David Peter, of the District of Columbia, by his will declared
it to be his intention that all the proceeds of all his estate
should be vested in his wife for her support and for the
maintenance and education of his children; that no appraisement or
valuation should be had of any part of the property attached to his
dwelling house; that his children should receive good educations.
He provided for the payment of his debts by the following clause in
his will:
"I wish all my debts to be as speedily paid as possible, for
which purpose I desire that the tract of land on which Dulin lives,
together with all personal property thereon, may be sold and
applied to that purpose, and in aid of that, as soon as sales can
be effected, so much of my city property as may be necessary to
effect that object."
He appointed his wife, Johns, and George Peter his executors.
The whole of the personal property attached to the dwelling house
went into the bands of Mrs. Peter, and site maintained her family
and educated her children out of the proceeds of the estate. At the
time of the decease of David Peter, he was largely indebted to the
banks in the District of Columbia, and the executors, to obtain a
continuance of the loans, and considering it advantageous to the
estate to do so, gave their individual notes for the debts, and
received the notes of their testator. This was done under the
understanding that the arrangement was to continue as long as the
banks should he willing to indulge the estate or until the
executors could make sales of the estate for the payment of the
debts. In the settlement of the accounts of the executors, in the
orphans' court, the notes of the testator received from the banks
were charged by the executors. The Dulin farm was sold, but no
title made to the purchaser, he having paid a part of the purchase
money and given his notes endorsed for the balance. His notes were
not paid, and an ejectment was brought for the recovery of the
estate, which has not been decided. George Peter survived the other
executors, and he was called upon by the banks to sell the real
estate of David Peter directed to be sold to pay the debts. The
children of David Peter obtained a perpetual injunction in the
circuit court to prevent the sale of the city property of their
father for the payment of the debts, alleging that no debts were
due, as the notes of the executors had been received by the banks
for the debts of the testator, and they had charged them in their
accounts with the estate, and also alleging negligence in not
collecting the balance due for the sale of "the Dulin farm," and
that the executors were liable as for a
devastavit for the
money which went into the hands of their mother for the support of
the family and the education of the children, and it was denied
that the power to sell the estate of the testator survived to the
surviving executor, George Peter. The court held that the direction
of the will of David Peter to sell a portion of his real estate for
payment of his debts created a power coupled with an interest that
survives. That the surviving executor is, by necessary implication,
the person authorized to execute that power
and fulfill that trust. That the debt due the banks has not been
extinguished by the notes substituted by the executors
Page 35 U. S. 533
as renewals in the bank, or the estate of the testator in any
way discharged from the payment of the debt. That the executors are
not chargeable with negligence or misapplication of the personal
estate that ought to render them personally responsible for these
debts, and that satisfaction of these debts should be had out of
the lands appropriated by the testator for that purpose. The
perpetual injunction granted by the circuit court was ordered to be
dissolved.
If executors have paid a debt to banks, or the banks have
accepted their note in payment in place of the notes of the
testator, so that the executors became the debtors and personally
responsible to the banks, the only effect of this is that the
executors became the creditors of the estate instead of the banks,
and may resort to the trust fund to satisfy the debt.
The testator had a right, unquestionably, so far as respected
his children, to charge the payment or his debts upon any part of
his estate, real or personal, as he might think proper and most
advantageous to his family. And if the creditors were willing to
look to the fund so appropriated to that object, no one would have
a right to counteract or control his will in that respect. And he
having thought proper to constitute his widow the trustee of the
proceeds of all his estate for the maintenance and education of his
children, thereby vesting in her an unlimited discretion in this
respect so far as the proceeds of his estate would go, the
surviving executor is not accountable for anything applied by her
for that purpose, not even if she would be chargeable with a
devastavit.
It is a well settled rule that one executor is not responsible
for the
devastavit of his co-executor any further than he
is shown to have been knowing and assenting at the time to such
devastavit or misapplication of the assets, and merely
permitting his co-executor to possess the assets, without going
farther and concurring in the application of them, does not render
him answerable for the receipts of his co-executor. Each executor
is liable only for his own acts, and what he receives and applies,
unless he joins in the direction and misapplication of the
assets.
It is a well settled rule in chancery, in the construction of
wills as well as other instruments, that when land is directed to
be sold and turned into money, or money is directed to be employed
in the purchase of lands, courts of equity in dealing with the
subject will consider it that species of property into which it is
directed to be converted.
The general principle of the common law, as laid down by Lord
Coke and sanctioned by many judicial decisions, is that when the
power given to several persons, is a mere naked power to sell not
coupled with an interest, it must be executed by all, and does not
survive. But where the power is coupled with an interest, it may he
executed by the survivor. It is not a power coupled with an
interest in executors, because they may derive a personal benefit
from the
devise. For a trust will survive though no way beneficial to the
trustee. It is the possession of the legal estate, or a right in
the subject over which the
power is to be exercised, that snakes the interest in question.
And when an executor, guardian, or other trustee is invested with
the rents and profits of land for the sale or use of another, it is
still an authority coupled with an interest, and survives.
The courts of America have generally applied to the construction
of such powers, the great and leading principle which applies the
construction of other parts of the will, to ascertain and carry
into execution the intention of the testator. When the power is
given to executors, to be executed in their official capacity of
executors, and there are no words in the will warranting the
conclusion that the testator intended, for safety or some other
object, a joint execution of the power; as the
Page 35 U. S. 534
office survives, the power ought also to be construed as
surviving. And courts of equity will lend their aid to uphold the
power, for the purpose of carrying into execution the intention of
the testator, and preventing the consequences that might result
from an extinction of the power, and where there is a trust,
charged upon the executors in the direction given to them in the
disposition of the proceeds, it is the settled doctrine of courts
of chancery, that the trust does not become extinct by the death of
one of the trustees. It will be continued in the survivors, and not
be permitted, in any event, to fail for the want of a trustee.
It is a settled doctrine that the acceptance of a negotiable
note for an antecedent debt will not extinguish the debt unless it
is expressly agreed that it is received as payment.
