Opinion
11-22-1870
KELLY & als. v. LOVE'S adm'rs & als.
John W. Johnston for the appellants. Baxter for the appellees.
B., by his will, dated in November, 1848, and admitted to probate in February 1850, gave land and personal estate for the establishment and support of a school in a certain neighbourhood in Washington county; and he appointed certain persons trustees to carry out his devise, with power to fill vacancies in their body. L was appointed one of the trustees, and president and treasurer of the board, and he was also executor. The treasurer was to receive ten per cent. on the money he paid out. The school was established; and L settled his accounts before a commissioner, which shewed a balance in his hands of principal and interest $3,701 44, on the 1st December, 1859. He died during the war; and in 1866 the then acting trustees filed their bill against his administrator and securities to recover the money in his hands. HELD:
1. At common law the devise and bequest was illegal and void.
2. But by the act of April 2, 1839, concerning devises and bequests made to schools, & c., and the act of 1840-41, Code, ch. 80, § 2, it was made valid, though it had not been reported to the general assembly, as directed by § 7 of said first act, and no act had been passed incorporating the institution.
3. The trustees could maintain the suit. But an act having been passed, since it was commenced, incorporating the institution, the corporation should be made a party, and the decree should be for the payment of the money to the corporation.
4. L. is not to be charged interest upon the whole balance found against him in December, 1859, but is to be charged interest on the principal from that date.
5. The commissioner having made a special statement of the account, at the instance of the defendants, they cannot object that it is not stated on the basis of an executorial account.
Solomon G. Barrick, late of the county of Washington, departed this life prior to the 25th day of February, 1850. By his will, which bears date on the 6th of November 1848, after giving to his mother the tracts of land on which she lived, and the personal property upon the place, for her life, and at her death giving the same to his half sister Catherine for her life, and to her children, if she should have any, at her death, he directs that if Catharine should die without children the land left to her, as well as all other property, shall be sold by his executor, and the proceeds appropriated in manner and form as hereinafter directed.
The third clause of his will is, omitting useless words, as follows: I give and devise to Leonidas Love, three certain tracts of land lying in the county of Washington, (describing them) for which said tracts of land the said Leonidas Love has already executed his bond to me for the sum of $2,200, due and payable on the 1st day of January, 1848, bearing interest from the date; and I direct this sum of $2200, and the proceeds of the sale of the two tracts of land, and all the other property devised to my mother during her life, and at her death to my half sister Catharine, during her life, should she die without issue, as well as the proceeds of a tract of land I own in Indiana, and all other property of every description of which I may die possessed, after the payment of the devises hereinafter mentioned, to be held by my executor, or invested by him, on undoubted security, as a school fund; and the interest, after the first day of January 1853, is to be appropriated towards the payment of the salary of a competent teacher to teach school at a school-house which I wish to be erected on a certain piece of land upon which myself and James Cole consented a church and schoolhouse might be erected some years ago. And for the erection of said school-house, I hereby direct that $200 of the interest on Leonidas Love's bond to me for $2200, which may be due before 1853, be appropriated by my executor. And I further direct that no one sect or denomination shall have any power or control over said school-house. And if it should be that the schoolhouse should not be erected on said piece of land, or that there should be objection thereto, then I wish the school-house to be erected near that piece of land, so as to be convenient to the neighbourhood in which the said piece of land lieth. It is further my will and desire, that the interest upon the fund hereby created be expended yearly under the direction of Leonidas Love, David Jones, Oscar Love and Charles Meeke, and they are hereby appointed commissioners for the purpose; and any vacancy which shall at any time occur, either by death, resignation or removal, in the board hereby constituted, I direct shall be filled by the survivors of those remaining, and those who may be patrons of the school when such vacancy occurs. I constitute Leonidas Love as the president and treasurer of this board of commissioners; and if at any time hereafter, another treasurer should be appointed for this board, I direct that he be required to give undoubted security for the faithful discharge of his duties; and I order and direct that the treasurer of the said school fund shall be paid, or receive for his services, ten per cent. on the money which he pays out as heretofore directed, i. e., the interest for the school fund.
