By the Court.
Lumpkin, J.
delivering the opinion.
[1.] We will not stop to inquire whether it lies in the mouth of the trustee who has accepted the trust created by [247] this deed, to resort to the defence which he seeks to set up to defeat the complainant’s recovery. Grant that there was fraud practised by the donee, so far as extinguishing the amount of his liabilities is concerned, the donors who contributed this fund are' not complaining. Can he avail himself of the fraud to avoid accounting ?
Another interesting question, well deserving of examination, is this: if the trustee has, in the exercise of the discretion delegated to him, settled the claims against the trust fund at a discount, will it not accrue for the benefit of the cestui que trust ? Is he not entitled to be subrogated to the rights of the creditors for the full amount of their demands upon this fund of $5,000 ? Green vs. Winters, 1 John. Ch. Rep. 27. McClanahans vs. Henderson, 2 A. K. Marshall, 389. Kellog vs. Wood, 4 Paige, 578. Parkist vs. Alexander, 1 Johns. Ch. Rep. 394. Holdridge vs. Gillespie, 2 Johns. Ch. Rep. 30. Hart vs. Ten Eyck, 4 Johns. Ch. Rep. 104. Pavoree vs. Panning, 2 Johns. Ch. Rep. 457. Matthews vs. Drayard, 3 Desseaus. 25.
But we waive these grounds.
When this deed of trust was before this Court at this place, in 1849, .upon a demurrer to the bill, we held, that the complainant was entitled to the unexpended balance of the $5,000 which had been set apart for the payment of his debts out of the general fund of. $15,000 contributed by the residuary legatees under the will of Thomas Napier, senior, for his use and benefit. And, in our judgment, this construction of the instrument is conclusive upon all the questions raised upon this record. 6 Geo. Rep. 404.
It was the leading intent of the donors, in obedience to the dying wishes and injunction of their deceased father, as well as in accordance with their own feelings, to raise and appropriate the gross amount of $15,000 for the benefit of their brother, who had been accidentally excluded, by the will of their common parent, from participating in the common patrimony. The designation of $5,000 for the payment of his debts out of this fund, was a more secondary matter, and made in subor[248] dination to the main object. They supposed, from the statement, which at their request, he supplied, that it would require $5,000 to pay his debts — they limited the fund to be taken out of the $15,000 to that sum; and the residue computed to be sure of $10,000 still. The whole residue, be it that or more, is expressly rested in the trustee for his support and maintenance. And ayo have already adjudged that this residue shall go to him. And AYhcther the amount demanded for the payment of William Napier’s debts Avas over or underrated, cither by him or the donors, by mistake or othenvise, is obviously, in this vícav of the' subject, a matter of no earthly consequence; and fraud or no fraud, in ascertaining the aggregate indebtedness of the beneficiary of this provision, is an immaterial issue, and cannot affect the result, so far as the liability of the defendant is concerned. The loss the creditors get, the more ayíII be loft in the hands of the trustee for his cestui que trust. In any event, he cannot be injured. And the donors, Ave are sure, will not regret that less is needed to relievo their brother from his enthralment than they anticipated. They ought to rejoice rather, that they were misled in this particular. Ear, bettor far, that their bounty should go to their blood-kin than to the blood-suckers avIio sought to devour him. This remark is not, intended for his Iona fide creditors.
Had this instrument, a copy of which I have appended to this opinion, been drawm differently, viz: First, creating a fund of $10,000 to be vested in the trustee for the benefit of the cestui que trust, and then contributing $5,000 to be applied to the satisfaction of his debts, or so much thereof as might be required for that purpose, and out of the latter fund a surplus had remained, after; the execution of the trust; in that event, it might have been contended Ayith some plausibility at least, that this surplus Avould, from construction of laiv, have reverted to the donors.* For, tho true doctrine upon this subject, ayo apprehend to be this : that if he Avho AYas before [249] possessed of the whole, carves out of it a part, and grants it away, whatever is not granted remains in the donor. Blackstone, title Reversion. But such, we repeat, is not this case. But on the contrary, the manifest design of this deed is to raise and invest by voluntary contributions $15,000 for the complainant’s benefit, and to devote so much of this fund only as may be needed to relieve him from his embarrassments; that being justly considered indispittably necessary for the respectability as well as comfort of their portionless relative.