The auditor to whom the accounts of the executors were referred
made an estimate of the expenses of the family of Mrs. Peter for
twelve years, without having called for vouchers for all the items
of the expenditures. The court held the allowance of $6,000 dollars
for the expenses of the family for twelve
years must certainly be a very moderate charge. It was a proper
subject of inquiry for the auditor, and there is no ground upon
which this Court can say
the allowance is exceptionable. From the nature of the
expenditure for the daily expenses of the family, it could hardly
be expected that a regular account would be kept, and especially
under the large discretion given by the testator in his will in
relation to the maintenance of his family.
The amounts paid by the executors for the curtails and discounts
on the notes running in the banks were properly allowed to their
credit. Those were debts due from the estate, and whatever payments
were made were for and on account the estate
The appellees filed their bill in the court below to enjoin a
sale of certain real estate, being lots in Washington which had
belonged to David Peter, deceased, which sale was about to be made
by George Peter, his surviving executor, for the payment of debts
due from his estate to the other appellants.
The following is a copy of his will:
"In the name of God, Amen. I, David Peter, of Georgetown and
District of Columbia, do hereby make and establish this my last
will and testament, revoking all heretofore made by me."
"1. It is my intention that the proceeds of all my estate shall
be vested in my dear wife Sarah Peter, for the maintenance and
education of my children."
"2. I wish all my debts to be as speedily paid as possible, for
which purpose I desire that the tract of land on which Dulin lives,
together with all personal property thereon, may be sold and
applied to that purpose, and in aid of that, as soon as sales can
be effected, so much of my city property as may be necessary to
effect that object. "
Page 35 U. S. 535
3. I desire that the corner lot on Bridge and Congress streets
shall be given to my son William, and the corner lot on Water and
High streets to my son Hamilton, and the storehouse and lot
adjoining the last named corner, devised to my son Hamilton, to my
youngest son James.
"4. I desire that no appraisement or valuation shall be had of
any part of the property attached to my dwelling house."
"5. I desire that my sons shall receive as good educations as
the country will afford, and my daughters the best the place can
furnish, and I desire that in the general distribution of the
residue of my estate on the division between my sons and daughters,
my sons may receive in the proportion of five as to three."
"I constitute and appoint my dear wife Sarah Peter, captain
George Peter, Leonard H. Johns, my executrix and executors of this
my last will and testament."
"In witness whereof, I have hereunto set my hand and seal this
30th day of November 1812."
"DAVID PETER [L.S.]"
The will was executed in the presence of three witnesses.
They charged in their bill that George Peter was about to sell
certain real estate of the testator, whose heirs and devisees they
are, for the payment of debts alleged to be due to the Bank of
Columbia and to the Bank of the United States; the said debts
having been assigned to him, that a very large real and personal
estate came to the hands of the executors of said David Peter, and
that if they had used due and reasonable diligence in respect to
the trust confided in them by the said will, and had properly
applied the assets arising from the sales of the real and personal
estate of said David, in a lawful course of administration, all the
debts of the said David would have been fully paid, without any
further application to the real estate to raise money for that
purpose.
They charged them with having received moneys which they have
not accounted for; that they sold the land in Maryland, mentioned
in the will, and received about one-half the purchase money, and
that the whole ought to have been received, if the executors had
used due diligence. They state that the executors have settled
accounts in the orphans' court which they had exhibited, whereby it
appeared that they have overpaid the personal estate more than
$12,000, and they contended, that if
"by the neglect of the
Page 35 U. S. 536
executors they have not received and applied the whole of the
purchase money of the land sold, to indemnify and reimburse them
for the advances made towards the payment of the debts, they, the
complainants ought not to be affected by such negligence."
They deny
"that there is any debt due to the banks, or any other debt
whatsoever, for the payment of which it is necessary, proper, or
lawful for the said George Peter to make sale of the said city
lots."
They prayed for injunction and general relief.
The answer of George Peter stated that he was the brother of the
testator, and that of the other executors appointed by his will,
one was his widow and the other, Leonard H. Johns, her brother;
that at the death of the testator in 1812, he resided in
Georgetown, and in 1816 removed to the country, in Maryland, where
he has ever since resided; that although he consented to qualify as
executor, he did not deem it necessary that he should interfere in
the management or settlement of the estate with the widow and her
brother, and that except in attending to a farm and the stock
thereon, and a few inconsiderable tenements in Montgomery County,
Maryland, which were near his own property, he did not so
interfere; that believing Mr. Johns to be fully competent, and that
he would attend to the business in the way best calculated to
promote the interest of his sister and her children, he left it to
them to settle the estate, and collect and dispose of the proceeds
thereof, and provide for the support and education of the family as
they might think best.
That all this was well known to the complainant Beverly, who
married the oldest daughter of the testator in 1819 and who and his
wife lived with her mother till within a year or two of her death,
and he exhibited a letter of said Beverly to prove this.
He stated that he had nothing to do with the settlement of
accounts in the orphans' court;
"Further than that, it was explained to him to be necessary in
order to comply with the rules of the banks, and thus to continue
the debts, and save the property from sacrifice by a sale, to put
in by way of renewal the notes of the executors for those of the
testator, and that the accounts should be settled in the orphans'
court, so as to show those debts in the banks, thus paid by the
executors, they having substituted their own notes, and that this
arrangement should continue as long as the banks would be willing
to indulge the estate, or until the executors should be able to
make sales for the payment of said debts, and he avers that this
arrangement was explained and understood, and assented to by the
said
Page 35 U. S. 537
executors and the said banks, and he presumes was explained to
the orphans' court."
That this arrangement was well understood by Beverly, the widow
and all the children, who were old enough to understand anything of
their affairs, was often talked of by the complainants, Beverly and
Ramsay, who always spoke of the estate as liable to the banks, and
he exhibits numerous letters from Beverly showing his knowledge of
and acquiescence in it, and shows that said Beverly was, for a
considerable time, acting as agent for the estate, under the
authority of the executors, and paying discounts on these
substituted notes to the banks out of the rents of the estate, and
sometimes from partial sales of lots, and at other times attempting
to make sales for the purpose of paying interest to the said banks.
