Case Name: James H. Boggs, William Oliver, and Wallace & McFie, vs. Harriet Reid, and D. Rumph, and George Butler
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1829-01
Citations: 3 Rich. 450
Docket Number: 
Parties: James H. Boggs, William Oliver, and Wallace & McFie, vs. Harriet Reid, and D. Rumph, and George Butler.
Judges: 
Reporter: South Carolina Law Reports
Volume: 37
Pages: 450–466

Head Matter:
In Chanceryi
January, 1829.
James H. Boggs, William Oliver, and Wallace & McFie, vs. Harriet Reid, and D. Rumph, and George Butler.
The duty of a trustee is to hold and employ the property for the benefit of the cestuique trust; but he is not authorised to encumber it with debts. ~ v
Persons who deal with him must do it upon his individual credit, and not upon the credit of the' trust estate.
Having the management of the estate, necessarily implies a power to provide for its maintenance and support. He is authorised, therefore, to pay the doctor’s bills, and taxes — to purchase plantation tools, and the necessary supplies for the slaves, &c., and to reimburse himself out of the proceeds of the crops.
The trustee’s reimbursing himself, is a matter between him and the cestuique trust alone, the creditors having nothing to do with it. They are the creditors of the trustee and not of the estate.
The trustee himself is not authorised to pledge the capital, but must keep the expenditures within the income.
If the estate is unproductive, and in danger of consuming itself, he must apply to the Court for advice, and may, under its direction, convert it into other property, or make such other arrangements as may remedy the evil.
There are cases when the Court will permit a part of the property to be sold to save the rest.
Cases of urgent necessity may exist where there may not be time to apply to the Court, in which a trustee may and must act upon his own responsibility, in wh: ch he will be indemnified out of the trust estate; as in case of the burning of a house, destruction of a crop by deluge, and the like. It is only in such cases, that the estate will be allowed to be encumbered, and the Court will judge of the necessity.
The grounds on which the cases heretofore decided were founded, do not distinctly appear.
The cases of Cater vs. Eveleigh, James vs. Mayrant, and Montgomery and Eveleigh, commented on.
The Court may allow the creditor the same privilege of being remunerated out of the income, as would be allowed to the trustee, for necessary disbursements.
Where, by a marriage agreement, an estate, real and personal, was conveyed to trustees in trust, to permit the husband'and wife to receive the profits during their joint lives, and if the wife survived, “in trust that they should assign, transfer and pay over, all the said property to the wife absolutely at the death of the husband, the wife surviving, the trust estate terminates, and the income in the hands of the widow will not be subjected to supplies furnished during the life time of the husband, though the income during his life time might have been so subjected, if application had been made to the Court.
Income in the possession of the husband, at his death, more than necessary for the current expenses of the family and plantation, might be subjected to reimbursements for necessary supplies.
The bill stated in this case, that on the 13th of November, 1821, John Reid and Harriet Hart, being about to intermarry, entered into a marriage contract, by which the property of said Harriet, consisting of lands and negroes, and other personal property, specified in said deed, was conveyed to D. Rumph and G. Butler, subject to certain trusts, &c. That the said marriage was afterwards solemnized. That the property went in consequence into the possession of John Reid, who superintended and managed the same, and made all contracts in relation thereto ; and purchased such articles as were necessary for the estate and the cestuique trust; and employed overseers and sold the crops ; either by virtue of the authority given in the deed, or by the direction of Rumph and Butler, the trustees ; or that he acted as agent of the trustees. That being possessed, (fee., he purchased of the complainant Boggs, same mules for the estate, and gave his note therefor, on the 9th October, 1826, for $225. That he took possession of the mules and carried them to the plantation, where they have been used and where they still remained. The bill further stated, that Reid employed the complainant, William Oliver, as overseer on the trust estate, and gave his note for the wages, on the 1st of January, 1826, for $165, for the services of the year 1825. The note not being paid, he sued Reid, and recovered a judgment at law; but no satisfaction had been made; and complainant was put to costs, (fee. That Reid had no other plantation than the trust property ; and that he departed this life sometime in the year 1828, insolvent, and that no means of payment remained, except from the trust property, for the benefit of which the debt was contracted.
