26 W. Va. 175 | W. Va. | 1885
. The clearest mode of determining the numerous legal questions necessary to he decided in order to determine the decree, which should be entered by this Court in this cause, it seems to me, is to consider in their order the legal errors, which have been committed by James F. Watts and John D. Kincaid as executors of Michael Hunger and as trustees of William D. Littlepage, and also those committed by James F. Watts as committee of William I). Littlepage, and the effect, which such errors ought to have produced in the settlement of the accounts of these executors and trustees and of the said committee.
The first error committed by these executors was made on December 5, 1859, within less than three months after they qualified as such executors, in that they improperly sold to James F. Watts, one of the executors of Michael B linger, deceased, a tract of land of 774 acres in Greenbrier county for the sum of $18,854.60. By the will the executors were directed to sell this tract of land. But they committed an obvious breach of their trust as executors, when they sold it to one of themselves. Ko person can consistently occupy the two positions of seller and purchaser. Of course the fact that they as executors of Michael B unger conveyed this tract of land to one Samuel B. McOlintic, who on the same day conveyed it to James F. Watts, one of the executors, does not in the least degree change the case. For it is admitted that James F.Watts, one of the executors, was the purchaser, and that it was conveyed to Samuel D. McOlintic and by him to James F. Watts as a mode of transferring the title from the executors to James F. Watts one of the executors. Their mode of transacting this- business only shows, that they were unconscious that they were doing any wrong or committing any breach of trust in selling a farm of their intestate to one of their own number. But that it was a breach of trust is indisputable. In the case of Newcomb, et al v. Brooks, et al, 16 W. Va. 83 point 7 of syllabus, this Court decided: “When there are several fiduciaries one can not purchase of
Any one of the children of Michael Bunger had a perfect right, had he or she chosen, to have this sale set aside, so far ás his or her interest in the land was concerned, and so had Wm. I). Littlepage his grandson or his committee; but none of them have chosen to do so, and the sale was not void but only voidable. The bill in this cause does not ask to have this sale, so far as the interest of Wm. D. Littlepage in the land is concerned, set aside, but on the contrary it is throughout the pleadings and all the proceedings in this cause treated as a valid sale. It must therefore be regarded as such; and this error of the executors of Michael Bunger can therefore have no effect upon any of the settlements of the accounts of any of the fiduciaries in this cause. The next error committed by the executors of Michael Bunger is, that they did not comply with the law which required them “to furnish a statement of all the money, which they had received or become chargeable with or had disbursed within one year from the date of the order conferring their authority or within any succeeding year together with the vouchers for such disbursements within six months after the end of every such year to a commissioner of the court wherein the order was made conferring their authority.” (Code of Virginia ch. 132 sec. 7.) And the law fixed a penalty for a failure to perform their duty in this respect, the penalty being if they “should wholly fail to lay before such commissioner a statement of receipts for any year within six months after its expiration, they should have no compensation whatever for their services during said year” with certain exceptions not necessary to be stated, as they have no application to the case we are considering. (Code of Virginia ch. 132 sec. 8.)
It is claimed however by the appellee’s counsel that the
. On the other hand it appears, that commissioner' Withrow’s first report was not made till after January 1, 1862, that is, till more than twenty-seven months after these executors qualified, and in his report it does not appear, when he commenced the settlement of this account, or when the executors first laid before him their vouchers for such settlement. Under these circumstances under the statute-law above referred to these executors would be entitled to no compensation for any services rendered during the first year after they qualified, that is, before some time probably about September 22, 1860.
