Case ID: tenn_25/html/0215-01.html
Source: Caselaw Access Project
Author: {"author": "Gkeen, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hester et als. vs. Wilkinson et als.
    1. A deed made to defraud 'existing creditors is void as to subsequent creditors.
    2. A.voluntary settlement is void as against existing creditors, yet if they are provided for on the face of the deed, or 'if it ,be the .understanding and agreement of the parties at the time of the execution of the deed, that all existing debts should be discharged, such facts would repel the idea of fraud and such deed of settlement would be valid as to subsequent creditors.
    3. Courts of chancery will not permit trustees of their, own authority to break ' in upon the capital of the trust estate, nor will they sanction air expenditure ' exceeding the income of the estate.
    4. The court will not hold the trustee responsible for wrongs to the trust estate in which he had no agency; and it seems a delay of suit by the trustee who resided in another State till the cause of action was barred by the statute of limitation would not be such.
    This is a bill which was filed in the Ghaneery Court át Pulaski, by Elizabeth Hester and others, her children, against John Wilkinson and others, for an account.
    John Hester, a man of wasteful habits, conveyed land and slaves to John Y. Wilkinson in trust for the benefit of his wife and children in-the State of North Carolina, on the consideration of love and affection. There were some debts existing against him at the time of the conveyance, but it was agreed with the trustee by the bargainor that they should be paid, and the trustee did pay them out of the effects conveyed to him. The property was removed from the State of North. Carolina to the State of. Tennessee.. The trustee remained in the State of North Carolina, but appointed an agent in the State of Tennessee to attend to his duties as trustee. A slave was sold to one Daniel, a defendant in the bill, and the proceeds applied in the purchase of necessaries for the maintainance of the family; • and one of the slaves was sold by the creditors of John Y. Hester, and no action brought by the trustee who resided in North Carolina, nor by his agent for the management of the trust estate in Tennessee. The bill seeks án account.
    The case was heard on bill, answer, replication and proof, by Chancellor Oahal.
    He; gave a decree for the complainants, and defendants, appealed.
    
      
      Wright, for complainants.
    1. The deed from John Hester to John Y. Wilkinson in trust for Hester’s wife and children must be regarded as valid and free of fraud. If Hester owed any thing at that time, those debts were to be, and in fact were paid. A man of wasteful habits like Hester, may very properly convey all he has to his Wife and children, taking care that his debts then outstanding are paid. Read vs. Livingston, 3 Johns. Ch. Rep. 497, et seq. et 501, 2; Smith vs. Greer, et al., 3 Hump. Rep. 121-2. The answer alleges no specific prior debts. — 3 Hump. Rep. 122. But be this as it may, this deed must stand as to subsequent creditors or purchasers. — Act 1801, ch. 25, (N. H. Rev. 351;) Marshall vs. Booker, 1 Yer. Rep. 14, 15; Bell vs. Blaney, 2 Murp. Rep. 171.
    3d. Complainants are entitled to recover of Daniel, the slave Tom’s, hire, and to have an account against John Y. Wilkinson as trustee of the deed. The conveyance is clearly valid between parties. Daniel is neither a creditor or purchaser of Hester. John Y. Wilkinson-accepts the deed and its trusts, gives Allen T. Wilkinson a power of attorney to manage the property for him, and under this he sells the boy Tom to Daniel. They all admit and act under the deed. The sale to Daniel was void. The trustee had no power to sell, and of course could delegate none. He in fact did not give any such power. A trustee could give no right toothers even to execute a trust. It is personal. Story’s Agency, 21, 22, 62 and 63. As to the slave Gloster, it is most manifest that John Y. Wilkinson should be charged with his value and interest. He pays no attention at all to the duties of the trust. The slave is sold to pay Hester’s debts; is carried to parts unknown and lost, and the remedy upon the officer suffered to be barred by the statute of limitations.
    And why should not Allen T. Wilkinson also be decreed to account for this slave? He disregards altogether the rights of the wife and children of Hester, and actually aided an officer in his sale. He had full notice, too, of the trust, and why does he not become a trustee? Even if a stranger intermeddle with an infant’s estate he is chargeable as guardian, &c. — 1 Mad. Ch. Pr. 91; Nelson vs. Allen and Harris, 1 Yer. Rep. 373-4.
    4th. It can make no difference that these slaves were sold, (if the fact be so,) to pay Hester’s debts. He of course, could not create debts or charges upon the property. If he could, the very purpose of the deed itself would be defeated. Neither can the capital of the estate be taken by the trustee or his agent, even for the debts of the wife and children.— The income is the proper fund for their support and main-tainance and if the trustee, or those who have in charge the estate, have gone beyond this, it was at their peril.— Such a course of conduct on the part of a trustee will not be sanctioned or confirmed by the court. — 6 Yes. Jr. 473; 2 McCord’s Ch. Rep. 211; 2 McCord’s Ch.Rep 58; 1 Mad. Ch. Pr. 346; 7 Monro, 150, 166; cited 1 Barb, and Harr; Dig. 591; 2 J. J. Marsh. 404; 1 Harr. Dig. 593.
    5th. Hester clearly had no interest in this property after the execution of the deed. His wife and children were tenants in common for life, and the remainder is in the children. Her interest is a sole and separate estate. — 8 Yer. Rep. 33. The two after born children can take here with the others.— Such is the intention of the deed and the intervention of the trustee preserves the estate for them. ■
    
