Case Name: Mary Stephenson, and Others v. John Axson, Executor of John Fowler Percy, and Sarah E. Mitchell
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1831-03
Citations: 1 Bail. Eq. 274
Docket Number: 
Parties: Mary Stephenson, and Others v. John Axson, Executor of John Fowler Percy, and Sarah E. Mitchell.
Judges: 
Reporter: South Carolina Equity Reports
Volume: 8
Pages: 274–279

Head Matter:
Mary Stephenson, and Others v. John Axson, Executor of John Fowler Percy, and Sarah E. Mitchell.
The bequest of an annuity is payable annually, from the death ot the testator, and the annuitant is intitled to interest on the arrears, if not paid when due.
A pecuniary legacy, payable on the legatees attaining the age of twenty-one years, does not carry iuterest in the mean time, unless the will gives interest; but if the legacy is not paid when due, the legatee is intitled to interest after that period. -
The testator directed his debts, and legacies, including s.ome annuities, to he paid out of the crops of his estate, and prohibited the sale of any part of his estate, except the crops: and the crops in some years exceeded, but in others fell short, of the charges upon it. Held, that the residuary legatee was not intitled to the surplus crops of each year, after payment of the annuities for that year; and of such legacies as were then payable : but that the annuities, and other legacies, constituted a charge upon the whole income of every year, until they were fully paid; and that the surplus of the productive, must be applied to make up the deficiency of the unproductive, years.
If an executor delivers over the estate to the residuary legatee, without retaining a sufficient fund for other legacies, it will be a devastavit; and the other legatees may recover against him: and it makes no difference, that the other legacies are payable at a future, and distant day, but it is the duty of the executor to provide for them, whenever they are to he paid. So if the legacies are directed to be paid out of the • income only, he is Bound to keep possession of the estate, until a fund has accumulated from the income, sufficient to pay all the legacies ; and if some of the legacies are annuities, he should accumulate and retain such a sum, as, being invested, will, by the annual interest meet the annual payments : and if he delivers over the estate, or pays any part of the income to the residuary legatee, he will be liable to the other legatees, for all sums so paid over, and for the income of the estate in the hands of the residuary legatee, with interest on the annual balances.
A residuary legatee, receiving the estate, or any part of it, from the executor, with a knowledge that the other legacies have not been paid, or ' provided for, may be required to refund, with interest, to the same extent to which the executor is liable to the other legatees.
This was a bill to recover the arrears of certain annuities, and biso certain pecuniary legacies, devised and bequeathed to the complainants, respectively, by the will of John Fowler Percy. The cause was heard at Charleston, in January, 1826, by Thompson, Chancellor ; and, upon appeal, it was sent back by the Court of Appeals, for inquiry into the accounts, reserving the questions made by the appeal. In pursuance of this order, the accounts were referred to the master ; and the cause came on for hearing,' in May, 1830, upon exceptions to his report, before Harper, Chancellor, from whose decree, the case will be fully understood.
Harper, Ch. John Fowler Percy, by his will, devised to the complainants, Mary Stephenson, and Elizabeth Rose, annuities of $200, each for life ; and to the complainants, John Rose, Elizabeth Percy Rose, and William Rose, legacies of $1,000, each, payable on their respectively attaining the age of twenty-one years : and the will contained the following clause ; “ it is my particular desire and order, that my executors shall not, on any pretence whatsover, sell, or dispose of any part of my estate, except the crops, which I hereby direct to be applied to the payment of my debts.” The testator devised and bequeathed the residue of his estate to the defendant, Mrs. Sarah E. Mitchell. A decree has been made in the cause at a former term, by Chancellor Thompson. The points decided by his decree are, that the annuitants are intitled to interest on the arrears of their annuities, from the time when the several payments ought to have been made ; and that the other legatees are intitled to interest on their legacies, from the time of their respectively attaining the age of twenty-one years, but not before : and the decree directs the legacies and arrearages to be paid by the defendants. This decree was appealed from, and the Court of Appeals has directed an inquiry, “ to ascertain the amount of the crops of the estate of John Fowler Percy, deceased, since his death, and how the same were disposed of; how much of the annuities due to the complainants, under the will of the said John Fowler Percy, has been paid to them, and how much still remains due; and that an account be taken of the executor’s administration in relation to the mutters in issue between the parties.” In pursuance of this direction, the accounts were referred to the master, and he has now reported.
The material facts stated by the master are these. The executor, John Axson, regularly paid the annuities for several years, up to the end of 1817, out of the proceeds of the crops; and during these years, he paid to the defendant, Mrs. Sarah E. Mitchell, at various times, the aggregate sum of $2,762.63, arising from the surP^us cr0PsJ after payment of the annuities. Of these payments, the sum of $2,000, was expressed to be on account of her residuary legacy. In 1818, the executor delivered over the whole estate to Mrs. Mitchell; and she regularly paid the annuities for the years 18X8, 1819, 1820, and 1821: and in those years she rece¡ve(j (he aggregate sum of $2,341.77, over and above the pay. ments on the annuities. From that time, no part of the annuities was paid up to 1827, when the estate was sold by order of this Court; but Mrs. Mitchell, in the last mentioned period, received from the crops the sum of $3,514.69. Mrs. Mitchell holds a bond given by the testator in his life time; which the master recommends to he set off against the surplus received by her, after payment of the annuities in the years 1818, 1819, 1820, and 1821. The mas. ter makes several recommendations, as to the manner in which the defendants shall be charged; and various exceptions have been filed, on the part, both of the complainants, and the defendants, to the report.
The complainants’ fourth, and the defendants’ second, exceptions apply to the subject of interest on the legacies, from the time when they became payable. These are points decided by Chancellor Thompson’s decree, and it is not for me to review it. That decree is now before the Court of Appeals, and the present reference is for the purpose of enabling that Court to decide upon it.