He admits the sale of the land, called Dulin's in the will, to
George Magruder; that he paid part of the money, was sued and
became insolvent; and that an ejectment was brought to recover the
land, that it might be resold; that the ejectment was removed to
the Court of Appeals of Maryland, where he believes it is still
pending; that if there was any neglect or delay in recovering this
land, it was the neglect of the complainant Beverly, who undertook
to attend to it, being then agent for the estate, who also employed
counsel to file a bill in chancery in Maryland, for a resale of the
land.
The defendant under these circumstances, considering this
business in the hands and under the care of complainant, did not
suppose it necessary for him to interfere in it. He admits that he
received some small sums of money from the farm in Maryland, which
he always sent to Mrs. Peter or Mr. Johns, and which, with the
other money they received, he believes were faithfully applied in
paying the debts, and supporting and educating the children. He
knows that great expenses were incurred in this way; that the
family continued to be supported in the way they had been
accustomed to live; and that the income of the estate, which had
greatly diminished, must have been insufficient for these purposes;
that rents had greatly fallen, and most of the city property was
unproductive, and the taxes were considerable. Under these
circumstances, the executors exercised their discretion, honestly
and fairly, in withholding the city property from forced sales at
very low prices, and became responsible to the banks, who consented
to the arrangement made to save the estate from sacrifice. He avers
that considerable advances were made by the executors, particularly
by himself
Page 35 U. S. 538
and Johns, for the payment of debts, and the necessary support
and education of the family.
He exhibits statements with his answer, showing what, upon the
lowest estimates, must have been the annual expenses for
maintaining the family and educating the children, and what was the
annual income of the estate, showing its great inadequacy to meet
those objects.
He contends that under the arrangement with the banks, with the
perfect understanding of the complainant, the estate remained
liable to the banks, but that if this were not so, yet if the
executors had made themselves liable, they would have an undoubted
right to resort to the estate for their indemnity or reimbursement,
and might use and apply this right for the benefit of the banks, to
whom the said debts are still due.
The answer of the banks refers to the answer of the surviving
executor, for the facts stated as to the arrangement between the
executors and the bank, which they aver was entered into to save
the estate of testator from sacrifice, and to continue the
accommodation, and that the executors and the bank, and the agents
of the executors, one of whom was the complainant Beverly, always
so understood it, and looked to the trust estate as still liable to
the banks. They exhibit statements showing the situation of these
debts at the death of the testator, and the various renewals by the
executors afterwards, with the payments made by them and their
agent, and the balance now due.
An amended bill was filed calling for an account of another sum
of money alleged to have been received by the executors, or some of
them, and charging more particularly negligence in the executors in
not suing the endorsers on the notes of George Magruder, the
purchaser of Dulin's farm, in time, and the consequent loss of the
balance of the purchase money, by such neglect.
To this amended bill the surviving executor answered stating his
knowledge and belief as to the further sum charged to have been
received and unaccounted for by the executors: and he denies, as
before, the negligence imputed to the executors, and avers if there
was any negligence, it was that of Beverly the complainant, who,
being interested in the estate and being a lawyer, undertook to
attend to the recovery of the balance of the purchase money; that
the endorsers were in very doubtful circumstances; that the land
was looked upon by all interested as a sufficient security for
the
Page 35 U. S. 539
balance of the purchase money, and that the counsel employed in
recovering the balance of the purchase money advised a resort to a
resale of the land, as the best remedy to recover said balance;
that for this purpose an ejectment was brought, and a bill in
chancery filed in Maryland, under the direction and superintendence
of said Beverly, and that if any delay or negligence occurred in
the prosecution of these suits, it was caused by said Beverly.
On the coming in of this answer, the cause was referred to the
auditor to make a report and account and take depositions,
&c.
The following report was made by the auditor:
"This cause having been referred to the auditor, with directions
to take and report an account of all sums received by the executors
from the real and personal estate of David Peter deceased, and of
the sums paid by them, &c., and to take depositions and report
all evidence and testimony by him taken, the auditor, after having
notified the parties, proceeded to examine the accounts and
vouchers of the executors, and the several statements made by the
counsel of the complainants and defendants; and now bogs leave of
this honorable court to report: "
"That he has examined the several statements made by the
executors with the orphans' court, and has extracted therefrom the
several sums received and paid by them. In making the statement now
submitted, the auditor has omitted the charges made by the
executors, and for which they obtained credit in their settlement
with that court for payments stated to have been by them made to
the Bank of Columbia and the Union Bank of Georgetown, because it
does not appear that these debts were at that time paid by
them."
"When David Peter died, he was largely indebted to these banks
upon endorsed notes, discounted in them. A proposition was made by
the executors and acceded to by the banks to prevent these notes
from lying under protest, to substitute notes to be drawn by Mrs.
Sarah Peter, executrix, and endorsed by Leonard H. Johns and George
Peter, executors. These notes of David Peter were retired by this
substitution, and passed as credits to the executors in the
orphans' court as paid, when in truth and in fact they were not
paid. Whether the bank by this arrangement released the estate of
David Peter or not the auditor does not undertake to determine. In
the account with the orphans' court, the executors are charged with
the amount of the inventory of the personal estate, both in the
District of Columbia and in Maryland. In the present statement,
these charges are
Page 35 U. S. 540
omitted. As far as any proceeds of the personal estate came into
their hands, they are charged in this audit, but they are not
charged with what the widow and heirs retained in their own hands,
and for their own use, the object being to ascertain whether the
executors are indebted to the estate or the estate to them. It will
be seen that by an account stated by the counsel for the heirs and
annexed to the auditor's statement, that he has charged the
executors with $20,250, being the amount of sale of land to George
Magruder. It appears from the papers that the first payment for
this land, amounting to $6,895.96, and interest thereafter, in all
$8,000, is all that has ever been paid or received by the executors
on that account; the balance has not been paid, under the plea by
the representative of Magruder that the will of David Peter did not
sufficiently authorize the executors to sell and make a good title
to the land. Under these circumstances, this charge for the balance
of the purchase money is rejected by the auditor."
