Case Name: Charles and Thomas Drayton, executors of John Drayton, vs. Glen Drayton, and M'Credie and others, creditors of Glen Drayton
Court: Court of Chancery of South Carolina
Jurisdiction: South Carolina
Decision Date: 1797-09
Citations: 1 Des. Eq. 557
Docket Number: 
Parties: Charles and Thomas Drayton, executors of John Drayton, vs. Glen Drayton, and M’Credie and others, creditors of Glen Drayton.
Judges: Psaent — Chancellors Mathews and Rutledge,
Reporter: South Carolina Equity Reports
Volume: 1
Pages: 557–567

Head Matter:
Psaent — Chancellors Mathews and Rutledge,
Charles and Thomas Drayton, executors of John Drayton, vs. Glen Drayton, and M’Credie and others, creditors of Glen Drayton.
Sept'r. 1797
rase cxx.
decree noon, yo1' p- 84'
Executors who were al-Rgatee^'di-tate among tliem: which they c°mépnrcha-sers. One of ^ ™ed debts and judg-incuts were obtained a-13 hehbe’ came insol-vf,nt- ,Tlie are solvent, j^Y Gainst their co-executor, and his creditors to subject had recefved from his testator’s estate to his testator’s debts and legacies still unpaid. It was decreed that the assent of the co-executors to their legacies had so far vested the personal property, (though not ■the real) in the legatees, that the executors could not pursue the assets, and take them from tiie creditors of the co-ex-ccutor who was insolvent: but they, the solvent ex’ors. who had assented, were liable to the testator’s creditors.— The will of the testator having charged, the whole of his real and personal estate with the pay ment 0f jj;s legacies^ to children: *at Part¡ °f which came insolvent cx-o^the^residuary lega-i^ay,eIS ti}ose le8'a-cutors sell-inS, property, ecutor pur-changed, and j*is The co-exe-^requirin!^ bond ¿np n“p°mhif ej
This was a bill filed by the complainants under the following circumstances. John Drayton being possessed of very large real and personal estates, made and executed liis last will and testament, wherein after giving several legacies to his wife and daughters, he devised and bequeathed certain estates and property to his son John, and on his death, under age, and without issue, to ids sons William Henry, Charles, Thomas and Glen. He also devised and bequeathed the remainder of his estates, real and personal to Ids said last named sons. They all * survived the father: William Henry died soon after, leaving issue. John died under age, and unmarried; — and the property bequeathed to him fell to the sons, according to the will. The sons Charles, Thomas and Glen, qualified as executors on their lather’s will, and possess-eil themselves of the whole estate, real and personal.— Knowing that the estate was very large, amply sufficient to pay the debts and legacies, and to leave a considerable estate to them, they divided a good deal of the property among themselves, and sold some of the unproductive lands, of most of which they became purchasers. Glen Drayton, one of the sons and executors, held his share 0<? ^ es^a^e maT1y years, (as the other sons did,) treated it as his own property; sold some of it to third persons; contracted debts, &c. Some of his creditors brought suits aSaif,st him, obtained judgments, issued executions, and in some instances levies were made oh the property which came him from his father’s estate. His brothers and co-executors being alarmed lest his private creditors should sweep away all the property, and leave nothing to pay his proportion of the father’s debts and legacies, (which were considerable,) the payment of which would then devolve on them, filed their bill against him, and several of his judgment creditors, to subject the property to the payment of the debts and legacies of the father, in the first instance. The creditors of Glen Drayton contended that the property had vested in him, and that some of them having obtained judgments against him, and caused levies to he made on the property, have acquired a lien, which cannot be taken away : and that they were all entitled to be paid.
