Case ID: sc-eq_8/html/0460-01.html
Source: Caselaw Access Project
Author: {"author": "Johnson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles Brown, Administrator of Charles Butler, v. John Vinyard.
    To excuse an executor from the payment of interest on the annual balances in his hands, it must appear, not only that there were debts due by the estate, but that he retained the funds in his hands to meet them. If he used the money as his own, he is liable for interest. The rule, which allows an executor to retain funds for the purpose of meeting debts, does not mean a hypothetical retaining.
    Where an executor has not returned an account of the crops of the estate, but is charged with a specific sum for the rent of the lands, and the hire of the slaves, he is not intitled to six months to invest the fund, but is liable for interest from the end of the year.
    The accruing interest on the annual balance in the hands of an executor is to be set off against his disbursements in each year; and if the disbursements equal, or exceed, the annual interest, the balance remaining, after deducting the aggregate of principal and interest, is principal, on which he is chargeable with interest for the succeeding year.
    An executor, who has been in possession of the estate, under a will, the probate of which was subsequently set aside, is not intitled, on a bill against him by the administrator of the deceased for an account of the estate, to an allowance for fees paid to counsel for defending the will, nor even to the usual fee to his solicitor in the suit for an account.
    Before Harper, Chancellor, at Charleston, May, 1830.
    Charles Butler, the complainant’s intestate, died in 1820, and administration of his estate was granted to the present complainant, and defendant, jointly. Shortly afterwards a paper purporting to be the will of the deceased, was found, and admitted to probate ; whereupon the previous grant of administration was revoked, and ihe defendant Vinyard qualified as executor of the will. Some years subsequently, proceedings were instituted to set aside the will, and after much litigation, the paper purporting to be a will was declared to be a forgery, and the probate was cancelled ; but without any evidence implicating Mr. Vinyard. Administration of the estate of Charles Butler was then committed to the present complainant, who in 1826 filed this bill for an account of the estate whilst in the hands of the defendant, as executor of the sup. posed will.
    The matters of account were referred to the commissioner; from whose report it appeared, that the defendant had not kept any separate account of the crops made on the lands, or by the slaves, of the intestate, but that believing the will to be genuine, and his own children being the parties chiefly interested under it, he had used the land and slaves of the intestate indiscriminately with his own. The account was therefore made up by charging him with a specific sum, annually, for the rent of the land, and the hire of the slaves. The cause now came up upon exceptions to the commissioner’s report, which will be sufficiently understood from the decree.
    Harper, Ch. I shall consider the several exceptions in their order. The first is, that the commissioner has allowed interest on moneys retained by the defendant to pay debts and current expen. ces of the estate. The general rule is, certainly, that an executor shall pay interest on the annual balances in his hands. He may be excused however, if it appear, that he retained the money idle in his hands to meet debts and expences. There was but one considerable debt against the estate, which the defendant litigated for four years, when a judgment was finally recovered against him. Did the defendant retain the funds with a view to meet that demand ? He mixed the slaves of the estate with his own, and made crops, of which he returned no account. It must be supposed that he used the proceeds of the crops as his own. It is on this ground that he is charged with interest. Having the use of the funds, it is as if he were shewn to have made interest. There is not, in fact, any ground to conjecture, that he did keep funds in his hands unemployed, with a view to meet that debt. The rule, which allows an executor to retain funds, for the purpose of meeting debts, does not mean a hypothetical retaining of funds. The exception must therefore be overruled.
    .The second exception is, that the commissioner allowed interest from the end of each year, without allowing a term of six months t0 make investments. I think the reasoning of the complainant’s counsel on this point correct. If the defendant had returned an account of the crops, he would have been intitled to a reasonable time after the proceeds were received, to make investments. But he is charged as the hirer of the slaves, and the land; and that was a debt from the end of the year. • Besides as the defendant received the land and slaves early enough in the first year to make a crop, he might have been properly charged with hire at the end of the year, or on the first of January of the following year: but the commissioner has made up his accounts to the twenty-first of May, annually. This effects a saving of interest to the defendant. If the hire be considered to have been in his hands on the first of January, it maybe said that he has been allowed nearly five months to make investments. This exception is also overruled.
    The third exception, which is, that the commissioner has allowed annual rests in the account, thereby compounding the interest, is misconceived. According to the rule adopted by the Court of Appeals in Black v. Blakeley, 2 M’C. Ch. 1, the accruing interest is to be set off against the expences of the year : if those expences exceed the interest, as in this case they did in the year 1822, then deducting them from the aggregate of principal and interest, nothing is left but principal, on which the interest is calculated for the ensuing year. In those years in which the expences fell short of the interest, it will be perceived, that the commissioner has allowed interest only on the principal, and not on the balance of the accruing interest. The exception is overruled.
    The fourth and fifth exceptions are, that the commissioner has disallowed the fees paid to counsel for defending the will, and has also disallowed the usual fee to the defendant’s solicitor in this suit. I think the reasoning of the commissioner conclusive as-' to these exceptions. If the defendant has any equity to be reimbursed the expences of litigating the will, it is against the legatees for whose benefit he was litigating, and not against the present complainant. And as to the expences of the present suit, I perceive no claim, that any other defendant, who has unsuccessfully litigated a hostile suit, would not have. These exceptions must therefore be also overruled.
    It is ordered, and decreed, that the commissioner’s report be confirmed.
    The defendant appealed, and now moved that the decree might be reformed, and the account referred back to the commissioner to be restated conformably to the exceptions.
    
      H. A. De Saussure, for the motion.
    As to the allowance of . , , , . , interest, and the tune from which it should be computed, cited Taveau ». Ball, 1 M’C. Ch; 459, 461, Pace ». Burton, lb. 250, and Wright v. Wright, 2 M’C. Ch. 185. And on the charge for counsel fees, cited Warden'». Burts, 2 M’C. Ch. 76, Wright». Wright, lb. 191, and Allen ». Dundas, 3 T. R. 125.
    Memminger, contra,
    
   Johnson, J.

This Court concurs with the Chancellor in the views he has taken of all the questions that have been raised on, this motion. The decree is therefore affirmed.

O’Neall, J., and Harper, J., concurred.

Decree affirmed.