Case ID: sc-eq_10/html/0235-01.html
Source: Caselaw Access Project
Author: {"author": "O’Neall, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Benjamin Perkins, and others, v. Mary R. Kershaw, and others.
    Where a trustee has been legally compelled to pay money, as the surety of his cestui que trust, in Equity the trust estate will be charged with the amount paid; and where the trustee and the principal debtor being devisees of the estate, with ' the other parties interested, referred all their “ claims, rights and interest in said estate” to arbitration, and the arbitrators awarded a portion of the share of the principal to the trustee, in payment of the money advanced by him as security, it was held, that the arbitrators had not exceeded their authority, and the award was confirmed. [*349]
    A surety paying the debt of his principal, may be remitted to all the rights of the creditor; and where separate judgments were obtained against the principal and surety for the same debt, and the latter paid the judgment against himself, and thereupon the sheriff entered satisfaction rn both executions, the surety will be allowed to vacate the entry of the satisfaction on the judgment against the principal, and to set it up as a lien on his estate. [*85l]
    This case was heard by Chancellor Johnson, at Camden, July, 1831. The bill was filed to confirm and enforce an award made between the parties, as devisees and heirs at law of the estate of Col. Joseph Kershaw, deceased, adjusting their rights, and making partition of that estate. The only objection to the confirmation of the award was on the part of Mrs. Sarah Kershaw, the widow of Joseph Kershaw, and sole *representative of her estate. She insisted that the arbitrators had exceeded their powers in assigning a part of the shares of her husband to Henrietta Perkins the only surviving heir and representative of James Kershaw, in satisfaction of a debt due by Joseph to James Kershaw; and on this ground objected to that part of the award; and the question for the determination of the Court was, whether on the facts before them the arbitrators had, in this particular, exceeded their powers under the submission. The Chancellor held that in this respect they had exceeded their authority; in all other respects he confirmed the award. From this decree Henrietta Perkins appealed and moved this Court to modify the same so that the award may be entirely confirmed, on the ground that the arbitrators had not exceeded their powers under the terms of the submission. The facts are stated in the judgment delivered by this Court.
    
      W. F. De Saussure, for the appellant,
    cited and relied on the following authorities: Kyd on Awards, 242; 1 Ld. Ray. 115 ; Kyd, 147-171; 1 Black. Rep. 415 ; Com. Rep. 541; 3 M’C. Rep. 481.
    
      M'Cord, for the defendant,
    argued that parol evidence could not enlarge or explain the terms of the submission; and that it was received to ascertain what was parcel of the submission — whether this subject matter was part “of. the estate of Col. Joseph Kershaw,” so that the whole question is, what was submitted ?
    This is in the nature of a bill for specific performance, Wood v. Griffin, 1 Swanston, 53. There is no allegation in the bill as to this claim— none, that it was within the terms of the submission or that it had any connexion with the estate of Col. Kershaw, which was to be divided, and can evidence be admitted beyond the pleadings, and relief granted which Was not prayed ? But it is said the parties are bound by judges of their own choice. But whether they have decided on the matters submitted to them, can only appear by the submission, and if they have gone beyond that they have exceeded their jurisdiction. See Digest Lib. 4, tit. 8, § 1; 3 Poth. 428-460,461. “One may refuse with impunity to perform an unjust sentence, that is to say, one rendered beyond the *terms of the submission, as where the arbitrators decide on an object other t!han that upon which they were charged to judge,” lb. The authority of arbitrators is founded on the will of those who appoint them, and there can be no other evidence of that will than the writing itself, Domat, 223, B. tit. 14; Gibson v. Watts, 1 M’C. Ch. 490. And their power is limited to what is explained in the compromise, 1 Domat, 224, B. 1, tit. 14, sec. 1; 2 Evans’ Poth. 180. The award must be limited to the terms of the submission, Kyd, 140 ; lb. 278. And if a submission be of all suits, &c., between A. and B. an award between B. and his wife, and A. is void, Kyd, 146. The same doctrine is laid down in Waters v. Bridges, Cro. Jac. 639 ; lb. 663 ; 2 Show, 61. An award can only be expounded by itself without the aid of an averment of matters dehors to explain the meaning, Bacon, Ab. E. And if the bond be given for a specific object, general words are to be construed with reference to that object, 1 Badger and Dev. N. C. Rep. 52. And as to the general authority of arbitrators, and how far the award is binding, see 2 Saund. 410 ; 6 East, 507 ; 16 John. 166; 3 Mod. 177 ; 1 Ld. Ray, 235 ; 1 Bos. & Pul. N. R. 113.
    James Kershaw could not claim as a trustee. It does not appear that he was a trustee at the time he made this payment on behalf of Joseph. It is denied that he was, but if he was, the debt he paid was in no way connected with the trust estate, and the trust property can only be charged, and the trustee reimbursed, for expenses incurred in the execution of the trust, 8 Yes. 8. Could Equity entertain jurisdiction of this claim ? What could give it ? A lien ? How is it constituted ? Bring a bill in Chancery for money laid out and expended for defendant’s use ? see Irish T. R. 256 ; 2 Bridg. Dig. 460. When the principal promised to assign to the surety who paid the debt, but omittted to do so, Equity considers it as done and orders it to be done; but this arises from the understanding of the parties. There was none such in this case.
    James Kershaw could have no right to Joseph’s share of his father’s estate on'the ground that he was his surety. Could he be subrogated to the rights of the creditor? Subrogation is defined to be “where the surety pays he may require of the creditor to substitute him to all his rights against *the principal debtor or against the other sureties,” 1 Poth. Oblig. 245. After the surety has paid, if he has procured a subrogation to the rights of the creditor, he may exercise them as the creditor himself might have done, but if he has neglected to acquire this subrogation he has still an action at law to reimburse him,” 1 Poth, 246. James Kershaw did not pay the judgment of the State v. Joseph Kershaw, administrator. Adamson, it is said, paid the execution against himself and James Kershaw, and James paid him back his half; so far then James could acquire no rights by subrogation, for this execution was no lieu on Joseph’s estate, and as regards the payment of the other executions by Adamson, and the contribution afterwards by James, Adamson neglected to take an assignment and the executions are marked “ satisfied” — he could not now be subrogated ; and after the long neglect of twenty-five years, can James Kershaw’s heirs at law be entitled to subrogation against the heirs of Joseph, and claim a lien on property which did not become part of Joseph’s estate until twenty-five years afterwards ?
   O’Neall, J.

