Case ID: va-patt-heath_1/html/0517-01.html
Source: Caselaw Access Project
Author: {"author": "GILMER, J-,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Doswell v. Anderson et als.
    January Term, 1855,
    Richmond.
    Absent, Cloptoet, J. (He decided the case In the court below.)
    Marriage Agreement — Trust Property — Debts of Ces- . tuís Que Trust. — M C, Raving- contracted an engagement of marriage with one W B, conveys, with • his assent, land and slaves, in trust “for the sole and separate use of herself during her life, and the profits thereof to he applied to her sole and'separate use, and the support, maintenance and education of her only child, Lorenzo, and any other child or children she may hereafter have, at her discretion, free from," &c., and for the use of such children as she may leave at her death, equally to he divided. M C contracts debts during and after the coverture, with the trustee and . other persons. Held :
    i. Same — Same—Same—Profits of Estate — Necessaries. — The trust property is not liable to he sold for. the payment of such debts contracted by M - C beyond the profits of the trust estate, although Some of them were contracted for necessaries ■ ■ -furnished for the support and maintenance of the cestuis que trust.
    2: Same — Same—Same—fledicai Services. — That the trust subject is liable for the payment of a debt contracted for medical services, rendered the
    ■ slaves and the beneficiaries.
    3. Same — Same—Same—Pees of Counsel. — Qu^RE : Whether the trust subject is liable beyond the .profits for fees of counsel employed by the cestuis due trust and trustee.
    4.. Same — Same—Same—Profits of Trust Fund Inadequate. — That in such a case, if the profits of the trust fund prove inadequate for the purposes of the trust, it is the duty of the trustee or the cestuis que trust to invoke the aid of a court of •'equity.
    
