Case Name: Eliza Stanton, appellee, v. Edward C. Stanton et al., appellees: Kenesaw State Bank, appellant
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1938-04-29
Citations: 134 Neb. 660
Docket Number: No. 30103
Parties: Eliza Stanton, appellee, v. Edward C. Stanton et al., appellees: Kenesaw State Bank, appellant.
Judges: Heard before Goss, C. J., Rose, Eberly, Day, Paine, Carter and Messmore, JJ.
Reporter: Nebraska Reports
Volume: 134
Pages: 660–681

Head Matter:
Eliza Stanton, appellee, v. Edward C. Stanton et al., appellees: Kenesaw State Bank, appellant.
279 N. W. 336
Filed April 29, 1938.
No. 30103.
Tibbets, Canaday & Hewitt, for appellant.
King & Bracken, contra.
Heard before Goss, C. J., Rose, Eberly, Day, Paine, Carter and Messmore, JJ.

Opinion:
Carter, J.
This is an appeal from the district court for Kearney county from a decree entered in a partition suit brought by one of the devisees under the will of Patrick W. Stanton, deceased, against the other devisees, partitioning the real estate devised by the will.
The record discloses that Patrick W. Stanton died on August 17, 1929, leaving a will by which he devised a one-eighth interest in his real property to each of his children or their representatives. The one-eighth interest of William P. Stanton is the only one that is involved in this suit.
The evidence shows that on October 17, 1921, William P. Stanton borrowed some money from Patrick W. Stanton, and gave two promissory notes in the amounts of $600 and $204.54 as evidence thereof. Payments of interest were made and indorsed on both notes on December 5, 1925. At the death of Patrick W. Stanton neither of the notes had been paid.
It further appears from the record that the Kenesaw State Bank obtained a judgment against William P. Stanton in the amount of $1,125 and interest and costs on January 25, 1926, and that it was a valid judgment on the date of the death of Patrick W. Stanton, the testator. The Kenesaw State Bank contends that the judgment became a lien upon the interest of William P. Stanton in the lands devised by the will at the time of the death of Patrick W. Stanton. The plaintiff contends that the amount due the testator as evidenced by the notes given by William P. Stanton should be satisfied from the interest of William P. Stanton before the bank's lien can attach. The trial court sustained plaintiff's contention and the bank has appealed to this court.
It must be borne in mind that the case at bar involves a testate estate and that the will of the testator is silent regarding the indebtedness of William P. Stanton owing to the testator. The indebtedness of William P. Stanton was incurrred prior to the making of testator's will, and, necessarily, prior to the codicil that the testator subsequently executed. The question immediately arises as to whether the debt of William P. Stanton to the testator is an advancement. The doctrine of advancements rests upon the supposed desire of an ancestor to equalize his estate among his heirs, not only as to the property left at the time of his death, but as to all property that came to him, so that one child should not be preferred to another child in the final settlement of his estate. "In its strict technical sense an advancement is a perfect and irrevocable gift, not required by law, made by a parent, during his lifetime, to his child, with the intention on the part of the donor that such gift shall represent a part or the whole of the portion of the donor's estate that the donee would be entitled to on the death of the donor intestate." 1 Am. Jur. 715, sec. 3.
"The doctrine of advancements applies only to estates of persons dying intestate unless otherwise provided by statute. Our legislature has acted upon the question of advancements, but has apparently limited the doctrine of advancements to intestate estates; at least it has not gone so far as to apply it to estates of those dying testate." In re Estate of Gibson, 130 Neb. 278, 264 N. W. 762. See, also, Comp. St. 1929, secs. 30-112 to 30-116.
In the case of In re Estate of Gibson, supra, this court, in passing upon a similar state of facts, said:
"An advancement does not carry with it the obligation of repayment; nor is it founded upon a valuable consideration ; while a debt or loan carries with it the obligation of repayment and gives the creditor the right to enforce the same in the courts. The enforceable obligation against the donee would, therefore, be contrary to the character of an advancement and must be viewed in the light of a debt. See 1 R. C. L. 653, sec. 1.
"In the instant case, when Joseph Gibson paid the debt of his son and required the son to recognize his obligation by giving his promissory note, bearing interest and payable at a future date, it was not in the nature of a gift, but was treated as a debt owing by the son to the father. It lacked the characteristics of an advancement. We think that the county court and the district court rightly held that the note was not an advancement but was personalty, and, as such, passed by the will of testator to his widow."