"The counsel for the bank and executors has also made a
statement, which is also annexed. The auditor rejects both
statements and presents one of his own. It appears that when David
Peter died, he possessed a large estate, with a suitable
establishment in Georgetown. He left a widow, three sons, and two
daughters, minors. His estate, although large, was not
proportionally productive. It consisted of land in Montgomery
County, Maryland, and lots and houses in Georgetown and the City of
Washington; most of the lots were unimproved. The land in Maryland
was tenanted out, except one farm, which, being stocked, was
reserved for the management and support of the family, and so
remains to this day. The income arising from the estate annually,
after paying taxes, was insufficient to defray the expenses of the
establishment in Georgetown in the manner they had been accustomed
to live and to educate the three sons and two daughters. The
auditor has therefore estimated the family expenses at $1,500 per
annum, or $500 over and above the produce of the stocked farm and
the small amount of rents received in Montgomery. In addition to
these expenses, the estate was bound by the will of David Peter's
father to contribute to his mother's support during her life $500
in money, with a proportion of wood and provisions, per annum.
These heavy charges upon the estate, and the accumulation of
interest and discounts on debts, has caused the estate to fall
largely indebted to the
Page 35 U. S. 541
executors, while the Bank of the United States, as assignee of
the Bank of Columbia, and other claimants, remain unpaid."
"The claims upon the estate by Richard West, Thomas P. Wilson,
and the Union Bank were recovered by judgments against George
Peter, as executor and endorser, and have been fully paid by
him."
"By the statement now presented, it appears that the estate is
indebted to the executors $17,539.61, arising from the above
causes: the larger part, if not the whole, is in justice due to
George Peter, in addition to which he has an account for a
considerable amount which is suspended in this audit, on account of
some charges in blank, for sundry payments to managers and
overseers, blacksmith's bills, &c., which charges may be
considered when the claims generally shall be presented for final
settlement."
"The death of the executrix, the subsequent death of Leonard H.
Johns, who was the acting executor, and the surviving executor not
residing in the district, and knowing little about the manner in
which the estate has been managed, the want of papers and confused
state of the whole concern, renders it a laborious and difficult
task to do exact justice to all parties, but with the materials
within his reach, the auditor has made the best report in his
power, which he hopes will be received. It cannot be very material
to the heirs whether they still owe the bank or not, because if
they do not owe the bank, they will be by the same amount more
indebted to the executors."
"December 10, 1833."
The complainants excepted to the report of the auditor. The
following is a summary statement of the exceptions:
1 and 2. That the auditor has not charged the said surviving
executor with the amount of the inventories of the personal estate
of the testator, filed by the said executors in the Orphans' Court
of Washington County, District of Columbia, on 12 December in the
year 1812, and on 12 January, 1813.
3. That the auditor has not recharged the surviving executors
with the sum of $4,552, being the value of certain personal
effects, part of the assets of the testator's estate, applicable to
the payment of his debts, which was improperly delivered to Sarah
Peter, widow and executrix of the said David, as a legacy, and for
which said executors have obtained improperly a credit on the
settlement of their accounts with the said orphans' court.
4 and 5. That the auditor has not charged the said surviving
executor with the amounts respectively of two promissory notes
of
Page 35 U. S. 542
George Magruder and interest on one to 1 January, 1815, and the
other to 1 January, 1816, which said notes were received by the
said executors of said Magruder, for the second and third
installments of the purchase money of the tract of land called
Dulin's farm, devised to be sold and sold by said executors to aid
in the payment of testator's debts, which said sums of money were
lost by the gross neglect and fault of the said executors.
7. That the auditor has given credit to said executor in said
account current for the sum of $5,809.92 cents, being the estimated
amount of taxes on the real estate devised by said David Peter to
the complainants (the appellees) and supposed to have accrued prior
to the year 1829, without any evidence that the said executors had
ever paid that or any other sum of money on account of such
taxes.
8. That the auditor has given credit to the executors for the
sum of $6,000, being, as he says, the estimated amount of the
expenses of Mrs. Sarah Peter's family for twelve years, without
evidence to show that that or any other sum of money was expended
by the said executors for such purpose.
9, 10 and 11. That the auditor has given credit to the said
executor, for the sum of $8,931.12 for discounts and curtails paid
in the Union Bank of Georgetown, and $1,430.75 for discounts and
curtails paid in the Bank of Columbia, since 25 September, 1815,
after which time no debt was due from the estate of David Peter to
either of the said banks, and after the said executors were in
possession of assets of the said estate sufficient to pay all the
debts of the said David.
12. That the auditor has rejected the statement and account
presented on the part of the complainants, the appellees, and
refused to charge the said executors as they are therein
charged.
In January 1835, the circuit court overruled the exceptions, and
on 25 May, 1835, the following decree was made.
"This cause having been set for hearing upon the bill, answers,
exhibits, and evidence and having been argued by counsel, it is
this 25 May, 1835, upon further hearing of the parties and their
counsel, ordered, adjudged, and decreed that the auditor's report
heretofore excepted to by the complainants be and the same is
hereby confirmed and the exceptions thereto overruled."
"And the court, further considering the said cause, does order,
adjudge, and decree that the said injunction, granted as aforesaid
on
Page 35 U. S. 543
the prayer of said complainants be and the same is hereby made
perpetual, and that the defendants pay to the complainants their
costs of suit."
From this decree the defendants appealed to this Court, and the
complainants appealed from so much of the decree as confirmed the
auditor's report.
Page 35 U. S. 558
MR. JUSTICE THOMPSON delivered the opinion of the Court.
The bill was filed by the appellees in the court below to enjoin
the appellants from proceeding to sell certain lots of land in the
City of Washington belonging to the estate of David Peter for the
payment of debts alleged to be due to the Bank of Columbia and the
Bank of the United States. David Peter made his will bearing date
30 November, 1812, and shortly thereafter departed this life, and
by his will he declares and directs as follows:
"It is my intention that the proceeds of all my estate shall be
vested in my dear wife Sarah Peter for the maintenance and
education of my children."
"I wish all my debts to be as speedily paid as possible, for
which purpose I desire that the tract of land on which Dulin lives,
together with all personal property thereon, may be sold and
applied to that purpose, and in aid of that, as soon as sales can
be effected, so much of my city property as may be necessary to
effect that object."
"I desire that no appraisement or valuation shall be had of any
part of the property attached to my dwelling house."
