Walker v. Craig

Scates, C. J. The question presented is, whether an administrator can-legally sell and assign a negotiable note, taken by him for personal property of the estate, sold by him; and before the note falls due, .where there is no fraud in the assignee ; and whether the payment, in full, of an allowance to the assignee, within a year of taking out letters, and without an order for payment, by way of discount or deduction from the sum due for the note, will be good and maintainable, on behalf of the assignee. The agreed facts show that, while plaintiffs knew the note was given for property of the estate, and that no order was made for the payment of debts, yet that they were not guilty of any fraud in the transaction, and were ignorant of the intention of Wentworth, the administrator, to commit a fraud on the estate. The facts showing Wentworth’s frauds on the estate, were not then known to them, but have since come to their knowledge. Had the plaintiffs been implicated in any fraud, by the evidence, there could be no pretense of law or justice to sustain the assignment, or payment. But regarding the plaintiffs as free from, as innocent of, any fraud, in fact and intention, on their part, I cannot doubt the powe'r of the administrator to collect, or to sell and negotiate, the sale notes of the estate given to himself, nor his power to pay debts, before orders of the county court for payments are made. A different rule would deny the administrator the power to commit a devastcmit, either in the mode of collection or payment of debts. - If every waste and devastcmit made or committed through the fraud of the administrator upon the estate, will authorize a corut of equity to set aside the transactions, and restore to the estate the property, money or effects wasted, without regard to the rights of parties who may have acquired them of the administrator, in due course of fair trade, for a faff and valuable consideration, and in good faith, then, indeed, the doctrine of devastmits, by administrators and executors, and executors de son tort, may, for all practical purposes, be stricken from the books. The safer, speedier and better course, would be to follow the property specifically, while traceable ; or, when not, to recover its value. For if the court may set aside the contract for the fraud of the administrator alone, when the other contracting party acted in good faith, it would leave the latter without protection, and liable to account for the property in kind, if in possession, or for values of the property, moneys or effects. If theyowr of the administrator is circumscribed, and exists only when he acts fairly, faithfully, and for the good of the estate,.then no one can innocently deal with him, in cases of fraud by him.; but every one must, at his own peril, ascertain whether the administrator is acting fairly in the given case. Such seems to be the rule upon which the decision was made in this case; for it is clearly shown that the administrator committed a fraud upon, and waste of the estate, by collecting in the moneys due it, and absconding with the money. But it is equally clear, that plaintiffs knew nothing of this purpose. If their innocence cannot protect them, it must be for want of power in the administrator to do wrong and waste the estate. No man could pay his debt to the administrator before it was due; no one could receive his debt from the estate before orders for payment; nor could he receive it before the expiration of a year from issuing letters; nor more than his yro rata of the estate, in cases of insolvency. Legacies assented to and paid, before debts, in insolvent estates, would be recoverable back without bonds from legatees ; and it would, indeed, seem to me, that all the principles of law, and provisions of the statute looking to and providing for the security of the estate against waste and a mal-administration, would become comparatively useless. Such cannot be, and is not the law. The liability to abuse is no ground fdr denying the existence of a power. Although an administrator may not possess as much power as an executor, the latter deriving his power from the testator and the law, the former from the law only, yet he possesses all necessary power to sell property, to negotiate securities, and to collect and pay debts. The law has provided a bond to indemnify the estate against waste and abuse. It may be true, this is not the only remedy in all cases, but I must think it is where innocent persons have dealt with the administrator in the fair course of trade, and upon a valuable consideration, without fraud. There are not wanting cases in which it has been held that letters of administration have relation back to the death of the intestate, so as to give validity to the acts done, and promises made by the administrator, before he sued out letters. Whitehall v. Squire, 1 Salk. R. 295; 1 Williams on Exrs. 334, Sec. 2. So, too, executors have maintained replevin, trover or trespass, before probate of the will, where they had an acbudl. possession which had been invaded and violated. 1 Williams on Exrs. p. 243. So, again, executors and administrators became personally and inclividually liable to pay funeral expenses, where they give orders, or ratify or adopt the acts of others. Brice v. Wilson, 8 Adol. and Ellis R. 349, note c ; 3 Mees. and Welsb. R. 350. And this, it would seem, for orders given before letters taken out. Lucy v. Walroud, 3 Breigh N. C. R. 841; though, generally, an administrator is not bound for acts done before letters. 2 Williams ort Exrs. p. 1522. But trustees, guardians, executors and administrators, and other persons acting en a/ubre d/roit, are generally held personally ■ liable on promissory notes, because they have no authority to bind, ex dvrecto, the persons or estates for whom and which they act; and it will require clear and explicit words to exempt themselves personally, which they may do, when the intention is made clearly manifest. So, if an executor or administrator make or indorse a note, in his own name, adding thereto “ as executor,” “ as administrator,” he would be personally responsible. Story on Prom. Rotes, p. 70, Sec. 63; the additional words may be treated as surplus-age, or as descripbio personas. Executors and administrators may assign notes made to the testator or intestate, as well as those made to themselves. Story on Prom. Rotes, p. 139, Sec. 123 ; Makepeace v. Moore, 5 Gil. R. 476; Walter v. Kirk et al., 14 Ill. R. 56; Dwight v. Newell, 15 ibid. 335. So, where the deceased had agreed to transfer a note, his executor or administrator may be compelled to indorse it, though without personal liability on their part. Story on Prom. Rotes, p. 136, Sec. 120. The power and right of transfer is therefore very clear, and the plaintiffs acquired the light of property in the note by the indorsement. I have as little question of the power and right of the administrator to allow full payment of plaintiff’s claim against the estate, and deduct the amount out of the price of the note. If he has committed a devastavit, he and his sureties are liable. Decree reversed.