48 Mo. App. 327 | Mo. Ct. App. | 1892
Lead Opinion
The questions arising on this appeal grow out of the action of the circuit court in sustaining objections to the final settlement . of appellant as executor of the estate of Henry C. Young, deceased, which' objections were made by Belle Young, the widow, and Gtrabell and Robert Young, two of his heirs. The executor paid Henry C. Young, Jr., one of the children of the deceased and also a distributee under the will, the sum of $300, for which he claimed credit in the order of the distribution made on the final settlement. This money was paid without an order of distribution. The respondents objected to it.
The facts concerning the only other item of dispute may be thus stated: At the death of the testator the .executor was indebted to him in the sum of $600 with
Section 98, Revised Statutes, 1889, reads: “ All debts due by an administrator to his testator or intestate shall be considered as assets in his hands.” The succeeding section (99) reads : “If any person appoint his debtor executor of his will, such appointment shall not discharge the debt, but it shall be assets in his hands.” At common law when a person voluntarily assumed the administration of an. estate to which he was indebted, prima facie, the acceptance of the trust was considered as payment of the debt, and the 'administrator would be treated as holding the amount of the debt- in trust for creditors and heirs. This rule is based on the principle that, where the same person is liable to pay money in one capacity and to account for it in another, the law will presume that he has done that which it was his duty to do, that is, paid the debt. Winship v. Bass, 12 Mass. 204; Stevens v. Gaylord, 11 Mass. 256; Ipswich v. Story, 5 Metc. (Mass.) 313. It was also a principle of that law that, where a testator in his wall appointed his debtor as his executor, he thereby
That it was the intention of the two sections above-quoted to abrogate that rule admits of no doubt. As was said by Sherwood, J., in McCarty v. Frazer, 62 Mo. 264, “the manifest object of these statutory provisions is to reduce to the same plane a.ll debts due the estate, whether owing by the executor or any other-debtor.” A majority of this court are also of opinion that these statutes abolish the common-law rule that, when an administrator takes charge of an estate, the-debts due by him to the estate, however evidenced, are-deemed to have been paid, and he is chargeable with them in his trust capacity as for so much money. It i.s-undeniably logical that, if the statute leaves this principle of the common law in operation, from the moment that an executor or administrator takes charge of an estate, all that be owes to the estate in his individual capacity, whether by bond, bill, note or otherwise, becomes so much money in his hands belonging to the-estate, for which his sureties in his administration are-liable. This conclusion, which is undeniably logical* has been more than once recognized in judicial decisions. In Simon v. Albright, 12 Serg. & R. 429, it was-held that one administrator cannot sue his co-administrator on a bond given by the latter to the intestate in his lifetime to secure a loan. The court, in the course-of its opinion, says: “The debt due from the defendant was assets in his own hands, which , if not accounted for according to law, his administration bond might, have been put in suit.” Nor would it make any difference with the operation of this principle of the common, law whether the administrator or executor were solvent or insolvent. This is shown by Leland v. Felton, 1 Allen (Mass.) 531, where it was held that debts due to-
decision is, that the mere fact of the administrator owing the debt to the estate does not make the debt actual money, but it remains a debt like any other, good or bad, as the case may be. And, being like any other debt, it must be inventoried and accounted for as other debts. Not to account for it in administration is a devastavit, and renders the administrator liable to the proceedings provided for in the sections of the statute above noticed” (referring to other sections of the statute). Ridgway v. Kerfoot, 22 Mo. App. 665. The just conclusion seems to be, that the operation of the statute is to prevent the assets being transmuted into money as soon as the administrator takes possession of the estate, but that it leaves them in his hands to be collected and accounted for exactly as any other assets. McManus v. McDowell, 11 Mo. App. 443. If, as in this case, the debt is evidenced by notes, the assets remain
Nor is it perceived how such a question can be made to turn upon an inquiry into whether the executor was solvent or insolvent, — that is, insolvent in the sense of being unable to pay all his debts, or in the mercantile sense of being unable to pay his debts as fast as they mature, and yet solvent in the sense of being able to' pay this particular debt. As the debtor has in this state the right to prefer his creditors, the only solvency, which in this relation could be made the subject of an inquiry,, would be the solvency of the executor in the sense of his being able to pay this particular debt. To that extent the statement of Shaw, 0. J., in Kinney v. Ensign, 18 Pick. (Mass.) 235, that, on technical ground as well as •on considerations of policy, an administrator is not permitted to show that he could not collect a debt due from himself holds good, even under the rule established in McCarty v. Frazer, supra.
A majority of the court are, then, of opinion that the word “assets” in the above statute is not equivalent in value or meaning to the word money. An executor, who owes money to the estate of the decedent •on overdue notes, may inventory them as money. By ■so doing he at once charges his sureties with so much
This also seems the view most beneficial to the estate. The right of the executor to get credit for uncollectable assets does not depend upon the fact whether or not the debtors are insolvent; but it depends upon the fact whether he could have collected the assets-by using such diligence as the law imposes upon a trustee. Williams v. Petticrew, 62 Mo. 471. Now, it will not be contended that, when an executor was a. debtor of the estate on an overdue obligation, and was solvent at the date of filing his inventory, he could not. have collected that debt from himself. It then becomes his duty to pay it, if he can pay it, and his subsequent insolvency cuts no figure in the case. The case of McCarty v. Frazer, supra, has reference to a state of facts, where the debts are worthless as assets at the date of filing the inventory.
