Benedict v. Chase

| Conn. | Oct 30, 1889

Carpenter, J.

There are two facts essential to the plaintiffs’ right to recover: 1st, that Benedict’s estate was in peril; 2d, that it was relieved of that peril by the plaintiffs. The finding does not state either fact in so many words. Are they in effect stated ? If so, we can dispose of the case; if not, we must remand the case for a more specific finding.

There are two considerations which incline us to regard the finding as sufficient. 1. The case has been heard upon its merits without objection from either party, or suggestions from the court. 2. Both parties have assumed that both facts exist, and have argued the case upon that assumption.

A careful consideration of the facts stated leads us to the conclusion, if not as a necessary inference, yet as a reasonable and proper one under the circumstances, that the estate was in peril, and that the plaintiffs at their own expense rescued it from its liability.

Benedict in his life time assumed a contingent liability for Mitchell, Yance & Co., a New York corporation, of which he was a stockholder, to the amount of $600,000; which liability was on his estate at the time of his decease. The corporation was unable to meet the paper endorsed by Benedict as it matured, without renewals, and no renewals could be had. That finding seems to exclude the supposition that the corporation could meet its paper, unless aided by the estate or by some one interested in it. In less than six years the corporation failed. That it was on the verge of insolvency, if not actually insolvent, is evident from the fact that it was unable to meet its maturing liabilities. Something must be done, or that paper will inevitably be presented against the estate. It necessarily follows that the estate was in imminent peril. Presentation meant payment, and payment by the estate meant insolvency.

Did the plaintiffs relieve it of its peril? In about one month after Benedict’s death the plaintiffs guaranteed bonds of the corporation to the amount of $144,000. That was done, as it is found, “ for the purpose of enabling the corporation to renew its paper without such endorsement and guarantee.” It is also found that “ the bonds were used by said Mitchell, Vance & Co. in taking up their obligations which said Benedict had endorsed or guaranteed.” A portion of the bonds were outstanding when Mitchell, Vance & Co. failed, and the plaintiffs were obliged to pay thereon §47,699. Had they advanced §144,000 in cash instead of guaranteeing bonds, and the money had been used to take up the indorsed paper as it matured, it would have conclusively appeared that they relieved the estate. Is the fact that they accomplished the same result by loaning their credit any less conclusive ? In either case it may be said that time is of some importance; that insolvency may have overtaken the corporation after the death of Benedict; so that it is uncertain whether the plaintiffs in fact benefited the estate. The reply is that there is no presumption to that effect; on the contrary, if insolvency originated subsequently, the presumption is that the defendants by an appropriate plea would have called the attention of the court to that fact. In the absence of any claim on that subject, the court is not bound to take into consideration mere possibilities. It is possible that the property of the corporation may have been destroyed by fire with no insurance; that they met with heavy losses otherwise, and the like; but these are not subjects for conjecture, but are matters to be proved. The court is not bound to inquire whether the defendants have a defense which they have not chosen to interpose. It is proper and according to the usual course for us to take the facts as the parties present them to us; and we can safely interpret them as both parties do, more especially if they are hardly surceptible of any other rational interpretation. We conclude therefore that the estate was in great peril and that the plaintiffs rescued it.

The time had come when something must be done. The estate could not legally take the risk. The administrators personally might do so, but they were not bound to, and could not be expected to. Two thirds in interest of the heirs could and did lend their aid; the remaining third, being minors, did not. The plaintiffs did not act officiously or unreasonably. On the contrary, it may be characterized as good business management. The result proved that while there was a loss, yet that it was doubtless much less than the estate would have suffered had nothing been done. This is a suit to reimburse the plaintiffs from the assets of the estate. The minor heirs defend. The case is reserved for the advice of this court.

What is it that the plaintiffs ask ? They do not ask, as may be supposed from the defendants’ brief, that the. defendants may be compelled to pay a part of the expenses of a losing venture; neither do they ask any compensation for the risk assumed. They simply ask that the fund which they have saved by a successful venture may refund to them the expense before distribution.

