Cunningham v. Cauthen

The opinion of the court was delivered by Me. Justice McGowan. Joseph A. Cunningham died intestate, in December, 1865, seized and possessed of considerable real and personal estate, leaving surviving heirs and distributees as follows: Mary C., a daughter (who married Robert T. Dunlap, and died in 1868, leaving as her heirs her husband and one son, Joseph A. Dunlap, of whose person and estate his father, Robert T. Dunlap, is guardian), Rebecca, another daughter (who never married, but died in 1867, leaving her brothers and sisters as her heirs), Nannie C. (who intermarried with Leon C. Yanlandingham), and three sons, William J., Thorn-well K., and Beauregard Cunningham. Soon after the death of the intestate, Andrew J. Kibler, his half-brother, was appointed administrator of the estate, and entered upon the discharge of his duties as such. The war had just closed, and the administration involved some novel and difficult questions, while the tendency to confusion was increased by the fact that the sis distributees were all minors, whose mother had died before their father, and who, when not absent at school, lived with the administrator, their kinsman, or some other relatives. For some time they had no guardians, and had to be provided for by the administrator, which made it necessary for him not only to keep the account of the general estate, but also special accounts with each of the distributees, for advances made to them from time to time for various purpose's and in different amounts. After the children reached their majority, in August, 1883, this action was instituted by the distributees against Kibler, the administrator, for an account, charging, amongst other things, that the administrator, under proceedings to foreclose a mortgage held by him as administrator, had bid off a certain tract of land, known as the “Mcllwain tract,” with funds of the estate, and for the benefit of the estate, and held the legal title for the distributees; but has failed and refused to account for the rents and profits thereof received by him for their benefit, and has refused to convey the said tract of land to the distributees. Also, that a considerable amount of cotton, and [134] other personal property (including gold and silver), went into the hands of the administrator; that the said personal property of the estate was sold on a gold basis, and the notes taken therefor collected in currency, with the premium of forty per cent, on gold added, but the administrator failed to charge himself with the premium so received, as he should have done, and in various other matters had failed to make a just and true accounting. The defendant made answer in 1883, but afterwards filed an amended answer, which was substantially a general denial, and alleged that he had not only fully and fairly administered the estate, but had paid to the plaintiffs large sums in excess of the amount to which they were really entitled. And these alleged over-payments were set up as counter claims and judgments demanded against the several plaintiffs for the same. The plaintiffs in reply denied every allegation of the amended answer as to the counter claims, &c. The issues were referred to D. A. Williams, Esq., as special referee, before whom the administrator was ordered to account for the administration of the estate; but he refused to take the initiative in stating the account, and the plaintiffs were required to assume the burden of charging the administrator. The testimony was very voluminous, covering at least two hundred pages of printed matter, marked “Appendix” in the brief. After the plaintiffs rested their case, the administrator was sworn as a witness, and his testimony taken down in writing and signed. Soon after, in June, 1886, he died intestate, and letters of administration upon his estate having been granted to Lewis J. Cauthen, he was substituted for the original administrator as defendant in the case. The report of the referee is very long, embracing a full account of the general estate, and also separate accounts with each of the distributees, as to partial advancements which had been made to them as needed from time to time. The whole report, of course, can not be restated here, but for reference it is printed in the brief. Both parties filed numerous exceptions, which were heard by his honor, Judge Witherspoon, and from his decree, confirming the report in some particulars, and recommitting it with instructions as to others, both parties [135] now appeal to this court—the plaintiff on fifteen principal exceptions, and in addition more than thrice that number of subordinate specifications, and the defendant on thirty-one principal exceptions, with many alleged omissions as to both findings of fact and errors of law. The points raised are so various and numerous that it will be impossible to consider the exceptions seriatim, but we will endeavor to consider the most important of them, and to classify, if possible, the alleged errors in the mere statement of the accounts, many items of which involve only inconsiderable sums. (1) As to the premium on the gold and silver, which went into the hands of the administrator. (See exceptions of defendant, 1, 2, 3, 4, 5, 6, 7, 8, and 9.) The referee reports that there was on hand, at the death of the intestate, $1,608.95 in gold and silver coin; and that personal property, including fifty-eight bales of cotton, was sold by the administrator for the