Case ID: sc-eq_1/html/0515-01.html
Source: Caselaw Access Project
Author: {"author": "_ Chancellor Rutledge", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Present — Chancellors Mathews and Kutibbbe.
    Mary Evans, George Evans, and others, children and legatees of George Evans, deceased, vs. the executors of George Evans, deceased.
    ÜASB CSV'.
    decree book, vol. ii. p. 57.
    Ex’ors selling estate without necessity, and without au-tkority, F1^ the implied ofth® sofarrespon-they’shalfbe accountable dTbts,ansing from the Scilss An ex-ecutór hav- ?*: his hands, ^ a creditor of jj0^dto apply the extinguish-debts.
    The complainants filed a bill against the executors of their father’s estate, for an account and settlement of the samej and for the recovery of their legacies under his will. Their bill charged, that their father being seized and possessed of a considerable real and personal estate, made his last will and testament, in and by which he devised and bequeathed certain specific legacies to the complainants: and then directed certain parts of his real and y * personal estate to he sold for the good of the estate, (meaning doubtless for the payment of his debts.) And lie concluded by bequeathing the remainder of his estate, (consisting chiefly of his furniture, and about eighty negro slaves) to the complainants, to he equally divided among them: and directed that the sons should receive their legacies at twenty-one years of age, and the daugh-tors at the same age, or on the day of marriage. The testator died on the 17th November, 1778, leaving his said will in full force. Three of the executors, Richard Walter, Benjamin Waring, and Thomas Waring, proved the will and qualified thereon. The fourth, John Glaze did not qualify.
    Sept. 1796.
    The bill charged, that within a few months after the testator’s death, to wit, in January and February, 1779, ^ cxecu£OTS ii0p] the whole personal estate of the testator (except the property specifically bequeathed) including his negro slaves, without any necessity to do so on account of debts, with the amount of which they must have been unacquainted, contrary to the manifest intention of the testator; without having returned an inventory and appraisement of the estate; and without any decree éf this court to authorise the sale. That there were only two of the children of age at the time of the sale, one of whom was not consulted; and the other was induced, by great persuasion of the executors, to consent thereto; but upon condition that the debts of the estate should he immediately paid; which has not been done fully to this day. That the executors having made these unnecessary and illegal sales in depreciated money, neglected to take-security in many instances from the purchasers, whereby several debts are lost; and also omitted to pay many debts due by the testator; though to pay the- debts, was the pretext for the sale; and though by such sales they were put in possession of funds much greater than enough to have paid the debts; part of which they loaned out to insolvent persons without security, and part they placed in the state treasury: and they have kept the residue in their own hands unaccounted for. That some of the debts which might and ought to have been paid off during the war, from these funds, have been paid since the war, in specie, to the great loss of the estate. That Richard Walter, one of the qualified executors, had two bond debts due him by the testator; and funds of the estate came into lile hands much more than sufficient to pay them off, but lie has never credited them on the bonds: and since his death his executors have brought suit against the estate nnd obtained judgment thereon, without having rendered any satisfactory account of the funds which came into his hands. That none of the executors have rendered satisfactory accounts, but they are confused, inexplicable and unjust.
    The complainants charge, that no necessity existed for the sale of the estate bequeathed to complainants, because the property directed to be sold, and one crop were sufficient, or nearly so, to have paid the debts of the estate. The complainants submit that the executors had no right to speculate on the property of the legatees, and to convert one species of property into another, without the authority of this court: and that no more of the personal properly bequeathed, should have been sold, than was necessary to pay the debts. That though there is no express prohibition of sales in the testator’s will, it is strongly implied; for he directs certain specified parts of Ms estate to he sold; and lie directs part of his stock of horses and cattle to be kept for the use of his plantation; and he directed a division of the property to be made among his children. All this shews plainly his intention that the slaves should not be sold.
    Complainants insist, that as the executors ought to have paid off debts with the monies received from the sales, and in many cases did not do so, but kept the paper money in their hands, or applied it to their own use, they are not at liberty to claim any benefit from its perishing by depreciation in their hands. The bill prays relief.
    The answer of Benjamin and Thomas Waring, two of the qualified executors, admits that George Evanc made Ms last will and testament as stated, and died leaving the same in full force; and that he left the property stated. That they qualified on the will, and made the sale of the estate as alleged by complainants. And that though no express power to sell is given by the will, the defendants were justified in selling, under the circumstances of the estate and of the country; and they acted on the advice of legal counsel. That tiñe estate was considerably indebted, which the executors well knew, though they did not know the precise amount, or the ’particulars. The defendants sold without the authority of the court of ■ chancery; hut iu those times of trouble, the court seldom met, and did very little business. Defendants believe there was an inventory and appraisement; and cannot account for its being mislaid. The defendants insist that the complainant, George Evans, who was of age, approved and consented to the sale, unqualifiedly; and Mary jgTailSj w]10 was a]so 0f age, did not oppose it. That the reasons which induced the executors to sell were the largeness of the debts, and the want of good lands to plant; the testator having devised his good lands exclusively to Ms eldest son; and his other lands being poor, worn out, and incapable of producing crops; and were situated twenty-four miles from a navigable river, on the Four-hole creek. The defendants deny that any losses were sustained by the executors not taking security from the purchasers of the negroes. The defendants aver that they paid off all the debts of the estate which came to their knowledge, except those to their co-executor, Mr. Walter; and he having received monies of the estate, they supposed he had applied the same to the payment of that debt: and defendants placed 9000k currency in the treasury, and loaned part of the balance to Mr. Morton Waring, who is perfectly solvent. That one of the executors sold his own estate at that time for the current money; which is evidence that he thought it better to sell than to keep property in such times. Defendants are ready to account and settle with complainants as to the affairs of the estate; and file their account with their answer.
    The executors of Mi’. Walter, executor of George Evans, admit the principal facts, as to the will and death of Mr. George Evans. They believe that he meddled very little with the affairs, and received but a small part of the funds of the es tate. That he did receive some money, and his executors arc ready to account for the same. They admit that he held bonds of the .testator, and that since the peace judgment has been obtained thereon.
    The cause came to a hearing, and Mr. Edward Perry proved, that the land of the testator at the Four-holes, was capable of producing rice, indigo and corn. Thai the distance of transportation was of no great importance. That he was security fox Mr. George Evans, and applied to one of the executors to pay the debt, which was not done; and he has been since cued fox* the debt.
    Mr. Parker*, Mr. Holmes asid Mr. Pringle for the complainants
    contended that the sale of the negro slaves. by the executors, was contrary to the intention of the testator, and was not warranted by law. And that hawing made sale of the estate, they are liable for the debic That two executors joining in a receipt, they are each liable for payment as to creditors. Formerly they were not so liable as to legatees; but only the executors who actually received the money: but by the later decisions, this distinction is done away. That the sale was mot only without authority, but unnecessary and improvident. The. extent of the debts was not fully known. And the sales of the property directed to be sold by the testator were equal, or nearly so, to the payment of the debts; and ac iually exceeded the amount of the debts paid by the executors. As the executors sold under the pretence of paying debts, why were they not paid ? Instead of doing so they loaned money to others, and put money in the treasury, which has been depreciated. As they did not pay the debts wdien they could, they are each liable for the amount. See 2 Eq. Cas. abr. 456, 742. 1 Bro. C. C. 114. 3 Atk. 584.
    Mr. Ward, Mr. E. Rutledge and general Pinckney for the defendants,
    argued, that executors had the power of selling personal estates, at their discretion; and no blame is imputable to them for doing so. That in this case there really existed a necessity to sell; for the sale of the articles directed by the will to be sold, did not amount to a sum sufficient to pay the debts. The depreciation of the paper money is not attributable to the execu - tors. Congress as late as Sept. 1779, promised to redeem the paper money at its nominal value. If it had done so, there would not have been any difficulty; for the money placed in the treasury would have been good money, and would have obviated all difficulties. To apply rigid rules to the conduct of executors, under such difficult circumstances as the times produced, would be unjust; and would be tu make them responsible for events beyond their knowledge or control. They will account for what they received, on account of the estate, at its intrinsic value, as established by the laws fixing the depreciation.
   The court took time to deliberate, and afterwards

