164 Iowa 517 | Iowa | 1914
Hiram W. Bissell died intestate some time in July of the year 1908, and on August 29th of the same year W. D. McEwen, the appellant, was appointed his administrator, giving bond as required by law. On October 26, 1908, he filed an inventory in which he scheduled as an asset the sum of $2,176.30, as being on deposit in what was called the City Exchange Bank of Pocahontas, of which he (McEwen) was the sole owner and proprietor, and over which he had personal supervision. One Doyle was cashier of this bank, and also kept the books. No report was made by the administrator until May 26,1910, when one was filed showing cash on deposit in the bank in the sum of $497.26, and admitting a personal indebtedness of $1,900, and expenditures amounting to
He also scheduled a claim of his own against the estate amounting to $65, and another claim of one Thompson, filed against the estate of Susan Bissell, deceased, upon a note signed by her and by H. W. Bissell. The only action which the record shows was taken on this report was an examination of the administrator in open court in January of the year 1911, and that seems to have been followed by an order on the administrator to make a further and final report, which he did on January 2, 1911, and this is the report to which objections were filed by four of the adult heirs of the deceased. One Atkinson was appointed guardian ad litem for two minor heirs, and he also appeared and contested the report and objected to the discharge of the administrator. The last report of the administrator showed the following:
That at the time of his appointment as such administrator, to wit, on August 29, 1908, there was on deposit in the said City Exchange Bank, a bank then privately owned by this administrator, the sum of $497,26; said money being there to the credit of said deceased. That at the time of his appointment and prior thei’eto this administrator was privately owing to said Bissell the sum of $1,893.19; said debt being due as the balance of the consideration paid for certain real estate deeded by the said Bissell to Will D. McEwen shortly
Among other objections filed to the report were the following :
That said report fails to show the true and correct amount of money in the hands of such administrator belonging to this estate. That said administrator has failed, neglected, and refused to preserve and administer the estate of the said deceased, Hiram W. Bissell, and has squandered, dissipated, and wasted the same, and the said administrator is not entitled to any compensation for what he has done as adminis-trator of the said estate and is not entitled to payment for counsel fees or the services of an attorney. And they allege upon information and belief that the said Will D. McEwen has in his hands as the funds of said estate about the sum of $4,731.90, also one certificate for 250 shares of stock of the Pocahontas Railroad & Improvement Company, one certificate for one share of the capital stock of the Pocahontas Heat, Light & Power Company, one shotgun, and certain boobs, papers, silver ware, plate ware, jewelry, and surveyor’s instruments.
Upon the issues thus joined, the trial court heard the testimony offered pro and con, at the regular March, 1912,
The report of the said administrator is not a full, true, correct, and complete report. Said administrator has failed, neglected, and refused to fully and correctly report and account for the property and funds of said estate, and has failed, neglected, and refused to administer said estate in accordance with the law and the orders of this court. The court further finds that at the date of the death of said Hiram W. Bissell said Will D. McEwen, who was thereafter appointed administrator of said estate, was the sole owner and proprietor of the City Exchange Bank. The said City Exchange Bank was not a corporation, partnership, or joint-stock company, but that the City Exchange Bank was simply a name assumed by the said McEwen under which he engaged in business as a private banker. Upon the hearing upon said report and the objections thereto, it was made to 'appear that the said Will D. McEwen was at the time of the death of the said Hiram W. Bissell owing and indebted to the said Bissell in the sum of $4,953.05 for and on account of deposits with the said City Exchange Bank, which amount was then due and owing by the said Will D. McEwen and the same was then due. It further appeared that, subsequent to the death of said Hiram W. Bissell, said McEwen, prior to his appointment as administrator aforesaid, paid the following items. Undertaker’s bill for casket and preparing the body of Hiram W. Bissell for shipment, the su,m of $140. Express upon the body of said decedent to Pocahontas, Iowa, for burial the sum of $74.15. For preparing grave for the decedent, $7.25. That after deducting the items mentioned in the last preceding paragraph, the said McEwen was owing the said estate on account of the deposits aforesaid the sum of $4,731.65. At the time of making and filing his said report aforesaid, the said Will D. McEwen had in his hands as the property of the said estate the sum of $4,731.65, together with one certificate for 200 shares of the capital stock of the Pocahontas Railroad & Improvement Company and a certificate for one share of the capital stock of the Pocahontas Heat, Light & Power Company and one shotgun. Said administrator, with full knowledge of the possession of said
The appeal is from these findings and orders of the court. The propositions relied upon are:
First. That the trial court had no right, on these objections, to determine the liability of the administrator upon
Second. That the trial court was in error in charging him with the sum it did.
There is no provision of law for the appointment of a special or temporary administrator to collect a claim due from the regular administrator to the estate; neither the heirs, creditors, distributees, or legatees may maintain an action to recover such indebtedness from the regular administrator; and, of course, the administrator cannot sue himself. Winship v. Bass, 12 Mass. 199; Bigelow v. Bigelow, 4 Ohio, 147 (19 Am. Dec. 591); Savery v. Sypher, supra.
We have no doubt of the power of the court, on any theory which may be adopted, to ascertain the amount of the indebtedness due from the administrator himself to the estate he represents, when he himself brings that into the case and asks the court to find the amount and order his discharge.
