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Gates v. Whetstone.

CTION by infant children of Christian A. Gates, deceased,

against William C. Whetstone, as executor of the last will and testament of the said deceased, and John J. Jackson and Barbara E., his wife, for an account. The testator appointed William C. Whetstone executor, and Barbara E. Gates, his wife, executrix. Barbara E. Gates, the widow of testator, intermarried with John J. Jackson on the 11th day of August, 1863. The testator had some cotton on hand at the time of his death, which was shipped by his widow to Pelzer & Rogers, factors of the estate in the city of Charleston. In the years 1862 and 1863, a considerable amount of cotton was made by the widow in her own right which was also shipped by her to the same factors and sold by them. On February 18, 1866, Pelzer & Rogers paid to the defendant, Jackson, $1,500 of the proceeds of the sales of the cotton that had been shipped to them, and one of the questions made in the case was whether the executor, William C. Whetstone, was liable for the amount thus received by Jackson. Testimony was given upon the question whether the amount paid to Jackson arose from the proceeds of the cotton on hand at the death of the testator, or from the proceeds of the cotton made by the widow after his death.

It further appeared that the testator left a number of notes, which went into the hands of his executor, one for seventy dollars given to the testator by Lewis Rust and two for five hundred dollars in the aggregate given to him by T. M. Wannamaker. There was no evidence that Wannamaker and Rust were insolvent, nor was it shown that any effort had been made to collect their notes. The trial judge held that the cotton, which produced the money paid to Jackson was cotton belonging to the estate of testator, and that the executor was liable for it. As to the three notes of Rust and Wannamaker, he held the executor liable for them. The executor William C. Whetstone appealed.

Hutson & Hutson, for appellants.

Izlar & Dibble, contra.

WRIGHT, A. J. We have carefully examined "the voluminous testimony" submitted, and looking at it in the different lights in which the respective counsel in the arguments have regarded it, do

Gates v. Whetstone.

not find much difficulty in attaining a conclusion on the facts entirely satisfactory to ourselves.

The first ground of appeal on the part of W. C. Whetstone (one of the defendants below) submitted error in so much of the decree as finds that the cotton in the hands of the factors, from proceeds of which, on the 18th of February, 1866, a payment of fifteen hundred dollars ($1,500) was made by them to J. J. Jackson, was a part of and belonged to the estate of the testator, C. A. Gates, "not being the profits accruing from such estate during the widowhood of Mrs. Barbara Gates," with whom the said Jackson, in August, 1863, intermarried.

While we agree with the circuit judge as to the right of property in the said cotton, we do not concur in the legal consequences which he deduces from it as affecting the payment of the said money to Jackson.

We do not perceive upon what principle Whetstone, the executor, can be made liable for the receipt by the husband of the executrix of money found by the decree to belong to the estate which they both represented. It is true that if an executor, of his own will, turns over to a co-executor a fund in his hands belonging to the estate of his testator, or by his act removes it from his own sole control and subjects it to the common control of himself and his co-executor, he will, in the language of O'NEALL, J., in Administrators of Johnson v. Johnson, 2 Hill's Ch. 288, "be generally responsible for its administration." The whole scope of the English and American authorities referred to in the opinion of the court in that case and the decision itself extend the doctrine no farther.

In this State the courts have not held an executor liable for the acts of his co-executor to which he has not contributed in some direct and active way, so as by his interference to afford not only countenance but co-operation. Such will be found to be the result on an examination of all the cases where the point has been brought into discussion. In Lenoir v. Baker, 4 DeS. 65, it was held "that executors and administrators are not liable for each other's acts unless there be connivance or gross negligence." To the same effect is Knox v. Picket, id. 92. In O'Neall v. Herbert, McM. Eq. 497, HARPER, Chancellor, delivering the opinion of the court, said 66 : The general rule of this court is, that one executor is not liable for the assets which come into the hands of his co-executor unless under particular circumstances, such as having paid them

Gates v. Whetstone.

over to him, having joined in a misapplication of them, or having joined in a receipt by which he enables him to receive them." In Gayden v. Gayden, id. 435, the same principle was announced, and on the hearing of the appeal, after the case had been again tried on the eircuit, the same chancellor, pronouncing the opinion of the appellate court, at page 144, said: "It is said in the former opinion of this court that one administrator is not liable for the acts of another in which he did not concur. As this seems to have misled, and perhaps was calculated to mislead, the parties, we have thought it proper to give the subject a full and thorough examination. In many authorities, as well as in the case of O'Neall v. Herbert, referred to, it is expressly held, both with regard to executors and administrators, that they are not liable for each other's acts. Though at law both may be jointly liable on their bond, yet this court discriminates and charges each with his own proper defaults."

