Miller v. Commonwealth , 111 Pa. 321 ( 1886 )

Mr. Justice Green

delivered the opinion of the court, January 4th, 1886.

The third clause of the will of David Richey is undoubtedly a positive and peremptory order to his executors to sell all of the real-estate in question in this ease. All of the numerous legacies which are given by the following clauses of the will are payable in money out of the proceeds of the property sold under the direction contained in the third clause. Under all the decisions it cannot be questioned that the third clause of the will operated a conversion of the residuary real estate into personalty efficacious from the moment of the testator’s death. But it is argued that the eighteenth clause of the will gives a discretion to the executors to barter the laird, or to convey the land itself to the legatees in satisfaction of their legacies, and that this discretion is such a qualification of the order to sell as to deprive it of the effect of conversion.

So far as the use of the word barter is concerned we cannot think it possible that the testator intended it in the sense of exchange, which is its proper meaning. Such an interpretation would frustrate not bill}’- the direction to sell, but the whole purpose of paying legacies in money. We think the word was carelessly used as an equivalent for sale, or other absolute disposition of the property. There is an undoubted discretion to convey land for legacies in ease the executors and the legatees can agree as to the portions of land which shall be fair equivalents for the legacies. But, if they so agree, it is manifest that the legatee takes the land as a purchaser, and not as a devisee. It is merely a substitute for the money, and is taken at a price. This seems to bring the case within the ruling in Laird’s Appeal, 4 Norr., 339, where we held that, although there was an express permission to any of the sons to take the land at the appraisement, it did not alter the effect of the previous direction to sell, which worked a conversion. This case was followed in Jones v. Caldwell, 1 Out., 42, and in Pyle’s Appeal, 6 Out., 317; and we are unable to see any material difference between those cases and this.

Had there been, a mere discretion to sell, as was the case in. Drayton’s Appeal, 11 P. F. S., 172, we should have felt bound to bold there was no conversion, and that as the land was situated in another State it would not be subject to collateral inheritance tax, as was decided in Commonwealth v. Coleman, 2 P. F. S., 468. But as the order to sell was absolute, and worked a conversion which was not affected by a permission to convey parts of the land in satisfaction of legacies, we have no choice to regard it as other than personalty. As such, it must be regarded as passing by the law of the domicile, and hence subject to the tax.

We see no sufficient reason for imposing the penalty of twelve per cent, interest upon the amount of the tax, as there were claims against part of the estate and consequent delay in the settlement, which, under the Act of May 4th, 1855, § 1, Purd. 216, pl. 9, constitute proper cause for charging only six per cent. We cannot regard as of any efficacy the contention that conversion is.to be considered only for the specific purpose of paying legacies, and that for all other purposes the real estate must be treated as such.

It is the legacies themselves that are subject to the tax. As these legacies pass to the legatees only in the form of money, we cannot regard them as other than personalty. If any of the real estate should be conveyed to legatees in satisfaction of their legacies, it would only be as a substituted equivalent for the pecuniary sum of the legacies.

Judgment affirmed.