Murray v. Blatchford

1 Wend. 583 | Court for the Trial of Impeachments and Correction of Errors | 1828

Savage, Chief Justice of the Supreme Court.

The complainants contended, in the court of chancery, that the release should be set aside, on several grounds: 1. Because it was executed by only two of the administrators’; 2. Because there was a lis pendens in consequence of the notice of the application for the appointment of a receiver; 3. And principally because the transaction was fraudulent. Judge Emott, who sat for the chancellor, decided all these points in favor of the defendants, but held that this was a case in which the complainants ought not to be bound by the acts of the administrators ; and therefore decreed, that the release be set aside, so far as relates to the interests of the complainants who represent one third part of the estate of John P. Mum ford, deceased. From this decision, John B. Murray has appealed to this court; and the questions to be decided, are the same as in the court of chancery.

1. Was it competent for two administrators, against the will of the third, to execute a valid release?

The law, as to the power of executors, seems never to have been questioned. “If a man appoints several executors, they are esteemed in law but as one person representing the testator, and therefore the acts done by any one of them, which relate either to the delivery, gift, sale, payment, possession, or release of the testator’s goods, are deemed the acts of all; for they have a joint and entire authority.” (3 Bacon's Mr. Exrs. & Adnirs. D.) The reason given for this rule bv lord Hardwicke is, that each executor is considered as entirely representing the testator. (Hudson v. Hudson, 1 Atk. 460.) Lord Hardwicke, however, considered that administrators have no such power; and the principal reason assigned for the difference is, that the executor receives his power from the testator, and may perform many acts before probate of the will; but the administrator receives ail his authority from the ordinary. Lord Hardwicke cites no authority but the opinion of lord Baron, (4 Elements of the Law, p. 83.)

A similar dictum is found in 11 Viner, 73, citing Tothil, 264, 5. The same point is laid -down by Blackstone, (2 Com. 510,) and he relies on the case of Hudson v. Hudson. In that case, this point was not necessary to be adjudicated, as the cause was decided upon another point. The opinions, however, of lord Bacon and lord Hardwicke, are entitled to great respect; and in the English courts they have been so treated. The case of Hudson v. Hudson, was decided in 1737. In 1751, in Jacomb v. Harwood, (2 Ves. 267,) the same question was discussed by sir John Strange, master of (he rolls, when the case of Hudson v. Hudson was considered. Speaking of that case, he says, it was said that in that case, the lord chancellor had been of opinion that one administrator could not release, so as to bind the other; yet when that case was more narrowly looked into, it appeared clearly that was applicable to the particular circumstances of the case. He then cites the case of Willand v. Fenn, in which there had been three arguments in the king’s bench, and thereupon decided, that one administrator stood on the same ground and founda-' lion as one executor; and such was the decision of the master of the rolls. The case of Jaeomb v. Harwood has never been overruled in England, but has been acquiesced in, and considered as settling the point. (Toller’s Exr. 407, 8.) And the same has been the understanding of the courts in this state. (11 Johns. R. 22.) The difference heretofore supposed to exist between the powers of executors and administrators, in this respect, was said to be founded in the different sources from which their powers were derived; the one being by appointment of the testator, the other by the appointment of law. I apprehend there never was any reason for the supposed distinction. Their liabilities and responsibilities were ever the same, and their power's should be so. But if there was ground formerly for it, there surely is none under our statutes, which recognize both as possessing the same rights, and interest, and authority over the estate of the deceased,

