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Vol. I.)

Perry v. Smoot.

(No. 5.

in said city; to his daughters Susannah A. Smoot and Catharine F. Smoot he bequeathed the sum of ten thousand dollars each, to be realized out of his estate, by sale or otherwise, as early as practicable after his decease ; and he directed his executors to invest said legacies in the stocks or bonds of the Commonwealth of Virginia. All the rest of his estate, real and personal, the testator devised and bequeathed to his sons Charles C. Smoot and John B. Smoot, whom he appointed his executors. The will was admitted to probate, and the executors qualified in October, 1867. The legacy to Susannah A. Smoot has been paid or arranged by the executors. The whole controversy in this case grows out of the failure of the executors to invest the ten thousand dollars given to Catharine F. Smoot according to the directions of the will.

It is insisted by the complainants, that the investment ought to have been made as soon as it was practicable after the death of the testator ; and that it was practicable so to do at any time within six months after that period. Not having made the investment at the time they should have made it, the executors are answerable for any loss by the subsequent rise in the price of the stock. It is certainly true that where a trustee is required by the terms of the trust to invest in public securities funds in his possession, and instead of doing so, he appropriates them to his own use, or otherwise unreasonably delays the investment, the cestui que trust has the option of charging him with the principal sum and its interest, or with the amount of stock he might have purchased with the money. And the same rule applies to an executor, who is also a trustee, but having fully administered the estate retains the legacy in his possession, not as assets of the estate, but as trustee of the legacy. In all such cases the trustee or executor is regarded as a wrong-doer; and as such, he is compelled to place the injured party in the same situation he would have been in if the wrong had not been done. But where the executor has received no funds for investment, and is required to raise them in the course of his administration, there can be, in the nature of things, no fixed rule as to the time within which the trust is to be executed. The farthest the courts have gone is to say that the investment must be made within a reasonable time. What is a reasonable time depends upon all the circumstances of the case. In one instance a year from the testator's death was considered a reasonable time for the purchase of United States stock. This rule was adopted in analogy to the payment of legacies. In another case the same period was regarded a reasonable time, although the trustees were directed to invest in the purchase of land with all convenient speed. Perry on Trusts, 462, and cases there cited; Hill on Trustees, 370-471. And under our statutes the executor is not compellable to pay any legacy given by the will, or make distribution, until after a year from the day of his qualification ; and even then he can only be required to make such. payment or distribution upon being secured by proper refunding bonds.

In this case the executors qualified in October, 1867. The estate which came into their hands is estimated by complainants at one hundred and fifty thousand dollars. The commissioner, however, reports it as of the value of sixty-two thousand dollars only. It consisted of real estate valued at forty-two thousand dollars, the interest of the testator in an unsettled partnership amounting to fifteen thousand dollars, and certain

Vol. I.)

PERRY v. Svoor.

[No. 5.

stocks and securities not exceeding four thousand dollars. From such sources the executors were required to raise the large sum of twenty thousand dollars. The testator was well aware of the difficulties they might encounter in carrying out his wishes. He therefore directed that the legacies should be realized out of his estate, not immediately, but by a sale as early as practicable after his decease. He did not intend that his sons should sacrifice the property given to them in paying the legacies to the daughters. He no doubt had entire confidence in the integrity and sound judgment of the former, and it was his purpose they should exercise a fair and liberal discretion in carrying out his instructions.

I think that discretion has not been abused; and that the executors were well justified in declining to make the investment. The condition of the State politically and financially from October, 1867, to January, 1870, when the decree complained of was rendered, is a matter of public history. The reconstruction acts passed in the beginning of the year 1867 declared that no legal governments existed in the states south. Virginia was denominated Military District No. 1, and as such was placed under the control of a general of the federal army; her judicial, executive, and ministerial officers were removed, and their places occupied by military appointees, and all the departments of the government, with all the great interests of the State, political and financial, subjected to a military domination acknowledging no constitutional responsibility. How long this state of things was to continue no one could foresee. Reflecting men, attentive observers of the times, were profoundly despondent of the future. They believed the termination of the military power would be followed by the establishment of a civil government greatly more disastrous to the prosperity of the State. Whether these fears were well or ill founded, whether they would have been realized in any event, it is not our province to inquire. It is certain that this condition of things exerted a most depressing influence upon the spirit and temper of the people, upon all the industrial interests of the State, its credit, its business, and its progress. The effect upon the credit of the State is apparent from a single fact disclosed by this record, that in 1867 and 1868 state bonds commanded in the market about thirty-eight cents in the dollar only. Capitalists might purchase such securities upon speculation, but few would regard them as safe and judicious investments. The executors no doubt acted upon these views. They wisely abstained from embarking the fortune of their sister in securities which did not and could not command public confidence, and might at any day become utterly worthless in the commercial world.