The cause came to a hearing in September, 1797, and was argued by Mr. E. Rutledge, and Mr. J. Parker, for the complainants. They contended that the creditoi’s and legatees of a testator have more than apersonal demand on the executors; they have an equitable lien on the very assets of the testator. And this lien, or equitable right, yields only to purchasers who have an equity to i’ehut such equity. And this right or Ken is stronger where the executor is also residuary legatee. His assent to his own legacy cannot prejudice the creditors of the testator, or his other legatees. A creditor may follow the assets into the hands of a legatee, though vested in him by the assent of the executor.— The court will follow the assets as far as possible, unless mischief results to third persons. If the executors are solvent, the court relying on their liability, might not pursue the assets. But here, Glen Drayton, one of the executors, is insolvent, and his effects cannot pay the whole of his share of his father’s and testator’s debts.— Where an executor sells assets of his testator to pay his own debts, the creditors of the estate may follow the assets into the hands of the purchaser; especially if he knew that testator’s debts wore unpaid. 2 Yernon, 616. 1 Atk. 463, 4. All assignments, or sales by an executor, fraudulently made, are void. 3 Atk. 240. And however the court may favor bona fide purchasers from executors or legatees, yet whilst the legacy remains in the hands of the legatee, it is liable to creditors of the testator. See 1 yol. of Cas. in Chanc. 257. To sanction tlie misconduct and sales and assents to legacies by executors, and to make them liable as on a devastavit, which is a mere personal claim, would be very mischievous to the creditors of the testator. Glen Drayton’s own assent would have yested the property bequeathed to him, as much as the assent of the other executors. Their assent therefore was of no importance. If he stood sole executor, would his assent in his own favor as legatee, vest the property in 1dm to the prejudice of the creditors of the estate ? Surely not yet this is substantially the case under consideration. A person taking by operation of law, stands on the same footing with the person from whom he takes by such operation. See 1 Yesey, 239, West vs. Skip. The ere-ditors then of Glen Drayton, who claim a lien by operation of law, stand in his place; and in his hands the assets of his testator might be followed to pay his debts. The funds of the testator are legally and rightfully bound to pay his debts first; and this right of his creditors to be paid, ought not to he shaken but on the strongest grounds. So in cases of partnership, the joint funds are first liable to pay the joint debts. The conversion or change of them by one partner, shall not deprive the copartnership creditors of the benefit of this rule. The case of Laurens vs. the executors of Hawkins, decided in this court, shews the extent of this doctrine. It would be very hard on the executors, that they might be ruined by the act of a «o-executor, without any fault on their part. They knew their testator’s estate was large, and could not refuse their brother and co-executor to take his share of it; but surely subject to the testator’s debts. What could they have ,}one with the estate ? If they had kept it together uxxdi- ^ might have been wasted in that way by the operations of the wax’, by neglect, by various accidents. — ■ The creditox’s of Glen Di’ayton must have known that he got his estate from his father, axxd that it was liable to his father’s debts. If they ci’edited him, it was at their own l’isk. Executors are liable only for their own misconduct, not for that of others. The complainants come before the coux’t as legatees as well as executors; and legatees may como and oblige other legatees to x’efund or abate. See 3 Eq. Cas. 554. 3 P. Wms. 446. But they come in also for the benefit of the cx’editoi’s of the testa, tor. If Glen Drayton’s creditors ai’e entitled to be paid before the testatoi’’s, because his co-exeeutoi’s assented to the legacy, the same may he said as to Charles and Thomas Drayton’s ci’editox’s, and the father’s debts and pecuniary legacies may go wholly unpaid. As to Glen. Drayton’s return of the property to the tax office, it was unavoidable. A division had been made, and he was in possession. He could not make a special x’eturn and say, that lie obtained the pi’opex’ty from his father, and it remained liable to his debts. This is never done by legatees, or ever by mox’tgagors or mox’tgagees. The case of the «’editors of Glen Drayton, is not so strong as tliat of purchasei's: a «’editor must always take the property of his debtor subject to its equity. Glen Drayton had other property acquired by his wife, to which they nxiglii have trusted in ci’editing him. The equity set up by the creditox’s of Glen Drayton, who are defendants, is ideal •and unfounded. They ax’e xxeither pui’chasers nor mortgagees, who would he too strong for the complainants' but mere creditors, who trusted to the character and pex’-•sor. of Glen Di’ayton.
