Johnson v. Henagan , 1878 S.C. LEXIS 46 ( 1878 )

The opinion of the court was delivered by

Willard, C. J.

The action is by two of the legatees of B. K. Henagan, for an account against B. Y. Henagan, as administrator cum testamento annexo' of the original testator, B. K. Henagan, and also as administrator of J. H. Henagan, who was, until his death, sole acting executor under the will of said B. K. Henagan. The interests of the plaintiffs, joined as such with their husbands, and who are styled by the will “ Mary and Alice,” consisted, under the will, of two undivided one-sixth parts of the personal estate, a portion of which was given to the wife of the testator for life, with remainder to the children; Mary and Alice took two-sixth parts of the remainder in the personal estate given to the wife for life, and two-sixths of the balance of the personal estate.

The portion of Mary and Alice was given to J. H. Henagan, the sole acting executor, in trust, with remainders over in case either daughter should die, leaving no issue surviving her. The testator devised the “ Cannon place ” to J. H. Henagan and A. B. Henagan, and the “ Glover land ” and “ Mill creek ” places to the defendant, B. Y. Henagan.

The testator directs that his estate, both real and personal, shall remain undivided until all my debts are paid and satisfied.” He also directs that “ crops made on the lands shall pay my debts. But that in the event that the proceeds arising from the crops and otherwise are not sufficient, then I desire my executors hereafter named to dispose of a sufficiency of personal property to pay the same; or, if my executors think best, they are empowered to sell a part or the whole of the lands given to, my son, Bobert Y. Henagan. If the executors should, in their judgment, dispose of a part or the whole of the lands above described, given to my son, Bobert Y. Henagan, then and in that case I desire my son Bobert shall be entitled, out of my personal property, over and above his distributive share, to the amount the land may sell for, above specified.”

The will contains provisions looking to a certain contingency upon which the proportionate shares of Mary arid Alice may be increased out of the amount given to Samuel, one of the testator’s sons; but it does not appear that such contingency has happened.

J. H. Henagan, J. W. Henagan and J. J. Harllee were appointed executors.

The complaint prays a general accounting as administrator cum testamento annexo, and as administrator of the deceased executor, and that plaintiffs may be paid their proper proportion of the estate.

The complaint alleges the death of the trustee of Mary and' Alice, J. H. Henagan, but does not allege the appointment of a trustee in the place of such deceased trustee. The purposes of the-trust cannot be satisfied during the lifetime of Mary and Alice, as the remainder over, on the contingency of their dying without issue, needs the support of the trust; the trust was also for their protection against the marital rights of their husbands. No attention appears to have been paid to these facts by either party, and no order appears to have been taken for the appointment of a trustee.

The wife of testator died before action brought, consequently the plaintiffs, Mary and Alice, were entitled, at that time, to one undivided sixth each of the personal property of which the testator died possessed, subject to the payment of the debts of the estate in the manner prescribed by the will.

The decree ascertains a certain sum to be due from the defendant, B. Y. Henagan, as administrator cum testamento annexo of B. If. Henagan, and directs payment of this sum among the several parties entitled as legatees or devisees under the will of B. If. Henagan, according to their respective shares. The plaintiffs, and the defendant, B. Y. Henagan, have appealed from the decree. ■ The other defendants have not appealed, consequently their only interest in the appeal relates to supporting the decree as against the appeal of B. Y. Henagan.

The appeals bring to notice many exceptions taken to the report of the referee and the decree of the Circuit Court. In order to understand the interests of the parties excepting and appealing, it will be necessary to state, with some degree of accuracy, their respective interests under the provisions of the will, and then it will be possible to trace the bearing of the questions raised, by way of exception, in the interests of the respective parties. We shall, in this way, discover what questions are material to be considered, and what are not.

