The facts appear from the following extracts from the adjudication of
Gest, J., Auditing Judge.
Clarissa C. McCutcheon died on October 27,1931, unmarried and without issue, and leaving a will duly probated on November 4, 1931, when letters testamentary were granted. . . .
By the third paragraph she bequeathed the following legacies to individuals, viz.: To Augusta Burbank Couch $5,000; to Adelaide Norton Narrow $5,000; to William M. Humphrey $3,000; to Ella H. Smith $3,000; to Eva Nelson Gilbert $2,000; to Mary Graham $1,000; to Carl Everett Lorenz $2,000; to Frances Thomas Lorenz $1,000; to Virginia N. Powell $5,000; to Lucy McCutcheon Yaw $3,000; to Lide Sherburne $1,000; and to Clarissa Weldon $5,000; and the testatrix further provided: “I hereby appoint her mother Elizabeth McCracken Weldon testamentary guardian of said fund for Clarissa Weldon to hold, invest, re-invest and keep invested, the monies, in good securities, not legal securities merely, my purpose being to obtain a better income return on investments than legal securities might yield, and to use the income therefrom for the maintenance, education and support of her said daughter, Clarissa, until said daughter reaches the age of twenty-one years when said fund shall be paid to Clarissa Weldon.” . . .
By the ninth paragraph of her will she provided: “I direct that all bequests made by me in the third paragraph of this my will be paid to the individual legatees named in full. All taxes incident to said bequests, whether State or Federal, and of whatsoever nature, I direct to be paid out of my residuary estate before the principal sum forming the residuary is distributed.” . . .
A question of construction was argued by counsel and submitted to the court. Under the third and ninth paragraphs of the will above quoted, it was claimed, in behalf of the individual legatees named in paragraph 3, that the ninth paragraph operated as a direction that these legatees be paid in full in preference to the legacies bequeathed in the fourth, fifth, sixth, and seventh paragraphs to corporations for charitable purposes. It was stated, and may be admitted, that three of the legatees are cousins of the testatrix and one of them is a granddaughter of a cousin of the testatrix; but, in my opinion, this fact does not affect the construction of the will.
I have considered the question with care and have no doubt that the intention of the testatrix, in the ninth paragraph, was simply to relieve her individual legatees from payment of inheritance taxes on their legacies and was not intended to direct their payment in full as preferred over the legacies to the corporate legatees.
The Fiduciaries Act, sec. 20, following the older Acts of February 24, 1834, P. L. 73, and March 21,1772,1 Sm. L. 383, provides for the pro rata abatement [132]*132of pecuniary legacies where the residue after the payment of debts and expenses,' is not sufficient, and this is declaratory of the settled law which is given thestamp of legislative approval. Wain’s Estate, 109 Pa. 479, is applicable. In that case, it was said that the presumption is against a preference among pecuniary legatees, and that presumption cannot be repelled by an ambiguous expression; the intent to the contrary must be clear. And in University of Pennsylvania’s Appeal, 97 Pa. 187, 200, it was said: “As between legacies which are in their nature mere bounties, the presumption of intended equality exists and governs, unless overcome by unequivocal evidence to the contrary. No priority will be allowed where the expressions of the will are ambiguous.”
In Miller v. Huddlestone, 3 Mac. & G. 513, it was said by Lord Chancellor Truro that “the onus lies on the party seeking priority, to make out that such priority was intended by the testator, and that the proof of this must be clear and conclusive. The reason is, that a testator, in the absence of clear and conclusive proof to the contrary, must be deemed to have considered that his estate would be sufficient, and consequently not to have thought it necessary to provide against a deficiency by giving a priority, in case of a deficiency, to some of the objects of his bounty.” And this case was quoted with approval by this court in Barry’s Estate, 13 Phila. 310.
Now in this case the specific bequests of personal effects aggregate $8,371.80; the pecuniary legacies to individuals amount to $36,000, and the legacies to the charitable corporations are $19,000, a total of $63,371.80. The account shows a balance for distribution of $63,026.42 (and if the balance of income due the administration, $2,810.40, be added, as it should be, the total is $65,836.82). The parties in interest ask, at the present time, for a distribution of the cash on hand only, with leave to the executors to retain the securities, “in the hope that an increase in values would result in payment of the pecuniary legacies in full as well as leave something over as residuary estate.” How then can it possibly be argued that the testatrix did in fact contemplate that there would be deficiency in her estate? On the contrary, the testatrix evidently supposed that she would not only leave an estate sufficient to pay all the legacies, but that a residue would be left for her residuary legatees, for she in her will twice refers to her residuary estate as chargeable with taxes, and expressly disposes of the residue.