The testator appointed Leonidas Love executor of his will, and directed that he should be allowed three hundred dollars for his services as such; and if it should be necessary for him, as executor, to make a trip to the west, that he should receive the sum of one hundred and fifty dollars, in addition, from his estate. And he directed, also, that Love should be required to give ample security for the faithful discharge of all the duties required of him by the will.
Leonidas Love qualified as executor of the will, and gave security, as required by it; and in 1859 he settled his administration account before a commissioner of the court, showing a balance in his hands, on the 1st of December, 1859, of $3,701 44, of which it would seem that $328 16 was interest. One of the items of charge against the executor is under date of March 12th, 1854, for cash received of R. T. & G. Harris, of Indiana, $650 00; which seems to have been assumed, in the Circuit court, to be for the Indiana land mentioned in the will, there being no other charge for that land.
In October, 1866, James Kelly, David Jones, James Buchanan and Matthew Houston filed their bill in the Circuit court of Washington county, against the administrators of Leonidas Love and his sureties in his official bonds, in which they set out the will of Solomon G. Barrick, stated that Love had paid the legacies, and had settled his account, showing the balance as above stated; that it did not appear what had become of the Indiana land, unless the item of $650 be the proceeds of the sale of it; that Love did not put out the money intended for the school fund, but retained it in his own hands; that the school-house had been erected, and the $200 appropriated for that purpose had been properly expended; that of the trustees appointed by the testator, the plaintiff Jones is still acting, Charles Meeks has resigned, Oscar Love has removed from the country, and Leonidas Love was killed during the war; that the plaintiffs, James Buchanan, Matthew Houston and James Kelly, had been chosen, as directed by the will, to act as commissioners or trustees; that James Kelly is the president and treasurer, and has given bond and security; and they pray for a decree against the defendants for the amount of the school fund, and for general relief.
The defendants answered the bill. The administrators claim some credits for payments made by Leonidas Love on account of the school; and the sureties insist that, as it was impossible to invest the fund safely during the war, they shall not be held liable to pay interest upon it during that period.
In January, 1867, the judge made an order in vacation, directing that M. M. Taliaferro, who was appointed a commissioner for the purpose, do proceed to take an account in the cause, and report to the court the amount to which the plaintiffs are entitled under the will of Solomon G. Barrick, together with any matter deemed pertinent by himself, or required by either party to be specially stated.
The commissioner made his report. Taking the account reported by the commissioner in 1859, viz: $3,701 44, he charged the interest annually, deducting from this interest the payments made during the year, and making the balance of interest bear interest from the end of the year, thus charging the executor with compound interest; and he ascertained the amount due on the 1st of December, 1866, to be $4,622 25. He also made a special statement, at the instance of the defendants, charging the executor with simple interest; and on this statement the amount found due from the executor is $4,516 28; of this sum, beside the interest included in the first item of $3,701 44, the interest included in the balance found due by the commissioner is $814 84.
The administrators of Leonidas Love excepted to the report, because,
1st. The commissioner had failed to report the balance against or in favor of Love's estate, upon the hypothesis that no interest is properly chargeable against him from the date at which he entered upon his duties as treasurer.
2. That the principle upon which the interest is charged, in both statements, is contrary to the principle of Granberry v. Granberry, 1 Wash. 249, as explained and settled, 3 Leigh 348.
3. Because, by the will, Leonidas Love was entitled to ten per cent. upon all disbursements; and this the commissioner has not allowed.
Before a decree was made in the case, Henry Lovell and Catharine his wife, who was the half-sister of the testator Barrick, and others who were his heirs at law, filed their petition in the cause, stating that they were about to file their bill to contest the validity of the provision of Barrick's will in favor of the school, and to claim the fund as his heirs at law.
