Hunt's Appeals , 105 Pa. 128 ( 1884 )

Mr. Justice Paxson

delivered the opinion of the Court, February 4, 1884.

These are five appeals from the decree of the court below distributing the estate of John H. Jones, deceased. I will consider the questions they present without incumbering the opinion by references to the particular appeals in which such questions are respectively raised.

Among the claims presented before the auditor was one by Edwin W. Lehman and John. L. Busby, executors and trustees of the will of William Crean, deceased, for $5,460; and one by Emily Lehman for $3,820. Both claims rest upon the same principle and need not be separately discussed. The claim first named arose under tire following circumstances: On the 22d of January, 1874, the decedent, John H. Jones, entered into a written agreement with the claimants whereby he covenanted and agreed to be responsible for and guarantee the payment of the interest upon each of ten several indentures of mortgage, given and executed by William S. Kite to the claimants, “ as the same shall accrue unto the said. Edwin W. Lehman and John L. Busby, executors and trustees as aforesaid, until such time as the lots described in said mortgages shall be improved- to fully secure the mortgage debts thereon secured.” This -agreement was signed and sealed by the decedent. The lots of ground described in the agreement have not been improved up to the present time. It was found by the auditor that the interest on these mortgages remaining unpaid up to the first 'of January, 1883, amounted to $5,460. The two principal questions which are involved in this claim may be stated as follows: 1st. Does the decedent’s covenant to pay the interest on the mortgages bind his executors and administrators, and 2d, -If the covenant does extend to the executors and administrators, was the lien thereof continued as to the real estate of the decedent ?

As to the first point it was strongly urged by the learned counsel representing some of the appellants that the covenant did not extend to the executors and administrators of the covenantor, and Quain’s Appeal, 10 Harris, 510, was cited in support of this view. Quain’s Appeal was the first Pennsylvania case which squarely decided that a ground rent covenant does not survive against executors or administrators except as to the rents which accrued in the lifetime of the decedent; and that rents which accrue subsequent to the death of the covenantor are not payable out of his personal estate, and it is not too much to say that that decision was somewhat of a surprise to the profession. For it must be conceded that such covenants are personal and may be enforced against the covenantor during his life, even after he has parted with the ground out of which the rent issues. The court was doubtless driven to that decision by the practical impossibility of enforcing such a covenant, in many instances perpetual, against a dead man’s estate, and no one at the present day who will take the trouble to read the opinion of the court as delivered by Justice Lowkxe, can doubt its soundness". Quain’s Appeal was followed by a decision of the District Court of Philadelphia, in which, in an opinion delivered by the late Judge Stboud, it was held that while the administrator” of a grantee in a ground rent deed is a proper party to an action of covenant for the rent accrued after his death, the judgment will however be restricted to the land out of which the rent issues. See Gardiner v. Painter, 3 Phila. Rep., 365. This case was not brought up to this court for review, but in Williams’ Appeal, 11 Wright, 283, it is referred to by the late Chief Justice Thompson with approval, and the doctrine thereof, as well as of Quain’s Appeal, affirmed by this court. We.may therefore regard the question at rest.

But we are not prepared to apply the same doctrine to the case in hand for obvious reasons. While there are some points of analogy between a ground rent and the covenant in question, there are also essential points of difference. In the former instance the rent issues out of the land, and the covenantee must be presumed, especially in the case of perpetual rents, to rely upon the security of the land for payment. In the creation of such ground rents, as was said by this court in Quain’s Appeal, supra: “ The grantor of the land cannot be presumed to have then placed any value on such a covenant; for the personal covenant of the original grantee is as nothing in a series of tenants lasting forever. The real security is the covenant running with the land and encumbering it; and this is the essential reliance of the owner of the rent.” It is not so with the covenant we are considering. The land in its unimproved condition was not deemed a sufficient security, and the mortgagee declined to take the mortgages without security that the interest should be paid until such time as by improvements placed upon the property his mortgages should be made safe. So that we must assume that the mortgagee looked to the personal security of the covenant, and to that alone, for the interest.