The account shows, that the whole amount received by the executors during this first year was $6,271.61, the commission on which at five per cent, ivas $313.58 which ought not to have been allowed these executors, it having been forfeited under the statute above quoted. But commissioner Withrow properly allowed the executors their commissions for the second year and for three months thereafter up to January 1, 1862, as their vouchers, on which this first settlement was
In this he erred. It was the object of secs. 7 and 8 of ch. 182 of the Code of Virginia to have an ex parte settlement of the accounts of fiduciaries made once a year. It such settlement once a year was not made, and it resulted from the failure of the fiduciary “to furnish a commissioner with a statement of all the money, which he had received or become chargeable with or had disbursed within one year from the date of the order confirming his authority, within six months after the end of the year, then he is to have no compensation whatever for his services during this past year.” If no such settlement is made as required, the presumption must be, that it arose from the failure of the fiduciary to tur-nish in proper time this statement and his vouchers, and he must show satisfactorily, that he did in fact furnish such statement and vouchers to the commissioner. If he shows this, the failure of the commissioner to make up and return his settlement till after the expiration of the second year would under these sections of the Code of Virginia not forfeit his commission. But unless he does show, that he furnished this statement and his vouchers within eighteen months, then he forfeits his commissions on the amounts received during the past year.
Did the executors of Michael Bunger show satisfactorily, that they furnished this statement and their vouchers to commissioner Withrow within eighteen months after they qualified ? It seems to me they did not. It is true, they had
Under the circumstances of this case I attach but little importance in reaching a conclusion on this point to the fact, that this suit was not instituted till more than twenty years after the settlement of the exporte, account by the executors and until after the death of both of the executors. Itis true that delay in the assertion of a right, unless satisfactorily explained, operates in equity as evidence of assent, acquiescence or waiver; and laches and neglect are always discountenanced
The amount of the commissions improperly allowed the executors was $313.58, and the interest on this from the close of the first year, October 27, 1860 till January 1,1862, when the executorial account was finally closed, is $12.75, making the error in this first account of commissions in favor of the executors $326.33. And as William D. Littlepage was entitled to one sixth of this amount, the true amount due him on January 1, 1862, by these executors principal and interest was $3,442.82 instead of $3,388.43, according to the account of the commissioner. Trom this is to be deducted the amount paid out for the tuition and other expenses of Littlepage up to January 1, 1862, amounting to $162.46, leaving a balance of $3,280.36 as the true amount, which on January 1, 1862 went in to the hands of James IP. Watts and J. D. Kincaid as trustees of W. D. .Littlepage..
In making this statement I have corrected no error in commissioner Withrow’s account except the improper allowance of commissions to the executors, as no other error was insisted on in the argument of counsel. The other errors claimed in the petition were trifling in amount, (if they really were errors, which they were not.. It was no error in commissioner Withrow not to charge these executors with the beds, bedsteads,-bedding and library mentioned in the will.) They were bequeathed by the will to testator’s daughters and William D. Littlepage; and the evidence shows, that Wil
This account shows, that these trustees between January 1, 1862, and August 4, 1868, that is, for five years and seven months, spent for the education and maintainance of William D. Littlepage including commissioner’s fees for settling the accounts $13.75 and' taxes, which amounted to $58.22, $1,208.22. Theinterestonthefundsinthehandsofthetrustees amounted during this time to $1,286.82. So thatthe intereston the funds in the hands ofthetrusteesjust about compensates the trustees and pays for the tuition and maintenance of Little-page leaving his principal undiminished. The true balance in the hands of these trustees on August 4, 1868 was the original principal sum, which came into their hands January 1, 1862, that is, $3,280.36 and $93.64 of interest. Commissioner Walker reports the amount in their hands at that time as $26.00. The difference is to be accounted for by the fact that commissioner Walker allowed, as I have shown-, too much commission to the trustees by $40.20, and did- not charge them with sufficient interest, having charged them with the interest on $3,182.91 only, which was the principal in the hands of the executors for Littlepage, when their exe-