With this interpretation of the deed, the second point, as to interest, becomes a plain one. It is admitted that the trustee was liable for interest on the $10,000, whether he made it or not. If then, the remainder of the $5,000, after the debts are extinguished, is to be added to the $10,000 and employed in the same way, that is, for the use and support of the cestui que trust, it follows of course, that it will bear interest from the time that all the debts are paid; so that the question mooted in the discussion, as to whether or not this balance is a liquidated demand or an open account, in contemplation of our Statute, does not arise. The balance in the hands of the trustee bears interest from the time it is relieved 'from the incumbrance of the debts, not because it is a liquidated demand, but because it is a trust fund to be managed by the trustee so as to make interest, and for which he is liable to pay interest even for his failure so to use it, unless he renders some satisfactory excuse. Here there can be none, for it is conceded in the argument, that his note of $5,000 due the estate of his father, and bearing interest, has been surrendered up to him to meet this liability for the debts of the cestui que trust under the deed.
Judgment affirmed.
Note. — It is possible that the instrument in its present shape may admit of this reading. It is not, however, its plain purport, especially when we take into consideration the avowed motives which prompted the parties to make it. Besides the deed is to be taken most strongly against the covenantors, and in favor of the cestui que trust.
[250] (copy.)
State or Georgia, Bibb County:
Free access — add to your briefcase to read the full text and ask questions with AI
By the Court.
Lumpkin, J.
delivering the opinion.
[1.] We will not stop to inquire whether it lies in the mouth of the trustee who has accepted the trust created by [247] this deed, to resort to the defence which he seeks to set up to defeat the complainant’s recovery. Grant that there was fraud practised by the donee, so far as extinguishing the amount of his liabilities is concerned, the donors who contributed this fund are' not complaining. Can he avail himself of the fraud to avoid accounting ?
Another interesting question, well deserving of examination, is this: if the trustee has, in the exercise of the discretion delegated to him, settled the claims against the trust fund at a discount, will it not accrue for the benefit of the cestui que trust ? Is he not entitled to be subrogated to the rights of the creditors for the full amount of their demands upon this fund of $5,000 ? Green vs. Winters, 1 John. Ch. Rep. 27. McClanahans vs. Henderson, 2 A. K. Marshall, 389. Kellog vs. Wood, 4 Paige, 578. Parkist vs. Alexander, 1 Johns. Ch. Rep. 394. Holdridge vs. Gillespie, 2 Johns. Ch. Rep. 30. Hart vs. Ten Eyck, 4 Johns. Ch. Rep. 104. Pavoree vs. Panning, 2 Johns. Ch. Rep. 457. Matthews vs. Drayard, 3 Desseaus. 25.
But we waive these grounds.
When this deed of trust was before this Court at this place, in 1849, .upon a demurrer to the bill, we held, that the complainant was entitled to the unexpended balance of the $5,000 which had been set apart for the payment of his debts out of the general fund of. $15,000 contributed by the residuary legatees under the will of Thomas Napier, senior, for his use and benefit. And, in our judgment, this construction of the instrument is conclusive upon all the questions raised upon this record. 6 Geo. Rep. 404.
