50 Tenn. 614 | Tenn. | 1871
delivered the opinion of the Court.
The questions to be decided in this cause, arise out of the administration of the estate of the late James Fulton. He died in Lincoln county, on the 15th of February, 1856, having made his will in 1843, which was materially altered by a codicil executed only three days before his death. He was seized and possessed a large estate, consisting of lands, slaves and other personal property. He appointed John M. Bright, John S. Fulton and Robert A. McDonald, to execute his will. They accepted the trust, proved the will, were qualified, and executed a joint bond, with securities, for the proper discharge of their duties.
The lands and slaves were sold, under decrees in the Chancery Court, yielding, about one hundred and thirty thousand dollars. But of this amount, it is alleged that about twenty-seven thousand dollars have been lost to the legatees and devisees, and that two of the executors, John M. Bright and John S. Fulton, and the Clerk and Master, Robert Farquharson, should be held responsible for the loss.
The several questions in litigation between the parties, are raised upon numerous exceptions to the report of a special commissioner, who was appointed with plenary powers, to take proof and report upon all the matters contested between the parties. We deem it unnecessary to allude in detail to the exceptions taken to the report of the commissioner, on both sides, as we are satisfied that there are a few principles of law which must control the result.
It is one of those cases in which a court of equity is called upon to apply the principles which must determine where a loss is to fall, where neither fraud nor bad faith can be attributed to either party.
It is not controverted, that when John S. Fulton made his last settlement, prior to entering into the military service in which he lost his life, he had in his hands a considerable amount of the funds of the estate. Nor is it disputed, that he died with this amount unpaid and unaccounted for.
The controversy is, whether John M. Bright, as his co-executor, is responsible to the estate for the amount so unaccounted for. The determination of this question depends upon the character of the trust assumed by the executors, the circumstances under which the funds came into the hands of John S. Fulton, and the connection which John M. Bright had with the receipt of the funds by John S. Fulton.
When John M. Bright, John S. Fulton and Robert A. McDonald were qualified as the executors of James Fulton, they undertook the execution of his last will and testament. By their bond, they gave security for the
As already stated, the original will was made in 1842. It is remarkable for its brevity, as follows: “I, James Fulton, of Fayetteville, Lincoln county, Tennessee, do make this my last will and testament: 1st, I desire that all my just debts be paid. 2d, I give and bequeath the whole of my property, both real and personal, to my wife and my nine children, to-wit: Alfred, James, John, Frank, Martha, Jane, Laura, Virginia, and the youngest child now living, which has not been named, together with any children I may hereafter have; said property to be equally divided among my wife and said children; and should any of my said children die before' attaining to the age of twenty-one, unmarried, then the share which I have bequeathed to such child shall be equally divided among the balance of my said children. Witness my hand and seal this 20th of September, 1842.”
By this will, no executors were named, and the only duty specified to be performed by his representative, is that of paying the testator’s just debts. For this purpose, the representative would be governed by the law, in appropriating the personal effects, as the testator gives no directions as to the special manner in which, or the property out of which, he desired the debts to be paid.
As already stated, on the 12th of February, 1856, the testator executed a codicil, in which he provides, that the property given to his several daughters, by his will o.
It is clear that the only duty imposed by the codicil upon the executors, in addition to that imposed by the original will, was in regard to having the farm carried on for the year 1856, and for selling his cotton ana mules, at home or elsewhere, for the payment of debts.
