Case ID: sc-eq_10/html/0086-01.html
Source: Caselaw Access Project
Author: {"author": "Harper, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*John Chesnut and Wife, and others, vs. James Strong and Robert Strong, Executors of John Maybin, deceased.
    A residuary bequest to be paid when the legatee arrives at twenty-one, gives a present vested legacy, and the legatee will be entitled to the profits or interests (if any accrue) in the interval between the testator’s death and her attaining twenty-one. [*123]
    The testator by his will, directed the remainder of his estate to be sold, and the proceeds to be equally distributed among his grand-daughters, and adds “I allow my undernamed executors to retain the aforesaid children’s parts in their hands, until the children arrive at maturityon a bill filed against the executors to account, it was held, that parol evidence was admissible to show that the executors retained the legacies in their hands without making interest on them, in consequence of an agreement with the testator that they should not be bound to invest the fund or make interest, nor be chargeable with interest on their failure to do so; and that they accepted the executorship on that condition. [*125]
    where there is something certain due, and there is a doubt whether the creditor may not be entitled to something more, and he thinks proper to accept what is certainly due and give a receipt in full, he is bound by it, notwithstanding it should afterwards turn out that he was entitled to more. [*127]
    The testator’s will, after certain specific devises, proceeds, viz : “And likewise the remainder to be equally distributed between Sarah, Jennet and Margaret Maybin, daughters of Andrew Maybin; and I allow my undernamed executors to retain the aforesaid children’s parts that I have herein bequeathed to them, in their hands, until the children arrive at the years of maturity,” &c: and then directs a sale of his whole real and personal estate. The defendants qualified as executors, and sold the estate as directed. The legatees in the above clause, married, and they and their husbands filed this bill against the executors for an account.
    The commissioner made a report, in which the defendants were charged with considerable balances and interest thereon, as to two of the legatees ; and as to the other, Mrs. Thompson, he reported in favor of the defendants, on the ground that in 1827, her husband had given a receipt for $1087 in full of his wife’s legacy, although if interest had been computed, a much larger sum would have been due.
    The case was heard at Chester, July, 1831. On the trial, the defendants insisted that they were only chargeable with such interest as they had made ; and tendered parol evidence to prove an agreement with the testator, that they were not to be charged with interest on these legacies, and that they had qualified as executors expressly on this condition. The evidence was rejected, and the following decree delivered.
    Johnson, J. (sitting for Chancellor Johnston.) It is objected on the part of the defendants, that the complainants are not entitled to the interest which accrued in the interval between the death of the testator, and their attaining maturity or twenty-one years of age.
    It is obvious that this question must be resolved by the inquiry whether the testator has disposed of the interest, ’’’growing out of this part of his estate. For it is only in the event of his not having done so, that the law makes any disposition of it. There is certainly no specific disposition of it in the will, but the remainder is devised to the complainants, and if no one else can claim, of course they are entitled.
    If there is no disposition of the accruing interests or profits, they fall necessarily into the residuum of the estate, and must go with it according to the will, if there is any disposition of the residuum, or be distributed according to our act of distribution, as in case of intestacy. And in the case of Nichols and Osburn, 2 P. W. 419, cited in 2 Roper on Legacies, 212, it was held upon very clear principles, that when the residue is so given, as not to be payable until the legatee attained twenty one, with a limitation over in the event of his dying within that period, that the accruing interest should go to his legal representatives and not to the remainder; and that too, in the case of a niece and not a child, which seems to be an exception.
    
