40 N.C. 357 | N.C. | 1848
After the decision of June Term, 1843,
Henry Shore, the elder, made his will in September, 1819, and by different clauses devised and bequeathed as follows: "It is my will that my executors shall pay all my debts out of my estate, and collect all debts due me. Thirdly. It is my will that all my household furniture be sold to the highest bidder, and money accruing from the sale be distributed among my children Henry Shore; Mary, the wife of John Harris; Magdalene, widow of George Hauser; Elizabeth, wife of John C. Lehman, and Mary Barbara, wife of Simon Peter Hauser, in manner following, that is, the parts of the four first mentioned shall be delivered to them, but the last mentioned Mary Barbara's share shall be left by my executors in trust for her children. nevertheless, my executors shall pay to my daughter Mary Barbara the interest of her share annually during her life for her use. Sixthly. It is my will" — after directing legacies of $10 each to several grandchildren — "that all the rest of my property, real or personal, consisting of cash, bonds, notes, book accounts, and the amount of sales, etc., be distributed among my children named in the third section of my will, and in the manner prescribed therein. Of course, the part coming to my daughter Mary Barbara to be managed as directed in the third section of this my will.Seventhly. It is my will that of the 1,000 acres of land on the Obion River in Tennessee, that I am possessed of, my son Henry and my son-in-law John C. Lehman, in consideration of their trouble in attending on me in my old age, shall each have 150 acres extra; that the remaining 700 acres be sold by my executors and the money arising therefrom be equally divided between my five children, Henry, Mary Harris, Magdalene Hauser, Elizabeth, wife of John C. Lehman, and Mary Barbara, wife of Simon Peter Hauser; the part of the last mentioned to remain in the (359) hands of my executors in trust for the children of my daughter Mary Barbara, on condition that my executors are to pay to her annually the interest on her share as specified in the third section." Henry Shore, the son, and John C. Lehman were appointed executors, and proved the will in December, 1819. Soon afterwards they sold and conveyed the whole tract of land in Tennessee, containing 1,000 acres, to Conrad for $2,000; of which the sum of $600 was paid down in cash, and for the residue of $1,400 Conrad gave his bond, payable 21 January, 1822, with a provision, however, that any sums he might pay before that time, and that any debts the executors of either of them might owe him, should be allowed in payment of his bond. At different periods Conrad made payments to Henry Shore in cash to the amount, in the whole, of $926, and in January, 1822, he came to a settlement with the *251 executors, and had credit for those payments, and discharged the residue of the bond with bonds and accounts due him from Henry Shore, one of the executors. The first ground on which it is sought to charge Conrad is that he was bound to see to the application of the purchase money of the land.
If the case stood on the seventh clause of the will, by itself, and the bill had been filed by the daughters Mary Harris and Magdalene alone, it would have raised the question on which opposite opinions have been expressed in modern times by eminent lawyers, namely, whether a purchaser is bound to see to the application of the purchase money further than to place it in the hands which the owner of the estate appointed to receive it. The position is at least plausible, that when a trustee has express authority to sell land and it is made his duty to receive (360) and distribute the price among particular persons, it should be considered that, though not expressly conferred, it was intended he should also have the power, upon the receipt of the money, to give the purchaser a discharge. 1 Pow. Mort., 312; Balfour v. Welland, 16 Ves., 156. It is not necessary, however, to embarrass this case with that point, since there are others on which it is plain that this purchaser was no longer responsible after paying the money to the executors.