It follows, that the entire trusts assumed by the executors, upon their qualification, were to have the just debts paid and to have the farm carried on for the year and to sell the mules and cotton, at home and elsewhere, for the payment of debts. The joint bond, which the executors made, is not in the record, but we may assume that it was in the usual form, and that it bound the executors to discharge all the trusts imposed upon them by the will and the law. The will imposes no trusts as to the land or slaves, upon the executors, except as to their
Upon the qualification of the executors, the title to the personal estate of the testator, except the slaves, vested in them in trust, for the payment of his debts, and after their payment, for the distribution of the residuum. Until the construction of the Act of 1827, c. 61, made by this Court at its December Term, 1853-, in the ease of Savage v. Hale & Coggin, 1 Sneed, 365, slaves were considered as personal property, and as such, legal assets in the hands of administrators and executors. In that case, the court held, that “since the act of 1827, c. 61, the title to slaves does not pass to the personal representatives, as before that act was the case as to all personal property, but to the distributees, as land goes to the heirs on the death of their ancestor, with no other exception but that the administrator is bound to take possession of them, and if not required to pay debts, to distribute them.” This decision has been followed and recognized in numerous cases from that time down to the present term of the Court.
It follows, that upon the qualification of the executors, the slaves did not pass to the executors as legal assets, but that until it could be ascertained, whether they would be required in payment of debts, it was the duty of the executors to hold and protect the slaves: Cheek v. Wheatly, 3 Sneed, 484; and when the executors should ascertain that the slaves would be needed in payment of debts, they could only convert them into money for that purpose, by resorting to a Court of Chancery. The slaves, therefore, were clearly equitable, and not
In the case last cited, Hughlett v. Hughlett, a testator had directed his executors to sell personal and real estate, for the payment of his debts. The executors had executed a joint bond, and therefore were responsible for the acts of each other, so far as the personalty was concerned, but as the County Court had no power under the act of 1813, to take a bond from executors, for the faithful performance of their duties, except in administering the legal effects of their testator’s estate, there was no mutual liability created by the bond, as between the executors in relation to the equitable assets. Much more clearly would these consequences follow in the case. before us, inasmuch as the will of the testator confers no power and imposes no duty, on the executors, which requires them to sell either land or slaves for the payment of his debts. The only power or duty conferred or imposed upon them is, that if the personal ■effects to be administered, should be insufficient to pay the debts, then they should be authorized by implication of law, to apply to a Court of Chancery, to subject such of the slaves.as might be required to pay the ■debts. The testator indicates in his will no doubt as to the sufficiency of his personal effects, including the crop of 1856, to pay his debts, and hence he makes no provision for such contingency. If such contingency actually occurred, and the executors applied to the Chancery Court for the sale of slaves, they did not and could not do so in pursuance of the directions in the will, but in pursuance of their duties as executors under the
The result is, that the executors were acting in a double capacity, as executors in regard to the legal assets, in pursuance of the duties imposed by the will, and as trustees in regard to the equitable assets, but without having their trust imposed by the will. Having given a joint bond, they were mutually liable for their acts as executors, but individually and severally, liable for their acts as trustees: 2 W'ms on Ex’rs, 1652; Hughlett v. Hughlett, 5 Hum., 469; Deaderick v. Cantrell, 10 Yer., 268.
It is not denied in the argument, that all the money derived from the sale of the slaves, from their hire, and from the rents, for which it is sought to hold Bright responsible, was in fact, received by Jno. S. Fulton. Nor is it controverted, that as a general proposition, when there are two or more trustees, who have entered into a joint bond, they are not responsible for acts done or moneys received by each other, unless the liability is fixed by facts and circumstances which show that the acts done, or moneys received by
It may be proper here to refer to the bill, under which the proceedings were had, which resulted in a decree for the sale of the slaves. The bill was filed on the 4th of February, 1867, by R. A McDonald, John . M. Bright, and John S. Fulton, Executors of James Fulton, deceased, and all the adult legatees and devisees, except- Martha Davidson, who was made a defendant, as were also the minor legatees and devisees. Jno. M. Bright and Jno. S. Fulton were the solicitors who filed the bill. Complainants allege, that the lands and slaves would not be susceptible of an advantageous division, and that it would be manifestly to the interest of all the legatees and devisees, that the same be sold for partition. They also allege, that the testator was considerably indebted at his death, but they think it probable that the proceeds of the perishable property, growing crops, and debts owing the estate, may be sufficient to pay off said indebtedness, if the whole of the sum can be realized; in the event, however, there should be a deficiency of such effects, they wish to reserve the right of asking an appropriation of a portion of the fund, for the payment of such deficiency. The answer of Mrs. Davidson concurs in the correctness of the allegations of the bill, and the minors by their guardian ad litem, Robert- Farquharson, answer formally.