"I desire that my sons shall receive as good educations as the
country will afford, and my daughters the best the place can
furnish."
And he appointed his wife Sarah Peter, his brother George
Page 35 U. S. 559
Peter, and his brother-in-law Leonard H. Johns, the executrix
and executors of his will, of whom George Peter is the only
survivor.
The bill charges that George Peter, the surviving executor,
under color of the directions in the will, was about to sell that
part of the real estate of David Peter which lies in the City of
Washington, and has actually offered the same for sale at public
auction. The bill further charges that there came to the hands of
the executors personal estate of the said David Peter to the amount
of more than $25,000. That they had sold the Dulin farm for
$20,688.90 to George Magruder in the year 1813, and received
one-third of the purchase money, and took for the balance, divided
in equal sums, two promissory notes, one payable 1 January, 1815,
and the other 1 January, 1816, one endorsed by Patrick Magruder and
the other by Lloyd Magruder. That the purchaser, George Magruder,
was put into possession of the farm and still holds it, and that
the notes given for the balance of the purchase money have been
lost by the negligence of the executors. The complainants deny the
existence of any debt due from the estate of David Peter to the
said banks or either of them, or any other debt whatsoever for the
payment of which it is either necessary, proper, or lawful for the
said George Peter to sell the said city lots. And the bill prays
that the executor may fully account for the real and personal
estate of the said David Peter and show how the same has been
disposed of, and that the banks may be required to produce the
notes or other evidence of their pretended debt and prove the same,
and praying an injunction to restrain the said George Peter and his
agents from selling or in any way disposing of or encumbering the
real estate of the said David Peter in the District of Columbia,
concluding with a prayer for general relief.
The injunction was granted, and on the coming in of the answer
was ordered to be continued until the final hearing of the
cause.
The answer of George Peter, the surviving executor, alleges that
the principal management of the business of the estate was assumed
by his co-executors; that believing Johns fully competent, and that
he would attend to the business in a way best calculated to promote
the interest of his sister and her children, he left it to them to
settle the estate and to collect and dispose of the proceeds
thereof and provide for the support and education of the children
as they might think best, and that all this was well known to the
complainant Beverly, who married the eldest daughter of the
testator in the year
Page 35 U. S. 560
1819. That he and his wife lived with her mother until within a
year or two of her death.
That the debts due to the banks had been continued by renewed
notes from time to time, drawn and endorsed by the executors in
compliance with the rules of the banks and with the understanding
that such arrangement was to continue as long as the banks were
willing to indulge the estate or until the executors should be able
to make sales for the payment of those debts; that this arrangement
was well understood by Beverly and all the children who were old
enough to understand anything of their affairs, and was often
talked of by Beverly and Ramsay, who always spoke of the estate as
liable to the banks for these debts. The surviving executor, to the
charge of neglect in relation to the balance of the purchase money
for the Dulin farm, alleges that Magruder, the purchaser, was sued
upon the notes given for the balance, and became insolvent. That an
ejectment was brought to recover possession of the land that it
might be resold, no title having been given for the land, but only
a bond for a deed according to the terms of the sale. That the
ejectment was removed to the Court of Appeals in Maryland, where he
believes it is still pending. That if there was any neglect or
delay in recovering this land, it was the fault of the complainant
Beverly, who undertook to attend to it, being then agent for the
estate.
The answer of the banks refers to the answer of the surviving
executor for the facts stated in relation to the arrangement
between the executors and the banks, which it is averred was
entered into to save the estate of the testator from a sacrifice
and to continue the accommodation. That the executors and the
banks, and the agents of the banks, one of whom was the complainant
Beverly, always so understood it and looked to the trust estate as
still liable to the banks. They exhibit statements showing the
situation of the debts at the death of the testator, and the
various renewals by the executors afterwards, in their private
capacity, with the various payments which had been made, and
showing the balance now due.
An amended bill was afterwards filed calling for an account of
other moneys alleged to have been received by the executors and
charging more particularly negligence in the executors in not
having sued the endorsers of the notes of Magruder for the balance
of the purchase money of the Dulin farm and the loss thereof by
reason of such neglect.
To this amended bill the surviving executor answers, stating
his
Page 35 U. S. 561
knowledge and belief respecting the moneys for which he is
called upon to account, denies the negligence imputed to him, and
avers that if there was any negligence, it was that of the
complainant Beverly, who, being interested in the estate and being
a lawyer, undertook to attend to the recovery of the balance of the
purchase money. That the endorsers were in very doubtful
circumstances; that the land was considered by all parties
interested as sufficient security for the balance of the purchase
money; and that the counsel of the executors advised the resort to
a resale of the land as the best remedy for the recovery of such
balance, and for that purpose an ejectment was brought to recover
the possession and a bill in chancery filed in Maryland under the
direction and superintendence of Beverly, and that if any
negligence occurred in the prosecution of these suits, it was
attributable to him.
The cause was referred to the auditor to take and report an
account of all sums of money received by the executors from the
real and personal estate respectively and of the sums paid by them
in the due course of administration and of any other sums paid by
them for the maintenance of the family and the education of the
children, stating them separately. The auditor reports a large
balance due the executors, allowing them for the maintenance of the
family and the debts paid by them. To this report the complainants
excepted, and the exceptions were overruled, and at the March term
of the circuit court in 1835, a final decree was entered confirming
the report of the auditor and decreeing a perpetual injunction.
From this decree of a perpetual injunction the defendants in the
court below appealed, and from so much of the decree as confirmed
the report of the auditor, the complainants appealed, and upon
these cross-appeals the cause comes here for review.
In examining the various questions which have been made in this
case, the most natural order seems to be to consider in the first
place, the will of David Peter. Upon this depends in a great
measure the rights of the banks as creditors of the estate and the
rights, duties, and responsibilities of the executors, and
particularly those which devolve upon George Peter, the surviving
executor.
