Etting v. Marx's Ex'r

• Decision Date: 01 June 1880
• Citation: 4 F. 673
• Parties: ETTING and others v. MARX'S EXECUTOR.
• Court: U.S. Court of Appeals — Fourth Circuit

4 F. 673

ETTING and others v. MARX'S EXECUTOR.

United States Circuit Court, E.D. Virginia.

June, 1880

John A Coke and W. W. Henry, for complainants.

John S Wise, for defendant.

Samuel Marx, of Richmond, Virginia, died in the fall of 1860 leaving a large estate, consisting in part of real estate but chiefly of valuable stocks and bonds. He left a will appointing his brother Dr. Frederick Marx, his nephew Edward Mayo, both of Richmond, and another who never qualified, his executors, and also trustees for the trusts created by his will; and devised to Frederick Marx, and certain of his adult nephews, certain portions of his estate in absolute right, and to his executors the residue thereof; but charged them as trustees, as to these portions, with certain trusts in favor respectively of Judith Meyers, Harriet M. Etting, Caroline Barton, and Adeline Mayo, his married sisters then living; and of certain daughters of his deceased sisters Louisa Myers and Frances Etting. He directed all his real estate and personalty to be sold as soon as possible after his death, and those proportions of the proceeds which were not devised absolutely to be invested in good and secure stocks, with power in the trustees to convert them into other stocks, the securities to be taken in the names of the executors for the beneficiaries named in the will, and to show on their face for whose benefit they were respectively to be held; and provided that these securities should have the character of realty in the event of the death of those entitled.

Frederick Marx was the only one of those named as executors who qualified shortly after the death of Samuel Marx, which he did on the thirteenth December, 1860. He seems to have filed an appraisement of the estate in due time, according to law and to have accounted regularly, before a proper commissioner, as to his transactions for the years ending December 13, 1861; December 13, 1862; December 13, 1863; and for the subsequent period ending September 7, 1864. I believe that it is admitted that he made the sales and investments required by the will in good faith; no fraud being charged or pretended in regard to any of his transactions.

On November 26, 1864, up to which time Frederick Marx had acted as sole executor and trustee, he turned over to Edward Mayo, who had then just qualified as executor and trustee, all the stocks, bonds, funds, and estate in his hands, taking minute and detailed vouchers and receipts from him; and from the time of doing so he does not seem to have had any actual connection with the estate or the trusts of the will, either in the capacity of executor or trustee; and this fact seems to have been well known to complainant and petitioner. The subsequent accounts of Edward Mayo, made up by commissioners of court, show that Frederick Marx had turned over the estate in the manner just stated to Edward Mayo.

The disconnection of Frederick Marx from the estate at the date named seems to be acknowledged by the bill and recognized by the decree in a friendly suit which was instituted in the circuit court of Richmond in March, 1869, entitled Etting et al. v. Marx et al.; the object of which was to substitute as trustee for Mrs. Etting, then under coverture, Francis M. Etting, one of her adult sons, in the place of Edward Mayo. It is not pretended that Frederick Marx acted or was considered as acting in the capacity of executor or trustee, after November 26, 1864, whatever his legal relation to the trust might have been. The bill in the friendly suit just named recites that the powers of Frederick Marx had been revoked after he had 'acted for a time.' The transactions of Frederick Marx in the years 1861, 1862, and 1863, in the securities of the estate, were very large, aggregating probably $75,000. After 1861 they consisted of sales of stocks for confederate money, and in the exchange of one sort of bonds for another, and of stocks in the name of Samuel Marx for those in the name of the executor for the respective beneficiaries of the trusts of the will.