Adopting the logic of Justice Good in the foregoing opinion, we conclude that the testator in loaning the money to William P. Stanton and taking his note therefor, bearing interest, payable at a future date and bearing the indorsements of interest paid apparently to bar the running of the statute of limitations, treated the amount due on the notes as a debt, and, as such, passes by the will to his executor as personalty.
Appellee contends, however, that the doctrine of retainer applies and that the amount owing by William P. Stanton can be retained by the executor from the proceeds of the sale of William P. Stanton's interest in the land.
The cases are uniform in holding that the doctrine of retainer applies where personal property is involved. This court has held that the right of an executor to retain a legacy and apply it pro tanto upon the debt of the legatee exists independently of statute. First Trust Co. v. Cornell, 114 Neb. 126, 206 N. W. 749. The question whether the right of retainer exists against a debtor heir where real estate is involved and the deceased left no will is one upon which the authorities are divided and upon which this court has not passed. In view of the fact that a determination of this question is not necessary to a decision in this case, we will not undertake to discuss it here. Suffice it to say that the two contrary rules are ably discussed in Marvin v. Bowlby, 142 Mich. 245, 105 N. W. 751, and Stenson v. H. S. Halvorson Co., 28 N. Dak. 151, 147 N. W. 800.
The question for our determination is whether the doctrine of retainer can be applied against the devisee of real estate under a will that is silent as to the devisee's indebtedness to the testator. Our former opinion in this case, 133 Neb. 563, 276 N. W. 180, holds that the doctrine of retainer applies. Upon a reconsideration of the case, after reargument, we have come to the conclusion that we erred in our former opinion.
An heir's distributive share of the personal estate, under all the authorities, may be applied by the administrator or executor in payment of a debt due the estate by such heir. The reason is that the personal estate passes to the administrator or executor, and, while it is in the possession of the administrator or executor, he may retain a sufficient amount of the legatee's share in the personal property to satisfy the claim of the administrator or executor against him. It is this situation that gives rise to the use of the term "retainer." But the title to real estate under a devise in a will is vested in the devisee at the instant of testator's death. Brown v. Webster, 87 Neb. 788, 128 N. W. 635; Fischer v. Sklenar, 101 Neb. 553, 163 N. W. 861. While it is true that the title of the devisee is subject to the right of the executor to sell the land to pay debts duly allowed against the estate and the expenses of administration, as by- statute provided, the surplus will be treated as real estate, and consequently the doctrine of retainer could not apply unless it applies generally to a devise of real estate. In re Estate of Schram, 132 Neb. 268, 271 N. W. 694.
The testator, a widower, had the legal right to dispose of his property by will in any manner that he saw fit and, if the intention of the testator can be ascertained from the will, it is the duty of the court to give it effect. Luenenborg v. Luenenborg, 128 Neb. 624, 259 N. W. 649; In re Estate of Mooney, 131 Neb. 52, 267 N. W. 196.
In the case of Dearborn v. Preston, 7 Allen (Mass.) 192, the court, in holding that the indebtedness owing the testator by a devisee of a share in testator's realty could not be charged against him, said: "The reason why that rule should prevail in reference to devisees to whom real estate is given without words of condition or limitation annexed to the devise is even more strong and obvious than why it should be applied in reference to the inheritance of heirs at law. The testator may prescribe at his own pleasure the terms of his gift; and, if he desires and intends to do so, he may charge and encumber the estate devised with the duty and obligation of paying any debt which shall remain due from the devisee to the testator at the time of his decease. His omission to impose any such condition unequivocally evinces an intention to make his gift absolute and unconditional. And it is a plain and unavoidable consequence of an unrestricted and absolute devise, that the estate devised comes to the devisee entirely free from any encumbrance or liability to be in any part appropriated to the payment or discharge of any debt which was due from him to the testator."
In LaFoy v. LaFoy, 43 N. J. Eq. 206, 10 Atl. 266, the court said: "The devisee of lands occupies no such relation to the executor as that which exists between legatee and executor. No act is necessary, on the part of the executor, to put the devisee in full enjoyment of the estate devised. The opportunity, therefore, could not arise for the executor to retain the debt of the devisee to the testator out of any demand which the devisee might seek to enforce against the executor. If such a charge attaches against the land devised, it would be necessary for the executor to establish it by proceedings in which he is the actor. After diligent search, I have been unable to find a case in which an attempt has been made to charge a devise of lands with a debt due from the devisee to the testator, in the absence of language in the will manifesting the purpose of the testator to do so."