We will first consider the interest of Mary and Alice under the will, as affected by the question raised on the accounting. Their sole interest is, as cestuis que trust, to have placed in trust that part of the estate of their testator devised to them through his will. Their only interest, under the will, is in the personal estate left by the testator; as to part of that personal estate, their interest commenced at the death of the testator, and as to the remaining part, at the death of their mother, the life tenant. The liability of the personal estate, as the primary fund for the payment of debts, is in part disturbed by the will. The realty and personalty are to be kept together until the debts are paid and satisfied. The personalty and realty combined constituted plantation property. The crops k> be made upon the lands in the hands of the executors were designated as the primary fund for the payment of the debts of the estate. These crops were to be made by the united employment of that part of the realty and personalty that was available for that purpose. If the crops were insufficient for that purpose, then resort was to be had to the personalty for that purpose.

Authority is given to the executors to sell the “ Glover land ” and “Mill creek” property, devised to the defendant, R. Y. Henagan; in which case R. Y. H. is to be compensated therefor out of the personal estate, independent of his distributive share therein. “ Mary and Alice ” are clearly interested to have the produce of the plantation, over and above its current expenses, applied to the payment of debts, so as to relieve the personalty devised, as far as possible, from contribution to that purpose. If it appears that the crops were insufficient for that purpose, then to the extent of the actual payment of the debts, over and above the amount derived from the crops and applicable thereto, the defendant, R. Y. H., is entitled, as administrator, to be allowed such amount, as against the other of the personalty charged against him. If any debts remain unpaid, he is also entitled to retain, for the purpose of applying to the payment thereof, so much of the amount that may be found chargeable against him, on account of the personalty that came into his hands, as may be necessary for that purpose. It follows that the plaintiffs are entitled to the consideration of all questions raised by their exceptions, as by those of the defendant, B. Y. Henagan, that affect the amount and value of the personalty that came into the hands of J. II. Henagan, as executor, and of the defendant, B. Y. Henagan, as administrator mm testamento annexo, and as administrator of J. H. Henagan, the executor, and the disposition of the same; also of such questions as affect the amount and value of the produce of the lands and the application thereof.

To avoid complexity, the questions at issue will be examined as raised by the exceptions to the referee’s report. It is said in the decree of Judge Green, that some of the exceptions taken by the defendant, B. Y. Henagan, to the referee’s report, were abandoned before him. It is not, however, stated which of them were abandoned, and as there is no other evidence of abandonment in the case, they must, therefore, be considered.

Plaintiff’s exceptions to referee’s report.

1. Objects to the allowance of the referee of a claim made by the administrator for the sale of seventy bales of cotton, produced on the lands subsequent to the death of the testator, for confederate currency. The allowance was proper. The cotton was produced under the authority of the will for the purpose of paying debts. It was a necessary inference that the product was to be sold from time to time to pay current expenses of planting and produce a balance for payment of debts. There was clear implied power to sell. The fact that confederate currency was taken, was an ordinary incident of the transactions of that class at that time. It does not appear that the cotton was sold for less currency than, at its current purchasing rate, represented the market value of the cotton. The bona fides of the transaction is sustained by the referee, and there is no ground to disturb his conclusion. State v. Mosely, 10 S. C. 1. The exception was not well taken.

2. This exception must be overruled. There is no proof that letters of administration oum testamento annexo, and of the estate of J. H. Henagan, were issued prior to 1863. The complaint does not lay the foundation for an account as administrator durante absentia.

3,4, 5, 6 and 8. These exceptions involve a question of fact purely, namely, the amount produced during certain years upon the lands of the testator, appropriate to the payment of debts under the will. The conclusions of the referee are drawn from conflicting evidence, in which questions of the credibility and accuracy of testimony largely enter. Such questions belong peculiarly to the court that tries the issues of fact in the first instance, and involve important inferences of fact. We cannot see that the conclusions of the referee on this subject are overborne by any clear weight of undisputed testimony, or are unfounded in the evidence. These exceptions are not well taken.

