Valley National Bank v. Crosby

108 Iowa 651 | Iowa | 1899

Ladd, J.

1 That an administrator, in the absence of statutory authority, may not bind the estate by executing a promissory note, is well settled. Winter v. Hite, 3 Iowa, 142; Dunne v. Deery, 40 Iowa, 252; Deery v. Hamilton, 41 Iowa, 17. Nor can an. action be maintained thereon against the.estate. Winter v. Hite, supra; Rich v. Sowles, 64 Vt. 408, 15 Lawy. Rep. Ann. 850, and note (s. c. 23 Atl. Rep. 723) ; Schlicker v. Hemenway 110 Cal. 579, 52 Am. St. Rep. 134, and note (s. c. 42 Pac. Rep. 1063); 11 Am. & Eng. Enc. Law, 932. Even when, in performing the duties of administration, expenses are necessarily incurred for services or purchases made, the parties with whom- the administrator deals must look to him personally for compensation, and no action therefor can be maintained against, the testate,' though the claim be valid. All such allowances are made to the administrator, not as fixed by his agreements, but based on quantum meruit alone. Johnson v. Lehman, 131 Ill. 609 (23 N. E. Rep. 435, s. c. 19 Am. St. Rep. 63, and note) ; Bott v. Barr, 95 Ind. 243; Baker v. Moor, 63 Me. 443; Austin, v. Munroe, 47 N. Y. 360; Harding v. Evans, 3 Port. 221; Steele v. Steele, 64 Ala. 438; Hallock v. Smith, 50 Conn. 127; Price v. McIvre, 25 Tex. 769 (78 Am. Dec. 558). In the last case, however, it was suggested an action might be maintained against the estate on a claim allowed by the -executor, but not otherwise. ' The apparent exceptions do not impinge these general rules. Recovery has been allowed from the estate for money or the proceeds of property appropriated by the executor, and used for its benefit and enhancement. Simpson v. Snyder, 54 Iowa, 577; Dunne v. Deery, 40 Iowa, 252; Deery v. Hamilton, 41 Iowa, 17. But this was not because of any contract, but on the ground that the estate had received the benefit, and should repay. Or, as-stated in De Valengin v. Duffy, 14 Pet. 282: “Whatever property or money is lawfully recovered or received by the executor or administrator after the death of his testator or intestate in virtue of his representative character, he holds as assets of the estate, and he is liable therefor, in such representative character, to pay the party who has a good title thereto.” Again, third parties have been permitted to maintain equitable actions on contracts of the administrator directly against the estate, where, because of his insolvency, or some other sufficient reason, their remedy against him is inadequate. But this is always based on a quantum meruit or benefit received. Clopton v. Gholson, 53 Miss. 466; Mosely v. Norman, 74 Ala. 422; Dickinson v. Conniff, 65 Ala. 581; Norton v. Phelps, 54 Miss. 467; Hewitt v. Phelps, 105 U. S. 393; Willis v. Sharp, 113 N. Y. 586 (21 N. E. Rep. 705). In all these actions, the recovery is based on a quantum meruit for something received by the estate, and the liability does not extend beyond the value retained by it.

2 II. Tbe order of the judge on ex parte hearing, in the absence of any statute, added nothing to the powers of the administrator. This appears from'Deery v. Hamilton, supra, where the executor reported the borrowing of the money, and her report was approved by the court. It was there said: “This action of the court, without the course prescribed by'the statute having been followed by the executrix, did not validate the transaction done without authority. As the law did not authorize the transaction, and prescribe that manner of converting the property of the estate into money, the approval of the court does not defeat its provisions. There is no statute authorizing an executor to borrow money, and, as security, convey the land of the estate. The course to be pursued in selling land of an estate is prescribed by statute. The whole transaction must be held invalid.” Surely, the court or-judge may validate any act, after done, which might have been authorized to be performed on an ex parte hearing. In Winter v. Hite, 3 Iowa, 144, Wright, J., speaking for the court, said: “With him [the administrator] it is not a mere question of fact whether he have authority, for there is no one to give it, but it is a question of law, and the law denies the authority.” The court may direct the exercise of an existing power in a proper case, but additional powers cannot be created by the mere fiat of .the court or judge, at least in the absence of any notice to the parties directly concerned.

