Opinion
July 3, 1928.
1. WILL: Real Estate: Mortgage Debt: Discharge: Statute. The rule of the common law authorizing the devisee of real estate to call upon the executor to exonerate the devised land by discharging a mortgage debt out of testator's personal estate, was abrogated by the statute (Sec. 512, R.S. 1919) declaring that an encumbrance upon real estate, for the purpose of paying money, shall not be deemed a revocation of any will relating to the same estate, but the devise shall pass and take effect, subject to the encumbrance.
2. ____: ____: ____: ____: Exception in Will. If real estate, at the time the will was made, was encumbered by a deed of trust to secure a note executed by the testator, the mortgage debt cannot be exonerated out of the testator's general personal estate, unless authority to so exonerate it is to be found in the will itself.
3. ____: Mortgage Debt: Exoneration: By Direction to Pay Debts. A clause in the will that "all my just debts and funeral expenses be paid" is not equivalent to a direction to pay out of the general personal estate, a note, executed by testator, secured by a deed of trust upon real estate devised unconditionally by another clause to named devisees. The debts of a decedent are required by law to be paid, and such a formal clause in a will is only declaratory of the law, and does not evidence a clear intention that such mortgage debt is to be paid out of the personal or residuary estate.
4. ____: ____: Apportionment: Life Tenant and Remaindermen: Statute. Where the testatrix devised real estate to her husband during his natural life and the remainder in equal parts to four others, the statute (Sec. 188, R.S. 1919) does not declare that the life tenant and remaindermen shall pay a mortgage debt, secured by a deed of trust upon the real estate, according to their respective interests. That statute provides that when a secured claim is allowed against an estate, the same shall not be paid until such security has been exhausted, and says nothing as to how the mortgage debt is to be apportioned.
5. ____: ____: Duty of Life Tenant and Remaindermen: Interest and Principal. Where real estate, encumbered by a mortgage, is devised to one for life and to others in remainder, it is the duty of the life tenant to pay the interest on the mortgage debt, but he is not required to pay the principal when it becomes due or thereafter, but if, in order to preserve his life estate, he pays the principal, he is entitled to reimbursement or contribution from the remaindermen, and is entitled to a lien on the remainder, or, in other words, he is subrogated to the rights of the encumbrancer.
Corpus Juris-Cyc. References: Estates. 21 C.J., Section 94, p. 958, n. 2; p. 959, n. 18. Subrogation, 37 Cyc., p. 443, n. 26. Wills, 40 Cyc., p. 2064, n. 69, 70.
Appeal from Randolph Circuit Court. — Hon. Allen W. Walker, Judge.
REVERSED AND REMANDED ( with directions).
Higbee Mills for appellants.
(1) The court erred in refusing to charge the interest of plaintiff in the land in question with the amount due on the outstanding deed of trust lien of $5000 and interest, for the following reasons: (a) The will disposes of all the property and effects of the testatrix in a complete and concise manner. By the first paragraph the testatrix directs that all of her debts and funeral expenses be paid. By the third paragraph this plaintiff is given a life estate in all of her real estate, worth, as agreed at the trial, $18,000. By paragraph 7 he is made residuary legatee. Immediately after the death of the testatrix the will was duly admitted to probate; this plaintiff qualified as executor, duly administered on the estate, accepted, received and retained all the legacies therein created for his benefit. By accepting the benefits under the will, he is conclusively presumed to have accepted its burdens — the only burden being that, out of the estate of the testatrix, which she, through her business acumen had assembled, this $5000 debt be paid. (b) The proposition that one cannot accept the benefits of a will and escape its burdens is fundamental. Austin v. Collins, 297 S.W. 36; Lynch v. Jones, 247 S.W. 123; Schorr v. Etling, 124 Mo. 47; Burgess v. Bowles, 99 Mo. 543; Pemberton v. Pemberton, 29 Mo. 413; Davidson v. Davis, 86 Mo. 443; Mosely v. Bogy, 272 Mo. 325; Headington v. Woodward, 214 S.W. 967; Stoepler v. Selberberg, 220 Mo. 270; Wood v. Trust Co., 265 Mo. 525; Ross v. Church, 272 Mo. 107; Schuster v. Morton, 187 S.W. 2; Hines v. Hines, 243 Mo. 497. (c) Where inconsistent remedies exist the adoption of one is an election, and binding. Tower v. Compton Hill Co., 192 Mo. 393; Bigelow on Estoppel (5 Ed.) 673. The filing of the will, qualifying as executor, inventorying and distributing all the property in accordance with the provisions of the will, constitutes an election. Austin v. Collins, 297 S.W. (Mo.) 36; Ross v. Church, 272 Mo. 107; Mosely v. Bogy, 272 Mo. 329. Should a testator devise his property to A and by the same will devise A's property to B, if A accepts under the will, B is entitled to A's property so devised to him. Lindsley v. Patterson, 177 S.W. 832; Wood v. Trust Co., 265 Mo. 525; Schuster v. Morton, 187 S.W. 2; Fox v. Windes, 127 Mo. 511; Pemberton v. Pemberton, 29 Mo. 414; Story Eq., sec. 1076; Pemberton v. Pemberton, 29 Mo. 414. (2) Even though the $5000 was secured by a deed of trust, nevertheless, the personal estate was the primary fund from which it should have been paid. Knight v. Newkirk, 92 Mo. App. 258; O'Day v. O'Day, 193 Mo. 93; Brant v. Brant, 40 Mo. 66.
