Case Name: Mary Emily Spencer, v. The Exor's. of Wm. H. Gibbes
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1838-02
Citations: 1 Dud. Eq. 174
Docket Number: 
Parties: Mary Emily Spencer, v. The Exor’s. of Wm. H. Gibbes.
Judges: 
Reporter: South Carolina Equity Reports
Volume: 13
Pages: 174–179

Head Matter:
Mary Emily Spencer, v. The Exor’s. of Wm. H. Gibbes.
Under an order of the Court, allowing1 an administratrix to borrow money on a mortgage of a lot which was part of the real estate of her intestate, and directing1 that the money thus raised should be appropriated “under the direction of the Master” to certain purposes, — it was held that he was not responsible for her misapplication of the money.
Butit is otherwise when he assumes the execution of the trust, and misapplies the money himself; in such case he shall be liable for the payment of the money, with interest thereon from the time of the misapplication.
Where the Master under such circumstances procured the loan, and executed the mortgage, and on its foreclosure sustained a loss, he was allowed a credit for the complainant's proportional share of the same, she being one of the distributees of the estate.
Before Ids Honor Chancellor HARPRR, at Charleston, June 2837.
Bill for an account and payment of complainant’s portion of $1875 received by defendant’s testator as master in 1S18, under the circumstances set forth in the following decree:
In 1818, Mrs. Mary Y. Spencer, the mother of complainant, and the administratrix of her deceased husband Joseph Y. Spencer, ■presented her petition to this Court, playing permission to mortgage to the Bank of the State a house and lot, part of her intestate’s estate, for the purpose of raising the sum of two thousand dollars, to be applied to the payment of debts of the estate, and for the maintenance and education of her children. The children of Joseph Y. Spencer and wife, at the time of his death, in 1814, were the complainant, a son, Joseph Y. Spencer, and a daughter, who died in infancy. The petition was referred to the master, William Hasell Gibbes, who recommended granting the prayer thereof, and that the said sum be appropriated under the direction of the master, to the discharge of the debts of the estate of the said Joseph V. Spencer, and for those since contracted for the support of the children by the administratrix, and that she account for the application thereof, to the said master. This report was confirmed. The mortgage 'was executed by the master, and he received of the Bank, on account of the petitioner, the sum of $1875. Of this amount he paid the petitioner, Mrs. Spencer, the sum of $600, which it is alleged that she principally applied, not to pay any debt of her husband’s estate, or towards the support of her children, but to the payment of her own personal debts. Out of the funds remaining in his hands, the master paid a judgment, which one Emanuel had obtained against Mrs. Yesey, personally, to the amount of $466, and another judgment, which La Prince and Dumont had in like manner obtained against herto the amount of $360 28. It appears that these debts were contracted for goods furnished her, to carry on a store. She was, however ,unsuccessful in herbusiness, and died insolvent, and no administration has been taken out on her estate.
It appears from the evidence in this cause, that there were no debts of the estate of Joseph V. Spencer, or if any, very inconsiderable. The administratrix could not have been in advance, on account of the maintenance and education of her children; but on the contrary must have been indebted to them, on account of the rents and profits of the real estate of the father, received since his death, a personal estate to the amount of $1353, wasted by her, and debt due to the estate, received by hei-, to the amount as fixed by one witness of $1000, and by another of about $3000, but which I believe, was settled to have been something more than $3000. The object of the bill is to render the estate of the master, "William H. Gibbes, liable for the amount paid by him to Mrs. Spencer, and misapplied by her, and the amount paid to Emanuel, and to Le Prince and Dumont, on the ground that these payments were improperly made, and in violation of his official duty. There is no evidence whether these latter payments were, or were not made, by the direction of the administratrix.
If these funds were still in the hands of the master, or his legal representative, I suppose the complainant would, in equity, be entitled to one half of them, one third in her own right, as distributee of her father, and the half of one-third as distributee of her deceas ed sister, lier brother being entitled to the other half. The funds were raised out of the real estate of their father, and their mother being indebted to them in a greater amount, would, if alive, not be permitted to receive any share. No objection is taken, that alegal representative of the mother, is not a party to the suit.
If the funds were improperly paid away by the master, and in violation of his duty, he is as much liable, as if they were still in his hands.
With respect to the $600 paid to Mrs. Spencer herself, I do not find any ground on which he can be made liable. The report which was made the order of the Court, certainly contemplated that the money should go into her hands, and be applied by her, though under the direction of the master. The direction that she should account to the master, indicates this. It does not appear that the payments made by her, were made under his direction, or by his sanction. He could not control the disposition of the money when it was once in her hands, and if she paid it without his sanction, I do not perceive that it could have any other effect, than to render her personally liable. However unadvised we may suppose the report of the master to have been, that was in the nature of a judicial act, for which he could not be rendered responsible.
