Delap ex rel. Stewart v. Stewart , 2 Pen. & W. 285 ( 1830 )

The opinion of the Court was delivered by

Gins ox-, C. J

The case is this': Charles 'Stewart, devised •two plantations in trust to apply the rents to the maintenance of .his brother and his family during his life : and bequeathed a thousand dollars, w-ith directions to apply the interest and any part of thw ■principal, ’which the trustees should deem necessary to the same object,and to divide the-residue at the brother’s death among his chil■dren. A creditor subsequently recovered a judgment against the brother and two sureties ; and the brother-having paid part of the debt, he and the sureties prevailed with the trustees to advance the -residue on ¡the credit of the judgment which was assigned as a security : and «the question is, whether any ,rule of law or equity forbids this as an investment of the trust fund.

It is a material part of-the case, that the judgment remained unsatisfied at law. That the advancement should not be talcen as .payment, but as the consideration of an assignment, was an express condition of the agreement,, which is to be executed, if at all, -in all its parts. It is unnecessary to say what would have been «the consequence of direct payment and a formal entry -of satisfaction, as it is evident from the transfer of the ownership, that all parties considered the judgment to be an unsatisfied security. The defendants insist they have an equity that entitles them to ¡turn the advancement into absolute payment, which, they allege, •would be within the scope of their trust. It is apparent however, -that such an equity would be in the. face of their own agreement; and it is, beside, fallacious to assume" that payment would be con-sistent with the trust. There is not a word in the directions to ■thé trustees, that looks to any thing beyond personal maintenance ■and support. On the contrary, the obvious purpose of the trust •was to guard the"testator’s bounty from interception by creditors. It is said that to relieve the brother’s household goods from the pressure of an execution, would conduce directly to the purpose. ¡Certainly it would. But to relieve them by paying the debt, instead of purchasing them in, would leave them exposed to other ¡creditors, as well as subject them to the disposition of the brother, who was to have no control over the trust property. Ia fact, the fund might be exhausted in payment of debts, without accomplishing a single object of the trust. Nor could the trustees have safely paid the money to the cestuy que trust, with permission to use it at his pleasure. To put any part of the fund into his hands, would have been inconsistent with their duty in preventing him from having a control over it. Being interposed to preyent 'him from wasting it, they would have confided the application of it to him at their peril, and any connivance with ,him to divert it from the prescribed object, would have been a breach of trust. The argument, then, that payment with his approbation, would be equivalent to payment to himself, is without force, because without foundation. The trustees had indeed, power to break in on the principal, in case they should think it necessary; but a plain answer to any inference from this, is that they have in fact, not thought it necessary.

By taking a security for what they advanced, they took care oot to leave that matter in doubt. It is the sureties who attempt to break in on the principal against the consent of the trustees, and with a view to their own advantage. It is said, however, that to sanction the-transfer, would enable the trustees to sell the cestuy que trust out of house and home. I see nothing in that. If the property were bought in by them, it would beheld under the trust for his use; and if bought by strangers, the proceeds would be part of the fund, and he would, be entitled to the benefit of it. The fallacy is in considering the transieras being to the trustees in their own right. The use they should make of it, would depend on tlieir discretion, which, it is fair to presume, would be exercised with a single eye to his advantage, as a failure in this particular, would render them" liable for a breach of trust.

So far is the judgment from being necessarily an instrument of oppression, that it may be the only efficient means of preserving the property for his use. But having obtained the ownership of it, they are not compellable to use it for tire advantage of the sureties, who are entitled to no benefit from the trust, the objects of which are unconnected with their equity against the cestuy que trust, as their principal. Would it not then be monstrous to permit the defendants after having seduced the trustees into the particular measure, to profit by it at the expense of the trust, and in the teeth of their own agreement? If the judgment creditor, the trustees, and the defendants have agreed that the transaction shall be a purchase and not a payment, what policy, or principle «flaw, requires them, without fraud or misrepresentation, to be cut loose from their agreement? The arrangement gave the defendants the benefit of delay, and probably saved their property.. from being sacrificed; so that an objection to the validity of it, comes from them with a bad grace. But I am unable to see any defect.in it, even without their assent. The trustees have nothing to do with equities between principal and surety. Their duty is limited to an administration of the fund, to the maintenance of the cestuy que trust, and distribution of it, at his death, among his children; and to effect this, they may collect the money from all or any of the parties legally liable, leaving to them their remedies against each other, with which the trustees have nothing to do. If the sureties fail in obtaining satisfaction to be made by the principal, they will be in at least as good condition as they Were before, the arrangement; but they can not manage matters so as to procure payment to be made out of the trust fund, at the expense of the trustees or the persons ultimately entitled.

HfstoN, J. — dissented.

Judgment affirmed.