Case Name: H. S. Neal and others vs. Thomas J. Sullivan and others
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1858-06
Citations: 10 Rich. Eq. 276
Docket Number: 
Parties: H. S. Neal and others vs. Thomas J. Sullivan and others.
Judges: Johnston & Wardlaw, CC., concurred.
Reporter: South Carolina Equity Reports
Volume: 31
Pages: 276–284

Head Matter:
H. S. Neal and others vs. Thomas J. Sullivan and others.
Set off — Judgment—Assignee—Guaranty.
The assignee of a judgment takes it subject to the equity of the defendant to set off against the judgment any sums he may be compelled to pay in consequence of his subsisting liability as guarantor of a note of the plaintiff in the judgment
BEFORE WARDLAW, OH, AT LAURENS,
JUNE, 1858.
Wardlaw,- .Ch. The decree of Chancellor Dargan, who heard this case in June, 1857, adjudged that the estate settled on Thomas J. Sullivan, as trustee for the use of Hewlet S. 'Moore for life, by the deed of Samuel Moore, bearing date June 1st, 1853, was liable to the extent of said Hewlet’s interest to the satisfaction of his creditors, and this judgment was affirmed by the Court of Appeals.
The decretal order of the Chancellor directed, that the real estate settled, should be sold absolutely by the Commissioner of the Court, and that the slaves settled, should be hired out annually, at public outcry, by the trustee; and the Court of Appeals, expressing the opinion that, if a sale were necessary, it should be made by the trustee, and saying they had not information of the circumstances on which the propriety of the -sale depended, set aside the decretal order, and referred it to the Commissioner “to take testimony, and report whether it would be most for the interest of the parties, that a sale should be made of all, or any part of the trust estate, or that the same should continue in the same shape under the management of the trustee.”
It is said, in the course of the opinion, that “thé rights of those ultimately entitled must be considered, as well as the rights of the creditors;” and in a conflict between these two classes, the attempt should be to reconcile the interests of both, and not to defeat entirely, or greatly impair the interest of either; the claims of the former being express, but contingent, and of the latter incidental, but accruing through the immediate object of bounty. In executing the order of the Appeal Court, the Commissioner has ascertained the following facts: Hewlet S. Moore is a married man, about thirty years old, and has a child born since the execution of the trust deed. His debts, as reported, amount to $7,335 15. The trust estate consists of three parcels of land and ten negroes. One tract contains three hundred and seventeen acres, of which forty only are cleared and arable, and is worth in fee $2,536, and for annual rent, $57. Another tract contains two hundred acres, all in forest, worth in fee $1,000, and nothing for rent. The third tract is an improved lot in the village of Laurens-ville, one mile from the Court House, containing eighteen and three-quarters acres, and worth in fee $2,000, and in annual rent, $150. The negroes are likely: Sylvia is about forty years old, and with her two children, a boy of six years, and a girl of one year, is worth $1,000 to $1,400 absolutely, or $60 for annual hire. Louisa, about eighteen years old, worth $1,000, and $75 for hire. Hagar, about thirteen years old, worth $900, or $75 for hire. Emma, about eleven years old, worth $800, and $60 for hire. Dave, about twenty-eight years old, worth $1,100, and $150 for hire. Avarilla, about twenty, and her child, worth $1,200, and $60 for hire; and Elijah, about twenty-nine years old, a plantation blacksmith, worth from $1,200 to $1,400, and for hire $150. On this state of facts the twelve witnesses examined by the Commissioner differ much in opinion as to the propriety of a sale of one or both descriptions of property, in fee or for life. Nearly all concur in the opinion that the interest of the creditors would be promoted by an ábsolute sale, as interest on the proceeds of sale would amount to a larger sum than the aggregate of rent or hire. Five witnesses express belief that if the life interest alone were sold, it' would not bring more than 25 per cent, of the whole value; one, that it would bring 40 per cent.; one, that it would bring 40-50 per cent., and others that it would bring 50 per cent. McDavid and Smith think it better that the property should remain as it is; Mitchell, that the land should be sold, and not the negroes; McCarley, that it is better for remaindermen that land should be rented; Blakely, that it would not be detrimental to remaindermen to sell both; Berry and Chandler and Eppes, that it would be injudicious to sell a life interest separately,particularly in the negroes; Richardson and Gunnels, that it is better for remaindermen not to sell the negroes; Dial and Davenport express no opinion, except that the former says that the value of the increase of the slaves is likely to be greater than interest on their value.
