Case ID: sc-eq_32/html/0405-01.html
Source: Caselaw Access Project
Author: {"author": "O’Neall, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William T. O’Neale vs. James Dunlap and others.
    
      Parent and Child — Advancement—Guardian and Ward— Election — Real Estate — Intestate's Estates — Acts of Legislature.
    
    A father being the guardian of his children, and having a sum of money of theirs in his hands, invested it in land, and the amount not being sufficient, paid a balance from his own funds. The title he took to himself, styling himself guardian: — Held-, under the circumstances, that the balance paid was an advancement, and that the whole of the land belonged to the wards.
    The wards having elected to take the land, not the money, heldy that it must be considered as real estate, and so treated in the distribution of the estates of the wards, some of whom were dead.
    The Act of 1851, 12 Stat., SO, amending the Act of 1791, must be read as if it' were part and parcel of the Act of 179J, and incorporated in it.
    BEFORE ING-LIS, CH., AT CHARLESTON, FEBRUARY, I860.
    This case will be sufficiently understood from the circuit decree, which is as follows:
    Inglis, Ch. Catherine Dunn, widow of George Dunn, by her last will, which was admitted to probate on the 5th December, 1846, and of which James Dunlap, one of the defendants in this cause, became the qualified executor, devised a lot of land with the improvements thereon, consisting of a dwelling house, &c., situate on Lynch street, in' the City of Charleston, to her three nieces, Ann, Margaret, and Elizabeth Dunlap, the infant daughters of the said defendant. For some reason not disclosed by the evidence, this devise did not take effect in specie. Under proceedings, had in a cause wherein Robert Adams and others were plaintiffs, and James Dunlap, in his capacity of executor, and others were defendants, (the record of which has not been put in evidence on the hearing of the present cause,) the lot of land on Lynch street, above mentioned, was sold by E. R. Laurens, Esq., then one of the masters in chancery, on the 20th March, 1851, and purchased by the defendant, James Du.nlap, for the consideration price of twelve hundred dollars, and a conveyance thereof was executed to him, under the style of “James Dunlap, guardian.”
    In March, 1851, James Dunlap' was, by the order of this Court, appointed guardian of the estates of his three infant daughters, above named, and entered into bond with his codefendant, A. Dorrill, as his surety, to one of the masters, in the penalty of six hundred and sixty-four 74-100 dollars, for his fidelity as guardian. If, in the order of the Court, making this appointment, there were any terms of qualification or restriction introduced, they have not been brought to the notice of the Court. It will be assumed, therefore, that it was a general grant of guardianship, and all receipts of money belonging to the daughters, must be referred to the authority to receive thereby conferred. Crenshaw vs. Cren-shaw, 4 Rich. Eq., 14. About the time when this appointment was consummated, or soon thereafter, James Dunlap received from the administrator of George Dunn’s estate the sum of three hundred and thirty-two 37-100 dollars, as the aggregate shares of his three wards, “ in the personal estate of George Dunn,” whether as distributees immediately of that estate, or, through Catherine Dunn, the widow of George, as residuary devisees and legatees, taking under her will parts of the distributive share to which she was entitled in her husband’s estate, does not very clearly appear. About the same time he received from master Laurens the sum of seven hundred and fifty-eight 16-100 dollars, as “ the shares of his three daughters in the sales money of the real estate of Mrs. Catherine Dunn,” and gave a receipt therefor, styled in the cause aforesaid of Adams et al. vs. Dunlap et al.
    The bill in the present cause, which is brought by William T. O’Neale, administrator of his deceased wife, Elizabeth, formerly 'Elizabeth Dunlap, one of the aforesaid three daughters and wards of the defendant, James Dunlap, states, that the consideration price of twelve hundred dollars, expressed in the deed of conveyance of the lot on Lynch street, was the amount to which the three daughters were entitled as devisees of Catherine Dunn. It states, further, the appointment of Dunlap, as guardian of the estates of his three daughters, and his receipt in that capacity of the shares to which, as legatees under the will of Catherine Dunn, they became entitled in the personal estate of George Dunn. And it prays that he may answer the premises, “as fully and particularly as if the same were here repeated, and he thereunto specially interrogated,” and that he may account for the monies received by him as guardian In direct response to these statements, he says-in his answer, that the aggregate sum received by him for his daughters, to wit,_ one thousand and ninety dollars and fifty-three cents, including the amount ($332 37) received from the administrator of George Dunn, as their share of the personal estate of the said George, &c., and the amount (758 16) received from master Lamens as “the shares of his daughters in the sale money of the real estate of Catherine Dunn,” was used by him in paying the consideration price of twelve hundred dollars, and that the deficiency, to wit, one hundred and nine 47-100 dollars, was advanced out of his own funds. His answer which, in these particulars, is thus made evidence by the plaintiff, is well sustained by the circumstances disclosed by the testimony, as exhibited in the master’s report.
    The three wards, Ann, Margaret, and Elizabeth, all married ; Elizabeth, who was the wife of the plaintiff, had died before the commencement of this suit, leaving surviving an infant child and her husband, to whom administration of her personal estate has been granted. Margaret, who intermarried with Thomas Divine, has died during the pendency of these proceedings, leaving her husband, but no issue, surviving. Ann intermarried with John A. Wotton, and is still living. All of these persons, who were alive at the institution of the suit, were made parties thereto. There has been no administration sued out on the personal estate of Margaret Divine, who has died since, and no proceeding, therefore, to revive as to the interest which she had in the subject matter of the suit.
    The bill claims a partition of the lot on Lynch street, as the joint property of the three wards, and an account from the defendant, James Dunlap, of the rents of the same, (he having occupied the place since its purchase,) and also an account of all other monies received by him, as guardian, from the administrator of George Dunn, or otherwise.