7. This exception is, “because the referee has failed to charge the administrator with the full value of the stock, farming implements, &c., which he carried off himself and permitted others to carry off from the ‘ Cannon place.’ ” There has not been such a statement of the account as to enable us to determine what allowance, if any, should be made to the plaintiffs by reason of the loss or disposition of personalty on the Cannon place at the decease of the testator. The principles of the accounting in this respect, should be as follows: The trust account for “ Mary and Alice” must be credited with two sixth parts of the value of the personal property, other than that in which testator’s wife had a life interest as of the date of testator’s death, and of the residue of the personalty on that place, as of the death of the tenant. As this exception only relates to the “Cannon place,” the account must be so stated only as it regards the personalty on that place. To this must be added the value of all other personalty chargeable in favor of the plaintiffs, as finally fixed by this decision, taking the report of the referee first made as the basis of computation. From this must be deducted all personal property lost or destroyed by natural causes or unavoidable casualty, without the fault of the administrator; also, the amount, if any, and all • sums paid for the indebtedness of the testator, over and above the amount realized for that purpose out of the crops raised upon the lands of the testator. . The defendant, R. Y. Henagan, must be allowed, out of the balance, any amount paid on account of the debts of the testator existing at his death, out of the proceeds of the sale of the “Cannon,” “Mill creek” and “Glover” places. The Cannon place was devised absolutely to J. H. Henagan and A. B. Henagan, and was not liable to the payment of the debts by the will, except as it should be used for making crops for the estate, and the administrator of J. H. Henagan is entitled to a credit for any monéys derived from the sale of that place, applied to the payment of the debts of the testator. So the Mill creek and Glover places were devised to the defendant, R. Y. Henagan, and he must be credited with any part of the proceeds of the sale of those places that was applied to the payment of the debts of the testator. As the account appears to be taken on different principles, it will have to be restated in this respect; but as to its items, it will only be re-opened to the extent rendered necessary by this decision.

Defendant, R: Y. Henagan’s, exceptions to referee’s report.

1. The item of $268, charged as cash in inventory, is not sufficiently explained to remove the inference from its appearing in the inventory. The inventory is not before us and the conclusion of the referee must stand.

2. The duty of scaling, referred to in this exception, appears, by the referee’s report on the exception, to have been the basis of the scaling by him, although entries are made in the account as of different days. The argument of the defendant does not dispute the correctness of this statement made by the referee in this respect and it must stand.

3. The objection to the charge of the hire for a blacksmith and a carpenter in 1863 instead of 1864, is placed by the argument on the sole ground that it is by the custom of the country chargeable on the following January. It must be presumed that the charge was made according to the fact, and that was the correct mode of charging.

4. The amount paid by the administrator for the purchase of slaves was not a proper item of charge. He had no authority to purchase for the account of the legatees of the personalty by the will, nor had he authority to substitute other property for that devised. If the necessities of planting for the estate could under any circumstances have authorized it, still that fact is not made out. Whether property sold or otherwise lost can be properly accounted for by other similar property acquired to the estate, is a question that cannot arise under this exception which involves merely the question whether debts created by the administrator for the purchase of permanent property can be ranked as debts of the testator, as against the personalty.

5. This exception is in part disposed of by what is said as to purchasers for the estate, under the last preceding exception. As it regards the other portions of this exception, the evidence referred to in support is too vague and indefinite to afford ground for disturbing thé referee’s conclusions.

6. As the question of thé settlement of the defendant, I!. Y. Henagan’s, account, as administrator durante absentia, is not open, the charge for his wages while in charge of the Cannon place, before letters of administration were taken out on the estate of K.. K. Henagan cum testamento annexe, and on the estate of J. H. Henagan, cannot be considered.

7. This exception depends upon inferential conclusions to be drawn from conflicting testimony, and cannot be allowed, for want of overbearing testimony.