      The objection has been attempted to be sustained upon the authority of the general rule, that legacies payable at a future period, or the happening- of some contingency, would not carry interest; and there is no doubt about the correctness of the rule. That is not, however, a new or> arbitrary rule, but the result of a construction by which the testator’s intention is attained. If a legacy be to one of a certain sum, when he shall attain the age of twenty-one, we understand that the testator meant what he expressed — that the legatee should have that much at that time, and not in addition what may have accumulated upon it in the form of inter-' est, or the profits of a fortunate investment; and even in those cases, an •exception is allowed in favor of a wife or child who has no other provision for support, founded on the supposition that a husband or father would not will that his wife or child should starve, ad interim, (2 Roper, 182, 4, 6, and the eases there cited.)
    The parol evidence tendered by the defendants to prove an agreement themselves and the testator, that *they were not to account for the interest on these legacies, and that they positively declared to him their determination not to qualify, unless they were exempt from-this accountability, cannot be received, upon the very familiar rule that the terms of a written trust cannot be varied by parol.
    The will creates a direct trust in the defendants to retain these legacies until the legatees shall attain maturity, and the obligation raised by law is, that they should employ the fund, so as if practicable, to make a profit for the legatee. By qualifying, they have accepted the trust, and necessarily undertook to fulfil it; nay, more, they.have sworn to do so, and the evidence offered, is intended to show not only that the testator by his will, gave them the use of this fund during the minority of the legatees, contrary to his intention plainly expressed in the will, but that they did not undertake to do what they have solemnly sworn they would perform.
    It is therefore referred to the Commissioner to state the defendants’ accounts, charging them with interest on these legacies, according to the principles of this decree.
    From this decree the plaintiffs, Thompson and Wife, appealed, on the ground, that the Commissioner and Chancellor had rejected their claim ; and the defendants appealed on the grounds :
    1. That by the terms of the will the executors are entitled to retain the legacies in their hands, free of interest, until the legatees arrive at maturity.
    2. That the Court rejected the parol evidence offered to show the terms on which the defendants undertook the trust; the plaintiffs’ right to interest being at best but an equity, and as such, liable to be rebutted by parol.
    
      Clarke and M’Call,
    
    for the defendants, argued that the will authorized the executors to retain the legacies in their hands, and gave them the use of the fund until the legatees reached maturity; that interest is a mere equity, and formerly was not charged against trustees, except where they made it; that parol evidence is admissible in this case, *to rebut the equity, or in aid of a doubtful construction of the will, or to repel a legal inference; and at most, that by the terms of the will, the legacies not being payable until the legatees arrive to twenty-one, did not bear interest until after that time. They cited and relied on the following authorities: 3 Bacon, Tit. Legacy B. 446 ; 2 Bro. Ch. Rep. 500 ; X Swinburne, 358; Harp. Bep. 42 ; 12 Yes. 386 ; 1 Bq. Rep. 193; 6 Yes. 324, 397 ; 7 lb. 228; 2 Fonb. 475 ; Amb. 126 ; 2 John Ch. 614 ; 3 Yes. 13, 282; 4 Ib. 1; 1 M’O. Ch. 456 ; 2 Dallas, 171; 1 John. Ch 2Sl; 2 Roper, 545-6 ; 3 John. Ch. 369; 5 lb. 68 ; Roberts on Frauds, 10, 11.
    
      Williams, contra.
   Harper, J.

We agree with the presiding Chancellor, upon the effect of the bequest in the residuary clause of the testator’s will. It would not have the effect of giving beneficially to the executors, the interest on the legacies, until the legatees should attain the age of twenty-one. The case of Nichols v. Osborne, is sufficient authority for this purpose, and there are many others to the same effect. The case is stronger against executors in this country than in England. Under our statute of distributions, it is always intended that the executor takes as a trustee, and not for himself, unless the intention to give him beneficially, be plainly expressed. The bequest of the residue to the testator’s grand daughters, gives a present vested legacy, and the direction that it shall be retained in the hands of the executors till they attain the age of twenty-one, only fixes the time of payment. It is debitum in presentí, solvendum in futuro.

We agree also, with the Chancellor, that parol evidence was inadmissible to show that the testator intended the executors to take this interest. That would be to alter and add to the will. But as now explained in argument, we understand the parol evidence to have been offered for a different purpose — to show that the executors did in fact retain the legacies in their hands, without making interest on them, and that this was in consequence *of an agreement or understanding with the testator, that they should not be bound to invest the fund or make interest, nor be chargeable with the interest upon failure to do so, and that they accepted the executorship on that condition. For this purpose we think the testimony was admissible. It was not to add to, or in any respect alter the terms of the will, but to excuse themselves for having failed to make interest. This Court habitually receives evidence to show that there were suits depending against an estate, and that the executor retained funds unemployed in his hands, to meet the demands which might be established, to excuse him from the payment of interest. In the case of Breure v. Pemberton, 12 Ves. 386, the Court refused to charge an executor with interest, on the ground that he acted fairly, under the belief that the balance in his hands belonged to himself as commissions, as in fact it would have done if he had charged commissions properly in his accounts from time to time. If the defendants in this case did have such an understanding with the testator, and accepted the office of executor upon such condition, I think it quite as good an excuse.