    The evidence satisfies me, that the sum of money, to wit : one thousand and ninety 53-100 dollars, received by the defendant, James Dunlap, for his daughters, constituted the whole aggregate of their several estates. He received and held it in the capacity of guardian. So he regarded, and such, in fact, was the character of his possession. Of his own motion, and without any authority of law, he invested this money in the lot of land on Lynch street, and added thereto of his own funds the further sum of one hundred and nine 47-100 dollars, to complete the purchase money. He, honestly enough, impressed upon the face of his title deed the fiduciary character in which he held the property. If he had done otherwise, and taken the title to himself, without the addition of such description, it would have made no difference, in so far as their money was invested in the purchase. There is, indeed, authority for the proposition, that where such investment of trust funds is wrongful, and more especially where the purchase has been made partly with the trustee’s own funds, the beneficiaries can only claim a lien for their money upon the property acquired. Adams’ Eq. (33) and Amer. Note; lb., 143, 2 Story’s Eq. Jur., sec. 1210, 1211; lb., sec. 1258, 62; Edwards vs. Crenshaw, Harp. 224; Myers vs. Myers, 2 McC., 214; Zimmerman vs. Harmon, 4 Rich. Eq., 165; Hill on Trustees, 97 and 103, 5. It seems, however, more consonant to equity and the rules which here govern the fiduciary relations, as well as more in accordance with the weight of authority, to give to the beneficiary his free choice between the property itself and the restoration of his money invested in it. To the extent of their money, therefore, used in the purchase of the lot iu Lynch street, the wards of Dunlap, or their representatives, are entitled to the exercise of this choice iu the present instauce. But, further, if a father purchase property with his own money, and take the title iu the name of his children, “the transaction will be regarded, prima facie, as an advancement for the benefit of the children.” The presumption thus arising may be rebutted by declarations or acts of the father wholly inconsistent with an intention to give the benefit of the purchase to the children, made cotemporaneously with the purchase; subsequent acts or declarations of the father, or any other matter arising ex post facto, cannot be admitted for this purpose. Here, the title is taken, not in the name of the children, but of the father, as their guardian, which is stronger evidence, if possible, of an intention to advance the children, as it amounts to an express declaration of trust, and precludes all idea that the purchase was, in his own intention, at the time, for his own benefit. And then, too, in the fact, that this particular property had been devised to his daughters by their aunt, there was inducement, in order that her benevolent purpose should not be defeated, to supplement by the addition of so inconsiderable a sum from his own resources, their means, which, alone, were insufficient for the purchase. It is the opinion of the Court, that the daughters of the defendant, James Dunlap, or those who now represent their interests, are entitled to the whole lot on Lynch street, as the joint equitable property of the three.
    The lot having been thus ascertained to be the property of the wards, it follows that the defendant, James Dunlap, having had it in charge, must account to them for the annual rent. Indeed, he has himself had the use and occupation of the premises, and they are still in his possession. The Court is informed, at the bar, that the desire of the daughters, or those who represent their interests, is, that this account for rent with each daughter shall not extend further back than to the date of her marriage; for that the one-third of the rent to which each would be entitled, may be deemed to have been rightfully used in her support and education up to that time. When the terms of the devise by Catherine Dunn are adverted to, the course thus indicated seems eminently proper, and the decree will be moulded accordingly.
    The deaths of Elizabeth O’Neale and Margaret Divine make it necessary, in order to ascertain the course of devolution of their shares, to determine the nature of the property, in the regard of the Court, whether it is to be treated as realty or as personalty. The question is not free from embarrassment, not so much in reference to the rules of law which must determine it, as to the practical application of those rules. In the form in which the Court finds the property when called to deal with it, it is realty, and the funds of the wards wherewith it was purchased, were, in very large part, the proceeds of real property devised directly to them. A small portion, however, of these funds, is stated to have been their shares in the personal property of George Dunn. In strictness of law, this portion must be treated as personalty, and the shares of the deceased cotenants therein must devolve accordingly on their personal representatives. Adams’ Eq., 142. The same course must be pursued as to all that part of the rent which shall be found due to each, which had accrued and was in arrear at her death. 1 Will, on Ex’rs, 733.
    Some doubt has been suggested as to the distribution proper to be made of the share of Mrs. Margaret Divine, in this land and in the rent thereof. The several Acts of Assembly, which regulate the distribution of intestates’ estates, are to be regarded as constituting one system, and to be con-strned together, and so as, if possible, to harmonize the whole. The modification introduced by the late Act, 12 Stat., SO, is to be so applied, that the original statute of 1791 shall read as if the canon applicable to the state of things contemplated by the new Act, stood there as now modified. The share of Mrs. Margaret Divine will, therefore, be distributed — one-half to her husband, Thomas Divine, and the other half, in equal parts, among her father, the defendant, James Dunlap, her sister, Mrs. Ann Wotten, and her niece, the infant, Ella H. O’Neale. So far as the property is personalty, her share must, for the present, go to her personal representative. The defendant, James Dunlap, in his answer, sets up a demaud of compensation for the boarding of Mrs. Elizabeth O’Neale and her children, during a large part of the interval between her marriage and her death, and for care and nursing bestowed during her illness, and claims to subject her share in the property, now to be partitioned, to the satisfaction of this demaud. Whatever may be-due to him on such account, must constitute a demand against the husband personally. Much testimony was introduced at the references before the master, touching the merits of his claim. I have examined it carefully, and although it might not be easy to make out from it the