_ Chancellor Rutledge

delivered the decree of the court:

There is not the smallest reason to charge the defendants with any fraud or unfair conduct in this business. From a review of their accounts it is obvious that if the stock, &c. liad not been sold, it would have been absolutely necessary to have disposed of a great number of the negroes, for it is evident the debts could never have been discharged with the annual income of the estate: especially as there were a number of children to be maintained and educated out of it. The stock, &c. being sold, and debts to a large amount paid off, a sale therefore of the negroes became less necessary; and the executors could not on any principle whatever be justified in making it in the extensive manner they did, because they wore not only not authorised by their testator, but it was expressly against bis direction. As they were all consenting and joined in the sale, they must all be responsible for the debts; but not one for the separate act of the other. Consequently if any bad debts have been made, they must be all answerable for the loss. The case of Smith and Bonsall vs. executor of G. Smith, determined in this court, is directly in point; for the executor in that case disposed of the estate expressly against his testator’s directions, and when there was not an absolute necessity for doing it; and the court held him responsible for any-had debts. As it appears from the accounts of the executor, Walter, that he had a large sum of money belonging to the estate in his hands, and the estate was indebted to him on several bonds, that money must be applied to the extinguishment of those bonds, the balance being depre - ciated, and applied towards payment of one of the other bonds. We have no doubt the defendants thought they were doing right, especially as it is said they acted by the advice of counsel; but they set out on a mistaken principle by supposing the estate inadequate to the payment ef its debts. This court however always discountenances the acts of executors, which are done directly contrary to the directions of their testator. It must be referred back to the master, to ascertain what was the net amount of the sales; what debts have been paid; and whether any, and to what amount are still unsatisfied; what funds of the estate remain in the executors hands; and the amount of the bad debts, if there are any.