Carrington & Co. v. Manning's Heirs

COLLIER, G. J.

We do not deem it necessary elaborately to consider the doctrine, that a trust for the benefit of creditors, attaches to a devise of real estate, where the words after my debts are paid,” or other equivalent terms are used by the testator. This doctrine owes its introduction into *626British jurisprudence to the exclusion of simple-contract-creditors from the lands of their deceased debtors, as the means of satisfying their demands, and has often been carried to an extent not contemplated by the testators. Treating of this subject, an elementary writer of great respectability says, “it seems to be generally admitted, that the courts have allowed their anxiety to prevent moral injustice, and that men should not sin in their graves, to carry them beyond the limits prescribed by established general principles of construction.” 2 Jarm. on Wills, 520. The trust being ascertained, the debts were considered as withdrawn from the influence of the statute of limitations, where the bar was not complete before the testator’s death. See the learned judgment of Sir William Plumer, in Burke v. Jones, 2 Ves. & B. Rep. 275, and cases there cited; 2 Story’s Eq. § 1245, 1246-7.

It is natural enough that terms not the most significant and direct, should be seized upon to create a trust upon the real estate of a testator for the payment of his debts, where the creditor, according to the law, could not otherwise subject it to liability. There are few men who do not cherish an innate sense of justice, and are pleased to see it accorded to others; no matter how unwilling they may be to render it, where it costs a sacrifice of interest or feeling. Judges are but men, and, with the most honest intentions, sometimes unconsciously yield to the extraneous influences which operate on others. Hence we have no difficulty in accounting for the implication of a trust upon grounds often unwarrantable, in cases analagous in point of .fact to the one now before us. But in this State, where all distinction in dignity as it respeets the debts of a deceased person, is abolished, and a debt by simple contract is placed on the footing with one which is evidenced by a record, if the latter is not a lien on the debtor’s estate, it cannot be expected that the courts should be astute in creating trusts by construction.

According to the common law, if a testator devotes his land to the payment of his debts, without particularizing or distinguishing them, it is regarded but a fair construction of his will, to suppose that he intended to embrace all the debts which were recoverable at the time of his death: But is it *627allowable to deduce this inference from the same terms, applied to the same description of property, where by statute it is already charged with the payment of the decedent’s estate ? Is there not great danger under such a state of the law, of making that which the testator intended as a direction to his executor, when his devisee should be let into the enjoyment of his bounty, a condition precedent to the enjoyment ? In England, personal estate in the hands of the executor is a fund for the payment of the debts, and words which would create a trust upon the realty of the testator, will have the effect of modifying the duties of the executor as the personal representative. True, in Jones v. Scott, 1 R. & Mylne’s Rep. 255, Lord Brougham decided, in opposition to the master of the rolls, that there was no difference “between a charge upon the real and a charge upon the personal estate.” It was admitted that the point had never received a judicial decision, and the Lord Chancellor advised that it should be reconsidered elsewhere. An appeal was accordingly taken to the House of Lords, where, after great consideration, the decree was reversed. Lord Lyndhurst, ill pronouncing the opinion of the court, said, “ Had it been real estate, in that case the plaintiff would have been entitled to recover, but though part of the personalty, it is said to be taken subject to the trust, and the question is, whether a trust of this description declared of the personal estate, prevents the statute of limitations from being set up by way of defence; and I am clearly of opinion that it does not at, all vary the legal liability of the parties, or make any difference with respect, to the effect and operation of the statute itself. The executors take the estate subject to the claim of the creditors ; they are in point of law the trustees for the creditors; the trust is a legal trust, and there is nothing whatever added to their legal liabilities, from the mere circumstance of the testator himself declaring in express terms, that the estate shall be subject to the payment of his debts. I conceive therefore, that the circumstance of there being an express trust in this case, does not make any alteration with respect to the question. And if in ordinary circumstances as to personalty, where there was a mere legal liability, the existence of a mere legal trust would not have been an answer to a plea *628of the statute of limitations ; so I conceive, that in the present case, no alteration can take place, from the existence of an express trust, and that that trust cannot, under these circumstances, be considered as an answer to the statute.” This opinion was approved by Lord Cottenham, in Freake v. Cranefeldt, 3 Mylne & C’s Rep. 500, who said it was a direct authority for holding that a direction in a will for payment of debts, was merely inoperative so far as the personal estate was concerned. See also Crallan v. Oulton, 3 Beav. Rep. 1; Ault v. Goodrich, 4 Russ. Rep. 430; Roosevelt v. Mark, 6 Johns. Ch. Rep. 293; Evans v. Tweedy, 1 Beav. Rep. 55. In Crallan v. Oulton, ut supra, the testator directed his debts to be paid out of his real and personal estate, and provided that if his personal estate should fall short in paying his debts his executors should enter into the receipt of the rents of his freehold, until the same should be wholly paid off. The personal estate was sufficient for the payment of the debts ; it was nevertheless held, that a trust had been created for the payment of the debts out of the realty so as to prevent the operation of the statute of limitations; and that the real estate remained liable to pay a simple contract debt, which had been left unpaid after distribution of the residuary personal estate.