It was the leading intent of the donors, in obedience to the dying wishes and injunction of their deceased father, as well as in accordance with their own feelings, to raise and appropriate the gross amount of $15,000 for the benefit of their brother, who had been accidentally excluded, by the will of their common parent, from participating in the common patrimony. The designation of $5,000 for the payment of his debts out of this fund, was a more secondary matter, and made in subor[248] dination to the main object. They supposed, from the statement, which at their request, he supplied, that it would require $5,000 to pay his debts — they limited the fund to be taken out of the $15,000 to that sum; and the residue computed to be sure of $10,000 still. The whole residue, be it that or more, is expressly rested in the trustee for his support and maintenance. And ayo have already adjudged that this residue shall go to him. And AYhcther the amount demanded for the payment of William Napier’s debts Avas over or underrated, cither by him or the donors, by mistake or othenvise, is obviously, in this vícav of the' subject, a matter of no earthly consequence; and fraud or no fraud, in ascertaining the aggregate indebtedness of the beneficiary of this provision, is an immaterial issue, and cannot affect the result, so far as the liability of the defendant is concerned. The loss the creditors get, the more ayíII be loft in the hands of the trustee for his cestui que trust. In any event, he cannot be injured. And the donors, Ave are sure, will not regret that less is needed to relievo their brother from his enthralment than they anticipated. They ought to rejoice rather, that they were misled in this particular. Ear, bettor far, that their bounty should go to their blood-kin than to the blood-suckers avIio sought to devour him. This remark is not, intended for his Iona fide creditors.
Had this instrument, a copy of which I have appended to this opinion, been drawm differently, viz: First, creating a fund of $10,000 to be vested in the trustee for the benefit of the cestui que trust, and then contributing $5,000 to be applied to the satisfaction of his debts, or so much thereof as might be required for that purpose, and out of the latter fund a surplus had remained, after; the execution of the trust; in that event, it might have been contended Ayith some plausibility at least, that this surplus Avould, from construction of laiv, have reverted to the donors.* For, tho true doctrine upon this subject, ayo apprehend to be this : that if he Avho AYas before [249] possessed of the whole, carves out of it a part, and grants it away, whatever is not granted remains in the donor. Blackstone, title Reversion. But such, we repeat, is not this case. But on the contrary, the manifest design of this deed is to raise and invest by voluntary contributions $15,000 for the complainant’s benefit, and to devote so much of this fund only as may be needed to relieve him from his embarrassments; that being justly considered indispittably necessary for the respectability as well as comfort of their portionless relative.
With this interpretation of the deed, the second point, as to interest, becomes a plain one. It is admitted that the trustee was liable for interest on the $10,000, whether he made it or not. If then, the remainder of the $5,000, after the debts are extinguished, is to be added to the $10,000 and employed in the same way, that is, for the use and support of the cestui que trust, it follows of course, that it will bear interest from the time that all the debts are paid; so that the question mooted in the discussion, as to whether or not this balance is a liquidated demand or an open account, in contemplation of our Statute, does not arise. The balance in the hands of the trustee bears interest from the time it is relieved 'from the incumbrance of the debts, not because it is a liquidated demand, but because it is a trust fund to be managed by the trustee so as to make interest, and for which he is liable to pay interest even for his failure so to use it, unless he renders some satisfactory excuse. Here there can be none, for it is conceded in the argument, that his note of $5,000 due the estate of his father, and bearing interest, has been surrendered up to him to meet this liability for the debts of the cestui que trust under the deed.
Judgment affirmed.
Note. — It is possible that the instrument in its present shape may admit of this reading. It is not, however, its plain purport, especially when we take into consideration the avowed motives which prompted the parties to make it. Besides the deed is to be taken most strongly against the covenantors, and in favor of the cestui que trust.
[250] (copy.)
