George Peter, Executor of David Peter Deceased, the Bank of Columbia and the Bank of the United States, Appellants v. James Beverly and Wife, and William Ramsay and Wife, and Others Heirs of David Peter Deceased

• Decision Date: 01 January 1836
• Citation: 35 U.S. 532,9 L.Ed. 522,10 Pet. 532
• Parties: GEORGE PETER, EXECUTOR OF DAVID PETER DECEASED, THE BANK OF COLUMBIA AND THE BANK OF THE UNITED STATES, APPELLANTS v. JAMES B. BEVERLY AND WIFE, AND WILLIAM RAMSAY AND WIFE, AND OTHERS; HEIRS OF DAVID PETER DECEASED
• Court: U.S. Supreme Court

35 U.S. 532

10 Pet. 532

9 L.Ed. 522

GEORGE PETER, EXECUTOR OF DAVID PETER DECEASED, THE

BANK OF COLUMBIA AND THE BANK OF THE UNITED

STATES, APPELLANTS

v. JAMES B. BEVERLY AND WIFE, AND WILLIAM RAMSAY AND WIFE,

AND OTHERS; HEIRS OF DAVID PETER DECEASED.

January Term, 1836

[Syllabus from pages 532-534 intentionally omitted] APPEAL from the circuit court of the United States for the District of Columbia, in the county of Washington.

The appellees filed their bill in the court below, to enjoin a sale of certain real estate, being lots in Washington, which had belonged to David Peter deceased; which sale was about to be made by George Peter, his surviving executor, for the payment of debts due from his estate to the other appellants.

The following is a copy of his will:

In the name of God, Amen. I, David Peter, of Georgetown and District of Columbia, do hereby make and establish this my last will and testament, revoking all heretofore made by me.

1. It is my intention that the proceeds of all my estate shall be vested in my dear wife Sarah Peter, for the maintenance and education of my children.

2. I wish all my debts to be as speedily paid as possible, for which purpose I desire that the tract of land on which Dulin lives, together with all personal property thereon, may be sold and applied to that purpose: and in aid of that, as soon as sales can be effected, so much of my city property as may be necessary to effect that object.

3. I desire that the corner lot on Bridge and Congress streets shall be given to my son William, and the corner lot on Water and High streets to my son Hamilton, and the storehouse and lot adjoining the last named corner, devised to my son Hamilton, to my youngest son James.

4. I desire that no appraisement or valuation shall be had of any part of the property attached to my dwellinghouse.

5. I desire that my sons shall receive as good educations as the country will afford, and my daughters the best the place can furnish; and I desire that in the general distribution of the residue of my estate on the division between my sons and daughters, my sons may receive in the proportion of five as to three.

I constitute and appoint my dear wife Sarah Peter, captain George Peter, Leonard H. Johns, my executrix and executors of this my last will and testament.

In witness whereof, I have hereunto set my hand and seal this 30th day of November 1812.

DAVID PETER, [L. S.].

The will was executed in the presence of three witnesses.

They charged in their bill that George Peter was about to sell certain real estate of the testator, whose heirs and devisees they are, for the payment of debts alleged to be due to the Bank of Columbia and to the Bank of the United States; the said debts having been assigned to him: that a very large real and personal estate came to the hands of the executors of said David Peter; and that if they had used due and reasonable diligence in respect to the trust confided in them by the said will, and had properly applied the assets arising from the sales of the real and personal estate of said David, in a lawful course of administration, all the debts of the said David would have been fully paid, without any further application to the real estate to raise money for that purpose.

They charged them with having received moneys which they have not accounted for; that they sold the land in Maryland, mentioned in the will, and received about one-half the purchase money, and that the whole ought to have been received, if the executors had used due diligence. They state that the executors have settled accounts in the orphan's court which they had exhibited, whereby it appeared that they have overpaid the personal estate more than 12,000 dollars; and they contended, that if 'by the neglect of the executors they have not received and applied the whole of the purchase money of the land sold, to indemnify and reimburse them for the advances made towards the payment of the debts, they, the complainants ought not to be affected by such negligence.' They deny 'that there is any debt due to the banks, or any other debt whatsoever, for the payment of which it is necessary, proper, or lawful for the said George Peter to make sale of the said city lots.' They prayed for injunction and general relief.

