Case Name: The Executors of Kinder Mason vs. the Executors of Spencer Man and the Administrators of J. J. Foltz
Court: Court of Chancery of South Carolina
Jurisdiction: South Carolina
Decision Date: 1810-11
Citations: 3 Des. Eq. 116
Docket Number: 
Parties: The Executors of Kinder Mason vs. the Executors of Spencer Man and the Administrators of J. J. Foltz.
Judges: 
Reporter: South Carolina Equity Reports
Volume: 3
Pages: 116–124

Head Matter:
■case xxii.
The Executors of Kinder Mason vs. the Executors of Spencer Man and the Administrators of J. J. Foltz.
[Tried before Chancellor Besaussure, Circuit Court of Equity, Charleston,
Nov. 1810.]
An agent re-neyV Romans a1 bond1,and judgment, it tracTdebt1;0^ it cannot be his judgment debtsPeClilon death of the agent.
THE bill charges that the late Kinder Mason appointed the late Spencer Man Ms attorney in fact to recover an(t remit considerable sums of money, due to him by R. & P. Smith on bonds, on which judgments were obtained. That Spencer Man received considerable sums of money, which he remitted, but there remained in his hands a large balance unaccounted for. That this ^a^ance the sai(i Man employed to his own use, or carried the same into the copartnership funds of Man & Foltz, who traded thereon; and the copartnership funds are liable therefor.
The complainants pray that they may belaid the balance due, cither out of the copartnership funds or the private estate of Mr. Man; and that the debt may be considered a specialty debt, as the money was received on specialties, due to complainants’ testator, on which judgment was obtained.
The answers admitted the facts generally, but denied that there was any ground on which this simple agency could be converted into a trust, subject to the peculiar rules of this Court: and the executors of Mr. Man and the administrators of Mr. Foltz- submitted to be guided in their conduct by the decree of the Court.
An order of reference was made to the master, to en-quire into and report the balance due to the complainants’ testator ; and the master reported the precise sum due for-monies received by Mr. Man as attorney of Mr. Mason. The money received was all subsequent to the judgment against R.. &P. Smith. The sums received wore entered in the books of Man & Foltz, sometimes by Man and at others by Foltz.
Mr. Man was anxious for the payment of this debt, and iñ a memorandum which lie made respecting it he called if a sacred debt.
There were judgment creditors of Mr. Man’s estate who claimed a priority, and resisted the payment,of this claim till they were paid, and insisted that this was no more than a simple contract debt.
Mr. Pringie, for complainant,
contended that this demand against Mr. Man’s estate should be put on the footing of a judgment, or at least a specialty, because the money was received by the attorney on a bond, on which judgment had been obtained. He cited the case of the heirs and legatees of Gadsden vs. the executors of Lord, decided in this Court, in August, 1791, by which it was decreed that the husband of an executrix, receiving money on bonds due to the testator, should be accountable as for a specialty debt: and a similar deci sion in the case of Buist & others, administrators of Som - mers, vs. executors of Perry, made in May, 1803. These decisions apply to the case before the Court, and they are founded on the highest equity. Mr. Man considered the money received for Mr. Mason a sacred debt, and i*1 fac^ a trust. No particular words are necessary to raise a trust. It arises, by implication, from acts done, as well as from written deeds. Prothonotaries receiving money (fees of office) for a judge, were decreed to be trustees, as having received the money in trust, see 4 Bacon, 473, new edition; 2 Lord Raym. 1204. So when money is left in a person’s hands for a particular purpose, 2 Cha. cas. 26.
The money in Mr. Man’s hands was a trust, and his estate must be liable as for a judgment debt, because received by him on a judgment. Stare decisis is an important maxim, without which the law of the country could not have any stability or uniformity.
Mr. WARD for defendants, and Mr. W. L. Smith for the judgment creditors of Mr. Man.
They insisted that where money is received by one person for another, it forms a simple contract debt. The cases cited do not form a rule, but an exception, under peculiar circumstances. In Lord’s case particularly, the husband of an executrix called in money due to an estate, on bond and judgment, which estate owed no money. He did not put out the money so received to interest, but kept it in his own hands. This was considered a breach of trust, and his estate, the solvency of which was doubtful, was decreed to be liable as for bond and judgment debts. • In Buist and Perry there were similar circumstances.
The case under consideration is very different. Mason appointed Man his attorney expressly to collect the money due ; and if he had not done so it would have been a neglect of his duty as agent. Having received the money, it is in his hands as money - had and received for his principal, and this is a simple contract debt. Many of the merchants .are mere agents.'- If, when they re ceive and neglect to remit money, the debt should he set up as a judgment or bond debt, (according to the nature of it when received from the debtor) it would he very dangerous. Such latent liens would spring' up suddenly and defeat all the prudential arrangements of cautious men, who perhaps examined the offices for judgments aripTmortgages, before they gave credit to these very agents. In this case it would destroy or diminish the fund to pay judgment creditors.