The Commissioner, “ deeming it proper to draw his own conclusions from the testimony of the witnesses,” " reported 'his opinion that it would be to the interest of all the parties that the fee simple of the whole real estate should be sold, and that the life interest of the defendant, Hewlet S. Moore, in the negroes, should, be sold.” To this report the trustee excepted, I. “Because the testimony was conclusive that it was not most for the interest of the parties to sell either the life estate in the slaves, or the fee in the landand 2. “Because the Commissioner disregarded the testimony, and adopted his own arbitrary opinion, in recommending a sale of the property.” Some misconception is exhibited in the frame of these exceptions. A question as to the propriety of a sale is not within the province of science or peculiar skill, as to which the maxim cui libet in sua arte credendum est, but is an ordinary inquiry into facts, in which the opinion of witnesses is not strictly testimony. The Commissioner being required to report on the question, necessarily expresses his opinion in recommending any course to the Court, but his opinion should be based on the circumstances proved, and not on the unsupported theories of other persons. It is the business of witnesses to state facts, and of the Court to form opinions on their statements. The judgments of all of us, however, are so much influenced by the views of intelligent • associates, that we may well listen, in matters of discretion to the mere advice of others; but it seems plain that a Commissioner or Chancellor may disregard the advice or opinions of all the witnesses in a case, if not approved by his own understanding. My own judgment is entirely satisfied of the propriety of selling the lands in fee. They are now yielding a rent of $207 only, which is $180 less than the annual interest on their value. If they were sold for Moore’s life only, a purchaser could afford to give nothing for one of the tracts, and little for another, as, according to my apprehension, he would have no right to open the wild lands for cultivation. Even the -house and lot, although the improvements are new, is not yielding any thing near that rate of profit, say 10 per cent, of the value, which is the ordinary standard of rents; and common experience teaches that such property is liable to great dilapidation, especially in the tenure of-those holding for a year only, or for an uncertain term. The remaindermen sustain no direct loss by a sale, and at most complain of possible loss of the contingent appreciation of the estate, whereas there is much risk of depreciation. My conclusion is nearly as confident that the slaves should not be sold for the life of Moore. If sold at all, an absolute sale would be preferable. They are likely, and for the most part reproductive, so that, as Dial says, the value of their increase will probably exceed the interest on their present value. They are now capable of yielding a hire of $630, which is $105 more than the interest on their whole estimated value, and the probability is, that their annual value will increase, so that creditors cannot complain of hiring. The utter uncertainty of the duration of Moore’s life, makes the price of his interest as uncertain, according to the hopefulness or caution of bidders. Slaves sold for an uncertain time are exposed to the risk of being overworked from the greediness of purchasers to reimburse themselves and make profit, and thus their lives may be shortened, and their fruitfulness impaired. So, too, notwithstanding every precaution of forthcoming bonds, and the like, they may be eloigned and lost. There are objections even to hiring, in its bearing on the interests of remaindermen ; but it is the least objectionable form of securing the interests of the parties. The trustee must be invested with as much discretion as is consistent with the interest of creditors, and they should have the opportunity of bringing 'forward their complaints of any breach of trust or waste on his part. It is ordered and decreed that Thomas J. Sullivan,-trustee, do sell the several tracts of land described in the trust deed, at public auction, on a credit of one and two years, with interest from the day of sale, payable annually, the two tracts lying in Greenville, at some suitable place, on, or near the premises ; and the house and lot at Laurens C. H., at such times as may be fixed by the trustee, public notice, for at least twenty-one days, of the sales being given before the sales. Purchasers to give bonds to said trustee, with at least two good sureties, and possession not to be taken until the present leases expire.
It is further ordered arid decreed that the said trustee pro ceed to hire such of the slaves passing by the trust deed as are not hired, until the first of January next; and it is further ordered that said trustee on the first Monday in January next, and on the same day in every year afterwards during the life of Hewlet S. Moore, while the debts established against him remain unpaid, hire out the said slaves at public outcry, at Laurens C. H.; allowing discretion to said trustee to reject the bid of any unfit hirer, and to take all proper measures to secure the humane treatment of said slaves.
It is further ordered that said trustee pay ratably to the creditors of said Moore who have established, or may establish their demands, the amount of the hire of the slaves and the interest of the proceeds of sale of the land, as the same may be collected. It is further ordered that ssid trustee make annual returns to this Court for Laurens of his transactions under the foregoing orders; and that any of said creditors have leave to except to such returns, a'nd bring to the notice of the Court any breach of trust, waste, or other act impairing or endangering the trust, on the part of the trustee.