It appears that Col. Joseph Kershaw in 1790 conveyed the whole of his estate to five persons, of whom James Kershaw was one, in trust to pay the debts of the said Joseph out of the said estate ; and the residue, if any, to transfer and deliver to the said Joseph, his heirs, executors or administrators. Col. Kershaw died in 1791, leaving a will bearing date in 1788, which devised and bequeathed his real estate in certain specified portions among his eight children, and his personal estate in equal shares among his wife and children. James Kershaw and Joseph Kershaw, Jr., were two of the children, heirs-at-law and devisees of Col. Kershaw. Joseph Kershaw, Jr., was a tax-collector, and Adamson and James Kershaw were his securities : he made default and was found to be in arrear to the State $2202 99, for which sum, after his death (which took place in 1791) several judgments were recovered against John Kershaw, administrator of Joseph Kershaw, Jr., (deceased) and against Adamson and James Kershaw, the securities of the said Joseph. The whole amount was paid by Adamson, and James Kershaw contributed and paid to him the one-half of the amount so *by him paid ; and the executions issued 16th January, 1805, on the jndg-ments were returned satisfied. These transactions took place during the continuance of the trust, and before the death of James Kershaw, who died in 1815. It is true, that in 1794 the trustees, according to a power to that effect contained in the deed, appointed John Kershaw their attorney and general agent under the said trust deed, and he had from that time the entire management of the trust estate. In 1828, all the original trustees being dead, John Kershaw was substituted as a trustee under the trust deed in the Court of Equity. It is alleged by the complainants that James Kershaw was the surviving trustee : the defendant, however, contends that Robert Henry was; in this respect there appears to be no proof on the subject whatever; it is allegation against allegation, and no conclusion can be drawn from either — Sarah Kershaw is the widow and the only surviving heir or representative of the estate of Joseph Ker-shaw, Jr., (deceased) ; Henrietta Perkins, from the award, seems to be the only surviving heir and representative of the estate of James Kershaw, (deceased). The arbitrators to whom were referred all the claims, interests and rights of the heirs of the late Col. Joseph Kershaw, in his estate,” undertook to charge the estate of Joseph Kershaw, Jr., ascertained and separated by their award from the rest of the estate of Col. Joseph Kershaw, with the payment of the debt to James Kershaw, on account of the amount paid by him as security for the said Joseph Ker-shaw, Jr., by awarding to Henrietta Perkins, as the representative of James Kershaw, (deceased), 13-81 of the 32-81 parts of the estate of Col. Kershaw, which constituted the share of the said Joseph Kershaw, Jr., and to his widow Sarah the remaining 19-81 parts. From the death and minority of some of the parties, it became necessary to have the award confirmed by the Court of Equity. Accordingly a bill was filed for that purpose. Mrs. Sarah Kershaw objected to the confirmation of so much of the award as set up the debt due by her husband’s estate to James Kershaw, and vested in Henrietta Perkins’ 13-81 parts of the estate of Col. Kershaw out of the share to which Joseph Kershaw, Jr , was enti-satisfaction of the said debt, on *the ground that the arbitrators had exceeded the submission. This objection was sustained by the Chancellor, and that part of the award set aside; in all other respects it was confirmed. From this decree Henrietta Perkins has appealed', on the ground that the arbitrators did not exceed the submission in awarding as they did.

