Walcott, Administrator v. Pitcher and Others

The first question raised by the respondent, George W. Pitcher, is, whether the annuities which have now become payable, viz., the annuity to Irena W. Pitcher, of $300, and the annuity to George L. Pitcher, of $500, are to be paid out of the capital of the estate, or out of the rents, income, interest and dividends of the same?

The principal reason, and, indeed, the only reason, urged for requiring the payment of the annuities from the income is, the form of the gift to the said George W., viz.: "I give and bequeath to my son, George W. Pitcher, all the rest and residueof the rents, income, interest or dividends of all my estate, real or personal, during his life, for his own use, to be paid to him by my executor, at least as often as once in six months, and after said rents, income, interest or dividends shall have accrued and been received by my executor, and not by way of anticipation." This language implies that the legatee was not to receive all the income of all the estate left by the testatrix, but that something less than the income of all was to be paid over to him; and that the amount of the income was to be diminished by the prior gifts. The first impression given is, that it is to be diminished by payment out it of all the prior gifts, — this legatee receiving what of it may remain after the prior gifts are satisfied. But some of those prior gifts are legacies of gross sums. Those, now become payable, amount to the sum of $6000. If this sum, in addition to the annuities now payable, amounting to the sum of $800, are payable from income only, three years or thereabouts must expire before this legatee can receive any portion of the income, — the yearly amount of the income from all the estate being only $3000. The sum to be paid to the son was intended for his maintenance and support, and that it might not be diverted from that purpose, the income is to be collected and received by the executor in the character of a trustee, and paid over to him semi-annually, and not by way of anticipation. If the prior gifts are to be satisfied out of the income, this provision for the support of the son must be, for a time, entirely suspended. But other gifts are provided for. It is also provided, that the executor may advance to the grandson the gross sum of $8000, on his arrival at the age of twenty-one years; and the same provision is made for every other child which the said George W. might thereafter have born to him. At every of these payments, the means of support intended him must be, for a time, again suspended. The purpose of the gift must fail, if these suspensions are allowed. The testatrix could not have intended this.

Can we distinguish between the annuities and the legacies in gross? The implication from the gift of the residue puts them upon the same footing. It may be said, indeed, as Mr. Jarman suggests was implied in the case of Heneage v. Lord Andover, 3 Y. J. 360, that annuities, from their nature, are evidently intended to come out of income; and, indeed, are feel that is most natural that annual payment should be made from annual receipts.

In looking, however, at the annuities provided for, we see, that if this legatee should have other children, (a contingency for which the will provides,) each of those children is to have, for its support and education, an annuity of $500; so that his means of support, if the annuities alone were payable out of the income of the estate, might be reduced to a very meagre sum, if not altogether taken away. Had the mother desired, what certainly would seem to be desirable, that the income provided for the support of this, her only son, should be liable from year to year, to as little variation in amount as might be, consistently with the payments necessary to be made to the other legatees before directed, she would desire those payments to be made from the estate, from time to time, as the several sums became payable; so that, instead of taking the whole income for the time, and wholly suspending his means of support, they should be diminished only, from year to year, in proportion to, and by means only of, the diminution of the estate from which they were to be derived. The other parts of this will point in that direction.

The testatrix directs that these annuities be paid "by my executor from my estate," evidently not contemplating payment from income; for this language excludes the idea of payment from dividends, rents, or interest. By the ninth clause, the executor is authorized to sell any of the estate, not only to change investment, but in order "to raise money for any of the purposes hereinbefore mentioned." Those purposes were as well to pay annuities as other legacies; the testatrix, evidently, having in contemplation the sale of her estate to raise money for payment of the annuities. After disposing of the income to her son, for his life, the testatrix proceeds, in the next clause, to dispose of the capital of the estate, and gives to the children of this son "all the residue of my estate, real and personal," subject, however, to the payment of the legacies and annuities hereinbefore mentioned, and to the payment of the rents, income, interest or dividends thereof, to my son during his life." The annuities, as well as the sums in gross, were first to come out of the estate; then the income, diminished by the diminution of the property out of which it was to arise by payment out of it of the annuities and legacies.

It is quite apparent from the whole of this will, that the maker contemplated that her executor should have the management, care and control of the property, real and personal; should receive the rents, interest and dividends therefrom during the life of George W. Pitcher, the son; that he should, from time to time, as occasion required, sell any part of the estate, real or personal, for the purpose of paying annuities and legacies which he was ordered to pay, and which, by the general residuary clause were charged upon all the estate; and of the annual income, should pay over to the said George W., during his life, as often as once in six months, whatever may then have been actually received by him, that is, the rents, dividends, and interest of the whole estate, so long as the whole remained unsold, and the income of all the residue which, from time to time, remained unsold, after portions thereof had been disposed of and applied to the payment of the legacies, as they became payable.

The respondent, George W. Pitcher, also claims, that he is entitled to receive the gross income derived from the estate, free from all taxes, repairs, or expenses of managing the estate, or of collecting the rents and dividends. There is nothing to take the case out of the general rule, that the life estate shall bear the current expenses of the estate. Trustees will not be justified in defraying these charges out of the trust fund.Thurston v. Thurston and others, 6 R.I. Rep. 296, 300; Hill on Trustees, 395, and cases cited; North American Coal Co. v.Dyett, 7 Paige, 9.

The income in this case, therefore, must be subject to all taxes upon the estate, to necessary repairs, and to all the necessary expenses incurred in the management of the estate, and in collecting the rents, interest and dividends, this legatee to receive the nett income only, after all these expenses are deducted.

The general expenses of administration in settling the estate must be charged, as the statute charges it, upon the estate, to be paid out of the personalty, if it be sufficient, and if not, then out of the realty.