Graff v. Castleman

• Decision Date: 28 May 1827
• Parties: Graff and Others v. Castleman and M'Cormick
• Court: Virginia Supreme Court

26 Va. 195

Graff and Others v. Castleman and M'Cormick

Supreme Court of Virginia

May 28, 1827

This was an appeal from the Chancery Court of Winchester. For a complete history of the cause, it is only necessary to refer to the following opinion.

Decree affirmed.

Johnson Stanard and Wickham, for the appellants.

Jones and Leigh, for the appellees.

JUDGE CARR delivered his opinion. JUDGES GREEN, COALTER and CABELL concurred, and the decree was affirmed. ^[*]

OPINION

CARR JUDGE.

These suits arise out of the will of John D. Orr, and proceedings of his executor and trustee under it. In 1816, Dr. Orr died leaving a will, by which he devised and bequeathed to his brother Benjamin G. Orr, his whole estate, real, personal and mixed, upon the following trusts: " In the first place to sell and dispose of the same, or such part of the same, as he may deem most beneficial for the general interest of my estate, and to apply the proceeds of the same, or such yearly income or profits as may be made from the same, to the payment of all my just debts; meaning hereby, to subject all my estate, real, personal and mixed, to the payment of my just debts, and to leave the application of the same to that purpose, and the mode of raising the necessary funds from the estate, to the sound discretion of my said brother. In the second place, after the payment of all my just debts, the surplus of my estate, or the proceeds of the sale thereof, to be given and divided by my said brother to and among my three children, Mary, Ellen and Thomas, in such shares and portions, as in the sound discretion and judgment of my said brother, to him shall seem most agreeable and expedient, according to the situation and conduct of my said children. And it is my will and desire, that such division and distribution as he shall actually make of my estate among my said children as aforesaid, or such division and distribution as he shall by writing under his hand, or by last will and testament, direct and appoint, shall be valid and binding; it being my intention to place my said brother, in respect to my said children, to all intents and purposes, in loco parentis. And it is also my will and intention, that he be fully empowered and authorized, not only for the purpose of paying my debts, but to raise and provide a fund for division and distribution among my said children, and for their immediate maintenance, support and education, according as he shall deem it most expedient either to sell or dispose of the same or any part, in specie, to be applied to the purposes aforesaid." The testator also appointed his said brother guardian of his children, and executor of his will, and exempted him from giving bond and security. The executor qualified. On the 11th of March, 1817, he conveyed to Castleman and M'Cormick, for the consideration of $ 30,000, payable in installments, a tract of land in Frederick county, belonging to the estate of his testator, called Poplimento, and thus described in the deed, " formerly the property of Rawleigh Colston, esquire, and by him sold and conveyed to the late Dr. John D. Orr, by whom it was devised to the said Benjamin G. Orr, as appears by his will recorded in Frederick County Court." On the same day, Castleman and M'Cormick conveyed the same land to Henry St. George Tucker, in trust to secure the purchase money. This deed describes the land thus; " the estate called Poplimento, being the same land conveyed to the said Castleman and M'Cormick by an indenture of even date herewith, and to be recorded in the County Court of Frederick, by reference to which a more complete description of the said land may be obtained."