David Peter died in the year 1813, shortly after making his
will, leaving his widow with a family of five children, two
daughters and three sons, the eldest about thirteen years of age,
living in ease and supposed affluence, as appears not only from the
pleadings and proofs in the case, but as fairly to be inferred from
the provisions made for
Page 35 U. S. 562
them by his will and the disposition made of his property. His
primary object seemed to be that his family should remain together
and live as they had been accustomed to live. And he accordingly,
in the first place, directs that the proceeds of all his estate
should be vested in his wife, Sarah Peter (who is made one of his
executors) for the maintenance and education of his children. He
directs that no appraisement or valuation should be had of any part
of his property attached to his dwelling house, and that his sons
should receive as good educations as the country would afford, and
his daughters the best the place could furnish. The family
accordingly remained together, except Mrs. Beverly, and were
maintained and educated according to the directions of the will
until the death of the said Sarah Peter in the year 1825. The
testator directed his debts to be paid as speedily as possible, and
for that purpose declared that the tract of land on which Dulin
lived, together with all the personal property thereon, should be
sold and applied to the payment of his debts, and in aid of that,
as soon as sales could be effected, so much of his city property as
should be necessary for the payment of his debts.
The testator had a right unquestionably, so far as respected his
children, to charge the payment of his debts upon any part of his
estate, real or personal, as he might think proper and most
advantageous to his family. And if the creditors were willing to
look to the fund so appropriated to that object, no one would have
a right to counteract or control his will in that respect. And he
having thought proper to constitute his widow the trustee of the
proceeds of all his estate, for the maintenance and education of
his children, thereby vesting in her an unlimited discretion in
this respect so far as the proceeds of his estate would go; the
surviving executor is not accountable for anything applied by her
for that purpose, not even if she would be chargeable with a
devastavit. For it is a well settled rule that one
executor is not responsible for the
devastavit of his
co-executor, any farther than he is shown to have been knowing and
assenting at the time to such
devastavit or misapplication
of the assets, and merely permitting his co-executor to possess the
assets, without going further and concurring in the application of
them, does not render him answerable for the receipts of his
co-executor. Each executor is liable only for his own acts and what
he receives and applies, unless he joins in the direction and
misapplication of the assets. Cro.Eliz. 348; 4 Ves. 596; 4
Johns.Ch. 23; 19 Johns. 427.
Page 35 U. S. 563
It is not intended to intimate that there was any
devastavit or waste of the estate by Mrs. Peter. There is,
indeed, no pretense in the bill of any misapplication of the estate
by her or any other of the executors, and for the very purpose for
which the proceeds of the estate were vested in her, to maintain
and educate a family of young children, it was necessary to clothe
her with a large discretion, and for this reason the testator
directs that there should be no appraisement or valuation of any
part of his property attached to his dwelling house. The proceeds
of all his estate being vested in his widow would render it
necessary, independent of any express direction in the will, that
recourse should be had to the real estate for the payment of his
debts.
And this leads, in the next place, to the inquiry whether George
Peter, the surviving executor, has authority to sell the lots in
the City of Washington.
With respect to the Dulin farm no doubt can exist. The testator
gives positive directions for that farm to be sold and the proceeds
applied to the payment of his debts. The executors in the sale to
Magruder only gave a bond for a deed; the title was not to be given
until the purchase money was all paid, and that not having yet been
done, no title has been conveyed, and it yet remains subject to be
applied to the payment of debts, and a resale is necessary in order
fully to carry into effect the will of the testator. It is a well
settled rule in chancery in the construction of wills as well as
other instruments that when land is directed to be sold and turned
into money or money is directed to be employed in the purchase of
land, courts of equity, in dealing with the subject, will consider
it that species of property into which it is directed to be
converted. This is the doctrine of this Court in the case of
Craig v.
Leslie, 3 Wheat. 577, and is founded upon the
principle that courts of equity, regarding the substance and not
the mere form of contracts and other instruments, consider things
directed or agreed to be done as having been actually performed.
But this principle may not perhaps apply in its full force and
extent to the city lots. They are not positively directed by the
will to be converted into money, but the sale of them was
contingent, and only in aid of the proceeds of the Dulin farm if a
sale of them should become necessary for the payment of debts. But
independent of this principle, there is ample power in the
surviving executor to sell. We find in the cases decided in the
English courts and in the elementary treatises on this subject no
little confusion, and many nice distinctions.
Page 35 U. S. 564
The general principle of the common law as laid down by lord
Coke (Co.Lit. 112b) and sanctioned by many judicial decisions is
that when the power given to several persons is a mere naked power
to sell, not coupled with an interest, it must be executed by all,
and does not survive. But when the power is coupled with an
interest, it may be executed by the survivor. 14 Johns. 553; 2
Johns.Ch. 19.
But the difficulty arises in the application of the rule to
particular cases. It may perhaps be considered as the better
conclusion to be drawn from the English cases on this question that
a mere direction in a will to the executors to sell land, without
any words vesting in them an interest in the land or creating a
trust, will be only a naked power, which does not survive. In such
case, there is no one who has a right to enforce an execution of
the power. But when anything is directed to be done in which third
persons are interested and who have a right to call on the
executors to execute the power, such power survives. This becomes
necessary for the purpose of effecting the object of the power. It
is not a power coupled with an interest in executors, because they
may derive a personal benefit from the devise. For a trust will
survive though no way beneficial to the trustee. It is the
possession of the legal estate or a right in the subject over which
the power is to be exercised that makes the interest in question.
And when an executor, guardian, or other trustee is invested with
the rents and profits of land for the sale or use of another, it is
still an authority coupled with an interest, and survives. 1
Caines' Ca. in Er. 16; 2 Peere Wms.
