| Tenn. | Apr 15, 1917
Lead Opinion
delivered the opinion of the Court.
Goodman, as the administrator with the will annexed of the estate of E. J. Halley, deceased, filed the bill of complaint for the purpose of bringing before the court the legatees under the will, among them the St. Peter’s Orphan Asylum, a body corporate, which is alleged to be the residuary legatee. It is alleged in the bill of complaint that practically all of the legatees had demanded of the administrator that he institute this action to the end that they might have the amount of their legacies determined and paid to them, more than two years having elapsed since he had issued
The bill recites that it is necessary that the court fix the compensation of the administrators and of his solicitor, that many of the legatees are unable to execute to complainant the usual refunding bond, and that some of them demanded that the net estate be distributed to them without the execution of such bonds, which complainant is advised he safely cannot do without the direction of the court.
Several of the legatees filed answers admitting the allegations of the bill, and joining in the prayer for the relief sought therein, but the orphan asylum demurred to the bill. After this demurrer was overruled, proof was taken respecting the amounts properly to be allowed the personal representative and his solicitor. A report was made by the master in respect thereto, and was heard upon exceptions by Chancellors Heiskell and Fentress, sitting jointly, who concurred in passing the final decree, adjudging all issues raised in the cause.
The orphan asylum prayed an appeal to the court of civil appeals, where several claimed errors were assigned, some of which, being renewed in this court, in support of a petition for certiorari, will be treated of in this opinion.
The result of the allowances of fees and expenses leaves the petitioner to take nothing as residuary legatee, and its counsel has ably striven to avoid this result of the proceeding in the chancery court.
(1) The court has no jurisdiction to grant the relief so far as concerns the settlement and passing of the accounts of the administrator of the estate. Those matters must first be fully settled in the probate court, which had taken jurisdiction of the estate for the purpose of administering it.
(2) The court has no jurisdiction to fix the fee of the administrator, or of his counsel, that being a a part of the administration of the estate over which the probate court had exclusive jurisdiction.
The chancellor overruled the demurrer, but the court of civil appeals stated that it was unnecessary for it to pass upon the question of jurisdiction, and it declined to do so. "We think that it was essentially the right of the demurrant to have the jurisdiction of the chancery court thus challenged passed upon, under its assignment of error in the court of civil appeals.
Tho-rnp. Shan. Code, section 4048, under which the bill of complaint was filed, provides:
“Any distributee or legatee of the estate may, after two years from- the grant of letters, apply to the county, circuit or chancery court of the county or district in which administration was taken out, to compel the payment of his distributive share or legacy.”
In Murgitroyde v. Cleary, 16 Lea (84 Tenn.), 539, whicli was a proceeding in chancery court, it was held that this statute authorizes either of the courts named, upon application of a legatee or distributee, to compel
Indeed, Judge Caruthers in Taliaferro v. Wright, 1 Shan. Cas., 178" court="Tenn." date_filed="1861-09-15" href="https://app.midpage.ai/document/taliaferro-v-wright-8372524?utm_source=webapp" opinion_id="8372524">1 Tenn. Cas., 178, said that under section 4048 an administrator may he compelled to settle and pay over in a chancery court proceeding, and that there could he no injury “to the creditors, because the interests of all will be carefully guarded by the court, by retaining the ease as long as may he necessary for their protection, and for maldng the proper decrees and orders for their safety and for costs,” thus seemingly indicating that a court of equity may take up the final administration even for the benefit of creditors proper. The case under review, however, does not call for a decision on the point last indicated, since no creditor of the estate, in the strict sense, is undertaking to maintain jurisdiction in the chancery court to administer to the end that his claim be paid by means of an accounting.
It was said in Murgitroyde v. Cleary, supra, that the statute does not deprive the court of chancery of its inherent jurisdiction over the administration of estates, which is reserved to the court by Code, section 4279 (Thomp. Shan., section 6088), which is as follows:
*562 “The chancery court shall continue to have all the prowers, privileges and jurisdiction properly and rightfully incident to a court of equity by existing laws. ’ ’
This includes the powers and jurisdiction of a court of equity as the same were at common law — the jurisdiction which was exercised by the Lord Chancellor of England sitting as an equity judge. Lake v. McDavitt, 13 Lea (81 Tenn.), 26, 30.
It therefore follows that when the chancery court is duly resorted to to enforce a settlement in behalf of legatees or distributees under section 4048, and jurisdiction is taken, that court may at least proceed to determine what is the net amount for distribution to the legatees or distributees, and thus fix the compensation properly payable to the administrator and his solicitor, and determine other questions of the amount of costs, charges, etc., properly to be deducted. The chancery court went no further in the pending .case. Mr. Gibson in his Suits in Chancery conceives that such an account may be ordered in a chancery proceeding, Section 927.
In both of the cited cases the power of a court of chancery to order the administrator to pay the moneys in his hands into the court’s registry is recognized. Payments out and the ascertainment of the proper amounts are, of course, involved, and the determination of expenses and deductions is a necessary incident to the latter step.
