Court Opinion

ID: 6229775
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:19:14.923284+00
Date Added: 2024-06-11T08:57:49.216855
License: Public Domain

The opinion of the Court was delivered by
Woodward, J.
Two other questions arising upon the will of John Hoff are presented by this appeal, quite unlike those which have just been ruled in the opinion in Newell’s Appeal.
The testator devised to his wife, the appellant, for life, the house in whioh he dwelt on Chestnut street, together with the policy of insurance and furniture. When he purchased the house in 1847, there was a mortgage resting on it for $8400, made by a former owner, and his will is silent in regard to the payment of the mortgage. The executors paid it off out of the personalty, and took an assignment; but the creditor and the Court of Common Pleas refused to allow them a credit for it on the ground that the widow took the estate cum onere, and that she must pay the mortgage. She appeals, and the question is whether the mortgage is chargeable on her estate or on the personalty.
The will contains, in the introductory clause, the usual direction as to payment of debts, a phrase which in England is necessary to charge debts on the realty, but wholly unnecessary here, where lands as well as personal estate are bound for every decedent’s debts. Still the words “ after the payment of my lawful debts,” cannot be treated as meaning nothing; and if they are to have any significance, it must be that the executors should pay the debts before distribution be made of the estate in pursuance of the will. A debt secured by a mortgage of the testator’s own making, is no less a debt within the meaning of the introductory *204phraseology of wills than a promissory note; and executors are as much bouiid to pay the one as the other. The reason assigned in the English cases for throwing such a mortgage upon the personalty, is-that the personal estate has been benefited by the making of the mortgage; a reason for which we stand in no need, though it is as applicable here as there. As to the mortgagee, the mortgage is a specific lien, and he cannot be restrained from resorting to the land pledged; and as between him and other creditors, he will often be compelled to do so in relief of other funds; but as between the mortgagor and his representatives, his mortgage is evidence of indebtedness; and where there is nothing in the will to control their action, it is their plain duty to pay it. And to excuse them' there must be a clear declaration of intention that the devisee of the mortgaged premises is to take them cum onere. Thus it is settled, says Powell, on the authority of a great number of cases (see his work on Devises, vol. 11, p. 671), that a devise of mortgaged lands, subject to the mortgage thereon, does not throw the charge on the estate so as to exempt the funds which by law are antecedently liable, as the testator is considered to use the terms merely as descriptive of the encumbered situation of the property, and not for the purpose of subjecting his devisee to the burden.
But how is it where the estate comes to the devisor encumbered by a mortgage made by a former owner ? If it come by descent or devise, and the testator has done no act to make the debt his own, his devisee will take the estate cum onere, and the executors are not chargeable with the mortgage; and the rule is the same even where, the testator has purchased the estate, if he have had no connexion, or contract, or communication with the mortgagee, and have done no act to show an. intention to transfer the debt from the estate to himself. What dealings will have the effect to make the mortgage his own deb% have been debated in a great variety of cases, several of which counsel have cited in their paper-books. It seems that paying the mortgagee a higher rate of interest; and indemnifying the vendor against the mortgage, both which occurred in this case, are not such acts on the part of the purchaser as make him personally liable for the mortgage-debt: Shafto v. Shafto, 2 Cox's P. W. 664; Woods v. Huntingford, 3 Vesey 128.
The Court, below ruled the question on this ground. The learned judge said, it must appear that he (the testator) has done some act by which he has made himself directly liable .to the owner of the encumbrance; and then he ruled that the evidence submitted to the auditor was insufficient to shift the obligation from the real to the personal fund. We agree that some act must, be shown, indicative of an intention to take the mortgage upon himself,-and the Court were, perhaps, right in setting aside the evi*205dence of payment of an increased rate of interest, and certainly right in disregarding the declarations of the testator, made to persons having no interest in the subject; but they overlooked one important and decisive fact, which -was in full proof before the auditor, to wit, that Hoff purchased not merely the equity of redemption in this house and lot, but the entire interest, and’ that the mortgage formed part of the price of the estate. The proof was that he bought of William Reynolds and wife for $18,900; that he paid §5500, which, with this mortgage of Elmes to Harvey of $8400, was “in full the consideration for the premises.” The receipt of Reynolds, endorsed on his deed to Hoff, stipulates, moreover, that the said mortgage and the interest due, and to grow due; thereon are to be paid by the' said John Hoff.