At the April term, 1867, the court overruled the exceptions to the report, and confirmed the special statement; but Lovell and wife and others having filed their petition, the court declined to decree the payment of the money to the plaintiffs, and gave the heirs at law leave to file a cross bill in the cause by the special term of the court.
At a special term of the court, on the 13th of November, 1867, the defendants demurred to the bill; and the cause coming on to be heard, the court overruled the demurrer, and made a decree in favor of the plaintiffs against the administrators of Leonidas Love and his sureties, for the sum of $4,516 28, with interest from the 1st of December, 1866, till paid, and the costs; the decree against the administrators to be paid by them out of the assets of their intestate. From this decree the administrators obtained an appeal to the District Court of Appeals at Abingdon, where the decree of the Circuit court was reversed, and the plaintiffs below then applied for and obtained an appeal from that decree.
John W. Johnston for the appellants.
Baxter for the appellees.
STAPLES, J.
That the devise contained in the will of Solomon G. Barrick, for the establishment of a free school, is void at common law, must be taken to be well settled in Virginia, upon the authority of numerous decisions. Gallego's Ex'or v. Attorney-General, 3 Leigh 450; Brooke & als. v. Shacklett, 13 Gratt. 301; Seaburn's Ex'or v. Seaburn & als., 15 Gratt. 423.
If the said devise can have any effect, it is only by force of the act passed 2d April, 1839, entitled an act concerning devises and bequests made to schools, academies and colleges. Sess. Acts, pp. 11 and 13, ch. 12. That act was in force at the death of the testator, and the question is, Does it legalize the devise under consideration?
The first section of the act provides that all devises and bequests thereafter made for the establishment or endowment of any unincorporated school, academy or college, for the education of free white persons, shall be valid in law and equity, except as hereinafter provided; that the trustees appointed by the testator shall have the same right to maintain suits in law and equity, that they would have had if the beneficiary had been a certain natural person; and if the trustees so appointed should decline to act, or if none were appointed, the Circuit courts should appoint trustees to carry the devise into execution.
The act further provides, that if any will, containing devises or bequests of the character mentioned, shall be admitted to probate in any court other than a Circuit court, the clerk of such court shall certify the fact of such probate, and an attested copy of such will, to the Circuit court having jurisdiction over the county; and the Circuit court, at the next term after such certificate is received, is required to appoint a commissioner to ascertain the character and value of the property devised.
The seventh section of the act provides that, at the next term ensuing such probate, or the reception of such copy, the Circuit court shall report the case to the Legislature, together with the report of the commissioner, and any other matter it may deem proper; and if the Legislature shall refuse, or within two successive sessions after the receipt of said certificate, shall fail to incorporate said school, academy or college, the said devise or bequest shall be void.
It has been argued, that the true intent and meaning of this statute is to refer all questions, touching the validity of charitable bequests and devises, to legislative action; and the Legislature having failed to incorporate the school within the time prescribed by the act, this provision in the will of Solomon G. Barrick cannot now take effect.
I think the object of the Legislature, in passing the act, was to change the rule of law laid down in the cases before cited, controlling bequests and devises for the establishment of schools and colleges, leaving it in full effect and operation, so far as it applied to bequests and devises for religious purposes. This adherence to the rule in the latter case, originated in legislative and popular jealousy, and opposition to the incorporation of religious societies, and a just apprehension that the accumulation of property by such institutions would be incompatible with sound republican polity.
It was not intended, however, by this statute, to place the whole subject of devises and bequests, for literary purposes, beyond the control of the Legislature. The effect of the act was simply to take from the heirs the right to object to the validity of such devises and bequests. It made them valid, so far as the heirs were concerned, but reserved to the State the right to determine, through its Legislature, acting upon the facts of each case, as reported by the Courts, whether the devise should be carried into effect or not.
