
    
      Executors of Thomas W. Morton, deceased, v. William H. Adams and Wife.
    
    Without some special emergency, to be justified by the Court, the trustee cannot encroach on the capital of the trust estate; but, confining his discretion to the ' appropriation of income, he may be guided by the wants of the cestui que trust. In this view of the ease, the Court was of opinion that the surplus income had been properly applied towards the reimbursement of money advanced by him for necessaries to the trust estate, and ordered the deficiency to be made up from portions of the subsequently accruing income.
    
    A trustee has no antliority topurehase lands for, or to bind, the trust estate; and the Court ordered such lands to be sold, and an estimate made of the relative proportion of the sales, which may have arisen from improvements made thereon by the cestui que trust — the proceeds of the land to be applied first, to discharge the amount due for the purchase with interest — the proceeds of the improvements to be applied first, to the extinguishment of the demand of the trustee on the trust estate; and the surplus to any demand against the cestui que trust, for which he had no claim on the trust estate.
    
      Before Dunkin, Ch. at Edgefield, June, 1846.
    A bill in this case was filed on the 29th April, 1842, by the complainants testator, as trustee of the defendant, Mary G. Adams, for an account' and settlement, and especially to have paid to the complainant' various sums of money, which he had advanced out of his own funds on account of the trust estate. It appears that on the 17th of October, 1830, in contemplation of their marriage, the defendant executed a deed •of marriage settlement, whereby the defendant, Mary G. Adams, (then Evans,) conveyed all her estate, real and personal, to John Key, in trust for her use and benefit.
    The defendant, Mary G. Adams, before her marriage aforesaid,' was the widow of Oadwell Evans, who died intestate, leaving his widow and brothers and sisters entitled to his estate.
    John Key became his administrator. The real estate was very inconsiderable, and was sold by the Ordinary for $170. The personal estate was sold by the administrator. At the sale by the administrator, Mrs. Evans bought property exceeding her interest in the estate by $1914 9S. It appears from the evidence, that after the marriage contract was executed between the defendants, they took possession, of the negroes embraced in the settlement, and for some years employed them on rented lands with the approbation of John Key, the trustee, and that land for their use was rented of Dr. Washington. It appears also that a judgment debt, due by Cad-well Evans to Samuel Tomkins for $456 27, was, whilst the said John Key was trustee, arranged between the executors of Samuel Tomkins, the said John Key and the defendants, by the said John Key giving his note as trustee of Mrs. Adams, for the amount of • that judgment. In the year 1835, John Key was relieved from his trust, leaving the debts to Tom-kins and Washington, for which he had given his notes, unpaid, and the complainant was appointed trustee in his place. After his appointment, the complainant, at the request of the defendants, but of his own private funds, paid the debt due on Key’s note, given for the debt due- to Tomkins, 'to' Mrs. Rochell, to whom the note had been transferred by the executors of Tomkins, and made various other advances of monies from time to time for the trust estate. Most of these advances were made for the benefit, and in many cases for the absolute necessity, of the trust estate ; such, for instance, as for the purchase of-.hogs, pork, wagon and provisions, actually necessary, to the support of the cestui que trust. It may be added in this connection, that the defendant, Wm. H. Adams, was possessed of no means in his own right out of which the family could have derived a support. It appears that on 17th January, 1835, the complainant advanced out of his own money $516, for the purchase of a tract of land of 172 acres, and on 11th April, 1836, advanced out of his own funds the further sum of $500, to Josiah Kilgore, for the purchase of another tract of land of 446 acres, taking the title in his own name. The defendants took possession of these tracts of land, which were adjoining, and still reside upon them, and have made thereon some improvements. It appears that the complainant and defendants from time to time would adjust the accounts between them, the former taking from the latter their joint notes for the amount found due, and on these occasions would deliver them the various small notes and accounts which he had paid on their account; and it appears that on the 1st June, 1837, the complainant and defendants had one of these settlements, at which time the complainant signed a memorandum in writing, (offered in evidence by the defendants,) acknowledging that he held the titles to the aforesaid tracts of land in his own right, and that he held the two notes of defendants for three thousand two hundred and sixty-one dollars forty cents, ($3261 40,) and agreeing that when these two notes should be paid, he would hold said tracts of land as trustee of Mrs. Adams. The last note which seems to have been given by the defendants to the complainant on one of these occasions, and which obviously from the evidence embraced all the previous transactions between them, was given on the 3d July, 1841, for four thousand five hundred and seventy-eight dollars twenty-eight cents, ($4578 28,) and due one day after date, and which is in the hands of the complainant. A portion of the advances of complainant was made after the date of the last mentioned note. It appears that previous to the appointment of the complainant as trustee of Mrs. Adams, the defendants had borrowed from Drusilla Anderson $600 or $650, and given their note for the amount, and that the complainant paid this debt out of his own funds. It was proven by DrusilJa Anderson, that $207 of the sum lent by her to the defendants had been paid on the note of John Key and Mrs. Adams as aforesaid to Dr. Washington, for the rent of land for the trust estate; the balance was appropriated to buy provisions for the family, and to pay a debt due by Evans’ estate to A. Perrin for pork. It appears that in May, 1840, the defendants and complainant presented their joint petition to the Court of Equity, in which it is set forth that the trust estate is largely indebted to the trustee for money advanced, and whereby it is admitted that the debt to the trustee is fair and just, and the parties unite in praying that the amount of said debt might be ascertained by the Commissioner, and that a portion of the trust property might be sold for the payment of that debt. The parties met before the Commissioner, and upon the evidence of John Rochell and Wm. H. Adams, the Commissioner made a report establishing against the trust estate the amounts paid severally to Mrs. Rochell, Jno. Hearst, Jr., Josiah L. Kilgore, and Drusilla Anderson, amounting aggregately to $2930 07. It is, however, stated in the report, that the petitioner Thomas W. Morton, had other demands against the trust estate, which he was not then prepared to prove. No order was taken on this report. It appears that the trustee, about 1st January, 1842, or in December, 1841, hired out a portion of the negroes belonging to the trust estate, and sold some corn belonging to it, leaving the defendants a sufficient number of hands and provisions for a support. From the hire of the negroes and sale of the corn, the trustee is chargeable, on 1st January, 1843, with $686 55. This case, at the last Court, was referred to the Commissioner on the matters of account, reserving the equities of the parties.
