Case ID: sc-eq_26/html/0227-01.html
Source: Caselaw Access Project
Author: {"author": "DargaN, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Henry T. Street & others vs. Edward R. Laurens & others.
    
    Construction given to a decree of the Circuit Court in another cause.
    Where a Master in Equity is ordered by the Court to invest funds in his hands, and neglects to do so, his sureties for the torn during which the default, in negloeting to invest, is committed, are liable. That the Master, by re-election, becomes his own successor — giving new bond with other sureties — does not discharge them.
    So, also, where a Master commits default in not depositing money in Bank, as directed by the Act of 1840, his sureties for the term during which the default is committed, are liable.
    The sureties of a Master were sought to be made liable for the default of the Master in not investing funds of a certain estate, as directed by an order of the Court: — Held, upon the evidence, that certain bonds, payable to the Master, were not in fact investments for that estate, and therefore the sureties were not exonerated — although, during a subsequent term of the same Master, the bonds were paid to him, (and the money wasted,) as belonging to that estate.
    A Master having committed default in not investing funds, his sureties were charged interest, with annual rests, until he went out of office, and with simple interest from that time.
    
      Before Dargan, Ch. .at Charleston, July, 1852.
    Edward E,. Laurens was elected Master in Equity for Charleston in December, 1836 : he was re-elected in December, 1840 : again re-elected in December, 1844: and qgain in December, 1848. He remained in office until May, 1851, when he resigned. His mother, Eliza Laurens, was one of the sureties on his official bonds of his first and second terms. She died in 1842, leaving a will, of which he was the executor.
    This bill was filed by Henry T. Street, and others, heirs of Timothy Street, against Edward R. Laurens, as executor of his mother, John Laurens, Eliza Laurens, Henry Laurens, and John R. Laurens, her devisees, to render her estate accountable for certain funds of the estate of Timothy Street, which came into the hands of Edward R. Laurens as Master, prior to December 9, 1844, when his second term of office expired.
    The bill was taken pro confesso against him. The other defendants answered, admitting the liability of the estate devised to them for the debts of Mrs. Laurens, but denying knowledge of any debt due by her on account of the official bonds of her son.
    One of the Masters, Mr. Tupper, was directed to take an account of the sums owing by Mrs. Lawrence to the complainants, on the bonds to which she was a party, as the surety of Edward R. Laurens ; and he submitted his report, dated June 15, 1852, as follows:
    “ I have been attended by the solicitor for the complainants, and the solicitors for the defendants; and having heard the allegations of the said parties, and their proofs thereon, I have taken an account of the estate of the late Timothy Street, which came into the hands of Edward R. Laurens as one of the Masters of this Court, and not accounted for, during the official terms for which Mrs. Eliza Laurens was bound as one of the sureties of the said Edward R. Laurens.
    “Mr. Laurens was first elected .to the office of Master in Equity, in 1836, and on. the 12th day of December, in that year, executed his bond in the penal sum of thirty thousand dollars for the faithful discharge of the duties of said office. In 1840 he was re-elected, and on the 12th day of December of that year executed a like bond. The name of Mrs. Eliza Laurens appears as a surety on both of these bonds. The term for which the latter bond was given, expired on the ninth day of December, 1844, when upon the third election of Mr. Laurens^ a new bond was executed, to which Mrs. Laurens was not a party.
    “ For any default, therefore, occurring between the date of the first bond, to wit, the 12th December, 1836, and the expiration of the second term, the 9th December, 1844, Mrs. Eliza Laurens was liable as one of the sureties of Mr. Laurens.
    
      “ Timothy Street, the father of the complainants, died in the year 1833, intestate, leaving a considerable estate in realty, of which he was seized, as to'part, in his own right, and as to other portions, as tenant in common, with Thaddeus Street and Daniel Boinest, who had been partners in trade, and to whom administration of his estate was committed after his death. By a decree of Chancellor DeSaussure bearing date the 23d day of January, 1836, and made in a cause then pending in this Court between the said administrators and the widow and children of the said Timothy Street, for a division of the real estate of the said intestate, it was ordered: that the said real estate be sold; that so much of the proceeds of said sale as belonged to the distributees of Timothy Street, be paid over to the Master of this Court, and ‘ that the said Master do invest in his official name the amount coming into his hands from the sales aforesaid, on account of the distributees of Timothy Street, in such manner as may be agreed on by himself, and the administrators of Timothy Street, to be held for the use of the legal distributees of Timothy Street, and transferred to the parties who may be decided to be entitled thereto.’
    “Thomas O. Elliott, who, at the time of the pendency of these proceedings, was one of the Masters of this Court, received under the above decree, as a part of the proceeds of the sales of the real estate, belonging to the distributees of Timothy Street, a bgnd of Benjamin Smith, dated 27th January, 1836, for four thousand four hundred and fifty-five dollars; also, in cash, four hundred and eleven dollars. The latter sum was invested by the said Master in July, 1836, in a bond of M. I. Keith, secured by a mortgage of a pew in St. Peter’s Church, of Charleston. Both of these bonds were transferred by Mr. Elliott to his snc-cessor, Mr. Laurens, upon the election of the latter in December, 1836. Upon the bond of Benjamin Smith, Mr. Laurens received, from the year 1837 to the year 1840 inclusive, the annual interest accruing thereon ; and on the 10th February of the latter year, the principal of the said bond in full. I have admitted these receipts, by Mr. Laurens, as proper charges in this account, upon the evidence of B. F. Smith, which accompanies my report in the case of Thaddeus Street, et al. vs. Angelique Street et.al., filed the 2d July, 1851, and upon inspection of the original bond, with the acknowledgment of the several payments endorsed by Mr. Laurens.
    
