Weir v. Mosher

19 Wis. 311 | Wis. | 1865

By the Court,

Dixon, C. J.

It is of the plaintiff and his deceased co-executor as executors, and not as trustees under the will, that we must speak. It is not shown that the estate was settled, and the securities passed to them as trustees; nor does it appear but that sufficient funds out of the securities are still in the hands of the plaintiff as surviving executor to answer the exigencies of the trust.

Viewing the case then as one involving the powers and duties of the executors as such, we hold : 1. That the satisfaction of the mortgage by the deceased executor, Stone, is prima facie valid — that it may be voidable, but is not void. It was competent for Stone to release the mortgage without the assent or signature of the plaintiff. Jackson v. Shaffer, 11 Johns., 513; Douglass v. Satterlee, id., 16; Wheeler v. Wheeler, 9 Cow., 34; Murray v. Blatchford, 1 Wend., 583; Bogert v. Hertell, 4 Hill, 492 ; 2 Williams on Executors, 810.

2. That there can be no foreclosure of the mortgage while the satisfaction stands. Being prima facie valid, it bars the remedy by foreclosure. It must first be set aside, either by the voluntary agreement of the parties or the judgment of a competent court. Before this is done, the plaintiff cannot come in to assert the validity of the mortgage. The setting aside of the satisfaction constitutes of itself a distinct ground of action. The plaintiff might sue upon it separately, or he might join it in the action to foreclose. But he has done neither. He sues to for^jlose, leaving the satisfaction in full force.

3. That upüi the facts shown in evidence, the deceased executor, Stone, was guilty of a devastavit in satisfying the mortgage, and consequently that the satisfaction is liable, upon a proper application, to be set aside for that reason. The law upon this point is correctly stated in 2 Williams on Executors, 799, 800. If a man concerts with an executor, by applying the value of the testator’s effects to the purchase of other subjects, for his own behoof, or in any other manner contrary to the duty of the office of executor, such contract will involve the seeming purchaser or pawnee, and make him liable to the full value. And again, *%owever it may be at law, it seems to be now 'well established in equity, that, generally speaking, the executor or administrator can make no valid sale or pledge of the assets as a security for, or in payment of, his own debt: on the principle that the transaction itself gives the purchaser or mortgagee notice of the misapplication, and necessarily involves his participation in the breach of duty. The deceased executor, Stone, and one Wells and Alexander Mosher, a brother of the mortgagor, bought a piece of land of the mortgagor, who, by their direction, conveyed it to his brother Alexander. They bought it for their own use. Stone, in part payment for the land, released the mortgage, which belonged to the estate of his testator. This was a clear misapplication of the assets and violation of his duty as executor. The facts were well known to the mortgagor. They could nob have been otherwise, and when called to the stand as a witness he makes a full and truthful statement. The transaction must, therefore, whether so intended on the part of the mortgagor or not, be regarded as collusive. He knew, or ought to have known, that the executor was violating his duty, and participated in such violation. Hence the satisfaction must be set aside when proper proceedings for that purpose are instituted.

Under these circumstances we think the court below ought not to have given final judgment in favor of the defendant, the mortgagor ; but should either have dismissed the action without prejudice to the right of the plaintiff to bring a new suit, or, upon proper application and on such terms as might be just, have directed an amendment of the complaint so as to include a statement of the cause of action for relief against the satisfaction, and to have it vacated. The judgment will therefore be reversed, but without costs to the appellant, and the cause remanded, with directions that it be dismissed without prejudice, &c., unless the appellant, upon due notice, moves to amend as it is above indicated that he may do.