Vreeland v. Schoonmaker

The Ordinary. The administrator of Enoch J. Vreeland, upon the settlement of his accounts in the Orphans Court, among other items for which he claimed credit, prayed allowance for $2000, “amount received by Sophia Vreeland (widow of the intestate), by bequest from her father during coverture with the intestate, and which, at his death, remained in his possession.” Exceptions filed to the account by the next of kin of ■ the intestate, were by the decree of the court overruled, and the account was allowed as audited and stated by the surrogate. Prom this decree the exceptants appealed. The material question in the cause is, whether the sum of $2000, which formed the subject of exception, was in fact the property' of the widow, or whether it belonged to the estate of her husband. It is admitted that the sum of $2000 came to Mrs. Vreeland during her coverture, in the year. 1855, from the estates of her father and mother, and that it passed into her husband’s hands and was inventoried. Her mother died about the year 1850, seized of certain real estate.' Her father, Abraham L. Ackerman, died on the 9th of April, 1855, intestate, whereupon his children became each entitled to a share of his estate, as well as of the estate of .the mother. In December, 1855, Lawrence and Abra — 521 — ham Ackerman, two of the sons of Abraham L. Ackerman, agreed with their sisters to give them each $2000 for their respective shares of their father’s and mother’s estates. In fulfilment of this agreement, on the 24th of December, 1855, Lawrence and Abraham Ackerman gave to Mrs. Vreeland for her share, their joint and several bond for $2000, payable on the first of May, 1856. This bond was given to Mrs. Vreeland with the knowledge and assent of her husband, who, thereupon, joined with his wife in a conveyance to her brothers, of all the real estate which she inherited from her mother. It is clear that the property, both real and personal, was the property of the wife, and by operation of the “act for the better securing of the property of married women,” became her sole and separate property, and was not subject to the disposal of her husband. It is true that she had no power of aliening or disposing of the property, except by the consent and with the concurrence of her husband. She had the right of ownership, without the power of disposing of it. That power the statute does not confer. Had the property remained in her possession undisposed of, upon the death of her husband, it would have been hers absolutely. It would have formed no part of her husband’s estate. Is that title lost by her settlement with her brothers, and receiving their bond in lieu of the estate to which she was specifically entitled ? Had she accepted, in lieu of her property, a bond made payable to her husband, so unequivocal an expression of her will, might be regarded as evidence of her intention that the property should become her husband’s. But the bond was taken in her own name, and was made payable to her, her executors, administrators, or assigns. Such bond was a valid instrument in the wife’s favor at common law. The husband, it is true, by virtue of his marital rights, acquired a qualified right to the property. He had the right, during the joint lives of himself and wife, to collect the money and appropriate it to his own use. If he survived the wife, it was his. But if the husband died without re — 522 — ducing the chose in action into possession, it remained the property of the wife. 2 Bl. Com. 434; 2 Kent's Com. 135; Clancy’s Husb. & Wife 5. But the right of the husband to the wife’s choses in action, as well as to her other property, real and personal, was extinguished! by the act of 1852. The' bond in question, accepted by the wife in lieu of the specific personal and real property which she took by inheritance, remained absolutely hers as if she were a single female, and was not subject to the disposal of her husband. How has her title to that property become extinguished ? How has the husband acquired title to it? It must be borne in mind that she had both the legal and equitable title to the bond, and to the proceeds of it. She never assigned it to the husband. If she had done so, the assignment would have been inoperative and void at law. She can make no valid contract with any one, much less with her husband, for the transfer of her legal rights. But it is insisted that the facts, that the bond at its maturity was paid to the husband, and was subsequently invested by the husband in his own name, without objection on the part of the wife, and the interest received by him, are plenary evidence of the transfer of the property from the wife to the husband, and of the determination of her interest. That undoubtedly would have been the effect of the collection of the money by the husband, with or without the wife’s consent, prior to the enabling act of 1852. But since the passage of that act, she takes and holds the property as a single female. If, as a single female, she had permitted a third person, or if, as a wife, she had permitted a person other than her husband, to receive and collect her moneys, and invest them in his own name, it would have afforded no evidence of the renunciation of her right, or of his ownership of the property. He would be regarded, both at law and in equity, as her agent or trustee. The reduction of the choses in action into possession by the husband, without the consent of the wife, cannot change the title of the property. If by marriage settlement, the estate of the wife be secured — 523 — to her separate use, the husband is accountable for that part of it which comes to his hands. 