aggregate sum of $9,428.13, on the terms “payable in gold or its equivalent;” and that at the time of the receipt of the gold and silver on hand by the administrator, and at the time the aforesaid sales of property fell due, the said specie was at a premium of forty per cent., which said premium upon the specie and the amount of the notes is estimated and embraced in the general accounting of the estate reported by him; that, as matter of law, the administrator is chargeable with, and must account for, all moneys belonging to the estate, which came into his hands, or which should have been collected by him, with the premium on gold collected by him, or which could have been collected by him when due, and with the interest as charged in the aforesaid accounting. In this report and recommendation of the referee, the Circuit Judge concurred, and the question now is, was that ruling error? 1 It certainly is fundamental, and one of the moral maxims of equity, that a trustee shall not be allowed to make profit to himself out of the estate of his cestui que trust in his hands; and it is equally true, as a matter of fact, that in 1866 and 1867, gold and silver possessed a paying power beyond that of the mere currency of that time; and at first view it may strike the casual observer, that an administrator [136] should be required to account for specie at its true value, or according to its power in making payments and in obtaining receipts. But upon careful consideration, we think, it will be found that such view is not maintainable either in reason or authority. At the close of the war, specie was the standard of value, and for a time almost the only circulating medium of exchange in this State. From very well known causes, paper currency was much depreciated. None, not even -the wisest, could foresee clearly what would be the outcome in regard to the financial'condition or currency of the country. But, as it happened, the depreciation turned out to be only temporary, and now national currency is convertible at par into gold or silver under the legal tender acts. 2 As to the specie found on hand at the death of the intestate, there was no contract whatever as to what should be done with it, except that it should be projierly taken care of, and used, as the law required, in the due course of administration. There was no proof that the administrator ever exchanged the gold for greenbacks, thus realizing the premium. We do not think that he was bound to make the exchange, or that we are authorized to presume that he had done so. 3 As to the notes taken by the administrator for property sold, payable “in gold or its equivalent,” the premium on those notes could not have been collected at law by the administrator; and if he had been obliged to sue, he could not have collected the premium in national currency. As we understand it, after some conflict of opinion, it is now settled “that if the contract is only soluble in coin, it would be improper to enter judgment for the market value of that amount of coin calculated in terms of the treasury notes; the judgment must simply be for so much gold or silver.” Black on Judgments, section 132; Bronson v. Rhodes, 7 Wall., 229, and authorities in note, Curtis edition. “A promissory note, payable in gold coin, or the equivalent thereof in United States legal tender notes, is completely discharged by a payment in legal tender notes, dollar for dollar.” Killough v. Alford, 32 Texas, 457; s. c. 5 Am. Rep., 249; Chesapeake Bank v. Swain, 29 Md., 483; Wood v. Bullens, 6 Allen, 518; and see Gist v. Alexander, [137] 15 Rich., 50. We think it was error to charge the administrator with the whole premium en bloc; but we think that he is properly chargeable with the premium on gold or gold notes due the estate, which it can be shown he actually received, in addition to the value of the paper, by its terms. 4 (2) As to the Mcllwaine land. The referee reports, that cotton belonging to the estate sold in January, 1866, was bid off in fair and open market by the administrator, Andrew J. Fabler, at the price of twenty-four cents per pound, and soon after sold by him, at private,sale, to different persons, at twenty-eight cents per pound, payable in coin or its equivalent in currency; and the cotton was charged against him on the sale bill, at twenty-eight cents per pound, payable in coin or its equivalent in currency, this sum, as shown by the testimony, being the true market value at that time, and the administrator, having bid off the cotton at the estate sale, became liable to the estate for the actual value thereof; that the tract of land, known as the Mcllwaine tract, sold under the foreclosure of a mortgage given by James D. Mcllwaine to secure the purchase money of a lot (fifteen bales) of the cotton so purchased and resold by the administrator, was purchased by the said Andrew J. Fabler, and a deed of conveyance of- said land was executed by the proper officer of the court to him, the said Andrew J. Fabler, in his own right. Upon this state of facts the referee held that the distributees (plaintiffs) have no title to the said tract of land, the title thereto being vested in the heirs of A. J. Fabler, their ancestor, who purchased the same at the sale, under the judgment of foreclosure, as shown by the testimony. Upon this question the referee concludes that, even if the mortgage under which the land was sold had been trust funds in the hands of the administrator (which