      Jones and N. Brown, for defendant.
    A voluntary settlement is void as against existing creditors and being void as to existing creditors, is void as to subsequent creditors. See 3 Johnson, ch. 481; 3 Hump. 118; 5 Pet. 264.
    2. A trust estate is liable for necessaries furnished the estate. 1 McCord, Ch. Rep. 277; 4 Dess. 19,591; 1 Hill, 228; The trustee dischargedincumbrances on the trust estate to wit, debts existing at the date of the execution of the deed, and is entitled to be reiimbursed; 6 John. ch. Rep. 62. A trustee may break in upon the capital in case of necessity; 2 McCord, ch. 210, 56; 1 Munford, 119.
    It is a rule of equity that what a trustee would be compelled to do, is equally valid if done by the trustee without suit. 24 L. Lib. 209. .
   Gkeen, J.

delivered the opinion, of the court.

From this record it appears, that John Hester, in July, 1831, then of Granville county, North Carolina, executed to John Y. Wilkinson of Person county, North Carolina, a deed of trust, in which he conveyed 150 acres of land in Granville county, and five slaves--Lucy, • Hillman, Daniel, Amy and Gloster, with other property, in trust, that the said John Y. Wilkinson should keep the same in his “care, custody and control,” for the benefit and advantage of Elizabeth Hester, his wife, and her children, during her natural life, and at her death, for the same, and its income, to be equally divided between all the children of said Elizabeth.”

This' deed was duly proved and recorded, and Wilkinson accepted the trust. Wilkinson sold the tract of land and the slave Hillman in North Carolina. Hester and family removed to Giles county Tennessee, bringing with them the other slaves. Subsequently to their removal to Tennessee, Héster contracted debts, and judgments were obtained against him, and the slave Gloster sold to satisfy the same. The statute of limitations is- a bar to any recovery against the purchaser of Gloster, or against the officer by whom he was sold. The trustee appointed his brother, Allen T. Wilkinson, his agent in Tennessee to execute the trusts of the deed, and he has sold a negro'boy, Tom, son of the slave Lucy, to the defendant, Tilman R. Daniel, who still has him in possession.

1. It is alleged by the defendants that Hester was indebted at the time he executed the deed, and that being voluntary fraudulent and void as to existing creditors, it is also void as to subsequent creditors.

■ It is unquestionably the law, that if a party execute a deed to defraud his existing creditors, it will be void as to subsequent, as well as existing creditors. But a voluntary settlement, for the benefit of a wife and children, if fair, at the time, will be good against subsequent creditors of the person making the deed. In this case, although it is stated that Hester was somewhat indebted at tbe time the deed ■ was made, yet it is admittedly the trustee in his answer, that although no express provision is made in the deed for the payment of these debts, it was the understanding and agreement of the parties, that the trustee should pay such existing debts by the sale of so much of the property conveyed as might be necessary for that purpose.

This being the state of the facts, there is no. ground for assuming that any intentional fraud existed in the transaction.

2. The defendants allege that the estate was of a character that its profits were wholly inadequate for the support of the family, and that the trustee was compelled to contract debts and make advances for that purpose;- that the property sold in Tennessee vras disposed of for the payment of debts for necessaries for the family, and that as a court of chancery would have ordered these sales for their support-, this court will now sanction them or allow the trustee for the expended items.

It is .very probable that this estate was not sufficient to support his family from the profits alone. The slaves Were women and children, whose services could not be very profitable; and there is little doubt that the trustee has made advances beyond the income of the property. We think, as the master of the Rolls said in the case of Walker vs. Wetherell, 6 Ves. Jr. 473, “that the objection to an allowance for these ad vanees.on the part of the plaintiffs is rather ungracious.” These complainants would doubtless have'made greater complaint if the trustee had kept them in that situation in which they must have been, if' -maintained upon the profits of their estate alone.

But courts of chancery never permit trustees, of their own authority, to break in upon the capital of the trust estate, and to sanction the expenditure after it has been made, would give a license to trustees that would endanger estates committed to them. The benefieiai’ies in these settlements are usually in a helpless situation, either from infancy or cover-ture, and it is indispensable to the safety of the estate to hold the' trustee to a strict accountability. The land, negroes and other property sold in North Carolina, must be accounted for, allowing the defendant for all disbursements in payment of debts existing at the date of the deed, and for expenditures since that time for the support of the family, not exceeding the income of the estate.

The slave Tom, will be delivered up by the defendant Daniel, and his hire accounted for.

As to the slave Gloster, he was seized and sold by the creditors of John Hester, as his property. This was a wrong in which the trustee had no agency. But the complainants seek to charge him because he failed to bring suit to recover the negro in time to prevent the bar of the statute of limitations.

The defendant lived and still lives in North Carolina, a distance from the place of residence of these beneficiaries.

We think under all the circumstances, to charge him with the value of Gloster, would be an unreasonable exaction.

We are of opinion the decree be affirmed, with the exception of the point, reversed as to Gloster.