In Avery Power Machinery Co. v. McAdams, 177 Ark. 518, 7 S. W. (2d) 770, the court said: "In other words, it may be stated as the settled rule in this state that, except where the indebtedness be held an advancement, the distributive share of ah heir or devisee in the real property of the estate is not chargeable with the heir's or devisee's indebtedness to the estate, either as against the land itself or the proceeds of the sale thereof; but the indebtedness must be collected in the same manner as any other indebtedness due the estate."
In the case of In re Estate of Lyon, 70 Ia. 375, 30 N. W. 642, the court in a similar case said: "The primary object in all cases is to ascertain the intention of the testator. The will must stand and speak for itself, unless it has been revoked or changed in the manner provided by statute. As the will gives the appellant an equal share of the estate, after the specific legacies have been satisfied, and no mention is made in the will of any advancements having been made to her, or that she is to be charged therewith, the presumption must obtain that such was not the testator's intent. This, it seems to us, must be so; and that it quite clearly appears that it was not the intent of the testator that appellant should be charged with money given her husband prior to the execution of the will, for the reason that he clearly intended she should receive the one-third part of the residue of his estate; and it is clear she would not receive this share if the so-called advancements are to be charged to her."
In Kuhne v. Gau, 138 Minn. 34, 163 N. W. 982, the court stated the rule as follows: "The theory is this: The doctrine of advancements has no application to testate estates. If a father gives his daughter $1,000 as an advancement, such amount will, in the event of the father dying intestate, be deducted from the daughter's distributive share of the estate, but, if the father leaves a will, it will not be deducted from the share given her in the will, for the will is supposed to contain the final manifestation of the testator's bounty, and all advancements not saved by the will are extinguished (Kragnes v. Kragnes, 125 Minn. 115, 145 N. W. 785), and though it was understood at the time the payment was made that it should be an advancement, if the donor dies testate it becomes an absolute gift."
Other cases to the same effect are Campbell v. Martin, 87 Ind. 577; Wisner v. Teed, 9 How. Pr. 143; Broas v. Broas, 153 Mich. 310, 116 N. W. 1077.
Appellee relies upon the case of In re Dayton's Estate, 173 Okla. 180, 46 Pac. (2d) 933. The opinion in that case shows that' Herbert J. Dayton died testate and that the doctrine of retainer was applied to the interest of a devisee. The decision, however, was based upon two Oklahoma statutes, the first of which provided that there shall be no priority as between personal and real property in its sale to pay debts, expenses of administration and the allowance to the family. The second statute provided that the executor or administrator must take into his possession all the estate of the decedent, real and personal, except the homestead and personal property not assets, and collect all debts due to the decedent or to the estate. Under these statutes, real estate is placed in the same status as personal property and the doctrine of retainer applies to the real estate to the same extent that it applies to personal property. This case is not, therefore, authority in the case at bar for the reason that it is founded entirely upon statutes taking it out of the general rule.
We have examined the cases in other jurisdictions and the only court which appears to have departed from the general rule, where a testate estate is involved, is the supreme court of Iowa. In Russell v. Smith, 115 Ia. 261, 88 N. W. 361, the Iowa court held: "A purchaser of an heir's share of the decedent's real estate pending administration does not take the land subject to a debt which the heir owed the deceased, the claim not being a lien on the heir's property until reduced to judgment." We think that this holding is in line with the great weight of authority. The later case of Senneff v. Brackey, 165 Ia. 525, 146 N. W. 24, 1 A. L. R. 978, is also relied upon. In that case the testator devised an interest in land to his son who, at testator's death, had a sum of money belonging to .the testator in his possession which he refused to turn over to the administrator. The obligation did not accrue until after the death of the testator. The administrator brought suit against the son and obtained a judgment. The question decided was one involving the priority of liens. However, the court in its opinion said: "So here, in view of the peculiar facts of this case, already set forth, the estate not being closed, we think it is clearly within the power of a court of equity to take from a specific devise, made to a distributee, a proper part of the funds of the estate in his hands at the time of testator's demise, and to decree the same to be a lien upon this specific devise." The court then added: "These cases are in equity, and they are both peculiar in their facts; so peculiar as to introduce exceptions to general rules, and this opinion is not to be taken as a precedent for more than is actually decided." We submit that this case is not in point either as to the facts or the propositions of law decided. In Schultz v. Locke, 204 Ia. 1127, 216 N. W. 617, the court held directly that retainer would not be denied by reason of the fact that no mention was made of the indebtedness of the devisee in the will when the devisee was insolvent. The court in its opinion relies upon Russell v. Smith, supra, Senneff v. Brackey, supra, and Woods v. Knotts, 196 Ia. 544, 194 N. W. 953, 30 A. L. R. 768, the latter of which involved an intestate estate. We are of the opinion from what we have heretofore said that these 'cases are not in point and that they do not support the holding in Schultz v. Locke, supra. We are unable to follow the reasoning of the Iowa court in the Schultz case, and we are convinced that it is not supported by the authorities. The next Iowa case is that of Rodgers v. Reinking, 205 Ia. 1311, 217 N. W. 441. It is based entirely upon the decision in the Schultz case and consequently is no better authority than the former. Likewise, the later case of Johnson v. Smith, 210 Ia. 591, 231 N. W. 470, in so far as the doctrine of retainer is allowed against the interest of the devisee in the real estate is concerned, is based upon the Schultz case. We necessarily conclude that the decisions of the supreme court of Iowa on this subject constitute a view not supported by the authorities generally and, in our opinion, are not supported by the better reason and logic.
