Case ID: scl_18/html/0199-01.html
Source: Caselaw Access Project
Author: {"author": "\n      O’Neal, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William Joyner, Commissioner in Equity, v. John Cooper.
    Although the names of the sureties do not appear in any part of the body of the bond, but a blank intended for them is left unfilled ; yet if they signed, sealed, and delivered it as their bond, they are bound, vide Stone v. Wilson, 4 M‘C. 203.
    A surety may look into the decree of the Court of Equity against his principal, to see if he has been charged solely in his fiduciary character; but he cannot re-examine the merits of the decree in a Court of Law, or call in question the propriety of his principal having been charged in it, in his trust capacity.
    Where one, indebted by specialty to the estate of a lunatic, is appointed committee of his estate, and the specialty is transferred to, and received by him as committee, the debt is extinguished, and the sureties to his bond as committee, are liable as for so much money received by him.
    It may now be regarded as a settled point, that where one owes a debt to a trust, and-afterwards assumes the management of that trust, the amount of the debt shall be regarded as so much cash in his hands.
    Where the appointment of a committee is revoked, and he delivers to his successor a bond due to the lunatic’s estate by the successor, he is discharged by the latter’s acceptance of the bond, from all liability for having originally taken insufficient security for, or granted undue indulgence on the debt.
    The Commissioner in Equity has no authority, except by special appointment of the Court, to receive the funds of a lunatic’s estate, from a committee, whose appointment has been revoked.
    Tried before Mr. Justice O’Neall, at Coosawhatchie, Spring Term, 1829.
    This was an action of debt on a bond executed by John M‘Nish, the defendant, and others, of which the condition was., that M'Nish should faithfully discharge the trust of committee of the person and estate of John Dupont, a lunatic. The obligation commenced in the usual form: “ Know all men by these presents, that we John M‘Nish,--, are held, &e.” but the blank for the names of the sureties, was not filled up. Tho due execution of the bond by the defendant was admitted; but a nonsuit was moved for, on the ground, that the name of the defendant not being mentioned either in the obligatory, or the conditional part of the bond, it was not his deed.
    His Honor held, that to constitute the bond the deed of the defendant, it was only necessary to prove that he sealed and delivered it as his deed. Bac. Abr. Obligations, C. 2 Stark. Ev. 4 part, 475. That these acts were the only solemnities required by law ; and that they were the legal evidence of the defendant’s assent to bo bound by the paper, so by him sealed and delivered. It is laid down, that “ if A. by bis bill obligatory, acknowledges himself to be indebted to B. in the sum of £10, to be paid at a • day to come ; and binds himself and his heirs, in the same bill, in £20, but does not mention to whom he is bound, yet is the obligation good, and he shall be intended to be bound to B. to whom he acknowledged before, the £10 to be due.” Bac. Abr. Obligations, D. 3. Here, it is obvious, that the decision turns upon the fact, that there is enough upon the face of the bill to authorize the conclusion, that B. was intended to be the obligee. And so in the present case, there is enough to warrant the conclusion, that the defendant intended to become a joint and several co-obligor in the bond of M'Nish. But independently of the very conclusive facts of signing, sealing, and delivering, the bond itself could never, according to its letter, be regarded as the single bond of M‘Nish: It recites that, “ we” are bound, and can only be satisfied by shewing, that at least one more than M.‘Nish is bound ; and then it would embrace all who have, by any sufficient legal act, indicated that they intended to be bound. If M'Nish’s name had not been mentioned in the obligation, but it had begun, “ we are held, &c.” and, as in this case it had been sealed and delivered by four persons; it could not have been pretended that it was not the deed of all of them: and no substantial difference exists between such supposed case and the present.
    Act of 1792, 1 Faust, 213.
    The motion for a nonsuit was therefore refused: And the condition of the bond being submitted to the jury, under the Act of Assembly, the following facts were found by special verdict.