2. The doctrine of Us pendens is this: That whoever purchases the subject matter of a suit, pendente lite, takes his purchase subject to. the decree or judgment which may be rendered in such suit, and the pendency of such suit is per se notice to all the world, and such pendency, when in chancery, commences with the service of the subpoena. (1 Johns. Ch. R. 576.) I apprehend this doctrine is not applicable to this case. A suit is not considered to be pending within this rule, until the service of process. In chancery, no subpoena issues until bill filed; and the court is supposed, by awarding process, to have adjudged that the plaintiff had shewn a prima facie case for relief. In this case, notice had been given by one of the administrators to the other two, that an application would be made for the appointment of a receiver— not because there had been any improper conduct in the administrators, or because any thing of that kind was alleged— but because one was said to be old, and the other insolvent, and they had given security in only $40,000. This notice can never operate as a lis pendens. It is a mere interlocutory proceeding in the suit already pending; and if this notice were to incapacitate the administrators from acting, it would be easy for a cestui que trust, by giving a similar notice, to prevent executors or administrators, or trustees, from ever doing any thing, and there would be no safety in transacting business with them. A reference to the offices of any of the officers of the courts, would give no information of any such lis pendens. Not even an ex parte adjudication of the matter gives sanction to the claim1; but simply the mere assertion of a right to interfere, by the person giving the notice. It is conceded in this case, that the defendants had notice of the intended motion, and they acted in reference to such notice, and, it is presumed, with knowledge that such notice could have no possible effect upon any fair and equitable arrangement which they should make.

The main question in this case, I apprehend, is the question of fraud. The bill charges, that the defendants acted fraudulently, in bad faith; and in relation to the defendant Murray, several facts are charged, as evidence of the fraud. Among these are, 1. Attempts to delay a decision in the cause, by appeal to this court. He twice appealed, and at each time, suffered the appeal to be dismissed. This is admitted, but the defendant Murray declares, that the appeals were brought bona fide, with an intention to have them argued and decided by this court, but that his counsel advised to the course which was adopted. This is an answer which ought to be satisfactory. The counsel, after the appeal brought, were of opinion, that after certain other steps should have been taken in the cause, the errors, which they advised their client existed, would be more apparent. The answer is given under oath, is responsive to the bill, and is not contradicted. It must, therefore, be taken to be true, and if true, rebuts the idea of fraud.

2. That Murray procured the release for much less than the report, to which he did not except, and that he was able to pay the whole sum reported due. This fact is conceded to be so; but Murray avers that the amount paid is much more than was really due, and much more than John P. Mumford, in his life time, ever claimed, though he was fully apprized of his rights.

3. It is also alleged, that the same sum had been previously offered, and rejected. To this, it is answered, that two years previous the same sum was offered; that an arrangement was partially made by the counsel in the cause for a settlement for $35,000; and that $30,000 would have been received, provided the defendant Murray would have paid the costs; and that at the time when the arrangement was made, $40,000 would have been assented to by all the parties in interest.

It appears that there existed in the family of Mrs. Mumford an unfortunate family difficulty, insomuch that it was unpleasant for her and Dunscomb to transact business together. So Dunscomb says; but Mrs. Mumford denies that they could not associate for the transaction of necessary business.

4. It is urged as evidence of fraud, that the settlement was made without consulting Dunscomb or the complainants. The answer is, the family quarrel already stated ; but that in fact the consent of Dunscomb was requested by John I. Mumford, previous to the execution of the release.

5. It is also charged, that Murray had been long endeavoring to circumvent Mrs. Mumford and John I. Mumford, and to take advantage of their situation, both being in necessitous circumstances, arid Mrs. M. moreover, being old and infirm. The intention imputed to Murray, he denies. He knew that Mrs. M.. was poor, and that J. I. M. was insolvent; but it is to be recollected, that the same offer was made when these circumstances did not exist, and he made no attempt to obtain more favorable terms than he had before proposed. In ansyver to the'charge, that Mrs. M. was old and infirm, it is denied, except that she was sixty years old and upwards. This is indeed an age which is supposed to disqualify certain persons for the" performance of certain public duties; but the presumption of incompetency, I believe, does not extend to the transaction of private concerns; but if so, still Mrs. M. in this respect, had the vantage ground of Murray, who, from facts appearing in the case, must be presumed to be several years in advance of her. But the fact of age is not urged as a ground to support the charge of fraud in Mrs. Mumfoi'd. It were, indeed, a melancholy spectacle to see persons, far advanced in life, active participators in fraudulent practices, or even’ the dupes of others, when the natural presumption should be, that as we approach the end of our course, probity and integrity should be predominant, that we may be better prepared to answer .the charges to be made against us in that dreadful day of awful responsibility and account which we are rapidly approaching.