2 Kent’s Com. 164. Irrespective of the right of the wife under the act of 1852, it is not every reduction by the husband of the dioses in action into possession, that will vest the property absolutely in the husband. The ownership follows the will of the husband. Hinds’ Estate, 5 Wharton 138; Barron v. Barron, 24 Vt. 375; 2 Bl. Com. 434, note 2, by Sharswood. The reduction into possession is, in all such cases, prima facie evidence of conversion to his use. He is exercising a right which the law gives him over his wife’s dioses in action'. But under the enabling act of 1852, the husband has no such right over the dioses in action of his wife. The absolute interest is in the wife. A conversion of them by the hus1 band to his own use, is a violation of that right. The law, therefore, will not presume, that from the mere reduction of the wife’s dioses in action into possession, he intended to convert them to his own use, in violation of the rights of the wile. Nor will the wife’s assent to the reduction by the husband of her diosos in action into possession, for the mere purpose of re-investment, be evidence of her assent to its conversion to the use of the husband. There is in the case no evidence of the intention of the husband to convert the property to his use, or of the assent of the wife to such conversion, other than the mere fact that the money due on the bond having been paid to the wife, was permitted to be invested and re-invested by the husband in his own name, and that the interest was collected by him. These circumstances, in themselves, are not evidence of the conversion of the wife’s property to the use of the husband. But the right of the wife does not rest upon this evidence alone. It is shown that an application for a loan of money having been made to the husband shortly before his death, he told the appli-' cant that his wife had $2000, and he would see what she had ' to say about it. And he subsequently stated that his wife' had given her consent, and thereupon made the loan. Now it must be admitted that this evidence is utterly inadequate — 524 — to prove a transfer of property from the husband to the wife, but it is, nevertheless, competent as tending to evince the absence of intention on the part of the husband to convert the wife’s money to his own use. Upon a question between the estate of the husband and the wife, I see no objection to the competency of this testimony. In Gray’s Estate, 1 Barr. 327, it was held, that a husband’s disclaimer of conversion to his own use, at the time of reducing his wife’s choses in action into possession, may be established by his subsequent admissions. Nor is the case materially altered by the fact, that the husband is permitted to take and use the interest of the money while it remains in his hands. That may be done for the joint benefit and support of the husband and wife, while they live together. In fact, the nature of the relation is such, that while it continues, neither can ordinarily have a sole and exclusive enjoyment of their individual property. If the wife’s property consists of lands, and she lives upon it, the husband may enjoy it jointly with her. If of chattels in her possession, the husband may use them. The legal relation of husband and wife is so intimate, that it necessarily involves, to some extent, a common use of their individual property. It was not intended that the statute for the better securing the property of the wife, should impair the intimacy and unity of the marriage relation. Walker v. Reamy, 12 Casey 414; Naylor v. Field, 5 Dutcher 292. It is clear that the intervention of no trustee is essential to protect the legal rights of the wife. That is the necessary result of the enabling act of 1852. Her property is protected in her own hands, as well against the claim of the husband, as against strangers. She may receive and hold property in her own name, as if she were a feme sole. But though she may hold, she cannot manage the property without the intervention of an agent. She can make no valid contract in regard to it, nor can she enforce its collection, without the intervention of her husband. Admitting that the funds of the wife may lawfully be en — 525 — trusted by her to a third person for investment, why should she be compelled to have recourse to such agency ? Or why should the mere fact that they are entrusted to the management and control of her husband, be evidence of the renunciation of her rights, or of the transfer of her property ? It would seem that there is no one to whom the care of the wife’s property can more naturally, and with more propriety be entrusted, than the husband. And if, while they are living together, lie is permitted to take the interest or profits of the estate for their mutual benefit, or for his own use, it should, as between the husband and wife, raise no presumption prejudicial to her rights. I say as between the husband and wife, because it is obvious that, as it regards the interests of third parties, the possession and control of the funds of the wife by the husband in his own name, may create equities and give rise to questions of fraud, which will involve very different considerations. It has been held in the state of New York, that where the husband, by the permission and agreement of the wife, has the exclusive control of her separate estate and its accumulations, by means whereof he is enabled to obtain credit and carry on trade, the property is liable to the claims of the husband’s creditors. Sherman v. Elder, 1 Hilton 476. It is worthy of notice in this connection, that the enabling statutes of