The complainants, Wallace & M’Fie, stated, that John Reid being in possession of, and managing said estate, purchased sundry articles for the estate, and for the cestuique trusts, in the year 1825 and 1826, which were carried to the estate, and there used. That on the 7th of March, 1826, Reid closed the account of the year 1825, and gave a draft on his factor for said estate, for $173,78, which was not paid, but protested and returned. That thereupon complainants charged the same to the account of John Reid, and that this account, and also the articles subsequently purchased for said estate, and that of cestuique trust’s, amounted on 1st January, 1827, to $215,73, for which Reid gave his note ; on which suit was brought, and judgment obtained, but the execution was returned nulla bona.
The bill charged, that as the marriage settlement secured the property to Reid and wife during their joint lives, and as these debts were contracted during their joint lives, the trust property was peculiarly liable to pay them. That independent of the general charge, that Reid died insolvent — there were many executions returned nulla bona against him; and that he was taken by viitue of a capias ad satisfaciendum by some plaintiff, and that he assigned all he possessed, which was not sufficient to satisfy the claims entitled to distribution. That they applied to said Reid and to defendants for payment, without success. The bill prayed discovery of all the facts ; and that defendants might pay the debts, interest and costs, out of the estate or otherwise ; and if necessary, that they should account before the Commissioner for that purpose ; and asked for general relief and subpoena.
The answer of Mrs. Reid admitted the deed and the marriage, and that Mrs. Reid and husband took possession of the property, and received the proceeds ; that John Reid was the established and only manager, and sold the crops, until about two years before his death, being arrested on a ea. sa. he assigned his property and also his interest in the trust estate, to R. P. M’Cord, who took possession and sold the crops for the benefit of the judgment creditors, amongst whom were most of the complainants, and submitted whether any demand could be made upon the trust estate, until it was ascertained to what extent this fund was liable in discharge of complainants’ debts.
The answer admitted that J. Reid purchased the mules, for the trust estate, and gave his note ; that they were used for the said estate. That Oliver did oversee, and that the note was given for his wages, &c. She could not say for what purpose Wallace & M’Fie’s account was created. The articles appeared not to be such as were for the estate. That it appeared that a large portion were ordinary family supplies, and some for which this court cannot hold the trust estate liable. When the court shall have settled the principles upon which her estate was liable, for debts created by her last husband, she was willing that such portions of this account as the commissioner might think came within these principles,- might be paid. The answer submitted that if the estate was made liable for these debts the primary object of the settlement might be defeated. She understood there were many debts, enough to consume almost the whole estate, <fcc., and prayed to be dismissed with costs, <fec.
Preston, for the defendant,
contended that the trust estate was not liable at all.
Chappell, for the complainant.

Opinion:
De Saussure, Chancellor.
This case involves a question which is too frequently occurring before the Court. The decisions have been numerous, and almost every case has some peculiar or diversified circumstances, so that hardly any two of them are exactly alike.
The precise facts are stated in a few paragraphs. A widow lady, named Harriet Hart, being about to intermarry with Mr. John Reid, and being possessed of a good real and personal estate in her own right, a marriage contract or settlement was entered into between them, with the usual intervention of trustees, by which her property was conveyed to George Butler and David Rumph, in trust, that they would permit the said John and Harriet to receive and enjoy the profits and proceeds of the above mentioned property, (except three slaves, who are named) during the joint lives of the said John and Harriet: And if the said Harriet should survive the said John, in trust, that they (the said trustees) should assign, transfer, and pay over, all the said property, and the issue of the negroes, to the said Harriet, absolutely and unconditionally. But in case John Reid survived his wife, and there was no issue of the marriage, then the estate to go to said John Reid absolutely. If there should be issue surviving said Reid, then to such issue.
The marriage took effect — and Mr. John Reid died on the day of in the year 1828. There was no issue of the marriage ; so that Mrs. Reid is entitled to the whole estate, transferred to her unconditionally and absolutely.
During the coverture, Mr. John Reid was in possession of the estate, and received and applied the rents and profits as he pleased. He contracted debts with various persons ; among them, with James H. Boggs, one of the complainants, from whom he purchased certain mules, for which he gave his own note of hand, for two hundred and twenty-five dollars, on the 9th day of October, 1826, paya ble on the 1st December following. This note has no reference to the trust estate ; but it is charged in the bill, and admitted in the answer, that these mules, for which the note was given, were purchased for the benefit of the plantation, and were placed thereon by John Reid, and have never been removed. John Reid also employed Mr. Oliver, another of the complainants, as an overseer on the plantation, for the year 1825, and gave him his note of hand on 1st January, 1826, for one hundred and sixty dollars, expressed to be for his services as overseer, during the year 1825.
