Case ID: sc-eq_31/html/0518-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Wardlaw, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

C. C. Wightman vs. J. W. Gray.
    
      Master in Equity — Practice—Guardian—Decree for Foreclosure.
    
    Where an order directs the Master to pay out the assets ofan estate in his hands, reserving a sufficient amount to pay certain claims, the Master discharges his duty if the assets retained are sufficient at the time. He is not liable to the parties if from subsequent causes they should become bad.
    Where dioses belonging to suitors are in the hands of the Master, it is the duty of the parties, and not of the Master, to have proceedings instituted for their collection ; and where a minor is the party interested, it is the duty of Ms guardian to see to their collection.
    If a Master institutes proceedings for the collection of choses, without the order of the Court, he acts as the private agent of the parties.
    In taking a decree, in I-SdO, for foreclosure of a morcgage, it was not negligence to omit to take a decree for the balance due after exhausting the proceeds of the mortgage — the practice of taking such decrees having then but recently commenced.
    BEFORE DUNKIN, OH. AT CHARLESON,
    JUNE, 1858.
    The facts upon, which this case was heard and decided, are contained in the following report of the Master, made at June sittings, 1854 :
    On the 7th June, 1838, it was ordered and decreed, “that the Commissioner retain in' his hands a sufficient amount of the personal assets, and if they be insufficient, then a sufficient amount of the real assets, to cover any claims against the estate of Major W. Wightman, whether for debts or legacies, or- any other claims against the estate, and pay over and deliver the remainder to the defendants, Valk and wife.”
    On the 19th January, 1838, the executor of William Wight-man delivered to Mr. Gray, among other assets, a bond of William Burrill, for $932, secured by a mortgage of three lots on Vernon street, which was among other assets retained by the said Master to pay the claims and legacies referred to in the order of the 7th June, 1838.
    Two legacies were bequeathed by the will of William Wightman — one to the children of William Wightman, which has been paid in full, and the other to the children of John T. Wightman, upon which there is now due a balance of $676 67, as appears by the account of Mr. Gray, in evidence in this matter.
    To pay this balance the bond of William Burrill was retained by the Master, and the questions raised by the actors in these proceedings have reference to this bond.
    It is urged by Mr. John T. Wightman, (who is guardian of his children, entitled to the balance due upon the unpaid legacy above referred to):
    First. That the Master should have paid the legacy in full to the children of John T. Wightman, before anything was paid to the defendant, Valk.
    Second. That the Master, by his delay in collecting the bond of Burrill, has caused injury to these infant legatees, and made himself liable for the balance now due to them.
    The following evidence has been submitted on the part of Mr. Wightman, as the guardian of his children.
    William Burrill died, leaving a will, dated 8th March, 1838, proved 27th March, 1838, by which he left his entire estate to his wife, Eleanor, and his three children, Mary Jane, Henry, and Elizabeth. The real estate was directed to be sold when Elizabeth should arrive at full age, and the proceeds equally divided between his wife and children, share and share alike; the wife’s to be in lieu of dower.
    R. W. Seymour and William Caldwell were appointed executors, but never qualified. Administration, with the will annexed, was granted on the 10th June, 1839, to Alexander Hamilton; penalty of administration bond, $7000. Sureties, J. St. Amand and James Divver. The administrator rendered no .account until 17th August, 1846, when he filed one account from 1839 to 1846, inclusive, showing a balance against administrator of $350 46.
    The inventory and appraisement of the estate of Burrill shews the following property:
    Lot of land corner Bull and Smith streets, appraisement.......................................................$2,300 00
    Three water lots on Gadsden’s wharf, (Vernon street,)........................................................ $900 00
    The following slaves:
    Lucy, $420; Sam, $750; Tena and child, $700.... 1,870 00 Furniture................................'...................... 90 00
    $5,160 00
    On 14th January, 1840, Mr. Gray, by his solicitor, filed a bill against Alexander Hamilton, administrator, and the widow and children of Burrill, to foreclose the mortgage on the three water lots on Gadsden’s wharf, and obtained a decree for foreclosure and sale. No money decree was given.
    On the 23d November, 1S50, Mr. Gray obtained a judgment against Alexander Hamilton, administrator, for $976 62, being balance due on bond and mortgage of the water lots after the sale for foreclosure.
    In November, 1852, the heirs and devisees of Burrill sold a part of the lot in Bull and Smith streets, for.......$2,400 00
    And on 3d December, 1852, conveyed the rest of the lots to Geo. H. Ingraham, for.................... 1,800 00
    This sum.....................................................$4,200 00
    With balance due by administrator..................... 350 46
    Gives............................................................$4,550 46
    Which, it is urged, should have been resorted to for the payment of the comparatively small balance due upon the bond of Burrill held by the Master.
    