      “ The bond of M. I. Keith, I am of opinion, cannot be allowed as a charge against the late Master, so as to bind the estate of Mrs. Laurens. Some time previous to 1842, this bond was placed by Mr. Laurens in the hands of the late George B. Eck-hard, for collection ; on the 4th May, 1842, the pew in St. Peter’s Church, mortgaged to secure the payment of this bond, was sold by Master Gray, but the proceeds of sale (f 126 25) were not paid over to Master Laurens until the 15th March, 1845, after the last term had expired, for which Mrs. Laurens was bound as one of the sureties of Mr. Laurens. To secure the balance still due upon this bond, after the above payment, Mr. Eckhard received from the obligor, probably in 1842, a bond of James Hamilton and D. H. Hamilton, conditioned for the payment of a sum considerably exceeding the amount of Keith’s bond, for which it was substituted. The Hamiltons’ bond was not paid until 1850, six years after the termination of Mrs. Laurens’ liability on the official bonds of the late Master.
    “ In 1839, Master Laurens received, on account of the complainants, from the sale of certain real estate under the decree before referred to, a bond of Henry T. Street conditioned to .pay six thousand two hundred and fifty dollars, also a bond of George B. Locke for $5,416 67, both bearing date the first day of April, 1839. From the evidence appended to my report of the 2d July, 1851, before referred to, and from the original bonds produced before me, it appears that the interest arising on the bond of H. T. Street was paid annually to Mr. Laarens, up to the 24th of June, 1843, when the principal was paid in full. It also appears that the interest was regularly paid on the bond of George B. Locke, to the 1st April, 1844, the last year for which Mrs. Laurens was bound. I have, therefore, allowed as proper charges in this account, the moneys received by Mr. Laurens on the bonds of Street and Locke, previous to the expiration of his second official term.
    “Under the decree of Chancellor DeSaussure, Mr. Laurens sold, in 1840, a house and lot in Queen-street, and received from Daniel Boinest, the purchaser, his bond bearing date the 22d April, 1840, for $4,500, .being the moiety of the proceeds of said sale belonging to the complainants, as distributees of Timothy Street; on this bond Mr. Laurens received $317 35, on the 22d April, 1841, and $588 40, on the 23d July, 1843 — these payments being endorsed in the handwriting of the late Master on the back of the original bonds produced before me, I have allowed them as charges in the account.
    “ The defendants, by their solicitors, have submitted to me evidence upon which they rely to sustain the following credits, claimed by them in discharge of their liability upon the account as established by the proof of the complainants.
    “[!•]
    1840, February 28, cash paid by Mr. Laurens for
    note of Thaddeus Street at 12 months, $4,455 00
    
      “ In Master Laurens’ annual report of. funds for the year 1841 and 1842, this credit appears in his account with the estate of Street, and seems to have been vouched before the Chancellor. The investment of. funds, by the Master, in promissory notes, unsecured by mortgage or otherwise, would not, I presume, under ordinary circumstances, receive the sanction of the Court; in this case the order of Chancellor DeSaussure authorizes the investment of moneys received by the Master for the estate of Street, ‘ in such manner as may be agreed on by the Master, and the administrators of Timothy Street.’ The note taken by Mr. Laurens in this case, was the note of the acting administrator of this estate. Both the Master and administrator mast, therefore, have agreed to the investment. In allowing this credit, I have been influenced, not so much by the foregoing consideration, as by the fact, that Mr. Street paid the principal of his note in full on the 1st March, 1842. I have charged Mr. Laurens with the principal of this note on the said day, and with the interest as of the dates when it fell düe. A different conclusion as to this credit would probably' have been arrived at, had the allowance of it in anj manner changed the account, or the liability of the parties sought to be charged by these proceedings.
    “[2.]
    1841, June 22, Cash p’d by Laurens for - 616 55 State 6 per ct. Stock at 105, 1841, Dec. 14, Cash p’d by Laurens for - 224 88 646 32
    State 6 per ct. Stock at 105, “ “ “ Cash p’d by Laurens for - 517 10 State 6 per ct. Stock at 105, 236 12 542 96
    #1,357 53 #1,425 40
    “ From the Stock Ledger of the State Treasury Office it appears that, at the above dates, scrip representing State six per cent, stock (Fire Loan) for the above three amounts (the two first redeemable, in 1860, and the third, in 1870,) was transferred by Mrs. Louisa Ingraham to ‘Edward R. Laurens, Master in Equity, for estate of Street;’ this stock remained in the name of Mr. Laurens for this estate until May, 1849, when it was transferred by him upon the books of the Treasury Office as follows:
    To Edward R. Laurens, Master in Equity,.
    .for Bailey vs. Boyce, 601 16
    “ “ “ Balthazar & Co., 14 37
    615 55
    
      “ “ “ Estate of Merritt, 224 88
    “ “ “ Balthazar <fc Co., 434 04
    “ “ “ Estate of Merritt, 64 06
    #1,357 53
    “ It is clear, from the date of the foregoing statement, that although the estate of Street has lost the above stock by its transfer to other estates represented by the late Master, still the credit claimed upon this account by the défendants must be allowed. On the 9th daybof December, 1844, when the liability of Mrs. Laurens upon the bonds of the Master ceased, this stock was held, by Mr. Laurens, in trust for the distributees of Street. The default occurred in 1849, during a term subsequent to the period for which Mrs. Laurens was bound. The defendants, I think, are entitled to the benefits of the above investments. The interest, however, received previous to December, 1844, from this stock, is a charge which may properly be claimed by the complainants, and I have accordingly allowed it.
    “[3.]
    1842, March 1, Cash paid by Mr. Laurens for $4,500
    State 6 per cent. Stock at 105, - - $4,725 00
    
      “ Proof is furnished by the certificate of William Laval, State Treasurer, that on the above day Mr. Laurens invested in his official name for the estate of Street $4,500 in State 6 per cent, stock. In May, 1845, from this stock he transferred $2,000 to the estate of Stoney. In January, 1848, he received $833 34, that being the one-third redeemable at that time, and the balance, $1,666 66, was taken in new scrip. In May, 1849, this new scrip was, with some other stocks, divided by Mr. Laurens between the cases of Kenderson vs. Henderson, and Boyce vs. Boyce. This credit, for the reasons assigned in determining the preceding one, must also, I think, be allowed. The first default here arose in May, 1845, after the second term of Mr. Laurens had expired. I have inquired, and find that State 6 per cent, stock, at the dates when the two last credits are claimed, was selling at $105; the price alleged to have been paid by Mr. Laurens.
    “[4.]
    Cash paid by Mr. Laurens for $143 37 City 6 per cent.
    ...at 110, 157 70
    “ “ “ “ City 5 per ct. at par, 250 00
    
