62 Minn. 459 | Minn. | 1895
The plaintiff, as payee, brings this action against the ■defendants, as makers of the following note: “$36,000.00. St. Paul, Minn., May 6th, 1892. Sixty days, without grace, after date the estate of E. Langevin or either of us promise to pay to the order of Germania Bank of St. Paul thirty-six thousand dollars, with interest thereon, at the rate of 8 per cent, per annum from date until paid, for value received. Payable at the Germania Bank of St. Paul. The Estate of E. Langevin, by Achille Michaud, Administrator.” It is alleged that the defendants Eleanora Langevin, Emma Flanagan, and Mary E. Michaud indorsed said note before it was delivered to plaintiff, for the purpose of giving the same credit with plairitiffi and intending thereby to make themselves liable thereon as makers thereof. It is further alleged: “That the said defendant Achille Michaud had no authority whatever and was at no time empowered to make or deliver the said promissory note for or on behalf of the said estate of the said E. Langevin, deceased.” Judgment is demanded against all of the defendants personally for the amount of the note.
The defendant Achille Michaud answers, separately, and alleges: That on September 16, 1890, Edward Langevin died testate, and, at and before the time of his death, was indebted to plaintiff in the sum of $50,000, and “was mentally and physically incompetent to transact business, and under the guardianship of certain persons, duly appointed as such by the probate court of said county of Ramsey, who were then duly qualified and acting as such; and that said plaintiff at that time held several unpaid promissory notes given to it by said .guardians, solely for said indebtedness of said Edward Langevin, and which had been previously made, executed, and delivered by said guardians, as such, to said plaintiff; and that said unpaid promissory notes of said guardians, so held by said plaintiff at the time of the death of said Edward Langevin, were for sums amounting in the ag
The other defendants interposed a somewhat similar answer. The plaintiff demurred to each of these answers, on the ground that it does not state facts sufficient to constitute a defense, and from the orders sustaining the demurrers defendants appeal.
Let us first consider the defense of the administrator, Michaud. Although the note is executed by him in the name of the estate, it is well settled that an administrator or executor cannot bind the estate by any promissory note he may make. Even though the note is given for a valid debt or liability of the estate which he should pay, and even though he has a right to reimburse himself out of the assets of the estate when he does pay it, still the note, though made by him as administrator, is his personal obligation, and not the obligation of the estate. 1 Daniel, Neg. Inst. (4th Ed.) § 262. The case is not at all analogous to one where the party signing the note is acting for a disclosed principal. An executor or administrator has no principal. “When a trustee contracts as such, unless he is bound, no one else is bound, for he has no principal. The trust estate cannot promise. The contract is therefore the personal undertaking of the trustee.” Taylor v. Davis, 110 U. S. 330, 4 Sup. Ct. 147. Persons contracting in a representative capacity are liable personally when they represent no responsible principal. Story, Ag. §§ 280-286. But these are very general statements of well-established principles, which it might be easy to misapply. / When a trustee executes an instrument as trustee, even though he has no principal, and does not bind the trust estate, there ought to be some good reason why the court will make for him a new contract by which he is bound personally. The doctrine that he is liable personally on such a contract is a fiction of law, which, like many other fictions of law, was invented to prevent in
The defendant administrator attacks the complaint, and contends that it does not state a cause of action as against him. Under the ■rule of the law merchant, a negotiable promissory note made by an «executor or administrator, as such, imports sufficient consideration to bind him personally. Story, Prom. Notes, § 63; 1 Daniel, Neg. Inst. § 262. For this reason, we are of the opinion that the complaint states a cause of action against the administrator. But, as :against any one but an innocent purchaser for value before maturity, the consideration for such a note may be inquired into.