All the circumstances and facts of the case tend to show that complainant throughout was informed of the failure of the executors to make the investment. She resided in the same town with them. At the death of the testator she was over twenty-one years of age, and fully competent to understand her rights. If the investment had been made, the bonds would have been in her possession, and the interest collected from the State by her authority alone. But instead of this she received from the executors annually a sum or sums equal to the yearly interest upon the amount of her legacy. She received the payments without objection or complaint, although she must have been apprised they were made by the executors as borrowers of the fund due her. In Byrchall v. Bradfield,

Vol. I.]

COVERSTON v. THE CONNECTICUT Mut. LIFE INS. Co.

[No. 5.

6 Mad. R. 148, cited by complainant's counsel, Sir John Leach directed an inquiry by a commissioner to ascertain whether the legatees were informed at any time that the executor had retained the legacy in his hands. It appeared that he had so retained it for ten years, paying interest to the cestui que trust under a representation that the legacy had been invested according to the trusts. Under these circumstances the executor was required to furnish the stock which might have been purchased when the investment ought to have been made. It is fair to presume a different decision would have been made, if it had appeared that the cestui que trust had accepted the interest knowing the funds were retained by the executor. In such case he would be treated as a borrower and not as a wrongdoer. In this case there is nothing to impeach the good faith of the executors. Their conduct throughout evinced a desire to perform the duties imposed by the will, with a due regard to the interest of all the legatees.

For these reasons I am of the opinion the decree should be affirmed. The other judges concurred in the opinion of Staples, J.

Decree affirmed.

CIRCUIT COURT OF THE UNITED STATES.

[NOVEMBER TERM, 1873.]

LIFE INSURANCE.

SUICIDE.

INSANITY.

LOUISA COVERSTON v. THE CONNECTICUT MUTUAL LIFE

INS. CO.

Held, that to make the insurer liable the mind of the deceased must have been so far

deranged that he was incapable of using a rational judgment in regard to the

act of self-destruction. Held, that if the insured was impelled by an insane impulse which his remaining

reason did not enable him to resist, or if his reasoning powers were so far overthrown that he was unable to exercise them on the act he was about to perform, the company

is liable. Held, that there is no presumption of law that self-destruction arises from insanity,

and if, by reason of sickness, or distress of mind, or a desire to provide for his family, the insured takes his own life in the exercise of his usual reasoning faculties, the company is not liable. Held, that the burden of proof lies upon the company to show that the death was

caused by suicide and not by accident.

J. W. Deford f A. W. Benson, for plaintiff.
Mann f Parkinson and Clough f Wheat, for defendant.

DILLON, J. 1. This is an action on a policy issued by the defendant upon

the life of the plaintiff's husband for her benefit. That the policy was issued, and that on the 16th day of December, 1871, the assured came to his death, are undisputed facts. Under the admissions in the answer, the plaintiff makes out a prima facie case for a recovery

1 Verdict rendered December 10, 1873.

Vol. I.)

COVERSTON v. THE CONNECTICUT Mut. LIFE Ins. Co.

(No. 5.

when she shows that she was the wife of the said Henry 0. Coverston; that he is dead, and that due notice and satisfactory evidence of the death of the said Henry 0. was given by her to the defendant or its authorized agents ninety days before this suit was brought. If these facts are shown, then it devolves upon the company to establish its defences pleaded in the answer, or some one of them.

2. The main defence relied on by the company is that the assured procured the policy with intent to cheat and defraud the company by there. after taking his own life ; and that in pursuance of this purpose the assured purposely took his own life by shooting himself on the 16th day of December. These defences are denied by the plaintiff.