      “ “ “ “ City 5 per ct. . “ 892 42
    $1,142 42
    
      “ From the books of the City Treasurer, it appears that City 6 per cent, stock of the issue of 1838 and 1839, for $157 70, was transfered to Mr. Laurens for the estate of Street, in October, 1844. This stock remained unchanged in the hands of Mr. Laurens until his resignation, in 1851, when it was turned over to me. as his' successor, and by me transferred to the distributees of T. Street. In April, 1844, at the same office, City 5 per cent, stock of the issue of 1824, for $250, was placed to the credit of Mr. Laurens for this estate. In 1846, this stock, being then redeemable in full, was paid to Mr. Laurens by the City Treasurer. The dividend book of this office shows that in October, 1842, there was also standing in the name of the late Master, for the estate of Street, City 5 per cent, stock of the issue of 1835' for $454 85 ; and that in April, 1844, this sum was increased by other purchases to $892 42. This investment continued unchanged in the hands of Mr. Laurens after December,
    1844. Scrip representing $669 32 of this stock was transferred to me • by Mr. Laurens, and by me assigned to the complainants. I have allowed this credit, there appearing no default in respect to these investments during Mr. Laurens’ first and second terms. Two quarters interest is charged as received on this stock in 1844.
    “[5.]
    1. 1841, January 19, Cash paid by Mr. Laurens for bond of Mrs. Eliza Laurens, - - $1,082 33
    2. 1842, July 10, Cash paid by Mr. Laurens for bond of Mrs. Eliza Laurens for $766 80, with interest from 14th March, 1839, - 962 57
    3. 1843, July 3, Cash paid by Mr. Laurens for bond of Mrs. Eliza Laurens for $633 20, with interest from 14th March, 1S39, - - 856 01
    4. 1843, July , Cash paid by Mr. Laurens for bond of Mrs. Eliza Laurens, - 2,207 58
    5. 1843, July, , Cash paid by Mr. Laurens for bond of Mrs. Eliza Laurens, - 635 00
    Interest from 19th January, 1841, on 2,842 58 3,367 87
    $6,268 78
    
