Lyon v. Foscue

60 Ala. 468

• Court: Supreme Court of Alabama
• Decided: December 15, 1877
• Status: Published

Opinion

STONE, J.

This ease was before this court, and was decided at the December term, 1876. We then very explicitly laid down rules, which were intended to settle, and did settle, all the material questions in this cause, except those hereafter stated. In some respects, we reversed the ruling of the chancellor, and declared the principles which should govern in the settlement of those questions. In other respects, we affirmed the chancellor’s rulings. We reversed the decree of the chancellor, and remanded the cause, “ for further proceedings not inconsistent with this [that] opinion.” All the principles we declared in that cause, we intended should be rules for the after conduct of the litigation. We intended to make, and thought we had made, ourselves understood. We did not expect our rulings to be disregarded, and the same questions we thought we had settled, to be returned upon us, not only with our own directions overruled, but with that part of the chancellor’s decree which had been affirmed by us, itself reversed by the same chancellor who pronounced it. With limited exceptions, this court has appellate jurisdiction only; and it is, as its name imports, a Supreme Court, or court of last resort. It is clothed with “a general superintendence and control of inferior jurisdictions.” We regret the necessity we feel ourselves under of announcing this wholesome principle, which seems not to be understood.—Johnson v. Glasscock, 2 Ala. 519. We adhere to our former decision in this cause, and hereby reverse all that is found in this record, inconsistent therewith. On these questions, we deem it unnecessary to elaborate this opinion. The chancellor seems to have fallen alike into errors of fact and of law.

In our former decision, we approved the trustee’s investment of the fifty thousand dollars, pecuniary legacy, in the Breitling note and mortgage, and the other claim mentioned. The civil war was then raging, and, viewed from any standpoint, we do not think a wiser or safer investment could have been made. So, we approved the sale to Jones, and the subsequent sale and purchase of the lands for the benefit of the trust estate. We think it is shown, with reasonable certainty, that the trustee’s purchase then appeared to be the best that could be done for the interest of the beneficiaries. Infallibility is not exacted of trustees. They must form their best judgment in the light of existent facts, and, if they act in good faith, are not responsible for results -which ordinary vigilance and prudence could not foresee. Others, it is shown, were willing to give near the same sum; but the trustee believed the lands worth the entire debt, and he was not willing they should be sold away from the beneficiaries, at a sum less than the entire demand. It is not shown that’ others offered to take the bid off his hands, to be paid in three installments. Lyon purchased on the 6th December. Five days afterwards, on the 11th, title was made to him for the benefit of the trust estate. A week or two — (more than five days) — after the sale and purchase, Siddons and others had an interview with Lyon, for the purpose of proposing to take the purchase off his hands, to be paid in the three installments. Lyon informed them he had" let the lands to rent for the next year. Thereupon, the negotiation ceased, and it is not shown whether any offer was in fact made. Before the interview, as far as we can learn, Lyon, in ignorance of their wish to purchase, had leased the lands to Buford, and thus placed it out of his power to deliver immediate possession. The witness Selden, one of the negotiating parties, testifies that the interview took place about a week after the sale. The language of this witness is : “I knew of no agreement, or conclusion. The reason it was not carried out was, that the land had been rented to one Buford, before we could get an interview with Mr. Lyon. That was my understanding.” Mr. Siddons, another of the negotiators, says the interview was a week or two after the sale. His language is, “As soon as we learned that Mr. Lyon had rented the place, we abandoned all idea of purchasing.” Dr. Dugger, the other proposed purchaser, was not examined. Mr. Lyon, in his deposition, after stating that Messrs. Sid-dons, Dugger, and Selden, had reminded him of the interview, says, “My recollection as to these facts is not distinct.” He neither proves nor disproves that these parties offered to take his purchase off his hands. We have said this much, because much stress is laid on the fact that Lyon refused to allow these parties to become the purchasers of the Calhoun plantation, and thereby, as it is contended, injured the trust estate very seriously.