The executor’s law ’fixes the right of creditors in relation to judgments, bonds, and other claims on the estates of deceased persons ; and that act recognizes no such latent liens as this. It would be mischievous to break in upon the rules and regulations of the act. The law relative to agents and executors besides is very different. Executors are easily converted into trustees ; they are peculiarly under the control of the Court. Agents and attornies are liable to suits at law for money had and received.
In Lord’s and Perry’s cases the executors called in money at interest and well secured, improperly, and never vested it, but employed it to their own use ; and one of these, Lord, employed it to purchase property which the Court could follow and lay its hands on. But Mr. Man put the money he received, as agent, into the funds of Man & Foltz, as appears by his declarations to Mr. Ogilvie at his death. This cannot be followed specifically as property could.
If a factor becomes bankrupt, and a merchant’s goods trusted to him, are not mixed, he shall have them; not so if mixed, see 2 Atk. 623. Principal has a lien on his goods, if unchanged. If sold, he is only a general creditor. If notes are taken, which can be pointed out and followed, the Court will lay hold of them for the principal. But it must be something which can be distinctly traced and laid hold of, see £ Vern. 585.
In the case of M’Farlane and Player, decided in this Court, 2d vol. of decrees, (manuscript) the Court refused to follow money, received and carried into a copart- nership fund, in a very hard case, and left the creditor to pursue his remedy as a simple contract creditor. See Amid. 297". Bond creditors considered here as having priority, because they have it at law. Tins Court follows the rule of the forum having jurisdiction. The counsel quoted 3 Atk. 333$ 2 Yes. 269 $ 5 Yes. 169 $ 10 Yes. 511. ' ^
This is not a trust more than any other agency. Trust is a creature of equity, where the party has no remedy, or an imperfect one, at law. The declaration of Mr. Man, that this was a sacred debt, cannot change its nature and convert that into a trust which was a mere agency. The statute of limitations would apply to such a demand as this, after the proper lapse of time. This shews it cannot be a trust. If you take Man’s declarations you must take them altogether 5 and they shew you that he has placed the money received into the funds of Man & Foltz, a commercial house. This was neither a trust, nor a breach of trust. He did as he was required. He collected the money and remitted the greater part. A balance remained in his hands, which he did not lay out in property, but transferred to his commercial house, which is liable. There may be a lien on property purchased with the money of another, but not on receipt and expenditure of another’s money. But if this had been a trust, and a breach of it, it would only raise a simple contract debt 5 and even particular circumstances will not vary the law, 2 Atk. 119, Yernon v. Bawdry. Cestui que trust is only a simple contract creditor of his trustee, unless trustee has acknowledged the debt under his hand and seal, see 2 Fonbl. 173, ch. 7, sec. 1, note. A debt due by an attorney for money collected on a judgment is only a simple contract debt, see 1 Hening & Mumford, 427, Cartwright v. Marshall. None of the English decisions come up to this ; none of them set up such a claim as this and put it on the footing of a bond or judgment debt.
Mr. PRiNGiiE, in reply,
contended that there was no more reason for the Court declaring executors trustees, ou a misapplication of funds, than mere agents. Insists there were no peculiar circumstances in Perry’s or Lord’s cases, to declare them trustees, more than exist in Man’s ; the receipt of money and application of it to their own use. The Court must have decreed in those cases on a general principle. The case of factors is different. They are general agents for every body. They are not special agents selected and confided in as trustees ; and cases respecting them, and their receipt of money for their principals, turn upon this reason, that money has no earmark and cannot be followed. Baillies and receivers are as liable to the control of this Court as executors: they are liable to account here.
decmse.

Opinion:
The CouRT delivered its decree on the 17th Novem-her, 1810, as follows :
The substance of this case is comprised in a few words. Kinder Mason having a demand on bond against K. & P. Smith, sent a power of attorney to the late Mr. Spencer Man, to recover, receive and remit the same. A judgment was obtained thereon, and various payments were made to Mr. Man, part of which were carried into the funds of Man & Foltz, and some remittances were made to Mr. Kinder Mason.
On his death-bed, Mr. Man, feeling distressed that he had not remitted all the money which he had received far his principal, Mr. Mason, expressed a strong desire that it should be paid; considering it, as he very feel-, ingly called it, a sacred debt.
Mr. Bulkley holds a judgment against Mr. Man; and Mr. Man's estate, it is said, will be sufficient to pay this debt, if the debt to Mr. K. Mason be not construed to be ajudgment debt — but not otherwise.
