Although an executor may be exempt from personal liability where he pays legacies under a will thereafter annulled, such executor may recover from the legatees the money erroneously advanced to them. The fact of payment by the executor does not invest the legatees with title to the property;22 and the same right of recovery against the legatees is vested in the person who in fact was entitled to receive the legacies so paid.28 § 1599. As to Rights and Liabilities Where Executor Overpays a Legatee: Refund. When the assets of the estate are insufficient to pay all debts and legacies, the legacies must abate, or, in other words, they must be reduced to meet the deficiency. This subject has heretofore been treated.24 If an executor voluntarily and without an order of court pays certain legatees, the presumption is that he has sufficient assets on hand to pay all legacies, and the executor, should the assets thereof prove insufficient, will be held personally liable for any deficiency caused by the payment of such legacies. The executor has the means of ascertaining the value of the assets of the estate, and if, before a determination of the value of the assets and without an order of court, an executor makes payment of a legacy, he does so at his own peril and can not collect from the legatee the amount so paid. However, if the payment of the 41; Succession of Heffner, 49 La. 22 Carter v. Board of Education, 628; Wood's Admr. v. Nelson's Admr., 10 B. Mon. (Ky.) 229. 23 Le Baron v. Fauntleroy, 2 Fla. 276, 300. 24 See §§ 690-707. legacy is not voluntary, but is under an order of court, the rule is otherwise.25 The application, however, of the rule that the executor can not compel an overpaid legatee to refund depends largely upon the good faith of the executor. If he has acted with caution and prudence, and without knowledge of the insufficiency of the assets to pay all legacies, he may compel a refund from a legatee who has received more than that to which he is entitled.26 And the executor should be entitled to enforce a refund where he can present special circumstances showing that he was neither at fault nor negligent.27 But the right to compel a refund does not lie in a case where the insufficiency of the assets to pay all legacies arises because of waste committed by the executor.28 And it has been held that the right to a refund exists only where the same is necessary in order to pay the debts of the estate.29 Matter of Hodgman, 140 N. Y. 421, 35 N. E. 660. Where an executor makes an unauthorized payment under a trust provision of the will and takes a bond conditioned that the funds paid shall be applied according to the terms of the will, he has a right of action for the recovery of the money.-Moss v. Cohen, 158 N. Y. 240, 53 N. E. 8. 26 Jones v. Sikes, 85 Ga. 546, 547, 11 S. E. 664; Zollickoffer v. Seth, 44 Md. 359; McEndree v. Morgan, 31 W. Va. 531, 8 S. E. 285. Where the deficiency of assets Is caused by depreciation in the value of the estate in no wise 27 Lyle v. Siler, 103 N. C. 261, 28 McLure v. Askew, 5 Rich. Eq. (S. C.) 162. See, also, Buffalo Loan, Trust Co. v. Leonard, 154 N. Y. 141, 146, 47 N. E. 966. 29 Anderson v. Piercy, 20 W. Va 282, 284 1 §1600. Manner in Which Executor May Enforce a Refund from an Overpaid Legatee. 31 Where the executor has the right to compel a legatee to refund an overpayment of his legacy, he can not apply to the probate court for relief, for such court has no jurisdiction to order the legatee to refund.30 The right must be enforced in a separate proceeding in equity; even an action at law does not lie. It has been said, however, that upon accounting and distribution, if a legatee has been overpaid but there are other assets of the estate to be distributed to him, the probate court may determine the fact and the extent of such overpayment for the purpose of distribution. In such a case, however, the legatee should be made a party to the accounting.32 But it may be questioned whether advance payments by a personal representative to a distributee without an order of court have any place in the representative's account. Such voluntary payments partake more of the nature of a personal transaction between the representative and the beneficiary, and have no place in the accounting; but since the beneficiary has received such advance payments, the representative, in distributing the estate, is entitled to claim credit as against the beneficiary for the amount of such advance payments, and may retain the amount thereof out of his distributive share.33 And where an 30 Matter of Underhill, 117 N. Y. 471, 22 N. E. 1120; Lang v. Stringer's Estate (Matter of Lang), 144 N. Y. 275, 39 N. E. 363. 