Soper v. Pointer

BRYAN, Circuit Judge. Appellee, Mrs. Zoe L. Irwin, now Pointer, executed a promissory note payable to the First National Bank in Decatur or order, and signed it “Mrs. Zoe L. Irwin, Admx. S. W. Irwin Est.” The note was given after her appointment as administratrix of the estate of her husband, S. W. Irwin, in renewal of her personal note executed a few days before she was appointed. The proceeds of the original note were used to pay a debt of the decedent. The bank knew the purpose for which the money was borrowed and intended to extend credit not to appellee but to the estate she represented. Appellant, as receiver of the bank, brought this suit against appellee individually. Appellee defended, successfully in the district court, on the ground that she was not personally liable. But she did not plead or prove that she had the authority of the probate court to give the note on behalf of the estate. She makes no contention here that she had such authority, and it was assumed in the argument on both sides that in fact she did not. Besides, the burden was on her to show authority from the probate court if it was her intention to defend the suit on that ground. Error is assigned upon the giving of the peremptory instruction in her favor. [677] We agree with counsel for appellee that the note showed on its face that it was her intention to bind the estate of the deceased and not herself, and also that the bank accepted the note with intent to look only to appellee in her representative capacity for payment. If this were all, doubtless the judgment should be affirmed upon the authorities upon which she principally relies. Metcalf v. Williams, 104 U. S. 93, 26 L. Ed. 665; Cotton v. Courtright, 215 Ala. 474, 111 So. 7. See, also, American Trust Co. v. Canevin (0. C. A.) 184 F. 657. In the first and last of the cited cases the agent had authority to act for his principal. In the other, the notes of the executors added nothing to the obligations of the estate, but merely evidenced the amounts owing to legatees. The trouble with the defense in this case is that appellee, merely because she was administratrix, had no authority to bind the estate to pay the note sued on. It is true generally that an administrator cannot, without the aid of a statute, create a liability against the estate which he represents; and that, if he undertakes to do so and fails for lack of authority, he is personally bound. Woerner’s American Law of Administration (3d Ed.) § 356; Sehouler on Wills (3d Ed.) § 2574; Smith v. Peyrot, 201 N. Y. 210, 94 N. E. 662 ; Carr v. Branch, 85 Va. 597, 8 S. E. 476; Howard v. Leete (C. C. A.) 257 F. 918. The reason for the rule is that the contracting parties are presumed to intend to enter into a valid, binding contract; and since the estate is not bound, in or-, der to give life to the contract, it is necessary to hold the undertaking to be that of the personal representative. Taylor v. Davis, 110 U. S. 330, 4 S. Ct. 147, 28 L. Ed. 163. This rule of liability is recognized and enforced without qualification in Alabama, the state from which this case comes; and it has been applied in cases involving promissory notes. Whiteside v. Jennings, 19' Ala. 784; MeCalley v. Wilburn, 77 Ala. 549'. It is not impaired by the decision in Richardson v. Fields, 124 Ala. 535, 2,6 So. 981. There the note of the trustees of an incorporated college was held void on the ground that the trustees received no consideration, because the note was given in payment of an antecedent debt of the college. In this ease there was consideration moving- from the bank to appellee, for she received from it the amount of money represented by her note. The majority decision in the case of Grafton National Bank v. Wing, 172 Mass. 513, 52, N. E. 1067, 43 L. R. A. 831, 70 Am. St. Rep. 303, held that the executor’s indorsement upon a renewal note given for a debt of the estate was not binding on him personally even though the estate was not bound. But we are unable to follow that decision since it stands practically alone and is opposed to the great weight of authority. It is provided by an Alabama statute that an administrator may, by authority of the probate court, give a note for the purpose of paying a debt of the deceased; and that upon doing so the liability thereon is not his, but becomes that of the estate. Alabama Code, § 58301. It was recognized by the court in Cotton v. Courtright, supra, upon which much reliance is placed by appellee, that if the executors had undertaken without authority of the probate court to Create a debt or obligation against the estate they would have become personally liable. It is only by complying with the statute and receiving authority from the probate court to execute notes binding upon the estate that the administrator may escape personal liability upon his promissory note although it was signed by him in his representative capacity. Christian v. Morris, 50 Ala. 585. The judgment is reversed, and the cause remanded for further proceedings not inconsistent with this opinion.