Also known as: exoneration doctrine · exoneration
Written by attorneys — see sources below.
2 senses
A rule of construction providing that a specific devise of property subject to a lien passes to the devisee encumbered by the lien. The estate has no obligation to discharge the debt from general assets unless the will expressly directs exoneration of that particular encumbrance.
A rule of construction providing that a specific devise of property subject to a lien passes to the devisee encumbered by the lien. The estate has no obligation to discharge the debt from general assets unless the will expressly directs exoneration of that particular encumbrance.
An equitable right of a secondary obligor to compel the principal obligor to perform the secured obligation. The right arises because the secondary obligor is entitled to freedom from the burden of discharging the mortgage and may be enforced by court order even before the secondary obligor has paid the creditor.
An equitable right of a secondary obligor to compel the principal obligor to perform the secured obligation. The right arises because the secondary obligor is entitled to freedom from the burden of discharging the mortgage and may be enforced by court order even before the secondary obligor has paid the creditor.
Each sense below has its own examples, sources, and questions.
Diana Delgado's will specifically devised her mortgaged warehouse to Denise Donovan and left the residue to her children. The will contained only a general direction to pay all just debts. At death the mortgage remained unpaid. Under the modern rule the executor distributed the warehouse to Denise subject to the lien without using residuary assets to discharge the debt.
Doris Duffy devised her encumbered factory to Daphne Doyle with a general clause directing payment of debts. The residue passed to her siblings. The mortgage secured a production loan that remained outstanding at death. The executor refused to exonerate the factory, and Daphne received title subject to the lien because the general clause did not expressly direct payment of that specific debt.
3 common questions
No. Modern statutes treat a general pay-debts clause as boilerplate that does not overcome the default rule. The will must expressly direct exoneration of the particular lien on the specifically devised property.
Supporting sources
The devisee takes the property subject to the existing lien. The estate is not required to pay the secured debt from general or residuary assets absent an express testamentary directive.
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No. Many states have reversed the common-law presumption by statute so that a specific devise passes subject to any mortgage existing at death without any right of exoneration.
Supporting sources
Daniel Diaz sold mortgaged real estate to Dakota Industries. Dakota assumed the obligation but later defaulted and threatened waste that would impair the collateral. Daniel remained personally liable on the original note. He obtained a court order compelling Dakota to discharge the mortgage directly to the lender so that Daniel would not have to pay.
In July 1993 Vincent W. Foster, Jr., then Deputy White House Counsel, met with attorney James Hamilton of the firm Swidler & Berlin to seek legal representation concerning possible congressional or other investigations of the 1993 dismissal of employees from the White House Travel Office. During the two-hour meeting Hamilton took three pages of handwritten notes, one of the first entries of which was the word "Privileged." Nine days later Foster committed suicide. In December 1995 a federal grand jury at the request of the Office of the Independent Counsel issued subpoenas to Hamilton and Swidler & Berlin for Hamilton's handwritten notes of the meeting with Foster. Petitioners filed a motion to quash the subpoenas. After examining the notes in camera the District Court concluded they were protected by both the attorney-client privilege and the work-product privilege and denied enforcement. The Court of Appeals for the District of Columbia Circuit reversed. It recognized that most courts assume the privilege survives death but concluded that a balancing test should apply in the criminal context. The Court of Appeals also held that the notes were not protected by the work-product privilege. A dissenting judge would have affirmed the District Court's judgment protecting the notes under the attorney-client privilege. Petitioners sought review in the Supreme Court on both the attorney-client privilege and the work-product privilege. The Supreme Court granted certiorari in 1998.
View case1 common questions
The transferor may bring an action for exoneration. The court may order the transferee to discharge the obligation directly to the mortgagee or enter a money judgment that is applied to reduce the secured debt.
Supporting sources