We have been referred to several decisions, as having a bearing upon this question, but none of them are directly authoritative. The case of Eichelberger v. Morris, 6 Watts (Pa.) 42, decided the question under the rule of the common law. In Kinney v. Ensign, 18 Pick. (Mass.) 232, the common-law principle was stated by Chief Justice Siiaw ; but the court refused to apply the principle so as to prevent an administrator from exercising his right to redeem a mortgage for the estate. In several decisions of the court of appeals of New York, which have fallen under our notice (Soverhill v. Suydam, 59 N. Y. 140; Baucus v. Stover, 89 N. Y. 1, Re Consalus, 95 N. Y. 341), the question arose under
The conclusion of a majority of the court, then, is that the circuit court committed no error in charging the executor with interest, according to the tenor of the notes, down to the time of his final settlement. But in this conclusion Judge Biggs does not concur.
But on the other question presented for decision all the members of this court are agreed. The facts bearing upon this exception may be stated as follows : The deceased left surviving him a widow and four sons. The will provided that, after the payment of a certain legacy, and after two of the sons, who were then minors, had been educated out of the general estate, the residue of the estate was to be divided equally among the four sons. This disposition of the estate was made subject to the dower interest of the widow. It was also stated in the will that Charles Graham Young, one of the sons, had received the sum of $300 as an advancement, and it was provided by the testator, that this amount should be charged to Charles in the distribution of the estate. Belle Young, the widow, was guardian of Grabell Young, who was at the time a minor. On her petition the probate court ordered the appellant to pay to her, as guardian of Grabell Young, the sum of $G75 for the support of her ward, to be
Under the record, as presented to this court, we are at a loss to know upon what principle this credit was rejected. Graham Young had no interest in the distribution, because he had been fully advanced. Belle Young was entitled to a child’s part of the personalty, and she had been paid $300. Under the orders of the probate court Graham Young was paid largely in excess of $300, which must be regarded as so much distributed to him. The executor had paid Robert Young $200 on his distributive share, and, therefore, it only required $100 to make him equal to the other heirs. The final settlement as presented showed an actual balance in the hands of the executor of $199, which amount was more than sufficient to make Robert equal with the other distributees except Grabell. The excess paid Grabell resulted from the orders of the probate court, and we are not disposed to impose any penalty on the executor for obeying them. The mere fact that the money was paid to Henry 0., without first obtaining an order of distribution, could not affect the question on the merits, because, if nothing had been paid Henry C., he would have been entitled to an order of distribution in his favor for at least $300. Hence, we conclude that the judgment of the circuit court on this question was erroneous.
Dissenting Opinion
(dissenting).— I have been unable to agree with my associates concerning the first proposition discussed and decided in the opinion. I think that thequalifieation of Mr. Thrasher as executor, and the recognition by him of his debt to the testator by entering the notes on the inventory, must, under this record, be treated as absolute payment of the notes at the date of the inventory. This would stop all interest on the notes as such, and, if the executor ought thereafter to be charged with interest on the amount, it would have to be done on grounds other than that of a continuation of the original indebtedness. Any other view of the law would, in my opinion, lead tó complications and legal absurdities. At common law the nomination by a testator of his debtor as executor extinguished the debt. The reason was that an executor could not sue himself, and the right of action haying been suspended by the voluntary act of the creditor, it was gone-forever, except as to the creditors of the testator. Out of the hardship or injustice of this rule sprang, the-equity doctrine, which declared such indebtedness to be assets in the hands of the executor and constituted him a trustee for the beneficiaries under the will. Dealing further with the question as a practical one, courts of equity, recognizing the legal difficulties which would arise if such debts were treated as ordinary demands, declared that the acceptance of the trust must be treated as payment of such debts, invoking the principle, that,, when the same person is to pay and also receive a debt,.
In the McCarty case, which was a contest between , the administrator de bonis non and the sureties on the bond of the original executor, whose letters had been
grounds, as well as on considerations of policy, an administrator is not permitted to show that he could not collect a debt due from himself. But this is in the nature of an estoppel, and it is a well-settled rule of strict law, that although a party is bound by an estoppel, as of a fact proved or admitted, yet it shall not be taken as a substantial fact from which other facts can be inferred. Monumoi v. Rogers, 1 Mass. 159. So, in pleading, a party is held to admit all facts not traversed, but it is only for the determination of the issue in which such pleadings terminate. Such admission cannot be used elsewhere as a fact from which other facts may be inferred. Or, the holding the fact of a debtor taking administration upon the estate of his creditor to be a payment, may be deemed a legal fiction, adopted for purposes of justice and convenience, as well as from considerations of policy, and calculated generally to promote justice; but such a legal fiction will never be allowed to go so far as to worlc wrong or injustice." So in the McCarty case the innocent sureties ought not to have been made responsible for the worthless debt of their principal, which would have been a wrong and injustice to them. But in the case at bar the facts are entirely difieren t.
Concurrence Opinion
(concurring). — I concur in the ■opinion, because the conclusions therein reached are unavoidable under the construction placed upon the statute by the supreme court in McOarty v. Frazer, •62 Mo. 263, which must control our decision. It was there held that the statutory provision, which made debts due from an executor assets in his hands, did ' not mean cash assets, but that such assets, notwithstanding the appointment, retained their original character until converted into cash. It is an unavoidable logical sequence, that the equity which is injected into the statute by that decision works both ways. If it is an equity in favor of the executor and his sureties, it is necessarily one in favor of the estate as against them. The character of the trust funds is fixed, and cannot, on any principle known ‘to the law, shift between parties standing in the same relation according to whether it is one or the other who asserts the equity.