In Atcerson v. Robertson 3 Rich. Eq., Chancellor DUNKIN, delivering the opinion of the court, at page 137, says: "If an executor, having received funds of the estate, pays or delivers them over to his co-executor, or joins in a misapplication of them, or joins in a receipt which enables his co-executor to receive them, he may be made responsible; but the general rule of the court, as declared in O'Neall v. Herbert, is that one executor is not liable for the assets which come into the hands of his co-executor, and the same rule was applied to joint administrators in Gayden v. Gayden.

In Clarke v. Jenkins, id. 341, Chancellor WARDLAW, delivering the opinion of the court, said: "Every executor has a several right to receive the assets of the estate, and he who receives is exclusively answerable for the misapplication of them, unless his co-executors have contributed to enable him to get possession of them, or acquiesced in his appropriation of them, contrary to the trusts of the will, knowing of such misapplication."

Whatever control the executrix acquired over the estate by virtue of her office vested in Jackson on their intermarriage to the same extent as held by her. 1 Williams on Executors, 788; 2 id. 827. When the cotton was in the hands of the factors, it was held by them "to the credit of the estate of C. A. Gates." Each of the executors had a right to draw against it, and an order for its payment did not require the signature of both. Gage v. Administra

Pierce v. Jones.

tors of Johnson, 1 McC. 492. The children were all minors, without guardians, and if Jackson neglected any duty in relation to the money which he received, it was in not investing it in some good and valid security. He and Whetstone stand in the same relation to the money drawn by each from the factors of the cotton proceeds. Whetstone could have no more compelled him to pay to him whatever sum he so received than he, Jackson, could have required Whetstone to account to him for the funds which he had drawn from the same source. No act of Whetstone is shown which contributed to the payment of the money to Jackson, and his mere passive course in withholding his interposition is not enough to render him responsible.

In regard to the notes due the estate, and uncollected, there was no evidence to show that the parties were doubtful, much less insolvent, and the consequence of their loss must fall on the executor, who, having them in his hands, made no endeavor to realize the amounts on them.

[Omitting minor questions.]

The case is remanded to the Circuit Court, with leave to the plaintiff, if they desire, to take an order against the said Jackson, for an account of the fifteen hundred dollars ($1,500) received by him from proceeds of the cotton, with interest, and for any other assets of the estate which may have come to his hands, and for any other orders necessary to give effect to the judgment of the said court hereby and herein modified.

MOSES, C. J., and WILLARD, A. J., concurred.

PIERCE V. JONES.

(8 S. C. 278.)

Composition agreement not under seal.

A written agreement, not under seal, between an insolvent firm and its creditors whereby the latter agree to accept in payment of their several and respective claims twenty-five cents on the dollar, and give clear receipts in full, provided that all the creditors of the firm shall assent to this arrangement, is a valid and binding contract, which discharges the firm, on its compliance with the terms of its agreement, from the residue of its indebtedness to any creditor of the firm receiving the composition. (See note, p. 293.)

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Pierce v. Jones.

CTION on two promissory notes. The opinion states the facts:

J. C. Sheppard, for appellants. The payment of a part of a debt liquidated and payable is no consideration for a promise to discharge the balance. Eve v. Moseley, 2 Strobh. 203; Chitty on Cont. 774; Co. Lit. 264; Story on Prom. Notes, § 410; Story on Cont. 689; Bail. on Bills, 365; James v. Badger, 1 Johns. Cases, 131; Fitch v. Sutton, 5 East, 230. A parol release of the whole sum on the day, in consideration of the payment of a part, is not satisfaction of the whole; Pinnell's case, 5 Rep. 117; Hope v. Johnson & Cavis, 11 Rich. 137. See, also, Corbett v. Lucas & Dotterer, 4 McC. 323; 9 Strobh. 205; 3 id. 36; and 5 Coke's Reports, 117.

Addison Butler, contra.

MOSES, C. J. This was an action on two several promissory notes drawn by the respondents in favor of the appellants-one for $4,000, dated 17th March, 1873, payable 1st March following; the other for $5,820.03, dated 16th March, 1874, payable fifteen days after date. The last was the aggregate of open accounts and small drafts due before 14th February, 1874, and is, alike with the first, subject to the operation of the alleged agreement to be hereafter referred to.

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On the 14th February, 1874, the said J. J. Price, Butler & Co.; with other creditors of the said Thomas Jones & Son, executed a written agreement in the following words: We, the creditors of T. Jones & Son, hereby agree to compromise with the said T. Jones & Son for twenty-five cents on the dollar on the principal and interest of the several amounts due us, and will give them a clear receipt of all indebtedness to us and our assigns, provided that all persons who may hold any claim, account, note or other evidence of indebtedness shall assent to this settlement and arrangement." It appeared that each of the said creditors had received the sum for which, by the agreement, they had stipulated "to give a clear receipt of all indebtedness."

The report of the referee states that all the other creditors had acted in good faith in regard to its stipulation, and this must be held to include all the creditors of the respondents, for the agreement was on the condition that all persons who might hold any claim, etc., should assent to it; and if any other creditor had VOL. XXVIII — 37