Now, it is immaterial whether this amounted to a covenant on the part of Hoff to pay the mortgage, though, according to the doctrine of Campbell v. Shrum, 3 Watts 60, and the cases there cited, it might be easy'to say it did, but surely there can be no doubt he would be liable to an action for money had and received, at the suit of the mortgagee. As was said in the case of the Earl of Belvidere v. Rochfort, cited in 2 Powell on Devises 679, the plain intent of the deed was to put the purchaser in the place of the vendor, and that he might not be longer liable to the mortgagee, a sufficient part of the purchase-money was left in the purchaser’s hands for satisfaction of the mortgage, the purchaser thereby taking upon himself the vendor’s bond and covenant for payment of the mortgage, as fully as if he himself had covenanted to pay it off, and either the vendor or mortgagee might, upon that contract, have compelled him to pay it off. The decree in that case was confirmed by the House of Lords, and though some doubt has been thrown upon it by Lord Thueiow, in Tweedle v. Tweedle, 2 B. C. C. 107, and by Lord Alvakxey, in Woods v. Huntingford; still, its good sense is its sufficient vindication, and commends it to our acceptance. Nor is the doctrine of that case destitute of support from authorities of high respectability, as may be seen by consulting Billinghurst v. Walker, 2 B. C. C. 608; Cope v. Cope, 2 Salk. 449, 2 Ch. Ca. 5; Pochley v. Pochley, 1 Vern. 36; King v. King, 3 P. W. 360; Galton v. Hancock, 2 Atk. 436; Robinson v. Gee, 1 Vesey 251; Phillips v. Phillips, 2 Bro. C. 273; Johnson v. Milkrop, 2 Vern. 112; Balsh v. Hyam, 3 P. W. 455.
If then Hoff, in his purchase of Reynolds, made himself liable to the mortgagee in any form of action, how can we hesitate to call the mortgage his debt? It is of no consequence that the mortgagee was not a party to the dealings between Hoff and Reynolds, for it is a rudimental principle, that a party may sue on a promise made on sufficient consideration for his use and benefit, though it be made to another and not to himself. It is equally un*206important that tbe mortgagee’s remedies against the land remained unimpaired. The question before us does not touch the specific lien of the mortgage, but the personal liability of the purchaser. Pie made himself liable to his vendor and to the mortgagee, and he retained purchase-money enough in his hands to indemnify himself. That money belonged to the mortgagee, and I hold he might have recovered it in assumpsit if not .in covenant; but, not being paid in the lifetime of Hoff, his personal estate had the benefit of it, and it went into the hands of his executors for the payment, first of all, of his “lawful debts.” He had no debt more lawful than this mortgage, and there is great precision in the equitable principle which devotes that money in the executor’s hands to the satisfaction of this debt.
But that principle is applicable only when there is no controlling testamentary intention expressed. If it were deducible from the whole will, that the testator meant his widow should pay the mortgage out of her life estate, we should be obliged to say so— for the will is the law of his estate. But no such intention is manifest.
It is clear, however, beyond all doubt, that he meant the bulk of his personal estate should go to legatees in the form of pecuniary legacies; and it seems to be settled, that the devisee of a mortgaged estate is not entitled to be exonerated out of personal estate specifically bequeathed: O’Neal v. Mead, 1 P. W. 693. And the same rule, it has been decided, extends to pecuniary legacies: Lutkins v. Lee, Cases in time of Talbot 3, Hamilton v. Morely, 2 Vesey, Jr. 65. In Ruston v. Ruston, 2 D. 243, S. C. 2 Y. 54, we have a discussion of many of the principles I have adverted to; and, under a devise of mortgaged premises, it was held that the personal estate of the testator shall not go in ease of the mortgaged premises, so far as to defeat specific or ascertained pecuniary legacies, or any part thereof; — aliter of the legacies of the residuum.
On this ground the decree of the Court can be sustained so far as the ascertained legacies under the will are concerned, but not as to the residuum, and the auditor’s report shows that there will be a residuum, though not of sufficient amount to pay off the mortgage. Whatever there is must be applied to the mortgage in ease of the widow’s life estate. The auditor distributed this under the 13th clause of the will; but so much of the decree as sustains this distribution must-be reversed. If that clause be regarded as a bequest of additional legacies, it is so general and indefinite in terms as not to exempt the portion of the estate to which it applies from contribution to the mortgage.
The only remaining question on this appeal, relates to the bequest to the widow of the “interest on $15,000 of such stock as I may possess.” We do not regard this as a specific legacy *207of that much of the testator’s stock; but in allowing her, as the auditor did, the full interest on $15,000 of the testator’s Pennsylvania six per cents at par value, we believe he came as near to the mind of the testator as was possible. If it be objected that it is liable to taxation, the widow must bear it. We see nothing in the will that would compel anybody else to pay her taxes.'
Decebe. — Now to wit. March, a. d. 1855, this cause having been argued by counsel and considered by the Court, it is ordered and decreed, that so much of the decree of the Orphans’ Court as appropriates the residuum of the personal estate, after paying legacies to the persons mentioned in the auditor’s report, be reversed and set aside, and that the said residue, stated by the auditor to be $3692.73, be retained by the executors and applied in part payment of the mortgage on the premises devised to the appellant, which said mortgage is assigned to and held by said executors, and that they have credit in their account for that amount so applied. And, as to all other matters in said decree, the same are confirmed.