    In January, 1823, JohnM’Nish was, by a decree of the Court of Equity, directed to account with the commissioner, for Ms actings and doings as committee of the lunatic, John Dupout; and upon talcing the account, he was reported by the commissioner, to be indebted to the estate of the lunatic, in the sum of $8802, 97, and the report was duly confirmed, and made a decree of the Court. In the amount, thus reported to be due, was included the sum of principal and interest of a bond for $1200, on which M‘Nish was indebted to the estate of the lunatic, prior tb his appointment to be committee: This bond was past due at the date of M'Nish’s appointment, and was transferred to, and accepted by him, from Thomas Dupont, his predecessor in the office of committee; and it remained in the hands of the attorney of M‘Nish, uncancelled, at the trial of the present issue. After the report was confirmed, M‘Msh was removed from his trust; and his successor instituted a suit on his bond as committee in the Court of Common Pleas, and recovered judgment upon it for the whole amount of the decree in Equity. Execution was sued out, and the property of M‘Nish levied and sold by the sheriff, to an amount, more than sufficient to satisfy the sum due for principal and interest of the bond, on which he was indebted prior to his appointment, but not sufficient to discharge the whole amount of the decree in Equity, which remained in full force for the residue. If, upon the whole matter, the Court should be of opinion, that the sureties of M'Nish are liable for the debt due by him before his appointment, the jury found for the plaintiff the amount of the decree in Equity, deducting the proceeds of the sale by the sheriff: But if the Court should be of opinion, that the sureties are not so liable, then the jury found for the plaintiff, the amount of the decree, deducting the amount of sales by the sheriff, and also deducting the amount of the said debt.
    Upon this verdict, the plaintiff moved for leave to enter up judgment for the larger sum, with interest: which motion was opposed by the defendant, on the ground, that for the debt due by M*Nish prior to his appointment, he was liable personally, and not as committee; and therefore the defendant was not liable.
    His Honor, the presiding judge, delivered the following opinion:
    The defence set up involves two inquiries: 1. Whether the defendant has the right, to re-examine the accounts made up by order of the Court of Equity, and confirmed by its decree, and to contest the allowance of any item in that account: 2. Whether, conceding to him that right, John M‘Nish was properly charged, as committee, with the amount of his own debt, as so much money received by virtue of his trust.
    Upon the first of these heads, the rule, I apprehend, is that the security to the bond of an administrator, guardian, or committee, may look into the decree of the Court of Equity against his principal, in order to see that he is charged only for the accounts, or duties, the faithful discharge or performance of which the security has undertaken to guarantee. In every other respect the decree is conclusive against him.- Shelton ads. Cureton, 3 M‘C. 412. If this were not the case, and a general license of re-examination were afforded to the surety, it would necessarily lead to the result; that the Court of Law would undertake to revise and correct the proceedings of the Court of Equity, in every case where it became necessary to sue the bond of an administrator, guardian, or committee: and that too in a matter which the Court of Law has decided itself incompetent to examine, either originally, or on appeal. Anderson v. Maddox, 3 M‘C. 237. Harrington v. Cole, Ib. 509. Wallis v. Gill, Ib. 475. But under the rule laid down, it is only necessary to look to the proceedings in Equity, and if from them it appears that the matter, or thing objected to, is not within the duties of the trust, then it is clear, that the defendant has never undertaken for the act of his principal in this respect, and it is no decree against him, in that capacity for which the surety is bound. For example, if on making up the accounts of an administrator, he is charged with rents of land ; this charge, not arising from his authority as administrator, does not fall within the scope of the surety’s undertaking, and hence does not render him liable for it.
    The question in this case, is whether the item now disputed, is manifestly one that is not chargeable to the committee, as not being within his trust. It is manifest, that it is a part of the funds of the lunatic, which the committee, by virtue of his authority, received. How then can it be pretended, that this Court ought now to examine the propriety of its allowance in the decree of the Court of Chancery % It was for that Court to say, whether it should be charged to him, as committee, as cash, or should still stand as his private individual debt. Having made him accountable for it as money received in his trust capacity, this Court has no power to review that decision.
    But concede to the defendant the privilege of reviewing it, and then as to the second head of inquiry, I should have no hesitation in saying, that the defendant is as much answerable for the bond of M‘Nish to the former committee, as he is for any other part of the decree. The former committee, Thomas Dupont, upon taking the bond of M'Nish, was liable for the amount, if he did not take sufficient security; or if he indulged until the principal and his securities were in failing circumstances. Smith v. Smith, 4 Johns. Ch. R. 284. John Odell, Guardian, v. Executors of James Young, decided at Columbia, Spring Session, 1829, of the Court of Appeals. These liabilities on the part of Thomas Dupont, have been discharged by M'Nish receiving his own bond; and it follows that M'Nish, the moment he reduced it into his possession, became liable for the amount, in all events, as so much money received by him in his trust capacity. The debt due by an executor or administrator to his testator or intestate, is regarded as cash in his hands. Hall v. Hall, 2 M‘C. Ch. 304. So, where a person received moneys belonging to infants, and afterwards was appointed their guardian, it was held, that he was chargeable, in his character as guardian, with the amount so received, and that his surety was liable. for it. M'Dowell v. Caldwell, Ib. 55. These cases are so perfectly analogous to the one now before us, that it becomes unnecessary to reason further on the subject. I regard the point as settled, that where one owes a debt to a trust, and afterwards assumes the management of the trust, the amount of his debt shall be considered as so much cash in his hands. I am of opinion therefore, that the plaintiff is intitled to recover the whole amount of the decree in Equity, with interest, deducting therefrom the amount collected under the execution of the same plaintiff against M‘Nish, and leave is granted to enter judgment accordingly.
