1877 March Utterb'k's V. Cooper. ascertain from Utterback, before he would consent to Term. sell him the stock, whether he desired it for investment or sale. Willis returned, and stated that he, Utteradm'r back, was willing to hold it as an investment, as the money he applied for was ample for all his purposes. Utterback himself afterwards came to the office and stated that he wanted the money to pay off certain judgments, which were the only liens upon his property, and of improving the property, and that the $5,000 which he had applied for would be ample for that purpose. Now I ask with what propriety can Cooper claim that this money ought to have been applied to the debt due Armistead Utterback's estate. But if every dollar had been applied in that direction it could not have paid one-half the debt. But we are told there was the stock, the eighty-six shares, the proceeds of which might have been so appropriated. But this is all an afterthought. If Cooper himself is to be believed, if his witness and partner is reliable, one of the conditions imposed upon Utterback was that he should not sell the stock, but keep it as an investment; and the reason assigned was, that Cooper held large amounts of the stock, and was unwilling to have the value of it depreciated by permitting it to be sold to persons unacquainted with its value. Now in the face of these developments, with what show of reason can it be claimed that Cooper thought, or had the right to think for a moment that the money or stock would be applied to the discharge of any incumbrances upon the land. But in saying this I do not wish to be understood for a moment as conceding that Cooper believed it was Utterback's purpose to keep the stock. All this talk about the purchase of stock as an investment was a mere pretence, a device to cover the usury. Cooper knew well enough that no citizen of Virginia 1877. March would go to Baltimore to buy Navassa Phosphate stock at $70 per share as an investment. Upon the Term. cross-examination he was forced to admit that in no other sale ever made by him had any such conditions Utterb'k's adm'r V. been imposed on the purchaser. And notwithstand- Cooper. ing his great anxiety to prevent the depreciation of the stock by sales to persons unacquainted with its value, he permitted Utterback to sell his eighty-six shares at $26 per share. That sale amounted to $2,210, from which, of course, would be deducted commissions and other charges. But adding the whole amount to the $2,683 received in money would make an amount of about $4,800. The amount of Charles Utterback's indebtedness to his father's estate in July 1866 was about $7,500; so that the whole sum derived from Cooper and from the sale of the stock would not have paid the deed of trust by nearly $3,000. In this calculation I assume, of course, that Utterback had not paid the first three bonds in his father's lifetime, as he represented. There is not a scintilla of evidence to sustain this pretended payment except the assertion of Charles H. Utterback himself. If a debt of $4,000, well secured and attested by bond and mortgage, may be defeated upon the testimony of the debtor himself after the death of the creditor, there is no safety under any kind of security. As has been already said, if Charles H. Utterback were a competent witness, his statement upon this point is improbable, contradictory, and unworthy of credence. For all the purposes of this investigation we must then assume that no part of the debt due Armistead Utterback was ever paid. In Graff v. Castleman, 5 Rand. 195–207, Judge Carr, in alluding to the purchaser, said: "He took a transfer of the trust property as security for money to be 1877 March Term. Utterb'k's adm'r V. Cooper. advanced to the private trade of the executor, a trade having not the slightest connection with the estate of the testator, or the objects of the trust." And so here I think it has been demonstrated that the money was loaned and the stock transferred for the individual use of the administrator; that the transactisn had no connection whatever with the estate; and that the money would not be applied in any way for its benefit. And yet we are told, that as Utterback had the money in his hands derived from Cooper which he ought as an honest man to have applied to the debt due his father's estate, that debt, in Cooper's favor, must be deemed satisfied, although at the time he advanced the money he well knew it would not be so applied. This is certainly carrying the doctrine of the legal fiction beyond all precedent. If there is any proposition which ought to be regarded as settled law in Virginia, it is that a party concerting with an executor or administrator in a breach of trust, cannot claim credit for the money actually advanced by him. It is not for him to say the fiduciary ought to have applied the money to the purposes of the estate. When he aids him in any manner contrary to the duty of the executor, he takes upon himself all the hazards of a misapplication of the fund. All the cases, including Graff v. Castleman, 5 Rand.; Pinckard v. Woods, 8 Gratt. 140; Fisher v. Barrett, 9 Leigh 119; Cocke v. Minor, 25 Gratt. 246, and Jones v. Clark, 25 Gratt., 642, established that proposition. In Fisher v. Barrett the purchaser was informed that the bond belonged to the administrator, and was so informed as to justify him in believing it; and yet he was decreed to surrender the security. In the case of Jones v. Clark, 25 Gratt., all the authorities are reviewed at great length by the president of the court, and the result of all of them, as there announced, is: If a person buying a bond from an executor has good reason to believe that the executor intends to apply the proceeds of sale to his own use, and thus commit a devastavit, it is incumbent upon him to stay his hand until he can ascertain by regular inquiries that the sale is to be made for the purposes of the estate. In all such cases the party dealing with the executor does not gain credit even for the money advanced, but is decreed to surrender the securities and account for the full value of the property received by him. It is very true that most of the decisions referred to relate to the sale of bonds or assets of the estate; but the same principle applies to any improper dealing with the assets, or to any case in which a person concerts with an executor in a manner contrary to the duties of the office of executor or administrator. There can be no difference, upon reason or principle, between the case of an executor selling the assets for his own private purposes, and the case of an executor who seeks to destroy a lien he has given for the payment of a debt due his testator, with a view to raise money for his own individual uses. In either case it is a fraud, and the person who participates with him stands on no higher ground than the fiduciary himself. It is said, however, that the jury have found that Cooper was not guilty of any fraud in the transaction. The jury did not pass upon the question we are now considering they were not called on to do so. They found that Cooper had not perpetrated any fraud upon Charles Utterback, which might well be, and yet both Utterback and Cooper combining to perpetrate a fraud upon the estate; and if not so combining, Utterback himself perpetrating the fraud, and Cooper content to reap the benefit of it. 1877. March Term. Utterb'k's adm'r V. Cooper. 1877. March Fraud is rarely the subject of direct proof. In Term. general it can only be established by circumstances. If ever there was a case in which the circumstances and facts unmistakeably disclose the real purpose and design of the parties, and the true nature of the transaction, it is the case before us. Utterb'k's adm'r V. Cooper. Satisfied as I am that Utterback's sole object was to use his office of administrator in extinguishing his private debt and releasing the security for its payment, and upon the same property raise money for his own private purposes, and that Cooper had every reason to understand these designs, he can stand on no higher ground than Utterback, but must share the same fate. Holding these views, I have not considered it any part of my duty to attempt an answer to the inquiries made by counsel in the course of the argument, how and when may an administrator pay his debt and release his land; how may he sell and convey a good title with a view to raise money and discharge the indebtedness? These questions do not arise in this case. It is not incumbent upon us to lay down rules for the guidance of fiduciaries, any further than is necessary to an adjudication of the matters in controversy. It is sufficient for us to decide this case and leave others to be decided as the occasion may demand. For the reasons stated I think the decree of the circuit court must be reversed. ANDERSON, J., concurred in the opinion of Moncure, P. CHRISTIAN and BURKS, JS., concurred in the opinion of Staples, J. The decree was as follows: |