Winchester-Simmons Co. v. Cutler

Bbogdeh, J.

The record presents two questions o£ la.w.

1. If an insolvent legatee receives and applies a portion of the legacy to make improvements upon the land of his wife, can a judgment creditor of such legatee recover from the wife, and if so, what amount?

2. Can such legatee, who is also a coexecutor of the testatrix bequeathing the legacy, deduct from his legacy and pay the amount due the estate of his testatrix by him, and thus exclude a judgment creditor from such amount ?

The defendant Cutler, under previous decision of this Court, was entitled to a legacy of $5,000 in North Carolina bonds from the estate of Sarah E. Wadsworth by virtue of the terms of her will, in which the defendant and another were named as executors thereof. As such co-executor the defendant took active charge and management of the estate with the consent and approval of the other executor.

After the plaintiff had secured a judgment against him, but before the supplementary proceedings had been instituted, the defendant took a portion of his said legacy and made improvements and repairs upon the property of his wife, Laura, D. Cutler. The principle of law applicable is thus stated in Michael v. Moore, 157 N. C., 462, 73 S. E., 104: “We entertain no doubt as to the plaintiff’s right to follow the fund invested by his debtor in improvements upon his wife’s land. No principle is better settled by our decisions than the one that an insolvent debtor cannot withdraw money from his own estate and give it to another to be invested by him in the purchase or improvement of his property, and when it is done, creditors may subject the property so purchased or improved to the payment of their claims.” However, the lien of the creditor, in such event, is confined to the enhanced value of the land by reason of the expenditure rather than to the amount spent in making improvements. Garland Arrowood, 177 N. C., 371, 99 S. E., 100; Garland v. Arrowood, 179 N. C., 697, 103 S. E., 2; Wallace v. Phillips, 195 N. C., 665. It necessarily follows that the legacy of Laura I). Cutler is not chargeable with the amount of such repairs and improvements, upon the theory of advancements. It is also clear that such amounts as the defendant spent for ordinary living expenses in the support of himself or his family prior to the supplemental proceedings is not recoverable by the creditor upon the facts disclosed in the record.

The second question of law involves the right of the defendant as executor of the estate of Sarah Wadsworth to retain from his legacy an amount sufficient to pay the note held by Sarah Wadsworth against the defendant. The general rule is to the effect that it is the right and duty of a personal representative to retain from the share of each legatee whatever amount may be due said estate by said legatee either as debtor to the estate or by reason of matters growing out of the settle■ment. Scbouler on Executors, secs. 208-470-492 (a), Mordecai Law Lectures, V.ol. II, page 1348; Rogers v. Gooch, 87 N. C., 442; Balsley v. Balsley, 116 N. C., 472, 21 S. E., 954; Dodson v. Fulk, 147 N. C., 530, 61 S. E., 383; Nicholson v. Serrill, 191 N. C., 96, 131 S. E., 377.

In tbe Nicholson case, suyra, this Court said: “Tbe right and duty of an executor to deduct from a legacy tbe amount of any indebtedness of tbe legatee to tbe estate of bis testator, is well settled, and is in full accord witb tbe elementary principles of justice.”

Upon tbe findings of fact, tbe judgment rendered was correct, witb tbe exception and modification hereinbefore pointed-out; that is to say, tbe plaintiff is entitled to recover from Laura D. Cutler tbe enhanced value of her land by reason of repairs and improvements made thereon by tbe defendant L. H. Cutler from bis own funds.

Modified and affirmed.