On September 6, 1869, these trustees and William D. Lit-tlepage and his father L. B. Littlepage executed an agreement under their hands and seals, which was regarded by commissioner Withrow as binding on the parties in the next settlement of James F. Watts as trustee and committee of William D. Littlepage, of date January 28, 1876. Did he err in treating this agreement as binding? On July 13, 1863, James F. Watts and James I). Kincaid, executors of Michael Bunger, presented an ex parte petition to Robert Hudson, the judge of Greenbrier county, Virginia. In this petition they simply set out that Michael Bunger by his will had appointed them executors pf his will and also trustees for Wm. D. Lit-tlepage “ to hold the fund given him, until he should attain the age of twenty-five years, the interest to be expended upon his education; that he was, they thought, about fourteen years of age, and they found it impossible to make any productive investment of the capital coming to him upon good security except in government stocks; that they had on hand $3,100.00 or $3,200.00 to be invested; and they asked an order authorizing them to invest said runds in Confederate stocks or such other public stock as the judge might prefer.” The judge in vacation entered an order on July 13, 1863, whereby he gave them leave “ to invest the money in their hands in their fiduciary character in interest-bearing bonds or certificates of the Confederate States or of the State of Virginia.” There is no proof that any such investment in
In the case of Crickard, Executor v. Crickard’s Legatees, 25 Grat. 410, approved by this Court in Mc Clure, Administrator v. Johnson et al., 14 W. Va. 448 it w'as decided, “ that to authorize an investment by a fiduciary under an order of a judge in Confederate bonds, the act of the Virginia Legislature of March 5, 1868, required that these three conditions should concur: First. The money must be in the hands of the fiduciary. Second. It must have been received in the due exercise of his trust. Third. For some cause he must be unable to pay it over to the party entitled to it; and if they do not all exist, the order of the court or judge is null, and the fiduciary is responsible for the money.”
In this case it is clear that neither condition one nor condition two existed; and this ex parte order of Judge Hudson was null and void. First, there were no Confederate notes or any other money in the hands of these fiduciaries belonging to Wm. D. Littlepage. And second, if it is possible to regard any Confederate notes or other money which they then had as having been received by them as executors of Michael Bunger or as trustees of W. D. Littlepage, then such Confederate notes were clearly received not in the due exercise of their trust but in clear violation of their duty as trustees. To show that this must be so, it is only necessary to state the facts briefly. These trustees were James F. Watts and James D. Kincaid; if they ever did receive this money at all, they received it from James F. Watts as the price of a tract of land, which was improperly sold by them to him. And the account, which they settled, showed that they received the whole of this money on or prior to October 27, 1861. It is not even pretended that the identical money received by them had been kept on hand, some of it for more than two years, and all of it for nearly two years, when they applied for leave to invest it in Confederate bonds. I presume the truth is that in point of fact this money was not collected by these trustees of James F. Watts either in Confederate notes or in any other sort of money. It was due from him to the trustees, no sort of money having been paid. It -was simply charged up to the trustees, as if it had been
His counsel does not contend, that under the authorities we have citted James F. Watts and James D. Kincaid had any authority by virtue of this order of Judge Hudson to make any investment in Confederate bonds, and admits that they would despite this order be bound to account for all the money of Wm. H. Littlepage that might come into their hands. But it is claimed that this was a subject of controversy in 1869, and that Wm. D. Littlepage, on September 6, 1869, when he was more than twenty-two years- of age, agreed, as a compromise, that because of this loss by reason of the depreciation of Confederate bonds and their ultimately becoming valueless, Wm. D. Littlepage would abate of the principal one-third of his demand against his trustees, Watts and Kincaid, and that they should pay interest on the full amount of what was due only up to October 3,1869, at which time the principal was to be thus abated. Was this a valid contract ? There was certainly no consideration to sustain such an agreement, unless we are to regard this abatement as a compromise between Wm. L. Littlepage and his trustees of a controversy existing between them and him at that time. They claimed, that they were under no obligation to pay to him any part of the funds, which had come into their hands as trustees under the will of Michael Bunger, and it was, their counsel claimed, agreed, that they would pay two thirds of the principal which had come into their hands, and all
It is very questionable upon the principles laid down in Newcomb et al. v. Brooks et al., 16 W. Va. 32, whether such an agreement as that between these trustees and their cestui que trust, made while this relation existed between them, could be sustained, even had the cestui que trust been one who was in all respects capable to enter into any sort of contract with third persons. It certainly could not be unheld, unless he was made perfectly aware of all the facts by his trustees, before he made the contract with them. Such dealings between trustees and their cestuique would certainly be scrutinized by a court of equity and could not be sustained unless it was accompanied with uberrima fides. But in this case, it seems to me, a court of equity would not hesitate to regard this agreement as voidable at the pleasure of William D. Little-page. His grandfather by his will, written when William D.