The ex parte affidavits of R. A. McDonald and Jno.
The proof as to the impracticability of dividing the land and slaves, was abundant.
It is manifest that the real object of the bill was, to obtain a decree of sale of the land and slaves for distribution, and not for the payment of debts. Neither the allegations of the bill, nor the proof, would, at that time, have authorized a decree of sale of any portion of the slaves for the payment of debts. But the proof was sufficient to authorize a sale for partition, and such a decree was made, directing the Clerk and Master to make the sales, and to take the notes payable to- himself. Upon the making of this decree the court took charge of the further execution of the trusts, and the executors, as such ceased to have any further connection with, or control over, the proceeds of the sales. When the court ordered, that ten thousand dollars of the proceeds of the sale of these slaves, should be reserved by the Clerk and Master, from distribution, and be held subject to be applied, if necessary, by the executors in payment of debts, they could not receive the fund in their character of executors, but as trustees or receivers .of the court. In this capacity they were not bound to accept the trust, and if they did, they would be responsible only for their individual acts, except upon the law which governs the liability of co-trustees for the acts of each other. The fact that the court designated them
But it is insisted, that when the Clerk and Master sold the slaves, and reported that $10,000 had been reserved for the executors, as well as when he reported that the $10,000 had been paid over to the executors, and that he had taken their bond with security, Jno. M. Bright drew the several decrees, ordering the money to be thus paid over, and confirming the report of the Clerk and Master, stating that it had been paid over to the executors, and therefore that he is estopped from denying his liability; although the proof shows, that in fact, the money was paid only to John S. Fulton, one of the executors, and his receipt alone taken for it, and his bond alone, if any, executed to the Clerk and Master.
The fact that Mr. Bright, as solicitor, drew the decree, ordering the Clerk and Master to reserve $10,000 of the funds, and pay it over to the executors, could have no other effect, than to fix upon him knowledge that such an order had 'been made, and to furnish presumptive evidence that he was williug to accept the trust.
But the decree, confirming the report of the Clerk and Master, made at the August Term, 1860, in which the Master reports that he had paid over' to the executors $10,000 of the proceeds of the sales of slaves, and $2,303 derived from their hire, which decree was in the hand-writing of Mr. Bright, is mainly relied on to fix his liability. The Clerk and Master reports,
Then follows the decree of confirmation, as follows: “To Avhich report no exceptions being taken it is in all things confirmed.”
It is argued, that as Mr. Bright drew this decree of confirmation, it is an admission that the amounts reported by the Master were received by the executors, by which he is estopped. In Heane v. Rogers, 9 B. & C., 577, it is laid down, that, “the express admission of a party to the suit, or admissions implied from his conduct, are strong evidence against him; but he is at liberty to prove that such admissions were mistaken or were untrue, and he is not estopped or concluded by them, unless another person has been induced by them to alter his condition.” It. is observed that while the decree recites that the $10,000 was paid over to the executors; yet the accompanying receipt, which is part of the decree, shows .that the recital was erroneous, and that it was paid to Jno. S. Fulton only. The error or mistake in the recital, therefore, can not es-top Mr. Bright from showing by the decree itself, that it was a mistake, and that he was led into it by the erroneous statement on the face of the report of the
It is argued, however, that an agreement was entered into among the three executors, by which each one undertook to execute specific duties in carrying out the trusts of the will, and that this agreement made each one liable for the acts of the others. The proof as to such an agreement is entirely unsatisfactory. One witness has an impression that he heard Jno. M. Bright say something that indicated that there was some sort of agreement. Another says that there seemed to be a sort of tacit agreement, that Bright was to attend to the law business, Fulton to take charge of the finances, and McDonald to attend to the out-door business of the estate. But what were the specific terms of the agreement, to what extent, if any, they were to be liable for each others acts, or whether the agreement referred to their acts as executors under the will, or as trustees under the appointment of the court, the proof wholly fails to show. We can, therefore, make no inference from this vague and uncertain agreement as to a joint liability. But it is insisted, that although there might be no joint responsibility of the executors for equitable assets that came into their hands as trustees, and not as executors, as the law stood before the act of 1838, c. Ill, s. 18; yet, that after that act, the executors would be jointly liable for the acts of each other, as well in regard to equitable as to legal assets. That act was intended to make executors and
The result is, that as to the proceeds of the sale of the slaves and of their hire, and of the rents of the lands there was no joint liability assumed by, or resting upon, the executors; but that the liability rested on John S. Fulton only, as trustee or receiver, as he only, received the funds arising from these sources.