M.D. Campbell and Chas. E. Murrell for respondent.
(1) Since there was no specific direction on the part of the testatrix that the note and deed of trust should be paid out of the personal estate, we must look to the will to ascertain the intention of the testatrix, and this intention may be ascertained from the entire instrument. Technical rules must yield to the obvious intention of the testatrix as gathered from all parts of the will. Knight v. Newkirk, 92 Mo. App. 258; O'Day v. O'Day, 193 Mo. 93; Brant v. Brant, 40 Mo. 266; Peck v. Fillingham, 199 Mo. App. 277. (2) It was manifestly the intention of the testatrix that the defendants' remaindermen should assume and discharge this incumbrance. Testatrix must have had in mind the idea of leaving to plaintiff a life estate for his support and maintenance during the period of his natural life. Being desirous of securing to him an income sufficient for his support, she gave to him a life estate in realty that was conveyed to her "for her sole and separate use." Unless it is manifest from the will itself, that incumbered real estate devised shall have the amount of the incumbrance paid out of the assets of the estate, such real estate passes to the devisee subject to such incumbrance. Peck v. Fillingham, 199 Mo. App. 286. (3) To hold that the entire burden of this mortgage must be borne by the plaintiff is to nullify the express provisions of the statutes, and would defeat the very purpose of the law as enacted by the Legislature. Secs. 188, 512, R.S. 1919; Knight v. Newkirk, O'Day v. O'Day, and Brant v. Brant, supra.
Martha R. Gates died testate at her home in Kirksville, Missouri, February 5, 1923, the owner of personal property and the following described real estate:
"All of the south one-third of Lot Eight in Block Twelve of the original town (now city) of Kirksville, Missouri, described as follows: Commencing at the southwest corner of said Lot Eight and running thence north eighteen feet, thence east one hundred and eight feet, thence south eighteen feet, thence west one hundred and eight feet to place of beginning."
The pertinent parts of her will are as follows:
"1st. I will that my just debts and funeral expenses be paid.
"3rd. All of my real estate, I give, devise and bequeath to my husband, Harry Gates, to have and hold during his natural life, and at his death the same shall pass in equal parts to Thomas Rice, Ellen Burchett, Grace Tarr and Adah Reddish.
"7th. All of the remainder of my property, I give, devise and bequeath to my husband, Harry Gates."
She left surviving her Harry E. Gates, her husband, and collateral heirs. No children were born of the marriage. Harry E. Gates was appointed administrator with the will annexed. He qualified and administered upon the estate, but did not pay a note for $5000, executed by deceased and secured by a deed of trust on the above described land. His final settlement was made February 16, 1924, and he was discharged. Her estate was solvent, and no rights of general creditors or legatees are involved.
This proceeding was started by the husband, Harry E. Gates, filing suit against all the collateral heirs of the deceased to determine the title to said land. The petition was conventional, but it seems the plaintiff intended at the time of filing the suit to rely on a deed executed by deceased on the day of her death, conveying to him said land. All of the defendants defaulted except the collateral heirs named in the third clause of the will. When the case was called for trial, the plaintiff, by leave of court, withdrew his petition and announced that he would proceed to trial upon the issue as joined by the answer filed by defendants, the reply of plaintiff thereto, and the reply of defendants to the reply of plaintiff.
Thus, the issue tendered by the pleadings was the right of the defendants to have the land exonerated from the lien of the deed of trust out of the personal property held by plaintiff as residuary legatee under the will. On this issue the trial court entered judgment, as follows:
"The court further finds it was not the intention of the testatrix, Martha R. Gates, that all of said $5000 note and interest should be paid out of the personal estate, but that same should be paid out of the respective interests of the plaintiff and said defendants therein; that the reasonable value of said premises is $18,000, and that plaintiff is 53 years of age, and that the portion of said $5000 note to be charged against the interest of the plaintiff shall be ascertained by the mortality tables, and the court finds said sum to be $2996.40, and the amount to be charged against the interest of said defendants is $2003.60; said sum represents the part of the principal each shall pay, and all unpaid interest shall be likewise apportioned.
"The court further finds that the warranty deed recorded in Book 101, page 181, by agreement of the parties hereto, is to be canceled, set aside and for naught held.