The statute has been given a liberal construction. In both of the cases cited above the clause relating to the time of bringing suit “after the expiration of two years from the grant of letters” has been held to be merely directory, and so far so as not to deprive the chancery court of its inherent jurisdiction over such an administration of estates in a proper case.
One of the inherent powers of a court of equity is to entertain a bill filed by a trustee for instructions and directions as to the policy he shall pursue in the conduct of his trust. Read v. Citizens’ St. R. Co., 110 Tenn., 316" court="Tenn." date_filed="1903-04-15" href="https://app.midpage.ai/document/read-v-citizens-street-railroad-8300046?utm_source=webapp" opinion_id="8300046">110 Tenn., 316, 75 S. W., 1056, and cases cited.
We are of the opinion that, when the legatees made demand on the administrator to make distribution without taking refunding bonds from them, the chancellor properly entertained the ’bill of the administrator which made the legatees defendants. When the section is liberally construed, an action so brought is not without its purview. All parties to be affected are before the court quite as effectually for the protection and enforcement of substantial rights as if the suit had been commenced by one or more of the legatees.
. Modification of the decree of the court of civil appeals and affirmance of that of the chancellor result. Writ of certiorari granted, and so ordered.
Rehearing
ON PETITION TO REHEAR.
When the original opinion in this case was handed down, we were of opinion that, though errors were assigned on the point, it was not necessary to pass upon the question as to the date from which interest should be allowed on the pecuniary legacies. A petition to rehear calls attention to the fact that a lot in the city of Memphis, reckoned by us to be of value $20,000, may probably bring more when put to sale on a rising market and enough to make the question of "interest more than academic. In that event the orphan asylum would have become a participant in the distribution as residuary legatee, and its portion would be augmented should the question as to interest he solved in accordance with its contention.
By the general rule of the common law interest was allowable on general pecuniary legacies after one year from the death of the testator, unless the will contained a provision to the contrary. Ensley v. Ensley, 105 Tenn., 107" court="Tenn." date_filed="1900-06-20" href="https://app.midpage.ai/document/ensley-v-ensley-8299643?utm_source=webapp" opinion_id="8299643">105 Tenn., 107, 58 S. W., 288, and cases cited.
“In this state the executor would have two years within which to settle the estate, and it would seem the sounder rule that interest should accrue according to the exigencies of the estate in regard to its debts and the situation of.its assets.”
In this State the rule has not been conformed to as applicable in every situation. There is no reason why interest in such case should be allowed when in other instances the court would in the exercise of discretion deny interest or postpone the date from which it should be calculated. Interest allowance should not be made on such legacies, treating the general rule as inflexible,. when the same facts would impel the court to rule to the contrary in the case of claims other than legacies. That no such distinction should be made is indicated by our decisions.
Thus in Darden v. Orgain, 5 Cold. (45 Tenn.), 211, 214, it was said:
“Interest is payable on money in general, on the ground of- delay in liquidation of the principal; so also, with respect to legacies, it may be stated as a*566 general rnle that it is payable on them.from the time at which the principal becomes actually due. 2 Roper on Leg., 184. . . . They [general legacies], in their nature, carry interest as in the case of other claims, with that incident, but the interest is computed from the time the principal is due and payable, if such time can be inferred from the will; but, if not, and no time of payment is fixed, the law, for convenience, has prescribed the general rule that interest shall be computed from the end of one year from the testator’s death.”
In some jurisdictions the general rule has been adhered to even in cases where the delay in the settlement of the estate, by reason of a contest, was shown to have been' participated • in by the legatees who claim the interest. Kent v. Dunham, 106 Mass., 590; In re Woodward, 78 Vt., 254" court="Vt." date_filed="1906-01-26" href="https://app.midpage.ai/document/in-re-woodwards-estate-6585615?utm_source=webapp" opinion_id="6585615">78 Vt., 254, 62 Atl., 718, 6 Ann. Cas., 524.
In this State, contrary to the decisions in those States where that rigid rule is applied, it is held that delay in payment due to the fault of the legatee operates to deny interest under the general rule. The court said that:
“Interest in such cases is not a matter of positive law; and whether it shall be allowed . . . must depend upon the circumstances of such case.” Laura Jane v. Hagen, 10 Humph. (29 Tenn.), 332.
It is a question on which the courts are divided whether' the fact that payment of legacies is delayed
The contest is not to be deemed to have been in the mind of the testator when he formulated the proportions for his provisions for the pecuniary legatees, on the one part, and the residuary legatee, on the other. The fairer inference is that he anticipated that a distributon would be made within "the statutory period, and in due, usual, and unobstructed course. To allow the fixed legacies to be paid, with interest calculated under the general rule, would probably be to deny the residuary legatee any part of the bounty the testator intended to bestow upon that charity. The general rule is too rigid to produce a just result when it would thus frustrate the testator’s intention.
The rule was adopted as one of convenience, and when in operation it tends to' work out an inequitable result, an exception to it should be raised. That which was intended to serve as a mere convenience in ordinary circumstances should not govern where the situation is different.
The petition to rehear is granted, and a decree will be entered in accord with this ruling.