Burroughs v. Bunnell

Yellott, J., delivered the .opinion of the Court. There are three appeals in this record, and in order to understand the questions involved in controversy, it becomes necessary to refer to the statement of facts prefixed to the opinion of the Court in the ’case of — 24 — Burroughs vs. Gaither, reported in 66 Md., 171. By the provisions of the will of Richard D. Burroughs, who died in 1870, the property of the testator was left-in trust to his son, John W. Burroughs, for the benefit of the children of said John. The testator devised all the rents, issues and profits of his estate, to be disposed of as the trustee might think proper, for the maintenance, education and advancement of said children, and when the youngest child arrived at the age of twenty-one years the corpus of the estate is to be equally divided among them share and share alike. On the death of the-testator the trustee took possession of the estate, but some years afterwards an application was made for his removal. The “Court declined to remove him, but, on the 19th of January, 1880, passed an order appointing C. C. Magruder and R. B. B. Chew receivers, and authorized and empowered them to manage the estate under the direction of the-Court, to sell and dispose of the crops raised or to be raised, to receive the income, rents and profits, and to hold and apply the same under the direction and orders of the Court, and to account annually or oftener if required. The receivers gave bond and entered upon the discharge of their duties. In November, 1884, John W. Burroughs, the trustee died, and in August, 1885, Mary E. Burroughs, his widow, and the mother of the cestuis que trust, was appointed by the Court in his place. Prior to this appointment, in March, 1884, the death of C. C. Magruder, one of the receivers, had occurred. By an order of Court filed on the 22nd of December, 1885, the surviving receiver was directed to suspend further proceedings, and to bring into Court all moneys under his control belonging to the trust estate, to be deposited subject to the future order of the Court, and he was discharged from any future manage — 25 — ment or liability for such of the trust estate as had already passed in to the possession of Mary E. Burroughs,' the trustee. Upon the removal of the surviving receiver an audit was required. The present controversy relates to some portions of accounts A, B, C, and D, and statements No. 1 and No. 2 filed by the auditor. Account A, is a statement of the receipts and disbursements of the two receivers. Account B states the receipts and disbursements of the surviving receiver. Account C is a statement of certain sales and disbursements made by Magruder and Chew, receivers, and sanctioned by; order of the Court. Account D is a statement showing the creation of a mortgage debt upon the trust estate by the receivers, apd sanctioned and approved by the orders of the Court. Statement No. 1, is a list of claims against the trust estate created by John W. Burroughs before and during the receivership, and of other claims created by the two receivers and by the surviving receiver, together with certain costs and expenses. Statement No. 2, exhibits the amount of commissions due C. C. Magruder and E. B. B. Chew, receivers. The Court helow ratified and confirmed these accounts and statements of the auditor, with the exception of that portion of statement No. 1, which is marked “Debts” created by John W. Burroughs, trustee, both before and after the receivership. The rejection of this portion of statement No. 1 excluded the claims of Detrick and Bunnell, two of the creditors, and each has entered an appeal from this part of the order of the Court. The debt due to Detrick was contracted by the trustee, John W. Burroughs, long before the appointment of the receivers, and the record shows that its correctness was admitted by the trustee. There is no proof in the record that any — 26 — part of this claim is unfounded, and it ought to he allowed, with interest from the time when the transactions between the trustee and the creditor terminated. There was error in that part of the Court’s order which operated as an exclusion of this claim. The claim of Bunnell is for necessaries furnished the trustee, John W. Burroughs. His family, the cestuis que trust, could not have subsisted without the supplies thus furnished. The trust, created by the will of his father, made it his duty to maintain his children from the income of the estate. The claim is for payment out of the income of the estate. Part •of the debt was contracted by the trustee and part by the receivers, hut the whole of it was contracted in order to carry out the purposes of the trust. On page 17 of the record is an admission of its correctness by the opposite party. The Court therefore in administering the trust ought not to have rejected