The present trust originated in 1861. It came to the hands of the trustee in 1862. Our civil war was then raging with terrible earnestness. The blockade cut off intercourse from without, while the value of all stocks and moveables within Confederate lines was dependent on the result of the gigantic struggle. The wisest could then have found no safer investment, than a personal loan, secured by mortgage on valuable real estate. Slaves were then also considered good security; for the Southern people, in their zeal and heroic hopefulness, generally believed we would achieve a separate Federal government. The philosophic and calculating could not fail to know that all stocks and attainable personal investments hinged on the fate of the war. Nothing promised so good and lasting security as a pledge of real estate. Surveying the surroundings, we think Mr. Lyon elected the best possible investment of the trust fund confided to him. The war ended, and the star of Confederate hope went down forever. We had been the wealthiest agricultural people in the world. We soon came to be numbered among the poorest. Two and a half to three thousand millions of personal property, deemed, at the time, the most valuable of .Southern acquisitions, were struck down by an edict as relentless as the torch of Omar. Unprecedented shrinkage of values supervened, añd affluence gave place to gaunt poverty. Yiewed from any period since the war, results have vindicated the wisdom of Mr. Lyon’s choice; and few trust funds have been carried so successfully through the ordeal of fire, through which it was doomed to pass. Not a shadow of suspicion rests, or is attempted to be cast, on the purity and integrity of the trustee, during the long and trying period of his ministration; not a semblance of self-seeking, or personal aggrandizement. The law deals generously with trustees, who have acted in good faith. “ Well done, good and faithful servant,” is the language of Him “ who spake as never man spake.”—Gould v. Hayes, 19 Ala. 438; Henderson v. Simmons, 33 Ala. 291.

In the chancellor’s decretal order of June 21,1877, he followed substantially the rulings of this court, when this case was formerly before us. We find nothing in that order upon which we consider it necessary to comment. So, we approve the report of the special register, first made, with the exception of certain points hereafter considered, and, to the extent named, confirm the same. The decrees of August 17, 1877, and of November 30, 1877, together with the instructions to the special register of the first named date, were unauthorized, and are reversed and annulled.

Under the terms of the trust, it was the duty of the trustee to collect the interest annually, and pay it to Mrs. M. J. Foscue. This he attempted to do. In the first calculation of interest, January 10th, 1863, he collected,on the Breitling note near four thousand dollars more than was then due, of accrued interest. This collection was made in Confederate money, and part of it was paid to Mrs. M. J. Foscue, on her claim of interest on the fifty thousand dollars trust fund. If the whole payment then made in Confederate money be allowed as a credit on the note, the effect will be to reduce the principal to between forty-one and forty-two thousand dollars, as of January 10th, 1863. Taking this as a basis of calculation, and allowing credit for all the payments after-wards made, and accounted for by Mr. Lyon, the balance of the note would be fully realized, with a probable residuum of more than three thousand dollars, overpayment. On the other hand, if we treat the Confederate payment of January 10th, 1863, as only paying the interest up to that time, and leaving forty-five thousand dollars of principal then due on the Breitling note, and drawing interest from that date, then the payments afterwards made and accounted for by the trustee fell short of paying the note in full by about the sum of $2,063 at the time of the last payment, 23d day of Febraarv, 1870. In making these calculations, we have taken the credits, both as to amounts and dates, from the admission of the parties, made and found in connection with the testimony of Sharpe, the expert, given, or offered, on the last trial before the special register. The additional collections, mentioned in the testimony of Sharpe, are also set forth in the report of the trustee, sworn to and filed December 15th, 1873, and made part of the evidence in this cause.

In the Confederate collection of January 10th, 1863, it was the intention of the trustee to collect the accrued interest on the Breitling note, and only the accrued interest. By an oversight, or mistake, for which no excuse can be offered which meets the requirements of the law, he collected more than the interest, and therefore more than he intended to collect. If he had not made this excess of collection, he would have realized, in good money, the balance of the note —some $2,063 — as of 23d day of February, 1870. This entailed a loss of about $1,208 in the corpus of the trust fund, and the residue of the said sum of $2,063 in the interest collected in good money. While not a shadow of suspicion is cast on the personal uprightness of the trustee, the law exacts of him more than purity of purpose. He must bring to the service diligence; that degree of care and diligence, which an ordinarily prudent man bestows on his own affairs. Tested by this standard, the trustee can not be pronounced legally blameless in the loss of this part of the trust fund, and he must account for it.

