Ringgold v. Stone

Mr. Justice Compton delivered the opinion of the Court. The bill in this case was brought by the legatees, under the will of John Redman, deceased, against John Ringgold and others. The testator had been engaged for a number of years, in the business of a merchant; and at the time of his death was interested as a partner in two mercantile establishments; the one under the name of Ringgold & Redman, and the other, under that of Ringgold, Redman & Co.; the partners in the former being Ringgold and the testator, and those in the latter, Ring-gold, the testator and Henry R. Hynson. Besides his joint interest in these mercantile establishments, the testator, at the time of his death, was also seized and possessed of a separate estate, both real and personal, consisting chiefly of bonds and promissory notes on divers persons. The testator, after making sundry bequests, appointed Ringgold and Mrs. Redman, his wife, executor and executrix of his will, who qualified as such, and possessed themselves, not only of the separate estate of their testator, but also of the effects of the mercantile establishments (consisting in part of promissory notes and bonds for the payment of money,) and filed in the County Court an inventory of the same. After making their first annual settlement with the court— which was done at July term, 1834 — Mrs. Redman intermarried with Daniel J. Chapman, and from that time forward, Ringgold acted alone in the settlement of the testator’s estate, making further settlements with the court in 1835, 1836, 1837, 1338, 1839, 1841 and 1845 — the last mentioned being a final settlement. The object of the bill was to impeach these settlements. Ringgold pleaded the settlements and decrees of the County and Probate Courts in bar to the relief sought. The plea was disallowed, and he made the same defence by way of answer. The Chancellor sustained an exception to so much of the answer as set up the subject matter of the plea. This was error. Keatts vs. Rector, 1 Ark. 391, cited by counsel to sustain the ruling of the Chancellor, was, in effect, overruled by the subsequent decision of this court, in Kelly’s Heirs vs. McGuire et al., 15 Ark. 607, where it is held that after a plea has been disallowed, the same defence may be insisted on by way of answer. The erroneous decision of this preliminary question becomes unimportant, however, if it shall appear from the evidence adduced, that the settlements were successfully impeached, even allowing Ringgold the benefit of the defence denied him by the Chancellor. On the final hearing the Chancellor opened the accounts, and referred them to the Master for re-statement. Ringgold alone appealed, and so much only of the decree as is against him will be examined here. In order to test the correctness of the decree, we will first ascertain the jurisdiction of the courts which passed upon the matters in controversy, and the nature of their adjudication. Under our judicial system, the Probate Court has jurisdiction in the settlement and allowance of executors and administrators, and to hear and determine all controversies respecting such accounts, Gould's Dig. chap. 48, sec. 2; and our statute, regulating the administration of the estates of deceased persons, provides that every account presented to the Probate Court by any executor or administrator, for settlement or confirmation, shall be continued, without being acted on, until the next term of the court, the Clerk giving notice by publication in some newspaper, or by advertisement set up in his office, and on the court house door, of the filing of said accounts, to all persons interested in the settlement of the estate, calling on them to appear and file exceptions to the account, if any they have, on- or before the second day of the next term of the court; and the statute further provides that if exceptions are not filed within the time specified, the account shall be examined and confirmed by the court, and when confirmed, shall never thereafter be subject to investigation, unless in a court of chancery, upon the allegation of fraud supported by the affidavit of the party making such allegation. Gould's. Dig. chap. 4, secs. 128, 129, 130. By the same act the right of appeal is secured. The jurisdiction and powers thus conferred on the Probate Court, are ample, and its adjudication upon the matters now drawn in controversy, must be regarded as the judgment of a court having jurisdiction of the subject matter, and the parties, and is binding and conclusive except for fraud. Under the Territorial Statute, which was in force at the time some of the settlements were made, the County Court had jurisdiction in matters testamentary, with powers essentially similar to those now exercised by the Probate Court; and its adjudication was a judgment likewise conclusive, if not vitiated by fraud, as held in Raysdale vs. Stuart, 3 Eng. 270. So that if mere errors occurred in the settlement of the appellant’s accounts, the only mode of correcting them was by appeal. The Chancellor was of opinion that the appellant had fraudulently omitted to account for interest which accrued on the bonds, notes, etc., that were solvent, and belonged to the testator, separately and in his individual right, at the time of his death, as also for the testator’s part of the interest which accrued on the bonds, notes, etc., that were solvent, and belonged to the mercantile firms of which the testator was a member; and decreed against the appellant accordingly, with directions to the Master that, in taking an account of the interest, he should deem the bonds and notes as falling due twelve months after the death of the testator, unless the contrary should appear in evidence, and charge the appellant with interest at the rate of six per cent, per annum from that time until they were collected, unless the evidence