    Thomas W. Morton having died in 1845, the executors of his will, Augustus Morton and Lucinda Morton, filed their bill on the 20th March, 1846. The following is the circuit decree.
    Dunkin, Ch. This cause was heard on the pleadings and the report of the Commissioner. The complainants’ testator was the trustee of the defendants under a marriage settlement, and the object of the proceedings is to adjust his transactions with the trust estate, and obtain payment of the balance alleged to be due to him. Prior to the marriage, the property belonged to the wife. During the coverture, she was, by the terms of the settlement, entitled to the sole and separate use. Upon the termination of the coverture, it was to be disposed of as her absolute estate. The only effect was this: by the coverture, her legal existence was, to some purposes, suspended; she was incapacitated from contracting debts. By the settlement, the marital right was excluded. The legal title was in the trustee. It was his duty to support the trust estate, and apply the income to the objects, or in the mode specified by the deed. If this had been a bill by the husband and wife to require an account from the trustee, and it had appeared that, during the years 1835 and 1836, he had hired out the trust estate, it would seem that the joint receipt of the husband and wife, or the separate receipt of the wife, for the income of those years, would afford the most satisfactory evidence that, to that extent, the trustee had discharged his trust. It is difficult to conceive what other evidence could be produced, as between trustee and cestui que 
      trust. In this view, any acknowledgment from the cestui que trust, that he had received what he was entitled to receive, would be admissible. It appears from the records of the court, in a petition filed by the parties themselves, in May, 1840, that up to that period, the income of the trust estate had been barely adequate to the support of the family and the plantation — that it was absorbed in this way, and could afford no aid in extinguishing a debt due to the trustee. The only purpose for which this petition is used, is to .show that the trustee had appropriated the income as directed by the settlement, and for this purpose the court deems it proper evidence. The debt to Mrs. Kochell was, originally, a claim on the estate of Cadwell Evans. It was adjusted by Key, and afterwards paid by Morton, who became, successively, the legal owners of the estate, with the understanding, no doubt, that their legal right did not destroy their equitable lien. The exception to the report on this point is overruled. All the other demands allowed by the commissioner, (not including the notes for the land) seem to the court to be for supplies strictly to the trust estate, such as rent of land to Dr. Washington, wagon for plantation, blacksmith’s work, taxes, &c. These are properly chargeable on income. But, as between trustee and cestui que trust, some discretion on the part of the trustee must be exercised and permitted. If a crop is lost one year, he may be permitted, nay is bound to keep up the plantation, purchase supplies, and may furnish food and raiment to the cestui que use, trusting to the income of the next year for reimbursement. Without some special emergency to be justified by the court, he cannot encroach on the capital, but confining his discretion to the appropriation of income, he may be guided by the wants of the cestui que trust. It is impossible to prescribe the limit accurately, nor is it necessary, perhaps, as the parties who appointed him were willing to confide in his judgment. In this view, the court is of opinion, that the surplus income received by the trustee, in 1842 and 1843, may be properly applied to his reimbursement, and if this be insufficient, a portion of the subsequently accruing income. The defendants’ exceptions, in these particulars, are also overruled. The point seemed scarcely to be questioned that the land purchased by the trustee, in his own name, and paid for by his own means, or on his individual credit, should stand as a security for the purchase money and interest. But the trustee had no authority either to make the purchase, or to bind the trust estate. It was not necessary, and experience has proved it to he inexpedient. The slaves of the estate are now hired out, as a more profitable mode of employment. The lands were purchased at the request and by the desire of William H. Adams and his wife. But the conveyance was not made to the trustee. It seems to have been the understanding of all the parties, that the entire property was liable to the trustee, for his advances. In this view, they all united in a petition to this court, in May, 1840, setting forth the debt due to the estate, and praying that a portion of the trust estate might be sold to satisfy it. The cestui que trust and trustee may have both acted under a misapprehension. If the land should sell for less than the amount due for the purchase with interest, the trustee will have no claim for the balance on the corpus of the trust estate. On the other hand, if the sales exceed the purchase, with interest, it is in accordance with the understanding of the parties that any sums due to him, by Adams and wife, or either of them, should be a charge on the surplus. To this extent, the Court is of opinion that the complainants’ exception should be sustained.
    It is ordered and decreed, that the real estate described in the pleadings, be sold by the Commissioner, on the first Monday of January next, for one-half cash, the balance on a credit of twelve months, secured by bond, bearing interest from the date, and a mortgage of the premises; that the proceeds be applied, in the first instance, to 'discharge the amount due for the purchase, with interest, and the surplus, if any, towards the satisfaction of any demands of the complainants’ testator, on William H. Adams and wife, or either of them, for which he had no claim on the trust estate.
    It is further ordered, that the Commissioner take an account of the annual income of the trust estate, and report a mode of payment of the amount reported to be due to the complainants’ testator, according to the principles of this decree, they having consented to suspend any right to subject the capital of the estate to the reimbursement of the amount paid on the Rochell debt. Parties to be at liberty to apply for any further order which may be hereafter necessary for carrying this decree into effect.
    The defendants moved the Court of Appeals to reverse or modify the Chancellor’s decree in this case, on the grounds:
    1. That as the demands of plaintiffs’ testator were not established by regular vouchers, nor verified by the oath of the trustee, nor proved, except by the admissions of William H. Adams; and as they were contracted in violation of the duty of the trustee, not to exceed the income of the estate in his expenditures, and as many of them are barred by the statute of limitations, and others arose from his voluntary payments of the private debts of defendants, the plaintiff's are not entitled to any relief in this court.
    