      It is, however, admitted on the part of Mr. Wightman, that Master Gray, after obtaining judgment against the estate of Burrill, made efforts to induce the Sheriff to levy on the lots previously sold; but the heirs and devisees resisting the levy, on the ground that they had been in possession the statutory time, both Sheriff Shingler and Sheriff Yates declined to enforce the execution.
    Mr. John T. Wightman, who was examined, by consent, deposes, that he has applied to Mr. Gray for payment of the amount due to his wards, and has received sundry sums on , account, as shewn by the book kept by Mr. Gray. He says that Mr. Gray never offered to pay him in bonds, and if he had, does not know that he would have taken them.
    Alexander Hamilton, also examined on behalf of the defendant, deposes, that, as administrator of Burrill, he was notified by Mr. Gray that he had a bond demand against the estate, secured by a mortgage, and offered to apply to the Court, on behalf of witness, for the sale of the lots mortgaged. At the sale, Mr. Hamilton, by consent of Mr. Gray, bid in one of the lots to prevent- its being sacrificed. Subsequently, Hamilton sold this lot to one Beckman, but there was some difficulty in obtaining titles, and Beckman did not settle for the lots. Hamilton says he called on Mr. Gray after the sale to Beckman, offered to settle the balance of the debt due by the estate of Burrill, after deducting the price at which this' lot was sold to Beckman. Mr. Gray declined to settle, as he did not know what the balance was, it being uncertain what would be realized from the sale of the lot. Hamilton did not offer to pay the whole of the debt due by the estate, but only the balance remaining after deducting the amount for which the lot was sold to Beckman. He has not offered to pay Mr. Gray since 1840. I refer to the testimony of Mr. Hamilton, appended hereto, for his further statements in this matter.
    Jacob R. Valk and wife were decreed to be entitled only to the remainder of the estate of William Wightman, after providing for the debt and legacies of the testator. It appears, however, considerable sums and assets were .turned over and paid by the Master to Valk, although the legacy to the children of John T. Wightman was not fully paid. On the part of the Mastér, it is urged that he was justified in so doing, the assets retained by him being considered, at the time of the payment on account to Valk, amply sufficient to discharge the legacies and other claims against the estate.
    It further appears that the administrator of Burrill is insolvent, and the balance due by the estate of Burrill to the estate of Wightman will be lost, unless it can be recovered from the heirs of Burrill, by levy on the lands derived from their father or otherwise, or by suit against the sureties of Hamilton’s administration bond.
    Mr., Gray states that since his return to the rule, he has reason to believe that the estate of St. Amand, one of Hamilton’s sureties, is not insolvent, as stated in the return.
    On the part of Mr. Gray, evidence ffias been adduced to show that the mortgage of William. Burrill was foreclosed in this Court, by decree, dated January, 1840; that the sales by Master Laurens, under this decree, left a deficiency to pay the bond, which was afterwards sued against Burrill’s administrator, and a judgment obtained, but nothing has as yet been realized on the judgment, and that the bond is now in the hands of the solicitors of Mr. Gray for suit against the heirs 'at law of William Burrill.
    The first sale by Mr. Laurens, under the above decree, was on the 27th February, 1840, when Hamilton bid in one of the lots for $300. This lot was resold by Mr. Laurens on the 14th January, 1847, for $230. The net proceeds of this last sale, $188 32, was received by Mr. Gray.
    In explanation of the difficulty in making titles to Beck-man, the record of the Court in the case of William Wight-man vs. Francis G. DeLiesseline, has been given in evidence, from Which it appears that a decree of foreclosure was entered at the January Term, 1827, in favor of the complainant, William Wightman, and directing sale of the three lots in Vernon street by the Master, unless the debt due by the defendant was paid within twelve months.
    It seems, however, that the decree was not enforced as to the sale, but the complainant, William Wightman, took possession .of the mortgaged premises, and they were after-wards sold by his executors, as part of his estate, to Burrill. This defect appearing in the title, Beckman refused to comply,
