In Re Boardman

13 A. 94, 16 R.I. 131, 1888 R.I. LEXIS 14

• Court: Supreme Court of Rhode Island
• Decided: February 11, 1888
• Status: Published

Opinion

Durfee, C. J.

The case stated shows that the testator, George F. Wilson, died January 19, 1883, leaving a will which was admitted to probate after modification under the statute by compromise between the parties.in interest. Plalsey J. Boardman, of Boston, and Ellery PI. Wilson, a son of the testator, were appointed executors by the will, and have accepted the appointment. The will bears date of January 12,1883, seven days before the testator died. It contains twenty-two items. The first item directs the executors as soon as practicable to pay the debts and funeral expenses, and to erect a monument to the testator. Then follow items bequeathing specific chattels to different persons, giving two legacies of $5,000 each and one of $1,000, making $11,000 ; giving annuities for life of $3,500 to one person and $1,000 to another; and appropriating the sum of $1,500 for the erection of a monument to the testator’s grandparents and aunt. The 17th item directs that the said bequests shall take effect immediately, that the articles specifically bequeathed shall be delivered immediately, that the pecuniary legacies shall be paid as soon as practicable, and the annuities shall be promptly paid as they become due. The 18th item directs the sale of the testator’s household effects, not bequeathed, together with his horses, carriages, etc., and all personal property appurtenant to his horses and stables, by his executors within two years, and the application of the proceeds, together with all moneys on hand or in bank at the testator’s decease, to the payment of the debts and legacies before mentioned, the excess, if any, to be added to the trust estate provided for and disposed of in the remaining items of the will. 1

The case also shows that for some years before his death the testator was pecuniarily embarrassed, and that on September 14, 1880, being largely indebted to the Rumford Chemical Works, and desiring further advances from it, he transferred all his stock, amounting to 1,248 shares, in said Works, to trustees as security for said indebtedness, and for any further advances made by the Works to him or to Newton D. Arnold, trustee under another deed of the same date, for the settlement of his debts. By virtue of said transfer and deed the testator conveyed nearly all his property to trustees, who at the time of his death held it under said transfer and deed subject to the trusts therein created. The testator was still largely indebted to the Rumford Chemical Works at the time of his death, and the dividends accruing on his 1,248 shares of stock therein continued to be received and applied under said transfer and deed up to and including dividends payable April 80, 1883. On September 15, 1883, said trustees transferred said 1,248 shares to Halsey J. Boardman and Ellery H. Wilson as trustees under the will, and said Arnold conveyed to them the remainder of the trust estate in his hands, and paid over to them as trustees and executors the sum of dollars, being the residue of dividends accruing after the testator’s death after paying the remaining indebtedness to said Works.

The case further shows that the entire estate left by the testator, exclusive of his 1,248 shares of Rumford Chemical Works stock, was insufficient to pay simply his debts, but that, including those shares, it was sufficient to pay the debts and satisfy all the provisions of the will.

The first question put on the ease stated is, whether it was the duty of the executors and trustees to apply at once all the dividends and income of the 1,248 shares which accrued or became payable after the testator’s decease, less the income of 150 shares payable to his daughters, toward the payment of the legacies to Brown University and Dartmouth College. The question is raised by the daughters, who are interested to have those legacies paid as soon as possible, since the sooner those legacies are paid the sooner they will become entitled to the dividends on the additional shares under the compromise. The question, however, is not, so far as we see, affected by the compromise, and should be decided precisely as it would have been decided for the colleges if no compromise had been made.

The contention for the daughters is, that it is or was the duty of the executors to sell all the real and personal estate not specifically bequeathed, except the 1,248 shares, and then, if the proceeds are insufficient, to sell so many of said shares as are required to make up the deficiency, in order to carry out the following course of administration, to wit: (1) To pay the costs and charges of administration; (2) to pay the expenses of the last sickness, funeral, and monument; (3) to pay all lawful debts ; (4) to distribute the 'articles specifically bequeathed and pay the pecuniary legacies; (5) to pay not over §1,500 for a monument to the testator’s grandparents ; (6) to provide for and pay the annuities of §3,500 and §1,000 ; and (7) to turn over the residue to the trustees. Such a Course of administration is proper if it best comports with the provisions of the will, otherwise not. There is no stereotyped rule for administering testate estates. Every such estate should be so administered, if possible consistently with the law, as to carry out the purposes of the testator, as those purposes appear from the will interpreted as a whole in the light of the circumstances in which it was made.

The same persons are executors of the will and trustees under it, and it seems to us that its obscurity arises in part from the fact that the draughtsman of the will has not always observed the distinction between their capacities, but has sometimes confused and intermixed them so that it is impossible to discern clearly where the functions of the executors were intended to end and those of the trustees to begin. The will nowhere empowers the executors as such to sell the real estate, but empowers and directs the trustees to sell it for the accomplishment of the objects of the will, so that even for the payment of debts the executors could only sell it under the will as trustees. It is the trustees also who are empowered and directed to sell all “ stocks or interests in any and all corporations, companies, or partnerships,” except the Rumford Chemical Works, not simply for the purposes of the special trust, but “ for carrying out and accomplishing the objects in this my last will,” though these “ stocks or interests ” are plainly personal assets, and the executors as such would ordinarily be expected to administer them for all purposes except those of the special residuary trust. At this point it seems to have occurred to the testator, or his draughtsman, that there might be some confusion, and the testator adds that it is his will that the interest and rights of the trustees shall be subordinate to the payment of debts and legacies and the annuities “ for the period occupied in the administration of my estate by said executors,” manifestly implying that, at least after said “ period,” the annuities, if paid at all, were to be paid by tbe trustees. It seems clear to us, therefore, that there is a looseness and lack of order in the structure of the will which should be constantly taken into the account in construing its provisions.