The cases of Fenwick v. Chapman, 9 Pet. Rep. 461; Peter v. Beverly, 10 Pet. Rep. 562; Bank of the U. S. v. Beverly, et al. 1 How. Rep. 134, we think are in harmony with the English decisions, and perhaps go quite as far in implying a trust for the payment of the testator’s debts, and in the consequences deduced from it. See also Lewis’s Ex’rs v. Bacon’s Legatee and Ex’r, 3 Hen. & M. Rep. 89.

In Hines v. Spruill, et al., 2 Dev. & Bat. Eq. 93, the testator by his will, gave to his two sisters all his land, together with all cattle, horses, and other appurtenances thereto, except so much thereof as will pay my just and lawful debts, which I think may be done from the crop now growing thereon.” He also gave to the same persons all his negroes : Held, that the will did not create a charge upon any part of the property for the benefit of creditors, beyond that *629which the law imposes upon the testator’s estate; that if the words “ except so much thereof as will pay my debts, which I think may be done by my crop growing thereon,” create a charge, it is confined to the cattle, horses and other appurtenances mentioned in this clause. These were the subjects immediately anteceding the exception.” The fund which the testator trusted would be sufficient, was of the character of appurtenances — the then growing crop. It was also directed by the will, that the negroes should remain on the plantation, until one of his sisters, who is made a legatee, should become of age, at which time he wished the property divided. Upon this provision the court remarked, that creditors could not wait until the sister became of age, “ and until that time at least he contemplated that the plantation should continue entire, and the negroes, who were certainly given without any charge, were to remain thereon. It was therefore concluded, that it was not the intention of the testator to charge any part of his property to his creditors.” Speaking of the English decisions on the subject of charging lands by will, for the payment of debts, it was said, “ In that country lands are not, (or at least were not when these decisions were made,) liable for the payment of the simple contract debts of the deceased. He cannot alter the law and make them directly liable,' but having a right to devise his lands', he may devise them either absolutely, or subject to any reasonable condition. When therefore a court of equity collects from a will so executed as to be effectual to pass lands, that the testator devises that his lands shall be subject to the payment of all his just debts, they give effect to this will in the only mode by which it can operate. They hold that it is a devise in trust for the payment of debts- — that the lands are by force of the will charged with the payment of debts. But we can find no case — no dictum — where, in that country, a testamentary disposition is made of chattels, subject to the payment of debts, that the liability of those chattels to the creditor is in the slightest degree affected thereby. The testator can give no chattels but subject to the *630payment of debts. All his chattels are immediately liable to his creditors. The chattels do not pass by his gift to the legatee — but they go first to the executor, and the law has prescribed their liability, and his liability by reason thereof, to the creditors — and the liability of legatees, if the executor delivers them over, without satisfying or providing for the satisfaction of their demands.”

