Imágenes de páginas
PDF
EPUB

Opinion of the Court.

and administrators who are not permitted to derive a personal benefit from the manner in which they transact the business or manage the assets of the estates intrusted to them; but whatever advantage is derived by them from a purchase at an undervalue is for the common benefit of the estate.

In this case the precise nature of the trust, as well as the character and limits of the relations of the executor to the estate, are fixed with precision by the terms of the will, which is as follows:

"I do hereby constitute and declare the children of Son Kosinsko Morgan and his wife Caroline, to wit, Fannie Belle, Charles W., P. May, Maria Orphelia, and Nellie Latham, and Ellen Lee, the daughter of my daughter Othelia Lee, my residuary legatees, and to them in equal shares I will, devise, and bequeath all my estate and property, both real and personal, wherever the same may be, after all just debts against my estate and expenses accruing in the settlement thereof shall have been paid and discharged.

"I hereby constitute and appoint George Ball, of Galveston County, and H. F. Gillette, of Harris, both of the State of Texas, and Mr. Wm. H. N. Smith, of Murfreesborough, North Carolina, the executors of this my last will and testament (and to qualify without bond), with power, jointly or either two of them, to do all such acts and things, to sell any property necessary for the liquidation of debts, and to take all such steps and measures as may be necessary or expedient in the discharge or execution of the trust hereby reposed in them, and in payment and discharge of all the provisions and bequests herein contained, and in the administration of the estate and property devised and disposed of by virtue of this testament; and finally, it is my special desire that when this my last will and testament shall have been proven and recorded and an inventory and appraisement of my estate recorded in the probate court, neither such court nor any other shall have anything further to do with the administration of my estate, but my said executors, George Ball, H. F. Gillette, and W. H. N. Smith, or any two of them who shall qualify and act, shall have full control of my estate under the will,

Opinion of the Court.

without accountability to any judge or court further than before expressed by the will."

It is clear, that, with the exception of the exemption of the executors from accountability to the court in the details of administration, the trust created by this will is the same that attaches by operation of law to any executor, to wit, a trust to pay the debts of the estate and then to deliver over the remainder of the lands for partition among the devisees or heirs.

The subject matter of the trust in this case is the whole estate in its entirety: (1) for the common benefit of all the creditors; and (2) for the common benefit of all the heirs or devisees. Respecting these creditors or devisees in their separate and individual capacity, he is not the representative or guardian of their person or property, and can exercise no legal control over either. The disposition which a single creditor may make of his debt against the estate, or the sale or other disposition which an individual devisee may make of his individual interest in said estate, cannot interfere with the executor's control of the estate for the payment of the debts of the creditors, on the one hand, or for its ultimate partition among the devisees, on the other; and both are, therefore, matters entirely outside of his trust and his office.

We have already taken it as true that fraud is out of the question in this case, and that the defendant had no agency in the borrowing of the money and incumbering her separate interest as above described by the complainant. She had, in conjunction with her husband, absolute authority to contract that debt, and to convey her interest in the lands of the estate in trust to the bank, with a power, in case of default of payment, to sell said property. Having this right free from any power of interference on the part of the executor, Gillette, it must follow that the debt was a legal one, the incumbrance a valid one, and the sale under it by the trustee in the deed equally valid and legal. Up to this point the defendant occupies no relation of trust or confidence to the transaction. With no legal power over any of the contracting parties, with no right to interfere with the trustee, to whom full power by

Opinion of the Court.

the deed is lawfully given to sell the incumbered interest at public auction, he has no trusteeship in regard to it, no duty to perform in respect to it. The debt itself, incurred by complainant, constitutes no part of the liabilities of the estate which he, as executor, represents. The sale, when made, touched that estate nowhere, did not diminish its assets in the least, nor withdraw from it any lands subject to the debts of creditors, and to the ultimate partition of the devisees and their assigns.

There is nothing in the transaction, from its inception to its final consummation, that imposed upon the defendant any duty incompatible with his right as a purchaser at the sale.

The principle that a trustee may purchase the trust property at a judicial sale brought about by a third party, which he had taken no part in procuring, and over which he could not have had control, is upheld by numerous decisions of this court and of other courts of this country. Prevost v. Gratz, 1 Pet. C. C. 364, 378; Twin Lick Oil Co. v. Marbury, 91 U. S. 587; Chorpening's Appeal, 32 Penn. St. 315; Fisk v. Sarber, 6 W. & S. 18.

