57 Neb. 426 | Neb. | 1899
Richard Kitchen and his brother, James B. Kitchen, were the equal owners, on November 20, 1889, of the entire capital stock in the Kitchen Brothers Hotel Company, consisting of 500 shares each of the par value of $1,000. The Paxton Hotel property in the city of Omaha constituted the assets of the company. On that day Richard Kitchen executed his last will and testament, which contained, among others, the following provisions:
“Ninth. I give and bequeath to my brother Charles W. Kitchen, of Leadville, Colorado, twenty-five thousand dollars ($25,000).
*428 “Tenth. I give and bequeath to each of his sons, my neplieAvs, Ralph Kitchen and Charles W. Kitchen, Junior, five thousand dollars ($5,000), and to my niece, his daughter, Jessie CoAvherd, Avife of W. S. Cowherd, of Kansas City, Missouri, five thousand' dollars ($5,000).”
“Any or all of said legacies described in paragraphs of this will numbered second, third, fourth, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, and twelfth may be paid by my executor, in his discretion, either in cash or in shares in the capital stock of the Kitchen Brothers Hotel Company at their par value, or part in cash and part in such shares of stock at their par value,- having regard to the condition of my estate, and the circumstances of the legatees, or any of them; said legacies shall be paid as soon as it can be properly done without embarrassment to my estate, within three years after my death. My executor is hereby duly authorized to assign and transfer, or cause or authorize the transfer of any of my shares in the capital stock of said company, to carry out the provisions of this will.”
-x- # * # -x- # $ *
“Lastly. I give, devise, and bequeath to my brother James B. Kitchen all of the rest, residue, and remainder of my estate of every name and nature, real and personal, the said James B. Kitchen out of said residue of my estate to pay all the indebtedness of the Kitchen Brothers Hotel Company, including that certain mortgage for ninety thousand ($90,000) dollars, held by George Warren Smith, upon lots one (1) and two (2); block 188, in the city of Omaha. In case of the death of said James B. Kitchen before my decease, the rest, remainder, and residue of my estate shall be disposed of as follows:
“First. For the payment and satisfaction of all debts and liabilities of every name and nature of the Kitchen Brothers Hotel Company, including the said mortgage to George Warren Smith for ninety thousand dollars ($90,000) and all taxes, assessments, or other incumbrances upon its -property.
*429 “Second. The residue, after satisfying said indebtedness and liabilities, shall be divided equally, share and share alike, among all the other legatees in the will named who shall survive me.
“I hereby constitute and appoint my brother James B. Kitchen to be the executor of this my last will and testament, no official bond as such, or other bond, to be required of him. In case of his death before my decease, or before the final settlement of my estate, then said Ralph Kitchen to be such executor, no official bond as such, or other bonds, to be required of him.”
On June 27,1S90, the testator died. His said will was duly admitted to probate in the county court of Douglas county, and James B. Kitchen qualified as executor and entered upon the performance of the duties of his trust. The assets belonging to the estate, and which came into the hands of the executor, consisted of a farm, two diamond sliirt-studs, and the 250 shares of stock in the Kitchen Brothers Hotel Company. At the time of the death of the testator the mortgage of |90,000 upon the property of the company mentioned in the will remained unpaid. The indebtedness secured by said mortgage was not to become due until T89S, and prior to the maturity thereof an extension of the time of payment for the period of ten years was obtained by the directors of the Kitchen Brothers Hotel Company, at the instance of James B. Kitchen, and as yet said mortgage has not been paid. The diamonds and farm were distributed according to the provisions of the will. The executor also determined and elected to pay the legatees the amount of their several bequests in the shares of stock of the Kitchen Brothers Hotel Company at the par value thereof in lieu of cash, as the will permitted him so to do. He accordingly, within three years from the death of the testator, delivered to each legatee, excepting certain minors, the requisite number of shares of said stock, which at their face value equaled the amount of his or 'her legacy, although two of them- — Jessie L. Cowherd
Upon the hearing of the matter the county court did not sustain the said objections, but affirmed the final report of the executor, except as to the item of delivery of stock to Jessie L. Cowherd and Charles Kitchen, Jr.; ordered the executor to pay their bequests in the stock of said company at its par value, provided that the same shall be transferred to, and held by, them free from the $90,000 mortgage; appointed James B. Kitchen trustee of the stock bequeathed to him as residuary legatee, and, upon taking the proper oath of office and the giving of a bond for $35,000, conditioned to pay said mortgage debt and interest out of the shares of stock bequeathed to him as residuary legatee, the executor was directed to transfer all of the shares of stock left as a residuum to James B. Kitchen, as trustee, taking his receipt therefor; and that upon the compliance with said order and decree by the executor, and the presentation of proper vouchers and report of his doings in the premises, he be discharged. Jessie L. Cowherd and Charles Kitchen, Jr., prosecuted an appeal to the district court, where pleadings were filed by the appellants, the minor legatees and the executor, which it will be here unnecessary to summarize. At the hearing that court allowed and approved the final account of the executor, adjudged and decreed that the delivery of the ten shares of the stock to Jessie L. Cowherd and Charles Kitchen, Jr., by the executor was in full payment and satisfaction of their respective legacies; that the executor assign and transfer to Ralph Kitchen, as guardian of the minor legatees, twenty-five shares of stock of said company in full payment of the legacies due his wards; that the shares of stock left as a residuum under the will be transferred by the executor to James B. Kitchen, as trustee without bond, to be applied and appropriated first toward the payment of the
