Case ID: sc-eq_1/html/0489-01.html
Source: Caselaw Access Project
Author: {"author": "Chancellor Rutledge", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Present — Chancellors Mathews and Rutledge.
    Tobias Bowles, and Susannah his wife, and others, vs. Charles, Thomas, and Glen Drayton, executors of John Drayton.
    cage exir.
    
      JULY, 1796.
    
    decree noor5, voL iL p'3S-
    A testator ial.g.e estat| ^dhis ^ns, them execu-^eqlieatlied* a legacy of fi^°Z‘tostb-g daughter, tot ber Pday of marriage, or ing'IV^-ears tTh® paid ammal-T , If s,hG age, or with. ieg)cyll%vas given over to q-be qualified as and^posses;. se& them-seives of thfr whole estate. b,]¿ebv ral orders ai-a^haS-ést ibr her mam-fsh£. liiarriedatlS years of age; ilnd is not yet of age. She and her husband filed a bill for the legacy. The court decreed that the legacy should be paid; with interest, on the annual arrears of in-
    
      The bill stated that John Drayton being seised and posscssed of a large real and personal estate, made and executed his last will on the 31st day of May, 1779, in and by which he, amongst other things gave and bequeathed to his daughter, Susannah Drayton, the sum of 3000L sterling money to he paid her by his executors out of his estate, on or at the day of her marriage, or when she should attain the age of twenty-one years, and that the lawful interest of the said sum should be annually paid and applied for her use, behoof, maintenance and education — That ■ shortly after, the said testator died, leaving his said will in full force, and leaving the said legatee alive, then an infant of two years — That Charles, Thomas and Glen Drayton, the sons, executors, and principal devisees and legatees of the testator, proved the will and qualified thereon as executors, and took possession of the estate, to the amount of 100,0001. sterling, That on the 10th of March, 1795, the said Susannah Drayton being of the age of eighteen years, intermarried with the. complainant, T. Bowles, and a marriage settlement was executed, securing her property to their use, ° *• . * v ' and the use of their issue, if any. That on or about the 20th of March, 1785, the court of chancery, on application math1, ordered and decreed that the sum of 60f. sterling should be paid out of the interest of the said legacy (to commence from the 22d June, 1779) for the maintenance of the said Susannah, which, allowance was ini-creased on the day of September, 1790, to 150Í. p<§* annum. That there is due to the complainants the sum of 5687l. calculating interest on said legacy according to the usage of the court of chancery. That demands have been frequently made for the payment of said legacy and interest, without success. The hill prays relief.
    Sept. 1796.
    The defendants admitted all the material facts charged in the bill, but denied that so large a sum as 56871. was due to the complainants on account of the legacy; for they insisted that compound interest was not demand-able on principle, or on the usage of the court. They admitted that the complainants had applied for payment of the legacy, and they averred that they had offered in. payment, property to a considerable amount at a fair valuation. The defendants pray the court to grant them k reasonable time to raise the portion of the complainant, Susannah, as one of the contingencies on which it was to be raised, to wit, the day of marriage was in itself so uncertain, as to leave the defendants unprepared to meet the demand; and the other contingency, to wit, her attaining 21 years of age has not yet happened: and the defendants said they were induced to hope for this indulgence, as in the event of her dying under age and with-out issue, the said legacy is, by a limitation in the testator’s will, to revert to and be equally divided among the defendants.
    There wei'e several questions raised in this case, but; the only two fully discussed and decided upon, and material to notice were the two following:
    1. Whether the -arrears of the interest, on the legacy of 3000Í. directed by the will of the testator to be paid annually, should he calculated and paid with interest thereon, for the detention of the money.
    2. Whether the complainants are entitled to have the legacy raised immediately.
    Mr. Lee, Mr. Goodwin, Mr. Ford, and Mr. Desaus-gure for the complainants,
    argued that on the former applications to the court for an allowance for the maintenance of Miss Susannah Drayton, the master had reported whht was due? as interest on the legacy; and that wherever the master states an account, interest is allowed by-the law and the usage of the court, on the balance stated, at least from that time. See 2 Eq. Cases abr. 529, 530. 14 Yin. 457, 1 P. Wms. 453, 652, 478, 480. 1 Bro. P. C. 202, 566. 2 Powell on mortg. 227. 2 Fonb. 188,9, 423. But independent of the master’s report, interest ought to be allowed on the ari’ears of interest due on the legacy. The intention of the testator is explicit, that the interest of the legacy should be paid annually, and applied to the. use, behoof, maintenance and support of his daughter Susannah, the legatee. Those are the very words of the will, which cannot be otherwise satisfied. If less than the amount of the annual interest was: suffi-. cient to maintain Susannah, then the balance of the an*, nual interest ought to have been placed out to interest or vested beneficially for her use and behoof. The tes.