Case ID: tenn_18/html/0400-01.html
Source: Caselaw Access Project
Author: {"author": "Reese, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Thomas et al. vs. Scruggs et al.
    
    Nashville,
    December, 1837.
    When trustees and executors in a will, or either of them, are directed to sell land and reinvest the proceeds in other lands, and they receive and divide the trust fund between them, in part execute the trust, but violate it in other respects by omitting to carry into effect the positive injunctions of the testator, they are all equally responsible for the acts of each other.
    As to the liability of trustees in general for the acts of each other, vide Veaderick and others vs. Wharton and others, ante page 263.
    The bill is filed by complainants as legatees of Jesse Thomas, against Phineas Thomas and Finch Scruggs, the executors, and alleges that the testator died in Virginia in 1805; that the executors were directed to sell real estate in Virginia, and with the proceeds and £400, purchase real estate in Tennessee, which was given to the widow during her life, and at her death, to be divided between certain named children; that the executors sold the real estate in Virginia, and in part laid out the proceeds in land in Tennessee; that the executors sold and suffered to be sold by execution thereof, the ne-groes given to the widow, to pay the debts of the estate, when there was sufficient money to pay the debts; that a large amount 'of personal propei ty came to the hands of the executors, for which they never accounted; that Anthony Thomas died after the death of the testator, intestate, and without issue, in the lifetime of the widow, without having reduced to possession his portion of the estate; that the widow died in 1334.
    The bill was taken pro confisso as to Thomas. The answer of Scruggs admits the death of the testator, and states that himself, the widow, and Pbineas Thomas, were nominated executors; that at the death of the testator he resided in Tennessee, and on his arrival in Virginia, Thomas and the widow had qualified as executors, and had sold all the real estate and personal property, and had taken the notes payable to themselves; that after his arrival he also qualified, and some years after went again to Virginia and received about $500 from the attorney in whose hands the widow and Thomas had placed the notes for collection; and that he collected about $400 from another source; that after the removal of the family to Tennessee he acted as executor, and with the other executors purchased land for which he alone paid $1000; that he has paid other debts which consumed all the assets that came to his hands; that the sales of the negroes were necessary for payment of debts.
    The money received by Thomas was misapplied by him; ■and this bill was filed to make Scruggs, his co-executor, liable therefor. The facts upon which his liability depends are stated in the opinion of the court.
    
      R. Alexander, for complainants,
    insisted; 1st. That the defendants are both jointly liable for the amount for which the testator’s plantation was sold, after deducting therefrom the purchase money of the two plantations bought in Tennessee, with interest from the time they collected the money, or the increased value of the land, and this for the following reasons:
    1. The defendants acted as partners in complete concert in collecting that money. The answer of Scruggs states that he acted as co-executor with Phineas and Mary Thomas, from the time of his qualification in the fall of 1805 till 1834; that he supplied-Phineas with money to go to Virginia on business of the estate, and that he went four times to Virginia on business of the estate, and collected part of this money from Wilson, the attorney in whose hands the notes were placed for collection, and for these service's he claims compensation. The deposition of Phineas Thomas proves that Scruggs acted in concert with him as co-executor in selling the property and collecting the money; that they both collected this purchase money for the land, and that Scruggs went different times to Virginia to collect it, and did collect more of it than he did. So that we see they kept no separate accounts: each one had full power to collect it, and they assisted one another in doing so, and now they do not know or do not show what part each one did collect. Jeremy’s Eq. Jurisdiction, 159, 16Ü — 1—2: 2 Wms. Ex. 1119: Willis on Trustees, 194-5: Deaderich ■ys. Cantrell, decided at this term.
    2. The will created a trust, and by taking probate of the will, and acting under it, the defendants accepted the trust, and by failing to perform the trusts of the will according to its true intent and meaning, each trustee became personally liable for the whole loss or devastavit occasioned by such breach of trust. 2 Williams Ex. 1104, 1105: Deaderick vs. Cantrell, decided this term: Mucklow vs. Fuller, Jacob’s Rep. 198, in 4 Eng. Ch. Rep. Con. 93: Bone vs. Cook, 13 Price’s Rep. 329, in 6 Eng. Ex. Rep. 117, 120, 12S: Oliver vs. Court, 3 Ex. Rep. 312, 334-5, from 8 Price, 127: Keble vs. Thompson, 3 Bro. C. C. Ill: 5 Eng. C. R. 487: 0 Eng. C. R. 531: Shipbrook vs. Hinchinbrook, 11 Vesey’s Rep. 252: 16 Vesey, 477: Underwood vs. Woodharn, J Merivale’s Rep. 712: 3 Swanst. Rep. 58.
    
