Allen v. Shanks

• Decision Date: 06 June 1891
• Citation: 16 S.W. 715,90 Tenn. 359
• Parties: ALLEN et al. v. SHANKS et al.
• Court: Tennessee Supreme Court

16 S.W. 715

90 Tenn. 359

ALLEN et al. v. SHANKS et al.

Supreme Court of Tennessee.

June 6, 1891

Appeal from chancery court, Shelby county; B. M. ESTES, Chancellor.

W. M Randolph & Son, for complainants. Turley & Wright, L. W Finlay, W. W. McDowell, and J. E. R. Ray, for defendants.

LURTON J.

Dr Lewis Shanks, a citizen and resident of Memphis, Tenn., died October, 1861. He left a will, disposing of his entire estate, and complainants were named as executors without security. This will was probated in the county court of Shelby county December 2, 1861, and same day complainants qualified as executors. The estate consisted of a large plantation in the state of Arkansas, upon which were some 80 slaves, and a large amount of live-stock and other personal property. In Tennessee it consisted of many separate pieces of real estate in the city of Memphis, some of which were improved and under rental. In April, 1862, the complainants filed an inventory of the Arkansas property, and another of the Tennessee estate, with the clerk of the Shelby probate court. No settlement has ever been made in that court of the accounts of the executors. In 1868 this bill was filed in the chancery court against the devisee and legatees under the will, for the purpose of construing the will, having a settlement of accounts, and that the executors might have the aid of the chancery court in the further administration of the trusts of the estate. This bill alleged the exhaustion of the personal estate in the payment of debts or in supporting the widow and family of the testator, as directed by the will. It alleged the loss by emancipation of all the slaves of the estate, and the loss of all the personal property on the Arkansas plantation, either by pillage and robbery, or by being destroyed in maintaining and operating that place as directed by the will. It alleged that debts remained due and unpaid aggregating $40,000 or over, and set out, in an exhibit to the bill, a list of such creditors, and a description of their debts. It alleged that, in carrying out the trusts of the will, the executors had expended large sums in excess of their receipts, and filed a statement of receipts and expenditures as one exhibit to the bill. The necessity that land should be sold to pay debts was urged as a reason for filing the bill; that the executors had endeavored to sell under the powers of the will, but had been unable to complete sales by reason of doubts entertained as to their power to make such sale. They prayed that the court construe the will in this regard, and their power, and, if such power did not exist, that the court would authorize and empower them to sell lands to pay off debts due to creditors and the balance due to themselves.

Without now referring to the steps taken in the cause between 1868 and 1891, it is at present enough to say that in the latter year a decree was pronounced upon a final hearing of the cause, upon a most voluminous record, by which it was adjudged and determined: (1) That Thomas H. Allen, as executor, upon a final accounting, was indebted to the estate in the sum of $38,678.28; (2) that the estate was indebted to executor I. M. Hill upon a final accounting in the sum of $1,111.55; (3) that the estate was indebted to the firm of I. H. & J. M. Allen & Co. in the sum of $40,604.55; (4) that the estate was indebted to Bates, Hyde & Co. in the sum of $904.95; (5) that the executors had been guilty of such mismanagement as to deprive them of all right to compensation or to counsel fees in this cause. From this decree both complainants and defendants have appealed, and about 60 errors have been assigned.

It must be obvious that neither the time which may be devoted to this cause without injury to others, nor the limits ordinarily admissible in a legal opinion, will permit the separate discussion and decision of the numerous assignments of error. We can only venture upon the elaboration of a few of the more important questions arising, and announce our ruling upon the rest without discussion, assuring counsel, however, that this transcript has been patiently examined, and every error pointed out fully considered. At the outset, it will be noticed that this cause was begun in 1868, and that a final decree was not pronounced until 1891. During this long period of 23 years interlocutory decrees were, from time to time, entered, the effect of which upon the rights of the parties is matter of the most serious controversy. In 1890 the chancellor, after a most thorough consideration of the entire pleadings and former decrees, ordered that the master should take and state an account with the complainants from the beginning of their administration; being of opinion that none of the former decrees had adjudicated any matter of account between complainants and the estate. He also directed a report upon the debts due and unpaid; being of opinion that former decrees had not judicially settled the existence of any unpaid debts. Under a former decree, the executors had made sales of real estate aggregating in all some $100,000. He was of opinion that these sales had been made without authority, and, with the exception of the sales made in 1869-70, he refused to ratify or confirm them.

