Ochiltree v. Wright, 21 N.C. 336, 1 Dev. & Bat. Eq. 336 (1836)

June 1836 · Supreme Court of North Carolina

21 N.C. 336, 1 Dev. & Bat. Eq. 336

WILLIAM E. OCHILTREE v. THOMAS WRIGHT and ALFRED BECK.

Where one of two co-exeeutors took possession of the effects of the testator, sold them, and received and kept the bonds taken for the same, and the other executor did not interfere in the management of the business, further than to assent to the sales, and join in signing the inventory and account of sales, it was held, that the latter, not having done any tiling more than the law required of him, was not responsible to the legatees for the devastavit of the former.

When co-executors are appointed curators or trustees of a fund, bequeathed by their testator, each is responsible only for what was in his hands or under his control; and as neither has any authority to taire from the possession of another the property of their cestui que trust, he cannot, therefore, be made answerable for the default of that other.

William Beck made his will, which was proved by the defendants. The testator gave to his wife several slaves, and other personal property, for and during her life; and, on her death, then he bequeathed one-fifth part thereof to the plaintiff, provided he should attain to the age of twenty-one years. The testator, after a bequest of one-fifth part of all the remaining portion of his property to the plaintiff, provided he should arrive to the age of twenty-one years, and the other four-fifths to his, the testator’s children, directed as follows : — “ It is my will and desire, that my executors retain in their hands the whole of the property herein given to him” (the plaintiff,) “ until he shall arrive at the age of twenty-one, should he live to that age, and apply the annual profits of the same property towards his education, so far as it is necessary; and the balance, if any, to be paid to him when he arrives at the age of twenty-one years; but should he die before that age, then the remaining profits, together with the property, immediately to be divided and paid to my children.” Upon the death of the testator, the widow took possession of her legacy; and, on her death, the defendant, Beck, who was the devisee in remainder of the plantation where she resided, and also one of the executors, immediately moved to that plantation, and took possession of all the property in which the widow had an estate for life. The executors had power by the will, to divide the property among the legatees, either by lot or sale; and for the purpose of a division among the five claimants, to wit, the plaintiff, and the four children of the testator, the property was advertised and sold at the late residence of the widow, and then the residence of the defendant, Beck. The other defendant, Wright, who had married one of the testator’s daughters, and was therefore entitled to a share of the property, was at the sale, and assented to it. Both of the executors signed an inventory of this property, and also an account of the sales, and returned them to the County Court. On the day of the sale, after the property was all cried off, Wright returned home, leaving every thing in the hands of Beck, who delivered the articles to the purchasers, and took their bonds therefor. Except what is above stated, Wright took no part in the management of the business, leaving the whole to Beck, who settled with four of the legatees, for their shares. One of the bonds taken by Beck, for articles sold, was executed by David Ochiltree, and C. Shaw as his surety, which bond was for an amount equal to one-fifth part of the whole sale, and was, at the time, perfectly good. Beck kept this bond as the share of the plaintiff, then an infant; and on one occasion he solicited a gentleman to become his guardian, and to take the bond as payment of his share; but this was declined. Beck then continued to keep the bond, and negligently omitted to collect it, or make any effort to collect it, until one of the obligor’s became insolvent, and the other died, and the demand against his estate was barred by the statute of limitations. The plaintiff, having arrived to the age of twenty-one years, brought this bill against both the executors,, in which he prayed for an account of his one-fifth part of the property, which had been left to the wife for life, and then over, as before-mentioned. The bill was taken joro confesso as against Beck, who was a non-resident. Wright answered, and contended that he was not liable to the demand; and as far as he was concerned, and for the purpose .of deciding on his liability, the facts were admitted by the counsel to be as above stated. There was no allegation or pretence that the defendant, Beck, was insolvent.

June, 1836.