6. It is also charged as one of the fraudulent devices resorted to by the defendants, that the late chancellor Kent was consulted in relation to the settlement, and his advice in favor of it fraudulently obtained.

Of all facts adduced to support a charge of fraud, this is, to my mind, one of the most extraordinary. That the chancellor, who had known the whole history of this case, who had established the principle upon which the defendant, Mursay, was to account, who had presided in our courts for a longer period than any other citizen in the state, and who, during all that time, held a most distinguished rank, should be incapable of giving correct and wholsome advice, without consulting the counsel in the cause, is a paradox incapable of explanation. It seems to me, therefore, as it did to the learned judge who decided this cause in the court below, that the charges of fraud have been successfully refuted.

One other circumstance appealing on the part of the defendants is worthy of notice. The persons entitled to the estate of John P. Mumford are, the widow Mary I. Mum ford and six children, three of whom were in favor of the settlement, and three against it. The widow being entitled to one third of the avails of the suit, those concurring in the settlement, represent two thirds of the subject in controversy. If they conspired and confederated to cheat any body, it was to cheat themselves twice as much as they cheated the complainants, which is a palpable absurdity. And, in relation to this point, it should be recollected, that before any examination before the master, Murray made the same offer; and $5000, or at most $10,000, in addition then, and even when the settlement was made, would have been accepted by those who now seek to set aside the release. Of this additional sum, two thirds would have gone into the pockets of the defendants, and but one third to the complainants—less than $1000 to each—a sum which it seems to me could be no equivalent to the mortification resulting from the fact of presenting upon the records of the court a charge of a fraudulent attempt by a mother to defraud her own daughters. When to all these considerations is added, what no doubt had a controlling influence, the determination of Murray to appeal, and the possibility that even less than the $30,000 might ultimately be recovered after a protracted litigation ; and further, that Mrs. M. was advised to this course by a counsellor, than whom no one could be more capable of giving advice, so far from seeing, in this transaction, evidence of fraud, it would have been extraordinary if the offer had not been accepted.

Thus fav I have concurred in the views of the learned judge who made the. decision in the court of chancery. In the eloquent opinion which we have before us, it is shewn very satisfactorily to my mind, that the acts of two administrators stand on the same ground as two executors ; and the dissent of the third administrator, forms no objection to the validity of the release; that it is in no way affected by the doctrine of a lis pendens, and that fraud is not imputable to any of the parlies to the release. Yet, he decreed that it should be held inoperative and void as to the complainants in this cause, who are two of the children of' John P. Mumford not assenting to the settlement and release. This decision is not placed upon any particular principle, but upon the circumstances of the case : the amount of the report, compared with the amount received; the compromise carried into effect, when the motion was about to be made to supersede the powers of the administrators ; the uncertainty of the result of an appeal ; the possibility of an entire loss of whatever might ultimately bo awarded to the estate ; and the impossibility of deciding whether the settlement was advantageous to the estate. It is certainly true, that there are cases where those ¡11-teres’led in an estate are permitted to pursue it into the hands of any person who colludes or conspires with the executor to produce a devastavit. It becomes my duly to examine this subject in the cause of Colt v. Gilbert, adm'r, &c., decided in this court one year ago, but which is not yet reported, and to review several of the cases referred to in the opinion of the circuit judge. In the case of Colt v. Gilbert, the facts were, that Jabob Le Roy was executor of the last will and testament of Dulary ; that, as such executor, he had in his hands a considerable sum of money which belonged to the estate, and which money was used as part of the capital of the house of Jacob Le Roy and son ; and that Colt, one of the firm, transferred the money of the estate of Dulary to Colt, by Le Roy’s direction, as he said, in payment of a debt due him by the firm. In that case, we held that the house of Le Roy and son, and of course Mr. Colt, one of that firm, was responsible to the administrator, with the will annexed, and to the residuary legatee, for tire amount of the estate thus miaapplied; and after referring to the leading cases on the subject, we came to this conclusion : “That any person receiving from an executor the assets of his testator, knowing that such disposition of them is a violation of his duty, is to be adjudged conniving with the executor; and is responsible for the property thus received, either as a purchaser or a pledgee.” And the principles laid down by Ch. Kent, in Field v. Schieffelin, (7 Johns. Ch. R. 150,) were approved : that the purchaser is safe if lie is not a party to the fraud of the executor, and has no knowledge or proof that the executor intended to misapply the proceeds, or was, in fact, by the very transaction, applying them to the extinguishment of his own private debt; that in such case, he buys at his peril; but that if he has no such proof or knowledge, he is not bound to inquire into the state of (he trust, because he has no means to support the inquiry, and he may safely repose on the general presumption, that the executor is in the due exercise of his trust.

