Newby v. Skinner, 21 N.C. 488, 1 Dev. & Bat. Eq. 488 (1837)

June 1837 · Supreme Court of North Carolina

21 N.C. 488, 1 Dev. & Bat. Eq. 488

THOMAS NEWBY, Ex’r of WILLIAM LAYDEN v. EDMUND B. SKINNER et Uxor, et al.

June, 1837.

Where a testator directs land to be sold and the proceeds divided, it is not a conversion of the land into personalty out and out, but merely the appointment of a mode of division ; and those entitled to the purchase-money take as devisees ; and the money is not subject to the payment of debts until the personal estate is exhausted.

William Layden died in December 1834, having duly made his last will and testament, whereof he constituted his daughter Eliza Curtis, and his friend Thomas Newby executors; the last of whom alone proved the will, and performed the functions of executor. By the will, the testator devised to his wife for life, his Sound plantation, and bequeathed to her sundry negroes, and other specific chattels: devised to his son Joseph, in fee, the tract of land called the Clayton tract, and bequeathed to him several negroes specifically: directed that three negro slaves, designated by name, and a tract called the Thomas Barclift tract, should be sold for the payment of his debts : bequeathed certain negroes, specifically to each of his two daughters, Mary Jane and Eliza Curtis, (wife of the defendant Skinner) and then devised, bequeathed, and declared as follows: “ It is my wish that the lands called the Dempsey Barclift tract, or say the Broad Neck tract, should be rented out for the benefit of my estate, for the term of two years; and also my negro men Will and Stephen,” (the former of whom he had bequeathed to his daughter Eliza Curtis, and the latter to his son Joseph,) to be hired out for the term of two years, for the benefit of my estate. Item. It is my wish, that after two years, the Bro.ad Neck tract, or say the Dempsey Barclift land, should be sold at six and twelve months’ credit, by those who purchase the land, to give good security, and the moneys to be equally divided between Mary Jane and Eliza Curtis, both my daughters; and also if there should be any moneys left after paying my just debts, should be equally divided between my two daughters as above.” Thomas Newby, the executor, has filed his bill against the devisees and legatees, setting forth that he has applied the residuary part of the testator’s personal estate, and all the funds arising from the sales of the negroes and tract of land specifically charged ... „ , , , , , r l with the payment or testator s debts, and the rents ot the Broad neck tract, and the hires of the negroes Will and Stephen for two years ; and has sold some of the negroes specifically bequeathed, and applied their proceeds also to the satisfaction of those debts : that he has sold the Broad Neck tract, and applied a part of the proceeds of that sale to the satisfaction of debts : and that he has now a balance in his hands, which he knows not to whom to pay, because of a controversy between the widow and the son of the deceased, on the one hand, and the daughters on the other; the former contending that the proceeds of the sale of the Broad Neck tract, ought to be regarded as in the nature of a pecuniary legacy, and therefore liable to abatement before their legacies, which are specific; and the latter insisting, that the said proceeds are in the nature of land specifically devised, and not liable for debts except upon a deficiency of the whole personal estate. The defendants have answered. The daughters set up the claim to receive the proceeds of the Broad neck tract undiminished because of the testator’s debts ; the widow joins with them in the assertion of this claim; and the son, who is a minor, submits his rights to the protection of the Court.

Kinney, for Joseph Layden, the infant legatee. '

Devereux, for Skinner and wife, and Mary J. Layden.

Gaston, Judge,

having stated the case as above, proceeded :—

• In our opinion, the daughters have clearly the right in this controversy. The general rule is indisputable, that the personal estate is the first and natural fund for the payment of debts, and the real estate is not to be made liable thereto, except to supply the deficiency of the personal. It is sought, in this case, to subject the proceeds of the land devised to the daughters, because by the direction of the testator to sell the land, he turned it, in the contemplation of a Court of Equity; into personalty, and made it a part of his general personal estate. This position, to the extent to which it is pressed, is untenable. The real estate directed to be sold, was at the time of the 'testator’s death, land. By the will it was to remain land until sold, and it was directed to be sold only for the convenience of division between the -devisees. It was impressed with the character of personalty so far as was necessary to effectuate the testator’s purpose, but -no further. Every person taking an interest under a will, in the produce of land directed to be sold, is in truth a devisee, and not a legatee. As he takes from the bounty of the devisor, he must receive what is given, in the <luality which the devisor has impressed upon it. The devisor has given, not the land, but the price of land ; and although the trustee is not bound to sell-, if the cestui que trust will take the land itself, yet the land in the hand of . ... the cestui que trust, is, in equity, regarded as personalty; an<^ ^ die without any act to change its quality, it is personalty as between his héir and executor. The devisor m'ght, if he pleased (see Kidney v. Consmaher, 1 Ves. Jr. 436, and 2d lb. 267,) have converted the land into money out and-out, and then from the whole context of the will, it would have been open for consideration, whether it was made an auxiliary fund for the payment of debts, or was thrown into the ordinary fund as apart thereof j or constituted the primary fund in exoneration of the personal estate- But even in these cases, the executors take as devisees, it is not strictly a part of the testator’s general personal estate, but real assets, applicable in their hands to the payment of debts, because-devised to them,in trust •to be so applied. And in England, however it may be with us, the proceeds of land so converted, are held to be equitable, and not legal assets. Barker v. May, 9 Barn. and Cress. 489, (17 Eng. Com. Law Reps. 426.) But a ■conversion of land into money, directed for the benefit of .the devisees, creates no charge upon the land for the payment of debts, and does not make the proceeds either legal or equitable assets, in the hands of an executor. He holds these proceeds simply as a trustee for the devisees. Gibbs v. Angier, 12 Ves. 413; and see Smith v. Claxton, 4 Mad. 484.

The person entitled to ceedsof land directed by a tes-tatortobe take the^ land itself sale'buVit is regarded personalty^ .and if he changing ifwilTbe7 personalty, his^heh'6611 and execute'

Although a Court of Equity may, when it is applied to for the settlement of an estate! determine the question of the commissions to be allowed the executor, as incidental to the main question, yet it will never do so without a reference.

The bill submits to the Court also the quantum of commissions to which the executor is entitled. The ordinary-tribunal for deciding_ on such a question, is the County Court, and although when a Court of Equity is resorted to for the settlement of an estate, it may as incidental to the exercise of this jurisdiction, determine that question also, it ought to have the materials before it, as far as practicable, to enable it to form an advised judgment. We should require for that purpose, an examination by a commissioner, of the nature and quality of the services rendered by the executor, and a report from him, before We acted upon the subject. This has not been moved for, and we should not direct it without a motion. It will produce costs which neither party may be willing to incur.

It is highly probable that the declaration of our opinion on the main question in controversy, will enable the parties to come to a complete settlement. If it should not, either party may hereafter move in the cause as he may be advised.

Per Cum am. Declare accordingly.