Burwell's adm'rs v. Fauber
Burwell's adm'rs v. Fauber
Opinion of the Court
In the petition for the appeal in this case, but two errors are assigned, viz :
1st. That it was error to decree against John Dauber, or against his estate or his representatives, in favor of the administrator de bonis non of Thomas Hutchins, for any supposed failure to distribute administered assets in the hands of said Dauber as the first administrator.
2d. That Burwell as a purchaser in good faith from the devisees without notice of any outstanding debts of the estate, or unsatisfied claim upon the land purchased,
I regard the first assignment of error as waived by the learned counsel of the appellants ; and it was properly waived, for it is certainly unsustainable. For, although Baylor,- as adm’r de bonis non with the will annexed of Hutchins, may not have a right, of himself, to maintain a suit against the representatives of his predecessor, for assets of the testator which that predecessor received and converted to his own use, according to the principle of the case of Wernick v. McMurdo, 5 Rand. 51; 2 Rob. Pr., old ed., p. 77; yet, as the legatees of Hutchins, who zoere entitled to maintain the suit, were parties thereto, and made no objection, and do not complain of the decree, which in fact was in their favor ; the appellants, certainly, have no right to make any such objection or complaint on that ground. If any authority were necessary to sustain so plain a proposition, the case of Morriss, adm’r v. Morriss’ adm’r, &c., 4 Gratt. 294, cited by the learned counsel of the appellees, would be full to that effect. I therefore proceed at once to notice the second, and only substantial, assignment of error in the case.
The Code, chap. 131, § 3, provides that “all real estate of any person who may hereafter die, as to which, he may die intestate, or which, though he die testate, shall not, by his will, be charged with, or devised subject to the payment of his debts, or which may remain after satisfying the debts with which it may be so charged, or subject to which it may be so devised, shall be assets for the payment of the decedent’s debts, and all lawful demands against his estate, in the order in which the personal estate of a decedent is directed to be applied.”
§ 4 provides, that “ such assets, so far as they may be in the hands of the personal representative of the decedent, may be administered by the court, in the office whereof there is or may be filed, under the 132nd chap
§ 5 provides, that “ any heir or devisee who shall sell and convey any real estate which by this chapter is made assets, shall be liable to those entitled to be paid out of the said assets, for the value thereof, with interest; in such ease the estate conveyed shall not be liable, if the conveyance was bona fide, and at the time of such conveyance no suit shall have been commenced for the administration of the said assets, nor any report have been filed as aforesaid of the debts and demands of those entitled.”
The “Home Place,” devised by the third clause of the will of John Fauber to his sons FToah and Thomas, charged with the payment of the legacies given by the fourth, fifth and sixth clauses of the will, being the land sold by the said devisees to Thomas C. Burwell, the intestate of the appellants, and the subject of controversy in this case, ivas not, by the said will, charged with the payment of the testator’s debts, and was therefore, assets for the payment of said debts, under the third clause of chap. 131 of the Code, as aforesaid; and there was no suit pending for the administration of the said assets at the time of the conveyance of the said land by the said devisees to the said Burwell. The only questions arising in the case, then, are, first, whether such conveyance was bona fide; and, secondly, whether, at the time of such conveyance, any report had been filed as aforesaid of the debts and demands of those entitled. I will enquire, first, whether such conveyance was bona fide.