3. The policy in suit contains a provision, that if the assured “ shall die by suicide” the said policy should 6s become and be null and void."

And the first question to be determined is, did the assured shoot himself accidentally, or did he purposely take his own life by an act which he knew, designed, and intended should have that effect? If, upon the evidence, you are of opinion that the plaintiff's husband accidentally shot himself, this is not suicide and the defence fails. If, upon the evidence, you find and believe that he intentionally shot himself with the design and purpose to take his own life, this is suicide and avoids the policy, unless the evidence also establishes to your satisfaction insanity of such a character and degree as will in law prevent the act of suicide from having the effect of avoiding the policy.

4. It is not every kind or degree of insanity which will so far excuse the party taking his own life as to make the company insuring liable. To do this, the act of self-destruction must have been the consequence of insanity, and the mind of the deceased must have been so far deranged as to have made him incapable of using a rational judgment in regard to the act which he was committing. If he was impelled to the act by an insane impulse, which the reason that was left him did not enable him to resist, or if his reasoning powers were so far overthrown by his mental condition that he could not exercise his reasoning faculties on the act he was about to do, the company is liable. On the other hand, there is no presumption of law, primâ facie or otherwise, that self-destruction arises from insanity; and if you believe from the evidence that the deceased, although sick, or distressed in mind, formed the determination to take his own life, because in the exercise of his usual reasoning faculties he preferred death to life, or desired thereby to make a provision for his wife, then the company is not liable, because he died by his own hand within the meaning of the policy.

5. The burden of proof to show that the death of the assured was suicide and not accidental is upon the company. If you are satisfied from the evidence that the assured died by suicide, then the burden to establish the insanity of the kind and degree above mentioned, as being requisite to hold the company,

is

upon the plaintiff. Verdict-for plaintiff in the amount of $5,543. Defendant moves for new trial.

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1. The council of the city of Richmond may lay a tax upon lawyers as such. 2. The ordinance of the council provides that lawyers and others shall be divided

into six classes, and that those in each class shall pay a certain sum as his tax ; and it directs that the committee of finance shall place each lawyer in the class to which they shall think he properly belongs, looking to all the circumstances of the case. And it is provided that when the committee have completed their classification, public notice shall be given, and any lawyer dissatisfied with his classification may appear before the committee and have it corrected if erroneous. Held, the tax is not an income tax, nor are the duties imposed on the committee legislative, but ministerial; and the ordinance is not unconstitutional.

This was an action of assumpsit in the circuit court of the city of Richmond, instituted in November, 1871, by Ould & Carrington, lawyers, against the city of Richmond. The object of the suit was to test the constitutionality of the ordinance of the city council, imposing a tax on lawyers. Issue was made up on the plea of “ non-assumpsit," and the whole matter of law and fact was submitted to the decision of the court.

The power of taxation vested by the charter in the council of the city is stated by Judge Anderson in his opinion, and need not be repeated. By the ordinance imposing taxes, persons following various employments in the city were classified, and a specified tax was imposed on each class. Among these were lawyers, who were divided into six classes. The eleventh section of the ordinance provides : “ That the committee on finance shall place each person and firm employed in the trade or business referred to in sections three, four, five, seven, and eight, in the class to which the committee shall be of opinion such person or firm properly belongs, looking to all the circumstances of the case.” And it was directed that when the committee had completed their classification, they should give notice of the fact by publication in two of the papers of the city, and that the committee would meet at a specified time to hear any application for a correction of the classification; and in the mean time the list was left in the auditor's office, open for the examination of all persous interested in the matter.

In 1871 the committee of finance placed the plaintiffs, as lawyers, in the first class, and classified all lawyers practising in the city in the respective classes mentioned in section five of the ordinance, – that being the section in reference to lawyers. In doing so the committee had no assessment of the plaintiffs' income from their profession before them ; nor did the committee ascertain, or attempt to ascertain, their incomes in any way; but formed its own estimate, without evidence, of the reputation and standing of the lawyers practising law in the city of Richmond, including the plaintiffs, and their supposed capacity to make profits in

VOL I.

16

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