At common law, except when suit was brought against him, the •administrator or executor himself, and not the court, allowed or adjusted the debts of the deceased with the creditors. He paid these •debts without any order of the court out of the assets of the estate, •or paid them out of his own funds, and reimbursed himself out of •Che assets. He had the right, among creditors of equal degree, to pay one in preference to another. 2 Williams, Exrs. (Rand. & T. Ed.) 256 (882). He might thus prefer and pay a creditor by giving his own obligation for the debt. Hepworth v. Heslop, 6 Hare, 561. When the executor or administrator, having assets of the estate applicable to the payment of the debt, gave his own note to the creditor for such debt, it amounted to an appropriation of the assets to the amount of the debt to the payment thereof; and this constituted a sufficient consideration for his promise, and he was personally liable, whether he made the note as administrator or in his own right. 1 Daniel, Neg. Inst. § 263. If he failed to reimburse or indemnify
In jurisdictions where the giving of a new note for a prior indebtedness and the surrendering up of the old note which represented the prior indebtedness is an absolute payment, it is held that when the executor or administrator gives his note for the debt of his testator or intestate, whose note is surrendered up to the executor or administrator, it constitutes an absolute payment of the debt and a sufficient consideration for the new note. But this is not the law in those states where, in such a transaction, the giving of the new note would not constitute absolute payment. In referring to the case of Thacher v. Dinsmore, 5 Mass. 299, the court in Bank of Troy v. Topping, 9 Wend. 273, says: “That case is no authority here, because the reasons are not applicable. A promissory note given in this 'state for a simple contract debt does not absolutely discharge such debt; the creditor may still prosecute upon the original consideration, and may recover upon producing and canceling the note. In that case, also, it appears that the defendant had assets. In the case now under consideration, the plaintiffs lost nothing by taking the defendants’ notes for the note of their intestate. They might at any time have prosecuted the defendants as administrators for the money lent to their intestate, and recovered judgment, and thus have obtained any preference which the law would then have given them.” In this respect the law of this state is like that of New York, and the giving of the new note in such a transaction would not be an absolute payment. See Combination Steel & Iron Co. v. St. Paul City Ry. Co., 47 Minn. 207, 49 N. W. 744.
The respondent’s counsel has cited many cases which hold that the contracts of an executor or administrator are not binding on the estate, and, although made by him as such executor or administrator, are binding on him personally. Most of these are cases where
But the transaction set out in the answer of the administrator in the case at bar did not originate with him. He alleges that he gave the note in suit for the debt of the testator. An administrator, under the law of this state, has no assets of the estate which he can apply to the payment of a debt of the deceased, unless the claim has been allowed by the probate court. He does not allow such claims, and has no discretion as to the order or priority of payment of such claims. The probate court allows and orders the claims paid, and he is the mere depositary of the funds for payment. Then the doctrine of the common law that assets of the estate in the hands of an administrator or executor are sufficient consideration for his promise to
Both parties have argued the demurrer to this answer on the theory that the only question is whether or not the administrator has, by the note in suit, bound himself personally to pay the debt of his testator; while it seems to us that the answer clearly shows that this debt had ceased to be a debt of the testator or a liabiltiy against his estate long before the administrator signed the note in suit. If this is true, he could not (as could the original debtor) by his promise, without a new consideration, revive a debt barred by the statute of limitations. But the answer alleges that, at the time of his death, the testator was under guardianship, and plaintiff then held the notes of the guardians for this debt; that, viven the note in suit was made, plaintiff “still held the said notes of said guardians, or a note
For these reasons, we are of the opinion that the answer of the administrator stated a good defense, and that the court below erred in sustaining the demurrer to the same.
But the other defendants promised in their own right, and, from what we have said, there may be sufficient consideration, by such an extension of the time of payment of the debt, to support their promise. These defendants allege nothing that is not alleged in the answer of the administrator, and, while they do not allege as much as is alleged in that answer, still they refer to that answer, and make it a part of their own. Whether this is an irregular mode of pleading we need not consider. No objection is taken to it, and we shall therefore regard both answers as substantially the same. We are therefore of the opinion that the answer of these other defendants states no defense.
This disposes of the case. The order appealed from, so far as it sustains the demurrers to the answer of the defendant Achille Michaud, is reversed, and, so far as it sustains the demurrers to the answer of other defendants, is affirmed.