White Estate

Hunter, J.,

The estate is insufficient to satisfy all legacies, and preference has been given to the specific legacies.

The specific legacies as determined by the adjudication are of the value of $156,000, and the general legacies $31,400. The net estate is $191,000 before estate and inheritance taxes. Payment of all legacies could have been made, and a small residue of $3,600 remain, had not testatrix directed that all legacies should be tax free, and the taxes paid out of residuary estate. Estate and inheritance taxes amount to $33,000, which is a tentative figure, subject to adjustment. Residuary estate not being sufficient to pay the taxes, the audit*409ing judge found, citing Greaves’ Estate, 29 Dist. R. 577, that the amount of the taxes was an additional legacy, to be added to the list of general legacies, and to abate with them proportionately. This, it will be seen, is a further preference for the specific legatees, whose specific legacies constitute five sixths of the value of the estate, and further cuts down the general legacies.

Exceptant, who is a general legatee, contends that 370 shares of stock of the St. Paul Fire and Marine Insurance Company is not a specific bequest, and should be applied to the payment of taxes and general legacies; and further, that each legatee should pay his own tax to the extent that the residuary estate is insufficient for the purpose.

The facts are unusual. Decedent owned individually 1,700 shares of the St. Paul Fire and Marine Insurance Company appraised at $132,000. She also had power of appointment over a trust fund under the will of her mother in which were 370 shares of the same stock of the value of $24,000.

By her will she exercised the power of appointment and directed the payment of the appointed estate to her executors “to be added by my said executors to my own estate and the combined fund or estate is to be disposed of as follows”. She then proceeded to give pecuniary legacies to various general legatees, “my holdings” of stock of the St. Paul Fire and Marine Company to two specific legatees, directed the payment of estate and inheritance taxes out of the residue “of the combined fund or estate”, and the residue of “said combined fund or estate” to four named persons.

Does the specific bequest of “my holdings” of the stock include the 370 shares coming from the appointed estate? The auditing judge decided that it did.

Where there is a general power, and the donee in his will describes property in a general manner, all *410distinction between property and power is abolished. In cases of implied execution arising under the Wills Act of June 7, 1917, P. L. 403, sec. 11 (now the Wills Act of April 24, 1947, sec. 14 (14)), a bequest of “my assets”, Noble’s Estate, 344 Pa. 81, “my estate”, Finn’s Estate, 18 Dist. R. 408, or property which is “possessed” or “seized”, Thompson v. Wanamaker’s Trustee, et al., 268 Pa. 203, includes property subject to a general power. In the English case of Re Doherty-Waterhouse, Musgrave v. De Chair, L. R. (1918), 2 Chan. 269, a bequest of “all my shares” in a certain corporation, was held to include similar shares in an appointed estate.

In the instant case testatrix left nothing to implication, and expressly blended the appointed estate with her own.

These principles of course are subject to a contrary intent appearing by the will, and. the question is whether the circumstance that the estate is insufficient to satisfy all the legacies indicates that testatrix brought the appointed stock into her own estate only for the benefit of the general and residuary legatees. Exceptant contends that she must have realized that taxes and general legacies could only be paid by using the appointed estate for that purpose.

The language of the will itself gives no support to exceptant. The appointment is not made in the residuary clause alone. The direction is that the appointed estate be “added by my said Executors to my own estate and the combined fund or estate is to be disposed of as follows”: The specific bequest of the stock is one of the items which is payable out of the “appointed fund or estate”.

In cases beyond number, specific bequests have been preferred over general legacies under the common-law rule of abatement. It is assumed that the primary object of a testator’s bounty is the specific legatee, and *411that testator would want the legacy delivered to the specific legatee without charge or lien in favor of the general legatee.