I think it will enable us to decide on the matter of the other exceptions, to consider how the executor ought to have acted, in the discharge of his trust under this will. In general, there can be no doubt, but that a residuary legatee is intitled to nothing, until all the debts, and other legacies are paid. There is as little doubt, that if the executor deliver over the estate to the residuary legatee, without retaining a sufficient fund for other legacies, it will be a devastavit; and the legatees may recover against him. So, if legacies are payable at a future day, he should retain enough to satisfy them when they become due. Regularly he should invest such a sum, as will meet the payment at the day. So, if the legacy be an annuity, he should retain such a sura, as being invested, will, by its annual interest, meet the annual payments. This is what the Court directed an executor to do in Slanning v. Style, 3 P. Wms. 337 ; viz., to bring in bonds and securities sufficient to raise the annual amount coming to the annuitant. The residuary legatee will, in the meantime, be i intitled to the principal sum in remainder, after the annuity shall fall in.
Such are the general rules. The only peculiarity in this case is, that the annuities and legacies are directed to be paid out of a particular fund, the annual crops. But the only difference this makes is, that if the fund proves insufficient, the legatees must abate. If the fund is sufficient, they must be paid ; and the residuary legatee can, of course, be intitled to nothing of that fund, until they are paid in full. I think the executors duty required him, after making the first year’s payments of the annuities, to invest any surplus, with a view to such an accumulation, as would meet the annual payments to the annuitants, and the legacies, when they should become due. When that was effected, and not before, he might properly deliver over the estate to the residuary legatee. The annuity, although payable in instalments, is an entire legacy; and the residuary legatee can be intitled to nothing out of the fund provided for it, until it is paid in full. This is involved in the very idea of a residuary legacy. The executor might have retained the estate in his hands, and gone on paying the annuities out of the annual crops, and paying the surplus to the residuary legatee; but it must have been at his own risk, if future crops should prove insuf. ficient to meet future payments. It is idle to say, that the executor was not bound to provide for the payment of the legacies, so long before they were directed to be paid. Whenever a legacy is .to be paid, it appertains to the executors to provide for it.
It follows from the view I have taken, that the executor, John Axson, is chargeable with the amount paid to Mrs. Mitchell, previously to 1818, together with interest from the time of the several payments. He is also chargeable with whatever the estate has produced since, with the surplus received by Mrs. Mitchell, over and ahove the payment of the annuities, up to 1823 ; and with all that she received after she ceased to pay the annuities, together with interest on the annual balances. This was the fund for the payment of legacies which he suffered to go out of his hands. By deliver, ing the estate to Mrs. Mitchell, he seems to have constituted her his agent, to discharge his trust; and he must be responsible for his agent.
But I think Mrs. Mitchell also chargeable to the complainants to the same extent. She concurred with him in the misapplication of the assets, and received the benefit of the misapplication. Those inti, tied to an estate, may, in many cases, either charge the executor, or follow the fund in the hands of those who have received it. She was a volunteer; and she was, of course, aware of the will, under which she claimed: and although I have no idea that any thing dishonest was intended, yet, in a legal point of view, it must be re garded as a case of collusion. If the complainants had proceeded against the executor alone, she would have been answerable over to him ; and the Court having all the parties before it, will do complete justice.
As to the bond held by the defendant, Mrs. Mitchell, it is immaterial out of what moneys received by her, it must be regarded as having been paid. The interest charged against her, will balance the interest accruing on the bond.
I believe the views I have taken, dispose of all the objections on both sides. It is therefore ordered, that the report be referred back to the master, to be remodelled, according to the principles herein expressed.
From this decree, the defendants appealed ; and the cause now came before the Court of Appeals, upon the appeals from the decree of Thompson, Chancellor, and the last decree.
Cruger, for the defendants.
King, for the complainants.

Opinion:
O'Neam, J.,
delivered the opinion of the Court.
The annuitants, under the testator's will, are intitled to interest on the arrears of their annuities, from the time when they respectively became due; and so also the pecuniary legatees are intitled to interest on their legacies, from the time of their respectively attaining the age of twenty-one years; These points were settled by the decree of Chancellor Thompson, and the Court is satisfied with his opinion, and the reasons which he has assigned for it. It is a rule of universal application, both in law, and in equity, that a sum certain, payable on a day certain, bears interest from that day. The annuities in this case, were payable annually, from the death of the testator ; and where they have not been paid, it follows from the rule, that the arrears will carry interest from the time when they ought to have been paid. To allow interest on the arrears of an annuity, is the established practice of the Court. The pecuniary legacies are directed to be paid, on the legatees attaining the age of twenty-one, and they aré intitled to interest from that time; but there is no ground for ,the claim set up to interest from an earlier period. Where a legacy is directed to be paid at a particular time, the legatee is not intitled to interest in the mean time, unless it is given by the will.
The income of the estate arising from the crops of each year, and the nett proceeds of the sale of the estate, since it was sold, constitute the fund for the payment of the debts, and legacies, including the annuities. The capital of the estate cannot be broken Mi upon for the payment either of the annuities, or the pecuniary legacies ; but the whole income is applicable to them, without reference to the years in which it accrued. As in some years the crops exceeded the charges upon the fund, and in others fell short, the years of plenty must aid those of scarcity and want.
The annual balances left in the hands of the executor, and the residuary legatee, Mrs. Mitchell, must be accounted for by them, with interest, and applied to the payment of the debts, annuities, and pecuniary legacies, as directed by the decree of Chancellor Harper, and for the very satisfactory reasons which he has assigned.
It is, therefore, ordered, and decreed, that his decree be affirmed.
Decrees affirmed.