This decision, and the principles established in it, seem to me to bring ns back again to the question of fraud and collusion. All the cases cited by the circuit judge, are, I apprehend, cases of fraud or collusion. Lord Eldon seemed to be at a loss to determine what collusion is. We have defined it to be any intermeddling with the executor, or the assets of the testator, by which the executor is guilty of a violation of his duty; so that we arc brought round again to the question whether the administrators were guilty of a violation of duty, under all the circumstances of the case, and which need not be again recapitulated.

It is true, they released for one third of the sum reported in their favor; but it is also true that, according to the answer of Murray, (and this answer must be considered true,) the sum paid was more than was really due, or was ever claimed by Mr. Mumford, in his lifetime. It must also be understood, that Murray did not intend to submit to this report, but was about to appeal; and the chancellor, who knew all the facts and the law of the case, advised to the acceptance of the terms offered. It is idle to suggest, that fraud was practiced on such a man. Can it be supposed, that he was incapable of giving an opinion upon a case which he had adjudged, without the opinion of counsel 1 I would by no means depreciate the services of counsel; but it is a mistake to suppose that no one but the counsel employed in a cause is capable of forming a correct opinion as to its probable results, or of giving suitable advice as to its progress or termination.

It is also true, that the persons claiming one third of the avails, were opposed to the settlement, but the administrators, and those interested in the residue, were in favor of it. Suppose the administrators had no interest in the avails, and those owning two thirds of the fund had urged such an arrangement, but it was declined, and in the end much less had been recovered ; or suppose the whole had been lost, through the subsequent failure of Murray, after rejecting such an offer; would not those who had urged the settlement have much more reason to call upon the administrators and charge them with a violation of duty 1

In addition to these considerations, when it is stated as a fact in the case, that a sum in addition, but less than $1000, to each of the complainants, would have been accepted by them, though less than half the sum reported, and this known to the administrators, I am free to express my opinion, that to have refused the offer of $30,000, would have been highly indiscreet, if not a positive violation of duty; and that their termination of the controversy was prudent and proper.

I am therefore of opinion, that the administrators were not guilty of any violation of duty—of course, Murray could be guilty of no collusion ; and therefore the complainants would have no right to pursue even assets in the hands of a bona fide purchaser. But another consideration of some weight is this : that in this instance, the claim in question cannot be considered assets for any greater amount than the sum agreed upon.

The result of my Conclusions is, that the judge erred in setting aside the release as to two sixths of the demand in question ; and that the decree should be reversed, and that the bill of the complainant's should be dismissed, with costs.

JF the state of mew-yore. E .nd, J, expressed his concurrence in the opinion pro oy the Chief Justice, and Benton, Crary, Elswo is, Hager, Lake, McMartin, Oliver, Smith, To >op, Tysen, Warren and Wilkeson, Senators, alsi ed. Dayan, McCarty, McMichael, Schenck,

ion - decree ought to be affirmed. ion, a decree was entered reversing the decree in the of chancery; declaring the release executed by Mi umford and John I. Mumford to John B. Murray, va linding upon the representatives of John P. Mumfoi sed; ordering the bill of the respondents to be dis-m .h costs, and directing the respondents to pay the co íe appellants in this court; and that the cause be

re d the court of chancery, to the end that the decree of irt may be carried into effect. f suggested that the appellant had died since the hi f the appeal, it was ordered, that the decree be ente i reference to the time of hearing on the 14th day of