    *Note by tbe Reporters. — 1The case of Nickell et ais. v. Handly etals., reported in 10 Grat. 336, had not been published, though decided before the decision in this cause, and for thatreason a statement of the result of that case is appended :
    “Á testatrix devises and bequeaths a small farm, slaves and other property on the land, to a trustee for the life of her daughter IT, remainder to the children of H living at her death. And the trustee is directed so' to use and conduct the farm, slaves and other property, as to be most advantageous to the interests and support of the said H and her children during her life-time. There are five children, and the husband of H is dead. H becomes indebted, judgments are recovered against her, and she is discharged as an insolvent debtor. Her creditors then file a bill to subject 'her interest in the property to the debts. Held :
    “1. H and her children are not entitled to have set apart for each of them an equal share of the trust property, or its annual products, but it is to be held by the trustee, and the annual products are to be applied to their support according to the necessities of each.
    “2. The creditors would only be entitled to the ratable portion of H of any surplus of the annual products, of the trust subjects, after providing for the support of herself and family, and as any such surplus is not alleged or shown to exist, the bill was properly dismissed.
    “3. If any surplus product now exists, or shall hereafter exist, the plaintiffs may file a hill to subject it, notwithstanding- the dismissal of this bill."
    *On the 20th day of December, in the year 1828, Meriel H. C. Colley, otherwise called Meriel H. C. Rhodes, a widow, being about to marry William Boyer, made, with his privity and assent, a deed, by which she conveyed to Charles C. Mitchell her whole estate, consisting of a tract of two hundred and forty-two acres of land and sixteen negroes, in trust for her sole and separate use and benefit during her life, and “the profits to be applied to her sole and separate use and the maintenance and education of her only child, the said Charles Lorenzo, and any other child or children she may hereafter have, at her discretion,” remainder in fee after her death to the said Charles Lorenzo and any other child or children she might thereafter have. Boyer died childless, and she afterwards married one Apperson, by whom she had two children, named Elizabeth Ann and Sarah F. Apperson, who were infants during this controversy. Mitchell was removed from the office of trustee by an order of the County Court of Hanover and Michael R. Jones was appointed in his stead. Jones was afterwards removed by another order of the same court and William W. Anderson was appointed in his stead, and by another order of the said county court the said Anderson was removed and the appellant appointed in his stead. Under the administration of Mitchell the trust fund underwent no diminution; *under the administration of Jones there was a balance of $289 due to the fund arising from the price of one of the trust slaves who had been condemned to death. Anderson kept a country store in the neighborhood of Mrs. Colley; he was trustee for about four years, and during that time he permitted the whole income, amounting to nearly $350 per annum, to be consumed, and one of the beneficiaries in the deed, Mrs. Colley, to contract a debt of more than $600 with him, a debt of $268 38 with another country store keeper named William Bagby, and another debt of $194 to her physician, Dr. George .Fleming.
    In January, 1846, Anderson, Bagby and Fleming filed their bill in chancery in the County Court of Hanover against Michael R. Jones, Mrs. Apperson, her three children before mentioned, and the appellant, claiming that large debts were due to them and asking for satisfaction out of the principal of the trust estate. The appellant and the infants, by their guardian ad litem, answered and denied the claims as illegal, and that of Anderson as unjust and in law fraudulent. Michael R. Jones also answered, denying any indebtedness to the trust estate, and .claiming that the beneficiaries were indebted to him for necessaries furnished them. Accounts were ordered and reported, showing debts from Mrs. Apper-son to Anderson of $912 83; to Fleming of $194 51, to Bagby of $253 43, and that a" large portion of the amount due to Anderson was contracted before he became trustee, and, commencing as far back as 1835. These balances reported by the commissioner were much less than the amounts claimed. He had excluded much of Anderson’s account, being items for ardent spirits, Candies and cakes, and he had also reduced the charges one-fifth.
    The cause having been removed to the Circuit Superior Court of Hanover county, John Page presented, on the hearing, a petition to the judge, setting forth, that he had been counsel for Mrs. Apperson and her three children, defendants in the cause; that he had *drawn their answers, taken depositions in their behalf, and done all that his professional skill enabled him to do for their interests in the suit; that he had received no compensation for his trouble, and he therefore prayed that he might be allowed a fee of fifty dollars out of the trust fund.