The first defense interposed is a demurrer, raising the claim that the Superior Court has no jurisdiction; that it is one of those matters within the jurisdiction of the court of probate. Without saying that the court of probate could not have passed upon this matter, we are inclined to regard it as a disputed claim against the estate, not, it is true, an ordinary claim, but still a claim on which a suit may properly be brought to the Superior Court, especially as it is claimed that the administrators are liable at law. Whether an estate being settled as a solvent estate is indebted or not, legally or equitably, when it is disputed, is a question for the courts. If an administrator incurs expense in the course of his duty, the question whether he is to be repaid from the estate is a question for the court of probate. If, in this case, the administrators had done what the plaintiffs did, the question whether they should be reimbursed would be a question for the court of probate. Other parties having volunteered, they bring a suit claiming that the administrators are liable at law, and if not, then in equity. The question of legal liability seems clearly to be a question for the Superior 'Court. We think that the question of liability in equity is also within the jurisdiction of that court.

The next question is—are the administrators liable at law ? They had no power to bind the estate in a matter of this kind. Any previous request, or subsequent promise, would have been of no avail. What they could not do they could not authorize others to do ; and it is not claimed that they have made themselves personally liable.

There can be no remedy at law against the defendant heirs, for they were incapable of contracting, and made no contract in fact. No legal duty rested upon them, so that there is no ground on which a request can be implied. For the same reason they are not liable to a contribution at law.

Have the plaintiffs any equitable remedy? It will be noticed that the defendants’ brief deals almost exclusively with a contract liability, or a personal liability on some other ground. An equitable claim upon the fund, as distinguished from a claim against the defendants personally, is hardly alluded to. We agree with them that no judgment against them in personam should he rendered; but whether the plaintiffs are not entitled to be reimbursed from the fund which they have saved is quite a different question. No case has been referred to, and we are unable to find any directly in point. A simple statement of the case shows such strong equities that authorities are hardly needed, and little else need be said by way of argument.

There are analogous cases however, which in principle strongly support the plaintiffs’ claim. When a cargo at sea is in peril a portion of it is frequently sacrificed to save the balance. In such cases the doctrine of general average compels the freight that is saved to contribute towards making good the loss. Here the whole' estate was in peril. The plaintiffs voluntarily sacrificed their own private funds to save it. They in fact saved it. Why should the defendants share in the whole estate as though it had never been in peril, and compel the plaintiffs to bear the whole burden ?

So also with the doctrines of apportionment and contribution. They are often applied, especially in cases of burdens upon real estate, where, ex cequo et bono, the party is entitled to relief. See Story’s Equity Jurisprudence, §§ 477, 478, 479, and 483. New cases can be supposed in which the equities are’ stronger than in the present. Take another class of cases; a fund, in which several persons are interested, is attached, or involved in litigation, requiring a heavy expense to defend it, or settle its status, and the like. Usually the fund is charged with the expenses, and the balance only is distributed. These cases and others that might be mentioned are decided upon principles that are fairly applicable to the present case. We do not believe it will be unjust to apply them to this case.

Once more. Suppose these administrators, as they might, although not bound to, had risked their private fortunes in doing precisely what these plaintiffs did, and had thereby saved the estate at an expense to themselves of $50,000; would these heirs—plaintiffs and defendants—have been hearc]*to say—“You did it voluntarily, no law required it; therefore you must bear the loss while we will enjoy the estate ? ” Is it so that an administrator, prompted by no duty, but simply by a desire to benefit the estate, incurs an expense whereby it is in fact benefited, may not be reimbursed ? The case before us can hardly be distinguished in principle from the case supposed. The administrators did not act, but with their approval the plaintiffs did, and justice requires that they should be reimbursed.

The Superior Court is advised to render judgment for the plaintiffs, to be paid from the estate.

In this opinion Loomis, Prentice and J. M. Hall, Js., concurred; Beardsley, J., dissented.