Welsh v. Brown

Decision Date18 March 1893
PartiesWELSH et al. v. BROWN.
CourtNew Jersey Supreme Court

(Syllabus by the Court.)

Appeal from orphans' court, Morris county; Childs, Wilson, and Hardin, Judges.

To the account of Jacob W. Welsh and Matthias T. Welsh, administrators of John C. Welsh, deceased, late trustee for Alletta W. Brown, said Alletta W. Brown filed exceptions. From the decree entered on hearing of the exceptions, accountants appeal. Reversed.

Alfred Mills, for appellants.

George W. Forsyth, for respondent.

McGILL, Ordinary. Catharine Welsh died on the 22d of April, 1874, leaving a will by which she bequeathed to her niece, Alletta W. Brown, the interest of $2,500, to be paid to her, by the executor of the will, annually, during her life, subject to just deductions therefrom for taxes. John W. Welsh was appointed executor of the will. He died on the 9th of November, 1890, without having rendered a formal account as trustee of Alletta W. Brown. On the 1st of December, 1890, letters of administration upon his estate were granted to the appellants, and in August, 1891, they prepared a final account of his trusteeship, which was duly filed with the surrogate of Morris county. By that account they charged the trustee with the principal of the trust fund, $2,500, together with interest upon it from April 22, 1875, to July 22. 1878, at the rate of 7 per cent. per annum; from July 22, 1878, to April 22, 1882, at the rate of 6 per cent. per annum; from April 22, 1882, to April 22, 1884, at the rate of 7 per cent. per annum; for the year between April 22, 1884, and April 22, 1885, the sum of $157.50; from April 22, 1885, to April 22, 1886, the sum of $140,— stating that $1,000 of the $2,500 principal had been invested for only 10 months of that year; and after April 22, 1886, to the time of accounting, at the rate of 5 per cent. per annum. They at the same time asked allowance for the trustee for the payment or amounts equal to the interest thus charged, to Alletta W. Brown, partly in cash and partly by credits for yearly taxes upon the trust fund, varying in amount; and also for commissions to the trustee at the highest rate permitted by the law. With this account they filed 15 receipts signed by Alletta W. Brown, covering all the payments to her for which allowance was asked. The first of these receipts bears date on the 28th of April, 1876, and acknowledges the receipt of $175 from the trustee "for one year's interest or annuity due me from him under the will of Catharine M. C. Welsh, due on the twenty-second day of April, 1876." In it Alletta W. Brown protests that the payment is not to prejudice her in a proposed suit against the trustee for interest for the first year after the testatrix's death. Such suit was in fact afterwards brought, and decided adversely to her. Welsh v. Brown, 43 N. J. Law, 37. At the foot of this receipt is a short account as follows:

J. C. Welsh check

$153 75

Tax bill

21 25

$175 00

The second receipt is dated in May, 1877, and is for $175, "being one year's interest on $2,500 from April 22, 1876, to April 22, 1877," under which, over the signature of Alletta W. Brown, is this short account:

Check to ray order

$153 35

Tax for 1880

21 65

$175 00

Each succeeding receipt is either for "one year's interest on $2,500," or, "in full of all interest on $2,500," or, "in full of interest due me," except the receipt given in 1885, which is for $157.50, "being the interest received on $2,500 for one year;" and each receipt has appended to it, over the signature of Alletta W. Brown, a short account, similar to those above set forth, stating the amount of cash received and the amount of the tax, the cash and tax being, together, equal to the whole amount receipted for. The only variations in the statement of those accounts are found in the receipts of May, 1879, and May, 1886, the former of which is as follows:

Statement.

Interest on $2,500 from Apl. 1st to July 1st, at 7 per cent.

$ 43 75

Interest from July 1st to Apl. 1st, at 6 per cent

112 50

$150 25

Less tax

21 25

$135 00

—And the latter as follows:

$150 00

Tax on $1,500

$29.25

Loss of in terest on $1,000

10.00

39 25

$110 75

To the appellants' account exceptions were filed, and thereupon the appellants asked leave and were permitted to strike from the allowance asked the taxes charged after the year 1886, when the rate of interest was reduced to 5 per cent., amounting in the aggregate to $143.56. The exceptions were then heard, and after the hearing the orphans' court decreed in effect that the accountants should be charged with the sum of $10, which was specified in the account and in the receipt of Alletta W. Brown for 1886, as the loss of interest upon $1,000 of the trust fund during the year ending April 22, 1886, and also that they should be refused allowance for taxes paid, and be charged with interest upon each sum deducted for taxes paid from the time when the interest from which they were respectively taken was payable, and allowed the trustee for commissions 5 per cent. on the interest paid after the 22d of April, 1886, but nothing upon the interest before that date, together with 2 per cent. upon the principal of the trust fund. From this decree the administrators of Welsh have appealed, claiming it to be erroneous in each of the particulars stated.

