Thompson's Appeal

42 Pa. 345 | Pa. | 1862

The opinion of the court was delivered, April 21st 1862, by

Read, J.

The contention in this case in the court below was whether the sum of $3500, paid by the testator for his son, Robert Thompson, Jr., was an advancement by the father to him in his lifetime, and Avhether it operated in that character as an ademption of his legacy as one of the residuary legatees named in the third clause of the will. The auditor decided it to be an advancement, and deducted it from the legacy. The court (Judge Ludlow) reversed this decision, and, being of opinion it Avas not an advancement, directed this sum to be stricken out, and the whole of his share of the'residuary estate to be paid to the legatee without any deduction whatever. In this court, the argument, both printed and oral, Avas directed to this single point, although, in the course of it, it was suggested by the court that it would be proper to consider what would be the effect of treating it as a loan by the father to the son. There was no dispute as to the fact that the testator had paid a debt of his son — on whose behalf the allegation Avas that it was a loan of so much money to him.

Robert Thompson died in October 1858, leaving a will dated August 31st 1841, and a codicil thereto dated March 27th 1847, both of which were duly admitted to probate on the 29th October 1858, and letters testamentary granted to the executors. The will, which was made seventeen years before his death, declares his intention to advance to each of his daughters the sum of $4000 on her marriage, which is to be deducted from her share of his estate, which is divided equally amongst all his children, born and to be born. In his family book, which is called in the inside cover, in his own handwriting, “ Robert Thompson’s book, 2, Phila., Jan’y 1st 1852,” on page , is Mrs. Lydia D. Murphy, Dr.

1846.

Mar. 5, To cash, for furnishing house, .... $500

“ 30, “ “ “ 500

1847.

Mar. 2, “ “ “ 300

$1300

On the 2d page is “ To Mrs. Elizabeth Jones, Dr.”

Similar entries are made from Book 1, extending from June' 1846 to December 29th 1848, footing up $4000.

On the 3d page is “ Rob. Thompson, Dr. 3.”

1853.

Mar. 25, To cash paid his note, due 25th March 1853, for thirty-four hundred and sixty-eight dollars, to order of Geo. T. Lewis, for balance due him on dwelling-house No. 7 Union-Place, situated on Pine St. above Sch. 8th, . . $3468

1857.

Feb. 1, To cash paid Thompson, Clark & Young, . . 32'

$3500'

Below each of these accounts, on pages 1, 2, and 3, are in order, the names of Anna M. Thompson on page 1, Mary Thompson on page 2, and William R. Thompson on page 3, but no sums of any kind charged to them, although evidently intended for that purpose. Upon pages 6, 7, 8, and 9, are statements of Robert Thompson of his estate, in some detail, beginning with 1851, and ending with the close of 1856; the last being dated “1st February 1857 — attest Robert Thompson.” There is an omission of a year, and whether it be 1853 or 1854, owing to the differences of dates between the heading and the foot, does not clearly appear. Robert Thompson, Jr.’s name, does not occur in these statements until that for 1855, which is dated at the foot February 7th 1856, and also in the last for 1856, dated 1st' February 1857. In both these it is clearly classed with the advances to his married daughters, and is simply “ R. Thompson, Jr., page No. 3,'$8468,” increased in'the last to $3500. The ■whole; of this clearly points it out as an advancement upon exactly the same footing as those made to his married sisters, and charged in the same way and form upon his family book; and we have the positive testimony of his brother, William R. Thompson, who had some conversation with the testator with regard to his advancements to his children, in which he said that he had charged against Robert what he had got, just as he had against the girls what they had received. Upon this state of facts, it is clear that this was an advancement to the son by the father, in anticipation óf his share under the will, and was so intended by him.

In opposition to this there are produced by the son, from the papers of his father, two loose and imperfect memoranda, which, whether they be for 1853 and 1854, do not correspond with any of the statements deliberately entered in his family book. They are not original entries of the transactions at the time, but simply incomplete statements, from which fuller and more formal ones might be made. The first is headed abridged statement of the affairs of Robert Thompson for 1853, and is dated at the foot January 1854; the principal items are not carried out, and no one could form from it any estimate of the value of the estate of the decedent at that period. The only items carried out amount to $30,7.68, making up which is, amongst others, the following:

“Money loaned to my son, R. Thompson, Jr., to pay balance due on his dwelling to Mr. Lewds, $3468.”