When John Fauber died in August 1855, he had an ample estate, real and personal, for the payment of all his debts, and then making a comfortable provision for his family. He had a small personal estate, not greater
How it was the plain duty of the executors, under the second clause of the will, to sell the Heiskell farm and apply the proceeds to the payment of the debts, which were sufficient in amount to cover the value of said farm, after applying to their paymentthe proceeds of sale of the personal estate, also directed by the will to be sold for
The law allowed to the executors one full year after their qualification, to enquire into and ascertain the condition of their testator’s estate, and the amount, nature and relative dignity of his debts, and to make preparation, by sales and collections, for payment of debts aud legacies, preparatory to a final settlement of the affairs of the estate. Until the expiration of a year, they could be compelled to pay the debts of their testator only in their legal order of priority, and could not be compelled to pay any of the legacies. The executors in this case doubtless knew of the existence of all, or nearly all, of the debts of their testator, and that they would require for their payment, all, or nearly all, of the subject devoted to that purpose by the second clause of the will. They certainly knew of the existence of the debt due by their testator to the estate and legatees of Thomas Hutchins, of whom he was administrator with the will annexed, which constitutes almost the entire amount for which the decree appealed from in this case was rendered. The account of John Tauber as such administrator, was settled by a commissioner of the County court of Augusta, about the time of said Tauber’s death, in August 1855 ; and shortly after his death, to wit: on the 31st of January 1856, an order was made by said court, directing said commissioner to revise said settlement, which was accordingly revised ; and the revised settlement was returned to the said court, and not being excepted to, was confirmed and ordered to be re
On the 24th of April 1856, about eight months after the death of John Fauber, and with full knowledge of the existence of the said debt to Hutchins’ estate, and while, it seems, those to whom that debt was due were trying to collect it, the executors of John Fauber, to wit: Noah and Thomas Fauber, sold and conveyed the “Heiskell farm” to Catharine Fauber, widow of the said John Fauber, in consideration of $2,700, of which the sum of $1,200 was retained by her as an agreed satisfaction in gross of her annuity of $200 for life, under the will of her husband, the said John Fauber, and for the residue she executed her two single bills, both dated that day, and carrying interest from date; one for $500, to the said Noah and Thomas H. Faubeiy ex’ors of John Fauber, payable on demand; and the other for $1,000, to the said Noah and Thomas H., ex’ors of John Fauber, and trustees for Joseph Fauber and his family, payable twelve months after date. For these two bonds a lien was retained upon the land conveyed. And Catharine Fauber, for the consideration of $1,200 aforesaid, released to the said Noah and Thomas H., as ex’ors of John Fauber, and as devisees and legatees under his will, all her interest under the said will to the said annuity of $200 for life, and released the estate of said John Fauber from any charge for the same, and from all claim to dower or distribution. Catharine Fauber did not sign her own name to the deed, but merely made her mark; and says in her answer that she was an illiterate woman, knew nothing
Hot long after that arrangement was made, to w7it: on the 21st of January 1857, Tbomás C. Burwell entered into a contract with Hoah and Thomas H. Tauber for the purchase of the- “Home l?lace,” at the sum of $7,000, payable as follows : The said Burwell sold to said Hoah and Thomas H. his entire stock of goods, &c., at cost and carriage, the amount to be ascertained by inventory. He was to pay $2,000 down in goods, at cost and carriage, and the remaining $5,000 in instalments of $1,000 annually, until paid, after deducting the remaining part of the stock of goods and accounts that said Burwell might transfer to the said Hoah and Thomas H. from the 1st, 2d, and 8d payments of $1,000 annually, deducting the interest therefrom.
Less than two months after the said contact was entered into, to wit: on the 10th of March 1857, a deed
Noah and Thomas H. Tauber having thus disposed of the estate of their testator, left the Commonwealth, leaving unpaid the debts of their testator, which are the subject of controversy in this suit. The amount of those debts has been decreed in this case Jo be paid out of the
That Noah and Thomas H. Fauber, executors of John E'auber, were guilty of a plain and palpable breach of trust, in diverting the trust subject created by the second clause of their testator’s will, from the payment of his debts, to which it was devoted by the will, and applying it to the payment of legacies expressly charged by the will on land devised to them in their own right, is a matter beyond all controversy. And if that land had never heen aliened by them ; if the title in law and equity yet remained vested in them, as it was given to them by the will; nothing in law can, I suppose, be more certain, than that the said land would be now liable for the payment of the said debts yet remaining unpaid. The executors had a right, and it was their duty, to sell the “ Heiskell farm” for the payment of their testator’s debts; and if they had sold the said land to a bona fide purchaser, and received from him the purchase money, he would not have been hound to see to its appplication ; and his title could not have been questioned, even though the money had been misapplied. But they had no l-ight to apply that farm, or the proceeds of the sale of it, to-the payment- of legacies, chai-ged upon the home place, at least until all the debts were paid ; and if they sold the Heiskell farm for the express purpose of paying the legacies instead of the debts, the right of the creditors, in equity, to interpose and arrest the proceeds of sale before being applied to the payment of legacies, and have them applied to the payment of debts; or to be subrogated to the place of the legatees, and be paid out of the proceeds of sale of the home place, if those legatees had received payment out of the proceeds of sale of the Heiskell farm, rests upon the plainest and best established principles of the law. Such would be the state of things, and such the
But those devisees having sold and conveyed the land devised to them to Thomas C. Burwell as aforesaid, is he entitled to hold it against the claims of the creditors 1
He claims to be so entitled as a bona fide pui’chaser.