But, with watchfulness and much prudence, he carried this fund through the trying ordeal of our late civil war. In this, as we have shown, he performed a hazardous trust, and he was necessarily put to trouble, and required to exercise skill, first, in collecting the Breitling and D. Cpmpton claims, and, second, in the suits and collections from Jones, the purchaser of the Calhoun plantation. These, together with the necessary account and settlement of the trust, he is entitled to have considered in the adjustment of his accounts. He has been allowed commissions for receiving and disbursing the interest on this fund. He has had no allowance for receiving, carrying and settling the corpus of the trust. Without further embarrassing or delaying this litigation, we think a proper allowance to be made the trustee in this case is about the sum we have shown was lost, by the error committed . in calculating interest. We therefore set off one against the other, and adjudge that neither be noted in the account.

The balances found and reported by the register, included interest up to the 15th day of December, 1873. There was then due from the trustee, of the corpus of the fund, $13,665.03. And there was due from Mrs. Mary J. Foscue, to the trustee, for overpayment to her, the sum of $8,161.67. These are to be the dala of the final decree, subject to the changes in their several sums, to be produced by the result of the account for professional services, &c., hereinafter ordered. This simplifies the account, and the final disposition of this cause, so that it will be difficult to err in the consummation. We shall hereafter show, there is but a single question left open, and that a quantum meruit, to be determined on proof. And if the sum paid to the register by Mr. Lyon; when he tendered his resignation, has not been included in the former account, or he has not otherwise had the benefit of it, the special register will allow that to the trustee also. We have not been able to determine whether this has been allowed or not.

In the conduct of this litigation, many claims have been preferred against the trustee, which have been disallowed. Some have been allowed. Counsel fees and costs have necessarily been incurred in the very severe litigation to which this settlement has been subjected. Some errors of claim have been committed on each side ; a decided majority on the side of’ complainants. We think the compensation to the trustee’s solicitors, and the costs in the court below, should be divided into three parts; one-third to be paid by Mary Jane Foscue, one-third by the remaindermen, and the remaining third by the trustee, Lyon, We feel, however, unable to determine, in the present state of the record, what should be a proper allowance to the solicitors. It should be a reasonable and customary charge for the services rendered. Since the testimony was taken, bearing on that question, and since the report of the register thereon was made, a seeond laborious and protracted contest has been had before the register, and a second appeal to this court has been rendered necessary. These services should enter into the account of solicitor’s fees. We order a reference to the special register on the single question of a proper allowance for the services of the trustee’s solicitors; and in taking such account, the register will be allowed to consider all the testimony taken, bearing on that question, and any other legal evidence that may be offered; and he may re-examine witnesses heretofore examined, if desired. One-third of the sum he may so find and report, he will deduct from the balance of the corpus of the trust fund, found in the hands of the trustee, and one-third he will add to the balance of overpaid disbursements made by the trustee to Mrs. Mary Jane Foscue. He will take as the basis of this part of his report, the balances found and reported by the special register, filed of date June 5th, 1877; and when those balances are thus corrected, and interest computed to the coming in of the report, he will report his findings to the Chancery Court, to be there acted on by the chancellor, as other reports made to him are.

When these balances are thus Ascertained by the report of the register and its confirmation, then, if Francis S. Lyon gives an order to Ella Foscue, F. L. Foscue and James M. Curry, administrator of Aug. Foscue, for the balance found due from Mary J. Foscue — the order to be drawn on Mary J. Foscue — the balance found against the trustee of the corpus of the trust fund is to be credited with a corresponding sum; and the balance found against the trustee, after allowing- this credit, is to be the decree in favor of the remaindermen against the trustee. This under the agreement filed of record June 19th, 1877. This is the sole question left open for decision by the chancellor, in accordance with the rules above declared.

Let the costs of this appeal be paid by the appellees, and the costs of suit in the court below be divided into three equal parts, and taxed as above directed.