a valid claim, when the debt was contracted for the very purpose of accomplishing the object for which the trust was Greated. As has been already said there was error in this portion of the Court’s order. Bunnell’s claim should he allowed, with interest from the time when the account was closed. On behalf of Mary E. Burroughs and others, a number of exceptions were filed to the auditor’s report on the receivers’ account. The first exception relates to an allowance to the. receivers for payments to the trustee, John W. Burroughs, upon his personal receipts, or upon drafts drawn to his order. The signatures to these receipts and drafts, the exceptants admit to he genuine, hut contend that it was the duty of the auditor to require proof that said payments were applied to the purposes of the trust. There seems to he hut little force in this objection. It being admitted that the signatures were genuine, and the auditor having the merchants’ ac — 27 — coirnts for necessaries before him, no other evidence was required in the absence of proof on the part of the exceptants, that the trustee did not apply the necessaries thus obtained to the maintenance of his family, but disposed of them for his own private benefit. The evidence before the auditor offered prima facie proof of sufficient strength to shift the onusprobandi to the other side. The second exception relates to the allowance of $200.26 to the attorney of J. EL Traband, it being alleged by the exceptants that there is no evidence that said amount was a debt of. the estate. The exception rests on no solid foundation. The answer under oath of John W. Burroughs to the cross-bill filed in the cause, shows that this was a claim for money borrowed, to enable the trustee to carry out the purposes of the trust. The answer must be taken as true in the absence of proof to the contrary, and no proof was adduced. Eversole vs. Maull, 50 Md., 95; Crowe vs. Wilson, 65 Md., 479. The exceptants certainly could not expect this Court to consume time in considering their third exception, relating to an allowance of interest on what they deem it proper to designate as a pretended mortgage. This Court decided in Burroughs vs. Gaither, 66 Md., 171, that this was a valid mortgage, and under the Constitution of Maryland, the decision of the Court of Appeals is final and conclusive. The fourth exception cannot be sustained. The Court having assumed control of the trust, certainly had power to order a sale of personal property which was old and perishable, and to direct what disposition should be made of the proceeds. It was the duty of the receivers to obey the orders of the Court. All the questions intended to be raised by the fifth and sixth exceptions, in relation to what is called a — 28 — pretended mortgage, have been disposed of by the decision in 66 Md., 171, already referred to. The seventh exception relates to the allowance of fees and commissions to the receivers, which is objected to on the ground that they have violated their trust, and are entitled to no compensation for their services. As there is no proof in the record of any misconduct on the part of the receivers, this exception can have no force nor effect. The eighth exception, and also part of the seventh, calls in question the allowance of fees to R. B. B. Chew; the objection being that he was functus officio after the death of his co-receiver. It is manifest that, as C. C. Magruder, the co-receiver, and John W. Burroughs, the trustee, both died in 1884, had not Judge Chew continued in control of the estate, the very purposes' of the trust would have been defeated, as MaryE. Burroughs was not appointed trustee until August, 1885. There was a mortgage on the property and interest notes were about to fall due, and on default of payment the estate would have, been sold and the trust broken up. The Court subsequently ratified the acts of the surviving receiver, and omnis ratihabitio mandato cequiparatur. The ninth exception relates to the allowance of “a list of claims” without specifying what claims are meant. This exception cannot therefore be considered. As was said by the Chancellor in Norwood vs. Norwood, 2 Bland, 461, with reference to an exception presented for his determination, “it is indefinite and uncertain. It specifies nothing.” And the Chancellor refused to consider it. What has been said disposes of all the questions presented by thqse appeals. Such as have not been directly considered were already decided in the case of Burroughs vs. Gaither, to which we have already referred. No errors are found in the order appealed — 29 — from except that portion of said order which disallows the claims of Detrick and Bunnell. (Decided 9th January, 1889.) Order affirmed in part and reversed in part, and cause remanded, that is to say in No. 9 order affirmed, and in Nos. 10 and 11 the order is reversed.