It does not appear upon what reasoning the decree is based, but I assume that the $10 was charged, and commissions upon income from the beginning of the trust until 1886 were refused, because the orphans' court believed that the trust fund had not been invested by the trustee until 1886, but had been mingled with his private funds and used by him for his own purposes, and hence, under familiar principles, in the absence of its appearing that greater profit than legal interest was earned by the fund, that he should pay simple interest. Such reasoning, if the facts upon which it rests can be regarded as established, justifies the additional charge of $10, and the fact of the trustee's willful noninvestment of the fund, being a breach of trust, would ordinarily be sufficient cause to justify the disallowance of commissions. The allowance asked on account of the payment of taxes appears to have been denied, because the court deemed it not to have been established that taxes had, in fact, been paid upon the trust fund. The difficulty in the case appears to be in the proofs. The exceptant, assuming, and, in view of the vouchers filed, I think rightly, the proof of her exceptions in the orphans' court, both as to charge and discharge, produced a witness who testified that he had examined the record of mortgages and assignments of mortgages for Morris county, in which county the trustee resided, and had failed to find that during the term of the trust he had taken any mortgage in his name as trustee for Alletta W. Brown, and she also produced the books of tax collectors to show that in Washington township, in Morris county, where the trustee resided, no assessments for taxes had been made against him, as trustee for Alletta W. Brown, except in the year 1879, when he claimed deduction from his taxes because of $2,500 indebtedness to himself as trustee for Alletta W. Brown. In the lastmentioned year the collector's book showed that the deduction claimed was allowed, and that $2,500 was assessed to Mr. Welsh as trustee, upon which the tax was $21.55, instead of $22.84, as stated in the receipt given by Alletta W. Brown. Upon making this proof the exceptant rested. The accountants, to sustain their account, proved that 5 per cent., after 1886, was the prevailing rate of interest to be had upon mortgages of the character required for trust investments, and also produced tax receipts from the collector of taxes at Hackettstown, in Warren county, for the years 1882 and 1884. The tax receipt for 1882 recited that the tax was upon a "mortgage on Tim storehouse, in trust," and the tax bill of 1884 recited that it was to "John C. Welsh, N. R. A.W.Brown." They also presented again the receipts of Alletta W. Brown already referred to, which were each admitted to have been signed by her. Where an exceptant seeks to charge an account, the burden of proof is upon him, but it is not his duty to disprove the allowances claimed by an executor, to which he excepts. The burden of proving such allowances to be just and proper is upon the accountant. The rule with respect to the burden of proof stands upon the fundamental principle that he who affirms must sustain. The burden was upon the accountants in the present case to prove the payments of taxes for which they claimed allowance. This burden they assumed by the production of the receipts signed by Alletta W. Brown as vouchers. Hoffman's Masters Office. Those receipts each contain a short account stated, between trustee and cestui que trust, and make prima facie proof for the accountants, because they are in substance admissions by the exceptant, not only of the account of interest paid to her, but also that credit for taxes, to the amounts they specified, was due to the trustee. They, however, were not conclusive upon her. It was admissible for her to show that they were the product of mistake or fraud, and that the fact was otherwise than as admitted. Whart. Ev. § 1130. There was no proof that tax bills were surrendered for the receipts, or that the trustee otherwise so acted upon the faith of the receipts that a contradiction of them now would be inequitable to him.

I conceive that the important question in this appeal at this point is whether the exceptant's proofs are sufficient to overcome the evidential weight of the admissions of the receipts. The assessor's duplicates for Washington township showed that for eight years, at least, the trustee had not been assessed, at the place of his...

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4 cases
  • Dalliba v. Winschell
    • United States
    • United States State Supreme Court of Idaho
    • 16 August 1905
    ...... taken adversely to him." (Gaston's Trust, 35 N.J. Eq. 60.) If a trustee loses his accounts, he must bear any. resulting damage. (Welch v. Brown (1893), 50 N.J. Eq. 387, 26 A. 568; Dufford v. Smith, 46 N.J. Eq. 216, 18 A. 1052; Smith on Receivers, 587; In re Sheets. Lumber Co., 52 La. Ann. ... allowed no compensation whatever for his time or services. rendered in connection with this estate. (See Smith on. Receiverships, p. 587; Welsh v. Brown, 50 N.J. Eq. 387, 26 A. 568; 2 Perry on Trusts, sec. 821; In re Gaston. Trust, 35 N.J. Eq. 60.) We are further satisfied that. the ......
  • Quirk v. Quirk
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • 10 July 1907
    ...... obscurities appear will be construed against him.' 28 Am. & Eng.Ency.p. 1095; McCullough v. Tomkins, 62. N.J.Eq. 262, 49 A. 474; Welsh v. Brown, 50 N.J.Eq. 387, 26 A. 568; White v. Rankin, 18 App.Div. (N.Y.). 293, 46 N.Y.Supp. 228, affirmed 162 N.Y. 622, 57 N.E. 1128. Section ......
  • Howell v. Taylor
    • United States
    • United States State Supreme Court (New Jersey)
    • 21 March 1893
  • Bingham v. Keylor
    • United States
    • United States State Supreme Court of Washington
    • 7 May 1901
    ...had, his neglect may be punished by resolving doubts against him, and also by withholding compensation from him. Welsh v. Brown, 50 N. J. Eq. 387, 26 A. 568. have no doubt that the firm was also entitled to interest on moneys found to have been fraudulently abstracted and withheld from it b......

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