There is another branch of this case. The Court of Appeals . further ordered the Commissioner to call in the creditors of Moore to present and prove their demands, and that he report thereon. The Commissioner has reported demands established to the amount of $7,225, and to this report the trustee also excepts because certain claims are included, on insufficient proof. The objection to the proof of the claim of Cheshire & Smith is made in mistake. The note was in evidence before the Commissioner and was produced by him on the trial. The claim of Wm. M. Badgett of $250 is for building a kitchen on the lot in Laurensville, on a fair contract with Moore. The building added to the value of the lot at least to the extent of this claim. I think the demand may be fairly considered as originating in the creation of the trust estate, and that it was properly allowed. The claims of J. H. Henry and E. B. Benson, which are objected to, are not clearly proved, but, under the circumstances, I shall grant the application for leave of further time to make suppletory proof.
The fourth exception of the trustee is, “ because the Commissioner has reported that H. S. Moore is liable on a guaranty of a single bill for $845 84, and interest, claimed by Edward Hix, when the makers of the single bill, (Daniel L. and Spencer H. Neal,) are parties before the Court, through their assignee, H. S.< Neal, claiming a judgment of $950 62, and interest, against said Moore, and the Commissioner has allowed both; whereas he should have reported thatif Moore is liable on the guaranty, the judgment against him in favor of D. L. & S. H. Neal should have been credited with the amount of his liability on said guaranty.”
It appears that the single bill from D. L. &-S. H. Neal is dated February 23, 1853, payable on January 1,1854; that it was assigned by Moore to J. W. Arnold, with guaranty of payment, April 23, 1853, and that by subsequent assignments it passed to Edward Hix, who obtained judgment thereon against D. L. & S. H. Neal. They were afterwards discharged under the insolvent debtor’s Act. The note of Moore to D. L. & S. H. Neal was given March 4, 1854, payable one day afterwards; and sometime afterwards Moore confessed judgment to them on said note; and they, on November 15, 1855, assigned this judgment to H. S. Neal as indemnity or collateral security for certain liabilities he had incurred in their behalf. The Commissioner sustained this exception without making any explanation, and I am not able to perceive the reasons on which he acted. • There'is no such connection between the two claims as to render the doctrine of set-off applicable. It would be manifestly unjust to compel Hix to release his claim because his debtor, after Hix’s right was acquired, became debtor of a firm of which hetwas originally creditor. The Commissioner was right at first, and wrong in reversing his judgment. It is ordered and decreed that this report of the Commissioner on the debts of Moore be re-committed for the purpose of further inquiry and evidence, and report as to the claims of J. H. Henry and E..B. Benson, and that in ail other particulars said report be confirmed.
The defendant, Thomas J. Sullivan, appealed from so much of the decree as relates to' the judgment in favor of the Neals, and the guaranty on which E. Hix sets up a claim, and now moved this Court to reverse that portion of the same which allows said judgment, on the grounds:
1. Because the fourth exception filed by the defendant to the Commissioner’s report, and sustained by him, was well taken, and ought not to have been overruled by the Court.
2. Because the Chancellor’s decree was founded in a misconception of the facts of the case, and the defendant has an equity to have so much as his estate pays on the debt to Hix, for which he was only security, credited on the judgment of the Neals against him, who were his principals.
3. Because if the judgment was assigned to H. S. Neal, as indemnity or collateral security, he was* bound to prove that he was damnified before he could avail himself of the judgment.
Sullivan, for appellant.
Simpson, Henderson, contra.

Opinion:
The opinion of the Court was delivered by
Donkin, Ch.
When this case was formerly heard, the principles of the Circuit decree were affirmed, but the decretal order directing a sale, &c., was opened for the purpose of further inquiry. That inquiry has been made, and the judgment of the preceding Chancellor has been confirmed by that of his successor, and no appeal has been taken from that part of the decree. The trustee should, therefore, account for the hire of the slaves as well as the rent of the land from the time fixed in the former decree, and apply the same as provided in the last circuit decree.
Upon the subject of the fourth exception, it appears that the judgment.of I). L. and S. H. Neal against Hewlett S Moore was assigned 15th November, 1855, to H. S. Neal as indemnity for certain liabilities, sometime after the transfer and guarantee by Moore of the note of D. L. and S. H. Neal which was payable to himself. In'the opinion of the Court the .assignee of the judgment, H. S. Neal took it subject to the Equity, which Moore had to set off against the same, any sums which he should be compelled to pay in consequence of this subsisting guarantee. The decree of the Circuit Court is modified accordingly. In all other respects the decree is affirmed.
Johnston & Wardlaw, CC., concurred.
Decree modified.