In Kenworthy’s Estate (No. 1), 52 Pa. Superior Ct. 152, testatrix gave general legacies without at the time having any general assets to pay them. Judge Head in an opinion which is an excellent review of the law, found that mere insufficiency of assets cannot be regarded as a satisfactory argument against the application of the general rule, and said:

“. . . Were it otherwise, the rule would necessarily disappear and what is now the exception take its place, because the same argument could be made against the abatement of a general legacy in every instance.”

Notwithstanding the fact that we are dealing with the blending of two estates, we believe this controversy resolves itself into an ordinary case of insufficiency of assets, without sufficient indication in the will that the usual rule of abatement of legacies is disturbed.

In our opinion the auditing judge was correct in his conclusion that all of the stock of the St. Paul Fire and Marine Insurance Company passed to the specific legatees.

The second question raised by the exceptions is whether the “tax free” clause of the will is equivalent to an additional legacy of the tax to each of the legatees, including the specific legatees of stock.

The will provides as follows:

“I direct that all the foregoing gifts, devises, bequests and life interests, shall be paid free and clear of all succession, inheritance and estate taxes, which taxes I direct shall be paid out of the residue or balance of the combined fund or estate, which residue or balance is disposed of in the next succeeding paragraph of this Will.”

*412The residuary estate is nominal in amount and if the specific legatees of stock are entitled to an additional legacy of the tax, the general pecuniary legatees must then not only pay their own tax, but also a substantial part of the tax of the specific legatees.

The auditing judge was of the opinion that where taxes are directed to be paid out of a nonexistent residuary estate, the burden should not be transferred to other general legatees, but felt that he was bound by Greaves’ Estate, 29 Dist. R. 577, McCutcheon’s Estate, 19 D. & C. 131, and other cases in this court.

In our opinion the intention of a testator is to be found not only in the gift of the tax legacy, but also in his designation of the source from which the tax is to be paid. When he directs the payment of the tax out of residue he means to place the burden of the tax on the residuary legatees, and not on the general legatees. If there is no residue then there is no legacy of the tax; it is a residuary legacy and like all residuary gifts is deferred to general legacies.

Greaves’ Estate was decided in 1920 when the tax burden was light. In these days of heavy taxation, care must be taken not to disturb or destroy testator’s scheme of distribution.

In the instant case the specific legacies of stock are overwhelming in value and the taxes large, and the application of the rule in Greaves’ Estate brings a result which is inequitable. In our opinion Greaves’ Estate and the cases which follow it should be overruled where testator expressly places the burden of the tax on the residuary legatees.

Bryant’s Estate, 315 Pa. 151, is in accord with this view, but attention should be called to the fact that in the latter case testator directed that the tax should be paid by residue, but only, as the will expressly said, if residue was sufficient for the purpose. The opinion in Bryant’s Estate, however, makes this significant statement (p. 155) :

*413. . Moreover, the clause of the will last quoted, applies to the charitable legacies as well as it does to the trust legacies, and for this reason also appellants’ argument fails, . .

So in this case the clause directing that “all” gifts shall be free of taxes applies to the general legacies as well as to the specific legacies, and there is no indication of a preference between them. The specific legatees cannot reasonably contend that testatrix intended that their taxes should be paid by the general legatees.

Normally, every legatee must pay his own inheritance tax, and language indicating a contrary intent should be free from doubt: Uber’s Estate, 330 Pa. 417. With respect to the proration of estate tax under the Pennsylvania Apportionment Act of July 2, 1937, P. L. 2762, it is said:

“The Act creates a presumption that a testator intends that proration should be made in accordance with its terms unless his will contains a specific provision, clearly expressed, inconsistent with such presumption, and, to accomplish that result, his language must not be of doubtful import”: Harvey Estate, 350 Pa. 53, and Stadtfeld Estate, 359 Pa. 147.

The exceptions filed November 14,1947, to the award of 370 shares of St. Paul Fire and Marine Company stock, or their proceeds, are dismissed, and the exceptions filed March 18, 1948, with respect to the charging of inheritance and estate taxes, are sustained.