-fator must have known that the interest on 30001. sterling must have far exceeded the wants of an infant, and would for many years. He therefore intended an accumulation. The executors were bound to obtain that, and in doing so, run no risk, on taking proper securities. But if they were apprehensive of any risk, they should have applied to the court for instructions and authority, at the time when the application was made to the court for an annual-allowance out of the interest for the support of Misa Susannah Drayton. That allowance was always considerably below the amount of the annual interest of the legacy, expressly directed to be paid annually. And they were bound by the will to.putsuch balance out. to accumulate for the advantage of the legatee. If the executors have not done so, they are bound themselves to make it good to the legatee. But this case is much stronger than the common case of executors without any property in the estate: for here the executors are the devisees and. legatees of the great bnlk of a very large estate, out of which this very moderateHegacy is carved for the benefit of their sister. If they have not raised and put out the interest for the benefit of their sister, they have had personally the benefit of it, and are more strongly bound to make it good to her. The court in allowing 60L per annum at first, and afterwards 150i. per annum out at the interest on the legacy of 3000Í. well knew that there would he a balance of interest due annually on the legacy. And it must have perceived by the will of the testator, that the whole of the interest was to he paid annually, or improved for the use of the legatee. By leaving the balance of the interest in the hands of the executors, who were also the devisees and legatees of the great bulk of the estate; (to whom it was a convenience) the court must have considered them liable to pay interest on it, else it Was giving a great advantage to the executors and owners of the estate, to the prejudice of the minor, which cannot be decorously attributed to the court; especially when it is recollected that it is the peculiar province of this court io protect and guard the interest of minors. The court therefore when it ordered no more than a part of the annual interest on the legacy to be raised and applied to the support of Miss Susannah Drayton, must have relied upon the executors pursuing the will of the testator, and putting the balance of such annual interest to the use of the legatee, by obtaining or by allowing interest upon it, if they retained it in then own hands. If this expectation of the court has not been attended to, the court will feel itself bound to compel the executors to perform the will and do justice, by paying interest themselves on the arrears» Even in cases not so strong as this the court has made executors pay interest, for money retained in their hands without absolute necessity. Seo 6Bi’o. P. C. 319. 3 Bro» C. C. 73, 433, 107. 1 BTo. C. C. 359, 430. 2 Fonb. 184 to 188, 376,7, 1 Eq, Cas. abr. 238, 287. 2 Ero. 430.-2 Eq. Cas. abr. 740. 1 P. Wins. 783, 2 P. Wins. 21, 252» 3 P. Wms. 126. See 1 Vera. 251. 2 Yesey sen. 170, Talbot 2. Indeed compound interest is allowed in many cases where it is reasonable, without coining under any particular head or class of cases. Sec 1 Bro. C. C. 440,3» and the circumstances of this case make it most X’easonable, to be allowed. The testator having directed, the interest to be paid annually, though the payment of the principal is postponed to a distant and even an uncertain period mid event, this may. be properly considered ars annuity; and an annuity bears interest. See 1 Salk. 15G. 1 P. ¥ms. 542. 3 Atk. 579. 1 Brown’s P. C. 202, 556, 1 Yes. 428,9. It is also an established equity that indulgence entitles the party at whose expense it is given, to remuneration. 2 Pow. on Mort. 220. Now the permitting the executors to retain the money in their own hands, was a great indulgence. Money was then scarce an.’ difficult to be raised; and even now at the end of Seventeen years, they ask in their answer, for time to raise the money. The complainant’s counsel contended that the troubles and calamities the war, »»ught not to bar the claim of interest; as was insisted bv the N -Pa counsel. There is no such general i wv ,r ■■ ■ , La the contrary tliis court had in many cases s i- ■ •' t Lu i rf during the wax*, on legacies; and made executors au ->. aide, for crops, where no accounts were rendered, by charging them 10Z. per annum, for the working slaves, See Mayrant’s case vs. executors of Nelson, and other cases. Under very extraordinary circumstances of national calamity, extending to all, by which estates are made wholly unproductive, the- court of equity may possibly he induced to qualify or restrict the payment of interest; but such circumstances should be proved to have existed, and to