But it was strenuously argued by the learned counsel for the individual legatees that the testatrix intended to give them a priority by directing the payment of their legacies “in full”. As I stated in the beginning of this discussion, I do not think that was her intention. This direction is immediately followed by a clause in the same ninth paragraph of the will that directs the inheritance taxes to be paid out of the residuary estate, and this I regard as explanatory of the meaning of the words “in full”. The entire ninth paragraph must be read together as a whole. Surely, if the words “in full” had been separated from the words that follow by a comma instead of a period, no one could, it seems to me, have the slightest doubt that the testatrix meant by the words “in full” exactly what I have said, and if the argument turns, as I think it must, upon the use of a period instead of a comma, the answer is that the presumption of equality and pro rata distribution is not overcome by mere punctuation, which, as was said in Ewing v. Burnet, 11 Peters 41, is a most fallible standard by which to interpret a writing. By reading the whole paragraph together, the words “in full” are given all the weight to which they are entitled, meaning without deduction, which has nothing to do with a preference over the other legacies, which are nowhere referred to. I therefore rule that the pecuniary legacies must all abate pro rata.
Thomas N. Griggs, for exceptant; Richard Hay Woolsey, contra.
June 30, 1933.
Now, at the present time at least, there is no residuary estate from which the taxes on the legacies contained in paragraph 3 can be paid, and, consequently, each legacy must bear its own tax: Greaves’s Estate, 29 Dist. R. 577, last paragraph of the syllabus.
The specific legacies bequeathed of jewelry and personal effects were paid without deduction of tax, which paragraph 2 of the will directs shall be paid from the residuary estate. There is no residuary estate, and consequently it appears to me that the direction is tantamount to a pecuniary bequest of the taxes, which is subject to abatement.
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The facts appear from the following extracts from the adjudication of
Gest, J., Auditing Judge.
Clarissa C. McCutcheon died on October 27,1931, unmarried and without issue, and leaving a will duly probated on November 4, 1931, when letters testamentary were granted. . . .
By the third paragraph she bequeathed the following legacies to individuals, viz.: To Augusta Burbank Couch $5,000; to Adelaide Norton Narrow $5,000; to William M. Humphrey $3,000; to Ella H. Smith $3,000; to Eva Nelson Gilbert $2,000; to Mary Graham $1,000; to Carl Everett Lorenz $2,000; to Frances Thomas Lorenz $1,000; to Virginia N. Powell $5,000; to Lucy McCutcheon Yaw $3,000; to Lide Sherburne $1,000; and to Clarissa Weldon $5,000; and the testatrix further provided: “I hereby appoint her mother Elizabeth McCracken Weldon testamentary guardian of said fund for Clarissa Weldon to hold, invest, re-invest and keep invested, the monies, in good securities, not legal securities merely, my purpose being to obtain a better income return on investments than legal securities might yield, and to use the income therefrom for the maintenance, education and support of her said daughter, Clarissa, until said daughter reaches the age of twenty-one years when said fund shall be paid to Clarissa Weldon.” . . .
By the ninth paragraph of her will she provided: “I direct that all bequests made by me in the third paragraph of this my will be paid to the individual legatees named in full. All taxes incident to said bequests, whether State or Federal, and of whatsoever nature, I direct to be paid out of my residuary estate before the principal sum forming the residuary is distributed.” . . .
A question of construction was argued by counsel and submitted to the court. Under the third and ninth paragraphs of the will above quoted, it was claimed, in behalf of the individual legatees named in paragraph 3, that the ninth paragraph operated as a direction that these legatees be paid in full in preference to the legacies bequeathed in the fourth, fifth, sixth, and seventh paragraphs to corporations for charitable purposes. It was stated, and may be admitted, that three of the legatees are cousins of the testatrix and one of them is a granddaughter of a cousin of the testatrix; but, in my opinion, this fact does not affect the construction of the will.
I have considered the question with care and have no doubt that the intention of the testatrix, in the ninth paragraph, was simply to relieve her individual legatees from payment of inheritance taxes on their legacies and was not intended to direct their payment in full as preferred over the legacies to the corporate legatees.
The Fiduciaries Act, sec. 20, following the older Acts of February 24, 1834, P. L. 73, and March 21,1772,1 Sm. L. 383, provides for the pro rata abatement [132]*132of pecuniary legacies where the residue after the payment of debts and expenses,' is not sufficient, and this is declaratory of the settled law which is given thestamp of legislative approval. Wain’s Estate, 109 Pa. 479, is applicable. In that case, it was said that the presumption is against a preference among pecuniary legatees, and that presumption cannot be repelled by an ambiguous expression; the intent to the contrary must be clear. And in University of Pennsylvania’s Appeal, 97 Pa. 187, 200, it was said: “As between legacies which are in their nature mere bounties, the presumption of intended equality exists and governs, unless overcome by unequivocal evidence to the contrary. No priority will be allowed where the expressions of the will are ambiguous.”