It was conceded by the answer, that Oliver was so employed, and performed the service.
John Reid also contracted another account with Wallace & McFie, commencing in January 1825, and ending in March 1826. The charges were against John Reid in his own name, and without any reference to the trust estate. A draft was taken by Wallace & McFie from John Reid, on Conner <fe Wilson, for the then amount of the account, which was returned protested. This account, amounting to two hundred and fifteen dollars, seventy-three cents, (including some charges on protest and notice,) consisted of articles' such as are commonly used and consumed in a respectable family, and for use on a cotton plantation, except about twenty dollars for spirits and wine, <fec. These are the claims now before the court, on which it is stated in the proceedings judgments have been obtained at law. But that they have not been, and cannot be satisfied, as John Reid died in the year 1828, insolvent, leaving no property of his own. It is further stated, that several executions having been returned núlla bona, John Reid had been arrested under a ca. sa. and that he had sworn out of goal, and assigned all his property, and his interest in his wife's property, to Mr. Russell P. McCord, for the benefit of his creditors; and that he received the rents and profits of the trust estate for two years, and applied them as he thought right; but these complainants have not received payment from him or any other source. The complainants, therefore, seek payment of the trust estate.
In the argument of this cause, the counsel for the complainants contended that the doctrine of marriage settlements, and trusts for the benefit of families, is mischievous to creditors and to the community, and dangerous to the peace of families ; and that it ought to be discouraged, and the estates made liable, as far as possible. The court has little to do with the policy of the laws. Its duty is to administer them as it finds them established. The doctrine and the practice of marriage settlements, have been in use in this country from its first settlement, and it is not for the court to discourage them. It is for. the legislature to decide on the policy ; and that has been done by statutes prescribing that marriage settlements shall be recorded within limited periods, in order to give them validity; and when so recorded, are good and effectual, according to their respective provisions. These Acts have given them a perfectly legal sanction, in addition to the force and effect which they had from the long established use of them pri- or to the recording statutes. Nor is the policy so questionable, as it is supposed to be. The protection of families, and care of their comfortable subsistance and proper education, is as much a measure of sound policy, as the payment of creditors. In most civilized countries, the estate of the wife is more fully protected by the general law, than they are in England or in America by special contracts and marriage settlements. And there is no injustice in it. Surely the woman about to marry, and to rear a family, useful to the community, has'a just right to say, I have property which I wish protected for the benefit of that family. She owes no debts, (for if she does they must first be paid) and in conveying her own property to trustees, for the benefit of herself and children, she does no more than exercise a right of control over her property, common to all proprietors ; nor have . creditors of her husband a right to complain ; for unless she married him, they could not have the shadow of claim on her property. And if she marries on condition that her property shall be protected, her husband's creditors have no reason to complain, provided they are put on their guard, and are not led to give credit to the husband on false grounds. This is guarded against by our statutes, which require marriage settlements to be recorded within limited short periods.
The first question, then, in this cause, is, was the settlement in question recorded within the time limited by law, which is three months 1 The copy of the settlement furnished me, bears date the 13th November, 1821. It was marked on the back, " proven 30th January, 1822." But the certificate of the proper officer, that the copy is a true copy from the records, does not say when it was recorded. This was a serious dilemma in the way; for the entry of " proven, January, 1822," on the copy settlement, does not establish that the original deed was then deposited to be recorded, or was actually recorded. The probate is often made before magistrates out of the office — and the deposit or the recording, may not occur till long after— sometimes never'. ' In the absence of the regular proof, I caused the book of records to be searched, and the search has resulted in the disclosure of the most extraordinary carelessness in the office at the time in question ; for it appears that from the 16th November, 1821, to the 22d January, 1822, the time of recording a great number of deeds, comprised in thirty pages, has not been mentioned. Before and after these periods, the time is mentioned when every deed is recorded ; and as the marriage settlement we are considering is recorded in the intermediate space of time between those two dates, it appears to have been recorded within the three months prescribed by law, and is valid and effectual to its purposes.