    In explanation of the bond of Burrill being retained by the Master, it v^ould seem that by acquiesence of Mr. Wightman, it remained with Mr.- Gray for collection. It is admitted that Mr. Wightman never demanded the bond of Mr. Gray, and that Mr. Gray never offered to deliver it to Wightman.
    All the children of John T. Wightman, except one, (Charles, who will be of age in a few months,) have been settled with for their portion of the legacy left to them by William Wight-man. The whole balance reported due belongs to this minor.
    The money owing on the bond of Burrill would, if realized, be more than sufficient to pay this balance. The surplus would be payable to Valk and wife.
    Mr. Gray gives in evidence the Master’s report of funds in 1839, to shew that the payment to Valk and wife, and others, was regularly reported to the Court.
    The circuit decree is as follows:
    Dunkin, Ch. The facts of this case are set forth so clearly, and with so much succinctness in the pleadings and the report of the Master, that the statement cannot be advantageously abridged.
    It appears to the Court that the Commissioner complied strictly with the order 7th January, 1838, in paying over to Valk and wife the surplus, after retaining what appeared to be a sufficient proportion of the assets to satisfy the debts and legacies. But the transfer to Valk and wife was in June, 1838, and in the Commissioner’s annual report on estates in his hands for January, 1839, and which was ordered to be filed for the information of the parties, this transfer, or payment, to Yalk and wife is set forth, and no objection taken by any of the parties.
    The Court is of opinion that the plaintiff’s guardian was not bound to receive any of the bonds in payment of his ward’s legacy, nor does the Court think that the Commissioner had any authority, without the previous order of the Court, to transfer bonds to one suitor for collection, when 'other suitors were interested in the fund.
    The only inquiry of any doubt or difficulty is as to the official conduct of the defendant, in reference to the debt of William Burrill. His bond for $932, secured by a mortgage of real estate, was among the assets received by th'e defendant from the executors of the estate of William Wightman, deceased, on 19th January, 1838. William Burrill died in March of the same year, possessed of some real and personal estate, as set forth in the evidence, and leaving a will.- The executors declined to qualify, and no one administered until 10th June, 1839. It is not proposed to recapitulate the testimony in reference to the litigation for the recovery of this demand; undoubtedly there were causes both of delay and difficulty. But the Court is clearly of opinion, that if the proceedings had been directed and prosecuted under the auspices of able counsel, employed and stimulated by a vigilant client, the debt Would have been long since paid. And if the plaintiff (who is only recently of age) shall ultimately lose any part of his legacy, it is for the want of such exertions and appliances.
    It seems not to be sufficiently borne in mind that the Commissioner is merely the minister of the Court. He should do no act but by authority of the Court, expressed or implied. The carriage of the cause, both before and after the decree, is with the parties and their solicitors. In Napier vs." Gidiere, 3 Strob. Eq. 192, after intimating that suits to enforce securities in the custody of the Court should have the order of the Court, it is stated to be “ the safer practice where several par-' ties are interested, and the application is by one of them, to direct the officer holding the security to bring suit, upon being indemnified as to costs and expenses; and to bring the proceeds of the suit into Court for its further order.” It is one of the leading purposes of the law requiring annual reports on estates, from Masters and Commissioners, to keep parties advised, so that they may take such orders as may be proper and requisite. A Commissioner may, and should, if the exigency require it, institute proceedings on a money bond in his hands, relying ou the subsequent sanction of the Court. But the regular and proper course' is for the parties interested to obtain, through their solicitors, the necessary orders,-and to have the proceedings instituted and conducted at the expense of those parties claiming the fund. The rule and the reason of it are properly suggested in Napier vs. Gidiere. The Commissioner, as such, has no funds to fee counsel. As a general rule, it would be very inexpedient to vest him with any such authority over the funds in his hands, unless under a special order, procured at the instance of the parties interested in the fund.