It is enacted, by a statute passed in 1806, that the lands, tenements and hereditaments of the testator or intestate, shall stand chargeable with all the debts of the deceased, over and above what the personal estate shall be sufficient to pay. In 1803, 1818, 1820, and 1822, acts were passed authorizing the sale of the lands belonging to the estate of a deceased person, upon application to the orphans’ court, either upon a deficiency of personal property, or where it would be more beneficial to the estate to sell the lands than the slaves, &c. See Wyman, et al. v. Campbell, et al. 6 Port. Rep. 219. It is also provided, that whenever an executor, Sfc. shall fail to apply to the orphans’ court for the sale of real estate, for the purpose of paying debts of the deceased, the judgment creditor may proceed by scire facias, and subject the lands to the payment of his demand; and if an executor, $* c., shall fail to apply for leave to sell real estate, three months after reporting the estate insolvent, he shall be deemed guilty of a devastavit, and himself and sureties may be sued on his bond. Clay’s Dig. 197. So it is made lawful for executors, $*c., to rent at public outcry, the real estate of any decedent until he makes a final settlement of his accounts; and the proceeds shall be assets in his hands. Id. 199. And by a statute subsequent to the testator’s death, the orphans’ court granting letters testamentary, <fcc., is required to take into the estimated value of the estate, the real estate of which the testator, &c., may have died siezed or possessed of, and shall require of the executor, &c., a bond with security under such penalty as the law previously required. Id. 229.

These several legislative provisions may suffice to show that lands in this State are subjected to the payment of the *631debts of a deceased person, where the personal assets are insufficient, and that in such case it is not only competent for, but the duty of the executor to take proper measures to make them available. It must be conceded that the important modifications they make in the common law, when connected with the equalization of debts in point of dignity, should indispose us to extend the doctrine of implied trusts, such as we are considering. We will not deny that'it is within the power of a testator so to provide by will that his real estate shall be charged beyond what the terms of our statutes direct; though the authorities cited are conclusive to show that the course of administration in respect to the personalty cannot be thus controlled.

In Darrington v. Borland, 3 Porter’s Rep. 9, two points material to the present inquiry are determined. First— That a testator may charge his real estate beyond what it is charged by the general law. Second — That by postponing the distribution between his devisees until his debts are paid, it is so charged. If the question were now presented to us for the first time, we should be inclined to think that the intention to extend the charge created by the general law, could not be inferred from the terms of the will in that case; and we do not desire to be understood as giving our sanction to such an interpretation. Is it at all probable that the testator in that or the present case intended to withdraw his debts from the influence of the statutes of limitation and non-claim, and allow their payment at any future period, though his executor had performed and closed his trust, or wasted the assets which should have been applied to their extinguishment ? We cannot think that the testator in either case intended to keep the adjustment of his estate open for an indefinite period, or that the statutes of limitation and non-claim were in any way presented to his mind.

Although the question of these statutory bars was not raised upon the record in the case last cited, yet the opinion of the court is expressed as to the effect of the supposed trust upon them; and it was said that either of them might be successfully relied on, by the devisees. Mr. Justice Story says that a general direction in a will of personal estate to pay debts, will not stop the running of the statute of limitations, or if *632the bar has already attached, remove it. The same rule is equally applicable to the case of a devise or charge upon real estate for the payment of debts. In no case will it take the case out of the operation of the statute of limitations, or prevent the running of the statute.” Sto. Eq. § 1521, (a) ed. of 1846. We cite the language of the learned author, though it must be admitted that the citations he makes from the English authorities do not sustain the latter part of his proposition, viz : that the trust upon the realty does not prevent the running of the statute. The learned counsel for the plaintiff in error is mistaken in supposing that Darrington w Borland was re-affirmed in Hitchcock’s Heirs and Adm’r v. The U. S. Bank of Penna. 7 Ala. Rep. 386; is was merely cited as to one point, which is not presented in the case at bar. We have not denied that it is competent to devise lands to a trustee for the payment of debts, Spc.

The statute of non-claim differs in its effect and consequences from the statute of limitations, technically so called —it must be insisted on by the personal representative, and cannot be safely waived. It requires claims against the estates of deceased persons to be presented to the executor or administrator within eighteen months, &c. “ and all claims not so presented within the time aforesaid, shall be forever barred from a recovery: Provided, that the provisions of this section shall not extend to persons under age, femes covert, persons insane or non compos mentis, to debts contracted out of the State, nor to claims of heirs or legatees, claiming as such.” Clay’s Dig. 195, § 17. This enactment was not designed merely as a security for the estate against neglected and dormant claims, but was intended for the benefit of heirs, distributees and devisees, whom the policy of the law requires should be placed in a condition in which they may safely act with property apparently their own. The Br. B’k at Decatur v. Hawkins, at this term.