8. The referee properly rejected the demand of the plaintiff for a suit of clothes for himself. If this is intended to cover a claim for personal services, it cannot be so considered, as it is not properly connected with that subject. The evidence claimed as supporting the claim for money paid to S. Emanuel has not been found, possibly owing to the fact that no particular reference to the folio where found was made, as required by the rules of this court. The claim of $300 for the board of Alice and Mary was, probably, a gratuity merely, and, as such, not chargeable. The purchase of a brood mare is already disposed of by what has been held as to that class of purchases; such purchases are not chargeable against the legatees. The testimony as to payment for dentist’s work is not referred to by folio, and has not been found. This exception is not well taken.

9. The charge of $1000 paid as counsel fee, is not supported by the facts, sufficient to enable the court to judge of its necessity and propriety.

10. This exception depends on the credibility and accuracy of the testimony of the defendant, B,. Y. Henagan. The character of the testimony is such that a view opposite to that taken by the referee, is not a necessary inference. This exception is not well taken.

11. The accounts rendered by parties dealing with the administrator, are not, in themselves, proof of disbursements. This exception is not well taken.

12. The referee was justified in not crediting amounts paid for articles purchased, unless satisfied, by evidence, that they were proper disbursements for the protection of the personal estate, and the cultivation of crops for the benefit of the estate. This exception is not well taken.

13. It must be assumed, upon the testimony and findings of the referee, that the money paid for the debt of J. H. Henagan came from the assets of B. K. Henagan. J. H. Henagan was entitled to a distributive share of the personal estate of B. K. Henagan, and to that share R. Y. Henagan must look for reimbursement. As the object of the present accounting was, among other things, to ascertain the amount of the share of J. H. Henagan, as well as the other legatees, that credit cannot come into the present account. This exception is not well taken.

14. The account of Niel Alford was not proved — it was conjectured merely. No proof was offered that the account of A. Thomas was chargeable to the estate. The account óf King and Cassidy was not sufficiently explained. The statement that the account of P. Epstein was for the benefit of the estate, was insufficient as proof, as it does not appear that the benefit was of the nature that could justify expenditure by the administrator. This exception is not well taken.

15. The item of $1024.19 was not sufficiently proved by the mercantile books of Henagan & Northrop; these books required proof. The transactions between the hands and the store of H. & N., are not entitled to be admitted into the account, without additional proof that such transactions cover advances made for the production of crops for the estate. This exception is not well taken.

16. The statement that corn was purchased for “ estate purposes,” is insufficient; nor was the statement that corn was “used on the plantation” sufficient, as there may have been other uses for it than such as concerned the case of the stock ■belonging to the estate and making the crops. This exception is not well taken.

17. The testimony as to payments to Tait, as overseer for 1866, is too indefinite and uncertain to afford ground to disturb the conclusion of the referee. This exception was not well taken.

18 and 19. The account of J. H. Baggett & Co. will have to be restated. The items allowed should be stated in the several years in which the transactions that constituted that account occurred. It does not appear with sufficient clearness what items •of the account were allowed. The allowance of interest must be revised accordingly. The administrator must be allowed interest on all items of that account allowed as a credit against interest charged. 'These exceptions must be sustained to the extent just ■stated.

20, 21 and 23. The subjects of these exceptions have already been disposed of, as they relate to the quantity of produce, fixed by the referee on disputable testimony — for this reason, the conclusion of the referee cannot be disturbed. These exceptions are not well taken.

22. The legatees are not entitled to be credited with the value of the Mill creek place, as that place was specifically devised, and if sold to pay debts, the amount used for that purpose was to be replaced out of the personalty. This exception was not well taken.

24. The referee erred in charging for the use of the plantation for the years 1868, 1869 and 1871. The plantation, independently of the personalty, was not subject to the claims of the legatees, and its rental could not be charged for the benefit of the legatees of the personalty. The use of the personalty by the administrator, or by others with his assent, in planting in these years, should be compensated to the legatees, on the principle ■that when the administrator ceased to plant for the estate he held the personalty for division alone, subject to the usual liability in such cases. The devotion of the lands to cultivation for the relief of the personalty was not absolute, but to some extent dependent on the discretion of the executor during his life • we cannot say that the administrator cum, testamento annexo was bound indefinitely, as it regards time and circumstances, to continue planting, nor is there a proper foundation in the pleadings and proofs, to charge the administrator cum testamento annexo, as for a breach of duty in ceasing to plant for the estate. The account must be reformed in this respect.