    The decree for the administration of William Wightman’s estate, and payment of the debts and legacies, was made by Chancellor Harper in June, 1837. In January previous, the plaintiff had applied for the appointment of his father, John T. Wightman, as his guardian. The master reported that his estate consisted of a legacy of two thousand dollars, under the will of William Wightman, deceased. On 19th January, 3 837, on motion of Messrs. Peronneau, Mazyck and Finley, the report was confirmed, and the guardian duly appointed. As early as 27th March, 1838, the guardian received payments from the Commissioner on account of his ward’s legacy undefi the decree. During every succeeding year until 1850, payments were made in greater, or less sums, according to the state of the collections. John T. Wightman was guardian for five of his children, each of whom was entitled to the same sum. All have been fully paid except the plaintiff, for whom a balance is claimed of six hundred and fifty-four dollars, with interest from 28th August, 1850. It is very manifest, not only from the answer of the defendant, but from the . account filed with his answer, (to which the guardian himself in his evidence refers,) that the situation of the assets was ' open to the regular supervision of the guardian. It was his duty, as well as that of all others, interested in the assets,.to keep a watchful eye over their collection — to employ counsel if need required, and to take care that the necessary orders were made and carried into effect for rendering the funds available. The Court will not say that the defendant acted officiously in procuring the decree of foreclosure in 1840, without the previous direction of the Court, for instituting the proceeding; but it would have been safer, and more regular to have required the parties to jiursue the course intimated in Napier vs. Gidiere. The defendant in his answer, states that the suit for foreclosure was instituted at the suggestion, or invitation of the administrator of JBurrill. The guardian of the plaintiff should have looked after the matter. Pte was in funds for his wards. If counsel were to be engaged or stimulated in their exertions, it was his duty to see that they were employed and their services remunerated. Without a special order it was not the duty of the defendant. Many of the remarks in Boyce vs. Bailey, 5 Rich.. Eq. 263, are applicable to every case where an estate, at the instance of those interested, has been committed, or surrendered, to the control and disposition of the Court. Every party interested in the fund, ’ “is entitled to move for any order to speed the cause, or carry the . decree into successful execution.” It might well be expected that those thus entitled, would be most diligent in stimulating the action of the Court. “If proceedings under the decree are unreasonably protracted or suspended, the delay is not more chargeable upon one than another'of those who were entitled to expedite them, &c.” But least of all, should the minister of the Court be held responsible, “ for suspension or delay” where the action of the Court had not been invoked to authorize and direct the proceedings of the officer.
    From recent inquiries, it appears that, by proper exertions, enough may, perhaps, yet be collected to satisfy the balance due to the plaintiff. But it is of general importance, that the relative rights and obligations of the parties in the cause, and the officers of the Court, should be properly understood.
    It is ordered and decreed that the bill be dismissed.
    The plaintiff appealed on the grounds:
    1. Because the order of 7th January, 1838, required the Commissioner, as a condition precedent to paying over the funds to Valk and wife, that he should reserve a sufficient amount for the legacy to the plaintiff, and he has rendered himself liable by not performing the condition.
    2. Because, even after such payment to Valk and wife, there would have been a sufficient balance if the Commissioner had used the diligence in collecting the assets, required of an officer of the Court in like circumstances.
    3. Because the Commissioner instituted proceedings to collect the fund, thereby assuming the management of the business, and to that extent taking it out of the guardian’s hands, and he. is, therefore, estopped from the benefit of the views expressed by the Court in that behalf.
    4. Because, having so assumed the management of the funds and instituted suit in Equity on Burrill’s mortgage, he deprived the guardian of power to proceed to foreclose the same; and by neglecting to enter a money decree, he has caused the loss of the fund.
    