Certainly a bona fide purchaser for value, and without notice, is a great favorite of a court of equity, and that' court will not disarm such a purchaser of a legal advantage.
But we must not permit ourselves to be misled by words or maxims in this matter. Other persons are entitled to the protection and the favor of a court of equity as well as purchasers. Creditors are such persons, especially when they are, as sometimes, and in this case, in fact, they are or were, infants, feme coverts and nonresidents. Purchasers are bound to use a due degree of caution iu making their purchases, or they will not be entitled to protection. Caveat emptor is one of the best settled maxims of the law, and applies exclusively to a purchaser. He must take care, and make due enquiries, or he may not be a bona fide purchaser. He is bound, not only by actual, but also by constructive notice, which is the same in its effect as actual notice. He must look to the title papers under which he buys, and is charged with notice of all the facts appearing upon their face, or to the knowledge of which anything there appearing will conduct him. He has no right to shut his eyes or his ears to the inlet of information, and then say he is a bona fide purchaser without notice. The law on this subject of constructive notice is laid down with great clearness by a very great judge, Vice Chancellor Wigram, in Jones v. Smith, 1 Hare R. 43, 55, 23 Eng. Ch. R. cited by the learned counsel for the appellees. See also Le Neve v. Le Neve, and the notes thereto in second Leading Cases in Equity, Pt. 1, p. 23, marg. 127 top; and Brush v. Ware &c., 15 Peters. U. S. R. 93-114; also cited by the
That Burwell had actual notice of the will of John Fauber and its contents is perfectly certain.- That he would necessarily have had constructive, if he had not had actual notice of the same, is just as certain. That will was the source from which his title was derived; and he was bound to take notice of it and all its contents. He had constructive notice of every fact apparently affecting the title to the land, to which the will refers, and he was bound to enquire into such fact and fully inform himself on the subject. He had actual notice of the deed and its contents from John Fauber’s executors to Catharine Fauber conveying the Heiskell farm, not because he was an attesting witness to that deed, but because he relics on it in his defence, and must have known its contents. Knowing the contents of the will, he therefore knew that Uoah and Thomas H. Fauber held the home place subject to the legacies charged thereon by the will, and that in becoming a purchaser of that place from them, he acquired, and could acquire, only their
How then does the case stand upon the law and the facts as they seem to exist ?
John Fauber owned two tracts of laud, the Heiskell farm and the home place. He owed debts about equal in amount to the value of the Heiskell farm ; and had a family consisting of a wife, three sons and a daughter. By his will he directed the Heiskill farm to be sold, and the proceeds of sale applied to the payment of his debts ; devised the home place to his two sons, Noah and Thomas, charged with the payment of legacies to. his wife and other two children ; and appointed his sons, Noah and Thomas, his executors. In about eight months after his death, his executors sold and conveyed the Heiskell farm to his widow for $2,700, agreeing to apply $2,200 of the purchase money to the payment of two of the three legacies given by the will, to wit: the legacies to his wife and to his son Joseph ; and the same has been accordingly so applied, leaving unpaid debts of the testator to about an equal amount. Shortly after the executors made that sale, they, as devisees, sold and conveyed the home place, devised to them, to Thomas C. Burwell for $7,000, a large portion of it payable in goods, and the vendors covenanting to relieve the land of the incumbrance of the legacies, and to obtain a decree for that purpose, and to warrant the title generally. At the
The legatees, or two of them, having received payment of their legacies out of the fund which belonged to the creditors, the latter had a clear and plain right to compel the former to refund the money, so far as it was necessary for the payment of the debts. And the legatees, being thus disappointed in obtaining satisfaction out of the fund which belonged to the creditors, would have as clear and plain a right to be reinstated in their charge upon the home place, and to be satisfied out of the same. But, to avoid circuity, a court of equity will subrogate the creditors to the place of the legatees, and. give the former a direct decree against the home place. This is a simple process daily pursued in courts of equity.