W. C. Stanly, for the plaintiff,

contended, 1st. That by the assent of Wright to the sale made by his co-executor, and his joining in the signing and return of the inventory and account of sales, he had made himself responsible for the acts of his co-executor. That his conduct was such an active interference in the business, as to make him jointly liable, because it enabled or assisted his co-executor to get the funds into his possession. Williams’ Ex’rs, 1118. 2nd. That by the will, Wright was appointed a joint trustee with Beck, of the property bequeathed to the plaintiff : that the bond of Ochiltree and Shaw was part of that fund, and that it was as much Wright’s as Beck’s duty, to see tp the faithful collection of it: that Wright had shown himself sufficiently vigilant where his own interest was concerned, and that he was bound to have used the same vigilance in behalf of the other objects of his testator’s bounty; and that if the debt above mentioned was lost by his inactivity, he was as much responsible for it as his co-executor, and was liable to be called upon to make it good, notwithstanding his co-executor was solvent and responsible.

Badger and Henry, for the defendant,

Wright, contended : — That although the sale was made by both, yet as the bond was taken by only one, the other was not liable. A joint receipt by both might be evidence of concurrence by both; but as each had a right to act, if only one received the bond, the other could not be held responsible for it. There is no instance of any presumption against one, on account of a joint sale; there must also be a joint receipt of the purchase money. It was Wright’s duty to make the sale, and nothing can be inferred against him, unless he joins in a receipt, which shows that he intended it to be taken under the responsibility of both; and even then it may be shown, that it was a mere formal act. Where a receipt by both is necessary, no presumption arises, because both may be required by the party to sign. Apply this principle to the case of signing the inventory and account of sales. It appears that Wright did nothing more than the law required him to do. Williams’s Ex’rs, ] 119. M‘Nair v. Ragland, 1 Dev. Eq. Rep. 530. There is a difference between the liability to creditors and to legatees, in cases of joint receipts; there being a responsibility to the former, where there would be none to the latter. Churchill v. Lady Hobson, 1 P. Wms. 241.

Daniel, Judge,

after stating the case as above, proceeded : — It is contended on behalf of the plaintiff, that he is entitled to relief against Wright as well as against Beck, notwithstanding the whole of the assets came to the hands of Beck, and were disposed of by him, because Wright signed the inventory and account of sales, and assented to the sale: for that so far,-he was active in enabling his co-executor to dispose of the assets; and that he ought therefore in this court to be held liable for the devastavit of his co-executor.

The devastavit by one of two executors or administrators shall not charge his companion, provided he has not, intentionally or otherwise, contributed to it: for the testator’s having misplaced his confidence in one, shall not operate to the prejudice of the other. Hargthorpe v. Milford, Cro. Eliz. 318, 319. An executor shall not, under ordinary circumstances, be responsible for the assets come to the hands of his co-executor. Littlehales v. Gascoyne, 3 Bro. Ch. Rep. 73. 2 Will. Ex’rs, 1118. This then, being the rule, Wright could not be held responsible for the assets which his co-executor took into his sole possession, immediately after the death of the tenant for life. Wright being passive, and not obstructing his co-executor from getting the assets into his possession, is not as to that responsible. Langford v. Gascoyne, 11 Ves. 333. The • foregoing remarks bring us to the inquiry, whether, under the circumstances of this case, Wright, by his assent to the sale, and signing the inventory and account of sales, has made himself liable for that devastavit. The signing the inventory could not have that effect, because executors are bound to render an inventory of all the assets which came to their possession or knowledge; because each has authority by the will to take possession of the property, and because Beck had already exercised that authority before the inventory was signed. It was but a formal proceeding, and by no means subjects Wright to the devastavit of his co-executor. Is there any additional responsibility thrown on Wright, by his assent to the sale by his co-executor, and signing the account of sales with him to be returned to the County Court ? It is contended for the plaintiff, that the case is within the principle of the rule, that when two executors sign a receipt, and one alone receives the money, both are equally liable for that money. At one period, a well recognised distinction existed between trustees and executors. This distinction was founded on the difference between the power and authority of a co-trustee, and that of a joint executor, viz. that trustees cannot act separately, as executors may, but must join both in conveyances and receipts; and therefore, it may be taken that a co-trustee joins only for conformity. But a co-executor, as it is not necessary for him to join, interferes unnecessarily; he was therefore to be considered as assuming a power over the fund, and consequently, to be answerable for its application, as far as it was connected with the particular trust action in which he joined. Therefore the rule was, that when the executors joined in a receipt, both having the whole power over the whole fund, both were chargeable; but when trustees joined, each not having the whole power, and the joining being necessary, only the person receiving the money was chargeable. 2 Will. Exrs. 1125. One executor in trust, is not answerable for the receipt of the other, merely by taking probate, permitting the other to possess the assets, and joining in acts necessary to enable him to administer. Joining in a receipt, though not absolutely necessary, is not conclusive against an executor, any more than against a trustee, to charge him with the receipt of his co-executor. Hovey v. Blakeman, 4 Ves. 596-605. Again, in Scurfield v. Howes, 3 Bro. Ch. Rep. 90, Sir RichaRD Pepper Arden said, he dissented from the rule as broadlv stated, that if one executor receives the money, and two sign the receipt, both are chargeable, if it appear that the second joined for conformity only. And Lord Redesdale, in Joy v. Campbell, 1 Sch. & Lef. 341, took the distinction to be, that if a receipt be given for the mere purpose of form, then the . . ... , , . . , signing will not charge the person not receiving the money, And the true question in all these cases seems to have 1 been, whether the money was under the control of both executors. If it was so considered by the person paying the money, then the joining in the receipt by the executor who did not actually receive it, amounted to a direction to pay to his co-executor, and he became responsible for the application, just as if he had received it himself. Again, in Doyle v. Blake, 2 Sch. & Lef. 242, it is said, the true consideration in a question of this kind is, whether the executor who merely joins in the receipt, had a control, and his joining in the receipt is evidence of that control, although the money was actually received by the other. The joining in a receipt shall not have the conclusive effect of charging both. Westley v. Clarke, 1 Eden, 357. The relaxation of the rule in favour of executors, has been lamented by Lord Eldon,, but his lordship, in Walker v. Symonds, 3 Swan. 64, alludes to its alteration as having been completely effected, and it. seems to us reasonable and equitable. In the case now before the' court, it appears that Beck took possession of the property, and alone managed the sale: the law required an account of sales to be returned to the court: the signing that account of sale was, we think, merely for conformity, a control over the property is rebutted by the facts of the case, and according to the before-mentioned decisions, does not subject him on that ground to the demand of the plaintiff.

