18 Tenn. 263 | Tenn. | 1837
delivered the opinion of the court.
This is a bill of complaint filed by the legatees of George M. Deaderick, for an account and decree against Stephen Cantrell and Jessee Wharton, executors and trustees to the will of said George M. Deaderick, upon the following facts: Some time in the year 1816, G. M. Deaderick died in Davidson county, Tennessee, having previously to his death duly made and published his last will and testament, by which, after directing that all his debts be paid, and having appropriated to that purpose his personal estate and the rent of his lands, he provides, that his executors shall sell all his real estate at four equal annual instalments, with interest from the date, the proceeds of which he bequeathed to the complainants seperately in different proportions, some of them being specific legacies and others residuary, payable at the different periods when those entitled thereto should arrive at the age of twenty-one, or marry; in the mean time he directs his executors to loan out the money to the best advantage. This will was duly proven by Stephen Cantrell aud Jesse Wharton, two of the executors named therm, who took upon themselves the bur-then of executing the same. In l;!ay, 1820, the said executors jointly proceeded to sell the real estate of the testator, and did sell and convey the same, upon a credit of one, two, three and four years, taking notes with interest from the date, payable to themselves jointly. These notes Wharton permitted to remain in the hands of his co-trustee and executor, Stephen Cantrell, who collected the same as they fed
That Cantrell is liable for the amount of money and property used by him, is not disputed, indeed he has not appealed from the decree of the court below.j Wharton’s liability for the abuse of the trust by his co-trustee is disputed, and depends upon the following propositions.
1st. Did he take upon himself the execution of the trust imposed by the will? That he did is too evident to admit of debate. He proved the will and joined in the sale and conveyance of the land, and assented to the notes being payable to himself and Cantrell. Having accepted the trust and partially executed it, he could not denude himself of it afterwards.
2d. Was the trust abused? This proposition is also so clearly proved as not to have been denied. Stephen Cantrell, in violation of the directions of the will, which required the money to be loaned out to the best advantage, appropriated large amounts of it to his own use, for which he has never accounted.
3d. Is Wharton responsible for this abuse of trust on the part of his co-trustee? Trusts of the character now under consideration are of two kinds, distinguishable by the law as discretionary and directory trusts, the rules for regulating the responsibilities of co-trustees, being different when applied to these different trusts.
We will proceed to examine, 1st, When and under what circumstances a trustee is liable for an abuse of trust by his co-trustee, when the trust is discretionary; and 2d. When and under what circumstances he is liable, where the (rust is directory. A discretionary trust is, when by the terms of the trust no direction is given as to the manner in which the trust fund shall be vested, till the time arrives at which it is
From this opinion we understand the chancellor to have held, that a trustee is liable for an abuse of trust by his co-trustee, 1st. When the money has been received jointly. 2d. When a joint receipt has been given, unless it be shown by satisfactory proof that the joining in the receipt was neces-s'ary or merely formal, and that the money was in fact paid to his companion. 3d. When the moneys were in fact paid to his companion, yet so paid by his act, direction or agreement. Chancellor Kent is high authority, and we are satis¿ Bed to adopt his conclusions on the subject under consideration, without entering into an investigation of the decisions from which he extracted these principles — we think it would but encumber the opinion and be a useless consumption of time. It is admitted in the case under consideration, that the money was not 'jointly received, and that no joint receipt was executed, but it is contended that the money was paid to Cantrell by the act, direction, or agreement of, Wharton, and Under such circumstances as must make him liable for its waste, and we think successfully. This is not like ordinary
The true question in all such cases is, whether the money was under the control of both. Now the money must of necessity be in the hands of one or the other, as it cannot be. in both at the same time. What then is meant by its being under the control of both? manifestly where it has been received by the act or consent of both. If one receive money outstanding without consulting the other, inasmuch as he had a right to do so, the other shall not be charged, btit when a debt is due by note to both, one cannot receive it against the assent of the other, it being a debt due to them jointly, and for'which they may sue as individuals, and the fund, when collected, would be held in trust. But if the fund was not collected in such a manner as to charge Wharton with his co-trustee’s default, has not his negligence in attending to the execution of the trust made him so chargeable. At p. 525 of 2d Story’s Commentaries, it is said, if one trustee wrongfully permit the others to detain the trust fund a long time in
But this is not a discretionary, but a directory trust. A directory trust is when by the terms of the trust the’ fund is directed to be vested in a particular manner, till the period arrives at which it is to be appropriated. In such cases if the fund be not vested, or vested in a different manner from that pointed out, it is an abuse of trust for which both trustees are responsible, though but one received the money, because both are bound to attend to the directions of the trust, and must be careful to execute it faithfully, according to its terms and the intention of the person by whom it was created. Bone vs. Cooke, McClelland’s Rep. 168: Ringold vs. Ringold, Har. & Gill Rep. 12: 3 Bro. Ch. Rep. 90, 112: Oliver vs Court, 3 Exch. Rep. 312: 4 Cond. Ch. Rep. 93: Brice vs. Stokes, 11 Ves. 326. These cases so fully establish the principle above laid down, that it is useless to
Decree affirmed;