    The Circuit Court, being of opinion, “that the life-estate in trust, held by the defendant Meriel H. C. Apperson under the deed, exhibited in this cause, of the 20th December, 1828, is subject for her debts, and may be so appropriated; and being further of opinion, that the increase of the said property, so settled by the said deed, may be likewise applied by the court to the sustenance of the said property and the maintenance of the said Meriel H. C. Ap-person and her children, and it being suggested and consented to, as well by the counsel for the complainants as by the counsel for the said Apperson and her children, that some portion of the said increase of the said properly, with the fund now in the hands of the administrator of Michael R. Jones, dec’d, should be thus appropriated, instead of diverting the income of the whole for a length of time to the payment of the said debts, and thus depriving the said Ap-person of the means of maintaining her infant children provided for in the said deed,” confirmed the report of the commissioner, and decreed, that the balance of the sum of $289, with interest, due from the estate of Michael R. Jones to the trust estate, after deducting the sum of $137 22, with interest, due from Mrs. Apperson to Jones’ estate, should be paid by Jones’ administrator to the appellant; that the appellant should pay to Anderson, Bagby and Fleming, respectively, the amounts of their claims, as reported by the commissioner, and to John Page a fee of fifty dollars; that he should sell so many and such of the increase of the said slaves in the said deed as he might judge best and as might be required, together with the sum directed to be paid to him by Jones’ administrator, to pay the sums so ordered to be paid by him.
    *From this decree Doswell, the trustee, appealed to this court.
    Lyons, for the appellant:
    3. As to debts to Anderson, the trustee, contracted before he was appointed trustee, the cestuis que trust could not bind the trust fund without the consent of the trustee.
    2. As to debts contracted with Anderson, while he was trustee, they could not be allowed, because Anderson stood in the double relation of buyer and seller.
    3. The parties to the deed limited the trust fund to specific objects. The principal was limited to the children, and could not be absorbed for the use of the wife. This principle, if applicable to strangers to the trust, how much more stringent is it in its application to the trustee, whose duty it is to protect and preserve the trust subject for the purposes of the trust. Le-win on Trustees, 288; 24 Law Library, 146. A trustee is not to derive any benefit from the trust; he is not to be a purchaser. 24 Law Library, 190; Lewin on Trustees, 376; Markham v. Guerrant & Watkins, 4 Leigh, 279. The profits even cannot be applied so as to destroy and swallow up the maintenance of the beneficiaries. It is true, a court of equity may authorize the sale of the principal of the trust fund, where it is necessary for the support of infant cestuis que trust, but a trustee cannot pledge the prospective profits.
    Patton, for the appellees:
    There is no foundation in the facts of this case to impute any fraudulent misconduct to the trustee. He did imprudently yield to the importunities of the woman, and permit her to take up articles and to contract debts, which she ought not properly ,to have done. But these claims were rejected by the court below. The facts show that the items of expenditure allowed by the court below were necessary expenditures. Anderson’s account was purged by an examination by a *commissioner of the court below, whose re-' port was not excepted to. It was recited in the decree that the sale was suggested, and consented to, by the counsel for the complainants, and by the counsel for the beneficiaries, but there was no consent on the part of the trustee. It was best for the interest of the beneficiaries, that the sale should be decreed. A trustee in a marriage settlement is a merely formal contrivance to protect the property from the husband. If the wife or children had taken up necessaries without the knowledge or consent of the trustee, he would still have been bound for them. One of the items was for medical services, and the other items allowed were equally necessarjD The doctrine in Myers v. Wade, 6 Ran. 444, is no longer authority, and has been reversed by statute.
    If the trustee has done what the court upon application would have authorized him to do, the court will now confirm and sanction his action. The only question is, whether the circumstances justified the expenditure. There is no question, as to the power of the court to sell a portion of the trust subject, when necessary for the maintenance of the cestui que trust and the preservation of the trust subject. Lewin on Trusts, 412; 24 I/aw Library, 208.
    This case may be distinguished from Markham v. Guerrant & Watkins, 4 Leigh. There the question was whether the husband should be allowed to contract debts on the faith of his interest in the joint fund. Might not in this case the wife have encumbered her whole interest in the estate? By the terms of the deed she was to receive the entire proceeds of the trust fund, and apply them to the maintenance and education of her children, “at her discretion.”
    This was a marriage settlement. After the coverture in England, the wife’s rights are restored to her as if there had been no settlement. Lewin on Trustees, 156. 24 Law Library, 79.
    * (By TYLER, J. These were cases, in which there were no limitations over.)
    Patton. In this case, it is expressly provided that the trust is for her sole and separate use, &c., to be applied for the maintenance of herself and children, “at her discretion.”
    2 Bright on Husband and Wife, 274, 278, Acton v. White. The wife may sell or mortgage her interest for the purposes of the trust. Upon the facts here Mrs. Apperson has merely carried out the purposes of the trust.
    Lyons, in reply,
    argued,
    That the expenditures were not necessary; that the items stricken out of Anderson’s account by the commissioner showed the improvident character of his dealings with the cestui que trust; that in most of the cases cited, where a sale of the trust subject had been allowed, there were no limitations over; that where a grantor has directed the profits only to be applied to certain purposes, the courts have no authority to make a different disposition of his property, by directing the capital fund to be applied to those purposes.
    
