Case Name: James Wardlaw, for himself and Others, v. The Administrators and heirs of Henry Gray
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1837-05
Citations: 2 Hill Eq. 644
Docket Number: 
Parties: James Wardlaw, for himself and Others, v. The Administrators and heirs of Henry Gray.
Judges: Chancellors Dr Sausstjrr and Harprr, concurred.
Reporter: South Carolina Equity Reports
Volume: 11
Pages: 492–499

Head Matter:
James Wardlaw, for himself and Others, v. The Administrators and heirs of Henry Gray.
A wife being entitled to one-half of her father’s estate, proceedings in partition were had, and a tract of land ordered to be sold by the Commissioner on a credit of one and two years, with bond and mortgage to secure the purchase-money. The husband purchased, and instead of giving bond and mortgage, gave his receipt to the Commissioner for one-half the purchase-money, his wife’s share, and for the other half as guardian of the other distributees, and received titles. After the first, but before the second instalment became due, the husband died, and the land was sold by order of this Court, as his property, on a bill to apportion his assets. On the widow’s presenting her claim for her share of the sale of the land, it was held* that she was entitled to payment thereof; and to the benefit of the security of the mortgage which should have been given, or not being given, that the Act of the Legislature in such cases gave one. [*644]
Guardian settled with his ward while an infant, and took a receipt in full and gave his note payable at a future time for the balance due, and a payment was made on it after the ward came of age. After the death of the guardian on the claim of the ward to have the balance due on the note rank as a specialty demand under the guardianship bond: Held, that the note was not payment of the preceding demand; its only effect being to postpone the time of payment; and although the postponement might discharge his securities, it still left the guardian liable on the bond. [*649]
Payment by the Commissioner to the husband of his wife’s distributive share of an estate, without the order of the Court is wrongful; and is not such a reduction into possession by the husband, as that the marital rights attach. [*651]
Where the husband as administrator has wasted his wife’s chooses, this is a sufficient reduction into possession ; but if the notes or bonds which he took as administrator are forthcoming, the wife’s right still exists. [*653]
Abbeville, June Term, 1836.
Bill to apportion assets, &c. Report made of demands against H. Gray’s estate, arranged in the order of priority; and exceptions thereto filed.
This case was taken up for the special purpose of considering so much of the' Commissioner’s report as is covered by the 1st, 2d, 3d, and 5th exceptions of the administrators of Henry Gray; the rest of the report being still before the Commissioner.
Johnston, Chancellor. 1. Of the four exceptions which have been argued, the first depends on the following facts :
Henry Gray’s wife, who was a daughter of the late Dr. Flanagan of Newberry, being entitled as a distributee to one-half of her deceased father’s estate, proceedings in partition between the distributees were instituted in the Court of Equity for Newberry district, where the estate lay, which resulted in a decretal order that the Commissioner of that Court should sell for partition, a tract of land lying on the Enoree, called the Mill Tract, part of the real estate, on a credit of one and two years, with interest from the day of sale, taking bond with surety and a mortgage of .K-, the land to secure the purchase-money. Under this order, the *Com--I missioner sold the land to Henry Gray on the 5th of October, 1829, and without receiving either the money or bond and mortgage to secure it, executed titles to Mr. Gray, the 11th of November following, upon the following arrangement: *
Mr. Gray gave him a receipt for one-half the purchase-money as his wife’s share ; and a similar receipt for the other half, as the share of the other distributees, for whom he (Gray) was guardian or administrator.
On the 5th of April, 1831, (after the first, but before the second instalment would have fallen due,) Mr. Gray died, leaving his wife living.
By an order in the present suit, the same land was sold since Mr. Gray’s death, as parcel of his estate; and the avails are in Court to await claims against his estate.
His widow presents a claim for her share of the sale made to her husband ; signifying at the same time, that if it is sustained, she will accept in satisfaction a moiety of the last sale, being an inferior amount.
The Commissioner has sustained her claim; and the first exception is an appeal from his decision.