The next question is, whether the complainants are entitled to relief under the provisions of the deed. We have seen that the trustees were bound to permit John Reid and Harriet, his wife, to receive and enjoy the profits and proceeds of the above mentioned property, (except three slaves,) during their joint lives ; and if Harriet Reid survived her husband, then the trustees were to assign, transfer and pay over to her, all the property and the issue of the slaves, absolutely and unconditionally. The deed, then, placed the income, only, of the estate, at the disposal of the husband and wife, during the coverture. Of this provision, all persons were apprized, in the manner prescribed by law, by the recording; so that they might deal with the parties accordingly, if they chose to deal at all. So far as we have gone, then, it is obvious, that the court could not subject the body of the trust estate, to the claims of the creditors.
But another question is made, which must now be considered. It is argued for the complainants, that the several articles furnished, were for the benefit of the trust estate, which ought, therefore, to be subject to the payment. And it is urged that the court has already decided in several cases, that the trust estate should be subjected. This is certainly true. In the case of Cater vs. Eveleigh, the court decreed the estate to be liable for a saw gin, procured by the husband, father of the family, for the trust estate. In another case, respecting the trust estate of Eveleigh, 1 McCord's Chan. Rep. 267, again the court subjected the estate for supplies of corn, furnished for the subsistence of the slaves. And • in other cases, trust estates have been subjected to the payment' of the wages of overseers employed to manage those estates. In all these cases, the court has gone on the principle that these were essential to the well being of the trust estate. The slave might perish if not supplied with corn or clothing ; the cotton might lay useless without the machinery to prepare it for market; and this is strong ground on which to place the subject. Yet it is dangerous — for it is difficult to assign the precise limits to this responsibility. It may be abused, to the destruction of. the body and substance of the estate itself, by the extravagance or mismanagement of the husband. I acknowledge that I feel great difficulty on the subject, and should be much gratified and relieved, if, on an appeal in this case, some general rules could be laid down for my government in such cases. One thing, however, is clear, that if the husband is allowed to expend all the income on other objects, and to leave such demands as are founded on real supplies, for the manifest benefit and reasonable improvement of the trust estate, entirely unpaid until his death, and then these creditors are allowed to come for payment on the body of the estate itself, all the purposes of protection intended to be given to such estates, would be defeated. I see no remedy against this evil, but to examine strictly into the nature of the supplies to the estate, to ascertain whether they were indispensable to the estate itself, and not merely for the usufructuaries personally. And also to require that even such creditors should use all proper diligence to obtain payment out of the income of the estate, from year to year, as such indispensable supplies were furnished.
To apply these views to the present. There is no doubt that the mules supplied to the trust estate were a durable benefit, perhaps- as much so as a saw gin ; for they last as long, and are extensively useful. It seems the mules were sold by Mr. Boggs to Mr. Reid, in the autumn of 1826, and he gave his note on 9th October, 1826, for two hundred and twenty-five dollars, payable on the first day of December following. 'The mules were placed on the plantation of the trust, and worked on it, and now remain thereon, and the present cestui que use, or rather absolute owner, has the benefit of them. I think, this case comes clearly within the principles of the decided cases; and the mules must be paid for, especially as the creditor seems to have pursued his remedy with proper diligence, and endeavored to get payment, without success. It was ingeniously argued, that this would be giving a lien on the mules, which the parties did not contract for; It struck me at first with some force; but on reflection, I am satisfied it has not the weight ascribed to it. The question is, not whether Mr. Boggs has a lien on the mules, for that he certainly has not — but it is, whether the creditor, having supplied the trust estate with an article essential to its improvement, and which still remains beneficial to the present owner, is not entitled to be paid out of the trust estate, on the same footing with other creditors, standing on the same ground.
The next claim was that of the overseer, for wages for superintending the estate. This kind of claim has been repeatedly sustained by the court; and 'as there has been no laches, but reasonable diligence used without success to obtain payment, during the life of Mr. Reid, it appears to ine to be just, that the overseer should be paid by the present possessor of the estate, who was entitled to the income jointly with her husband, during the coverture.