    The defendant gave notice of appeal from this decision on both the grounds taken on the Circuit; but the motion for a non-suit was subsequently abandoned, on the authority of the decision in Stone v. Wilson, 4 M’C. 203, which had been recently published. A motion, however, was now made to reverse the decision of his Honor upon the special verdict.
    T. S. Grimke, for the motion.
    Did not intend to contest the decision in the cases cited from 2 M’C.'Ch. 55, and 304. But an obvious distinction existed in the case, where the debt due by a person assuming a trust, was, or ought to have been secured by his predecessor in the trust. It was the duty of Thomas Dupont to have had the debt due by McNish fully secured;' and he was responsible, if it was not so. He could not release himself from that responsibility, by transferring the bond to McNish. He ought rather to have surrendered it to the commissioner. But most assuredly he could not, by this means, shift the liability from himself to the sureties of McNish as committee. In this view of the case, the persons responsible to the plaintiff, were, first the sureties to the first bond, if there were any, and secondly, Thomas Dupont, or his representative, if there was either no security, or such as was insufficient; but the present defendant was not liable at all, unless the money were actually in hand, and the bond cancelled.
    Vide Acts of 1821, p. 9.
    Bailey, contra.
    
    The Commissioner in Equity has no authority to act as receiver, without special appointment: and if he had, it was superseded in this case by the appointment of McNish. There was no person, therefore, to whom Dupont could lawfully transfer the bond, but McNish himself; and it was his duty to transfer it to him, for his own authority was determined. If McNish had objected, Dupont might have been liable; but then he might also have secured himself by compelling payment of the debt. He has lost the opportunity of doing so by McNish’s acceptance of the bond; and therefore, he is discharged.
    If some other person had been appointed committee instead of McNish, it would have been his duty to have sued both McNish and Dupont; and the debt would have been secured. Now, the defendant, by enabling McNish to become the committee, has rendered this impossible; for his acceptance of the bond discharged Dupont, and he could not sue himself. McNish might have declined taking the bond; and so he might have declined taking the trust: but he chose to do both, and his securities are responsible for his acts. They have undertaken that no act done by him, under the authority of his appointment, should prejudice the trust; such an act of his has prejudiced the trust, and that is all that the defendant is now sought to be made responsible for.
    If we could suppose an authority in the Commissioner to receive the bond, we must suppose also an authority in him to put it in suit. And if the bond had been sued, the sale by the sheriff in 1827, shews, that it would have been paid ; and whether the property would have sold at first, for more or less than it did at last, yet the bond must have been first paid out of it, and the defendant would have been precisely where the judgment of the Court has left him now.
   O’Neal, J.

delivered the opinion of the Court.

This Court concurs in opinion with the presiding Judge below, on all the questions he has discussed. The second ground, however, presents a question, which although in effect decided, by the judgment below, it may be necessary to decide expressly here. It cannot be denied, that the committee of a lunatic is not subject to any further liability, if on the revocation of his powers he has accounted for, and paid over the funds in his hands, to whomsoever may be legally intitled to receive them. Who in the present case was intitled to receive from the former committee, Thomas Dupont, the funds in his hands 1 Unquestionably the committee John MeNish, who was appointed in his place. The commissioner of the Court of Equity had no right to receive them, unless specially authorized by the Court. McNish’s appointment clothed him with all the power to receive, and manage the estate of the lunatic. If he thought proper to settle with the former committee, without even an account before the commissioner, he could do so ; and his receipt of the funds was an act to which he was fully competent. If he thought proper to receive his own bond, there was nothing in the undertaking or duties of his trust, to prevent his doing so. And the money due on the bond, thereby became part of the trust fund, and his sureties are answerable for it. The motion is therefore refused.