The charging of an executor with interest on balances in his hands, is a creature of this Court, and it is by comparatively modern decisions that the doctrine has been fully established. But it is a general rule that parol evidence may be received, to rebut an equity. The distinction between receiving parol evidence for the purpose of altering or explaining a written instrument, and for the purpose of rebutting an equity, is very fully considered in the case of Townsend v. Stangroom, 6 Ves. 328, and Rich v. Jackson, in a note to that case. The first was a bill for the specific performance of a contract to lease. The Chancellor admitted parol evidence to show, that the intended lessee knew at the time of the agreement, that part of the lands described in it had been leased to another person. He could not execute any other agreement than that which the parties had entered into ; the evidence was received to rebut an equity — to rebut the right to a specific performance, and on it the bill was dismissed. *On this ground, the Court will not execute an agreement under seal, which has been rescinded by parol. Yet such an agreement cannot be discharged by parol,,but the plaintiff’s equity is rebutted. In Rich v. Jackson, the Chancellor says in allusion to the cases on the subject, “ none go further than this, in the decisions and rules laid down; that parol evidence of the conduct of the parties, the manner of conducting the transaction, the unfairness and hardship, may afford a good ground to leave the party in the condition in which he put himself at law, to make what he pleases to make of it, but ought not to make this Court give him any aid.” There are other eases proceeding on the same principle of receiving parol evidence to rebut an equity; as to rebut the presumption that an executor is not intended to take the residue, when a legacy is given him, &c. If in consequence of such an understanding with the testator, and believing that the will provided for their doing so, the defendants were induced to accept the office of executor, and retain the fund in their hands without making interest, it would be a case of great unfairness and hardship now to charge them with interest, and I think the complainants, volunteers under the testator, are not entitled to the aid of the Court for that purpose. Of course I can say nothing of the effect of the testimony which is to be produced. But if the defendants should be able to give such testimony as they purpose, it will be much strengthened by the terms of the will, which seem to point to such an understanding, though they are not sufficient, of themselves, to express it. Of course the defendants must account for any interest which they have actually made.

With respect to the complainants’ ground of appeal, nothing appears but what is stated in the Commissioner’s report — the simple fact that the complainant, J. V. Thompson, did receive from the defendants the sum of $1081, equal to the principal of the legacy, and give a receipt in full. It is said that a receipt may be contradicted or explained by parol testimony, a receipt being only a written admission of a previous fact; and if the fact be not true, the *party is not estopped by his admission: (see the cases referred to in the American edition of Philips’ Ev. 14.) A receipt is certainly evidence against a party, and in general conclusive evidence. But supposing that a mistake may be shown, I am not aware that any has been shown in the present instance. The error or mistake is supposed to have been, in admitting-the $108Y to have been in full of the legacy, when in fact he was entitled to interest on it besides. That is a matter still doubtful. If a person having a claim against another, thinks proper to forgive the debt, and with this view executes a receipt, this will bind him. It is a gift executed, and cannot be recalled. So, if lie receive part of bis demand, and give a receipt for the whole. In Martin v. Mowlin, 2 Burr. 979, Lord Mansfield seems to take for granted, that even a mortgage debt maybe forgiven by, parol; and in case of a bond, where a less sum than the bond was conditioned for had been paid, Chief Justice Marshall said, that although the jury were satisfied in fact that it was not, yet in law they ought to presume that it was, fully paid—5 Cranch, 11. The case seems to me to be still stronger where there is something certain due, and there is a doubt whether the creditor may not be entitled to something more, and he thinks proper to accept what is certainly due, and gives a receipt in full. Such appears to be the present case, and I think this complainant must be bound by his receipt. With respect to the rest of the complainants, it is ordered, that the case be remanded to the Cireut Court, for the purpose of receiving the evidence, and being heard and determined.

O’Neall, J., concurred.