The notes given in the case at bar were evidence of a simple indebtedness owing to the testator. The indebtedness represented by them was not an advancement for the reason that it does not comply with our statutes on advancements nor does it have any of the characteristics of an advancement. It is not a charge upon the interest of the devisee in the real estate because it was not made so by the testator in his will. It is nothing more than an indebtedness due the estate which passes to the executor upon testator's death. The effect of our former opinion was to make the indebtedness a charge when a charge in fact was not created.
It must be remembered that at common law all of the property of a deceased person passed direct to his heirs upon his death, free from any debts due the deceased from the heirs. Most states, including this state, have enacted statutes providing that personal property passes to the executor or administrator upon the death of the owner. Such statutes are clearly in derogation of the common law and it is only because of them that an executor or administrator comes into possession of the personalty and may retain from the interest of a legatee or distributee the amount owing to the deceased. In this state the legislature has not changed the common law in so far as the descent of real estate is concerned. The result is that real estate descends to the devisees of a deceased free from the debts of such devisee subject only to conditions imposed by statute. Our statutes, hereinbefore cited, do not provide for advancements in testate estates, the will of testator presumably being' the testator's last expression of his intention. There being nothing in the will purporting to charge the devisee with the indebtedness owing the testator, it evinces an intention to treat the notes as a simple indebtedness and to leave their enforcement to the ordinary legal methods provided by law. No charge against the land was created by the testator in the case at bar. Under such circumstances, the only remedy of the administrator or executor is to invoke the ordinary legal remedies to enforce payment. The adoption of any other rule would be equivalent to a rewriting of testator's will by us or tantamount to the passage of a statute by the court in a field where the legislature has refused to act. If the legislature had intended to make a devisee's ordinary debt to his intestate an advancement or a charge upon the devisee's interest in the real estate, it would have been a simple matter for it to have done so. By the inclusion of one, the exclusion of the other is logically inferable. The testator in this case had the legal right to dispose of his property in any way that he saw fit. He was under no legal obligation to give his children equal amounts in his estate. The intention of the testator must be determined from the four corners of the will. If the testator had intended to give his son anything less than a one-eighth share in his real estate, he could have said so in the will, and, as he did not do so, it is not the province of this court to do it for him and thereby give an effect to the will that the testator never intended.
The effect of appellee's contention is that we should substitute the court's idea as to what is fair and equitable for that of the testator. This we cannot do. It might appear to the casual observer that the will as executed produced an inequitable result, but, on the other hand, we have no knowledge of the facts that motivated the testator in drawing the will as he did. He had the legal right to dispose of his property as he saw fit and the reasons he had for making the disposition that he did make are not of concern to this court. The fact remains that the inequity of the present situation, if there be such, cannot be adjusted by depriving the appellant of its legal interest in the devise and giving it to others.
In considering the case before us, we must give effect to the intent of the testator as shown by the will itself and the enactments of the legislature upon the subject. After doing so, the only sound conclusion that can be reached is that the debt of the devisee to the testator cannot be charged on the lands devised to him, in the absence of language in the will making such debt a charge, and this rule applies whether the devisee be solvent or insolvent.
The judgment of the trial court is reversed, with directions to enter a judgment for the appellant in accordance with the views expressed in this opinion.
Reversed.