Case ID: sc-eq_7/html/0381-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Jenetta M. Watts, Executrix v. James Watts and John Black, Executors.
    An executor, administrator or other trustee, who bona fide advances money for the estate, is entitled to bo refunded out of the estate.
    The complainant Jenetta M. Watts was the widow of Major Richard Watts, who, by his last will and testament, appointed her executrix, and Major John Black and James Watts executors. His will gave, or rather in its own words loaned, to Mrs. Watts during her life or widowhood, the whole of his real and personal estate; and in the event of her marriage, one-half in fee : but if she remained unmarried during her life, the will gave to her one-third part of his estate to dispose of as she might think fit; and at her death or marriage, the other half or two-thirds of his estate, as the case might be, to his brothers and sisters. Another part of the will directed his executors to sell such part of his estate as they might *deem superfluous, for the of his debts. Some short time after his death, the executors sold some portion of his property; but the property not selling well, Mrs. Watts believing, with what had been sold and the debts due the estate, she might be able to pay the greater part of the debts, directed the executors to stop the sale, saying that she had rather undertake to pay the debts, than to permit the property to be sold at reduced prices. Subsequently, indeed some years after, Major Black and wife, finding that they were entitled to a large sum of money from the estate of Major Watts, and other persons, the representatives of Colonel Conway, filed a bill in the court of equity for Laurens district against Mrs. Watts executrix, and James Watts executor of Major Watts, and other defendants. Upon the hearing of that cause, the complainants recovered a decree against the estate of Richard Watts for 3804 53 cents. The complainant Mrs. Watts paid this debt and the other debts of the estate, to a considerable amount bevond the funds of the estate received by her; and in consequence of this she filed her bill, to have a part of the estate of Richard Watts sold to reimburse her the amount which she had paid. His honor Chancellor Thompson, at June term, 1825, referred the matters of account to the commissioner, and directed him to report what sums the complainant had paid out of her private on funds account of Richard Watts the testator. The commissioner reported at June term, 182(5, that the complainant had paid out, over and above the amount received by her as executrix, interest included, 31,485 25 cents. The defendants excepted to the report on various grounds.
    
      First, That the complainant having taken all the property into her possession, and used and enjoyed the same, (when by the will she was required to sell so much as would pay the debts,) she, therefore, took the estate, ^chargeable debts, ought to pay out of the of the estate.
    
      Second. That by not selling property to pay off the debts, the estate of the complainant was increased in value to the amount of the debts.
    
      Third. That the commissioner ought to have charged complainant with all such property contained in the bill of appraisement, as from its nature, must have increased in value.
    
      
      Fourth. That the estate should, in no event, have been charged with interest, inasmuch as complainant ought to have sold, on the death of the testator, a sufficiency of the property to have paid the debts.
    June, 1826. DeSaussure, Chancellor. It is very obvious from the testator’s will, that he intended his wife should enjoy the whole estate during her life or widowhood; but that she should pay off his debts by the sale of such property as his executors should think the most superfluous. The directions to sell were imperative, though the selection of the least material or most useless property was left to the executors. Small as the sales were, they amounted, with some debts collected, to two-thirds of the debts; and the executrix, who seems to have had the chief sway, should have gone on with the sales and paid them off. But she preferred not to do so, for her own accommodation. And meanwhile, the superfluous or perishable property has, from 1814 to 1820, actually perished, or been worn out and consumed. This the widow seems to have done from choice; for she is stated, in the answer of James Watts, to have declined selling, saying, she would take the estate into her possession, and pay the debts. The veracity of this answer is supported by the facts, that she did take the estate into her possession, and did not make sufficient sales to pay the debts, as the directed, but actually paid the debts without such sale. *It does appear to me, that on this statement of facts, the widow ought to bear the burthen of all the debts. She would have been bound to keep down the interest at all events during her life, and to have paid a third, or a moiety of the debts, according to her proportion of the estate, as she married or did not. But under the will, she would have paid them all by the sales. What she did not sell, as she ought to have done, she has enjoyed; and therefore has had an exact equivalent for the debts she has paid. Taking this view of the case, I feel bound lo support all the exceptions of the defendants to the report of the commissioner. If I bad not taken this view, still on the question of interest I could not have had any doubt;’ for the executrix ought to have sold out and prevented the accumulation of interest, and extinguished the whole debt, as directed by the will. It is therefore ordered and decreed, that the bill of complainant be dismissed.
    From this decree the complainant appealed, and moved the court of appeals to reverse the circuit decree; and for a decree for the complainant, on the following grounds:
    
      First. That having advanced out of her own funds, in the payment of the debts of the estate, the sum of 81,4-85 25Í cents, she became thereby a creditor of the estate for that sum, and was entitled to have so much of the estafe sold as would pay that amount to her.
    
