220 S.W.2d 379 | Ky. Ct. App. | 1949
Affirming.
This appeal is an aftermath of the case of Hampton v. O'Rear,
After the mandate went down in the above styled case and a judgment was entered in accordance therewith in the lower court, the executor under the Griggs will, appellee herein, filed an intervening petition, answer and cross-petition in which it stated in substance that as executor it had expended $16,081.18 in payment of debts, taxes and costs of administration and there would be additional expenditures for such items before the estate was finally settled, and prayed that it be adjudged that all such debts, taxes and costs of administration already paid and to be paid, be paid out of income from the real estate referred to and described in Item II of decedent's will, which income is in the hands of H.H. Bramblet as conservator, and that if such net income be insufficient for these purposes that a sufficiency of the real estate referred to in Item II be sold and the proceeds applied to these purposes.
To this intervening petition the heirs at law, who would inherit the real estate represented by the lapsed legacy and the accumulated income therefrom, filed a demurrer. A stipulation signed by attorneys representing all parties in interest was filed and on March 5, 1949, a judgment was entered adjudging that the executor recover of the defendants, heirs at law of deceased, all amounts paid and to be paid by the executor in discharging all debts, funeral expenses, costs of administration and taxes, except federal estate and Kentucky inheritance taxes, to be paid first out of the funds in the hands of H.H. Bramblet, conservator and if such funds are insufficient, then out of the undevised real estate mentioned in Item II of the will of L.E. Griggs, deceased. It further directed that the federal estate taxes assessed against the estate of decedent and heretofore paid by the executor shall be paid by each of the legatees, devisees and heirs at law of decedent in the proportion which each share bears to the total estate valued for tax purposes and the executor was allowed to recover out of the undevised estate referred to in Item *188 II of the will a sufficient amount to repay it the money it expended in payment of said federal estate taxes, all of which had been paid, for the heirs at law other than the residuary legatees, as may hereafter be determined by the court. It further directed that the Kentucky inheritance taxes shall be paid by each legatee, devisee and heir at law in the amount assessed against each by the Department of Revenue of the State of Kentucky.
The heirs at law, appellants herein, appealed from all the foregoing judgment and the executor, appellee herein, appeals from so much of said judgment as holds that the executor shall not recover total federal estate taxes and total Kentucky inheritance taxes out of the undevised property mentioned in Item II of the will of decedent and the income therefrom.
I. It is, of course, fundamental law that in construing a will the intention of the testator is controlling and if from the will there is any indication as to how the testator wanted his debts, costs of administration and estate and inheritance taxes allocated, his wishes must be followed; if not, then we must follow general principles of law as established in this and other jurisdictions. It will therefore be necessary to set out such portions of the will as might throw light on the question. Since Item II is the longest item of the will and it is copied in full in the case of Hampton v. O'Rear, supra, it will not be recopied here. That item has already been construed and its only relation to the present case is that the real estate mentioned in that item is the undevised real estate involved in the present case. In the *189 interest of brevity, it will also be unnecessary to copy Item III to Item VIII, inclusive, since they cover small specific money bequests to four individuals and two institutions and contain nothing that might assist in arriving at testator's intention as to the question involved. The remaining items of the will follow:
"From the net earnings of said trust, and from such part of the principal thereof as in its judgment may be necessary, I direct the trustee exercising said trust to provide ample support, in sickness and in health, for my said wife as long as she may live.
"Said trust shall be exercised under due qualification in, and due settlements and supervision made in, the Montgomery County Court.
"One-fourth thereof to the issue, per stirpes, of my dead brother, C.L. Griggs.
"One-fourth thereof to the issue, per stirpes, of my dead sister, Mrs. Mollie Elkin.
"One-fourth thereof to the issue, per stirpes, of my sister, Mrs. Oleith McKinney.
"One-fourth thereof to my sister, Mrs. Howard Hampton.
"I further provide that none of my said devisees, save those living at and to be ascertained as of the time of the death of the last survivor of my said wife or me, shall take anything hereunder. It is my intent that said relations shall take said residue upon the death of the survivor of my said wife or me just as if they were then taking from under the laws of descent and distribution then effective in the State of Kentucky.
It will be seen that Item I contains the usual language directing the payment of debts and costs and contains no direction as to how or from what source they should be paid, as of course he could have done. Item X sets up a trust fund for testator's wife during her lifetime and Item XI gives the residue of that fund to certain collateral relatives. Testator's wife died shortly after his death and the trustee of the trust set up for her has filed its settlement as such and turned the trust fund over to itself as executor for distribution to the residuary legatees mentioned in Item XI.
In very excellent briefs filed by both sides of the controversy particular parts of the above will are discussed and analyzed and each side points to some provision which it thinks spells out an intention by the testator which supports his respective contention. After *191 a careful consideration of these contentions and the will as a whole we are unable to find anything in the language of the will as a whole which would indicate the intention of the testator bearing on the question involved. It is apparent that testator did not intend to die intestate as to any of his property, it being his hope and expectation that the main provision of his will, the charitable trust which seemed nearest his heart, be carried out. Only by reason of its failure was there any undevised property, which came about through operation of law, not through any action on his part. We therefore have an estate, part of which will go to specific devisees, part to residuary legatees, and part, resulting from the lapsed legacy, to the heirs at law as undevised property. Before making this distribution all debts, costs of administration and federal estate and state inheritance taxes must be paid. If paid out of the personal property of the estate, valued at roughly $55,000, it will come out of the share of the residuary legatees. If paid out of the undevised real estate, valued roughly also at $55,000, it will come out of the share of the heirs at law, some of whom are also residuary legatees.
If there is any question of law well settled in Kentucky, it seems to be this one. The general rule is laid down in 69 C. J. Sec. 2570, page 1226, as follows:
"While the testator may, by charging specified property with the payment of his debts, exempt undisposed of property from such payment, his intention to do this must be very clearly manifested by the terms which he uses, for as a general rule, regardless of an express direction to sell certain property and apply the proceeds to the payment of his debts, or as a bequest of property subjecting it, as against other property bequeathed, to the payment of debts, property undisposed of by the will must first be resorted to for payment of testator's debts."
Beginning with Highbaugh v. Highbaugh's Ex'rs, 1 S.W. 422, 8 Ky. Law Rep. 257, followed by Davis v. Allen's Executor,
One of the cases listed above, Davis v. Allen's Ex'r,
II. As to the cross-appeal of appellees and their contention that the lower court erred in adjudging that federal estate taxes and state inheritance taxes be paid out of the share of each legatee, devisee and heir at law, and not out of the undevised property, little need be said. The question with reference to both kinds of taxes was again decided adversely to the contention of appellees in the recent case of Louisville Trust Co. v. Walter,
The judgment of the lower court is therefore affirmed both on the original appeal and on the cross-appeal.