After making this agreement these trustees continued to manage the estate of William D. Littlepage because of
This account was erroneous not only in this and in assuming the settlement made by Commissioner Walker to be correct, but also in allowing James F. Watts, trustee and committee, a commission on all moneys received by him, which had not been allowed in previous accounts, though he had settled no account for eight years. The account is brought up to October 24, 1875. The report having been made January 28, 1876. But before returning this report it was continued till February 21, 1876; and in this additional report he allowed to James F. Watts commission on the principal sum, $2,000.00, under this agreement, that is to say $100.00. There should have been, upon the principles we have laid down, no commission allowed to James F. Watts, except on his receipts during a period of not more than eighteen months
But there were other and more serious errors in this report. It allows to James F. Watts, as committee of W. D. Little-page, a credit of $1,550.00 cash paid to James I). Kincaid for a ti'act of land bought of him for W. D. Littlepage, and conveyed October 20, 1873, to James F. Watts, committee of W. D. Littlepage. How as there was no authority ever obtained of any court for this committee to make this investment of the funds of W. D. Littlepage, an idiot, in real estate, Watts as such committee had no authority to purchase this tract of land. It can not be regarded therefore as a purchase by him as committee of W. D. Littlepage, but must bo regarded as a purchase by him individually; and he ought not to have been allowed this credit of $1,550.00. I deem it unnecessary to make further comment on this ex parte report. The purchase of this land by James F. Watts, as committee of W. D. Littlepage, of his former co-trustee for $1,550.00, without any authority from any court to make such purchase and his subsequent sale and conveyance of this tract of land without any authority from any court to Mary- 0. Gabbertfor $1,212.00 taken in connection with his, Watts’s purchase of his testator’s tract of land of 774 acres of his co-executor said J. D. Kincaid, indicate a total disregard of his duties as a fiduciary, while his purchase of this 774 acres was, as we have seen,not absolutely void, but only voidable, his purchase of this tract of Kincaid in his capacity of committee of W. D. Littlepage was absolutely void, so far as it purported to invest the funds of W. I). Littlepage in this laud; and it could only be operative as a purchase by himself as an individual. This tract of land being thus his individually, upon the re-sale of it to Mary C. Gabbert he became entitled to the whole of the purchase-money individually, and whatever part he did not collect, his personal representatives on his death became entitled to and are still entitled to, if it has not been paid.
We have seen, that the true balance in the hands of James
The changes, which according to the views I have expressed must be made in the report of commissioner McWhorter, ar'e so numerous and fundamental, that I deem it much better to set aside all his reports and reverse the decree of April
This account of said Watts, committee of Littlepage, should not be mixed up with the accounts of said Watts and and J. D. Kincaid, executors of Michael Bunger, nor with the accounts of said Watts and Kincaid, trustees of Littlepage; but the account of Watts, committee of Littlepage should commence on the day he qualified as such committee, and on that day he should be charged with $3,566.61 received from the trustees of Littlepage, or more correctly speaking with the amount, which was in his hands or came into his hands at the time he qualified as such committee. This amount when calculated on the principles we have laid down, as it must be, is believed to be $3,566.61 but it may be that some error may on the principles on which we have laid down hp,ve been made in these figures, and if so, and it can be pointed out to the court below, it should be corrected, but the principles we have laid down must be strictly followed in ascertaining this amount. In making this settlement the committee is not to be allowed or credited with any commission or compensation of any sort for any services rendered by him except a commission on moneys received by him as such committee between. July 28,1875, and January 28,1876, when he settled the only account he ever settled as such committee, all his other commissions being forfeited. The committee should be allowed no credit for the $1,550.00 paid to James I). Kincaid for the 115 acres purchased for William X>. Littlepage or for the $612.00 paid to Holcomb for the 93f acres of land purchased of him for William 1). Littlepage, these purchases having been unauthorized. But these two tracts of land must be treated as bought and sold by James F. Watts individually, and therefore, they being his lands, he is to be credited with the reasonable rent of said lands during the time
Under the circumstances which actually existed in the case of Bird’s Com. v. Bird, 21 Grat. 712, the Court properly decided, that the accounts of the committee were not to be settled on the principles of a guardian’s account. The Court in that case expressly based, its action in this respect on the particular circumstances of that .case.