But in holding that John S. Fulton alone was responsible for these funds, we do not think that he was 'guilty of a devastavit in receiving them from the Clerk and Master. The proof shows that he received them as a trustee, or receiver, under the orders of the court. It is evident that he misapprehended the character in which he was holding the funds, and it is not improbable that the court labored under the same
The proof shows, that under the decree for the sale of the lands, the first sale took place on the 22d of October, 1859, the second on the 18th of August, 1866, and the third on the 8th of August, 1867. A question arises as to the responsibility of the executors,
As it does not appear that there was any want of diligence in the collection of the note of Todd & Steele, the executors will not be responsible, if the same should be lost.
It appeai’3 in the record, that the question of compensation to John M. Bright for his services as solicitor, was referred to the Clerk and Master, who took proof and reported that $2,500 would be a reasonable compensation. The proof shows an amount of services, not only in the cause commenced for the sale of the land and slaves, but in other suits in which the estate was involved, which might have entitled him to a larger compensation than that reported by the Clerk and Master. But it is insisted for the legatees, that he ought to be allowed no compensation, on account of a loss sustained by the estate in consequence of a professional mistake made by him in filing the original bill for the sale of the lands and slaves. The mistake relied on, consisted in his making the minor legatees complainants, instead of defendants to the bill. It appears that a decree of sale was made under the original bill, that the sale took place, and that afterwards some of the parties in interest becoming suspicious of the validity of the sale, carried the case to the Supreme Court, where the case was remanded for the filing of an amended bill, making the minor legatees defendants, instead of complainants. It
The argument rests upon the assumption that the Supreme Court, in ■ two cases, one decided in December, 1855, and the other in April, 1856, had decided that it was error, in filing bills under the act of 1827, c. 61, to make minors complainants, instead of defendants; and that it was culpable oversight in Mr. Bright, not to have known of these decisions. But upon examination of the cases referred to, it is found that neither of them bears out the assumption upon which the argument is rested. In the case of Elliott v. Cochran, 2 Sneed, 468, decided at December Term, 1855, Judge McKinney held (Judge Caruthers dissenting) that, in a proceeding under the statute of 1827, by the personal representative, the parties interested in the subject matter, and in whom the title is vested, must be made parties.” The only question in the case was, whether a bill, under this statute, filed by the executor or administrator alone, without making the distributees or legatees parties, could be maintained. But whether minor distributees or legatees should be made complainants or defendants, is not decided or alluded to. In the case of Cheek v. Wheatly, 3 Sneed, 494, decided at- April Term, 1856, it is held that the title to slaves vests in the distributees
But it is argued that the estate was greatly damaged by the delay in procuring a sale of the lands and ne-groes, and that this delay was the result of the error of Jno. M. Bright in not making the infant legatees defendants to the original bill. Upon looking into the action of this court, at its December Term, 1856, upon the original case, which was brought here by writ of error at the instance of the defendants, we find that the only question presented to the court was, whether the infants ought not to have been defendants instead of complainants. The decree in the case shows that the court declined to decide the question, but remanded the cause to the Chancery Court to be amended and proceeded in, and taxed the parties who brought the case here by writ of error with the costs. Up to that time, therefore, the Supreme Court had declined to reverse a decree for such an alleged error. But the real error which caused the delay was in the action of the Chancellor in setting aside the sales when the case was returned to his court. It was remanded and not reversed; it was remanded that the bill might be amended; not that the decree should be vacated and a new bill filed. Nothing was required but to shift the position of the infants, to have a guardian ad litem and a confirmation of the first sales. The delay resulted from the action of the Chancellor, and for this the solicitor could not be held responsible.