      
      Fiduciaries — Interests and Duty Conflict.- The language of Judge Gilmer lit the principal case, that .when the interest and duty of a fiduciary are placed in opposite scales, we need no law hooks to teach us which will preponderate, is quoted with approval in Thomas v. Turner, 87 Va. 19, 12 S. E. Rep. 149. See foot-note to Nickell v. Handly, 10 Gratt. 336.
    
   GILMER, J-,

delivered the opinion of the court.

In 1828, Meriel H. C. Colley, being then a single woman, and having an infant son, named Charles Lorenzo, and having contracted marriage with one Wm. Boyer, conveyed to Charles C. Mitchell, as trustee, a tract of land and certain slaves, in trust, for the sole and separate use of her, the said Meriel H. C. Colley, during her life, and the profits thereof to be applied to her sole and separate use, and the support, maintenance and education of her only child, the said Charles Lorenzo, and any other child or children she might thereafter have, at her discretion, free from the direction and control of her said intended husband. Boyer died soon *after the marriage, and the said Meriel after-wards married one Apperson, by whom she had two children, Elizabeth Ann and Sarah E. Apperson, who were infants when the decree in this court ‘'was rendered in the Circuit Court. Mitchell continued to act as trustee for some time, when he was removed by an order of the County Court of Hanover, and Michael R. Jones appointed in his stead. He was removed by an order of said court, and Wm. W. Anderson appointed in his stead; and he was succeeded by George W. Doswell, the present trustee. While Mitchell acted as trustee, the profits of the trust property were sufficient for the support of the said Meriel and her children, and there was a balance found in the hands of said Jones as trustee of $289, arising-from the price of a slave embraced in the said deed of trust, who had been condemned for felony and executed.

Anderson was a merchant, and during the trusteeship of Mitchell, the said Meriel commenced dealing in his store, and continued to do so until after his appointment as trustee, and contracted a considerable debt. She also contracted a debt with William Bagby, who was also a merchant; and Dr. George Eleming raised an account against the trust fund, for medical services rendered the trust slaves and the beneficiaries. These three last named persons united in a bill in equity in the County Court of Hanover, to which the said Meriel and her children, the said Jones and Doswell, the trustee, were made defendants.

It is alleged in the bill, that the profits of the trust property are insufficient to support the said Meriel and her children, and to pay the said debts; and the prayer of the bill is, that so much of the trust property as may be necessary for that purpose be sold, or that for so much as the said Meriel may have bound herself,, her life estate in said property may be subjected. The trustee Doswell and the beneficiaries answered, contesting the right of the plaintiffs to recover; and the cause was removed to the Circuit Court of Hanover. *Mr. John Page, an attorney of that court, filed a petition in the cause, setting forth that he had been counsel for the trustee and beneficiaries, and praying that a fee of fifty dollars might be allowed him out of the proceeds of any property that might be sold. An account had been directed in the countj- Court, and the commissioner made a report, and the cause coming on to be heard-in the Circuit Court, the report of the commissioner was confirmed, and the court made a decree directing a sale of a sufficient number of the trust slaves to pay the debts of the plaintiffs, and of the petitioner, Page. Erom this decree, the trustee Doswell appealed.

The first inquiry to be made is, what are the duties of a trustee in a case like this? He seems to occupy very much the position of a guardian. “It is his duty to use the property conveyed to him in trust for those purposes, and those only, which were contemplated by the grantor; to account for and protect the property while the trust continues; to restore it to the parties when the trust is at an end, and not to avail himself of his fiduciary 'character for any object of personal benefit.” Adams’s Equity, 55. This is a brief outline of some of the most important duties of a trustee, almost every one of which Anderson, the trustee in this case, has violated. It has been the wise policy of the courts, to keep fiduciaries of every kind as disinterested as possible, to avoid any antagonism between their duty" and their interest; for when they are placed in opposite scales, we need no law books to teach us which will preponderate. But this trustee pursued a course, from the first, in violation of this salutary and fundamental rule, and, as might be expected, he is now found, not aiding in the defence of the beneficiaries, but attempting to subject a portion of the trust property' to the payment of debts contracted by Mrs. Apperson in a course of extravagance permitted, if not encouraged, by him, seeking to take advantage of his own wrong, and to profit by a violation of the trust and confidence reposed in him. His duty was plain; he should have ^limited the expenditures to the profits of the estate; and if they proved insufficient for the purposes of the trust, either he, or the beneficiaries, might have invoked the aid of a court of equity. The judge of the Circuit Court seems to have been of opinion, that the trust property was liable to be sold during the life of Mrs. Apperson, for the payment of her debts. In this opinion I cannot concur, either on reason or authority'. The property was conveyed in trust, for the joint support, maintenance and education of the grantor, Mrs. Apperson and her children ; and so long as the deed remains un-impeached, it would be wholly inconsistent with its provisions to sell, to pay the debts of one of the beneficiaries, the entire property. Hughes v. Pledge, 1 Leigh, 443; Munday v. Vawter, 3 Grat. 525.