The next claim is that of Wallace & McFie, for the payment of an account for articles furnished to Mr. Reid, in the year 1825, and part of 1826. On examining that account, it appears that nearly three-fourths of the amount are for cotton bagging, negro cloth, <fec. for the indispen-sible use of the estate. These appear to me to come within the principles which have been recognized by the court in its decisions heretofore made, on this anomalous and embarrassing subject. The remaining articles for general family consumption, do not come within the principles, and cannot be allowed.
It was properly argued for the defendant, that before she could be called upon for payment, she was entitled to have the crops of the time that the estate was held by an as-signee, applied to the payment of the claims now made on her, unless otherwise legally applied. It will therefore be necessary to order a reference, that the commissioner may enquire and report, if there be any part of the proceeds of those crops remaining, properly applicable' to pay these demands. The assignee will doubtless produce the accounts of the receipts arid expenditures, without putting the parties to the expense and delay of making him a party. Should that fund be insufficient, then the deficiency must be made up by the defendant.
After a good deal of reflection, however, I am satisfied that the complainants have no right to touch the capital of the estate. The deed of settlement gave only the income of the estate to the husband and wife, during the cover-ture. That deed was recorded according to law, as a notice to all the world, of what interests the parties had in the estate. In giving credit, therefore, they could look only to the income ; and to the income they must resort for payment. Nor will the court permit the whole of the present income to be taken from the defendant. She must be allowed a reasónable proportion for her maintenance out of it, and the remainder applied to the payment of the demands of the complainants.
Preston, for the defendants.
It is conceded that a trust
estate is liable for debts created by it. Credit is indispensable to its existence. The wants of the estate must be supplied, and in the absence of any other mode this must be resorted to. But this concession must not be extended further than the terms import. The tenant of a term, cannot charge the estate in the hands of the remainderman, for expenses incurred in rendering it useful or convenient to himself. Reid was tenant for life, and these, all the proceedings show, are his own proper debts, and it never was thought that the trust estate, except so far as he had an interest in it, was to come in aid of his liability. That estate is passed away, and can they pursue it in the hands of the present owner 1
On looking into the decisions in this State on this subject, I find that this arrangement which I propose to make, is not a new course. For in the case of Bethune and others vs. Beresford and wife and others, (1 Des. Rep. 174,) the court, after deciding that the income of the settled estate was liable, to a certain extent, to the claims of the creditors then suing, determined that the wife, from whom the estate was derived, should have a subsistence out of the income, and made a provision accordingly.
It is therefore ordered and decreed, that it be referred to the commissioner to examine and report the amount of the debts due to the respective complainants, according to the principles laid down in this decree. Also, that he further enquire and report, what was the amount of the income of the estate whilst it was in the hands of the as-signee of John Reid, and what application has been made thereof; and whether any, and what sum, remains applicable to the debts due the complainants.
And he is further directed, in case it be necessary to resort to the income of the estate in the hands of the defendant, to examine and report what is the average amount of that income, and- what proportion thereof would be a proper allowance for the support of the defendant, until the debts due the complainants should be paid out of the remaining part of the income.
From this decree both parties appealed. The complainants, on the ground that the estate should be made liable, and sold for the purpose of satisfying their claims. The defendants, on the ground that the estate became absolute in Mrs. Reid, upon the death of her husband, and was not liable for debts incurred for the benefit of the particular estate.
If she had sold or transferred it to another, could the creditors follow it 'l This is not a legal claim, it is founded in a supposed equity, which is raised when one has contributed to the improvement and preservation of the estate. If, then, we regard John Reid as the proper agent for the estate, yet these debts were contracted by the tenant for life, with a view to increase his own income. They are not, therefore, necessary to the remainderman. Tenant for life, without impeachment, is bound to keep the premises in repair. 2 Atk. 283, Partretch vs. Powley. Tenant for life is bound to keep down the interest and to share with the remainderman a part of the principal. 1 Atk. 467; 1 Ves. 234. Reid purchased mules and they are found on the premises. If Mrs. R. has intermeddled with them, she may be liable as executrix de son tort, and not by this bill. A fire engine or cider press erected by tenant for life, goes to his executor. Dudley vs. Ward, P. W. 113. As to what debts the tenant for life may charge the remainderman, 1 Brown, 206, Jones vs. Morgan.
Chappell, contra,
cited Cater vs. Eveleigh, 4 Des. R. 19; James vs. Mayrant, do. 591 ; Montgomery vs. Eve-leigh, 1 M'Cord's Ch. R. 267.