US SUPREME COURT DECISIONS

In the distribution of the estate of a deceased person, an assignment to one of the distributees of a mortgage which is for a greater sum than his distributive share does not make him responsible to the executors for the difference between his share and the nominal amount of the mortgage, in case the mortgaged premises sell for less than the amount of his share, where the distributee has, with proper diligence and in good faith, subjected the mortgaged property to sale, and has not bound himself absolutely for the nominal sum secured by the mortgage. chanrobles.com-red

Page 42 U. S. 15

The facts in the case were these.

General Washington, by his will, executed in 1799, devised all the rest and residue of his estate, real and personal, not before disposed of by said will to be sold by his executors at such time, in such manner, and on such credits (if an equal, valid, and satisfactory distribution of the specific property could not be made without) as in their judgment should be most conducive to the interest of the parties concerned, and the moneys arising therefrom to be divided into twenty-three equal parts.

On 19 July, 1802, the executors assembled the legatees with a view to consult them upon certain questions arising under the will, and it was agreed that a certain portion of the personal estate should be sold, another portion divided, a certain portion of the lands divided, and the residue sold by the executors.

On 6 June, 1803, a meeting of the devisees was held at which it was agreed that certain lands, lying on the eastern waters, should be sold, and if purchased by the devisees, such purchaser should pay at three equal annual installments with six percent interest from the day of sale, but to be credited with his proportion of the sales which had there been made, and which were to be divided among the said devisees.

On 7 June, 1803, Burdett Ashton, who was entitled, in his own right, and that of his sister, to two-thirds of a distributive share, purchased from the executors property belonging to the estate, for the sum of $9,410.20, payable one-third on demand, one-third on 7 June, 1805, and one-third on 7 June, 1806.

On 12 March, 1805, Ashton mortgaged to the executors three tracts of land in Jefferson County, Virginia, amounting in the whole to one thousand and seventy-six acres, to secure the payment of the purchase which he had made, as above stated.

On 11 March, 1806, the executors assigned the mortgage to Thomas Hammond, who was entitled to a full distributive share in right of his wife, and attached to the assignment the following memorandum.

"The executors are not to be made personally liable in any respect or on any pretense

Page 42 U. S. 16

wherein, for, or by reason of the above assignment, and further, the within named Burdett Ashton, Jr., his heirs, executors and administrators, is to have credit for his proportion of $5,179.05, being the share of each legatee of said George Washington of certain sales of real and personal estate made by the said executors, as well as for the proportion of the sister of the said Burdett, as her attorney in fact."

As it was thought that the distributive shares of the said Ashton and Hammond, when added together, would not quite exhaust the debt due from Ashton to the executors, the latter took from Hammond, on the same day on which they made the assignment, a deed by way of mortgage in which it was stipulated that Hammond should indemnify the executors and also should pay to the executors whatever surplus might remain after deducting Hammond's and Ashton's distributive shares from the amount of Ashton's debt to the executors.

On 2 April, 1806, Hammond, being indebted to Smith, Calhoun & Co., of the City of Baltimore, in the sum of $5,604,64, assigned to them all his right to so much of the mortgaged premises as would be sufficient to satisfy the sum aforesaid. As speedily as possible, Smith, Calhoun & Co. obtained a decree in the High Court of Chancery in Virginia to foreclose Ashton's mortgage, who, at the time of such foreclosure, was insolvent, and died so. The result of such sale is thus stated in the opinion of the circuit court, delivered in a subsequent stage of the cause.

The property mortgaged by Ashton, sold under decree for (net proceeds) $3,908.46.

The debt of Ashton was . . . . . . . . . . . . . . $9,410.20

He had a right to retain . . . . . . . . . . . . . 3,452.70

---------

The real amount of Ashton's debt was . . . . . . . $5,957.50

Hammond's claim was. . . . . . . . . . . . . . . . 5,179.05

---------

Amount rec'd by Hammond's mort. to executors . . . $ 778.45

At some period between 1819 and 1823, the executors addressed a circular letter to each of the legatees, who had by this time become very numerous, expressing a desire to close their executorial duties and stating that a difficulty existed in the mode of calculating interest. They say

"there are but two

Page 42 U. S. 17

modes by which our objects can be attained -- a reference of the accounts to arbitration, or a suit; the former we should prefer as most consonant with the injunction of our testator, if it were not attended by insuperable difficulties, on account of the dispersed situation of the legatees, who consequently could scarcely be expected to agree upon the arbitrators; we therefore propose that the legatees should concur in instituting an amicable suit in chancery against us, to which we will immediately file an answer, and obtain an order of reference to the master, to adjust and report the precise sum to which each legatee is entitled; which being done, we can proceed with safety to pay such sums as fast as the money comes to our hands."

In 1823, the legatees, in conformity with the above suggestion, filed a bill in the Circuit Court for the District of Columbia, which the executors immediately answered, admitting the existence of a balance to be distributed, and submitting to any decree which the court might think proper to pass. A special auditor was appointed to state the accounts of the parties.

In 1825, the executors filed a cross-bill, alleging that all the parties were not in court, and praying that they might all be brought in. The proper proceedings were accordingly had as to the absentees, and in 1826 the circuit court passed a decree directing the sums to be paid to the several legatees, with the exception of the administratrix of Thomas Hammond and of Burdett Ashton. The auditor stated the account of Hammond upon two different principles; in one, giving him credit for $5,178.68, a distributive share, and charging him with $4,006.24, the gross amount of the proceeds of the mortgage sale; and bringing the executors in debt to Hammond upwards of $4,000; in the other, giving him credit for the same sum, but charging him with the balance of the debt due by Ashton, bringing him in debt to the executors upwards of $2,000. The circuit court adopted the latter, and decreed that the administratrix of Hammond should pay to the executors the sum of $2,158.56, with interest on $1,127.27, the principal sum due, from 1 June, 1824.

From which decree, the administratrix appealed to this Court. chanrobles.com-red

Page 42 U. S. 18