State or Georgia, Bibb County:
Thomas Napier, deceased, late of said County of Bibb, in the State aforesaid, having, by his last will and testament, subjected the mass and residue of his estate to a division into sett parts: wherefore, one part is bequeathed to his son, Leroy Napier; one to his son, Skelton Napier; one to his daughter Tabitha, the wife of Nathan C. Munroe ; one to the children of his deceased daughter, Sarah Harvey, which children are, Amanda Malvina, the wife of John D. Stell; Helen, the wife of Oliver W. Cox, and Tabitha, the wife of Myron Bartlett. One part to trustees in said will named, to wit: Leroy Napier, Skelton Napier, and Nathan C. Munroe, in trust for the testator’s son, Thomas T. Napier, and the wife and children of the said Thomas T.; and one part to trustees in said will named, to wit: Thomas T. Napier, Leroy Napier, Skelton Napier and Nathan C. Munroe, in trust for the sole and seperate use of his daughter Martha, the wife of Henly Varner, under certain limitations in said last will expressed ; and the said Thomas Napier, deceased, having during his last illness, declared it to be his wish audinjunction, that out of the above mentioned mass and residue of his estate, a reasonable amount should be set apart and secured as a fundfor the maintenance andsupport of his son, 'William Napier, and the undersigned legatees interested under the last will aforesaid, in the said mass and residue of the testator’s estate, being desirous of carrying into effect the wishes and injunctions of the said Thomas Napier, deceased, so declared as aforesaid, and also according ourselves fully in the feelings of the said deceased towards the said William — This indenture, therefore, witnesseth, that the said Leroy Napier, Skelton Napier, Nathan C. Munroe and his wife, Tabitha; John D. Stell and his wife, Amanda Malvina; Oliver W. Cox and his wife, Helen; Myron Bartlett and his wife, Tabitha; the said Leroy Napier, Skelton Napier and Nathan C. Munroe trustees as aforesaid for the said Thomas T. Napier and his wife and children, with the assent of the said Thomas T. and the said Thomas T. Napier, Leroy Napier, Skelton Napier, and Nathan C. Munroe as trustees for Martha Varner as aforesaid, and with her assent and that of her husband, Henley Varner, signified by their becoming parties to this instrument and joining in the covenants of the same, have mutually covenanted with one another, and do hereby mutually covenant and agree with one another, to raise a fund of fifteen thousand dollars forthwith by equitable contributions from the aforementioned mass and residue of the testator’s estate, proportioned to the amount of our respective interests in said mass and residue, that is to say, to the making up of the said fund of fifteen thousand dollars. The said Leroy Napier covenants and agrees to pay and contribute the sum of twenty-five hundred dollars. The said Skelton Napier covenants to pay and contribute the sum of twenty-five hundred dollars. The said Nathan C. Munroe, in right of his wife Tabitha, covenants and agrees to pay and contribute the sum of twenty-five hundred dollars. The said John D. Stell, in right of his wife Amanda Malvina; the said Oliver W. Cox, in right of his wife Helen Cox, and the said Myron Bartlett, in right of his wife Tabitha, covenant and agree to pay, each, the sum of eight hundred and thirty [251] three dollars and thirty-three and a third cents, making twenty-five hundred dollars for the three. And the said Thomas T. Napier, Skelton Napier, Leroy Napier and Nathan C. Munroe, trustees, as aforesaid, for Martha Varner, covenant and agree as such'trustees, and with the assent of the said Martha and her husband, Henly Varner, as hereinbefore stated, covenant and agree to pay and contribute the sum of twenty-five hundred dollars. And the said Leroy Napier, Skelton Napier and Nathan C. Munroe, as trustees of Thomas T. Napier and his wife and children, under said last will, covenant and agree, with the assent-of the said Thomas T. Napier, to pay and contribute as trustees for the said Thomas T. and his wife-and children, the sum of twenty-five hundred do.lars. And the aforenamed covenanting parties do further covenant and hgree to pay, each, his share in proportion as above stated of said fund of fifteen thousand dollars, forthwith into the hands of Leroy Napier. And they further covenant and agree that the said sum of fifteen thousand dollars so paid into the. hands constitute a trust fund in his hands and vest in him as trustee, and hot otherwise, for the following purposes, and ’ subject to the following trusts, namely :. to apply five thousand dollars thereof, and not more, to the disenthralment of the said .William Napier from the debts which he now owes, said Leroy