I am not entirely satisfied with the conclusion to which I have been conducted by the very imperfect examination which my short time has allowed me to give this very difficult matter. But my view is this :
A married woman cannot be deprived of her inheritance in laud but by deed strictly conforming to the Act of Assembly, or by an exact performance of such conditions as the Court may impose. Mrs. Gray was entitled to her land, or the substitute for it, which the Court ordered, as the only condition upon which she should be deprived of it; aDd she was entitled to have that substitute placed in the situation in which the Court ordered it to be placed; and to have all the benefits incident to its being placed in that situation. For it must be considered that the husband had no power to sell the land; and in order to have it sold was obliged to resort to the Court, and was a party to an order which placed the purchase-money in the custody of the Court, not in his. The fund (or the securities for it, which is the same thing,) was therefore in Court, at the instance of Mr. Gray, in trust for his wife; and he could not obtain possession of it without the order of the Court — an order which would not have been made without provision for *the wife, unless by her , consent. To all these advantages, Mrs. Gray was entitled, as ■- terms on which the land was sold.
If bond had been given for the wife’s share of the land as required by the order of sale, and the bond had neither been paid off nor assigned to the husband, it would have survived to the wife. If it was paid off by the husband, he could not draw the money (there being no order for the distribution) without applying to the Court; and then the Court might have provided for the wife out of it. If it was not paid off, the Commissioner could not assign it to him without permission : to say otherwise, would be to assert that an officer of the Court may supersede the Court itself in the exercise of the trust delegated to it in behalf of femes covert.
It is admitted that if Mr. Gray could, without the aid of the Court, or by operation of law have got the money, his wife’s right of survivorship is gone ; and it has been argued, that if he had given bond, he would eo instanti, have become both debtor and creditor; and so (on the authority of the cases following Wankford v. Wankford, 1 Salk. 299, 3 lb. 262, 2 Bail. 60, 1 HHl Ch. B,ep. 423,) have been rightfully discharged of the bond, and put in possession of the money secured by it. But' if he had given bond, he would not have been indebted to himself, but to the Court through its Commissioner, interposing as a trustee for his wife: nor could he claim payment unconditionally — which is, I apprehend, the ground upon which the law remits money to a debtor’s pocket. He must be a debtor, or a creditor with an unconditional right to receive.
In these observations it is not intended to assert that a Commisssoner may not, without leave, as is every day’s practice, pay out money to one unconditionally entitled to it, as for instance, to one entitled in his own right, or as guardian, or as administrator; but merely to decide that when the payment would deprive the Court of functions with which it is invested for the benefit of parties before it, and who also have a right to claim the exercise of those functions, and would be denied this right by the payment, the payment is unwarranted.
Again, a Commissioner, like any other agent to sell, has no other authority than that contained in the order under which he acts ; and cannot, without violation of duty, convey but upon a compliance with the condition set out in the order; nor can a purchaser take a conveyance without. 1=641] complying with the terms of sale *contained in the vendor’s authority, into with he is bound to look. A conveyance made without compliance with the terms of sale, must be set aside at the instance of any person interested.
Here the conveyance was upon no consideration.
Mr. Gray could not in the face of the terms of sale, which were notice to him not only as -party but as a purchaser, take a benefit to himself at the expense of his wife. He could not, after invoking this tribunal to aid him in disposing of his wife’s land, and after placing the fund under his control with power to provide for her out of it, defeat her rights and frustrate the power of the Court for their protection by refusing to pay the money into Court, or taking it into his own hands, under an assumption that it need not be paid in, which is the same thing.
If the money had been paid to the Commissioner, the payment of it to Mr. Gray would have been bad: in that case the Commissioner alone might have been liable to Mrs. Gray. As it is, there was no payment to the Commissioner; in fact the purchaser did not pay for the land. The owner of the land, Mrs. Gray, is entitled to payment, and to the benefit of the bond which should have been given, and to the security of the mortgage which was ordered, and which the Act of Assembly would have set up if none had been ordered.
The first exception is overruled.
2. I feel as great difficulty about the second exception as about the first. This exception depends on the following facts:
Mr. Gray became the administrator of his wife’s deceased father; he was also the administrator or guardian of all his wife’s co-distributees in that estate.
In this situation, under an order of the Ordinary, he sold his father-in-law’s personalty, and took notes for the purchase-money. He died without ever having had a partition of the estate ; the whole of which belonged to the distributees, there being no debts against it. Since his death, administration de bonis non on his intestate’s estate has been taken out by Mr. Harrington, to whom the administrators of Mr. Gray have accounted for the shares of Mrs. Gray’s co-distributees, but they decline to account to him for Mrs. Gray’s share, contending that Mr. Gray had reduced that as husband.
The Commissioner has allowed the claim of the administrator de bonis non for Mrs. Gray’s share (for the payment of which there are ¿o assets belonging to Mr. Gray’s estate) and the second exception *- contends that the allowance was improperly made.