It appears from the record that the County Court, upon a settlement made by the executors in 1859, allowed as part compensation for their services $2,000, of which Jno. M. Bright received $500, R. A. McDonald $500, and Jno. S. Fulton $1,000: the two former agreeing to accept no further compensation. In addition to the allowance of $1,000 to Jno. S. Fulton so made, the special commissioner allowed him $1,250 for further services.
Assuming that $1,000 was a fair compensation for
The record shows that Eobert Farquharson was appointed special commissioner by the Chancellor for the sale of the land and slaves, and that he discharged the duties of his appointment by selling the property under both sales; and as such commissioner took the notes of the purchasers, made collections and disbursements under the orders of the court, and acted as trustee for loaning out the funds belonging to three of the infant legatees. Several questions are raised as to his liability, in specified cases, and as to the compensation to which he was entitled, which we are required to determine.
He would be liable, in general terms, for all the sale notes taken by him, and for all moneys collected by him, together with interest actually received when the notes have been collected, and the interest actually due on sale notes or judgments not collected. To discharge himself he must show how he disposed of the several notes and how he has applied the moneys received, together with all interest actually received by him and due from him.
It is shown that he received from the sale of slaves a fund amounting to about $11,000, which belonged to three of the minor legatees who had no guardians. He was appointed trustee for these infants, and was ordered to loan out the fund on good securi
As the first sale of the land and slaves was set aside, a question is made as to the amount of compensation to which he is entitled. This is governed by the statute which was in force at the date of the sale. It is not a matter of discretion under the act of 1855, c. 264, s. 3, but is fixed definitely at $75.
It appears that the second sale of the slaves was made on the 4th of January, 1858, when the notes of the purchasers due at twelve months, were taken. The act of 1855 was then in force, and governed his com.-pensation as to the simple duty of selling and taking notes. But on the 8th of March, 1858, an act was passed, changing the amount of compensation to be allowed to clerks and masters and special commissioners. This act was carried into the Code as sections 4551
The special commissioner, Farquharson, is entitled to have the several amounts of commissions and allowances, with interest, credited upon the amount for which he may be found liable as already indicated. But as to the $10,000 and the $2,300 paid over to John S. Fulton by order of the court, the special commissioner incurred no liability for failing to take security, as he was not required to do so by the order of the court;
In the view we have taken of the law and the facts in proof, John S. Fulton acted as a receiver and officer of the court in receiving the proceeds of the sale and hire of slaves, and in renting out the real estate. In that capacity, the law attaches to him no liability to account for interest, unless it is shown that he converted the funds in his hands as receiver, to his own use, or that he made interest upon the funds, or that he failed to account for them, when properly demanded.
The record furnishes no evidence that he incurred the liability to account for interest on either ground. The proof shows that he kept a private record of his transactions and doings as such officer of the court. This was, no doubt, intended by him to be used in making his report and settlement with the court, and with the other beneficiaries. It is therefore to be taken as evidence as to his conduct in the execution of his duties as receiver. The circumstances satisfy the court that he acted with fidelity and integrity in his conduct as receiver, and that nothing but his connection with the civil war, and the loss of his life therein, prevented
A question has been discussed as to the appropriation of the share of John S. Fulton in the estate of his father, James Fulton. We have already seen that upon a re-sale of the lands purchased by Jno. S. Fulton, they fell short, of satisfying the original notes executed by him with security for the lands. He is therefore indebted to the estate in a considerable amount, on account of this deficiency. It also appears, that upon taking the account of his transactions as executor and receiver, he will be found considerably in arrears to the estate. The question is, to which indebtedness shall his share in the estate be applied? ' It is a rule sanctioned by authority that when a debtor owes two distinct debts to the same creditor, and makes a payment, if there is no contract controlling, the debtor may elect to which debt the payment shall be applied. If no election has been made, and it devolves on the court to make the application, the rule is to apply
For the satisfaction of the amount which may be found due from John S. Fulton upon the balance on the purchase of land, his interest in the estate of Jas. Fulton, deceased, will be first appropriated.
