55 N.J. Eq. 42 | New York Court of Chancery | 1896
Two questions were submitted — first, are the complainants entitled to interest on their several legacies commencing from the statutory period of one year after the death of the testator ? and second, was the amount due on the promissory note held by Elizabeth Adams paid and satisfied by the bequest to her of $500, found in the second clause of the will ?
With regard to the question of interest on the legacies, it is argued by the defendant that, reading the second clause of the will in connection with the third, which gives power of sale, and the fourth, which directs that the real estate shall be sold and the legacies paid out of it, the time for the payment of the legacies was after the sale of the real estate, and that they were not due and therefore did not bear interest until such sale took place.
I am unable to adopt that view. It is manifest from the language used that the testator did not contemplate any great delay in selling the land and paying the legacies; and it is not probable that he would subject the legatees to the risk of having the payment of their legacies indefinitely postponed, at the discretion of the executrix, who was also tenant for life and thereby directly interested in the postponement of the sale and payment of the legacies, and the consequent diminution of the?body of the estate and the income to which she was entitled.
But they did not press their claims and rested quietly for upwards of three years, during which period the executrix, who had the power of sale, was enjoying the income of the property without diminution from the payment of these legacies.
Now, it seems to me that this failure to act and collect their demands, on the part of the legatees, must be held, as against the persons entitled in remainder, to be a waiver on their part of the interest on their legacies. They had the power to enforce their claims and refrained from doing so, to the benefit of the tenant for life and at the expense of the tenants in remainder, if they are compelled to pay interest.
I conclude, then, that the complainants ought not to. recover against this administrator any interest on their legacies. It appears that he acted promptly in the sale of the property, and that he was ready and willing to pay the face of the legacies as soon as the estate could be liquidated.
Whatever claim the legatees may have for interest ought to be pressed against the estate of the widow, who enjoyed the benefit of the use of the property out of which the legacies ought to have been paid when due.
With regard to the second question, I doubt whether it is properly before the court, and intimated my doubts to counsel at the argument. Nevertheless, they requested me to express an opinion upon it, and I have examined it with the following result:
The settled rule of construction is that a bequest by a debtor to a creditor of a sum of money equal to or greater than the debt, where the debt was contracted before the bequest was. made, and no motive was assigned for the gift, and in the absence of any contrary intention discoverable on the face of the will, shall be deemed a satisfaction of the debt.
■ In this case there is no direction in the will that the testator’s debts shall be paid, nor any other expressions to prevent the
It is urged that in ascertaining whether the bequest is or is not as great as the debt, the interest, if any, which has accrued on the debt at the death of the testator must be added to the principal and the same taken as the debt.
No authority was cited in support of this proposition, but without admitting its soundness I will adopt it for present purposes. As before stated, the note in question does not mention interest, nor does it fix any time of payment. It promises simply to pay so much money.
It is well settled that such a note has precisely the same effect as if it had been drawn payable on demand. Story Prom. N. § 29; Byles Bills and N. 79, 210; Chitty Bills 151; 1 Rand. Com. Pap. § 119.
The authorities go the length of holding that the insertion in such a note by the holder, with the consent of the maker, of the words “on demand” is not such an alteration as to render it void.
The law is equally well settled that on a promissory note, payable on demand, which does not mention interest, it does not begin to run until after demand is made, either especially or by the commencement of an action. Mayne Dam. 172; Byles Bills 305; Chitty Bills 679, 681, 682.
The reason of this rule is that where there is no expressed promise to pay interest, it can be and is given only by way of damages for a default in the performance of duty. It is not a part of the contract and recoverable as such.
If one promises to pay money on a date named in a contract, he is in default if he does not pay on that date, and is at once liable to pay interest by way of damages for his default.
But upon a promissory note which fixes no date of payment he cannot be said to be in default until demand is made upon
This result is not inconsistent with the existence all the while of a present right of action in the holder of such a promissory note. The mere fact that he has the present right to sue and recover a sum certain does not give him the right to recover damages for non-payment of that sum before he demands payment.
It follows that the statute of limitations may and does run against a promissory note payable on demand from its date, although interest does not run until its actual demand unless so expressed in the note. Ang. Lim. § 95; Wood Lim. § 124.
It thus appears that if the statute was pleaded to the action at law brought upon the promissory note here in question, the action will probably fail; but that question was not submitted to me.
I think the note was satisfied by the legacy and will advise a decree iu accordance with the above views. I will hear counsel further as to costs, and merely say upon that subject that I see no occasion for the bringing of four suits to recover these small legacies.