does not appear), any title or interest which the distributees might have in the same, would cease as soon as the liability thereon is paid off and discharged, and then is only chargeable, equally with all other property of the said Fabler, with the payment of the several amounts due by him to the plaintiffs or their legal representatives, etc. The Circuit Judge, stating that he was satisfied that the adminis [138] trator acted, in good faith in bidding off the cotton at the sale, said: “The fact that he charged himself with the increased price for which he sold the cotton, is the highest and best evidence of good faith.” He also found that the administrator charged himself with the cotton at the highest market price ; but he declined to make an order for an amendment of the complaint so as to make the heirs at law of Kibler parties, so as to try the title to the land, but preferred to leave the matter of the title oj>en. ¥e think, however, from his other rulings, that he substantially agreed with the referee. The cotton belonged to the estate, and, of course, the distributees are entitled to its actual value. But they are not entitled both to the value of the cotton and the securities taken for it, or any part of it, at the second sale made by the first purchaser. The administrator does not seem to have had a very clear idea of his rights or liabilities in the matter. He bid off the cotton, and very properly charged himself with its actual value on the sale bill; and yet it seems that he took the note payable to himself as administrator, and sometimes spoke of having purchased it for the estate. That was not consistent with his conduct and the facts of the case. We agree that the extent of the right of the distributees is to realize the actual value of the cotton as charged on the sale bill. If that can be made good in the accounting, then the distributees have no further interest in the matter of the Mcllwaine land. The legal title is in the heirs of Kibler, and there is no equity on the part of the distributees to have declared a resulting trust, or to have the rents and profits thereof. In this view, it was error to allow the administrator credit for costs or fees or any other expenses incurred in recovering or cultivating the Mcllwaine land. Section 1974 of the General Statutes provides as follows: “It shall be lawful for any executor or executrix, administrator or administratrix, to become a purchaser at the sale of the estate of his or her testator or intestate, under whatever authority the said sales may be made, and the property so purchased shall be vested in him or her; but he or she shall be liable to the parties, interested for the actual value of the property at [139] the time of sale, in case it shall have been sold at an under-price,” &c. See Finch v. Finch, 28 S. C., 168, and authorities cited. 5 (3) As to the deposit in the Bank of Mecklenburg, N. C., the defendant alleges that the referee erred in not allowing the administrator credit for money deposited in the Bank of Mecklenburg, North Carolina. To sustain this credit, three certificates were produced, issued by the Bank of Mecklenburg at Charlotte, N. C., payable to A. J. Kibler individually, for $1,189.50 in gold, $40.44 in silver, and $371.77 in currency, and bearing interest at eight per cent. The bank failed on August 4, 1875, and on November 1, 1878, A. J. Kibler individually receipted on each of the certificates for a dividend paid by the bank. He does not refer to the “deposit” in his returns, and does not charge himself with the dividend received. There were endorsements, without date, on the certificates, in the handwriting of Kibler, that they belonged to the estate of Cunningham, and his testimony to the same effect, when called upon to account, is inconsistent with his acts. The Circuit Judge held: “Assuming that the bank was in good financial standing, and that there was no impropriety in the administrator depositing money in a bank at Charlotte, N. C., upon the evidence I fail to see how the referee could allow the credit.” The referee found that, as matter of fact, the money deposited was the individual property of the administrator, and not of the estate. In this finding the Circuit Judge concurred, and, under the well established rule, it will not be disturbed unless it is against the weight of the testimony, which we cannot say that it is. We concur with the Circuit Judge in sustaining the referee on this joint. See Williams v. Williams, 55 Wisc., 300; s. c. 42 Am. Rep., 708. 6 7 The defendant’s exceptions down to No. 15, and including. 29 and 31, have now been considered in connection with the special points disposed of above. Nos. 15, 16, 17, 18, and 19 are too general, making reference to former exceptions to the referee’s report difficult to find in such an enormous record. Besides, they make no particular points, [140] but are rather argumentative as to what should be the proper principles applied to the accounting. As, for example, No. 15 complains that “The judge erred, in not holding that the verified annual returns of ELiblei’, as administrator, to the Probate Court, made ten, fifteen, and twenty years ago, when the facts were fresh in his mind, and entered of record, open to the inspection of all parties interested and to the world, were prima facie evidence of the credits claimed. The ,fact that ELibler died pending the reference, &c., gives additional force to the rule invoked, and the same should prevail in the absence of affirmative evidence, that the credits claimed were improper expenditures, or otherwise successfully impeached,” &c. There is nothing here to decide, except to hold, as the judge did, “that Kibler’s returns to the Probate Court were prima facie evidence of the credits claimed, if it appeared on the face of the returns for what p> imposes of the estate the payments were made.” As to the exceptions indicated, it is really impossible to determine what are the precise points which are sought to be reviewed; and the enforcement of rule No. 5 of this court is invoked. 