have produced that effect. No proof had been given in the cause, to shew that the great estate in the executors and devisees hands had been made wholly unproductive by the war, or in what degree: and the court would not presume it, to the prejudice of a minor daughter and legatee. The complainant’s counsel contended that they are entitled to have the money raised immediately. They grounded this on the very words of the will. That directs that the legacy of 30001. sterling, should be paid to his daughter Susannah, by his executors, on the day of her marriage, or when she should arrive at the age of twenty-one years. The testator had a right to prescribe the time, and he lias done so. His daughter is married, and is entitled to payment of her legacy, according to the will. It was objected that the executors ought not to be bound to raise the legacy until the daughter attained twenty-ope years of age; because in the event of her dying under age, and without issue, there is a limitation» over of the legacy to others: or that at any rate a reason* able time ought to be allowed to raise so large a sum of money. To this the counsel for complainants replied that the testator knew very well that he had made a limitation over °f the legacy, in case his daughter should die under age, and without issue: nevertheless he chose to direct the payment to her on her marriage, which has taken place; and his will is the law on this point. See 1 Wilson 140.-Besides there are cases which shew that such, a legacy is sufficiently vested, notwithstanding such subsequent limitation. See 1 Vern. 462. 2 P. Wms. 612. 2 Yesey sen. 263. 1 Bro. C. C. 105, 300. 2 Bro. C. C. 3. With respect to the demand for time to raise the legacy, there-is no just ground for it: the executors knew that they were to pay the legacy when the daughter married, or attained twenty-one years of age. She was married on the 10th March, 1795; and it was the duty of the executors to have prepared to pay the legacy, in sterling money, as the testator directed; instead of which the executors have offered to pay in unproductive property at a valuation. For the time when portions are to be raised, see 2 P. Wms. 612. 2 Yesey, sen. 263. 2 Bro.. C. C. 3. 2 Eq. Cas. abr. 638. 1 Bro. C. C. 103.
    On the part of the defendant, it was contended by Mr. T. Parker, and Mr. E. Bntledge,
    that the claim of com* pound interest was not supported by the decided cases. None of them went so far as this demand, which went on (according to the calculation filed with the bill) adding the annual interest to the principal and forming a new principal every year, bearing interest, and thus forming a most enormous accumulation. That interest is a matter of discretion with the court; and it has been refused in times of public calamity. Sec 2 Eq. Cas. abr. 611. 1 Bro. P. C. 526. That the testator had carved out large portions for his two daughters, 3000k apiece, amounting to 6000k and the debts were 6000k That during and for some years after the war the estate though large could not meet its exigencies, and raise the annuity, or amount of annual interest on the legacies; therefore compound siiterest ought not to be allowed. That the executors bad offered to deposit bonds with Mrs. Drayton, the mother of the legatees to pay for those legacies, but she refused} and indeed the court refused to allow it, and obliged the defendants to keep the legacies in their own hands. All the cases for the allowance of compound interest go upon the executors occasioning improper delays. But here they were willing to pay in bonds. The executors could not invest the legacy. There were no banks, no public funds at that time. Besides the cases in which compound interest has been allowed are where maintenance was given as the means of subsistence to the children. But in the case under consideration, enough was paid out of the interest to maintain the legatee. The circumstances of the estate would not permit more to be raised for a long time. Again, to whom was the money to be paid ? Not surely to the minor legatees. Money could not have been put out to interest, and the interest regularly obtained, so as to be put out again an-nually, and thus produce a compound interest. If compound interest is allowed, it must be on the ground that tlie executors have not done tlieir duty, according to thé will. Yet it is not proved that they could have done better. As to the other point, the raising the legacy immediately, the counsel contended that would be improper; because Mrs. Bowles, the legatee, will not be of age till December, 1797} and if she dies before that period without issue, there is a limitation over in the will, which will carry the legacy to the defendants themselves. They ought not therefore to be obliged to raise so large a sum,at a great sacrifice, when ultimately it may not be paya* ble to the complainants. Again the time of marriage was uncertain. The executors therefore could not be expected to be prepared to pay the legacy- so immediately after the happening of an uncertain event. A reasonable time ought therefore to be allow«d the executors to raise the -money.
   Chancellor Rutledge