It is provided by statute in Massachusetts, that the real estate of a deceased person may be sold by his executor, <fcc.when the goods and chattels in his hands shall be insufficient for the payment of debts with the charges of administering, upon obtaining a license therefor from either one of several courts specifically mentioned. Rev. Stat. of Mass., ed. of *6331836, p. 452, et seq. In that State, the bond of the executor stipulates, not only for the proper administration of all the testator’s goods and chattels, rights and credits, but for the proceeds of all his real estate, that may be sold for the payment of his debts or legacies, which shall at any time come to the possession of the executor, or to the possession of any other person for him. Id. 422. It is also enacted that “ no executor or administrator, after having given notice of his appointment,” $*c. “ shall'be held to answer to the suit of any creditor of the deceased, unless it be commenced within four years from the time of his giving bond as aforesaid, excepting in the cases hereinafter mentioned.” One of these exceptions allows, under certain circumstances, an action to be brought within one year after an inability to sue, ófc. is removed, although the limitation prescribed has expired. Under this legislation, a decision altogether pertinent to the case before us was made in Hall v. Bumstead, 20 Pick. Rep. 2. Shaw, C. J. in delivering the opinion of the court, said, “ In this commonwealth, the liability of heirs for the debts of an ancestor, depends wholly upon statute, and is provisional only. By the statute, heirs, when bound at all, are liable, whether heirs are named in the obligation or not j so they are liable as well for debts by simple contract, as for specialty debts; so devisees are liable as well as heirs, to the extent of the property received by devise ; so legatees or distributees of personal property are liable as well as those who take a freehold by descent; in all which respects this statute liability differs from the liability of heirs at common law. Here, it is the policy of the law to make all property liable for all the debts of the deceased owner, and in the first instance, to place it under the administration of an executor or administrator ; and in pursuance of the same policy, land is made assets provisionally in the hands of the administrator, after the personal property is applied. The rule of the common law, making the specialty debt of the ancestor de facto that of the heir, and presuming that the heir has assets, until he shows the contrary by plea, does not prevail in this commonwealth.” Again: “ Every demand which can be made and enforced against the estate of a deceased person, is to be pur*634sued against the administrator where it can be done, and the whole estate, personal and real, is in effect made assets in his hands to meet such claims. This object is one of great importance, by securing, as far as practicable, an early and final settlement of estates, so that the residuum may be distributed among those entitled, free of incumbrances and charges, which would lead to protracted litigation. To enforce this policy, it is provided that all suits against executors and administrators must be commenced within four years from notice given according to law, and not afterwards. This is an absolute bar, given for the benefit of heirs and devisees, that they may hold their respective interests in the property, without claim or incumbrance.” 13 Mass. Rep. 201; 16 Id. 429; 5 Pick. Rep. 140.

Such being the object and policy of the statute of non-claim, we are inclined to think that its effect is to throw upon the creditors the necessity of presenting their demands to the executor, or administrator, before any trust by implication can become operative against the heir or devisee. Have not the legislature very significantly indicated that the heir or devisee shall take the estate freed from all implied trusts for the payment of the testator’s debts, if they are not presented to the personal representative within the time prescribed ? If this be so, it is an indispensable duty of the courts to sustain— not to defeat the legislative will.

Such is the authority and duty of an executor in respect to the real estate of his testator, that no disposition could be made of it by will, which would withdraw it from liability to pay the testator’s debts, if its appropriation should become necessary. If devised, the devisee takes it cum onere — subject to the provisional duty and authority of the executor. It may well be questioned whether by any other than express terms, or language most significant and direct, a testator in this State can throw upon his heirs or devisees, the burthen of paying claims, other than those excepted from the influence of the statute, where the creditor omits to present and enforce them against the personal representative.