Formerly, there was a distinction between co-executors and co-trustees joining in a receipt for money. In the former case, both were held responsible — in the latter, only he who actually received the money.

Now the executors joining in'3 a receipt, absolutely1 necessal7> is not con-elusive 311 executor, anymore ^™nsta trustee, ,tm? these cases thernoney" received control of both executor.

The join-evidence of trol, though itis“ot conclusive.

The last position taken by the plaintiff, is that, by the will of the testator, the two executors were appointed curators of the estate, which was contingently bequeathed t0 jjjm. that the bond of Ochiltree and Shaw composed a part of that estate: that it was the duty of Wright, as well as of Beck, to see to the collection of that bond : that Wright has been remiss in this part of his duty : that he has been vigilant in getting his own part of the estate, and permitting the other shares belonging to the children of the testator, (including that of his co-executor,) to be paid, and has wholly disregarded the interest of the plaintiff, who was then an infant, and should have been protected by him, as well as by Beck: that although Beck is not insolvent, yet that he is entitled to a decree against both defendants, and that Wright should run the risk of any loss, by the possibility of Beck’s becoming insolvent, and not let that risk fall on him. The true answer to this position may be given almost in the words in which the opinion of this Court was heretofore expressed in the case of Clark and others v. Cotton and others, 2 Dev. Eq. Rep. 51. Wright was indeed a curator or trustee for the plaintiff, but. only for what was in his hands, or had been in his hands, or was under his power and control. Beck was a curator or trustee, with precisely the same powers. If a misplaced confidence was reposed in the latter, it was not the confidence of Wright, but the confidence of the testator. Wright did no act by which, an abuse of that confidence was facilitated. He had no authority to take out of Beck’s hands the property of the cestui que trust, which was rightfully there; he never guaranteed the diligence, fidelity or solvency of his co-trustee; and there is no ground in conscience to render him answerable, when he has committed no fault, and broken no engagement.

The bill must be dismissed as against Wright, with costs to be paid by Beck; and the plaintiff is declared entitled to an account against Beck.

Pek Cukiam. Decree accordingly.