In the American cases, there seems to be less confusion and
nicety on this point, and the courts have generally applied to the
construction of such powers the great and leading principle which
applies to the construction of other parts of the will to ascertain
and carry into execution the intention of the testator. When the
power is given to executors, to be executed in their official
capacity of executors, and there are no words in the will
warranting the conclusion that the testator intended, for safety or
some other object, a joint execution of the power, as the office
survives, the power ought also to be construed as surviving. And
courts of equity will lend their aid to uphold the power for the
purpose of carrying into execution the intention of the testator
and preventing the consequences that might result from an
extinction of the power, and where there is a trust charged upon
the executors in the
Page 35 U. S. 565
direction given to them in the disposition of the proceeds, it
is the settled doctrine of courts of chancery that the trust does
not become extinct by the death of one of the trustees. It will be
continued in the survivors, and not be permitted in any event to
fail for want of a trustee. This is the doctrine of Chancellor Kent
in the case of
Franklin v. Osgood, 2 Johns.Ch. 19, and
cases there cited; and is in accordance with numerous decisions in
the English courts. 3 Atk. 714; 2 Peere Wms. 102, and is adopted
and sanctioned by the Court of Errors in New York, on appeal in the
case of
Franklin v. Osgood. And Mr. Justice Platt in that
case refers to a class of cases in the English courts where it is
held that although, from the terms made use of in creating the
power, detached from other parts of the will, it might be
considered a mere naked power to sell, yet if from its connection
with other provisions in the will it clearly appears to have been
the intention of the testator that the land should be sold to
execute the trusts in the will, and such sale is necessary for the
purpose of executing such trusts, it will be construed as creating
a power coupled with an interest, and will survive. This doctrine
is fully recognized by the Supreme Court of Pennsylvania in the
case of the Lessee of
Zebach v. Smith, 3 Binney 69. The
court there considered it as a settled point that if the authority
to sell is given to executors
virtute officii, a surviving
executor may sell, and that the authority given by the will in that
case to the executors to sell was to them in their character of
executors, and for the purpose of paying debts, an object which is
highly favored in the law.
Although the clause in the will now under consideration does not
name the executors as the persons who are to sell the land, yet it
is a power vested in them by necessary implication. The land is to
be sold for the purpose of paying the debts, which is a duty
devolving upon the executors, and it follows as a matter of course
that the testator intended his executors should make the sale to
enable them to discharge the duty and trust of paying the debts.
Mr. Sugden, in his Treatise on Powers, page 167, on the authority
of a case cited from the year books, lays it down as a general rule
that when a testator directs his land to be sold for certain
purposes, without declaring by whom the sale shall be made, if the
fund is to be distributed by the executors, they shall have, by
implication, the power to sell. And this is the doctrine of
chancellor Kent in the case of
Davoux v. Fanning, 2
Johns.Ch. 254. The will in that case, as in this, directed the real
estate to be sold for certain purposes therein
Page 35 U. S. 566
specified, but did not direct expressly by whom the sale should
be made, and he held, as lord Hardwicke did in a case somewhat
similar, 1 Atk. 420, that it was a reasonable construction that the
power was given to the executors; that it was almost impossible to
mistake the testator's meaning on that point. So in the present
case it is impossible to draw any other conclusion than that it was
the testator's intention that the sale should be made by his
executors.
Jackson v. Hewitt, 15 Johns. 349, is a case
very much in point on both questions. That the power in this case
is coupled with an interest, and survives, and that by implication
it is to be executed by the surviving executor. The testator, said
the court in that case, directed that in case of a deficiency of
his personal estate to pay his debts, some of his real estate
should be sold, without naming by whom, and one of the executors
only undertook the execution of the will, and sold the land, and
the court held that this was a power coupled with an interest, and
might be executed by one of the executors, it being a power to sell
for the payment of debts.
It has been thought proper to dwell a little more at large upon
the construction of this will and the power given to the executors
to sell than would have been deemed necessary had it not been
supposed and urged at the bar that the Court of Appeals in Maryland
had given a different construction to the will than the one we have
adopted. This will was brought under the consideration of that
court in the ejectment suit for the recovery of the Dulin farm
already referred to, 4 Gill & Johnson 323, and it is true the
court does say that the power given in the will to sell is a mere
naked power. But this was not the main point before the court. The
question seemed to turn upon the demises in the declaration, and
whether the legal estate in the land was in Mrs. Peter and her
children, so as to enable them to maintain an action of ejectment.
As the clause in the will directing a sale of the land did not
direct it to be made by the executors, it became a question whether
the executors had that power by implication, or whether it was a
case coming within the Maryland law of 1785, which provides that if
a person shall die leaving real or personal estate to be sold for
the payment of debts or other purposes, and shall not appoint a
person to sell and convey the property, the chancellor shall have
the power to appoint a trustee for that purpose. And the court
seemed to think the will now in question came within that
provision. But this case, however respectable the authority may be,
cannot be admitted to control the decision in
Page 35 U. S. 567
the case now before the Court, where the lands in question lie
in the City of Washington, and we entertain a very decided opinion
that the power to sell given by this will is a power coupled with
an interest which survives and may be executed by the surviving
executor.
The next inquiry is whether there is any subsisting debt due
from the estate of David Peter to the banks. It is contended on the
part of the complainants in the court below that this debt has been
extinguished by the notes given by the executors, and no longer
remains a debt due from the estate. There is no pretense that these
debts have in point of fact been paid, and if not, the trust has
not been executed and the land still remains charged with it. If
the executors have paid the debt to the banks or the banks have
accepted their notes in payment in place of the notes of the
testator, so that the executors became the debtors and personally
responsible to the banks, the only effect of this is that the
executors became the creditors of the estate instead of the banks,
and may resort to the trust fund to satisfy the debt. 2 Peere Wms.
664, note; 7 Har. & John. 134; 4 Gill & Johns. 303; 2 Pick.
567.
But there is no ground for considering the debt of the banks
extinguished. David Peter, at the time of his death, was largely
indebted to these banks upon endorsed notes discounted by them, and
to prevent these notes from lying under protest, an arrangement was
made between the banks and the executors to substitute notes drawn
by Sarah Peter and endorsed by Leonard H. Johns and George Peter,
and the notes of David Peter were retired by this substitution, and
passed as credits to the executors in the orphans' court as paid,
when in truth and in fact they were not paid. The substitution of
the notes of the executors was only by way of renewal and to comply
with the rules of the banks, and thus to continue the debts by the
indulgence of the banks until the executors should be able to make
sales for the payment of them, without any intention or
understanding by any of the parties that the substituted notes were
offered or received as payment of the debts. That such was the
arrangement made respecting these debts and so understood by
Beverly, at least, is established by the most clear and
satisfactory evidence, and there is good reason to believe, that
this was well understood in the family by all the children who were
of an age sufficient to understand the business and concerns of the
estate. This arrangement under such circumstances cannot in any
manner be considered an extinguishment of the debt. The law on this
subject is well settled, and the
Page 35 U. S. 568
principle well and succinctly laid down in the case of
James
v. Hackly, 16 Johns. 277. It is, said the court, a settled
doctrine that the acceptance of a negotiable note for an antecedent
debt will not extinguish such debt unless it is expressly agreed
that it is received as payment. It is unnecessary in the present
case to carry the principle so far as to say there must be an
express agreement for that purpose in order to operate as payment,
but the evidence must certainly be so clear and satisfactory as to
leave no reasonable doubt that such was the intention of the
parties. And the rule to this extent is settled by the most
unquestioned authority. 11 Johns. 513; 14 John. 404; 2 Gill &
John. 493; 7 Har. & John. 92.