The negx’oes pui'chased at the sale by Glen Drayton, are still liable — foe did not pay for them. His creditoi's ipust therefore pay for the property, if they take it.
Mi*. Pringle and Mr. Desaussure argued for the de-fondants.
Executors cannot make a legatee refund, unless the payment to the legatee was compulsory. 2 Yern. 205. — . On a voluntary payment to a legatee, the executors will be personally liable to the creditors. Yinter vs. Pix, X Chan. Reports, 71, 133. Tilsy vs. Throckmorton, 2 Cha. Cas. 132. 1 Yernon, 90, 453, 460. If the deficiency arises from the executor’s wasting the assets, the legatee who has recovered his legacy, shall not be compelled to refund. 1 P. Wms. 495. See also Sadler vs. Hobbs, 2 Bro. C. C. 114. Scarfield vs. Howes, 3 Bro. C. C. 90. And though the rule is, that creditors who are unpaid, and the assets fall short, may compel legatees who have been paid to refund; (1 Yern. 162,) yet executors cannot, if they paid the legacy voluntarily. 2 P. Wms. 296, Coppin vs. Coppin; and 2 Yesey, 194, Oit vs. Kaimes. Where a party has lain by for a great length of time, and suffered an estate to be distributed, he shall not have an account. See 4 Bro. C. C. 257, and the cases cited. A fortiori, the executors who made the distribution cannot. The executors are liable to the creditors of the testator for the assets, and there is no pre-tence that they are insolvent. They are men of large property, derived entirely from the testator’s estate. Even if the executors had a right to call on the legatees, to whom they made a voluntary payment or delivery to repay, they would stand only as simple contract creditors. But they desire in this case, to be preferred, even to the judgment creditors of Glen Drayton: nay, they even sold and delivered some property of the estate to Glen Dray-ton, for which they neither took bond nor mortgage; yet they expect to be allowed a priority over his judgment creditors. It is admitted that the executors have abundant assets to pay the creditors, yet they have not paid them: but they ask the court to aid them to compel the application of the estate of a legatee, to whom they voluntarily delivered it, to refund at the expense of his creditors, even of his judgment creditors who have liens.
By the common law, which was the law applicable t» this case, at the time it arose, the executor could sell the assets, and the bona fide purchaser would he protected even against creditors; and even if the executors wasted the money received on the sale. The executors having assented to the legacy, and divided the estate, and delivered Glen Drayton his share, he held it as his property; and third persons, his creditors, have become interested in it. These would be injured, if the assets could be followed. But some of the decided cases say, that the assets can be followed where third persons have obtained an interest in them by purchase, or by obtaining liens on them by way of mortgage or executions.
The parties have slept too long on their rights, if' they had any. It is nearly twenty years since testator’s death. See 4 Bro. C. C. 125, respecting purchasers from executors. The cases quoted from l Atk. 463, 4, and from 3 Atk. 240, for the complainants, are more favorable for the defendants.

Opinion:
Chancellor Mathews
afterwards delivered the decree of the court.
