in Section one thereof as to the payment of her just and legal debts certainly includes directly and affirmatively taxes which were imposed by the law upon her as her debt. By Item six, the testatrix devised to W.R. Eatherly, appellant here, Section 17 and burdened the land with one-half of the mortgage debt, or about $15,000, and then made clear that she imposed no further burden on the appellant with regard to this land, because she provided that if she died prior to April in any year, he should be entitled to possession of said land immediately after the probate of the will. She died on January 11, 1938, and the will was probated during that month. She therefore invested him with the right of possession, as well as the title to the land, so that the will of the testatrix was that the rent of the land, under the circumstances here, was devised to this appellant.
The testatrix further recited in the will that the residuary devisee and legatee was a principal beneficiary therein; for instance, it is clear that Section 18 was under the lien of a mortgage at the time of her death, to the amount approximately of $15,000, yet she did not charge this residuary devisee with any of that debt as she did the appellant here with reference to the land devised to him. In other words, from the terms of the will, it is manifest that the appellant took the lands upon which he paid the taxes here subject only to the mortgage debt described in Section six. The will directs the executors to pay her just and legal debts. Section 1675, Code 1930, requires an executor or administrator to pay all taxes due on the property of an estate. Section 1643, Code 1930, makes the personal estate of a decedent primarily liable for debts of the deceased whether testate or intestate. Here the personal estate was sufficient therefor, and it is so admitted in this case, in the absence of a direction in the will to the contrary. The only contrary provision directly in point is the charge upon the lands of the appellant for the mortgage debt. There is no intimation in the entire will, nor in any section, item, or sentence thereof, that indicates any other intention on the part of the testatrix. There is no basis in the instrument here before us upon which an intention of the testatrix to free herself from this debt is intimated.
It is said that the decision of Wasson named as umpire in Section ten is conclusive upon this appellant as to his probated claim. There are two obvious reasons why the decision of the umpire cannot control in this case. (1) There was only to be submitted to Wasson for settlement a disagreement between the two named executors as to any matter or policy in the execution of the will, and the executors were required to act in accordance therewith, followed by the expression: "However, it is my desire and hope that said executors may be able to, and will, act in perfect harmony in all matters with which they may have to deal." It is our opinion that this power vested in Wasson as umpire only brought about, and was intended only to bring about, harmony between the executors, and the umpire was not invested with the power to construe the will except as indicated above. In other words, the decision of Wasson was the equivalent of bringing about an agreement of the two disagreeing executors, and the matter stood as if they had agreed not to pay the probated claim in the first instance.
(2) The second reason is that Wasson, as umpire, has decided contrary to the manifest intention of the testatrix — that her just and legal debts be paid by her executors. There is nothing in the entire will contrary to this manifest intention. It was their duty to have paid the taxes which had accrued and become due in the year 1937. See Section 1675. The general rule is that taxes or debts on realty which are assessed and become due before decedent's death, are payments primarily from the personalty, even though thus to do would reduce or defeat specific or residuary legacies. See Gordon v. James, 86 Miss. 719, 39 So. 18, 1 L.R.A. (N.S.), 461; Anderson v. Gift, 156 Miss. 736, 126 So. 656; Gidden et al. v. Gidden, 176 Miss. 98, 167 So. 785; and 24 C.J., p. 460, sec. 1262, especially last paragraph.
The appellant was not a volunteer, he paid these taxes on the first day of February, 1938, to prevent a forfeiture of the land. He became subrogated to the rights of the state. See Prestridge v. Lazar, 132 Miss. 168, 95 So. 837.
If the umpire in this case was vested with the power to determine whether or not from the will the debt for taxes was due by the estate, we are of the opinion that his decision in this case is contrary to the express unambiguous and unequivocal direction of the will, as well as of the statute, and there can be found in the will no plausible reason for deducing therefrom that the testatrix intended to charge the lands devised to the appellant with the taxes for a past year. It was her debt, fully matured, and not the debt of the appellant.
While we look with favor upon the decisions of an umpire, named as such in a will, invested with the power to determine the questions that arise in the construction of a will, when the umpire decides contrary to the terms of the will as in this case and also contrary to the existing statutes and the plain law of this state with reference thereto, then the decision of the umpire cannot stand. This seems to be the general rule as to the decisions of umpire vested with power so to do by the weight of authority elsewhere. In 69 C.J., Sec. 1166, p. 124, is found this statement with reference to umpires named in wills: "Such decision may not be contrary to the plain intention of the testator, nor contradict a clear provision of the will. . . . where he (the umpire) violates some statutory requirement on which the dissatisfied party had a right to rely," his decision cannot control. See Pray v. Belt, 1 Peters 670, 7 L.Ed., p. 309. In McBrayer, Ex'or, v. McBrayer's Ex'x, 95 Ky. 475, 26 S.W. 183, it is said that the decision of the umpire will not authorize a construction of the will as given by the widow (final umpire) to be followed so as to destroy, devise, or change the intent of the testator.
From what has been already said, we conclude that it was the primary duty of the executors of this estate to pay the probated claim insofar as it constituted a debt of the estate of the testatrix, and therefore the payment by the devisee of the taxes on his land to prevent forfeiture thereof entitled him to recover the amount of the claim, in the condition of this estate, from the executors. He paid the taxes to prevent the forfeiture of the lands by sale, and was subrogated to the rights of the state in so doing. Neither is there any merit under the views already expressed in the contention that the executors would be entitled to offset the rents of the land for the year 1938 against the payment for taxes, which accrued and were due against the estate for the year 1937 because the testatrix in the case at bar specifically devised the land, the title to the land, and the right of possession to the appellant, and this she had a right to do so long as her personalty was sufficient to pay the debt here claimed. And therefore the provision of Section 1643 that the rent of the lands accruing during the year of the death of the decedent, whether she died testate or intestate, shall be a part of the personal estate of such decedent, has no application under the terms of the will herein. The right of possession granted in the will to appellant also granted him the rents accruing for the year in which she died, her death having taken place before April 1st of that year. The fact is that the appellees did not set up this contention as a defense to this claim.
There is in the probated claim an item for drainage taxes, which does not become the debt of the owner of the land for which suit might be brought (see Nickey v. State, 167 Miss. 650, 145 So. 630, 146 So. 859, 147 So. 324), and therefore the claim for drainage taxes should be deducted from the amount of the probated claim, and the decree here will be for the amount thereof, less the drainage taxes, in favor of the appellant.
Reversed and decree here for the appellant.