The second paper. is headed, “ Philadelphia, February 1st 1854, statement of the affairs of Robert Thompson, to date;” and at the foot it is dated “ February 10th 1855.” This is very much condensed, and does not correspond with any statement in the family book as to details; and if it be for the same year, 1854, as that in the book professes to be, then the book omits the very item which is brought forward to show that this was a loan. The footing at the end of this paper, $154,737.06, is the same as that in the book for 1854. It is clear, then, that the book contains the deliberate statement of the testator, and that these loose memoranda are not of a character to shake the conclusion drawn from the preceding testimony, that the testator designed this sum of $3500 to be an advancement to his son. The authorities and law have been ably discussed in the auditor’s report, which seem to have been the impression of the court below, and we agree with him in his views of the evidence, and of course concur in his conclusion that this was an advancement.

But taking this to be a debt due by the legatee to the testator, why, as suggested on the argument, should it not be deducted, principal and interest, from his legacy ? The note was paid on the 25th March 1853, and of course the Statute of Limitations had not run out at the death of the testator, and therefore, upon the principle of MeClintock’s Appeal, 5 Casey 360, the date of the death fixes the relations of the debtor and legatee, who has in his hands assets of the estate sufficient to pay and satisfy a part of his legacy. This is effected by the operation of law, and when the legatee comes into the Orphans’ Court, which is a court of equity, to demand' his legacy, he is obliged to do equity by applying his debt in payment of it. This is clearly the rule in England, where it has been extended to a case where the debt was bound by the statute before the death of the testator. - Mr. Justice Williams, in his valuable work on Executors, vol. 2, page 1174, 5th ed., thus states the law to be: “Where a legatee is indebted to the testator, the executor may claim the legacy, either in part or in full satisfaction of the debt by way of set-off, and it has been held that in a suit by a legatee to obtain payment of the legacy out of the assets of the testator in a due course of administration, the executor may retain so much of the legacy as is sufficient to satisfy a debt due from the legatee to the testator, although the remedy for the debt was at the time of the death of the testator barred by the Statute of Limitations.” This is fully supported by Courtenay v. Williams, 3 Hare 539, decided by Vice-Chancellor Wigram in 1844, where all-the debts due by. the legatee to the testator were barred at the time of his death, except 3007, the retainer- of which sum was not really disputed. . The vice-chancellor held that the statute could not be used to prevent the retainer of the other debts, because the rule in such case was, that he who would have equity must do equity. Since the argument, I have met with a case almost precisely in point; that of Smith v. Smith, decided by Vice-Chancellor Stuart, on 7th of November 1861, and reported in 31 Law Journal Rep. Chan., p. 91, and also in 7 Jurist, N. S. 1140, and 5 Law Times, N. S. 302. A testator by will gave a legacy to his son, who was a member of a copartnership firm. The members of the firm were, after the death of the testator, adjudged bankrupt, and at the time of the bankruptcy the firm was indebted to the testator’s estate. The vice-chancellor said : “ The question here is, whether the same principle applies to the case in which a debt is due to a testator from a partnership firm, of which one of his legatees is a member, as is applicable to the case in which a debt is due to the testator from the legatee alone. No direct authority in the shape of a decision upon the question has been cited upon either side. It seems to me that the principle which should govern the case is this, that the legatee should not be entitled to receive out of the testator’s assets, any part of the bounty intended for him by the testator, until he has acquitted himself of all obligations in the shape of debts, which may be due from him to the testator.” After stating its application to tbe case before him, he says: “ I do not think a 'retainer’ or 'set-off’ is a proper expression, for it is not a question of retainer or set-off, but a question of the right on the' part of the legatee to receive payment of the legacy, having regard to the amount of the debt due to the testator’s estate. The declaration will be in these terms: that so long as the debt remains undischarged, the assignees, in right of the legatee, will not be entitled to receive the legacy.” The contention was on the part' of the legatee, that this was a loan, and of course a debt due to the testator, and upon principle and authority it is clear that he must discharge it before he can claim his legacy; or, in other words, the legacy must first be applied to pay the debt, and then the balance belongs to him. In either form it must be recognised and discharged. Questions intimately connected with the doctrines applicable to this case have been so lately discussed by us- in Strong’s Executors v. Bass, 11 Casey 333, and Miner v. Atherton’s Executors, Id. 528, that we simply refer to them as the latest decisions of this court. In either way, Robert Thompson, Jr., must be charged with this sum of $3500, whether it be as an advancement or a debt, and thus the real justice of the case is attained.

We prefer charging him with it as an advancement, and this reverses so much of the decree of the court, and affirms the report of the auditor, as stated in his first teport, and his distribution of the estate of the decedent.

It is therefore ordered, adjudged, and decreed, that the decree of the Orphans’ Court be reversed, and the first report of the auditor be affirmed, and distribution of the estate be made according to the state- .. ment made by the auditor in the said report.