      Martin, for appellant.
    
      Brown S? Porter, Mitchell, contra.
   The opinion of the Court was delivered by

Wardlaw, Ch.

This Court is satisfied with the conclusion and general reasoning of the Chancellor, and contents itself with making some observations on the grounds of appeal.

The first ground of appeal is, “because the order of January 7, 1838, required the Commissioner, as a condition precedent to paying over the funds to Valk and wife, that he should reserve a sufficient amount for the legacy to the plaintiff, and he has rendered himself liable by not performing the condition.” The order referred to is in the following terms: “In this case the assets, both real and personal, have been ordered to be paid and delivered into the hands of the Commissioner to abide the final decree. Since that order, it hath been declared that the defendant, Sarah Valk, is entitled to the residue of the real estate; and i't is but reasonable that she and her husband, Jacob R. Valk, should have the possession of so much thereof as may not be required to meet claims in the cause. It is therefore ordered and decreed, that the Commissioner retain in his hands a sufficient amount of the personal assets, and if they be insufficient, that he retain a sufficient amount of the real assets to cover any claim against the estate of Major William Wightman, whether for debts or legacies, or any other claim against the estate; and that he pay over and deliver the remainder of the proceeds of the real estate or real assets, to the defendants, Jacob R. Valk and Sarah, his wife, in right of his said wife, whether the same be in bonds or cash.” This order was expressly for the benefit of Valk and wife, to let them into immediate possession of the residue of the real assets of testator, without waiting for the realization or reduction into money of these assets; the Court intending to provide for claims of prior right, yet delegating to the judgment of the Commissioner the reservation of assets sufficient for the satisfaction of these prior claims. It would be a most harsh construction of this order to hold, that the Court designed to make the judgment of the Commissioner in reserving a sufficient amount for the satisfaction of debts and legacies dependent on the actual event of the sufficiency of the reserved assets. This would make the subordinate officer of the Court an insurer of the ultimate realization of the assets reserved, or compel him for his own security to retain, in defeat of the advantage intended for Valk and wife, all the real assets until he actually received moneys enough for satisfaction of the debts and legacies. In execution of the order, the Commissioner retained cash $9,104 46, and real assets to the amount of $24,704 for the payment of the debts and legacies, (the personal assets,being insufficient) and all of these debts and legacies seem to have been discharged, except a balance of $654, with interest from August 28, 1850, due to the plaintiff. This balance, too, would have been satisfied, if one of the bonds reserved, that of William Burrill for $932, had been collected; and there seems no room for doubt that this bond was good at the time, and might have been reduced to money, if due and judicious diligence had been used. There is really then no ground for supposing that the Commissioner acted injudiciously in the reservation of assets, and it is not suggested that he acted with intentional unfaithful1 ness. The guardian of plaintiff was a party to the suit in which this order of Jandary 7, 1838, was made, and was bound to advise himself of its legal effect, and also to take notice of the master’s report concerning the execution of the order. If he was dissatisfied with the order, or its mode of execution, especially as to the payment to Valk and wife, and the sufficiency of the reservation of funds for the legacy to his children, it was his duty then to complain to the Court on pain of being afterwards estopped. This ground is untenable.

The second ground of appeal, conceding the sufficiency ox the assets reserved, affirms that the Commissioner did not use the diligence required of an officer of the Court in collecting these assets. This is the substantial question in the case, and is that which is most fully considered by the Chancellor. It involves the subsidiary question, whose duty it was, that of the Commissioner or of the guardian, to prosecute the remedy on Burrill’s bond, the only matter of controversy. In the Circuit decree, while the burden of the argument is that the guardian, and hot the Master, was bound to supervise the collection of the bond, the opinion is expressed that the guardian was not bound to receive any of the bonds in payment of his ward’s legacy; but it is manifest from the collocation of the remark and'from the whole train of reasoning, that the Chancellor did not intend to assert as a general proposition that a guardian is not under obligation to receive the estate of his ward in the form of investment, to which it is reduced by the decretal orders of the Court. He intended to say that the guardian was not bound to surrender any claim he might have against the Master for unfaithfulness in reserving sufficient bonds for the payment of the legacy, and that as this bond was prima facie larger than the share in arrear to his ward, the guardian was not bound to make himself the agent of other suitors for the collection of the surplus of the bond. As.is.said in Cason vs. Long, 4 Rich. Eq. 66, “ a guardian has plenary right to receive moneys coming to his ward, and to prosecute, compound and acquit any debt or liability accruing to his ward,” where he acts faithfully and without collusion ; and it is his duty to manage the choses of the infant according to the condition in which he finds them at his appointment, when this condition is lawfully produced by the action of an ancestor or other person, or of a competent Court. The Master here was not ordered by the Court to proceed'to the collection of the bond, and whatever he did in that respect must be treated as done as the. private agent of the-guardian. The guardian did not demand the bonds from the Master, and says in his testimony (which was taken by consent) that he does not know that he would have taken bonds if they had been offered by the Master. As is said in Thompson vs. Wagner, 3 Des. 94, it was his duty to collect the money when due or put the bond in suit, and to obtain the bond for this purpose. This case and McCauley vs. Heriot, Riley Ch. Ca. 19, in addition to the cases cited by the Chancellor, amply sustain his conclusion on this point.