      “The original bonds here referred to have been submitted to me. They are all signed Eliza Laurens, and payable to ‘ Edward R. Laurens, Master in Equity, his successors in office, and assigns.’ The dates and amounts are as above stated. On each of these bonds there is this acknowledgment: ‘ Received payment in full on the within bond. Edward R. Laurens, Master in Equity.” The following endorsements appear on the back of these bonds :
    On 1st bond — ‘ 19th January, 1841., Eliza Laurens to Master in Equity for Estate Street, $1,082 33.’
    On 2d bond — ‘ 14th March, 1839, Mrs. Eliza Laurens to Master in Equity, bond $766 80.’
    On 3d bond — ‘14th March, 1839, Mrs. Eliza Laurens to Master in Equity for Warren Andrews, et ux. bond $633 20.’ Warren Andrews, et ux. stricken but.
    On 4th bond — ‘ 19th January, 1841, Eliza Laurens to Master in Equity for Estate McLeod, 2,207 58.’ Estate of McLeod stricken out, and ‘January, 1845, for Estate Street,’ added.
    On'5th bond — ‘ I9th January, 1841, Eliza Laurens to Master in Equity for Estate H. P. Holmes, $635.’
    “ To fix upon these bonds the character of investments for the estate of Street, the defendants rely upon a schedule of debts against the estate of Mrs. Eliza Laurens, rendered, in January, 1846, to the Ordinary of Charleston District, by Edward R. Laurens, executor of said estate. In this schedule the above bonds are represented to be held by the estate of Street, and the testimony of Mr. Guenther is introduced to show that when this statement of the liabilities of Mrs. Laurens was prepared, these bonds were in the Master’s office, where they had been since 1842. There is nothing upon the face of the bonds, that proves -them to have been investments for the estate of Street. They furnish, in themselves, no more evidence that they ever belonged to this estate, than to any other estate in the Master’s office. They are made payable to ‘Edward R. Laurens, Master in Equity,’ without reference to the persons beneficially interested in them. Upon the back of two of these bonds, the words are written ‘ for estate of Street,’ If this be sufficient to determine that they belonged to the estate of Street, then of the remaining bonds one must be held to have been the property of the ‘estate of Holmes,’ another of ‘Warren Andrews, et ux.,’ and the third, having no endorsement upon it, to either, or to none of them. It does not appear to me that these bonds were taken in compliance with the Act of 1840, which directs that funds invested by the Master shall be invested in his official name, in trust for the persons or estates entitled thereto. Nor does it appear that these bonds were taken by the Master with the concurrence of the administrators of the estate of Street, as directed by the decree of Chancellor DeSaus-sure; nor in accordance with the general practice of this Court, to require other security than the personal responsibility of the obligor. From the books turned over to me by my predecessor, it does not appear that any account was kept by him with the estate of Street; and the late Master’s annual reports of funds to the Court, from 1836 to 1844, do not show that the bonds of Mrs. Laurens were ever held by him as investments for the estate of Street. In 1844 the account with this estate is dropped from the report of that year, and does not again appear in any subsequent report. Evidence is furnished from the books of the Bank of the State, that at the several dates, when it is alleged the investments in these bonds were made, there was little or no money in this Bank to the credit of the estate of Street. Either the deposits required by law had never been made, or the funds had been drawn before the times when these investments are claimed to have been made. The only evidence then, which goes to establish that these five bonds of Mrs. Laurens were ever held for the estate of Street by Mr. Laurens, as Master in Equity, is the schedule of debts rendered to the Ordinary by Mr. Laurens, as executor of the estate of Mrs. Laurens. The aggregate sum of the debts stated in this schedule is $61,911 67 — much the largest portion of this amount is made up of bonds of Mrs. Laurens other than those put down to the estate of Street. A considerable number of these bonds are designated in the schedule as belonging to estates which, I find, were at the time in the hands of the late Master, under various proceedings then pending in Court. The books and reports of Edward R. Laurens as Master — and which contain his accounts with these estates — do not corroborate his return as executor, in respect to these bonds. Of the eight estates in the Master’s office, to which, according to this schedule, Mrs. Laurens was indebted by bond, not one of them is charged by either the books or reports of the late Master, with the purchase on their account of these securities. It does appear to me, that this return to the Ordinary of the executor of Mrs. Laurens, cannot determine what investments were made by the late Master for estates entrusted to his care by this Court.
    “An account of the receipts and disbursements by Mr. Lau rens, as executor of his mother’s estate, vouched before the Ordinary in January, 1847, in which account the said estate is charged with $7,681 87, alleged to have been paid by the executor in January, 1846, to the estate of Street, is relied on by the defendants to show that the money, said to have been invested by 'the late Master for this estate in the bonds of Mrs. Laurens, was restored to the estate of Street by the payment of these bonds; and that, if the funds were misapplied by the late Master, the default occurred subsequent to this payment in 1846, and consequently after the date of Mrs. Laurens’ liability as one of the sureties on the official bonds of the said Master. In this account the estate of Mrs. Laurens is credited with $37,000, received from John Laurens, as the price of Mepkin Plantation. It is, however, admitted, that John Laurens paid in fact only $22,000 in cash, and settled the balance by assuming tó pay Mrs. Laurens’ bond to Sir Claudius Hunter, trustee of Mrs. Henderson, for $15,000 ; and that, with the exception of this last sum, the amounts credited to the estate of Mrs. Laurens in this account, were actually received in money by Edward R. Laurens, executor, on the 6th January, 1846.
    “ The defendants, by their solicitors, have urged before me that the fact, that the estate of Mrs. Laurens was not made available for the payment of her debts until 1846, and the additional fact, that by a provision of her will, the bulk of her estate was to be kept together until her grand-son, John Lau-rens, should attain his majority, which he did in that year, are circumstances going to show the inability of Mr. Laurens, as executor, to have paid these bonds before the tipie stated in his account to the Ordinary, as the date of their liquidation. To this the complainants, by their solicitors, oppose the principle of law, that when a payee and the legal representative of an obli-gor are one and the same person, payment of the debt will be presumed one year after the death of the obligor. This, it is contended, fixes the default in respect to the money invested in these bonds, assuming the investment to have been regular, within the second term for which Mrs. Laurens is liable as a surety of the late Master, to wit, in 1843, one year after the death of Mrs. Laurens, which occurred in 1842, and one year before the expiration of her suretyship in 1844. It is not necessary for me to- consider these questions, as I am of opinion that the evidence furnished by the account of the executor of Mrs. Laurens is as inadequate, standing alone, to establish the fact of the payment of these bonds, as of their ever having been investments for the estate of Street. I have nothing before me which sustains the statement of this account, that these bonds were paid to the estate of Street by the executor of Mrs. Laurens. The receipts endorsed upon these bonds are without date, and they are signed by the late Master, without reference to the estate for whose benefit the money was received. There is no entry in the books turned over to me by Mr. Laurens, or any intimation in his annual report of funds to the Court, that the money for these bonds had been received by him as Master for the estate of Street. And at the date when it is alleged that these bonds were paid, it is evident, from the books of the Bank, as well as from the original checks which have been exhibited to me, that Mr. Laurens, as executor, drew no money for the estate of Street, from the account kept by him in the said Bank with the estate of Laurens: nor deposited, as Master in Equity, any funds received from the estate of Laurens, to the credit of the account kept by him in the said Bank with the estate of Street.
    “ I have disallowed the five bonds of Mrs. Laurens, in stating the account between the parties to this cause.
    t! 6. — Commissions—one per cent, on the whole amount received by Mr. Laurens from 1S36 to 1844, for the estate of Street.
    
      “ I have allowed this credit.
    