The construction contended for by the plaintiffs’ counsel would make it difficult, if not impossible, for an heir or devisee, or a purchaser from either, where the will, according *635to the common law, made the real estate subject to the testator’s debts, to act with safety in the sale or improvement of the estates received by them under the will; lest debts of which they had no means of ascertaining, and of which the negligence of the creditor has prevented the payment, should afterwards be enforced. If, in the present case, a trust can be established, it would be hazardous for a testator to give any directions in respect to his land in connection with his debts, if he did not intend to take them out of the course of administration which the legislature has prescribed, or to arrest the operation of the act of limitations, and dispense with the statute of non-claim. Under, perhaps, a majority of wills in this country, the administration would be disturbed — trusts would be created involving responsibilities and consequences which testators never contemplated, and procrastinating to. the prejudice of heirs and devisees, the settlement of estates to an indefinite period. The duties of an executor, instead of being controlled by the statutes which apply to the estates of deceased persons, would be regulated by principles recognized by the English chancery, under a state of the law altogether different from ours — and Vhen, too, we have studiously endeavored to avoid the very evils that superinduced them. Our policy is decidedly adverse to the origination of trusts by implication for the payment of debts, not only because it is unnecessary, but because the character of the executor is changed to a mere equitable trustee, not accountable to the orphans’ court, and whose default in that character, perhaps his administration bond would not cover. In Cook v. Fountain, 3 Swanst. Ch. Rep. 592, it was said by Lord Chief Justice Raynsford, that “ the law never implies-, the court never presumes a trust, but in case of absolute necessity. The reason of this rule is sacred ; for if the chancery do once take liberty to construe a trust by implication of law, or to presume a trust unnecessarily, a way is opened to-the Lord Chancellor to construe or presume any man in England out of his estate ; and so at last every case in court will become casus pro amico.”

Whatever construction might be placed- by an English chancellor upon the different clauses of the will from which it is attempted to deduce a trust, in view of our statute law, *636which has effected such important modifications as to the powers and duties of an executor, they can be regarded as nothing more than mere directions by the testator as to the mode of fulfilling .his intentions — as an expression of his wishes, how, and from what portion of his estate, the means of paying his debts, and some of his legacies, should be raised. The direction to keep his Marengo estate together, until his debts, and the legacies he had given, should be “paid off and discharged,” could not operate to the prejudice of his creditors; for if their demands were not extinguished before judgments were recovered, they could coerce a sale.

It is a matter not unworthy of consideration in a proper case, that in this country, where land is so abundant, it is much less appreciated than at least one description of personal property; and as it can be so easily obtained, it is often most beneficial for a testator’s estate, that it should furnish by a sale the means of paying his debts. Besides, considerations of humanity and benevolence may make it desirable, and even a duty, to provide for retaining the slaves in his family. Under such circumstances, would it not be unjust to raise a trust which would render inoperative the statutes of non-claim and limitations, from the mere fact that the will made the lands primarily liable for the.payment of the testator’s debt, when he never could have contemplated such a consequence.

The cases of Duval’s Heirs v. McLoskey, 1 Ala. Rep. 708, and Inge, et al. v. Boardman, 2 Id. 331, bear no analogy to the present. There the creditors had specific liens under mortgages, which invested them with the legal estate. The lands of the debtors were pledged — the mortgagee had a remedy in equity, by which this pledge and lien could be made available. This remedy did not require a presentment of the mortgagee’s claim to the administrator, to authorize its enforcement. If the creditors had looked to any other portion of their debtor’s estate, then it would have been necessary to have presented their claims to the executor within the time directed by the statute.

Having determined that the testator did not create a devise by implication for the payment of his debts, so as to arrest the operation of the statutes of limitations and non-claim *637and give to a court of chancery, jurisdiction to subject his real estate to the payment of a debt at the suit of a creditor, it is unnecessary to consider the effect of the allegations in the bill as to the presentation of the complainant’s demand. The decisions of this court as to what will constitute a presentment within the meaning of the statute, furnish rules by which, in almost every case that occurs, it may be determined whether the claim has been duly presented to the executor or administrator. It remains but to add, that the decree of the court of chancery is affirmed, u