McKelvey v. Tate
McKelvey v. Tate
Opinion of the Court
Curia, per
The objection to the note on which this recovery has been had, is, that it was either partially or wholly without consideration. This presents the question, was the trust estate liable for the debt when the note was given 1 It appears that the trust had been managed by a former trustee, during the time the medical services were rendered by Dr. Moore. The general rule is, that any one crediting a trustee in relation to the trust estate, trusts him on his own responsibility; and that the remedy is against him personally. The exception to this rule, is, that where a trustee contracts a debt necessary and proper for his cestui que trust, and has no funds of the trust in his hands, out of which he ought to pay it, and is insolvent, in such case, the creditor may, in equity, make the trust liable for its payment. This case is, I think, fully within the reason of the exception. The propriety and necessity of the account, seems not to be questioned. The defendant’s testator and his co-trustee settled with the former trustee, and gave him a receipt, by which they acknowledged that they had received from him all the trust property, and relieved him from “ any demands which have arisen, or which may hereafter arise, against him, in the relation he lately stood as trustee.” The former trustee was liable to Moore for the account. If he or his executor, after this settlement, had sued the former trustee, and recovered from him the amount of the account, he would have been entitled to be refunded by the trust estate. It was, therefore, eventually, if not primarily, liable ; and being so, the trustees might well say, we will take upon ourselves the payment of the debt., without driving the credit- or and former trustee to their respective actions. This was a sufficient consideration, if the debt was a legal and subsisting one. It appears that the debt was not barred at the time the defendant’s testator and his co-trustee were appointed, nor at the time they gave the former trustee
The motion for a new trial is dismissed.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.