      “ In stating the account herewith submitted, I have calculated interest to the 9th of December, 1844, with annual rests, according to what I understand to be the rule of this Court in cases of this kind. The balance on that day I find to be $11,490 37. On this sum I have charged compound interest, calculated at half yearly periods to the date of this report, in conformity with the 16th section of the Act of 1840, defining the liabilities of Master in Equity, and I find the sum so ascertained against the estate of Eliza Laurens to be ($19,271 85,) nineteen thousand two hundred and seventy-one dollars eighty-five cents.”
    The cause was heard upon the report, and exceptions thereto by the defendants, on 7th and 8th July, 1852. His Honor pronounced the following decree :
    DargaN, Ch. This case was heard on the Master’s report and exceptions. The report is so full and clear, that it will be necessary for me to add nothing in explanation of the facts; and very little in illustration of the principles by which the decision of the questions made should be governed.
    In the first exception, the defendants. John Laurens and Eliza his wife,.Henry Laurens and John R. Laurens, who are legatees under the will of Mrs. Eliza Laurens, deceased, contend that the estate of the testatrix, (the.said Eliza Laurens,) to which they are now entitled under the limitations of her will, should not be subjected to the payment of the plaintiffs’ claims arising on the official defalcations of Edward R. Lau-rens as Master in Equity, because they say, that none of the defaults and devastavits of the said Edward R. Laurens in reference to the funds of the plaintiffs in his hands, occurred during those two official terms of the said Edward R. Laurens, for and during which the said testatrix was his surety. If the facts upon which the exception is predicated be proved, it must of course be sustained.
    Mr. Laurens was four times elected as Master in Equity for Charleston district. His mother, Mrs. Eliza Laurens, was one of his sureties on his official bonds for his first and second terms. Her liability commenced on the 12th December, 1836, and ceased on the 9th December, 1844, when Mr. Laurens; having been elected the third time, gave another bond tojwhich Mrs. Eliza Laurens was not a party. For any devastavits which Mr. Laurens may be proved to have committed between the dates mentioned, the estate of Mrs. Eliza Laurens will be liable.
    It is not denied, that the assets of the estate of Timothy Street, for which the plaintiffs seek a recovery in this bill, came into the hands of Mr. Laurens during his first two terms ; in other words, during the time for which Mrs. Laurens was bound as one of his sureties. But it is contended, that his default related to cash received by him, and not paid to the rightful owner; and that, when he was elected for the third time and qualified, he became debtor for that cash to himself as his own successor. And, upon the principle, that where the rights of creditor and the obligations of a debtor, of payer and payee, combine in the same person, the debt is discharged, it is contended, that these funds of the estate of Timothy Street, though paid to him before that time, must be considered as having been paid by himself to himself, at the commencement of his last term, and the liability for the waste, therefore, thrown upon the sureties of his last official bond. I think I have fairly stated the argument, and it would be a sound legal proposition, if it were true, that Mr. Laurens had no other duty to discharge in regard to the funds of the estate of Street, than simply to receive and safely keep them, and had, in fact so kept them, during the time that Mrs. Eliza Laurens was his surety. Vaughan vs. Evans, 1 Hill Ch. 414; Enicks vs. Powell, 2 Strob. Eq. 196.
    But the rule upon which the exceptants rely, is subject to modifications and exceptions. It would not apply to a case where consequential damages resulted from the nonfeasance or misfeasance of an act, which the official duty of the Master required him to perform: as not taking a mortgage and security when he was required ; or taking these securities in so negligent or defective a manner as to render them ineffectual for the purposes intended. In these, and similar cases, the damages resulting in one term, would not be considered as payable to himself as his own successor in his succeeding term, but the liability would attach permanently upon the sureties of the first official bond. And so, where the loss has resulted directly from the act of the Master; as where the fund has been lost by him from carelessness, or at play ; or has been applied by him to the payment of his own debts, or to his own use in any way, or was otherwise misappropriated. And so, also, in my judgment, where the purpose of giving greater security and productiveness to a fund, and removing it as far as possible beyond the control of the Master, and the hazards to which it might be exposed in his hands, the general law, or a special order of the Court directs him to make a particular disposition of the fund, which he omits to do, and loss results directly, or indirectly ; the liability must be referred to the official bond of that term during which the default was committed.
    During the first official term of Edward R. Laurens, on the 23d January, 1836, by an order made in Street & Boinest vs. Street, confirming certain sales made by the Master under a previous order of the Court, that officer was directed “ to invest, in his official name, the amount coming into his hands from the sales aforesaid on account of the distributees of Timothy Street, in such manner as may be agreed on by himself and the administrators of Timothy Street, to be held for the use of the legal distributees of Timothy Street, and to be transferred to the parties who may be decided to be entitled thereto.
    