      R. C. Foster, for the defendant Scruggs,
    insisted, 1st. That he is only liable for the assets which came to his hands and for his own acts; the true rule being that each executor is liable only for his ovtn acts, and for what he receives or applies, unless he hands over the money collected or received to his co-executor, or joins in the direction or misapplication of the assets, and that an executor joining in a receipt with a co-executor does not make him responsible only for so much as .comes to his hands. I Pierre Wms. 81: Fellows vs. Owen, 
      1 Eden’s Rep. 90: Wisley vs. Clark, 1 Piere Wms. 241: Churchill vs. Hobson, 2 Vernon’s R. 570: ¡Murrillvs. Cox.-4 Yes. 596: Ilancy vs. Blackman, 1 Dallas, 311: Toller on Executors, 118: 5 John. Ch. R. 283: 7 John. 17: 19 John. 427: Monahan vs. Gibbons, 1 Scho. and Lef. 341: Joyce vs. Campbell, 2 Scho. and Lef. 230: Hoyle vs- Blake¿ 2 Devereaux’s Rep. 55,60, 119: 4 Eng. Condensed Chan. Rep. 326: 4 Johns. 23; 11 Johns. 16, 21: 16 Johns. 272: 2 Day, 536: 4 Desaus. Ch. Rep. 65. The authorities that hold the reverse of this rule, are Prec. in Chan. 173: Amb. 218: 3 Atk. 584: 2 Bro. Ch. 114: 7 Ves. 186: 11 Ves. 319: 16 Ves. 479.
    2. Defendant Scruggs insists, that under the old rule charging one executor for the act of another, and for joining in a receipt, he would be responsible to creditors, but not to legatees and distributees of the testator. 2 Williams on Exrs. 1126: 1 Piere Williams, 241: 3 Bacon’s Ab. 31: 2 Scho. and Lef. 239, 240: 1 Dallas, 311.
    3. Defendant Scruggs insists that the executors are responsible to the administrator of Anthony Thomas, for his portion of the estate, and not to complainants.
    4. He insists that complainants are not entitled to relief for any portion but the negroes alleged to be sold, because more than twenty-five years have elapsed from the time the cause of action accrued, none of the complainants laboring under disability. Bicker son and others vs. Bwton and others, 3 Yerger’s Rep. 212.
   Reese, J.

delivered the opinion of the court.

In 1805, Jesse Thomas, of the commonwealth of Virginia, made his last will and testament and died. The first clause of the will directed that his executrix and executors, or either of them, should sell as they might think fit, the land and plantation whereon the testator then lived, and the proceeds of the same, with a further sum, not exceeding four hundred pounds, should be by his executrix or executors, or either of them, laid out in a tract or tracts of land lying within the State of Tennessee, which said land so purchased should be to the use of his wife, the executrix, during her natural life, and (hat at her death, the land should be equally divided among his sons John Thomas, Anthony Baggart Thomas, and Nathaniel Haggart Thomas, and their heirs forever.

The bill charges that there was personal estate enough to pay all the debts and to raise the sum of four hundred pounds, to be invested in land in Tennessee as directed,' that the executors sold the tract of land’ devised to be sold for a large sum of money; that a part of the proceeds was by them invested in the purchase of land in Tennessee as directed; but that a large portion of the trust fund they omitted to invest and retained in their hands.

The bill also alleges that after the death of the testator, and before the death of the tenant for life, Anthony H. Thomas, one of the devisees in remainder, died intestate; his personal representative is not before the court. The'widow died before the filing of the bill. They claim two-thirds of the un-invested trust fund, and two-sixths of the other third, as the heirs at law of Anthony H. Thomas. The defendant, Phin-eas Thomas, has not answered the bill, and as to him it is taken for confessed.

The defendant Scruggs answers, that at the death of the testator he was residing in Tennessee, and some months af-terwards went on to Virginia and qualified, the other executors having previously qualified, and before his arrival, sold the land mentioned in the will. He insists that so much of the trust fund as he received he expended either in the purchase of Tennessee lands, according to the trust in the will, or in payment of the debts of the estate, and argues that he is not liable beyond the amount he actually received. And whether his liability should be so restricted, constitutes the main question which has been discussed in the cause. It has been strenuously insisted, that as by the terms creating the trust, the concurrent act of the co-trustees was not made necessary to give' validity to the transaction of either a sale or a purchase, they should not be made responsible for each other in either acting amiss or refusing to act. But the answer of Scruggs shows that he accepted this trust; that ho entered upon its discharge by receiving a portion of the trust fund, and by purchasing a portion of the land direclcd to bo Purchased. His answer itself shows that he violated the trust 1 _ by misapplying the proceeds arising from the sale of the land to other purposes; and then the testimony of his co-trustee, Thomas, taken at his instance, establishes that he had equal control with himself over the trust fund arising from the sale of the land, and indeed that he received a larger portion of it than the witness Thomas did. Here then is a case of co-trustees receiving between them a trust fund, executing the trust in part by the purchase of lands, violating the trust by the palpable misapplication of the funds to other objects, and violating it also by omitting to carry into effect a positive injunction of the trust, in not vesting the balance of the fund in the manner directed. Scruggs, by having done so much, and by so far co-operating with Thomas, placed himself in an attitude to make him responsible for doing the whole. Thomas cannot say that, because Scruggs had some of the funds in his hands, and by the terms of the will, had power without his concurrent act to make a valid purchase, that he is not responsible, nor shall Scruggs be heard to say it. Both were guilty of a plain breach of trust, and they will not be permitted to say we have disobeyed the positive directions of the testator, but then we have divided between us the trust fund, and each may be held liable for the separate amount in his hands. No case can be 'found, it is believed, tending at all to sanction such a course.

This is a much stronger case than that of Deaderick vs. Wharton’s Executors, just determined by us. Here both the trustees violated their duty and the trust assumed by them, by acting as they should not have done, and by omitting to act as they should. From the proof, however, this extends 'only in the case of Scruggs, to the fund arising from the sale of the Virginia land. As to the four hundred pounds it does not appear that it came to the hands of Scruggs. The administration had for some time proceeded before he reached Virginia, and he seems only to have had joint action and control with Thomas, as relates to the proceeds of the real estate, and he professes to be ignorant, and there is no proof that he knew what had been previously received, or what debts had been paid. Thomas, however, against whom the bill is taken for confessed, must be held answerable for the whole trust fund, and Scroggs for the whole proceeds of the sale of the land in Virginia. 
      
      
         Auto page 263.