In relation to the third ground of appeal and the former portion of the fourth, if, may be remarked that if the Master assumed the management of this fund and instituted proceedings at law for collection of the bond and in'equity for the foreclosure of the mortgage, his interference was superrogatory, not required by any order of the Court, and in no respect superseding the power and duty of the guardian to supervise and direct the management of the fund. The necessary legal inference is that the action of the Master was directed by the guardian as his principal in a private agency; but the Master is pursued for negligence as an officer of the Court. It seems to be in vain to give caution to many persons that the action of the Court never professes to bind parties to suits beyond the legitimate interpretation of its orders and decrees, and not at all to conclude the titles of third persons who are not parties. In blind credulity they will conclude that wherever the Court or its ministerial officers touch any matter, a successful result is insured. Some purchasers at sales ordered by the Court, suppose that its orders are in rem, concluding the world, parties or not; and some parties to suits suppose that wherever the Court interferes at all, it undertakes to manage propitiously the whole results of the cause, including the duties of a constable. Sound policy requires that such superstition should be punished by pecuniary loss to its votaries, rather than that the proper power and action of the Court should be misunderstood and misinterpreted.

The latter portion of the fourth ground of appeal imputes special negligence to the Master, because in the bill of foreclosure instituted by him, he did not seek and procure a co-temporaneous decree for all the money Burrill owed on his bond. Passing by the consideration which has been sufficiently discussed, that it was the primary duty of the guardian to institute and control such proceeding, and granting that the Master was responsible for the conduct of the cause, it would be most harsh to convict him of negligence for not taking at the time a money decree on a bill of foreclosure. The decree of foreclosure was rendered in January, 1840. Before that time a single instance in 1837 is brought to our attention of a money decree accompanying a decree of foreclosure, in a case not taken to the Court of Appeals nor reported. Before the Act of December, 1840, providing that money decrees should create a lien as to third persons, without express notice, only from the time of enrolment, and while the doctrine prevailed that filing the decree was equivalent to enrolment, it was very unusual to pray for or to take a money decree in bills for foreclosure. Afterwards the practice has grown up gradually of taking in this Court the double remedy of a decree for the debt as well as for foreclosure of the real security; but the practice even now, although judicious and approved, where the security may be insufficient, is far from being universal, and is confessedly a departure from the procedure of the English Chancery. There the mortgagee may proceed at the same time on all his remedies at law and in equity, at law in ejectment, (his title here is much modified by our Act of 1791) or actions on his bond and other collateral securities, and by bill in equity for foreclosure. On bills for foreclosure in the usual course, it is referred to the Master to ascertain the amount of the.debt, and it is ordered that if the mortgagor pay the debt secured by. a day to be fixeá by the Master, the mortgagee must re-convey, and in default of payment, that the mortgagor be debarred and foreclosed from his equity of redemption. The time for redemption is frequently enlarged on motion, (in Edwards vs. Cunliffe, 1 Mad. 287, four times after a third peremptory day of payment,) and even if there be default at the ultimate time fixed, a final order of foreclosure is regarded as necessary. There now, as formerly here, the practice was to leave the mortgagee for further remedy, if the land mortgaged was inadequate for his satisfaction, to his remedy at law on the bond of the mortgagor. Seaton’s Forms, 137, et seq; Coote on Mort. 492, 497. We cannot conclude, under the circumstances, that there was culpable negligence in not taking a money decree.

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

Johnston and Dtjnkin, CC. concurred.

Appeal dismissed.