Commercial Law

by Richard D. Currier; Richard William Hill; Samuel Williston

PROBATE OF WILLS.—Every State has a probate court for the settlement of decedents' estates. Such a court is variously named as the probate court, the surrogate's court, and the like, according to the nomenclature adopted in a particular State. Before an executor named in a will has any authority to act, he must produce the will, and after the proper proceeding has been had, the will is admitted to probate, and he may then qualify under it by giving the necessary bond. If the deceased died intestate, the proper person will apply to the probate court for the appointment of an administrator, and after a hearing, the court will appoint the person entitled to receive letters of administration. The administrator will then qualify, give the necessary bond, and then proceed with the settling of the estate.

A testator may name anyone in his will as an executor. In the large cities, in recent years, it is becoming quite common to name a trust company as executor, because its facilities for handling estates render it more efficient than the average individual. If, on the other hand, the testator is unwilling to place the sole care of his estate in the hands of a trust company, he may name two executors, a trust company and his wife, if he is a married man, or a very close friend in whose judgment he has great confidence, and, together, the two act as executors. The fees which the executors receive are generally fixed by statute. If the deceased dies intestate, the letters of administration are granted by the court in accordance with a definite statute. While the law in the various States is not uniform, generally, the priority of the right to administration is arranged by statute something like this:

(1) On the estate of a husband:

(a) To the widow, if there is any.

(b) If there is no widow, or if the widow renounces, then to the children.

(c) If there are no children, then to the issue of deceased children.

(d) If no issue of deceased children, then to the nearest of kin.

(2) On the estate of a wife:

(a) To the husband, who has an absolute right. If the husband for any reason does not desire to act as such administrator, he may select any fit person to administer the estate.

(b) If there is no husband, then to the children.

(c) If no children, then to the issue of deceased children.

(d) If no issue of deceased children, then to the nearest of kin.

(3) On the estate of an unmarried child:

(a) To the father, who has an absolute right. If for any reason the father does not wish to act, the court may select any fit person to administer the estate.

(b) If there is no father, then to the mother and brothers and sisters, whether of whole or half blood.

(c) If no mother or brothers or sisters, then to the nearest of kin in equal degree.

PER STIRPES AND PER CAPITA.—Where the subject of a testamentary disposition is directed to be "equally divided" or to be divided "share and share alike," or where similar words are used which indicate an equal division among a class of persons, the persons among whom the division is to be made take per capita, unless a contrary intention is discoverable from the will. Where the individuals of a class are specifically named, or are designated by their relation to some ancestor living at the date of the will, whether the testator or another, they take per capita, unless the context of the will shows an intention that they should take per stirpes. But where the gift is to an individual, or several named individuals, and to others as a class, the latter take per stirpes; unless the testator uses language indicating an intention that the members of the class shall share equally with the named individuals. A gift to a class of persons or on their death to their heirs or children will be distributed among such heirs or children per stirpes; but a gift to one person and the children of other deceased persons will be divided per capita, unless it appears from the context or circumstances shown by extraneous evidence that the testator intended a distribution per stirpes.

ILLUSTRATION.—A gift to children of testator, A. B. and C., or on their death to their heirs or children will be distributed, in the event of the death of C. before the testator, among heirs or children of C. per stirpes. (In other words, they will divide the share of their father between them.) But a gift to A. and to X. Y. and Z., the children of B. deceased, will be divided per capita.

THE CONSTRUCTION OF WILLS.—It sometimes happens that wills are not carefully drawn, and even if they are, their meaning is not always perfectly clear. Ordinarily, any person who is interested in the meaning of a clause of a will may bring a suit in the proper court asking for a construction of the will. Of course, each case is governed more or less, by its own facts, but there are certain general rules which the courts follow in trying to arrive at the testator's intent. For example, a will is ordinarily presumed to speak as of the time of the testator's death. Thus, reference in a will, to the arrival of the testator's youngest child at the age of twenty-five years, will apply to the youngest child at the time of the testator's death, although such child is born after the execution of the will. Ordinarily, a testator is presumed to have intended to dispose of all of his property, and if a will can be so construed, this will be done, rather than to adopt a construction which will make him testate as to part of his property and intestate as to another part. If there are two irreconcilable parts, the latter part is the one which prevails. Words are to be understood in their ordinary meaning, unless there is something to clearly show contrary intent. If, between two possible constructions, one of which would disclose a legal purpose, and the other an illegal purpose, the court will adopt the former.