8 Exception 20 of defendant complains that there is error in the manner of stating the account, “in this, that not one of the payments made to, or for, distributees, on account of their distributive shares, has been credited against ‘the annual balances’ found in Kibler’s hands in any year of the accounting, and that Kibler is held responsible for a principal or interest bearing fund in excess of what is just.” We are not sure that we clearly comprehend the point made. As we understand it, in stating the account of the general estate, this is not a case, so far as the distributees are concerned, for the application of the rule in regard to “annual balances.” The amounts paid to (¿he distributees from time to time were not, as we think, “expenditures,” in the sense of Dixon v. Hunter, 3 Hill, 206. They did not, in reality, diminish the volume of the estate in the hands of the administrator, the whole value of which it was necessary to ascertain, to make a fair division among those equally interested. The payments were rather in the nature of advances or loans, still parts of [141] the whole estate, and to be accounted for as such; the children advanced, however, being required, on final settlement, to account for interest on their respective advances, from the times they were received, and thus re-imburse the administrator for so much interest as had been charged to him on the advances. This exception, as stated, must, therefore, be overruled. 9 Exception 21 of defendant. Because the Circuit Judge erred in ignoring, or failing to pass upon, defendant’s 30th exception to the referee’s report, by which defendant claimed credit for two and one-half per cent, commissions on $11,613.83, for interest charged in “exhibit A,” received between January 1, 1883, and August 1, 1890. As it seems that the judge made no ruling upon the subject of this exception, and the case must go back to the Circuit, it will be recommitted. 5 Exception 22. Because the referee refused to allow Kibler credit for paying out for W. J. Cunningham $2.50, tavern bill paid to B. P. Boyd, and for sundry other payments for the year 1871, aggregating $151.98, and for $8.10, paid by Kibler for him in 1872 and 1873,” &e. These items of account, stated in the referee’s report, were all disallowed by the referee; the defendant excepted, the exception overruled, and the defendant appeals. Id such a multitude of items of account, something must be allowed to the concurrence of the referee and Circuit Judge. Exception overruled. 5 Exception 23 of defendant. Because the referee refused to allow Kibler credit for paying a number of items, including board in 1869 and 1870, for Thornwell K. Cunningham. Similar to the above. Disallowed by the referee; defendant excepted, exception overruled, and defendant appeals. Exception overruled. 10 Exception 24. Same as above, but in reference to- the account against Nancy C. Vanlaudingham. In this case the Circuit Judge allowed a credit of $25 for board. This is not disturbed,, but defendant’s exception overruled. Exception 25. The same as to- the account against Beauregard Cunningham. But in this matter, also, the judge allowed a credit of $40 for board. There is a good deal of confusion in the testimony upon, the subject of board, but we con. [142] firm the ruling of the Circuit Judge. Defendant’s exception overruled. 11 Exception 27 of defendant. “That the Circuit Judge erred in overruling the defendant’s thirteenth (13) exception to the referee’s report, which claimed credit for the two following notes, charged as part of the sale bill, which Kibler failed to collect, viz.: (1) Note given by J. W. Crider and J. M. Ingraham, for $114.24, (2) and note of J. M. Ingraham, for $83.25, March 24, 1866. And the following notes given for money loaned, belonging to the Kibler (Cunningham) estate, viz., note of W. G. Stewart and Margaret Stewart. These notes were lost, and the Circuit decree did not allow the defendant credit for them. The referee disallowed credit for the notes as follows: (1) For the Crider note, for the reason that it was not given to the estate, but to Kibler for cotton, which he claimed to have bid off for himself; also, for the reason that the surety taken was insufficient, and the note had been paid in part. (2) He also disallowed credit for the Ingraham note, for the reason that there was no surety to the note, nor security for its payment, and also for the reason that it was not shown to be for the estate, or that the same, with proper diligence, could not have been collected. (3) He disallowed the Stewart note, for the reason that there was but one surety, that it was not shown to belong to the estate, or that the same could not have been collected at any time, down to 1875. The Circuit Judge concurred with the referee iu these findings and rulings, and we cannot say that in doing so he committed eri’or. Exception overruled. 