If my opinion, in Spann v. Stewart, 1 Hill Ch. 326, had been reported, (a) I should have referred to it as my opinion on this point. As it is, I can only say that my opinion has undergone no change since I delivered it: and that opinion is, that when funds come into an administrator’s hands ag administrator, be is still chargeable with them as administrator, until he does some act indicating an intention to throw off bis trust character, Here the only act done by Mr. Gray was to sell the property and secure the price by notes : an act which he was bound to do by the order of the Ordinary, and which he could do only as administrator.
My difficulty has been about the extent to which this opinion was modified by the appeal decree in the case of Spann u Stewart. But when I consider the current of authorities before that case, and the language of the Court in Boozer v. Wallace, 1 Hill. Oh. Rep. 393, since decided, and compare them with the opinion in Spann v. Stewart, I am rather under the impression that the Court intended to modify the doctrine I have laid down only in the single case where a husband, administrator, has wasted his wife’s share.
*P . *Here there are assets to answer for those received by Mr. Gi’ay, as administrator; and if I have correctly interpreted the decision in Spann v. Stewart, it cannot apply to destroy the wife’s right.
The second exception is overruled.
3. The third exception was not insisted on by any party, and is overruled.
5. The fifth exception objects to the Commissioner’s allowance of Philip Cromer’s claim as a specialty demand.
Mr. Gray, who was the guardian of Philip Cromer, came to a settlement with his ward on the Tth of January, 1830 — the ward being still an infant — (being born on the 20th of August, 1809,) — when the balance due the ward appearing to be about $1,300, he paid him part in cash, and gave him his negotiable note with'some time to run for the residue, and the ward gave him a receipt in full. Mr. Gray lived several months after the ward came of age, and paid him a $100 bill on it; but whether this payment was made before or after the ward’s majority, is uncertain, there being no date to the credit endorsed on the note. After Mr. Gray’s death, and after the ward attained age, Mr. Gray’s administrator made a small payment *which is credited on the note. It is also in proof, that upon being called on by the administrator, after he came of age, L ‘ b the ward admitted that he was then of age, and was satisfied with the settlement he had made. The note is still in possession of the ward, and was produced on the investigation of his claim, which claim is to have the balance due on the note charged on the guardianship bond upon giving up the note.
It appears to me that the infancy of the claimant at the time he gave the receipt and took the note, is an immaterial circumstance ; I think if he had done the same thing after coming of age, he still would be entitled to the relief he seeks.
The note in question was part of the consideration of the receipt. It has been repeatedly held that a note is not payment of a preceding demand, unless the note itself be paid. The only effect of taking the new security is to conform the time for payment of the preceding demand to that fixed in the new. The taking of this note postponed the time for paying the bond until the note fell due. The postponement might discharge Mr. Gray’s securities, but left him liable on the bond after the note came to maturity, *if the note be produced and given up to repel the presumption that it has been paid off. L b0
The case of Tobey v. Barber, (5 J. R. 68 : 1 M’C. 449,) which appears to be well supported by preceding cases, and is expressly relied on in our own case of Barelli v. Brown, is, I think, decisive of this exception.
The fifth exception is overruled.
The administrators of Henry Gray appeal from this ’decree, and will endeavor to sustain the first and second and fifth exceptions above mentioned. To the foregoing statement, they will, as to the second exception, add, that although H. Gray’s estate is amply sufficient to meet these demands of his wife if they stood alone, yet that it is unable to pay more than perhaps one-third of his debts ; and that none of the notes taken-by Henry Gray, as administrator, at the sale of Reuben Flanagan’s estate, remained in the hands of Henry Gray unpaid at the time of his death, so far as any of the settlements had between the administrators of Henry Gray, and the administrator de bonis non of Reuben Flanagan, or any of the papers which came to the hands of the administrators of Henry Gray, show.
Wardlaw and Perrin, for appellants.
Burt, contra.
Spann vs. Stewart, (1 Hill’s Ch. Rep. 326.) The decree of the Chancellor, so far as relates to this point, is herewith published :
[What constitutes a reduction into possession of the wife’s choses in action, by a husband administrator. Per. Ch. Johnston.]
Johnston, Chancellor. The third position is, that so far as Dr. Wright reduced his wife’s share into possession, the plaintiff is entitled to a diminution of his liability — (unless, I suppose; the amount reduced exceeded her share,) — and that his conversion of the assets into cash amounted to such reduction.