The counsel for the daughters does not include the sums of $5,000, which are payable to each of the sons annually under the 21st item of the will, among the sums which are to be paid by the executors according to his final scheme of administration stated above, but admits that the trustees, after paying the income of fifty shares to each daughter, are to pay said annual sums, while the college legacies are accumulating, either from the principal or the income of the stock. We have just seen, too, that the closing sentence of the 19th item implies that the annuities previously given are to be paid out of the income after the period of administration. If we pass to the 21st item, it seems to us that both of these points are clear. The 21st item begins : “ After the payments of the foregoing legacies, bequests, and annuities, and the payment annually to each of my said sons, Ellery H. and George F. Jun., which I direct to be paid to them until the legacies hereinafter provided for are satisfied, I direct my trustees to divide the dividends accruing upon my said stock in the Rumford Chemical Works,” etc., proceeding to prescribe accumulations for the colleges. In other words, to turn the phrases about in order to bring their meaning out the more clearly, the item directs the trustees to divide the dividends between the funds for the colleges after paying the legacies, bequests, and annuities given in prior items, and the annual sums for the sons, the implication being unmistakable that the payments are to come out of the dividends so far as necessary before division. The answer of the counsel for the daughters is, that no such payments ever can be necessary, because in the regular course of administration the legacies, bequests, and annuities will be paid by the executors, so many shares of the Rumford Chemical Works stock as are necessary to make good the deficiency of the other assets being sold for that purpose, and only the residue will go to the trustees. The trouble with this answer is, that it takes no account of the unmethodical structure of the will, and, instead of making the administration subservient to the will, subordinates the will to a preconceived course of administration. It is patent that the testator did contemplate an exigency in which the dividends should be used to pay legacies and annuities, and. did explicitly provide for it in the 21st item. What was that exigency ? Evidently an insufficiency of assets, exclusive of chattels specifically bequeathed and of the Rumford Chemical Works stock. If it be asked why exclusive of said stock, the answer is obvious, namely, because, if the stock was intended to be resorted to at all, it must have been intended to be resorted to to the full extent of the need, and the provisions for making any use of the dividends would be nonsensical. Accordingly, since the exigency has occurred, why should it not be met as the testator provided for having it met, and his will thus be carried out ? It seems to us that it should be so met, and consequently that the legacies and annuities, as well as the annual sums for the sons, are payable out of the dividends, and that they should be so paid, the annuities and annual sums of course being paid as they fall due. We may add that the 22d item, also, will be found, if examined, to lead to the same conclusion.

The counsel for the daughters urges against this conclusion that it is inconsistent with item 17, which directs the immediate payment of tbe legacies. Item 18, however, allows the executor two years for payment thereunder ; and probably the principal effect intended by item 17 was to entitle the legatees to interest from the death, instead of a year after the death, of the testator in case of delay. He also urges that the testator could not have intended to postpone his children’s enjoyment of the income by such postponement. The answer to this is, that, under the will simply, the daughters are not affected by the postponement, being entitled to the income of fifty shares each from the testator’s death, and the sons are provided for by the annual sums.

Are the dividends likewise applicable to the payment of the debts in so far as the other assets not specifically bequeathed, except the 1,248 shares, fall short of paying them ? The will does not expressly provide for the payment of the debts, as it does of the legacies, out of the dividends, and it therefore seems to us that this is a more difficult question than that which we have just answered. We have, however, after careful consideration, come to the conclusion that, the dividends are to be used in exoneration of the shares as well for the payment of debts as of legacies and annuities. We will state the reasons which have led us to this conclusion.

We think it is apparent that the testator expected that the Rumford Chemical Works stock would go intact to the trustees. Item 19, as we have seen, directs the trustees to sell all other corporate stocks except that, which of course imports such an expectation. Item 21 directs the manner in which the dividends “ accruing upon my said stock in the Rumford Chemical Works ” shall be temporarily disposed of. The language is “ my said stock,” not “ my remaining stock,” and again imports an expectation that the stock would go and continue intact. The same expectation reappears in the 22d item, which directs the disposition of the income, after the payment of the legacies to the colleges, during the lives of the sons, and the division of the stock itself after the death of the survivor of them, the stock there being called “ said stock,” meaning the stock previously mentioned. It would evidently disappoint the expectation and purpose of the testator if the stock were broken into for the payment of his debts. The question is, whether the expression of this expectation and purpose is determinate enough to be accepted as the will of the testator; for if it is, there appears to be nothing to prevent its controlling the usual course of administration.