In Miller v. Huddlestone, 3 Mac. & G. 513, it was said by Lord Chancellor Truro that “the onus lies on the party seeking priority, to make out that such priority was intended by the testator, and that the proof of this must be clear and conclusive. The reason is, that a testator, in the absence of clear and conclusive proof to the contrary, must be deemed to have considered that his estate would be sufficient, and consequently not to have thought it necessary to provide against a deficiency by giving a priority, in case of a deficiency, to some of the objects of his bounty.” And this case was quoted with approval by this court in Barry’s Estate, 13 Phila. 310.
Now in this case the specific bequests of personal effects aggregate $8,371.80; the pecuniary legacies to individuals amount to $36,000, and the legacies to the charitable corporations are $19,000, a total of $63,371.80. The account shows a balance for distribution of $63,026.42 (and if the balance of income due the administration, $2,810.40, be added, as it should be, the total is $65,836.82). The parties in interest ask, at the present time, for a distribution of the cash on hand only, with leave to the executors to retain the securities, “in the hope that an increase in values would result in payment of the pecuniary legacies in full as well as leave something over as residuary estate.” How then can it possibly be argued that the testatrix did in fact contemplate that there would be deficiency in her estate? On the contrary, the testatrix evidently supposed that she would not only leave an estate sufficient to pay all the legacies, but that a residue would be left for her residuary legatees, for she in her will twice refers to her residuary estate as chargeable with taxes, and expressly disposes of the residue.
But it was strenuously argued by the learned counsel for the individual legatees that the testatrix intended to give them a priority by directing the payment of their legacies “in full”. As I stated in the beginning of this discussion, I do not think that was her intention. This direction is immediately followed by a clause in the same ninth paragraph of the will that directs the inheritance taxes to be paid out of the residuary estate, and this I regard as explanatory of the meaning of the words “in full”. The entire ninth paragraph must be read together as a whole. Surely, if the words “in full” had been separated from the words that follow by a comma instead of a period, no one could, it seems to me, have the slightest doubt that the testatrix meant by the words “in full” exactly what I have said, and if the argument turns, as I think it must, upon the use of a period instead of a comma, the answer is that the presumption of equality and pro rata distribution is not overcome by mere punctuation, which, as was said in Ewing v. Burnet, 11 Peters 41, is a most fallible standard by which to interpret a writing. By reading the whole paragraph together, the words “in full” are given all the weight to which they are entitled, meaning without deduction, which has nothing to do with a preference over the other legacies, which are nowhere referred to. I therefore rule that the pecuniary legacies must all abate pro rata.
Thomas N. Griggs, for exceptant; Richard Hay Woolsey, contra.
June 30, 1933.
Now, at the present time at least, there is no residuary estate from which the taxes on the legacies contained in paragraph 3 can be paid, and, consequently, each legacy must bear its own tax: Greaves’s Estate, 29 Dist. R. 577, last paragraph of the syllabus.
The specific legacies bequeathed of jewelry and personal effects were paid without deduction of tax, which paragraph 2 of the will directs shall be paid from the residuary estate. There is no residuary estate, and consequently it appears to me that the direction is tantamount to a pecuniary bequest of the taxes, which is subject to abatement. I examined this question with some care in Greaves’s Estate, 29 Dist. R. 577, and cited some authorities, to which may be added Re Turnbull, [1905] 1 Ch. 726. If objection be made by any of the parties, the adjustment may be made in the schedule of distribution or the matter be brought before the court in the subsequent account. The same principle applies to the pecuniary legacies given to the individual legatees in paragraph 3, where the tax is also directed to be paid from the non-existent residuary estate. This is tantamount to a bequest to the individual legatees of the taxes thereon.
The Income Account shows a balance of $2,810.40, which, for purposes of the present distribution, should be added to the principal balance for the benefit of the pecuniary legatees: Greaves’s Estate, 29 Dist. R. 577; Bennett’s Estate, 29 Dist. R. 148.
Sinkler, J.,
The seven exceptions to the adjudication filed in behalf of certain of the pecuniary legatees named in paragraph 3 of the will all relate to the construction of the ninth paragraph thereof. To the discussion of the legal principles involved as set forth in the adjudication we can add nothing, and with the conclusion of the auditing judge we agree. The effect of the second sentence of paragraph 9 is to explain or amplify the first sentence. The wording used by the testatrix is no more than a paraphrase of the usual phraseology, that is, a direction that the legacies in question be paid without deduction of the transfer inheritance tax or other tax of like nature, which the executors are instructed to pay out of the residuary estate.
The exceptions are dismissed and the adjudication is confirmed absolutely.
Van Dusen, J., did not take part in the decision.