As the appeal in this case was taken before the final report ordered by the Chancellor to be made, after the several exceptions had been passed upon, we deem it unnecessary to do more than to remand the cause, that the special commissioner may make his final report to the Chancery Court, in doing which he will be governed by the directions given and principles settled in this opinion.
On account of the large amount involved in this cause, and the great interest which has been manifested in its investigation by the counsel, we have given to the immense record before us a laborious examination, and have arrived at the results already announced.
In this examination, we deem it not improper to state, that we have been gratified to find in it nothing which casts the least imputation upon the characters of any of the parties, either the dead or living, for strict integrity and honesty. Whatever losses have occurred can be easily traced to the unavoidable casualities of the late protracted civil war. If the chief actor in the settlement of the estate had survived the war, we have every reason to suppose, from his high character for
The cause will be remanded to be proceeded in according to the directions indicated in this opinion.
Mr. "Wade presented a petition for re-hearing, reviewing the-conclusions of the court:
First — On the construction of the act of 1837-8, c. Ill, s. 18, and citing the cases of Lester v. Vick, 2 Heis., 476, and Porter v. Moores, MS.; Code 2342, 2352.
Second — On the duty of executors in regard to the sale of slaves.
Third — On the doctrine that slaves were equitable assets.
Fourth — On the time of the decision that minors must be defendants, citing 1 Swan, 75.
Fifth — On the effect upon a sale of error in making minors defendants, citing 11 Hum., 489.
Sixth — On the. conclusion that the executors were not liable for rents on their bond, by act of 1837-8, c. Ill, s. 18.
Seventh — On the allowance of 10 per cent, commission on rents, accounted for when $6,000 of rents out of $12,000 remain unaccounted for, citing M. & A., of Winchester v. Slatter, 2 Heis., 65.
Eighth — On the allowance of commissions on $132,-000 of proceeds of sales, when all but $20,000 of this
Ninth — On allowing any compensation to R. Far-quharson for taking care of the funds of the infants when a large sum was lost by his failure to take security.
Tenth — On the allowance of fees to J. M. Bright on behalf of the infants, when the adults should be charged with all — they being the proper complainants whom he represented.
Eleventh — On the allowance of fees as to slaves, &c., held to be equitable assets, and so not in their hands as executors.
A. S. Makes submitted an argument on the petition, and insisted that R. Farquliarson could have no active relief on the Todd note, because he did not appeal: citing Code 3151, 2970; Gilchrist v. Cannon, 1 Cold., 581.
Second — That he ought to have no compensation, as he was not charged with interest and has not performed his whole duty: 2 Heis., 65.
Third — That commissions are erroneously allowed on money not “collected and paid over,” commenting on 11 Hum., 323, and the Code.
Fourth — That no commissions ought to be allowed on re-sales; a means of collecting former bids.
Fifth — That costs and commissions ought not to bear interest.
Sixth — That counsel fees ought not to bear interest.
Seventh — That the beneficiaries ought not to be charged with costs.
Re-hearing refused, March 10, 1871.
In the case of Thos. M. Andrews et als. v. John T. Andrews, decided on the 22nd day of February, 1871, the court said of an exception taken by a guardian to an account: “Defendant excepts because he is charged with interest during the existence of the war. This exception, is not well taken. He does not show that he made no interest and could make none. We can not presume, because a war existed, that the funds in his hands were not drawing interest.” * * * * * * “Because the master has compounded interest during the war. For the reason already stated, in regard to a former exception, this exception is not well taken.”