      2. That as the plaintiffs’ testator had taken the note of defendants in satisfaction of his demands, and had delivered up to them the evidences of his advances, the plaintiffs were not entitled to relief in this court, until their legal remedies were exhausted.
    3. That the plaintiffs, at most, were entitled to satisfaction of any portion of their demands, only out of the income of the trust estate, after reservation of so much as was necessary for the comfortable support of the defendants; and that the advance for the purchase of the lands should not have been excepted from this rule.
    4. That the proceeds of the sale of the land should not have been directed to be applied to the satisfaction of any claims, except the purchase money of the lands; at least, before defendants were reimbursed for their improvements.
    Wardlaw, for the motion.
    Griffin, contra.
   Dunkin, Ch.

-delivered the opinion of the court.

The fourth ground of appeal insists that the defendants are entitled to reimbursement for the improvements made on the land, the legal title of which is in the trustee. It is suggested that these improvements were made chiefly by the labor of the negroes of the trust estate, and were part of the annual profits arising from their labor and that of the defendant, W. H. Adams. In this view, it may be necessary to enlarge the order of reference, and direct that the commissioner should ascertain, as far as practicable, the relative proportion of the sales which may have arisen from the improvements, and that this be applied, in the first instance, to the extinguishment of the demand of the trustee, on the trust estate, and the surplus to any demand against the defendants, or either of them, as directed by the decree.

The decree of the Circuit court is modified accordingly. In other respects, it is affirmed.

Harper, Ch. and Johnston, Ch. concurred.

Decree modified.  