In the case of Crigler’s Committee v. Alexander’s Executor, 38 Grat. 681, et seq., Judge Staples discusses the manner, in which the accounts of committees should be settled. He says :
“ The next question is, whether in stating and settling the accounts of the intestate as committee he is to be charged with compound interest upon the balance in his hands. -It is insisted this ought to be done by analogy to the rule governing in the settlement of guardians’ accounts. It is sufficient to say that the liability of guardians for compound interest grows out of the peculiar provisions of our statutes on that subject. See Code of 1873, § 10, ch. 124, and Garrett v. Carr, 1 Rob. R. 196.
“ These provisions have never been considered as applying to other trustees.
“ The accounts of a committee of an insane person are to be settled upon principles governing in the settlement of accounts of other fiduciaries having the control of trust-funds.*219 They are not chargeable with compound interest except under very peculiar circumstances. When there is an express trust for accumulating, and the trustee instead of investing retains the funds in his own hands, or when he employs the money in his own business and refuses to account for the profits, he may be charged with compound interest or as a measure of damages for undiscovered profits. See 1 Perry on Trusts, secs. 470-474; Barney v. Sanders, 16 How. 535; Hill on Trustees 571, note.
“Much of the reasoning of Judge Allen in Garrett v. Carr, (1 Rob. 196) will apply as well to committees of insane persons as to guardians, and would seem to indicate that in some instances all classes of trustees, except executors and administrators, may be chargeable with compound interest even upon a mere failure to invest. See page 215.
“All that can be said therefore is, that no inflexible nile .can belaid down on the subject which would apply to all eases. Generally it is conceded that a trustee and other fiduciaries, except a guardian, are liable for single interest only. This doctrine seems to be settled by a great variety of authorities English and American. 1 Perry on Trusts, secs. 470-474; Barney v. Saunders, 16 How. 535 ; Hill on Trustees 571, note.”
In that case, as the unexpended balances in the hands of the trustee were generally small sums; and it did not appear, that he derived any profit from them, and it was regarded as a case of mere neglect to invest the money, he was therefore held under these circumstances chargeable only with single interest.
In this case the ex parte reports in the record and the report of commissioner McWhorter together with the evidence show, that William I). Littlepage and his family needed all the interest on his capital to support himself and his family, and that it was not all expended in such support by a good deal. The whole amount of expenditures by James E. Watts while acting as committee in the support of William I). Littlepage and his family was less than $350.00 in cash in ten years. This with the use of a very small quantity of land was all that was furnished by said Watts to said Littlepage and his family for their support. Something over $70.00 was
As it is obvious that his estate will upon the settlement to he made under the principles laid down in this opinion he indebted to the present committee of William D. Littlepage in an amount considerably greater than that ascertained by the decree of the circuit court of Greenbrier, it is obvious, that this decree was prejudicial to the appellant, $nd that he is entitled to his costs in this Court.
The decree of the circuit court of Greenbrier county of April 26, 1883, must be set aside, reversed and annulled, and the appellant must recover ofthe appellees, A. B. Watts and R. W. Hill, administrators of James F. Watts deceased, his costs in this Court expended ; and this case must be remanded to the circuit court of Greenbrier county to have taken all the proper accounts in this cause, and to proceed further with this cause according to the principles laid down in'this opinion and further according to the principles governing courts of equity.
EeveRsbd. Remanded.