The first and most material point in this cause is, whether the division of the estate by the executors of J. Drayton, was such an assent by the present complainants, as executors, to the legacy of G. Drayton, as will extinguish any right they might- have had under different circumstances, to that relief they have prayed for by their bill ? The second point is, how far, if at all, they are liable for any act done by them to the prejudice of the rights of the creditors and other legatees of J. Drayton ? It appeal's on the face of the proceedings that the executors ánd complainants Charles and T. Drayton, and the defendant G. Drayton, in the year 1779, agreed to make a division of their testator's estate, conformably to the dispositions pointed out by his will, for the reasons by them assigned, previous to their having ascertained or paid their testator's debts and other legacies; on a mutual understanding that each was to be responsible for his proportion of debts and legacies* Glen Drayton having thug drawn out his proportion of his father's estate, and being in full possession thereof, contracts considerable debts; they have been prosecuted to judgment and execution, and even levies made on some of them; but further proceedings on them have been enjoined by this court, till the hearing of this cause. As to the first question, it being a novel one, great ingenuity has been displayed by the counsel in their arguments on it; and they have referred to a vast variety of cases from the books, for the purpose of establishing certain great standing principles. But no case has been, nor do we think there is any which can be assimilated to the present, which has received a Solemn adjudication. It has therefore been necessary for us to trace this truly important question into all its ramifications with great minuteness, and to decide with caution. We already foresee that the conduct of the present complainants, is not alone implicated in the present question, for we have good reason to believe that the same has been the conduct of other executors similarly circumstanced. However, our duty confines us simply to the case before us; and the rules of law, and not policy, must be our guide. There are few principles of law better settled than this: that an executor assenting to, and the legatee being put in possession of his legacy, and alienating the same, it never can be followed as assets of the testator into the hands of the purchaser. But it is contended, that the legacy which went into the hands of Glen Drayton, not having been disposed of by him, and being still in his possession, is in its essence the same as it originally was, and is subject to that legal lien which was attached to it by the testator's will, viz : — .the payment of his debts and legacies in the first instance. And it wTas further contended, that as an executor, G. Dray-ton had a right to possess himself of his own legacy without the consent of his co-executors. On the other hand it has been contended, that although there has been no formal alienation by G. Drayton himself, yet the law has made such a disposition of this property, as will as effectually wrest it out of his hands, as if he had disposed of it in ever so formal a manner; for the division of the testator's estate, was an assent of Charles Drayton and Thomas Drayton, two of the executors, to the legacy ofG. Dray-ton; and his possessing himself thereof, enabled him to obtain a credit on this visible property, and made it liable to the judgments and executions of his own creditors, and which have created sucha legal lien thereon as they cannot he divested of at this time; provided there are assets sufficient of the testator in the hands of those executors who thus assented, to pay his debts and legatees: and that these are sufficient, is not denied. That as to his being an executor himself, and having a right independent of the assent of his co-executors to possess himself of his legacy, that cannot avail the complainants in this case, because they were privy, and assenting to his taking his legacy. It is with reluctance we pronounce the latter argument to be well founded, and must prevail: we say with reluctance, because we think the case of the complainants a very hard one; they must become severe sufferers by their misplaced confidence, and in whom ? In a brother. But as it is their misfortune to have done so, they are bound to abide the consequences; and however we may regret the inconvenience resulting to them, a superior duty calls on us to say, that by the division of their testator's estate under their immediate sanction, and their permitting G. Drayton to possess himself of his part thereof, in the unlimited and uncontrolled manner they did, was to every legal intent such an assent on their part as must subject them to all the disadvantages growing out of such incautious and untenable conduct.' — In the exercise of the office of an executor, great caution ought to be used; for the law subjects them to such penalties for small deviations from those rules, it prescribes for their conduct, as renders it obligatory on them to act up to its rigid rules, if they wish to avoid after inconveniences. The predicament in which the present complainants stand, verifies the observation; for had they done what the law directed them to do, which was to pay the debts of their testator, before they proceeded to a division of his estate; or if after a division, they had entered into proper mutual engagements for so doing, and made it an act of general notoriety, much might have been done in their favor; but on the contrary to suffer G. Drayton to possess anil incumber that part oí" the es-tale he was entitled to in the manner he did, was a degree of negligence, such laches on their part as never can entitle them to that relief, merely as.co-exmttors or co-ie-gatees, which they come here to ask for, to the prejudice of bona fide judgment creditors of Glen Drayton, who, we must presume, had trusted him on the faith of a largo visible, estate-, which for ought they could come to any legal knowledge of, was unincumbered with any other than his own debts.