31 Somervell v. Somervell, 3 Gill (Md.) 276, 43 Am. Dec. 340. See, also, Moore v. Lesueur, 33 Ala. 237, 248. 32 Lang V. Stringer's Estate (Matter of Lang), 144 N. Y. 275, 39 N. E. 363. Compare: Matter of Hodgman, 140 N. Y. 421, 35 N. E. 660. 33 Estate of Rose, 80 Cal. 166, 179, 22 Pac. 86; Estate of Moore, 96 Cal. 522, 527, 31 Pac. 584; Estate of Willey, 140 Cal. 238, 240, 73 Pac. 998. 34 executor has erroneously overpaid a legatee, he has the right to recoup the difference out of any other interest in the estate which such legatee may have. And if, out of his own funds an executor pays debts of the decedent or legacies under the will, he is entitled to be subrogated to the rights of the creditors or legatee so paid.35 § 1601. Right of One Legatee Where Another Has Been Overpaid. Where there are insufficient assets to pay all legacies and certain legatees have been paid by the executor a greater amount than that to which they are entitled, the general rule is that the right of action by legatees who have a claim for a balance is first against the executor, and they have no right of action against the overpaid legatees except where the executor is insolvent and no recovery can be had from him.36 But this rule should be confined to those cases where there were originally sufficient assets to pay all legacies and the insufficiency arose because of devastavit on the part of the representative; for if the assets were originally insufficient to pay all legacies and no waste has occurred, one legatee should have the right to enforce a pro rata refund from an overpaid legatee irrespective of any right of action against the executor.87 Advancements to distributees considered only on distribution, see § 1570. Personal representative may retain assets of estate to satisfy debt due himself, see § 1500. Debt due from a distributee may be retained by the personal representative from the distributee's share, see §§ 1496, 1497. 34 Snyder v. Warbasse, 11 N. J. Eq. 463. 35 Earle v. Coberly, 65 W. Va. 163, 17 Ann. Cas. 479, 64 S. E. 628. 36 Miller v. Stark, 29 S. C. 325, 70 S. E. 501. 37 Demare v. Scranton, 8 Ga. 43; Mills v. Smith, 141 N. Y. 256, 36 §1602. Rights of Creditors Where Beneficiaries Have Been Overpaid. The assets of an estate pass into the hands of the personal representative for the purpose of administration, one important duty being the payment of claims of creditors of the decedent. As against the creditors the personal representative has no right to make a partial or other distribution of the assets of the estate except under an order of court, and if he does so it is at his own peril. If the estate is solvent, no financial liability would result, but if the estate should prove insolvent, as against creditors the representative would not be entitled to credit for such advanced payments, and the fact that the representative made such distribution upon the advice of counsel and of the probate judge does not relieve him from liability.88 Where, because of advance payments by the personal representative to legatees, there is a deficiency of assets to satisfy the claims of creditors, such creditors have a right of action against the legatees to compel them to refund pro rata;39 and generally the personal representative may compel a creditor to refund when such creditor has been overpaid.10 N. E. 178; Gilbert v. Taylor, 148 38 James v. West, 67 Ohio 28, 65 N. E. 156. 39 Lupton v. Lupton, 2 Johns. Ch. (N. Y.) 614; Birmingham v. Forsythe, 26 S. C. 358, 2 S. E. 286; Leake's Exr. v. Leake, 75 Va. 792, 794. 40 Wolf v. Beaird, 123 I. 585, 5 Am. St. Rep. 565, 15 N. E. 161; Moore v. Moore's Heirs, 88 Ky. 683, 11 S. W. 780; Walker v. Hill, 17 Mass. 380. Claims must be paid pro rata when the estate is insolvent, see § 1504. |