Napier to judge of the justness of the debts which may he presented to him for payment, and of the order and proportion" in which they shall be paid, but in no event shall more than five thousand dollars-he taken from said fund of fifteen thousand dollars for the payment of existing debts. The residue of said fund of fifteen thousand dollars, to wit: the sum of ten thousand dollars, to be, vested in and managed by the said Leroy Napier, as trustee, for the use, benefit and support of the said William Napier, the same to be invested and employed by him in such manner as to him shall he deemed best and most judicious, and the annual profits to be applied by the said Leroy Napier to the support and maintenance of the said William Napier; but in no event shall the principal sum of ten thousand dollars he encroached upon or diminished by said trustee for tbe purpose of providing for the support and maintenance of the said William, but the same shall be kept as an entire and productive fund for that purpose. And it is further stipulated, covenanted and agreed by and and between tbe parties hereto, that if at any future time the said Leroy Napier shall be of opinion that said fund may be prudently and safely given up and delivered over to the direct and immediate possession and management of said William without danger of the same being by him mismanaged and spent, then the said Leroy shall be authorized in his discretion, to pay and deliver over to the said William the said fund of ten thousand dollars, in whatever shape it may then exist or he invested, and to put an end to his said trusteeship hereby created. And it is further covenanted, stipulated and agreed, that the said Leroy Napier, during the continuance of his trusteeship, shallbave absolute discretion as to the mode of investing and employing the trust fuud committed to his hands. And he shall also have power to commit said trust to such other person or persons as he may judge proper, by deed, or by his last will and testament in writing. And the said Leroy Napier hereby agrees to accept and dis[252] charge the trusts hereby created and reposed in him". And it is further stipulated and agreed, that the office of the said Leroy Napier as trustee as aforesaid, and his estate, powers and duties as such, shall be considered as having vested and taken effect, to all intents and purposes, immediately from aud after the execution of this instrument.
In witness whereof, we and each of us have hereunto sst our hands aud seals, this third day of April, 1840.
Thomas T. Napiee, [l. s.]
Leroy Napier, [l. s.]
Skelton Napier, [l. s ]
Nathan C. Munroe, [l. s.]
Leroy Napier, [l. s.J 1 Trustees for Thos. Skelton Napier, [l.s.] j-T. Napier and Nathan C. Munroe, [l. s.] ) family.
Witnesses to the signatures of Thomas T. Napier,") Leroy Napier, Skelton Napier and Nathan C. Munroe, trustees for Thomas T. Napier and family. V G. B. Carhart, j J. H. Taylor, n. p. j
Henley Varner, [l. s.]
Martha O. Varner, [l. s.]
Oliver W. Oox, |x. s.]
Witnesses to the signatures of Henley Varner, Martha 1 C. Varner and Oliver W. Cox. / John A. Ellis, ' f H. J. Williams, j. i. o. Henry County. J
Jno. D. Stell, [l. s.]
Witnesses to the signature of Juo. D. Stell, Benjamin Morris, James Knott, j. p.
M. Bartlett, [l. sj
Witnesses to the signature of M. Bartlett, B. H. Moultrie, Peter SoLoman, n. p. •
We the undersigned do hereby ratify aud confirm the covenants, acts and doings of Leroy Napier, Skelton Napier and Nathan C. Munroe, trustees under the last will and testament of Thomas Napier, deceased, so far as relates to the intents and purposes mentioned in the foregoing instrument. Witness our hands and seals, at Macon, this 9th day of March, 1842.
James L. DeLanney, [l. s.]
Wm. L. Maxwell, [l. s.]
Eliza B. Napier, [l. s.]
Attest
J. L. Saulsbury,
J. L. Owen, j. p.
Georgia, Bibb County :
We the undersigned do hereby ratify and confirm the covenants, acta and doings of Leroy Napier, Skelton Napier and Nathan C. Munroe, trustees, under the last will and testament of Thomas Napier, deceased, so far as re[253] lates to the intents and purposes mentioned in the within and foregoing instrument ' Witness our hands and seals, at Macon, this 3d day of May, A. D. 1845.
L. W. Napier, [l. s.]
Thomas C. Napier, [l. s.]
Signed, sealed and delivered in the presence of
Peter Soboman,
David Reid, j. p.
Georgia, Bibb County
I, Leroy Napier, as trustee for W. T. W. Napier, have received of Thomas T. Napier, executor of Thomas Napier, deceased, ten thousand dollars, as -in terms of the understanding of the legatees parties to the within instrument, this 30th March, 1S42. The ten thousand dollars mentioned above was given in Commercial Bank stock, (say one hundred shares.)
' Leroy Napier.
Recorded June l'íth, 1845.