DOWER.—Under the rules of the common law, a wife was entitled, on the death of her husband, to an estate for life in one-third of the lands of which her husband was seized of an estate of inheritance at any time during the marriage. This dower right still exists in most States, although it may differ in some particulars. For example, in Connecticut, a dower right exists only in the real property which the husband owns at the time of his death, and not, as at common law, in all the real property of which he was seized during the whole marriage. Therefore, reference to the statutes must be made in each State, to know the exact rule in a particular jurisdiction. Where the State adheres closely to the common law, this right, on the part of the wife, is a right of which her husband cannot deprive her; if the husband disposes of all his real property in his will to his friend, John Jones, such disposition is not valid and the wife would still be allowed her dower right by the probate court. It must also be borne in mind that dower refers only to real property. Generally, a husband may dispose of his personal property without any reference to his wife. Ordinarily, two things are necessary to establish the right of dower: (1) A legal marriage, and (2) seizin by the husband of an estate of inheritance in lands, or, in a layman's terms, the absolute ownership of a piece of real estate.

CURTESY.—Curtesy is the common law right which a husband has in the real property of his wife, and by it he is entitled to an estate for his life in all lands of which his wife was seized during marriage. Needless to say, women did not take part in law making when this law arose. To establish this right, three things are necessary: The two already mentioned in dower, and third, the birth alive of issue of the marriage. The right of curtesy does not exist in this common law form in as many States as does the right of dower. Where these two rights do exist, in their more or less modified form, you have the explanation of the fact that when a married man sells real property, his wife joins in the deed, or when a married woman sells real property, her husband joins in the deed. The act of either in joining, releases the dower or curtesy right and allows the purchaser to get a clear title.

CONFLICT OF LAWS.—We have already referred to this topic. It frequently happens that a person dies owning real property located in a number of States. It is almost certain that the laws covering real property will vary in these different States. If he was a resident of Philadelphia, his will will probably have been executed in accordance with the laws of Pennsylvania. The question arises whether such a will is valid to convey real property which he owns in New York, California, and Massachusetts. Insofar as the will affects real property, the mode of execution and its validity will be controlled by the law of the jurisdiction in which the real property is situated. If, then, the will had two witnesses only, as required by the Pennsylvania law, but three witnesses are required in one of the other States named, he would die intestate as far as the real property in the other State is concerned. Difficult questions sometimes arise in regard to gifts to charities. Some States limit the amount which a charitable corporation may receive as a gift under a will, and other States require that the gifts must be executed within a certain time before the decedent's death. Where there is a question of this character involved only a careful examination of the decisions and statutes in the States concerned can furnish the basis for any satisfactory answer. If there is personal property, the requisites of validity and construction of a will are controlled by the law of the testator's domicile. The question as to his domicile is sometimes quite difficult to determine and may require a court action. We have had a number of illustrations of that in connection with the inheritance tax laws, where the officers of one State have sought to establish the domicile of a particularly wealthy person, who has just died, within that State in order that they may secure the inheritance tax for the State, which would of course, be much larger if the person were adjudged a resident of that State than it would be if he were held to be a non-resident.

CONTRACTS TO MAKE A WILL.—It sometimes happens that one person may make a contract whereby he agrees to make a will in favor of another person. A, 75 years old, and of the proper mental capacity to make a will, makes a contract with Mary Jones, that, if she will live in his house and act as housekeeper as long as he lives, he will make a will and in it give her his house and $5000. He fails to make his will and dies suddenly at the end of the year after the making of this contract. It is generally recognized that contracts of this nature are valid. The general rules applicable to contracts apply here. There must be consideration, the contract must be certain in its terms, and as such contracts are not favored by the courts, because they are open to many forms of fraud, they must be proved by clear and convincing evidence, and the contract would have to be in writing under the provisions of the Statute of Frauds. In the illustration suggested, the further question arises, what is the remedy on the part of the housekeeper for a breach of contract. Ordinarily there are two proceedings open in such a case. The personal representative of the deceased might be sued at law to recover damages for a breach of contract, or one might proceed in equity to compel the parties who take the legal title to the house, in consequence of the failure of the decedent to make his will as he contracted to do, to convey the property which would have been conveyed by the will, had the will been made in compliance with the contract.