The first decree relied upon by complainants, as adjudicating rights and conferring power of sale on them, was entered in December, 1869. In January, 1868, and shortly after the cause was at issue, an order of reference was made directing the master to take proof and report as to the personal assets in the hands of the executors, and report whether a sale of land was necessary to pay the debts of the testator. In February, 1869, the master reported "that there are no personal assets now in their hands or under their control; that the estate is largely in debted, the debts amounting to $40,000 or over; and that it will be absolutely necessary to sell off real estate to pay this indebtedness." No exceptions were filed to this report, and it was therefore, on the 3d December, 1869, confirmed. After confirming this report, the decree proceeds to recite "that, it appearing to the court that the personal estate of the decedent, Lewis Shanks, is exhausted, and that debts are outstanding against and owing by the estate to the amount of $40,000 or more, and that it is necessary to sell the real estate of the said decedent to provide means necessary wherewith to pay the said debts, the court, therefore, orders and decrees that the complainants sell of the real estate of the decedent set forth in the bill of complaint an amount sufficient to pay the said debts, and that this cause stand over for the decrees and orders and directions as remain undisposed of, and as may be needful and proper." The defendants insist that this decree was a nulity, and conferred no authority on the complainants to sell lands of the decedent, and that all sales thereafter made by them were without authority. The complainants insist, on the other hand, that the decree not only operated to confer authority to sell lands to pay debts, but that it had the effect of adjudicating the indebtedness of the estate to the several creditors whose claims were mentioned in the bill, including large balances claimed to be due them on settlement of their accounts as executors, and set out in the schedule of debts annexed to the original bill. The truth lies between these extreme contentions. This decree should be construed in reference to the issues made by the pleadings and prayers for relief, and which thus show what it was meant to decide. This bill was not an insolvent bill; neither was it a bill under the act of 1827, carried into the Code of Mill & V. §§ 3105, 3106. The will of Dr. Shanks provided that his personal estate might be used for many purposes other than the payment of debts. It is true that he does direct that his debts should be paid out of debts due him, rents of real estate, and proceeds of his plantation. But it is clear that he did not intend that the funds from these sources should be exclusively so applied, for he requires that the executors should, for a number of years, carry on his cotton plantation, and that during all this time they should support and maintain his widow and daughter, and two grandchildren in part, and that the daughter and grandchildren should be educated. The scale upon which his widow and daughter were to be supported was to be a liberal one, commensurate with his estate, and such as the widow should desire. The personal estate had therefore been in part used to carry out these objects of the testator. The war had operated to emancipate the slaves, and, added to pillage incident to war, had consumed the bulk of the personalty on the Arkansas estate. A case for a sale of realty, under the provisions of sections 3105, 3106, could not, therefore, be made out, because it could not be made to appear that the personalty had been exhausted in the payment of debts. The case presented to the court by the bill was one where the application was to the general jurisdiction of the chancery court, rather than to the special or statutory jurisdiction.

The personalty is the primary fund for the payment of debts, but when it has been exhausted, under the provisions of a will leaving debts unprovided for, the lands will become assets and subjected by a decree of a court of equity under its general jurisdiction. In such case it is a question of marshaling. Here the executors were charged with the duty of supporting, maintaining, and educating the family of the testator, and also with the hazardous business of running a large cotton plantation for from eight to eleven years. They were also charged with the duty of paying off the testator's debts. They might and did use the...