It is the duty of a court in construing a will to bear in mind the circumstances under which it was made, so as to look at it, as far as possible, from the testator’s point of view. The observance of this duty is particularly important in this case, since the circum stances, as they concern the stock in the Rumford Chemical Works, were very peculiar.

The case stated shows that at the time the testator made the will his stock in the Rumford Chemical Works was, and for more than two years had been, in the hands of trustees under a deed which stipulated an extension of credit to the testator on a prior indebtedness to the Rumford Chemical Works, and further loans to him from said Works in consideration that said stock should be held as security, and that said Works, which was a party to the deed, should be entitled to retain the dividends on the stock as they accrued by way of payment. The stock was also complicated and entangled in the trusts of another trust deed of the same date, so that at the death of the testator it would have been hardly practicable for the executors, if they had been qualified, to sell the stock, unless the trustees would have consented to join in the sale, for the purpose of paying the indebtedness to the Works. The case likewise shows that, within a little more than three months after the execution of the will, dividends had accrued to an amount sufficient to pay off the entire residue of indebtedness for which the stock was held, and to leave a large balance to be paid over to the executors. It must be assumed that the testator knew when he made his will how much his indebtedness was, and how profitable a business the Works was doing, and consequently how soon the indebtedness was likely to be paid out of the accruing dividends. Can it be supposed that, with this knowledge, he intended that the process of payment, which he had found so successful during his life, should cease at his death ? The .will shows that he relied almost exclusively on the stock to yield the funds for his monumental benefactions to Brown University and Dartmouth College, and to make provision for his children and their posterity. Can it be supposed that he intended to expose this productive stock to the hazards of a sale in circumstances in which some sacrifice, and probably a heavy sacrifice, must ensue, for the purpose of paying a debt which the stock was itself paying rapidly and without risk, as he had agreed to have it paid ? It is strange, if he did so intend, that the will should indicate the contrary. It is not to be supposed that in making the will, which was made only seven days before his death, he did not contemplate the contingency of his dying before his indebtedness to the Works was paid. But if his idea was that, whether he lived or died, the indebtedness would disappear under the deeds of trust without the intervention of the executors, and if such was his design,-then the suggestion of the 18th item, that the debts and legacies might be more than paid by the property there directed to be sold, would become intelligible, and the apparent purposes of the will are all satisfied. In this view the testator did not provide in bis will, in express terms, that his debts, after the exhaustion of other assets, should be paid out of fhe dividends instead of the capital of the stock in the Rumford Chemical Works, because he had already so provided in regard to the bulk of his indebtedness before the will was made, and because he supposed that, in such circumstances, he made his intention not to have this capital so used sufficiently clear by directing it to be used in a different manner. And in this view, also, the probability is that, when he ordered in item 18 the effects there specified to be sold and the proceeds used to pay debts and legacies, and the excess, if any, turned over to the trustees, he had chiefly in mind his personal and family debts not embraced in the ante - testamentary provisions.

It seems to us, therefore, that the indications from the circumstances concur completely with the indications of the will, and add such strength to the latter indications that the latter are to be regarded as a determinate part of the will, and accordingly that the debts, so far as the other available assets fall short, are properly paid out of the dividends instead of the corpus of the Rum-ford Chemical stock.

The counsel for the daughters contends that this view is inconsistent with the direction of item 1, that the debts shall be paid as soon as practicable. The phrase “ as soon as practicable ” is rather indefinite ; but, however taken, the debts were paid, as the testator probably foresaw they would be, a good deal quicker out of the dividends than they would have been by selling the stock. The record shows that the will was finally proved April 28, only two days before the dividend of April 30, so that in fact it would have been impossible for the executors to hasten the payment by sale.

We wish to add that in coming to our conclusions we do not mean to derogate from the authority of the ordinary precedents, or of tbe general rules educed from them, namely, that, where a legacy is given which is subject to a charge, it is ordinarily entitled to exoneration out of the general assets, and that when a residue is given,.the income to go one way and the capital another, the legatee of the income takes it from the death, unless there be something in the will to show a contrary intent. Both these rules are recognized in Rhode Island cases. Gould v. Winthrop, 5 R. I. 319 ; Bailey, Petitioner, 13 R. I. 543. We know of no precedent which covers a case having the peculiarities of the case at bar. Nor do we acknowledge any conflict between our decision in this case and the decision of this court in Wolcott v. Pitcher et als. 7 R. I. 555, largely relied on by the counsel for the daughters; for in that case the will was supposed to indicate an intent to have the capital of the residue used, and it does not appear that there was anything to the contrary in the circumstances, whereas in the case at bar the will implies an intent to have the capital preserved and only the dividends used, and the circumstances under which the will was made corroborate the implication.

Thomas H. Russell, for Clara F. Penny, Mary A. Wilson, and Alice L. Wilson, daughters of the testator. James M. Ripley Sf John F. Lonsdale, for the other petitioners.

Other questions have been put in the case stated, but the answers to them are mere corollaries to the answers above given, and we leave the parties to draw them.

1 The opinion here recited the remaining items, but as the will is printed above in full, the reporter omits them.