exact state of the account between the parties, I am satisfied by this testimony, that the plaintiff, William T. O’Neale, is fairly indebted to the defendant, Janies Dunlap, after all reasonable deductions are made from the amount claimed, in a balance larger than any share to which he is directly entitled in this properly. As no decree could be given him, for any ascertained excess of his claim over such share, it is enough to know that an excess exists, without taking its exact measurement. In so far as the defendant, James Dunlap, holds the property in controversy in trust, immediately, for the plaintiff, O’Neale, and that is to the extent of his share in the realty, he is entitled to ask that this Court, before which the plaintiff has brought him, shall not compel him to surrender the means which he has in his own hands, for satisfying, in whole or in part, his just demand. Morton vs. Adams, I Strob. Eq.,72; 1 Story Eq., sec. 640. But Mrs. O’Neale’s share in the personalty goes to the plaintiff, not in his own personal right, but in his capacity of administrator, and what shall be his several share, in this, cannot be ascertained until he shall have closed his administration and settled the estate. There may be debts to be paid. Certainly there have been expenses attending the administration, and the assertion of the rights and interests which were of the intestate; all of which must be paid, before there can be any distribution. Beyond the share, which the plaintiff, O’Neale, as an heir of his wife, is entitled to take in the realty within the control of the Court, no provision can be made in this cause for compelling him to pay the claim of the defendant, Dunlap, against him.
    It is ordered and decreed, that James Topper, Esquire, one of the masters in chancery for Charleston district, after having given twenty-one days’ public notice, by advertisement inserted on alternate days, in one of the daily newspapers of the City of Charleston, do sell, at public outcry, at the usual place of master’s sale of real estate, all that lot of land, situate on Lynch street, in the City of Charleston, which is particularly described in the pleadings, on the following terms, to wit: one-third cash, and the residue in two equal instal-ments, at one and two years, with interest on the whole from day of sale, payable annually, the purchaser to secure the payment of the credit portion of the purchase money, according to the terms, by bond, with two or more good and sufficient sureties, and a mortgage of the premises; that from the cash part of the purchase money, he pay first, all the costs of the proceedings in this cause, except the costs of the references held for the investigation of the claim of the defendant, Dunlap, against the plaintiff, O’Neale, as to which each of those parties will pay his own costs; that he separate the residue of the purchase money into two distinct funds, in the proportion to each other of §>75S 16 to §>332 37, holding and treating the former or larger sum as realty, and the latter or smaller sum as‘personalty; that he state an account between the defendant, James Dunlap, and each of his three daughters, for one-third of a reasonable rent of the lot on Lynch street, from the date of the marriage of the daughters respectively, until the day of sale; that he regard and treat so much of the said rent, included in each of those accounts with his two daughters, who are deceased, as was in arrear at the death of the said daughters, as personalty, and all the other rent as realty; that he distribute the whole fund which is herein directed to be treated as realty, in the manner following, to wit: seven-eighteenths (7-18) thereof, to John A. Wotten and wife, Ann ; three-eighteenths (3-18) thereof to Thomas Divine; five-eighteenths (5-1S) to the infant, Ella Hamilton O’Neale, to be delivered to her guardian, and three-eighteenths (3-18) to James Dunlap, being one-eighteenth (1-18) in his own right as heir of his daughter, Margaret, and two-eighteenths (2-18) being the share of the plaintiff, W. T. O’Neale, as heir of his deceased wife; that he distribute the fund, which is herein directed to be taken and treated as personalty, in the manner following, to wit: one-third to John A. Wotten and wife, Ann ; one-third to the plaintiff, William T. O’Neale, as administrator of the estate of his deceased wife, Elizabeth O’Neale, and the remaining third to the personal representative of Margaret Divine; and that the share which shall fall to the defendant, James Dunlap, in this distribution, be subjected, in the master’s hands, to the satisfaction of any claim arising against him in favor of the other parties, or any of them, upon the accounting directed in this decree.
    It is further ordered, that the said master do inquire and report, whether the infant, Ella Hamilton O’Neale, has any duly appointed guardian of her estate; if not, who is a fit and proper person to be placed in that trust, and will accept it; what is the probable gross value of her whole estate, what is her present age, and in what amount the person appointed to the guardianship ought to give bond for his fidelity in the trust, with leave to said master to report any special matter.
    The defendant, James Dunlap, appealed, and moved that the decree may be reformed, so as to declare that the house and lot in Lynch street is his own property, standing only as a security for the amount that may be due by him, as guardian, or as executor of Catharine Dunn, to his three daughters, or to their legal representatives. That this amount is correctly stated by the master’s report, which ought to be confirmed.
    Or, failing in this, that it may be declared he has a lien on the premises for so much of the purchase money as was his own, and did not contribute it as an advancement for the benefit of the children.
    And the personalty consists only of the accumulated interest or rents.
    And also, to declare that the share of Mrs. Divine, whether it be regarded as realty or personalty, is to be distributed, one-half to her husband, and the other half to her father, James Dunlap, the appellant.
    1. Because, the case, as developed .by the pleadings and evidence, is not that of a guardian, executor, or trustee, speculating with, or trading upon, trust funds, but the contrary.
    The defendant, in good faith, securely and lawfully invested, by way of mortgage, the money of his wards, and thereby savel from defeat the intention of his testatrix, Whose bounty it was, and he is ready and willing to account for, and pay over the money that came to his hands, as this Court may direct, or the law require.
    2. Because the Act of Assembly, of 1851, does not apply to the distribution of Mrs. Divine’s share of the estate, but the same is distributable under the provisions of the Act of 1791.
    