afterwards delivered the following decree of the court:

There are two questions in this rase — ■

1st. Whether interest is to be allowed’ on the arrear? of interest, due on a legacy, bequeathed by a father to hist daughter.

2d. Whether the portion, bequeathed to the daughter should be now raised.

The cases in the books say that this point rests in the discretion of the court, where such interest is not expressly given. It depends therefore on circumstances whether the. court will allow it. The case of Mayrant and Davis was cited to shew that the. court would not allow more, than simple interest. But in that case the expenses of the legatees were nearly equal to the interest of the legacy, and therefore there was no fund to accunKiet. There are many cases in the books which shew the allowance of interest on the arrears of annuity, particularly when given to a wife or child. And this case has been assimilated to an annuity, because the interest of the is expressly directed by the will of the father, to he annually paid and applied to the maintenance, education, use and behoof of his daughter, it was plainly the father’s in* Mention that the whole interest should be applied to the ase and benefit of the daughter; but as she was very young it was not possible she could expend so mucin. Wl'.zt was to become of the residue ? Surely not to lie. in executor’s Lands. But it was asked to whom was it to be paid, as the infants could not receive it and give discharges ? The answer is that if the executors had the. money, and had applied to this court, they would have been directed what to do and how to invest the balance* But it was at their own request the court suffered it to remain in their own hands, and did not order the interest to he raised annually, and the surplus vested for the benefit of the minor: it was an indulgence granted to the executors ■ because the estate was much in debt. The executors therefore, who are also legatees, come with an ill grace, under these circumstances, and on the above pretence, to refuse the allowance of interest, on the arrears of the annual interest arising on the legacy or por* 'km: especially as they have held and'enjoyed the estate ol‘ the testator. Interest must he allowed.

Decree. The master to make a statement of the account, allowing interest on the yearly balance of interest, deducting the years of the war, and until 1785, before which no interest on arrears, was legally demanded.

On the second point, the court does not see the smallest reason for not raising the portion itself. Seventeen years have elapsed since the testator’s death, and not a penny is raised. Defendants have liad great indulgence. The suggestion of the doubt whether complainant would ever he entitled to receive her legacy, is not of sufficient weight to induce the court to delay the payment. One of the events, that of marriage has occurred upwards of two years. It is time the portion was raised. But as the sum is considerable, the court will direct that it shall be raised by instalments.

Decreed that defendants pay to complainants on the 1st day of March next, one half of the. principal and interest, bequeathed to- his wife, by her father, which the master shall report to be, now due, with interest thereon: and the remaining moiety shall be paid on the 1st of March, 1798, with interest. Costs to he paid out of the «'state of the testator.