The reasons for this legislation are apparent. Cases might, and probably would, occur, in which the execution of devises and bequests, of the character mentioned, would be inexpedient and unwise, upon considerations of a public nature, or impracticable by reason of a change of circumstances or events not foreseen by those who made them. The Legislature, therefore, reserved the right to declare them void, when a proper case should be presented, and a mode was indicated by which, in a reasonable time, the question might be brought to the attention of that body, and its action invoked by persons interested.
It was the duty of the courts to report such cases to the Legislature; but the validity of the devise or bequest was not dependent upon a compliance by the courts with the requirements of the statute. Their validity was clearly and unequivocally established by the provisions of the 1st section, before cited, subject only to the exception contained in the seventh section. That exception applies, and only applies, to those cases in which the Circuit court has certified a copy of the will to the Legislature, and the latter has refused or failed to incorporate the school within the period prescribed. This construction is confirmed by the language of the 2d section of ch. 80 of the Code of 1860, which declares that any gift, grant or devise, made since April 1839, for literary purposes, shall be valid, except such devises or bequests as have failed or become void by virtue of the 7th section of that act.
According to the legislative view, there was a class of devises and bequests invalid under the act of 1839; but they were those only provided for in the 7th section; cases which had been reported by the courts to the Legislature, and had failed to take effect by reason of the refusal or failure of the Legislature to pass an act of incorporation.
But if, as is contended, it is the true construction of the act of 1839, that those devises and bequests for literary purposes, only are valid which have been accepted by the Legislature, I think such acceptance is found in the provisions of the 2d section, chapter 80, of the Code 1860, already cited. By that section, the Legislature relinquished the right, previously reserved to the State, of determining whether it would or would not accept the devises and bequests for literary purposes made since 1839; and declared its pleasure to be, that all such devises and bequests should be valid, except those only which had become void by the provisions of the 7th section of that act. This legislation operated as a general act of acceptance in all cases, and instead of a special acceptance in each particular case. The heirs could not complain of such legislation, as it took nothing from them; their rights having been already divested under the provisions of the 1st section of the act of 1839.
It appears, however, that the Legislature, to place its acceptance of the devise, in this case, beyond all dispute, on the 20th December, 1866, passed an act incorporating " the Barrick Institute, in the county of Washington." The provisions of the act of 1839, already cited, were intended to bring the subject as speedily as possible to the attention of the Legislature, and to furnish that body with information necessary to enable it to judge of the propriety of accepting the grant, and to provide suitable means to give it effect. The Legislature having acquired such information otherwise, and passed an act of incorporation accordingly, everything has been done that is necessary to give effect to the devise in question. For these reasons, I am of opinion there is no error in the decree of the Circuit court of Washington in holding the devise in the will of Solomon G. Barrick, for the establishment of a school, to be good and valid in law.
Another error assigned in the petition is, that the account reported by the commissioner, in the mode of calculating interest therein adopted, violates the rule laid down in this State for the settlement of fiduciary accounts.
It is unnecessary to decide whether the rule laid down by this court in Harvey's adm'or v. Steptoe's adm'or & als, 17 Gratt. 290, for the settlement of trust accounts under deeds for the payment of debts, applies or has been violated in this case. It is sufficient to say that the special statement reported by the commissioner, and adopted by the court as the basis of its decree, was made at the instance of the appellants.
It appears, however, that the commissioner has charged the estate of Leonidas Love with $1,534 60 interest, upon a balance of $3,701 44, reported by Commissioner Lynch. This balance is, in part, composed of $328 16 interest, estimated in a previous settlement, thus charging the estate with compound interest.
And, again, the commissioner credits the estate with $739 76 for disbursements, and deducts this sum from the principal and interest aggregated; and the decree of the court is for this balance, with interest thereon from the 1st day of December 1866; and in this way the estate is again charged with compound interest.