The only possible difficulty in the case is at once removed when it is shown, as I think has conclusively
The release given by Catharine Fauber in the deed to her for the Heiskell farm can make no difference. The consideration for that release having wholly failed, it cannot stand in the way of her right to have satisfaction of her legacy out of the home place charged therewith by the will. The sum agreed to be paid to her in gross as compensation for her annuity for life, seems to have been considered a reasonable equivalent therefor, and no objection has been made to it from any quarter. Twelve hundred dollars may therefore be assumed as the amount or value of her legacy At all events, that amount was paid out of the proceeds of the sale of the Heiskell farm on account of that legacy. As to the amount of the legacy of $1,000 to Joseph Fauber and family paid out of the proceeds of sale of the Heiskell farm by decree of the court below, there can be no possible doubt of the right of the creditors to a decree against the home place to the extent of that amount, which (including interest) is not greatly less than the whole amount of the unpaid debts. Joseph Fauber gave no release of his legacy, as Catharine Fauber did; and his legacy had not been actually paid out of the proceeds of the Heiskell farm when this suit was brought. It would have been an easy matter, therefore, to have had that legacy charged upon the home place, leaving the money which he was to have received out of the Heiskell farm to be paid to the creditors. But the court having decreed the payment of the legacy to Joseph Fauber out of the proceeds of the Heiskell farm, the right of the creditors to subrogation and satisfaction to that extent out of the home place would have been self evident. There can be no doubt, however, for the reason before stated, that the right of the creditors to subrogation and satisfaction extends to the whole amount due them.
It may be proper to state that I think the record shows
My opinion upon the question, whether the conveyance of the home place to Harwell was bona fide, renders it unnecessary to consider the question, whether at the time of such conveyance, any report had been filed as-aforesaid of the debts and demands of those entitled ; and I therefore refrain from doing so.
Upon the whole, I am of opinion that there is no error in the decree appealed from, and that it ought to be affirmed.
Dissenting Opinion
dissented. Tie was of opinion the appellant Burwell could only be held responsible for the amount of the legacy given to Joseph Tauber and family. It is conceded that the creditors of John Tauber have no claim to or lien on the real estate in the possession of the appellant. If they have the right to subject it to the payment of their debts at all, it is only by subrogation to the rights of the legatees whose legacies have been satisfied out of the Heiskell farm. But Catharine Tauber, one of these legatees, released all claim to or interest in the whole and every part of the real estate of the testator. The deed containing this release was duly recorded, in order to give notice of the-fact, and to enable the executors to convey a clear and unencumbered title to any purchaser. The appellant, relying upon this release, purchased the home farm, paid the purchase money, received his deed of conveyance-with the clear and full conviction that the annuity claim
It seems to me, to sustain such a pretension, is not only to violate every principle of natural justice, but also a favorite maxim of courts of equity, that where one of two innocent persons must suffer, he shall suffer who by his own acts occasioned the confidence and the loss. Catharine Fauber having released her claim, she-has no equity to which the creditors can be subrogated. These views, however, have no application to the legacy given to Joseph Fauber. That, having been paid from the Heiskell farm, without, however, the execution of any release, the creditors have the right to be compensated to that extent out of the home farm ; and for the residue of their debt they should be satisfied from the proceeds of the sale of the Heiskell farm in the possession of both or one of Fauber’s representatives.
In my opinion the decree of the Circuit court should he reversed so far as it is in conflict with these views.
Decree affirmed.
Reference
- Full Case Name
- Burwell's adm'rs v. Fauber & als.
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- Published