The submission by the heirs of Col. Joseph Kershaw, deceased, is in as general terms as it could well be couched — it is “ all our claims, interests and rights in the said estate.” This covers everything which could in any way be connected with, arise out of, or spring from the estate of-Col. Kershaw. To see whether the arbitrators, in making up their award, have exceeded their powers under this general submission, it is necessary that we should have evidence of the facts, which, as they supposed, autho-rised them to make the award which they did. This is not evidence in explanation of the award; but it is evidence to show whether it is or is not an award binding on the parties. It ascertains whether the thing awarded, which may or may not be within the submission, is within its terms and intention. The facts which have been already stated were either in proof before the arbitrators, or within their knowledge. Upon them they passed and made the award, which is now the subject of complaint. The single inquiry is, had they the right, on the facts before them, under the submission, to make the award ? Whether right or wrong, is not now to be investigated. If it was within the submission, it is not pretended that any ground exists upon which the award can be set aside.

Since the able and ingenious re-argument of the defendant’s counsel, I have gone over my former views of the case, and have compared his arguments with the facts of the case, and the views of the case heretofore expressed by this Court, and.I confess that I have been able to discover no ground upon which the Chancellor’s decree ought to be sustained, and the award set aside.

James Kershaw, who was one of five trustees in whom the legal estate in the whole of Col. Kershaw’s estate was vested, was the security of Joseph Kershaw, Jr., and in 1805 paid *for him the sum of money now claimed to be refunded. He had the right to be refunded this sum before his legal title could be devested — for it must be recollected, that at law the cestui que trust could.have had no remedy — it is alone in Equity that he could have claimed the execution of the trust; and I can not be persuaded that it ever was doubted, that Equity in decreeing the execution of the trust would secure one of the several trustees, for all sums of money which he had been legally compelled to pay his cestui que trust estate. Taking this to be true, what were the claims, interests and rights in Col. Kershaw’s estate,” to which Joseph Kershaw, Jr., was entitled ? I answer, that it is clear that his claims, interests and rights, were his share charged with the debt paid for him by his trustee, as his security. In other words, that share could not be taken out of the possession of the trustee, until that payment was made to him. This is compelling a party who asks for equity, to do equity, and it is on this principle that the whole doctrine of a lien of a trustee for advances is predicated. But if I understand the argument, it is contended that James Kershaw never was entitled to act as a trustee after ’94, when John Kershaw was appointed the attorney of the trustees. There can, however, be nothing in this _ proposition. It would, to give it effect, be making the attorney superior to the principal — the created greater than the creator, and power delegated, irrevocable. John Kershaw’s acts were, however, the acts of each and all the trustees. They and each of them were bound by whatever he did — still, however, the estate was in them ; and it was against them, and not their attorney, that the cestui que trust must have proceeded to have the trust decreed. Neither can the substitution of John Kershaw, in ’28, as trustee, by the order of the Court of Equity, change the rights of the parties — it is true, the legal estate is then vested in him, but he holds it subject to all the equities existing between the original trustees or any of them, and the cestui que trusts or any of them. The question, whether Joseph Kershaw’s share of his father’s estate ought to be charged with the payment to James Kershaw of the money paid by him, as his security, according to the views which I have ^suggested, was necessarily to be decided upon by the arbitrators under the submission.

There is, however, another consideration, which to my mind, is conclusive to show the authority of the arbitrators to award as they did. The security, who pays the debt of his principal, has the right to be remitted to all the rights and securities of the creditor. He is in Equity substituted for the creditor. The debt to the State was a judgment against the administrator of Joseph Kershaw, deceased. In Equity the securities, upon showing that they, and not the administrator, paid the money, would be allowed to vacate the entry of satisfaction on the execution by the sheriff as made by mistake, and to set up the judgment as a subsisting lien on the real estate of Joseph Kershaw, Jr., deceased. The proof is clear, that Adamson first paid the entire debt, and that subsequently James Kershaw paid to him one moiety. The executions against them were properly returned satisfied, but that against the administrator of Joseph Kershaw, Jr., deceased, was improperly so returned ; and James Kershaw, for the amount paid by him or his representative, had the right to claim that the entry should be set aside and the judgment set up for the amount due to him, as a lien on Joseph Kershaw, Jr.’s, estate. This was in effect done by the arbitrators, when they ascertained that 32-81 parts of Col. Kershaw’s real estate belonged to Joseph Kershaw, Jr., and of course descended to his heirs, and when they set up the moiety of the judgment paid by James Kershaw, as a subsisting lien, and having ascertained the amount due, appropriated 13-81 parts to the payment. This award was, I think, within the submission, and I am not disposed to scan, with great nicety, the decision of men who were the friends of the parties, and intimately acquainted with the affairs which they were called upon to adjust, and which, from the.death of the parties and lapse of time, could be only justly arranged by the domestic forum of arbitration, which acts according to good conscience and not by technical rule.

is therefore Ordered and decreed, that so much of the Chancellor’s decree as sets aside that part of the award vesting in Henrietta Perkins’ 13-81 parts of the estate of Col. Kershaw out of the share of Joseph Kershaw, Jr., be reversed, and that the said award be confirmed entirely.

Johnson and Harper, Js., concurred.