25. Interest is improperly charged in the account after 1868. The rule of computation, in such eases, was laid down by this court in the case of Livingston v. Wells, S. C., April Term, 1876, and need not be recited. The interest account, subsequent to 1868, must, under this exception, be conformed to that rule.

26. This is substantially disposed of by the conclusion stated under the twenty-fourth exception, calling for a revision of the account as it regards the annual rent charged. The rent for the use of the personalty should be charged in the year in which the property Avas used.

27. The want of representation in this action, on the part of S. F. G. Henagan, is not material to the stating of the account as affecting the interests of the plaintiffs. If all the proper parties were not before the court, it was within the power of the administrator to cause them to be brought in, and, failing to do so, he can gain no advantage, as against the plaintiffs, from their absence. This exception Avas not well taken.

28. If the settlement of the estate of J. IT. Henagan AAras material, in order to reach the indebtedness of the administrator of B. K. Henagan, then the administrator should have brought forward his accounts, as such administrator — that accounting being open under the pleadings.; and, failing to do so, it must be assumed that such a settlement is unnecessary. The estate of J, H. Henagan is only incidentally concerned in the accounting, as affecting the legatees of B. K. Henagan, and to the extent only of the assets of B. K. Henagan that came into the hands of J. H. Henagan. This exception is not well taken.

29. As it regards the subject of this exception, the referee appears to have stated the account as fully as the evidence would admit of. The referee was not bound to assume the truth and accuracy of verbal statements made by B. Y. Henagan, not accompanied by proper vouchers, nor can this court make such assumption as against the referee’s report. This exception is not well taken.

30. In view of what has already been said as to rent subsequent to 1868, this exception need not be further considered.

31. The principle on which the account should be stated, as it regards the sale of the Grove and Mill creek places, has already been stated, and disposes of all matter that need be considered under this exception.

32. This exception involves the effect of disputable evidence, and affords no ground for disturbing the referee’s conclusions. There must, however, be a statement of the amounts chargeable to the administrator on account of personal property of the estate, improperly disposed of and unaccounted for, subject to the limitations herein stated.

It will not be necessary to notice any of the exceptions interposed to the final judgment, except that of the defendant, which seeks to exclude the plaintiffs from reviewing the ground on which the judgment was taken, for the reason that the judgment was entered, in form, by the plaintiffs. The act of entering judgment was formal, merely, and cannot be considered as a waiver of the objection that existed to the decree embodied in that judgment, and which were in invitum. The other exceptions are already disposed of.

The judgment and decree of the Circuit Court, so far as it is not in accordance with the general and particular conclusions stated, must be set aside, and the first and final reports of the referee must be modified according hereto, and there must be an account upon the principles above stated, in which all matters finally determined by the decree and report of the referee, and not disturbed hereby, shall stand established as between the plaintiffs and the defendant, B. Y. Henagan; and as against the other defendants, parties to the suit, the account must be opened only to the extent of the matters determined under the appeal by the defendant, B. Y. Henagan, as affecting defendants made parties by proper proceedings.

There must be provision also made for the ascertainment and payment of the debts, if any still due, provided for by the will, and after the payment of such debts, or provision made therefor, the amonnt, if any, due the plaintiffs must be ascertained, and a trustee appointed, and a decree taken for them in accordance with the foregoing conclusions, with liberty to the other defendants properly represented before the court, or who may become so represented, to move for such order or decree as may be proper in the premises.

Decree modified.

Haskell, A. J., and Kershaw, acting A. J., concurred.