It does not appear that said estate has been credited with the ten per cent. commission, to which the treasurer is entitled under the will of Solomon G. Barrick, upon his disbursements of the school fund.
In these respects the decree of the court below is clearly erroneous, and should be reversed with costs, and an account taken, in conformity with the decree of this court.
It seems that the testator, at the time of his death, owned a tract of land in the State of Indiana, embraced in the devise now under consideration. What disposition, if any, has been made of this tract does not distinctly appear.
Should the plaintiffs in the court below desire to proceed against the real estate, it is proper they should be required to amend their bill and make the heirs of Solomon G. Barrick parties to the suit, before any decree is rendered affecting said real estate.
The Legislature, since the institution of this suit, having passed an act incorporating the Barrick Institute, in the county of Washington, the said corporation should have been made a party thereto by its corporate name, and the decree for any balance due on account of the school fund should have been rendered in its favor.
The other judges concurred in the opinion of Staples, J.
The decree was as follows:
Upon an appeal from a decree of the District Court of Appeals for the seventh district, rendered on the 24th day of July, 1868, reversing a decree of the Circuit court of Washington county, rendered on the 13th of November, 1867, in a suit in which the appellants were plaintiffs and the appellees and others were defendants.
This day came the parties by their counsel, and the court having maturely considered the transcript of the record of the decree aforesaid and the argument of counsel, is of opinion, for reasons stated in writing and filed with the record, that the provision contained in the will of Solomon G. Barrick, dec'd, for the establishment of a school, is valid; that the appellants had a right to institnte this suit; and that the Circuit court did not err in overruling the demurrer to the bill.
The court is further of opinion, that the estate of the said Leonidas Love is properly chargeable with interest on the fund which was in his hands as executor of said Solomon G. Barrick, or as trustee of the school fund created by the said will, and that the Circuit court did not err in overruling the appellees' first exception to commissioner Taliaferro's report.
But the court is also of opinion, that the estate of the said Leonidas Love is not chargeable with compound interest on the said fund, or any part thereof, and is entitled to a credit of ten per cent. commission on the money paid out by him as treasurer of the said school fund, according to the will of the testator, and that the Circuit court erred in overruling the appellees' second and third exceptions to the said report, so far as said exceptions are in accordance with the opinion herein expressed.
The court is further of opinion, that although the appellants properly brought this suit in their own names, yet, as since its institution the said school has been incorporated, by an act of the general assembly passed December 20th, 1866, entitled " an act incorporating the Barrick Institute of the county of Washington," the said corporation, by its corporate name, should have been made a party to the said suit, and the decree for the balance due on account of said fund should have been in its favor.
The court delines to express any opinion upon the construction of the devise to Catharine Buchanan, as that question is not before this court upon this appeal.
The court is further of opinion, that if the plaintiffs desire to proceed against the real estate of Solomon G. Barrick, embraced in the said devise, if any such there be, they should be required to amend their bill, and make the heirs of said Barrick parties to this suit.
It is therefore decreed and ordered, that the said decree of the said District court be reversed and annulled, and that the appellees, out of the estate of their testator, Leonidas Love, do pay to the appellants their costs by them expended in the prosecution of their appeal aforesaid here. And this court, proceeding to pronounce such decree as the said District court ought to have pronounced, it is further decreed and ordered, that so much of said decree of the said Circuit court as is inconsistent with the foregoing opinion, be reversed and annulled, and that the appellants, John Kelly, David Jones, James Buchanan and Matthew Houston, do pay to the appellees their costs by them expended in the prosecution of their appeal aforesaid in the said Circuit court, the amount of which said costs is to be a charge against the school fund in the hands of the said appellants.
And it is further ordered and decreed, that this cause be remanded to the said Circuit court for further proceedings to be had therein, in conformity with the foregoing opinion.
Which is ordered to be certified to the said Circuit court of Washington county.
DECREE OF DISTRICT and CIRCUIT COURT reversed.