      “ And it is further ordered,” says the record, “ that on the sale of any part of the residue of the real estate in the bill mentioned, the proceeds thereof be partitioned as follows, viz: one-half thereof to Thaddeus Street, and the remaining half to the distributees of Timothy Street, deceased, to be paid to the Master of this Court, and distributed among the representatives of Timothy Street by the further order of this Court.”
    It does not appear that there was any residue of real estate ever sold, or that any such existed. The plaintiffs seek a recovery for the proceeds of no other sales than those mentioned in the clause of the decree first quoted. For the purposes of this case, therefore, the clause of the decree last quoted may be left out of view.
    The fund for the payment of which the Master’s report subjects the estate of Mrs. Eliza Laurens to liability, is a portion of that which the said decree requires the Master to invest. This he never did; unless certain bonds of Mrs. Eliza Laurens, mentioned- in the second exception, be considered an investment under the provisions of the decree.
    It is to be observed, that the decree not only orders the fund to be invested in the Master’s official name, for the use of the distributees of Timothy Street, but directs that the securities themselves, (not the money,) should be transferred to the parties who may be decided to be entitled thereto. If the duties imposed by the decree upon the Master had been performed, the fund would have been safe. He could not have called it in without the special order of the Court. If he had invested it in public securities, or in Bank stocks, or the shares of joint stock companies, the trust would have been blazoned upon the certificates. They could not have been transferred without the transferee receiving them with notice of the trust, and thus making himself liable to the cestui que trusts. And if he had invested them in private securities, in the manner prescribed by the decree, the same result would have happened. Thus, the plaintiffs have lost a portion of their funds in the hands of the late Master, (now hopelessly insolvent,) directly, in consequence of his omission to perform a reasonable and proper duty prescribed by an order of the Court. The loss results directly from the default, for without it, the fund would have been safe. The loss results from the default as clearly as in a case where a Master omits to take a mortgage, or omits to record it, or to take sureties to a bond for the purchase money of property sold by him, when those duties are required of him, and loss results from his omission to perform them. And this default having occurred during his first term, it became, I think, a fixed liability on the sureties óf the official bond of that term. It is not one of those cases in which his liability is transferred by operation of law from the Master to himself, as his own successor, and to the discharge of his sureties of the preceding term. There would be danger in carrying this rule of transferring liabilities by operation of law too far. If applied to cases like the present, it would have the effect, where the same person has held an office for several consecutive terms, to accumulate the liabilities of his whole official career upon the sureties of the official bond of the last term; thus rendering the security of the public against the consequences of official default incomplete ; to say nothing of the injustice to the last sureties by the operation of a principle, which must, in some sense, be regarded as a fiction of the law, and which they never think of when they become bound. I think it is sufficient, if the rule be applied to those cases where the liability of the officer is simply for receiving and not paying over money, unconnected with other circumstances of default, from which loss proceeds. I have no authority or precedent for carrying it further; and I will not.
    There is another view of the question arising on the first exception, at which I must now glance. The Act of 1840, (11 Stat. 113,) requires the Masters and Commissioners in Equity to deposite in Bank all money received by them in their official capacity, when the Court does not otherwise direct. The late Master did deposite in Bank the wasted assets of the estate of Timothy Street. But he 'checked it all out again to the last cent, during the two terms for which Mrs. Eliza Lau-rens was his surety. It cannot be doubted, that the Act means, when the Master has deposited a fund, that he should let it remain on deposite. It would be the merest trifling to say, that his making a deposite is a compliance with the requisition of the law, when he forthwith withdraws it on his own private check. As he did not check it out by the order of the Court for the purpose of investment, or in payment of the parties entitled, he must have checked it out for his own private uses. The manner of checking, as to the amounts and dates, also leads to this conclusion. If the fund had been suffered to remain on deposite, as the law intended, it would have been secure. His checking it out, without justifiable reasons, or an attempt at explanation, was an application to his own, or improper uses. It was a misappropriation of the fund, which, occurring during the official terms, for which Mrs. Eliza Laurens was responsible, fixed a permanent liability on her.
    If the provisions of the Act of 1840 were faithfully observed, questions like this could never arise. It would greatly enhance the security of suitors in this Court, and dimiAish the liability of sureties. It would free the fiscal officer of the Court from many temptations to an abuse of his trust. And it would most effectually prevent the perplexing questions which arise between the different sets of sureties on the official bond of a Master, who has held office for several successive terms.
    The Master’s report has not subjected the estate of Mrs. Laurens to any greater liability than would be warranted by the foregoing opinion of the Court. And the first exception is therefore overruled.
    As to the second exception, I shall add but a word or two of concurrence in what the Master has said in his report. His views on the subject are entirely satisfactory. I think it preposterous, on this evidence, to set up these bonds as having been intended as an investment of the funds of the estate of Timothy Street. As to their having been so charged, in the settlement of the estate of Mrs. Laurens, and as to the fact of Edward R. Laurens, her executor, having received credit for the amount of these bonds, as for so much money received by him, on them, for the estate of Street, I think, in the first place, that the said settlement, as evidence, was inadmissible, being res gesta between other parties than the plaintiffs; and in the second place, if admissible, it was inconclusive. The second exception is overruled.
    The third exception is also overruled. The most rigid rule of calculation is applied, where the accounting party is a defaulter and refuses to account. I think the mode of computation sufficiently lenient in this case.
    The fourth exception is sustained. This is not a case which comes within the provision of the Act of 1840, to which the Master refers. That Act, (Sec. 13, p. 114,) declares, “ If any Master or Commissioner in Equity shall be ordered by the Court to invest the funds in his hands, and the accumulations of interest thereof, when received, by him, as fast as received, in stock or other funds yielding interest, and he shall neglect to do so, he and his sureties shall be chargeable with compound interest upon all such sums, to be calculated at half-yearly periods, from the time when such sums, and the interest thereon, were received, respectively.”
    In this case, the Master was ordered to invest the fund, but not the accumulations of interest. It is clearly not a case under the Act, whose provisions, in this respect, are highly penal. I am not to extend its penal operation by construction — particularly in the case of a surety, who has been guilty of no default, and whose duty is only to respond to the defaults of her principal. Every case of payment by a surety is one of hardship. They are favored in Equity; at the same time, they are made rigidly to respond to all just and fair demands against their principal. All that the provisions of the Act of 1840 requires, is full indemnity for the interest upon interest, which he would have received, if the accruing interest had been invested, in pursuance of the order.
    In this case, the parties entitled to the fund will be fully indemnified, if they receive the fund ordered to be invested, with simple interest thereon, from the time when it should have been invested. The opinion of the Court is, that the estate of Mrs. Eliza Laurens is not responsible for any defalcations of Edward R. Laurens, after the expiration of his last term of office, for which she was the surety. It is further the opinion of the Court, that the estate of the said Eliza Laurens is only to be charged with interest on the amount of the indebtedness of the said Edward R. Laurens, at the expiration of the last term for which she, the said Eliza Laurens, was his surety, with simple interest thereon from that time to the time of payment. It is so ordered and decreed. It is further ordered and decreed, that the Master’s report be recommitted, and made to conform with this decree.
    The defendants appealed, on the grounds :
    1. The decree of 1836 directs the Master to invest the proceeds of the Broad-street house, and the Pinckney and Meeting street lots. The Pinckney and Meeting street lots never came to the hands of Mr. Laurens. The proceeds of the Broad-street house came to his hands, and were invested. So that the liability of Mr. Laurens is on account of the sale of the East Bay and Queen street property only, which form part of what the decree of 1836 calls the residue. But there is no direction to invest the proceeds of that residue ; and the money received by E. R. Laurens was, in contemplation of law, in his hands, when his office expired on the 9th December, 1844, and was transferred to the responsibility of his subsequent sureties. So that the decree ought to have been in favor of the defendants ; and the decree in favor of complainants is founded in a mistake in fact.
    2, That the bonds' which were paid out of Mrs. Laurens’s estate, to the Master, in 1846, ought to stand as a credit against any default to which her estate was liable, at the time of her decease.
    3. That the evidence taken by the Master is sufficient to raise the presumption that they were entered into by Mrs. Lau-rens for the express purpose of covering the liabilities of her son to the estate of Street, or to some other suitor; and it would not make any difference whether they were applied to one suitor or another. That the estate of Street has had the benefit of them so far as this, that the payment of these bonds in 1846, creates a demand against the sureties who were responsible.
    4. That as between the sureties of 1844 and the prior sureties, the sureties of 1844 are in the same situation as if they had become the sureties of a new Master, who received and wasted the bonds which the estate of Mrs. Laurens has paid.
    5. That notwithstanding the irregularity of Edward R. Lau-rens in vesting the funds of Street in the bonds of Mrs. Lau-rens, payable to the Master, without designating the parties beneficially entitled, the successor of Mr. Laurens and his sureties would have been liable for the misapplication of them, if such successor, being a different person, had received them, and claimed and received payment for them, as bonds taken for the benefit of the estate of Street.
    6. That in every view of the subject, the equities of the legatees of Mrs. Laurens are entitled to preference, not only over the sureties of the bond of 1844, but over the creditors.
    7. That interest should be charged according to' the rule laid down in Diwon vs. Hunter, (3 Hill, 204,) and not in the manner stated in the Master’s report, and confirmed by the decree.
    