      Second. That having paid debts beyond the amount received by her, she was at least entitled to be refunded the principal sum of the amount which he had paid beyond the amount received.
    O’Neall, for the appellant.
    A trustee paying off'the incumbrances on the trust estate, has a right to look to that trust estate for payment. 6 Johns. Cha. Rep. 62. *A trustee is entitled to a prompt remedy for his payments, and has a lien on the trust property; and the cestui que trusts can never call that property out of his hands, without first tendering indemnity. 6 Johns. Cha. Rep. 67. If an executor pays out his own money to the full amount of the assets in hand, he may apply the same to his own use; and he has even the right to retain the property as his own. So when lands are directed to be sold, he may retain out of the sales all his previous advances. 3 Johns, Cha. Rep. 318. The complainant is entitled to interest. See 5 Johns. Cha. Rep. 517.
    Bauskett, contra.
    She has come too late, after all the fund debts have been distributed. The case from 3 Johns. Cha. Rep. 318, is not applicable, nor the case in 5 Johns. Cha. Rep. 517.
    Johnston, in reply.
    Heirs at law are not entitled to receive their shares until debts are paid. The executors having paid off debts, are entitled to retain assets. In Everston v. Tappen, 5 Johns. Cha. Rep. 497, it was decided, that the whole estate being devised to a widow during life, after payment of debts, the widow as executrix, in accounting to the heirs at law for subsequently acquired properly, real and personal, had a right to apply the rents of undevised lands to the payment of debts, after the personalty was exhausted. The balance of the rents she should account for.
    “A trustee, who has paid off incumbrances on the trust estate with his own money, may look to the estate in the first instance for reimbursement, and is not bound to icsort to the covenants of the grantors in the trust deed; but may leave the cestui que trusts to their remedy against the grantor, by substitution.” 6 Johns. Cha. Rep. 62.
    Feb. 1, 1827.
   *Curia, per

Nott, J.

I think it is a very well settled rule in equity, that where a trustee has, in good faith, made advances out of his own funds for the benefit of the trust estate, lie is entitled to remuneration out of that estate, 6 Johns. Cha. Rep. 62, 67. The same rule applies to administrators and executors, and all other persons standing in the same relation. Plow. 186. In Dyer there is a case where it was held that an executor, -who had disposed of his own money in alms for the salvation of the testator’s soul, might retain the assets of the estate to that amount. 2 Dyer, 187. 3 Johns. Cha. Rep. 318.

Now, what reason can be given why this complainant should not have the benefit of that rule? it is said, that the property might have been sold according to the provisions of the will, if she had not prevented ; and that as the rule was omitted at her request, and for her accommodation, she must be bound by her contract: that she has had the use of the property, which would have been applied to that purpose, until it is consumed, or has perished, and comes now to be remunerated out of the valuable part of the estate, which was intended to be reserved for the remainder-man. If she had wasted the property, she certainly would come with a very bad grace into court with the present demand. But no such evidence is offered to the court; nor do the circumstances of the case warrant any such suspicion. It appears from the decree of the chancellor, that the whole amount of the personal estate which came into the hands of the executrix, except the outstanding debts, was $3,824, including the value of the slaves, which amounted to $3,300; so that the whole amount of property, exclusive of the slaves, was in value only $524, out of the sales of which it appears from the commissioner’s report, $373 were raised; leaving in her hands a balance of $151. The whole amount of funds which came into her hands was $1,617. The amount of debts which appear to have *been due at that time, was §1,671, leaving- for her to pay, in pursuance of her contract, fifty-four dollars. The property which she reserved amounted in value only to $150. Now that was a very small sum to allow her for provisions, household furniture, and such articles as were immediately necessary for her convenience and support. Yet that small pittance must have been taken from her, or the more valuable property be broken in upon. It seems to be supposed that this little property reserved by the complainant should be considered as the fund set apart by the testator, under the name of “surplus property,” for the purpose of paying his debts. But it cannot be believed that he meant, by his surplus property, those articles which were necessary for the subsistence of the first object of his bounty. It appears, however, that even this must have been sold, or other property sacrificed, if she had not stopped the sale. And the convenience which she secured to herself thereby, may, perhaps, be considered as a sufficient consideration for the payment of the small sum (say fifty-four dollars) over and above the funds otherwise provided for the payment of the debts which then appeared to be owing by the estate. Now suppose her liable to pay that, she will then have left, exclusive of the slaves, property to the amount of §100 only; out of which, it is contended, she ought to have paid a debt of more than $800, and not to have a bed left to sleep on, in order that the ne-groes may be left for those in remainder: and even that §100 and more were raised by the sale of a horse, at an advanced price, which had been bid in, at the sale.

But the fact is, the debt for the payment of which she now seeks remuneration, was nota subsisting debt at that time, and could not have been in contemplation of any of the parties when this engagement was made. It was a decree obtained against the estate three years afterwards. I think therefore that the complainant is *entitled to an indemnity for that debt out of the estate : but I do not think she" is entitled to interest. She had the use of the property, which ought to be considered equivalent to the interest. If it were not so, she might have stopped the interest by an earlier sale of the property. The decree is reversed.

It is therefore ordered and decreed that so much of the estate of the said Richard Watts be sold as shall be sufficient to reimburse the complainant the sum of $804 53 cents, and the costs of this suit; to be sold in such manner and upon such terms as the chancellor shall direct, and that the costs be paid out of the funds of the estate.

Decree reversed.