Several questions were made at the opening of this cause, but it was agreed by the counsel that the consideration and decision of them could not properly take place in the present situatiou of the case. The argument, therefore, was confined strictly to the question, whether the money received by Mr, Man, on the judg ment debt; of 11. Sc P. Smith to Mr. K. Mason, should be considered a judgment or a simple contract debt ?
There cannot be any "doubt that the general rule is, that age-nts receiving money and not paying it over to their principals, on judgments or bonds, are liable mere-as si,HP^c contract debtors, and not as judgment or •specialty -debtors. And indeed the decided cases, as well as the elementary writers, say that trustees receiving money, and committing a breach of trust, are liable only as simple contract debtors.
But it lias been contended that two decisions in this •country have settled this point, and that stare decisis is a maxim of judicial wisdom,'of great importance to the security of property and the sound administration of justice; and that this maxim should have peculiar obligation on a,judge sitting singly.
T am very sensible of the value of that maxim, and I •hope it will ever so influence my conduct as to prevent •my rashly disturbing settled doctrines. I shall therefore be unwilling, sitting alone, to shake the authority of those cases, where they have a direct and clear application. But I confess that -I do not feel inclined to extend the principle, contained -in the cases referred to, which, if pressed to an extreme, would be introductory of very great mischiefs.
On examining those cases, the devisees and legatees of Tho. Gadsdon vs. the executors of Andrew Lord, and of Dr. Buist, administrator of Somers vs. the executors of Perry, the executor of Somers, it does not appear to me that the Court intended to lay it down as a principle that in all cases where executors have received and misapplied money of their testator, due on judgment or bond, that they should be liable as judgment and bond debtors. The question does not appear to have arisen solely between conflicting creditors ; and if it had, it seems to me that the Court -acted on the peculiar circumstances of those cases.
In another case, that of M'Cauley, executor of Wells, vs. the assignees of M'Farlane and Player, the Court refused to apply the principle contended for, though there wore some peculiar and urgent circumstances to have induced the application of it, if it had been intended by the Court to have adopted the principle as- a gene-I'al one.
The case of the commissioners of public accounts vs. Róse, Tunno and Alexander Moultrie, turned upon other principles entirely. It was very.propesly remarked by the counsel for the defendants, that in the cases of Gadsden, and the executors of Lord, and the executor of Perry, the executors had not received the money pursuant to the powers vested in them and for the benefit of the estates under their charge, but had balled in good-securities, unnecessarily, and misapplied the money j whereas, in the case under consideration, the sole object of the power given to Mr.. Man was to recover and receive the money, and afterwards to remit it. He did: receive the money but did not .remit it,, and I think that pis estate is liable only as inordinary cases of agencies, for-1 l'eally cannot discern any peculiar circumstances in this caseto take it out of the course of common agencies.
Much stress was laid upon the solemn declaration of Man, in his last illness, that he ponsidered tins to he a sacred debt; hut I do not think that declaration can alter the nature of the transaction, or give a higher character to the demand on his estate. The law interposed at his death, and fixed the rights and priorities of the parties.
If the Court should be inclined to extend the principle contended for, to all cases of executors and administrators, (which I do not think it would be,) still there is a distinction between the case of executors and of mere agents. Executors arc certainly more immediately and exclusively under the control of this Cqurt. They act generally on estates where widows and children are interested, who are seldom able to watch over their conduct and to call them to account for many years, and who are more peculiarly the objects of the care of this Court. Whereas agents arc appointed by, and act for. principals, who are generally able and willing to act V%ilan^y for themselves, to watch over the conduct of their agents, and to change them when dissatisfied with their conduct.,
The counsel have not been able to produce a sin vie , , . . case, whex*e agents, receiving money tor their principals, on judgments or specialties, have been decreed to be debtors on judgment or specialty.
The current of authorities is the other way, and this policy has been pursued in the other states ; for, in the case of Garthright vs. Marshall, executor of Rind, decided in the High Court of Appeals, in Virginia, (see 1 Henning & Munford's Reports, p. 427) the Court decided, on appeal, that a debt due from an attorney to his client, collected on a judgment, is only a debt by simple contract.
Upon the whole I do not feel myself warranted, either on principle or on the authority of decided cases, to say that in a case of mere agency, where the agent receives money under his power of attorney, even on a judgment or specialty, and does not pay over the same, and then dies in bad circumstances, that the principal can come in upon his estate as a judgment or specialty creditor.
It is ordered and decreed, that it bo referred to the master to examine and report what is due by the estate of Spencer Man, deceased, to the executors of Kinder Mason $ and that the same, when ascertained, be deemed and taken to be a simple contract debt, due by the estate of S. Man to the executors of K. Mason.
There was no appeal from this decree.