The answer of George Peter stated that he was the brother of the testator, and that of the other executors appointed by his will, one was his widow, and the other, Leonard H. Johns, her brother; that at the death of the testator in 1812, he resided in Georgetown, and in 1816 removed to the country, in Maryland, where he has ever since resided; that although he consented to qualify as executor, he did not deem it necessary that he should interfere in the management or settlement of the estate with the widow and her brother; and that except in attending to a farm and the stock thereon, and a few inconsiderable tenements in Montgomery county, Maryland, which were near his own property, he did not so interfere: that believing Mr Johns to be fully competent, and that he would attend to the business in the way best calculated to promote the interest of his sister and her children, he left it to them to settle the estate, and collect and dispose of the proceeds thereof, and provide for the support and education of the family as they might think best.

That all this was well known to the complainant Beverly; who married the oldest daughter of the testator in 1819, and who and his wife lived with her mother, till within a year or two of her death; and he exhibited a letter of said Beverly to prove this.

He stated that he had nothing to do with the settlement of accounts in the orphan's court; 'further than that it was explained to him to be necessary in order to comply with the rules of the banks, and thus to continue the debts, and save the property from sacrifice by a sale, to put in by way of renewal the notes of the executors for those of the testator, and that the accounts should be settled in the orphan's court, so as to show those debts in the banks, thus paid by the executors; they having substituted their own notes; and that this arrangement should continue as long as the banks would be willing to indulge the estate, or until the executors should be able to make sales for the payment of said debts: and he avers that this arrangement was explained and understood, and assented to by the said executors and the said banks, and he presumes was explained to the orphan's court.'

That this arrangement was well understood by Beverly, the widow and all the children, who were old enough to understand any thing of their affairs: was often talked of by the complainants, Beverly and Ramsay, who always spoke of the estate as liable to the banks; and he exhibits numerous letters from Beverly, showing his knowledge of and acquiescence in it; and shows that said Beverly was, for a considerable time, acting as agent for the estate, under the authority of the executors, and paying discounts on these substituted notes to the banks out of the rents of the estate, and sometimes from partial sales of lots, and at other times attempting to make sales for the purpose of paying interest to the said banks. He admits the sale of the land, called Dulin's in the will, to George Magruder; that he paid part of the money, was sued and became insolvent; and that an ejectment was brought to recover the land, that it might be re-sold; that the ejectment was removed to the court of appeals of Maryland, where he believes it is still pending; that if there was any neglect or delay in recovering this land, it was the neglect of the complainant Beverly, who undertook to attend to it, being then agent for the estate, who also employed counsel to file a bill in chancery in Maryland, for a re-sale of the land.

The defendant, under these circumstances, considering this business in the hands and under the care of complainant, did not suppose it necessary for him to interfere in it. He admits that he received some small sums of money from the farm in Maryland, which he always sent to Mrs Peter or Mr Johns; and which, with the other money they received, he believes were faithfully applied in paying the debts, and supporting and educating the children. He knows that great expenses were incurred in this way; that the family continued to be supported in the way they had been accustomed to live; and that the income of the estate, which had greatly diminished, must have been insufficient for these purposes; that rents had greatly fallen, and most of the city property was unproductive, and the taxes were considerable. Under these circumstances, the executors exercised their discretion, honestly and fairly, in withholding the city property from forced sales at very low prices; and became responsible to the banks, who consented to the arrangement made to save the estate from sacrifice. He avers that considerable advances were made by the executors, particularly by himself and Johns, for the payment of debts, and the necessary support and education of the family.

He exhibits statements with his answer, showing what, upon the lowest estimates, must have been the annual expenses for maintaining the family and educating the children; and what was the annual income of the estate, showing its great inadequacy to meet those objects.

He contends, that under the arrangement with the banks, with the perfect understanding of the complainant, the estate remained liable to the banks: but that if this were not so, yet if the executors had made themselves liable, they would have an undoubted right to resort to the estate for their indemnity or re-imbursement; and might use and apply this right for the benefit of the banks, to whom the said debts are still due.

The answer of the banks refers to the answer of the surviving executor, for the facts stated as to the arrangement between the executors and the bank; which they aver was entered into to...