should show that they bore interest at a different rate. We agree with the Chancellor that the omission to account for interest was fraudulent. The appellant admits, in his answer, that some of the bonds and notes were probably due, and bearing interest at some legal rate, not exceeding ten per cent., at the time of his testator’s death, and that he collected all such of them as were on solvent persons, and legally collectable, with such interest as was due on them; but what portion of the bonds and notes were due at the time of the testator’s death, or when any of them fell due, or what rate of interest they bore, or when or how much of such interest was paid to him, he had no satisfactory or reliable means of ascertaining; and avers that all the interest which he ever collected on them he fully paid over and accounted for, in his several settlements with the County and Probate Courts, charging himself therewith, from time to time, “ either under the head of interest, cash received, or some other appropriate head,” and referring to an authenticated copy of his settlements, and the inventory of his testator’s estate, made them a part of his answer. The inventory contained an imperfect description of the bonds and notes, omitting to show when they were due, what amount of interest, or whether any, had then accrued, or what rate of interest they bore. The appellant, in the settlement made in 1834, charged himself with the principal sum as set forth in the inventory, and, though the greater part of the bonds and notes continued to remain in his hands, for several years, uncollected, he never, in either of his settlements, charged himself with any of the interest, which, he admits, he collected on them — the only interest accounted for being that which accrued “ on money on hand,” as charged in the settlement of 1836, and that “ on money loaned out,” as charged in the settlements of 1837 and 1839. These facts evince a course of conduct in an executor which it is impossible to reconcile with the absence of fraud. The directions to the Master, for his guidance in ascertaining the amount of the interest to be accounted for, were erroneous. As has been remarked, the appellant, as executor, did not make and file in Court a perfect inventory of the bonds and notes, nor did he show, in his accounts, what amount of interest he had received — thus failing to preserve, as it was his duty to do, the evidence necessary to establish the exact amount of interest, which he fraudulently withheld; and when interrogated, under oath, was found ignorant of that which it was his duty to know. Under such circumstances, every presumption is against the appellant, and the law charges him with interest on the bonds at the highest legal rate, from the time they were executed, in the absence of proof to the contrary. Smith's Lead. Cases, vol. 1, pages 470, 474; Finch vs. Ragland, 2 Dev. Eq. R. 143. Although this rule might operate, in some instances, to charge the executor with more interest than he received, yet, in all such eases, the hardship would result from a breach of legal duty on his part; while a rule, less rigidj would encourage executors not to preserve the evidence necessary to fix their liability for interest received and appropriated to their own use. Vide Finch vs. Ragland, 2 Dev. Eq. R. 143. But, inasmuch as this error was against the appellees, who did -not appeal, the decree, under our practice, will not be disturbed, because of the erroneous decision of the Court below, upon this'point. Dooley et al. vs. Dooley et al., 14 Ark. 125. Whether the Chancellor decreed against the appellant for interest other than he had accounted for, on cash balances in his hands at each settlement, does not distinctly appear. The decree, as copied into the transcript, is far from being clear and explicit as to the fact. Upon a careful examination, however, we have concluded that he did not; and could not have so decreed upon the evidence before him. The decree against the appellant for the value of sundry articles of personalty, was erroneous. The bill charged, in general terms, that the appellant fraudulently omitted to account for all the property mentioned in the inventory. This allegation was not sufficiently specific. This Court held in Conway vs. Ellison, 14 Ark. 360, that “ when fraud is relied on as a ground of relief, the facts and circumstances constituting the fraud, must be stated in the bill with distinctness and precision, so as to apprise the defendant of the true matter of the' case, and the points to which testimony should be supplied.” The decree opening the settlements, and directing an investigation before the Master, as to the items of commissions allowed the appellant for his risk and trouble in the settlement of the testator’s estate, and also as to the item of $736 52, allowed for improvements put upon the testator’s real estate, was likewise erroneous. There was no evidence of fraud connected with the allowance of these items; and we have seen that the County Court had jurisdiction of the subject matter, and the parties, and that its judgment was conclusive, except for fraud. Upon the whole case, we are of opinion that so much of the decree as requires the appellant to account for the interest which accrued on the bonds, notes, etc., that were solvent, and belonged to the testator separately, at the time of his death, as also for the testator’s part of the interest which accrued on solvent bonds, notes, etc., belonging to the mercantile firms of •which the testator was a member, together with the directions of the Chancellor for taking an account in respect thereof, ought to be affirmed; and that so much of the decree as is against the appellant, touching all other matters in the cause, ought to fee reversed — the appellant and the appellees each paying one-half the costs in this Court.