      Lesesne, Petigru, for appellants,
    cited Schnell vs. Schroder, Bail. Eq. 334; Joyner vs. Cooper, 2 Bail. 203; Gray vs. Brown, 1 Rich. 353; Act 1840, § 16,20, 26, 11 Stat. 108Uni-ted States vs. Ecford, 1 How. 250 ; Baker vs. Preston, Gil-mer, 232; Arlington vs. Merricke, 2 Saund. 403 ; So. Ca. Society vs. Johnson, 1 McC. 41; Peoplevs. Jansen, 7 Johns. R. 332.
    
      
      Magrath, Memminger, contra,
    cited Field vs. Pelot, McM. Eq., 399; Pratt vs. Northam, 5 Mason, 95 ; Raphael vs. Boehm, 11 Yes. 106 ; 12 Ves. 127 ; 7 Johns. Ch., 623; 1 McC. Ch. 220 ; 2 McC. Ch. 10, 203, 265; Hill on Trustees, 374.
   The opinion of the Court was delivered by

DargaN, Ch.

The first question made under the appellants’ first ground of appeal depends upon the construction of the decree of 1836, in the case of Thaddeus Street and Daniel Boinest, against the widow and children of Timothy Street, deceased. That decree is in the following words:

“ 1. The report of the Master in this case having been read, it is ordered that the same be confirmed. It is further ordered and decreed, that the contract for the sale of the house and lot at the corner of East Bay and Broad street, in the proceedings set forth, be confirmed, and that the Master, on compliance with the terms of sale, do execute titles therefor to the said Benjamin Smith. !
“ 2. It is further ordered and decreed, that the two lots in Pinckney-street and the two lots in Meeting-street be sold by Thaddeus Street, either at public or private sale, with the approbation of the Master of this Court, and that the Master do execute titles therefor to the purchasers, provided he approve the price and terms of sale agreed on.
“ 3. It is further ordered, that the two stores on East Bay-street, the warehouse in Gillon street, and the lot and dwelling house in Queen-street, be sold by Thaddeus Street, at such time hereafter as by himself and Mrs. Street, the widow of Timothy Street, may be deemed expedient, and that the Master do execute titles therefor to the purchaser, provided he approve the price and terms of sale agreed on.
“4. It is further ordered, that the proceeds of the sale of the house at the corner of East Bay and Broad streets be partitioned as follows: viz. one third part thereof paid to Thaddeus Street, one third part thereof to Daniel Boinest, and the remaining third part thereof to the Master of this Court, for the dis-tributees of Timothy Street, deceased. That the proceeds of the sales of the lots in Pinckney-street be also partitioned equally between Thaddeus Street and the distributees of Timothy Street, and that the moiety belonging to the distributees of Timothy Street, together with the proceeds of the lots in Meeting-street, be paid to the Master of this Court.
“ 5. It is further ordered, that the Master do invest, in his official name, the amount coming into his hands from the sales aforesaid, on account of the distributees of. Timothy Street, in such manner as may be agreed on by himself and the administrators of Timothy Street, to be held for the use of the legal distributees of Timothy Street, and transferred to the parties who may be decided to be entitled thereto.
6. And it is further ordered, that on the sale ojf any 'part of the residue of the real estate in bill mentioned, the proceeds thereof be partitioned as follows : viz. one half thereof to Thaddeus Street, and the remaining half to the distributees of Timothy Street, deceased, to be paid to the Master of this Court, and distributed among the representatives of Timothy Street, by the future order of this Court.
(Signed) HENRY W. DeSAUSSURE.”
January 23, 1836.

From a proper interpretation of this decree, does it appear that the Master was directed to invest the shares of the heirs of Timothy Street in the proceeds of all the sales ordered in the decree 1

On the"part of the appellants, it is contended, that there was no order for the investment of the proceeds of the sale of the two stores on East Bay, the warehouse in Gillon-street, and the dwelling house in Queen-street. To sustain this view, reference is made to the sixth or last clause of the decree, which, it is said, relates only to the lots which have been mentioned above; and this clause decrees a distribution, and orders the shares of the distributees of Timothy Street to be paid to the Master, but does not order an investment.

It was for the share of the heirs of Timothy Street in these lots that the defendant, Eliza Laurens, is made liable by the Circuit decree. And the argument is, that as E. It. Laurens, the Master, was not ordered to invest this fund, he has committed no default or devastavit, for which Eliza Laurens, as his surety, would be liable. This, I think, would be giving a narrow and erroneous construction to the decree. The first, second and third clauses direct a sale of all the real estate belonging to the parties that are mentioned or described in the pleadings. And by the fifth clause it is “ ordered, that'the Master do invest, in his official name, the amount coming into his hands from the sales aforesaid, on account of the’ distributees of Timothy Street.” It would be illogical, and a perversion of language, to say that the part of the order quoted, which directed an investment, did not relate to all the sales which had been previously ordered.

If this be the true construction, it is asked, for what purpose was the sixth clause intended ? This question admits of an easy and satisfactory solution.

