McCormick's Ex'ors v. Wright's Ex'ors

Lewis, P., delivered the opinion of the court: On the former appeal in this case it was held, affirming the decree of the circuit court: 1. That Mr. Marshall, one of the executors of Tidball, was entitled only to his pro rata share of the assets of the estate in payment of the advances made by him on account of certain debts of the testator, upon which he was bound as surety, and that, therefore, “in crediting himself with the full amount of those debts, he committed an error to the prejudice of the other creditors.” 2.. That the ex parte settlements of the [533] executors were sufficiently impeached by the allegations of the bill, the errors complained of being apparent on the face of the accounts; and 3. That the defence of the statute of limitations had not been interposed in the lower court, and could not have availed, if it had been, in favor of the executors themselves; that as to them, the responsibility is that of a fiduciary or trustee as to whom there is no limitation, except that which results from the staleness of the demand or the presumption of payment. These questions must, therefore, he regarded as finally and conclusively settled as between the parties to that appeal. Campbell v. Campbell, 22 Gratt. 665; Ins. Co. v. Clemmitt & Wife, 77 Va. 366; Frazier v. Frazier, Id. 775; Miller’s Adm’r v. Cook’s Adm’r, Id. 806. The questions, then, to he considered on this appeal relate, first, to the nature of the liability of the estate of Province McCormick, who was a co-surety with Marshall; and, secondly, to the liability of the estate of Francis McCormick, who was a surety on the joint bond of the executors. In respect to the liability of joint executors, the settled general rule is, that each is .liable as principal .for his own acts, and as surety for the acts of his companion when they execute a joint official bond. Morrow v. Peyton, 8 Leigh, 54; 1 Lom. Ex’ors, 333. But when one of the executors actually or tacitly assents to a misapplication of the assets by the other, or knowing of an intended misapplication of the assets, he fails to interfere, and loss occurs, when by the exercise of reasonable diligence he might have prevented it, he thereby renders himself responsible as a principal debtor for such default. Caskie’s Ex’ors v. Harrison, 76 Va. 85. In that case the ruling of Lord Langdale in Williams v. Nixon, 3 Beavan, 472, was referred to, where he said: “ There can be no doubt that if an executor knows that the moneys received by his co-executor are not applied according to the trusts of the will, and stands by and acquiesces in it without doing anything on his part to procure the due execution of the trusts of the will, in respect of the negligence, he himself [534] will be charged with the loss.” See the authorities collected in 2 Lead. Cases in Eq. (ed. 1877), part 1, 1794, et seq. In the present case the executors united in making sales of the real and personal property, and made joint settlements of their accounts. They were both privy to the auditing of the debts of the estate, and thus McCormick had notice of the claim asserted by his co-executor to be reimbursed to the full amount of the debts which, as surety for the testator, he had discharged. Notwithstanding, he allowed his co-executor to collect the assets, and without interference or objection on his part to misapply them. He thereby became properly chargeable, at the suit of creditors, as a principal debtor for the loss that occurred, and not as surety, as was held by the circuit court. This, however, is a question of little practical importance in the present case, as the result to the appellees is substantially the same. Most of the objections urged by the executors of the surety, Francis McCormick, are disposed of by the decree on the former appeal, to which they were parties. They rely on the statute of limitations and lapse of time, which defence, however, was not set up by plea or answer, but by exceptions, to the master’s report after the case went back to the circuit court. Without stopping.to decide whether the defence was asserted in time, it is sufficient to say that it cannot avail under the circumstances of this case. It appears that in the ex parte settlements of 1857 and 1859 the executors credited themselves with the debts in full, which Mr. Marshall, as surety, had paid out of his own means, thus showing a large balance due the executors on the face of the accounts; but, in point of fact, the greater portion of tbe money which was misapplied was afterwards collected, á part of it as late as the year 1870. The defence is founded upon a mistaken idea as to the effect of the ex parte settlements. As was said in Leake’s Ex’or v. Leake et als., 75 Va. 792, such settlements have no sort of analogy to stated accounts between individuals. Their efficacy as evidence rests upon the long established practice and [535] usage of the country, and upon the supposed integrity of the tribunal appointed by law for the adjustment of such matters; whereas a stated account is founded upon a supposed adjustment between the parties themselves. But the statute itself prescribes the time within which an action may be brought against the sureties on an executor’s bond, which is ten years after the right to bring the same shall have first accrued. And it further provides, that the right of a person obtaining execution against the executor, or to whom payment or delivery of estate in the hands of the executor shall be ordered by a court acting upon his account, shall be deemed to have first accrued from the return day of such execution, or from the time of the right to require payment or delivery upon such order, whichever shall happen first. Code 1873, ch. 146, §§ 8 and 9; Sharpe’s Ex’or v. Rockwood et als., 78 Va. 24. Here no order for the payment of money or delivery of estate by the executors was made by any court until the entry of the decree now complained of. Moreover, it may be regarded as settled by the former decree of this court, that the executors were not in default as late as the year 1861. The running of the statute was suspended from the 17th day of April, 1861, to the 1st day of January, 1869, and the present suit, which was brought to October rules, 1878, was begun within ten years after the latter date. Equally unavailing is the defence founded upon alleged laches and lapse of time. The suit was brought in the lifetime of the active executor, and it does not appear that by reason of the death of parties or the loss of evidence it has become impossible, or even difficult to do justice between the parties. The defence was, therefore, properly overruled by the circuit court, and the decree, subject to the qualification indicated, must be affirmed. The decree was as follows: This day came again the parties by their counsel, and the court, having maturely considered the transcript of the record of [536] the decrees aforesaid and the arguments of counsel, is of opinion, for reasons stated in writing and filed with the record, that the said decree of the 3d day of December, 1883, in so far as it holds that as co-executors there “is no joint liability, as executors, on the estates of James Marshall, deceased, and Province McCormick, deceased, and that the relation of the estate of the latter to that of the former, is that of surety” is erroneous. This court being of opinion, for reasons stated and filed as aforesaid, that the liability of the estate of the said Province McCormick, deceased, is that of a joint principal debtor with the estate of the said James Marshall, deceased. It is therefore considered and ordered, that in this particular the said decree be, and the same hereby is corrected, and as corrected, affirmed. And it is further considered and ordered that the appellees recover of the appellants their costs, by them expended, &c., &c., &c. 'The costs and damages to he paid by the appellants out of the estates in their hands, respectively, to be administered, &c., &c. Which is ordered to be certified, &c., &c. Decree affirmed.