      Campbell, for appellant.
    
      Buist, T. Y. Simons, contra.
   The opinion of the Court was delivered by

O’Neall, C. J.

In this case we concur in most of the points ruled by the Chancellor’s decree. Indeed, he has so well discussed and reasoned out the matters brought in controversy, in that as well as in other cases brought before him, as to save us the labor of re-examination.

In this case, however, we are constrained to differ with him as to the character of the property to which the wards of the defendant, Dunlap, are entitled. When they elect to take the property in which he had invested their funds they must take it, as a whole. It is all realty. The house and lot in Lynch street, by his investment and their election, became their property.

There is no propriety to say that a part of the investment arising from real estate sold should be classed as realty, and a part arising from personal property should be considered personalty. The whole investment made by their father of their funds, and a small part of his own, as their guardian, made the house and lot theirs, and of course it is all realty. So much of the Chancellor’s decree as makes a distinction cannot be sustained.

We agree with him, that the Act of 1851, 12 Stat., 80, 81, is to be regarded as part and parcel of the Act of 1701. My view of the effect of an amendment is presented in my dissenting opinion, Hill vs. Connelly, 4 Rich., 626. It is unnecessary to do more than to express our concurrence in the view there expressed, and which the Chancellor has enforced in this case.

It is, therefore, ordered and decreed, that the decree be reformed in the single particular in which we differ from him, and in all other respects be affirmed.

Johnstone, J., concurred in the result.

Wardlaw, J., concurred.

Decree modified.