III. The only property left by the deceased was real estate, .and the necessity of selling it for the satisfaction of indebtedness did not exist. The duty of the administrator pertained exclusively to the care of such realty, and for this purpose he derived his authority solely from three sections of the Code of 1873, which we set out:

“2402. If there be no heir or devisee present and competent to take possession of the real estate left by such decedent, the,.executor may take possession of such real estate, and demand and réceive the rents and profits therefor, and do all other acts relating thereto which may be for the benefit of the person entitled to such, real estate.

“2403. Such executor or administrator, under the order and direction of the court, may apply the profits of such real estate to the payment of taxes and of debts and claims against the estate of the deceased in case the personal assets are insufficient.

“2404. Such executor or administrator shall account to such heirs or devisees for the rents, profits, or use of such real estate deducting therefrom the payments made under the preceding section, together with a reasonable compensation for his own services, to be fixed by the court.”

3 But for these provisions, the administrator had no authority to interfere with the real estate or the rents and profits accruing. Little v. Sinett, 7 Iowa, 324; Gray v. Myers, 45 Iowa, 158; Hodgin v. Toler, 70 Iowa, 21; Kinsell v. Billings, 35 Iowa, 154; Foteaux v. Lepage, 6 Iowa, 123; Lepage v. McNamara, 5 Iowa, 124; Beezley v. Burgett, 15 Iowa, 192. We are not agreed as to whether these sections enlarge the 'powers of the administrator so as to authorize him to borrow money from which to make needed repairs, or simply require him, on the contingencies named, to exercise existing power on a class of property with which he formerly had no concern. But a majority does agree that if he may borrow money for such purpose it can only be done on due notice to those entitled to the estate. He is authorized to “do all other acts relating thereto which may be for the benefit of the person entitled to such real estate.” It may readily be eon-4 ceded that, had the estate derived any benefit from these loans, it might be required to reimburse the plaintiff to the extent of such benefit. But it does not appear that any of the money was so used. There was not the slightest necessity for borrowing, and investigation would have assured the bank of the folly of making loans save on the administrator’s personal obligation. As we have seen, ordinarily, no recovery can be had except for value received and retained by the estate, and these statutes seem to have been worded in.harmony with that rule. It is 'said, however, that because of -the order the estate should be held to the payment of this note. These orders, with the notes, if binding, amounted to pledging or mortgaging the realty and the rents and profits to the loaner as security for the payment of the money borrowed. A mortgage might not have been given to raise a fund for the payment of the debts of the deceased. Trust Co. v. Holderbaum, 86 Iowa, 1, 11 Am. & Eng. Enc. Law (2d ed.) 1059. If author5 ity existed, it was because of the provision of the statute quoted. ■ But we have held notice of application for the sale of land essential to the validity of the proceedings. Boyles v. Boyles, 37 Iowa, 592; Good v. Norley, 28 Iowa, 188; Code, section 3324. The evident reason- for this is that property, the title of which is in the heirs or devisees, may not be. taken from them without opportunity of being heard. The statute does not disturb the title, but simply authorizes the personal representative of the deceased, as trustee, to care for it, in the interest of the owner. Can the heirs be devested of that title, or of their inheritance, by incumbering the realty or rents and profits with 6 out the opportunity of being heard ? It is a wholesome doctrine, subject to few exceptions, which requires that those whose rights are to be affected must have notice, actual or constructive, of the pendency of proceedings against them or their property. No man’s property should be taken from him without reasonable means being afforded to assert and protect his rights; otherwise the law might well be stigmatized as an instrument of injustice and oppression. Hopkins v. McCann, 19 Ill. 113; Long v. Thompson, 60 Ill. 27. As the inevitable effect of the orders was the pledging of the .property of the heirs as security, and thereby depriving them of their interest therein to that notice of the of the application made for that purpose. Tbe orders, having been entered on ex parte hearing, to which no one except the administrator was a party, were void. The claim ought not to have been allowed. — Reversed.

Granger, J., dissenting.