Our opinion on this point is, that the division of J» Drayton's estate by his executors, was a reciprocal assent of the executors to their taking their several legacies; and that the capacity of the executor sunk from the moment of his receiving his legacy into that of a simple legatee, uncontrollable by the co-executors: and in no other point of view can it be taken, for the assent of at least one executor is indispensable to the acceptance of a legatee, and Ms peaceable enjoyment of his legacy; for should an executor legatee take his own legacy before the debts of his testator are satisfied, might not the other executors, by legal means, compel him to restore the assets of the testator, until his debts are fully ascertained and paid ? We think they might, in this case, G. Drayton was for many years in the peaceable enjoyment of his legacy, without any act done by the other executors to intercept him in such his possession. We shall next consider the effects of such possession. It is a well known rule in law. that if a man assigns his property to a creditor for valuable consideration, anil the creditor permits him to remain in possession of it, and he afterwards claims a credit on that property, and the creditor is ignorant of such assignment, that the subsequent creditor shall be preferred in the payment of his debt. So here, G. Drayton having obtained a credit on the property in his possession, his creditors unapprised of any other incumbrance, acquire a legal lien thereon by judgment and execution. They certainly cannot, upon any equitable principle, be divested of such lien by the present com plainants, merely to save them harmless, for an act of imprudence committed by them to the injury ofunoffend-ing bona fide creditors, whose rights are in this court, always favored and protected. As to the secpnd point, it *8 imnecessary for us to take any particular notice of the claims of G. Drayton's creditors, as to his real estate; as it is too well understood, that the real estate which came to him by his father was not under the control of his executor, they can therefore have done no act which exempts it from the payment of their testator's debts and legacies. G. Drayton's creditors can consequently come in for no greater interest in that part of his estate than he himself had; and as it was liable in the first instance in his hands, for the payment of his testator's debts and legacies, so must it continue under the judgments obtained by his creditors. We must also consider his part of the personal estate as liable for its proportion of the legacies of the minor children; because the testator has by his will expressly charged the whole of his real and personal estate with the payment of his legacies; which will, being recorded in the secretary's office, (where all wills were formerly deposited,) it was incumbent on G. Dray-ton's creditors, as he derived all his estate from his father, to see whether he possessed it, subject to any conditions or limitations; and if they did not, they must blame themselves for the neglect; and because the executors complainants cannot be charged with any improper or Unnecessary delay or neglect, in not raising the legacies of the daughters before G. Drayton had incumbered his part of the estate, for the daughters were not entitled ta their legacies until 21, or day of marriage, a contingen.cy, which might or might not happen; but as they are' both married, and application has been lately made to this court to have the legacies raised, it has been so decreed; and lastly, because as the executors who are considered as trustees for the legatees, took the whole estate • real and personal, burihened with the trust created by testator's will, the creditors of Glen Drayton then standing in his place, must take the personal estate subject to the same trust, and all the equity it was liable to in his hands. As to G. Drayton's purchase at the sale of his testator's estate, we consider it in the same light as that of any other individual; there is no law which prohibits executors purchasing (without fraud,) any property of his testator at open and public sale; and if Ms co-executors have been so incautious as not to oblige Mm to give the security required by the advertisement, but have suffered him to possess the purchased property for a series of years as bis own, and have even been privy to his sale of a part of it, and quietly acquiesced until executions had attached upon what was left; it is such an inexcusable laches on their part as this court never can countenance. They have lost that equity which they bad, and must submit to the consequences; although if this contest had been immediately between the creditors of John Dray-ton, and those of G. Drayton, and the executors of J. Drayton were insolvent, this court would support the claim of J. Drayton's creditors, who undoubtedly would have a prior and superior equity to those of G. Drayton's. It is therefore ordered, that the report which has been made by the master in this case, be referred back to him, and that he do state the same conformable to the terms of this decretal order.