12 Plaintiffs’ exceptions, from 1 to 9 inclusive, have been considered in connection with the subject of the Mcllwaine land. Exception 10 of plaintiffs, complains of error in the allowance of credits to the administrator, consisting of twenty separate and distinct claims of credit allowed, which seem to have been strongly contested and carefully considered below, where the witnesses were present, and the able counsel engaged had ample time. After this contest the referee allowed the credit in each claim. The plaintiffs excepted, exceptions overruled, and the plaintiffs appeal. This court really [143] has not the time to reconsider every item in an action for account. The concurrence of the Circuit Judge with the referee as to the sufficiency or insufficiency of the proofs, must, as a rule, be taken as conclusive. We have looked through the specifications of error alleged under this general exception, and we can not say that there is error. Exception overruled. 12 Exception 11 of plaintiffs complains of error in the Circuit decree, in allowing Kibler, the administrator, credit for certain alleged losses of money, claimed to belong to the estate of the intestate, whereas the evidence failed to establish that said losses were incurred without fault on the part of the said administrator: (1) Loss of note by J. B. Mobley et al., for $25, and premium, $10.29, it not having been shown that the same could not have been collected when due. (2) Loss of note by D. P. and 6. W. Bell, for $7.60, and premium, $3, it not having been shown that same could not have been collected when due. (3) Loss of balance due on note of B. F. Mobley et al., said balance being $2.86, and the premium thereon, $5.14, it not being shown that same could not have been collected when due. As to the specifications of alleged error, we have looked through the evidence, and we can not say that there was error. Just after the war was a hard time for all trustees. The referee allowed the credits, the plaintiffs excepted, exception overruled, and plaintiffs appeal. Exception overruled. 13 Exception 12 charges error in finding that the said Kibler, as administrator, paid out to and for one of the plaintiffs, William J. Cunningham, on account of his distributive share in the estate, certain sums herein below stated, whereas there was no sufficient evidence to establish the same as proper payment on account of said, share, and the Circuit Court should have sustained the exceptions by plaintiffs. As to the specifications under this general head, the same remark is made as above under exception 10. Exception overruled. [143] Exception 13 of plaintiffs complains of error in finding that the administrator Kibler paid out to and for another-of the plaintiffs, viz., Thornwell K. Cunningham,, on account [144] of Ms distributive share in the estate, certain sums herein below stated; whereas there was no sufficient evidence to establish the same as proper payment on account of the said share, &c. As to the specifications under this general head, the referee allowed'them; the plaintiffs excepted, the exceptions were overruled, and the plaintiffs appeal. Exception overruled. 14 15 Exception 14 of plaintiffs complains of error in finding that the said Kibler, as administrator, paid out of the moneys of said estate certain sums below stated, whereas there was no sufficient evidence to establish the same as proper payments on account of the said estate, and the Circuit Court erred in overruling the report of the referee, disallowing the same, viz.: (1) Clerk Clyburn’s costs in Croxton v. Kibler, $3 ; (2) J. D. White’s attorney’s costs, Croxton v. Kibler, $30 ; (3) Clerk Clyburn’s costs, Croxton v. Kibler, $9. These three items are for tax costs in the same case, and may be considered together. In 1866, soon after the war, it seems that educational facilities in Lancaster County were not good, and that Kibler, wishing to send four of the Cunningham children to school, procured the services of one Croxton as a school teacher for ten months, for $300, the tuition fees of some neighbors, who sent some thirteen children, to assist in paying the amount agreed upon, $300. There was controversy about it, and Croxton sued the administrator Kibler for the whole amount, and recovered judgment against him, and he had the costs, now in contention, to pay. Kibler had no children of his own, and he claimed that the arrangement with Croxton was made exclusively for the benefit of the Cunningham children. It is true, the contract was that of Kibler, and not of the children, but it was clearly for their benefit, and we think that, in justice and equity, the administrator should have the credit. The referee disallowed it, the defendant excepted, the Circuit Judge sustained the exception, and the plaintiffs appeal. We concur with the Circuit Judge, and the exception is sustained. In the matter of the costs. As the case will have to go back to the Circuit to reform the account in some respects, we think it better that the order as to costs should await that account [145] ing. The order as to costs is reversed without prejudice. The judgment, of this court is, that the decree of the Circuit Court be affirmed in all matters, except as herein reversed or modified, and that the case be remanded to the Circuit Court for such further orders and proceedings as may be necessary to carry into effect the conclusions herein announced.