For general purposes this must be treated as part of the assets of the estate, and it will be so treated, unless it appears that at the time of his appointment McEwen was insolvent and had no assets or property which could be used for this purpose. Many courts hold that the amount of the indebtedness of the administrator will be treated as assets in his hands belonging to the estate, from the time of its maturity, be he solvent or insolvent; thus making the sureties on his bond guarantors of his personal indebtedness, and becoming immediately liable for the amount of the indebtedness because of the administrator’s insolvency. See, as sustaining this view, the cases already cited' from other states, and Arnold v. Arnold, 124 Ala. 550 (27 South, 465, 82 Am. St. Rep. 199); Bassett v. Fidelity Co., 184 Mass. 210 (68 N. E. 205, 100 Am. St. Rep. 552); Tarbell v. Jewett, 129 Mass. 457; Crow v. Conant, 90 Mich. 247 (51 N. W. 450, 30 Am. St. Rep. 427); McGaughey v. Jacoby, 54 Ohio St. 487 (44 N. E. 231); Beall v. Hilliary, 1 Md. 186 (54 Am. Dec. 649); Davenport v. Richards, 16 Conn. 310 ; Jacobs v. Morrow, 21 Neb. 233 (31 N. W. 739); and cases cited in note to
The better rule, we think, is that, for the purpose of charging the sureties on the administrator’s bond, the indebtedness owing by the administrator to the estate should not be regarded as an asset as of the time of its maturity, if at that time and at all subsequent periods he was insolvent and did not have, or could not procure the money. Whilst some of the courts have been inconsistent on this proposition, the following cases seem to hold the doctrine last above announced: Walker’s Estate, 125 Cal. 242 (57 Pac. 991, 73 Am. St. Rep. 40); State v. Gregory, 119 Ind. 503 (22 N. E. 1) ; Buckel v. Smith (Ky.) 82 S. W. 235, 1001; Potter v. Titcomb, 7 Me. (7 Greenl.) 302; Linthicum v. Polk, 93 Md. 84 (48 Atl. 842); Compare Lambrecht v. State, 57 Md. 240; Sanders v. Dodge, 140 Mich. 236 (103 N. W. 597, 112 Am. St. Rep. 399); McCarty v. Frazer, 62 Mo. 263; Howell v. Anderson, 66 Neb. 575 (92 N. W. 760, 61 L. R. A. 313); Harker v. Irick, 10 N. J. Eq. 269; Baucus v. Barr, 45 Hun. (N. Y.) 582 (affirmed in 107 N. Y. 624, 13 N. E. 939); Matter of Piper, 15 Pa. 533; Rader v. Yeargin, 85 Tenn. 486 ( 3 S. W. 178); Lyon v. Osgood, 58 Vt. 707 (7 Atl. 5) ; Sanchez v. Forster, 133 Cal. 614 (65 Pac. 1077).
While the sureties on an administrator’s bond do not guarantee his solvency or ability to pay his own debt to the estate, yet as he holds the matter in his own hands and at the time of the maturity of his debt, or afterward, becomes solvent, he is expected to do his duty and to set apart for the estate of which he is trustee, the amount of his indebtedness. Condit v. Winslow, 106 Ind. 142 (5 N. E. 751) ; Matter of Piper, supra; Rader v. Yeargin, supra; Probate Court v. Merriam, 8 Vt. 234.
In Gay v. Grant, 101 N. C. 206 (8 S. E. 99, 106), it was held that the sureties were liable where the administrator was able to pay his debt, but was insolvent in that his property was not subject to legal process.
‘One question which seems to have been overlooked on the trial of the cause was the financial condition of Levin T. Miller, the administrator, during the period of his administration. The money collected by him while professing to act as agent of the administrator in Missouri, and for which he had not accounted when he became administrator, was a claim in favor of his trust, which he should have inventoried and charged himself with; and if, by the use of due diligence, all or any part of the claim could have been saved to the estate, his sureties are therewith chargeable; but, if he was hopelessly insolvent, they do not become liable therefor, the burden as to the question of insolvency being on the administrator and his sureties.’ Further on in the opinion the court says: ‘ The debt of the administrator is to be accounted for as other debts or assets, and he may show his insolvency during the period of his administration in discharge of his official liability’ — citing Woerner, Am. Law of Administration, page 654, section 311; Griffith v. Chew, 8 Serg. & R. (Pa.) 17 (11 Am. Dec. 556); Eichelberger v. Morris, 6 Watts, 42; Tarbell v. Jewett, 129 Mass. 457; McCarty v. Frazer, 62 Mo. 263. . . . It is a well-established rule of law, running back even before the Revolution, that an executor or administrator is considered as having paid the debts due from him to the estate, and as actually having in his possession that much more cash. If the personal representative is insolvent, the courts, in the interests of all concerned, modify this rule somewhat. He still charges himself with the amount of his debt, but it does not make it actually money. The law does not require impossibilities, and there is no more reason why he should be considered as having paid what he was utterly unable to pay, than any other creditor. He is held liable to the estate to the extent of his ability to pay the same at any time during administration.
Without keeping any separate funds in his bank for the estate, he continued to conduct his bank in the usual manner, so far as shown, down to the time he made his assignment for the benefit of creditors, in January of the year 1910, something like sixteen months after his appointment as administrator. Until that assignment was made, his bank was a going concern, and there is no proof of his insolvency before that time. By reason of his trusteeship, he was under greater obligations to pay this debt than any other which was not of the same character, or to set aside enough of his funds to do so. This he did not do, but on the contrary mingled all the funds in his bank, and made, no charge even against himself as a debtor, to the estate, or in any other manner segregated the funds. So long as his bank was a going concern, it was, as we think, his duty to do this, and he was not relieved because of the fact that it might make him insolvent.
Surely within the year for paying claims he should have given himself credit for the amount of his indebtedness to the estate, just the same as it was his duty to collect any other debt due from a third person. If to his knowledge such a third person was running behind and likely to become in
The orders and judgment are, therefore — Affirmed.