These transactions are not brought in question in the present litigation; but in the year 1864, or chiefly in that year, Frederick Marx bought, with confederate money received for other stocks, a large amount of the bonds of the confederate government. The securities of every name which Frederick Marx held as the result of his transactions under the will were as before stated, all turned over on November 26, 1864, by him to Edward Mayo, and Edward Mayo has duly turned over all of them except the confederate bonds to the persons entitled. The confederate bonds, however, were refused by some of the beneficiaries; and the object of the present litigation is to recover of the representative of Frederick Marx the scaled value of the confederate money he received in 1864, or chiefly in that year, and which he expended in the purchase of the confederate bonds which have been refused by some of the beneficiaries of the will of Samuel Marx. The suit was brought by Harriet M. Etting, who became sui juris on the death of her husband in 1870. It was brought in February, 1877, and those of the other beneficiaries who have been disposed to join in the litigation have come in by petition. The controversy is chiefly in regard to the confederate bonds. A smaller matter, also in controversy, is that presented by the petition of Moses Myers, for whom Frederick Marx made a deposit of $3,004 in the Bank of Virginia at Richmond on May 6, 1863, Myers being then in the federal lines, and not having notice of the deposit at the time, nor at any time before April, 1865, when it became worthless by the insolvency of the bank.

Frederick Marx was married in 1874, and died in the beginning of 1877, shortly before the filing of Mrs. Etting's bill. He left debts to the amount of $5,200, contracted, I believe, within a few years before his death; none of which could be paid if the claims of the complainant and petitioners in this litigation were sustained by the court.

Harriet M. Etting became sui juris, as before stated, in 1870. In March 1869, during her coverture, her son, Frank M. Etting, who was then an adult, was substituted, on her own prayer, for Edward Mayo, as her trustee, by decree of the circuit court of Richmond, as before mentioned. Very soon after the appointment of Frank M. Etting as such trustee all the securities which Edward Mayo held for Mrs. Etting, which had been turned over by Frederick Marx in November, 1864, were turned over to Etting by Mayo, and were all received, except the confederate bonds.

In a letter of June 18, 1869, occupied almost exclusively with statements and inquiries about the stocks and bonds which had been forwarded to him by Mayo, Frank M. Etting wrote to Edward Mayo, on one point, as follows:

'I must here take occasion to say that we have heard, accidentally, that Uncle Frederick had been told (in some unfortunate discussion with a member of the family) that it was our intention to take legal steps against him in consequence of some of his investments. Such statement was utterly without foundation. Mother's remark on hearing of it was that there were but few of the family left, and she would never consent to such a course for 50 times the amount. I join most entirely in the feeling, and I beg you will assure Uncle Frederick of this. However unfortunate the results have been, no one of our family has ever ascribed to him any action inconsistent with his near relationship, or his character as an honorable man; nor has any remark been made in my presence but what might well be repeated in his. I regret it should be necessary for me to give such assurances; but this is not the first time that an effort has been made to create differences in the family-- always bad enough, but tenfold worse if arising from mere pecuniary considerations. Aside from any claim of any kind, and with no intention of action in the matter, I still (to be perfectly frank with you) cannot feel justified in my own eyes in receipting for certificates of confederate stock. I do not want to embarrass your settlement in any way, or delay it, and we will see what can be done as soon as I have more time.'

In a letter of kinship dated July 3, 1869, Frank M. Etting wrote, among other things, to Edward Mayo as follows: 'I transmit herewith a receipt, etc.; also return what I am not entitled to give a receipt for. The money so invested has gone, but I think all can say, let it go. ' He alluded to the confederate bonds.

HUGHES, D.J.

There is little to be considered in this case, except the liability of the estate of Frederick Marx for the scaled value of the confederate money, which, in 1864, or chiefly in that year, he invested in confederate bonds. No one disputes that these bonds were an illegal object of investment.

All investments in them have been irrevocably decided to be void, as having been made 'in aid of the rebellion.'

It is not charged, however, that there was, on the part of the deceased trustee, any fraudulent motive or intention, moral or political, in making the investments. There is no element or charge of fraud, actual or constructive, in the present case; and so the only question is one of liability for a well-intended but illegal act. Nor can it be denied that the estate is liable for these investments, unless it has been absolved by the bar of the statutes of limitations, or by the laches of the complainant and petitioners in this suit, or by their acquiescence so long as to render the enforcement of their demands, at this late day, derogatory to the rights, interests, or equities of others, which have resulted from that protracted acquiescence.

As to the statutes of limitations I do not think they affect this case, either...