By deed dated the 10th of December, 1818, Benjamin G. Orr assigns and conveys this deed of trust to Frederick C. Graff, together with the lands and premises therein mentioned, and all the right, title and interest of the said Benjamin G. Orr, of, in, and to the same. This deed of assignment minutely and particularly describes the deed of trust, and concludes thus; " to which reference is hereby made, as a part thereof, as if the same were here fully recited." This deed of assignment was made as a security to Graff for the sum of $ 12,000, to be advanced by him towards completing certain water works, for supplying New-Orleans with water, " according (says the deed) to the terms and conditions of a certain agreement, bearing even date herewith, between the said Benjamin G. Orr, Graff and H. Latrobe." This agreement is in the record, and shews a partnership between Orr, Graff and Latrobe in the adventure of supplying New-Orleans with water; and that Graff, in purchase of one third of the shares for Orr, and two thirds for himself, was to advance the $ 12,000 as they should be wanting for carrying on the work. Before this assignment of the deed of trust to Graff, Castleman and M'Cormick had paid all the installments which had grown due; leaving five still to be paid, the first on the 15th of April, and the others annually, on the same day. The installment of the 15th of April, 1819, they paid to Graff; and this reimbursed him the $ 3,000 he had advanced to Orr for the purchase of his shares in the water works. When the time for paying the installment of 1820 was drawing near, Orr gave notice to Castleman and M'Cormick to pay no more to Graff, as no more was due to him under their agreement. Graff demanded the money; and hereupon, in April, 1820, Castleman and M'Cormick filed a bill of interpleader in the Winchester Chancery Court, stating the facts, and calling on the parties to interplead. Pending this bill, Orr, by deed of November 28th, 1820, assigned to the Bank of Washington, the deed of trust of Castleman and M'Cormick on the Poplimento land, describing the trust deed particularly, and adding, " to which reference is hereby made as part hereof, as if the same were here fully recited." This assignment recites, that it is made as a further security for a debt due from B. G. Orr to the Bank. Being informed of this fact, Castleman and M'Cormick, in April, 1821, filed an amended bill, and made the Bank a party. On the 4th of March, 1822, the children of Dr. Orr gave a written notice to Castleman and M'Cormick, that they claimed the money in their hands, and warning them not to pay to any other person; whereupon, Castleman and M'Cormick, by another amendment, added them to the defendants, in their bill of interpleader. In April, 1822, B. G. Orr died intestate, insolvent, and without having made any appointment among the children, in execution of the power given by his brother's will.

The parties defendant (except Graff,) answered, setting out their claims. Each party defendant also filed a bill making all the rest defendants. All answered, except Graff. It was agreed, that his original bill should be taken as the exhibition of his claim: that the children of J. D. Orr and the Bank should be taken as parties thereto; and that the exhibits in that case be received in the cases of interpleader.

During the progress of the cause, all the installments, as they became due, were paid into Court. In 1823, the children filed their bill against the administratrix of B. G. Orr for an account. She answered that she was willing to account. A reference was had, a report returned, and not being excepted to, was confirmed. It shewed a balance of $ 8,052 45 cents, for which there was a decree when assets. The record of this case is by agreement admitted as an exhibit in behalf of the children; and in 1825, the cases being consolidated, and coming on to be heard by consent, as to all parties, the Court rejected the claims of Graff and the Bank, and decreed that the receiver pay to the children the money and interest in his hands, deducting the costs of Castleman and M'Cormick. But the fund in the hands of the children, was decreed to be subject to the claims of the creditors of J. D. Orr, if any there be yet unsatisfied, and legally and equitably entitled to come upon that fund. The payment to the children was, therefore, suspended, till they should each give to the marshal bond with good security in double the amount decreed to them, conditioned to pay their proportions of any debts, which may be established by due course of law, against the estate of J. D. Orr, and against the fund in their hands. From this decree the appeal is taken by Graff and the Bank.

This cause, so important in its principles, so interesting in its character, has been most elaborately and ably argued by counsel.

The first objection taken to the decree is, that the proper parties are not before the Court. It is insisted that, after the death of B. G. Orr, and administrator de bonis non of Dr Orr, should have been appointed, and made a party to the suit; that the estate of Dr. Orr, for want of this proceeding, is unrepresented; and the case of Hays v. Hays, 5 Munf. 418, is relied on, where this Court dismissed a bill brought by persons suing as children of a deceased residuary legatee, because they were not the legal representatives. This objection seems to me to be founded on a mistake of the nature of the fund. Dr. Orr devised the land to B. G. Orr, and subjected it to the payment of his debts. He also appointed B. G. Orr his executor and trustee. But, this did not make the land legal assets. This Court decided, in Jones v. Hobson483, that the proceeds of land devised to be sold, are not a testamentary subject; that executors hold such proceeds, not as executors, but as trustees; and that the sureties of an executor are not responsible for the proceeds of land sold by him. Here, the trust embraced not only the payment of debts, but the maintenance and education of the children, and the distribution of the surplus among them; a trust highly...