In the original bill, the complaint against the executors for
not having collected the balance of the purchase money can hardly
be considered a charge of negligence, and much less of that gross
negligence which ought to make the executor personally responsible.
It barely alleges that this balance ought to have been received if
the executors had only used reasonable diligence in regard to the
collection. But after the answer and explanation of the executor to
this charge came in, an amended bill was filed, charging the
executor with gross negligence in this respect. This seemed to be
an afterthought, and rather a stale allegation. But the answer and
explanation of the executor, uncontradicted in any manner, fully
exonerates the executors from all culpable negligence. Magruder was
prosecuted for the balance of the purchase money; he became
insolvent, and no further payment could be obtained from him. An
ejectment was brought to recover possession of the land, that it
might be again sold; the cause was tried in the county court and
removed to the Court of Appeals, where the judgment was reversed
and a
procedendo awarded. This business was principally
under the care and direction of the complainant Beverly, and if
there was any want of due diligence in prosecuting the suit, it is
chargeable to him, and not to the executor. And besides, the
executor in the whole of this business acted under the advice of
counsel, which shows satisfactorily that he acted in entire good
faith, and would go very far to exonerate him from the charge of
negligence even if there were circumstances leading to a contrary
conclusion. 2 John. 376.
From this view of the case we are satisfied that the direction
in the will of David Peter to sell a portion of his real estate for
payment of his debts, created a power coupled with an interest that
survives. That the surviving executor is, by necessary implication,
the person
Page 35 U. S. 569
authorized to execute that power and fulfill that trust. That
the debt due the banks has not been extinguished by the notes
substituted by the executors as renewals in the bank, or the estate
of the testator in any way discharged from the payment of the debt.
That the executors are not chargeable with negligence or
misapplication of the personal estate that ought to render them
personally responsible for these debts, and that no reason has been
shown why satisfaction of these debts should not be had out of the
lands appropriated by the testator for that purpose.
It remains only very briefly to notice the exceptions which were
filed to the report of the auditor, and most of these have been
disposed of by the principles laid down in the foregoing opinion.
It is proper here to observe that from the report of the auditor
upon the accounts exhibited by the executors and allowed by him,
there has at all times been and now is a considerable balance in
favor of the executors against the estate.
With respect to the first and second exceptions, it is true that
the auditor has not charged the executors with the inventories, and
he ought not, according to the principles upon which he makes his
statement, the object of the reference to him being to ascertain
whether the executors were indebted to the estate or the estate to
them, and for this purpose he examined the several statements made
by the executors with the orphans' court, and extracted from them
the several sums received and paid by them. In the account with the
orphans' court, the executors are charged with the amount of the
inventory of the personal estate, both in the District of Columbia
and in Maryland, and as far as any proceeds of the personal estate
came into the hands of the executors, they are charged in the
statement of the auditor; but they are not charged with what the
widow and heirs retained in their hands and for their own use, and
this was correct, according to the provisions in the will, for the
maintenance of the family and the education of the children.
The $4,552 mentioned in the third exception was properly omitted
in the statement of the account against the executor. It was a
portion of that part of the estate which was put into the hands of
the widow, attached to the dwelling house, and with respect to
which the testator directed that no appraisement or valuation
should be made.
The fourth and fifth exceptions relate to the notes taken from
Magruder for the balance of the purchase money of the Dulin
farm.
Page 35 U. S. 570
The executors, as has been already shown, are not chargeable
with those notes. No negligence is imputable to them which ought to
make them personally responsible. No title has been given for the
farm, and it may yet be resorted to for payment of this balance of
the purchase money.
The auditor has properly given credit to the executors for the
taxes on the real estate. There is no suggestion that the taxes
were not due and paid by somebody. The amount appears to have been
paid according to the account of the register, and it is fairly to
be presumed that they were paid by the executors, although no
regular vouchers are produced for such payment. This may be
accounted for, in some measure at least, by the circumstances
stated in the answer of George Peter of the destruction by fire of
the books and accounts of his co-executor, Leonard H. Johns, who
had the principal management of the estate.
The allowance of $6,000 for the expenses of the family for
twelve years must certainly be a very moderate charge. It was a
proper subject of inquiry for the auditor, and there is no grounds
upon which this Court can say the allowance is exceptionable. From
the nature of the expenditure for the daily expenses of the family,
it could hardly be expected that a regular account would be kept,
and especially under the large discretion given by the testator in
his will in relation to the maintenance of his family.
The amount paid by the executors for the curtails and discounts
on the notes running in the banks were properly allowed to their
credit. These were debts due from the estate, and whatever payments
were made were for and on account of the estate.
These are all the exceptions taken to the report of the auditor,
and we think they were all properly overruled by the court below.
But the court erred in decreeing a perpetual injunction.
The decree of the circuit court must accordingly be
Reversed, the injunction dissolved, and the bill of the
complainants dismissed.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Columbia holden in and for the County of Washington, and was argued
by counsel, on consideration whereof it is ordered, adjudged, and
decreed by this Court that the decree of the said circuit court in
this cause be and the same is hereby reversed and annulled. And
Page 35 U. S. 571
this Court, proceeding to render such decree as the said circuit
court ought to have rendered in the premises, doth order, adjudge
and decree that the injunction in this cause be, and the same is
hereby dissolved, and that the bill of the complainants be, and the
same is hereby dismissed, and that this cause be, and the same is
hereby remanded to the said circuit court with directions to said
court to carry this decree into effect.