The first argument of counsel for appellants is that the primary intention of the testator was that the bequests should be paid in cash. Doubtless, Richard Kitchen when he made his will supposed that the legatees to whom specific sums were bequeathed would receive their respective shares in money, and not absolutely in shares of stock in the Kitchen Brothers Hotel Company, else stock would have been specially bequeathed unconditionally, instead of giving a certain number of dollars to each legatee, as was in the first instance plainly expressed in the will. But it is also manifest from the reading of the entire provisions of the will that the testator at the time he executed the instrument foresaw or contemplated that a contingency might arise when the shares of stock in said company, and which constituted his chief assets, would not be worth their face value, and the payment of the bequests in cash would embarrass his estate, or would not be so advantageous to the several-legatees, so that a discretion or option was given the executor by the tenth paragraph of the will to pay any or all legatees, to whom money was bequeathed, either in cash or in shares in the capital stock of said company at their par value, or part in cash and part in such shares. From the reading of the will it is clear that the testator also contemplated that there would not only be sufficient assets to meet all special bequests, but there would be a residuum to go to the residuary legatee more than sufficient to pay the entire indebtedness of the Kitchen Brothers Hotel Company, including the mortgage of $90,000 on the real estate. The proofs show that at no time since the death of the
It is next contended, if the legatees cannot demand that they be paid in money, they xvere entitled to receive stock in the condition in which the testator left it, with the burden of the mortgage indebtedness removed. In a qualified sense this is true. The residuum, or the balance of the estate after satisfying the special bequests, the testator charged xvith the payment of the said mortgage, but if the residuum should prove insufficient to lift the debt thereby secured, then, to that extent, the stock received by the legatees would necessarily be impaired or depreciated in value. As we read and construe the provisions of the will, it was not the intention of the testator that the mortgage indebtedness of the Kitchen Brothers Hotel Company should be first paid by the executor before the legatees could be compelled to accept stock in payment of their bequests, because, by the terms -of the will, the legatees xvere to be paid xxdthin three years from the death of the testator, and the mortgage debt, xvithout the consent of the oxvner thereof, was not payable within that period, as it xvas not to mature until 1896. This is true for another and better reason: The
Another argument of counsel for appellants is that the time of the payment of the mortgage having been extended ten years, the executor was thereafter powerless to pay the legatees in stock,- and by such extension he became obligated to pay the bequests in cash. Counsel for the executor, in reply to this contention, suggest that the extension of the mortgage debt was not obtained by James B. Kitchen, but by the directors of the Kitchen Brothers Hotel Company. It is true it was their act, but they were moved to do so by the insistence of James B. Kitchen. Doubtless, it was the intention of the testator that the residuary legatee should pay off this mortgage at its maturity, but neither his failure so to do nor the extension of the time for the payment of mortgage debt deprived the executor of the right to pay the bequests in the shares of stock owned by the testator in lieu of money, because it was not the duty of James B. Kitchen as executor to pay the mortgage, nor did he as executor obtain the extension. If the appellants suffered loss by such extension or by the omission to
It is urged that James B. Kitchen having accepted the residue is personally liable for the mortgage debt. There is no room to doubt that the 137 shares of stock received by him as residuary legatee is charged with the payment of the mortgage, but whether by accepting the devise he became individually bound to satisfy the mortgage, principal and interest, we are not called upon to decide, since if the contention of appellants on this point is well founded, it would not prevent a discharge of the executor. They could enforce the payment of the mortgage by a suit in equity against the stock or by an action at law against the residuary legatee upon the implied promise to pay it, if such a promise can be implied from the acceptance of the residue of the estate.
We quite agree with counsel that the executor could not properly be discharged until the trust has been fully executed. The debts of the estate of Richard Kitchen and the expenses of administration have been paid.' ° All specific legacies have been paid, except certain bequests to minors, for whom at the time of the discharge of the executor no guardian has been appointed. The residue of the estate has been turned over to James B. Kitchen as residuary legatee. The mortgage of the Kitchen Brothers Hotel Company was not a debt of the deceased, nor one, as we have already shown, which it was the duty of the executor to pay. The will had been fully executed, so far as it was within the power of the executor to discharge the trust, save and except the legatees who ■were minors have not been paid their bequest, and a discharge of the executor should not have been mad ‘ until they were paid. But these appellants were not prejudiced by the order of discharge, and it is elementary that one cannot appeal from a decision, however erroneous, which does not affect his substantial rights. (Burlington
Affirmed.