It is true that the rule upon this subject as stated by some text writers is more stringent than that stated in these cases. 1 Perry on Trusts, § 205; Hill on Trustees, 250. We think, however, that the language employed by them does not present a thorough and perfect generalization of the essential principles pervading the decisions upon this subject. They are in manifest conflict with the uniform current of decisions of the Supreme Court of Texas, which are our guides in this case. Erskine v. De la Baum, 3 Texas, 406, 417; Howard v. Davis, 6 Texas, 174; Scott v. Mann, 33 Texas, 725; Goodgame v. Rushing, 35 Texas, 722.

From all of which we are of the opinion that the decree of the court below was correct, and it is accordingly

Affirmed.

Statement of the Case.

FALK v. MOEBS.

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MICHIGAN.

No. 243. Argued April 20, 1888. Decided May 14, 1888.

A promissory note which reads: "Four months after date we promise to pay to the order of George Moebs, Sec. & Treas., ten hundred sixty-one &

24

dollars, at Merchants' & Manufacturers' National Bank, value received," signed: "Peninsular Cigar Co., Geo. Moebs, Sec. & Treas.," and indorsed : Geo. Moebs, Sec. & Treas.," is a note drawn by, payable to, and indorsed by the corporation, and without ambiguity in the indorsement; and evidence is not admissible to show that it was the intention of the indorser in making the indorsement to bind himself personally.

THE Court stated the case as follows:

The plaintiffs in error, Gustav Falk and Arnold Falk, who are citizens of the State of New York, brought suit in the Circuit Court of the United States for the Eastern District of Michigan against the defendant in error, George Moebs, upon nine certain promissory notes made by the Peninsular Cigar Company of Detroit, upon which they sought to charge Moebs personally as indorser. All of the notes were in form like the following, differing only as to amounts and the time of payment:

"$1061.24.

DETROIT, MICH., Aug. 4th, 1880. "Four (4) months after date we promise to pay to the order of Geo. Moebs, Sec. & Treas., ten hundred sixty-one & 24 dollars, at Merchants' & Manufacturers' National Bank, value received.

"PENINSULAR CIGAR CO.,
"GEO. MOEBS, Sec. & Treas.

"Indorsed: Geo. Moebs, Sec. & Treas.'"

The first count of plaintiffs' declaration was special, and alleged in substance that on July 6, 1880, defendant was the secretary and treasurer of a body corporate known as the

Statement of the Case.

Peninsular Cigar Company, then engaged in the business of manufacturing, buying and selling cigars and tobacco in the city of Detroit; that plaintiffs were then doing business as tobacco merchants in New York City; that the defendant, as secretary and treasurer of said Peninsular Cigar Company, applied to plaintiffs for the purchase of certain merchandise, and offered in payment therefor the notes of said Peninsular Cigar Company, and it was then agreed between the plaintiffs and defendant that plaintiffs were thereafter to sell and deliver the merchandise so applied for, and any other goods which defendant, in behalf of said company, might thereafter apply for, and that in payment therefor the defendant should execute and deliver to the plaintiffs the notes of the said Peninsular Cigar Company, payable to the order of the said defendant, and by him personally indorsed to said plaintiffs; that said defendant thereafter ordered from the plaintiffs certain merchandise of the value of $7449, and in accordance with said agreement and in payment for said merchandise, the defendant, upon the several dates indicated and specified in the several promissory notes heretofore mentioned, and with the intent and design of binding, charging, and obligating himself as an indorser upon said notes with the liability of an indorser as defined by the law merchant, made, executed, and delivered to the plaintiffs said nine promissory notes.

To this special count were added the common counts in assumpsit, with a notice thereunder written that the plaintiffs would, under the money counts, give in evidence nine certain promissory notes, copies of which were set out, and in which notice it was stated that said notes would constitute the sole bill of particulars of the plaintiffs' demand.

To the special count in the declaration the defendant demurred, and to the common counts he pleaded the general issue. The demurrer to the special count was sustained, and the plaintiffs at the next term of said court brought the cause on for trial upon the issue framed upon the common counts in the declaration. Upon the trial, which was had before said court and a jury, the plaintiffs offered in evidence the notes referred to, and also the deposition of Arnold, Falk, one of

« AnteriorContinuar »