The case is different with respect to the payments made to Emanuel and Le Prince and Dumont. These demands on the face of them, appeared to be her personal debts, the payment of which was certainly not authorized by the order of the Court. Ho was bound to inquire into the consideration on which they were founded. Even if we suppose them to have been made by the direction of the administratrix, he concurred with her in the application of the funds, when it was his duty to control her. If the money had been in her hands, it would have been a violation of duty to have sanctioned such a payment. To the amount of these payments then, I think, his estate is clearly liable.
The lapse of time is relied on by the answer. By the act of 1788, (P. L. 455,) four years are allowed an infant, after coming of age, to prosecute a personal action. According to the testimony, the complainant at the time of her father’s death in 1814, was an infant, just standing on the floor. The bill was filed in the for mer part of 1835, then, if we suppose her to have been two years old at the time of her father’s death, she did not come of age, until 1833, and her suit is brought two years within the time allowed by law, even if we suppose this a case in which the statute would apply.
It is ordered and decreed, that defendants pay to complainant, four hundred and seventeen dollars, (half of the aggregate of $466 and $368.) Costs to be paid out of their testator’s estate.
The complainant appealed from the foregoing decree on the following grounds:
1st. That the decree should have allowed complainant interest on $417, the amount ordered to be'paid to complainant from the time the money was borrowed from the Bank of the State, to wit, from 1818.
2nd. That the complainant is entitled to a decree, to receive from the representative of "William Hasell G-ibbes, the six hundred dollars paid by him to Mrs. Mary Y. Spencer, such payment it is submitted having been a misapplication of the funds received by him as master.
G. B. JSckhard and II. Yeadon, Jr. for complainant.
The defendants also appealed onthe grounds,
1st. That the bill ought to have been dismissed, as there was no proof of any misapplication of the fund by the master.
2nd. That against any amount which may be decreed to have been misapplied by Mr. Gibbes, the defendants are entitled to set off as a discount, the amount of $478, paid by him on his bond to the Bank of the State.
-II. GrimJce, defendants’ solicitor.
Copy of the master’s report, referred to in the foregoing decree:
To the honorable the Judge of the Court of Equity for the said State. It having been referred to me, to examine the merits of the above petition, and report on the expediency of granting the prayer thereof, I report that I have duly investigated the same, and ascertained the allegations to be true, as thereon set forth, and am of opinion, and do accordingly recommend, that the said prayer be granted and petitioner allowed to borrow $2000 from the Bank of the State, if the same can be obtained, and mortgage the lot for security of the payment, and that the said sum he appropriated under the direction of the master, to the discharge of the debts of the estate of the said J oseph Y. Spencer, and of those since contracted for the support of the children by the administratrix, and that she account for the application thereof to the said master.
Wm. H. Gtbbes, Master in Equity.

Opinion:
This report was confirmed on the 20th February, 1818.
Johnston, Ch.
We concur with the Chancellor with respect to the amount paid over by the master to Mrs. Spencer. It appears that the order of the Court was to put the money in the hands of the administratrix, to be employed by her, under the direction of the master, in the payment of debts, and that she should account for it. The custody of the money gave her the control of it. The master ought not to be made responsible for funds ordered to be put into the hands of another person beyond his control. She, in whose hands it was placed, was directed how to employ it, and was made accountable for its misapplication. If she had employed it under the direction of the master, as directed, she would have been discharged; as she did not, she was accountable for it. The direction that she should not apply it without the approbation of the master, was a condition which she was to obey, but her disobedience was no fault of the master.
With respect to the sums which the master paid to Emanuel and Le Prince and Dumont, we concur with the Chancellor, that it was a misapplication for which the master was responsible. He assumed to act on the trust delegated to the administratrix, and he who assumes the execution of a trust, shall be held liable, if he fails in the performance of his duties, he has undertaken. But we think that upon the well established principle that interest follows every breach of trust, interest should have been charged on the money misapplied, to be computed from the time of the misapplication. In this case, it is but a fair compensation for the loss sustained, The complainant was subjected to her proportion of interest paid to the bank for the very money which was misapplied.
The Court, on the other hand, is of opinion that the defendants should have been allowed credit for the complainant's proportional share of the money paid by the master to the bank, in discharge of the loan; the allowance to carry interest from the time of the disbursement. This was no misapplication. If the administratrix herself had received the money loaned by the bank, she would have been allowed credit for any re-payment. The master's repayment should stand on the same footing. As to the complainant, it is the same as if the loan had been less, by the amount repaid, and in the foreclosure of the mortgage, her'loss was diminished by so much.
Let the circuit decree be modified according to this opinion, and let the report be recommitted to be reformed accordingly. The defendants to pay costs.