The debt of Anderson before 1341, and the debt of Bagby, were both contracted with Mrs. Apperson alone; and the debt of Jones stands upon the same footing. We are not informed with whom Mr. Page, the petitioner, contracted; but however that may be, I think he cannot recover in this suit upon his petition, in the present condition of the trust fund. The money in the hands of Jones, and now in the hands of Saunders, his administrator, being the price of one of the trust slaves, executed as aforesaid, stands in place of the slave, and must be regarded as a part of the trust property; and I am of opinion, that the Circuit Court erred in decreeing that Saunders, administrator of Jones, should retain, out of that money, the sum of $137 22.

With regard to the account of Dr. Fleming, that stands on a different footing. It seems to be a reasonable one. The services were rendered to the beneficiaries and the trust slaves, and, no doubt, were necessary for their preservation. There was no improper dealing between him and any of the beneficiaries. When a physician is called on to visit the sick, humanity, and often urgent necessity', require his immediate attendance. He cannot stop to enquire from whence his pay is to come, or to bargain with a trustee; and concurring, as *we all cordially do, in the decision of the Court of Appeals, in the case of Markham v. Guerrant & Watkins, 4 Leigh, 279, I am of opinion, that this account, on the authority of that case, should be paid, even if it should be necessary to sell a portion of the trust property for the purpose.

Sound policy requires, that property conveyed in trust for infant beneficiaries, should be protected and preserved for their maintenance and education, and persons who seek to charge such property with the payment of their debts, must look to the deed — and in this case to the profits of the estate for reimbursement, and must deal with the trustee. They cannot be allowed to fake advantage of the improvidence or extravagance of an adult beneficiary, and to make that the means of stripping the infants of their property.

For the reasons set forth in the foregoing opinion, this court is of opinion that the decree of the Circuit Court, in holding that the trust property might be sold for the life-time of Mrs. Apperson to satisfy the demand of the appellee, Anderson, that accrued upon dealings before he became trustee, as well as upon dealings after the date of his appointment, and the claim of the appellee, Bagby, for like dealings, and in ordering a sale for the satisfaction of the fee of the counsel, Page, who was not a party, but came in by petition, and for decreeing against Saunders, administrator of Jones, for only the residue in his hands of the price of the condemned slave, after allowing him to retain a debt of his intestate not properly chargeable upon the principal of the trust fund, is erroneous, and therefore doth decree and order, that the same be reversed and annulled, and that the appellees do pay to the appellant his costs by him expended in the prosecution of his appeal here.

And this court, proceeding to render such decree as the Circuit Court should have rendered, it is adjudged, ordered and decreed, that the bill, as to the plaintiffs Anderson and Bagby, be dismissed, and that they pay to the defendants their costs by them expended in their ‘^defence in the Circuit Court; that the defendant Saunders, administrator of Jones, do, out of the assets of his intestate in his hands to be administered, pay unto the present trustee, Doswell, the sum of $200, with legal interest from the 11th May, 1839, till paid, and that the said Doswell do, out of the said sum, when collected, pay to the plaintiff Fleming the sum of $173 50, with interest from the 31st day of December, 1835, till paid; but, as between the plaintiff Fleming and the defendants in the court below, the parties, plaintiffs and defendants, pay their own costs.