Nor is it a perpetual covenant. It may be regarded as a security for the improvement of the property. This is really its scope, and the decedent could have relieved himself and his estate by doing this or procuring it to be done by others. The decision in Quain’s Appeal was a necessity growing out of the peculiar facts of that case, and we are not disposed to apply it to cases in which no such necessity exists. Were we to do so in the present instance, we would be at a loss where to draw the line. The general rule is that all personal covenants survive to the executor or administrator of the covenantor, and to take a case out of the rule there must be something more than the mere fact that the covenant is to be performed in future. We are clearly of opinion that the executors of this testator are bound by his covenant to pay the interest on the mortgages in question.

This brings us to the second branch of the inquiry, which relates to the extent the real estate of the testator is bound by the covenant.

The Act of 24th of Feb., 1834, section 24 (P. L. 77) provides two ways in which the debts of a decedent can be continued upon his real estate for a longer period than five years after his death. They are:

First.- — By the commencement and prosecution of an action against his heirs, executors or administrators within the period of five years from his death, and

Second. — Where the debt is not payable within five years, a copy or particular written statement of the bond, covenant, debt, or demand shall be filed within the period of five years in the office of the prothonotary of the county where the real estate to be charged is situate. Under this statute it is plain that where the debt is due and payable the suit therefor must be commenced’ within five years from the death of the decedent, or the lien is lost; and where the debt is not due and payable within five years the creditor is bound to file a copy or particular written statement of the instrument of writing by which the debt is secured, within five years. These directions being statutory cannot be omitted.

Two suits were commenced in the Courts of Common Pleas against the executors of John H. Jones, deceased, to recover arrears of interest due under this covenant. The first writ was issued on Dec. 1, 1876; the second on Jan. 4, 1888, and in both cases a narr. and bill of particulars were filed, but in neither was a copy of the covenant or instrument of writing filed, as required by the Act of 1834 when it is sought to hold, the lien for a debt not maturing within five years. The auditor and the court below held that to the extent that the arrears of interest were embraced in the first suit, which was brought .within five years of the testator’s death, the said suit continued the lien’thereof as to said arrears, and awarded the claimant a dividend out of the fund in court. But as to the second suit, inasmuch as said fund is the proceeds of real estate sold over eight years after the testator’s death, and no copy of the instrument had been filed in the proper office, it was held that the lien was gone and no further arrears could be recovered. It is difficult to see how any other conclusion could have been reached. The mere bringing of the second suit without a compliance with the Act of 1834 in filing a copy of the instrument could not prolong the lien beyond five years. This is too plain for argument.

It was urged, however, on behalf of some of the appellants, that the will of the testator worked a conversion of the real estate. The learned auditor has found that the fund in court is the proceeds of real estate, and has distributed it as such. If this contention be correct, the fund must be regarded as personalty, and as such distributed.

We are unable to see anything in the will of the testator from which an intent to convert can fairly be drawn. After giving a number of legacies to different persons and institutions, he devises and bequeaths all the residue of his estate to trustees in trust, “to let and demise the real estate, and invest and keep invested the personal estate ” for the purposes of the trust, and then follows a power of sale in these words: “To sell all or any part of the real estate, without liability on the part of the purchaser to see to the application of the purchase money, and the proceeds of sale to re-invest from time to time, if practicable, in irredeemable ground rents upon the same trusts.”

There is no direction here to sell: only a power. It ought to be settled by this time that, in order to work a conversion, there must be either — 1st. A positive direction to sell; or 2d. An absolute necessity to sell in order to execute the will; or 3d. Such a blending of real and personal estate by the testator in his will as to clearly show that he intended to create a fund out of both real and personal estate, and to bequeath the said fund, as money.

In each of the two latter cases an intent to convert will be implied.

These propositions are settled by a line of authority. It is sufficient to refer to the late cases of Jones v. Caldwell, 1 Out., 42; Roland v. Miller, 4 Out., 47; Lindley’s Appeal, 6 Out., 235.

We have neither of these requirements in the will of this testator. The most that can be said is that he made a mistake as to the extent of his estate, and a sale of his real estate became necessary in order to pay his debts. But this is not to the purpose. The scheme of his will did not contemplate this, and if by reason of the depreciation of his property or for other cause a necessity to sell the real estate arose which was not foreseen by the testator, it will not work a conversion, for the obvious reason that a conversion is always a question of intent.

We are of opinion that all of the questions arising in this estate were correctly disposed of by the court below.

The decree is affirmed and the appeals dismissed at the costs of the respective appellants.