"Wherefore, it is ordered and decreed by the court that the plaintiff is the owner of Lot 8, Block 12, of the original town, now city, of Kirksville, Adair County, Missouri, for and during his natural life and that, subject to said life estate, the defendants, Ellen Burchett, Adah Reddish, Grace Tarr and Thomas Rice are the owners in fee thereof as tenants in common; that the interest of Harry E. Gates be charged with $2996.40 and his portion of the unpaid interest on the $5000 note, secured by deed of trust on said premises, and that the interest of said defendants be charged with $2003.60 and their portion of said interest: it is further ordered that the warranty deed from Martha R. Gates to plaintiff. Harry E. Gates, recorded in Book 101 at page 181 of the deed records of Adair county, Missouri, be and the same hereby is canceled, set aside and for naught held; and it is further ordered that said life tenant keep said premises insured against loss by fire and storm for the ample protection of all the parties interested pending this litigation. One-half of lawful costs assessed against plaintiff, and the other half against defendants."
After unavailing motions for a new trial and in arrest of judgment, both plaintiff, and defendants named in the third clause of the will, appealed. However, plaintiff has abandoned his appeal.
The question for solution calls for a consideration of Section 512. Revised Statutes 1919, as follows:
"A charge or encumbrance upon any real or personal estate, for the purpose of securing the payment of money or the performance of any covenant or agreement, shall not be deemed a revocation of any will, relating to the same estate, previously executed; but the devises and legacies therein contained shall pass and take effect, subject to such charge or encumbrance."
This section has been construed by this court in the case of Hannibal Trust Co. v. Eizea, 315 Mo. 485, 286 S.W. 371. In that case we held that the rule of the common law authorizing the devisee of real estate to call upon the executor to exonerate the devised land by discharging the mortgage debt out of the testator's personal estate was completely and wholly abrogated by said Section 512. So, if the land in the instant case is to be exonerated out of the personal estate, authority must be found in the will.
Defendants contend the direction in the will of deceased to pay her debts is equivalent to a direction to pay the $5000 note out of the personal estate. We do not think so. The debts of the deceased are required by law to be paid, and this formal clause is only declaratory of the law. In construing a similar clause in a will under consideration in the Hannibal Trust Co. case, supra, we said:
"We do not regard the language of the testator used in Item 2 of his will, directing that all of `my just debts, including funeral and cemetery expenses, be first paid out of my personal estate,' as evidencing a clear and unmistakable intention on his part that the mortgage indebtedness shall be paid out of his personal or residuary estate, for the reason so clearly stated in the Estate of Porter, 138 Cal. l.c. 622, wherein that court said: `Of course, in any case, the testator may direct that the mortgage debt be paid, or use such words as clearly show such intent. Some stress is laid upon the direction in the first clause of the will to "pay all my just debts," but in this case we attach little importance to the words used in the formal manner in which they are used. They are much like the formal meaningless terms of endearment and pious phrases printed in the formal part of blanks for making wills.' A similar thought is expressed in Meyer v. Cahen, 111 N.Y. l.c. 274, where that court said: `The fact that the testator in the first clause of his will directed the payment of his debts as soon after his decease as conveniently could be done we do not regard as material. Such a clause is usually a purely formal one and works no change in the disposition of the testator's property.'"
Thus, it appears we have recently ruled on the exact question presented on this appeal against defendants.
Plaintiff insists that the life tenant and the remaindermen should pay this indebtedness according to their respective interests, citing Section 188, Revised Statutes 1919, as supporting this contention. This section provides that when a secured claim is allowed against an estate, the same shall not be paid until such security has been exhausted. We are unable to find in this section any authority sustaining the contention. In fact, no such authority is given by law or the will.
The general rule as to the duty of a life tenant with reference to encumbrances is as follows:
"The duty of a life tenant to preserve the estate includes the obligation to keep down the interest upon existing incumbrances, but he is not compelled to pay off the principal sum when it becomes due or thereafter, and it is a general rule that a life tenant, who in order to preserve the estate pays off an incumbrance upon the fee, is entitled to reimbursement or contribution from the reversioners or remaindermen to the extent of their interest in the land; by paying off the incumbrance the tenant acquires a lien on the reversionary interest or is subrogated to the rights of the incumbrancer."
It follows that the decree is reversed and the cause remanded with directions: (1) to enter a decree canceling the warranty deed from Martha R. Gates to Harry E. Gates, recorded in Book 101 at page 181, of the deed records of Adair County, Missouri; (2) that plaintiff. Harry E. Gates is the owner of the real estate in controversy for the term of his natural life, and that, subject thereto, the defendants Ellen Burchett, Adah Reddish, Grace Tarr and Thomas Rice, are the owners thereof in fee as tenants in common, each owning an undivided one-fourth thereof: (3) that neither of the remaining defendants has any interest in or to said real estate; (4) that the personal estate of Martha R. Gates, deceased, was not charged by the will with the exoneration of said encumbrance; (5) that plaintiff and the named defendants take title to the real estate in controversy subject to and charged with the encumbrance of $5000 and accrued interest as evidenced by a School Fund mortgage, dated January 3, 1922; (6) that the cost accruing up to and including the order of the withdrawal of the petition be taxed against plaintiff, and that all costs accruing thereafter be taxed against the named defendants. All concur.