An attentive consideration of the decree will show that its objects were three-fold. The first object was to order a sale; the second was to effect a distribution; and the third was to provide a proper investment and security of the share of the heirs of Timothy Street, who were infants. The fourth clause directs a distribution of all the lots which had been ordered to be sold in the three preceding clauses, except the two stores on East Bay, the warehouse in Gillon-street, and the dwelling house in Queen-street. This is followed by the fifth clause, which orders the Master to invest, in his official name, the amount coming into his hands from the sales aforesaid, (that is, the sales which had been previously ordered,) on account of the distributees of Timothy Street. This is followed by the sixth clause, which, without modifying or contradicting in any manner the previous parts of the decree, simply decrees a distribution of the proceeds of the sales of the two stores on East Bay, the warehouse in Gillon-street, and the dwelling house in Queen-street, which had not been done in any previous part of the order. The Court is of the opinion that the decree of 1836 admits of no other reasonable or consistent interpretation.

Having arrived at this conclusion, it follows, that by the terms of the decree, the Master was bound to invest the share of the heirs of Timothy Street in the proceeds of all the sales ordered by the said decree. This he has not done; and the consequence is, that the shares of the heirs of Timothy Street are not now forthcoming, having been wasted by the said Master. And this default having been committed within those official terms for which Mrs. Eliza Laurens was his surety, she becomes liable to the distributees of Timothy Street, upon the principles laid down in the Circuit decree. I do not know that I could make these principles any clearer than I have in that decree. Suffice it to say, that this Court fully concurs in the views that I have therein expressed. And, in fact, they were not controverted on this trial.

But, admitting the construction of the decree of 1836 contended for on behalf of the appellants, and that the Master was not ordered to invest this fund by that decree, this Court is of the opinion that the Master committed a default, in not depositing the fund in Bank, as required by the Act of 1840. And this default having been committed during those official terms for which Mrs. Laurens was his surety, she becomes, on that account, liable. The Master did deposite the fund in Bank, in his official name, for the estate of Street, but he very soon after-wards drew it all out, on his own private checks. This course of the Master, to deposite money in Bank, and to draw it out again on his own private check, is not a compliance with the provisions of the Act of 1840, according to their true intendment. The object was to afford security to the parties, whose funds were in the keeping of the Master. But what security would it be to deposite, and then to check out the fund ? The Court would be wanting in the discharge of its duty, if a Master were permitted, by such subterfuges as this, to evade the plain intent of the law.

Furthermore : Mr. Laurens not only checked out the funds of the estate of Timothy Street, which he had deposited, but he misappropriated them. An inspection of his Bank account, and other evidence reported by the present Master, convince us, that he not only checked out the fund, but that, in checking it out, he applied it to his own private use. And this devastavit, having occurred during the official terms for which Mrs. Lau-rens was his surety, that alone would make her liable. For it cannot be presumed that he paid over to his successor, (who in this instance was himself,) a fund which he is proved to have misappropriated, and applied to his own use, previous to the appointment of his successor. I need say no more on this branch of the case.

The second ground of appeal relates to the bonds of Mrs. Laurens to the Master, (Edward R. Laurens,) the amount of which, the appellants contend, should be allowed, as credits on the claim of the plaintiffs. For the evidence on this subject, I refer to Master Tupper’s report, where it is given in much detail. ■ The bonajides of these transactions is very questionable. There are not wanting circumstances to warrant the suspicion that they were not intended as securities for any estate in particular, but that they were designed to be applied and used as Mr. Laurens’ emergencies might require. The consideration of these bonds does not appear. They are all payable to Edward R. Laurens, Master in Equity, his successors in office or assigns. On each of them is endorsed an acknowledgment of payment in full by Mr. Laurens, which is without date. The bonds do not show upon their face to what estate they belong,. or for what purpose they were given. On the first bond, 10th January, 1841, is endorsed “ Eliza Laurens to Master in Equity, for estate of Street, $1,082 33.” On the second bond, dated 14th March, 1839, is endorsed “Eliza Laurens to Master in Equity, bond for $766 80,” with no indication of its belonging to any estate. On the third bond, dated 14th March, 1839, is endorsed “ Mrs. Eliza Laurens to Master in Equity, for Warren Andrews et ux, bond for 634 30.” The words “Warren An-drewsetux” are stricken out, and there is no further explanation. On the fourth bond, dated 19th January, 1841, is endorsed “ Eliza Laurens to Master in Equity, for estate of McLeod, $2,207 58.” The words “ for the estate of McLeod ” are stricken out, and January, 1845, for estate Street,” are added. On the fifth bond, dated 19th January, 1841, is endorsed “ Eliza Laurens to Master in Equity, for estate of H. P. Holmes, $635.”

Mr. Laurens was the executor of Eliza Laurens. In a settlement of her estate, he presented these five bonds as demands against that estate, as being held by him for the estate of Street, together with many other bonds of a similar character, belonging, as was stated, to other estates, amounting, in the aggregate, to $61,911 67. For all of which, it' seems, Mr. Laurens, as executor, was allowed credit, on balancing his accounts.

Under these circumstances, the appellants seek to set up the amount of the five bonds before mentioned, against the claims of the plaintiffs pro tanto. It is admitted that these bonds cannot be regarded as investments for the estate of Street. But it is argued, that having been actually paid by Mrs. Laurens for the estate of Street, to Master Laurens, as his own successor, and after the expiration of the time when the former was bound as his surety, they should be allowed as payments, though they might not be allowable as investments.

If they were not intended as investments for the estate of Street, then their payment or non-payment is of no concern to that estate. The Court perceives no sufficient evidence to connect those bonds with the estate of Street. The fact that Mr. Laurens was allowed credit for the amount of those bonds, in the settlement of his mother’s estate, as due to the estate of Street, does not conclude the plaintiffs on this point. They were not parties to those proceedings. They can still deny, and do deny, that they had any concern or interest in those bonds. In this view of the case, the payment or non-payment of the bonds becomes, as to these parties, an immaterial fact. I will not enlarge further upon this subject, but ■ again refer to Mr. Tupper’s report. This Court concurs, as the Circuit Court did, in the views therein expressed.

Such being the decision of this Court upon the second ground of appeal, the consideration of the other grounds of appeal becomes unimportant.

It is ordered and decreed that the Circuit decree be affirmed, and that the appeal be dismissed.

Johnston, Dunkin and Wardlaw, CC., concurred.

Decree affirmed.