The first branch of the position will not be controverted. The latter is questionable.
There is no allegation in the bill, that Mrs. Screven’s estate owes no debt; so that the decision in the case of Neil & Marsh, from Edgefield, does not apply.
The earlier cases are all, except one, cases in which the specific chattels which came to the husband’s hands during the marriage, remained unchanged at the wife’s death. It was scarcely contended in any of them, that the husband’s possession was a reduction. Spights vs. Meggs, 2 Brev. MS. 238; 2 Dess. Rp. 138, N; Sturgener vs. Hannah 2 N. & M’C., 147; Bryne vs. Stewart, 3 Dess. 135 ; Elmes vs. Hughs, lb. 155 ; Bunch vs Hurst, lb. 273. The only question of consequence was, whether he was entitled to administer to the wife without account, under the statutes 22 and 23 C. 2, and 29 C. 2, or whether this right had been taken away by the Act of 1791. It was held that there was no reduction, and that his right under the statutes of Charles was taken away by our act.
In one of the cases, the husband never had possession during the coverture ; so that that solely depended on the question whether the statutes of Charles were of force. '
There are some stray expressions in those cases, on which I may say something hereafter.
Whether a husband, who if also administrator, has effected a reduction, depends, I conceive, on this : Has he, by discharging, or by throwing off his trust, freed himself from accountability under it, for the property in question? Has he rendered the property no longer trust-property ? Then he holds it in his own right.
If he has openly denied his trust-character and openly evinced an adverse holding and the act of limitations has barred the cestui que trusts ; be holds the property as his own. If he has ended his trust by discharging it, what he has left, is divested of a trust character, and is held as his own.
But while ever he is liable to execute a trust out of the property, he has not reduced it, but holds as trustee, whatever the form of that property may be.
A bare change of the property cannot be a reduction; for, then, if he exchanges slaves for other slaves, these last would not be liable to partition. Can it make any difference if the exchange is for money ?
In Byrne & Stewart, the Court say “The marital rights cannot give him (the husband,) the property, because it was not reduced to possession ; nor coul'd it be, for the sale did not take place till her (the wife’s, death.” This referred to a sale by a different person, in whose hands the property was. If it be inferred from this expression that a sale is a reduction, it appears to me the inference is not law ; for, then, every sale by an administrator would amount to a conversion, and the beginning of an adverse holding of the avails; and then four years would bar the distribu- . tees.
If an exchange of chattels for money divests the trust, it cannot be merely by virtue of its being an exchange; for, then, any exchange, even for other chattels, would divest it.
Can it be on account of the character of the thing exchanged for ? because it is money? Then it would follow that if an intestate left nothing but money, the administrator would not be accountable.
It has always been held, however, that every trustee is liable, as such, for all the profits made by him, by trading with the assets. If this principle be not abandoned, no change of form will save the fund acquired from accountability.
The Court, in Elms v. Hughes, 3 Dess. 160; speaking of what constitutes a reduction, say “ whenever a suit is necessary to give effect to a right, this is a right in action.” This is a negative test of reduction; but I suppose was not intended as the only test. If it was, however, an accounting is a judicial proceeding.
An accounting is as much necessary, where the wife’s distributive share consists in money, as a partition is where it consists in slaves. The purpose in each case, is to ascertain and declare the wife’s share, and separate it from that of others. Without an accounting, it is impossible to ascertain it; since either she or some others of the distributees may have been advanced, either partially or beyond their shares, or settlements may have been made on them by the intestate.
The character of the holding may depend on the intention. Shall a man be considered as holding for himself, who declares that he holds as trustee ? Shall he be so considered, unless he has declared, and that openly before creditors and distributees, so as to put them on their remedies, that he intends to hold for himself? It is very little to require of a husband who wishes to pocket his wifels property, that he shall account on the estate first.
I see no evidence of an intention in Dr. Wright to reduce his wife’s share. Does it consist in receiving the dividends ? Was he not bound to collect the debts ? Does it consist in the sales ? Is there evidence that he was not acting under orders from the Ordinary?
The amount of the matter is, that he has not accounted. And has he, therefore, ceased to he accountable ?
We have a case on the very point. In Phselon & Houseal, 2 M’C. Ch. Rep. 423; the defendant received during his marriage, upwards of three thousand dollars in money belonging to the intestate, which he held till 1816, when his wife died, aud thence to 1821, supposing all the time that she was the sole distributee. In that year, other distributees appeared and demanded partition with him; and it was decreed.