The case may be considered, first, with respect to the claim of the original plaintiff, Simon Peter Hauser and wife, and their children, on its peculiar grounds. The share of the different parts of the property given for their benefit was by the third, sixth, and seventh clauses of the will to be left by the executors, or to remain in their hands, on interest, so that the daughter Mary Barbara should have the interest annually for life, and then over to her children. The words, "to be left," or "to remain in the hands of my executors," may possibly mean that the executors themselves were to use the money during the daughter's life and pay her the interest yearly. If so, it would be plain the intention of the testator could not be that the purchaser should be responsible for the integrity and solvency of the executors, for he could never expect the land to be sold on these terms — at least, not for anything like a reasonable price. The testator had confidence in his executors, and might have been willing to trust them with the money, which, for the sake of a provision for his daughter and the family, he was obliged to trust to some one; but he could not suppose that any stranger would be willing to become answerable for the fund in the hands of the executors for an *252 indefinite period, and, perhaps, to children then unborn. But the fair construction of the will may be that the money should be laid out in securities bearing interest, by which the annual interest would (361) be enjoyed by the daughter and the capital be preserved for her children at her death. If so, the case would be equally clear for the purchaser; for the will does not direct an investment in any particular securities, so as to afford the purchaser an opportunity of providing that the money, when leaving his hands, should be laid out in the prescribed securities. It must be implied, then, either that the testator intended that his estate should be put to the expense of a chancery suit to authorize a sale or order the investments, or that it should be done by the executors in the exercise of an honest discretion. There can be little doubt that, between the two, the latter was the intention; and then it cannot be supposed the purchaser would be expected to look further to the money after he had paid it into the hands which were appointed thus to receive and "manage" the fund. In Balfour v. Welland,supra, there was a trust to sell, and with the money to pay such creditors as should come in under the deed within a certain period; and it was held that there was a discretion in the trustees to make the sale before the creditors were ascertained among whom the money was to be divided, and, therefore, that the payment of the money to the trustees discharged the purchaser, as he could not know to whom it ought to go. So, in Doran v. Willshire, 3 Swanst., 699, one tract of land was to be sold, and the trustees were to receive and lay out the money in other land, and, until a fit purchase could be made, they were to invest the money in public securities; and the chancellor held that a general trust to lay out money was a personal trust, and that it was impossible to suppose it could have been intended to confide it to any stranger who might happen to buy a part of the real property. If a purchaser were not allowed to pay the money in such a case to the executor, but became entangled (362) in trusts of such duration as those here, and over which he could have no control, it could hardly be expected the land could ever be sold, unless it belonged exclusively both at law and in equity to the vendor.
But there is still a broader ground upon which the case is against all the plaintiffs on this point. The first clause in the will directs his executors to pay the testator's debts out of his "estate," which of course embraces the present fund, if needed for debts. It has long been settled that, either upon a trust or a charge, a purchaser is not bound to see that the money is applied either to the payment of debts generally or to the satisfaction of legacies out of the surplus after the debts are paid.Humble v. Bill, 1 Eq. Cas. Ab., 358, 5 Vern., 444; Williamson v. Curtis, 3 Bro. C. C., 96; Co. Lit., 290, Butler's note 1; Rogers v. Shellecome, *253 Amb., 188, and notes; Jenkins v. Hiles, 6 Ves., 654, note. The reason is that it would defeat a sale if the law obliged a purchaser to attend to the execution of a trust so indefinite as the payment of all debts which he would have no means of ascertaining. Legacies out of the fund after the debts paid stand on the same footing, because the purchaser would necessarily have to go through the administration of the assets and see, at his risk, that the debts were paid, before he could let the legatees have anything.
In the views hitherto taken, it has been assumed that Conrad made a fair bargain, and in good faith paid the purchase money to the executors. But the plaintiff deny those facts; and for that, as a second reason, they seek to charge him in this suit. The bill states that the executors were largely indebted to Conrad, and that by means thereof he had them in his power, and compelled or induced them to sell the land much below its value. But the master does not say anything on this head, further than to state that Henry Shore, the younger, was at the time of the contract in debt to Conrad about $336. It does not appear that the price was inadequate, nor that Lehman owed Conrad a cent; and the answer states that the price was the full value and that Conrad's heirs are willing the plaintiffs should have the land at the same (363) price. That ground, therefore, fails.
But the plaintiffs further contend that the mode of payment, being partly in the debts of the trustees to Conrad, and with a probable knowledge of the executor's insolvency or embarrassments, and that he was taking up the money for his own use, entitles the plaintiff to insist on the lands being still a security for their legacies. There is no doubt that the purchaser's paying off his debt for the land with the insolvent executor's debts to him would be a wrongful act, and leave him to make the payment over again, as far as it was made in the executor's debt, or in any other fraudulent manner. For such a concurrence in the executor's breach of trust makes the party responsible, as the executor is, on that transaction.McLeod v. Drummond, 17 Ves., 153; Exum v. Bowden,
The Court, therefore, perceives no reason for impeaching any part of Conrad's dealing, as far as it appears; and the bill must be dismissed as against his administrators, with costs, both those incurred by him and by the administrators.
PER CURIAM. Decree accordingly.
Cited: Rogerson v. Leggett,