Opinion:
Johnston, Chancellor.
In this case, it is the opinion of the Court, that the circuit decree upon the first exception was correct.
In offering any thing further in support of that decision, it" might be sufficient to refer to the opinion delivered by Mr. Justice Butler, at the last December Term of the late Court of Appeals, in the case of Pitts v. Wicker; in which every judge present, eight in number, including every chancellor, concurred.
The argument on the present occasion is, that the circuit decree is inconsistent with the principles upon which the Chancellor who pronounced it, professes to place it. That the Chancellor evidently acted upon the maxim that equity will regard that as done, which should have been done. But that admitting this principle to be true, it was not correctly applied to the case : for that although in virtue of the maxim, it might be correct to assume that a bond and mortgage had been executed by Mr. *6591 Gray i Jet that he *had a right to pay the money even before it J was due: that if he had paid the money to the Commissioner, he thereby extinguished the wife's interest in the bond. That the fund thus paid in, became thenceforth the exclusive legal property of the husband; which he urns under no necessity to ask the aid of the Court to obtain.
Passing by the obvious remark that whatever right Mr. Gray might have to make payment in anticipation he never in fact made any payment, let us suppose that he did pay the purchase-money to the Commissioner'. The question then is, had he a legal unqualified right to the money thus paid in.
The case of Hood v. Archer, cited by Mr. Justice Butler, is in point, to show that he had no such right. In that case, the wife's inheritance was sold by the sheriff. The purchaser paid over the price to the sheriff. The wife then died : and the question was, whether the money belonged to the husband, by virtue of his marital rights, or whether the right to it did not remain in the wife, so as to vest in her administrator. The Court held that it belonged to the administrator of the wife.
If Mr. Gray had paid the money to the Commissioner, had he such a legal right to it that he could have recovered it at law from .that officer ? Money in the hands of the Commissioner is in the hands of the Court itself. No action can be maintained against him in another tribunal, to deprive him of it. The comity of Courts forbids it. The application for the money must be to the tribunal in whose custody it is. This principle, the correctness and importance of w'hich will be at once perceived, was decided a few years ago in Charleston, in a case (I believe the style of it was Bowden v. Hutsell) carried up from a circuit decision of Chancellor Harper.
If, then, the money when paid in, still belonged to Mrs. Gray, and her husband could not obtain it but on application to this Court, the question is, what order would the Court have made on such application ?
Clancy says, " If the wife's fortune be within the reach of the Court," "Equity will not suffer it to be removed out of its jurisdiction until an adequate provision be made for her, unless she has been already sufficiently provided for; or that, on her personal examination, she waives the benefit of this protection." — (Clancy on Married Women, -* 188.) — The same author again and again speaks *of this doctrine as " a settled rule of our Courts of Equity," and refers to numerous authoz'ities which fully sustain him.
So far does this doctrine extend, that although the wife's trustee may, if he thinks fit, deliver her property to the husband ; yet if a bill be once filed, whereby this Court obtains a control, the trustee will no longer be at liberty to do so; and if he pay over any of her money after such suit begun, the Court will hold it a payment by wrong, and set it aside. (M'Caulay v. Phillips, 4 Ves. 18.)
The argument then, which maintains that the Court will approve the act of the Commissioner in paying the money to Mr. Gray, on the gi'ound that upon application it would have ordered him to pay it, seems to be unsupported by authority. The Court would never have so ordered, unless by the wife's consent.
And when we consider that the Court would hold a payment made by a trustee after suit brought, to be wrongful for the want of the wife's consent, or the ozxler of the tribunal: would it not be plainly absurd to suppose that when the Court is itself the trustee, it would depart from its own rule ; or that it would sanction that in its own officer which it would condeznn in every one else who happens to come under its control ?
The opinion of the Court upon the second exception is different.
It appears by the additional facts stated in the brief, that Mr. Gray did not only convert the assets, but that he wasted them, so as to bring himself within the rule in Spann v. Stewart.
If the notes or other securities which he took for the property which he sold as administrator, were forthcoming, or could be pointed out, I have the authority of all my brethren for saying that in such a case they would consider the wife's right indubitable. But when he has wasted the assets, the majority of the Court is of opinion, this is sufficient evidence of a reduction to destroy his accountability as administrator.
The appeal on the fifth exception has been abandoned.
Let the circuit decree be reformed according to this opinion.
Chancellors Dr Sausstjrr and Harprr, concurred.