the state of Hew York confer upon married women, powers in regard to the disposition and management of their estates, not conferred by the laws of this state. The statute of 1848, as amended by that of 1849, enables a married female not only to take and hold her property to her separate use, but also to convey and devise real and personal property, and any interest therein, in the same manner and with like effect as if she were a feme sole. And by the act of 1860, it is enacted that her sole and separate property may be used, collected, and invested by her in her own name. In the case now under consideration, the question as to the title of the property, is exclusively between the wife and the estate of the husband. The question is embarrassed by no — 526 — intervening equities, or claims of creditors. There is a large surplus in the hands of the administrator, to be distributed agreeably to law. I think the wife is clearly entitled to the sum.of $2000, for which allowance is claimed by the administrator in his account. It was urged upon the argument, that the second section of the act of 1852 relates only to the property in existence when the act was passed. I have never understood that this was the true construction of the statute. A directly contrary interpretation has been adopted, both in this state and the state of New York, where, with the exception of the last clause, the language of the section is identical. It is the settled rule of construction in New York, that the second section of the act has no application to property which a wife, married before the act took effect, had at the time of the marriage, or had already acquired during coverture, but that it applies to after acquired property of females, married prior to the act. Snyder v. Snyder, 3 Barb. 621; Holmes v. Holmes, 4 Barb. 295; White v. White, 5 Barb. 474; Hurd v. Cass, 9 Barb. 366; Perkins v. Cottrell, 15 Barb. 446; Smith v. Colvin, 17 Barb. 157; Watson v. Bonney, 2 Sandf. S. C. R. 405; Kelly v. McCarthy, 3 Bradf. 7. In the case of Ex’r of Henry v. Dilley, 1 Dutcher 302, it was held that the act operated as a protection of the rights of property of the wife, existing at the time the act took effect. But it was not decided in that case, nor was it intended to be decided, that the act related only to subsisting rights. The question was, whether the second section of the act was designed at all to affect subsisting rights, and if it was so intended, whether it was not an unauthorized interference with the vested interest of the husband in the property of the wife. Admitting the decision in that case to have been correct, it does not support the position, that the section relates only to the property in existence when the law went into operation, hior does the case of Vannote v. Downey, 4 Dutcher 219, nor any other reported case which has been referred to, sustain the doctrine contended for. — 527 — The decree of the court below can derive no support from the provisions of the act of March 12th, 1851, for the relief of widows in certain cases. Nix. Dig. 282, § 35. That act, by its terms, extends only to the specific chattel, chose in action, or other personal property, which belonged to the wife at her marriage, or which subsequently came to her, and which remained in the hands of the husband unchanged, at his death. Had the bond given to the wife during her coverture remained in the hands of the husband until his death, the case would have fallen within the operation of that statute. But the bond having been collected by the husband, and the funds, in whole or in part, invested in his own name, it is clear that the widow cannot claim the protection of the act. The act of 1851 effected no change in the rights of the widow to her choses in action, acquired before, or during her coverture, and remaining in the hands of the husband at the time of his death. But, in terms, it transfers the title to the wife’s chattels in possession of the husband, from the estate of the husband to the wife, saving the rights of the husband’s creditors. It is further urged that this claim is disputed, and therefore, is not the proper subject of adjudication in the Orphans Court; that the exception should have been allowed, and the widow compelled to resort to the ordinary tribunals of law or equity for the recovery of her claim. Our statute has conferred no authority upon the Orphans Court to try disputed claims, except in the case of insolvent estates. In such case, either the executor or administrator, or any person interested, may file exceptions against the claim of any creditor, and the court are to hear the proofs, and decree and determine in regard to the validity of the claims. In all other cases it is a settled principle, that the Orphans Court is not the proper tribunal for the trial of disputed claims. But by a disputed claim here, is meant a claim which is disputed by the executor or administrator, not a claim which the legatee or next of kin may deem unfounded or unjust. If the executor or administrator disputes the claim, or re — 528 — fuses to pay it, the Orphans Court cannot allow it, or compel the executor or administrator to include it in his account. To justify the Orphans Court in allowing a claim against an estate, it must appear that the executor or administrator assented to, or recognized it as a debt due from the estate. Wilson v. Baptist Ed. Soc., 10 Barb. 320; Andrews v. Wallace, 29 Barb. 350; Disosway v. Bank of Washington, 24 Barb. 60. But if the executor of administrator admit the claim and pray allowance for it in his account, it is not a disputed claim within the meaning of the rule, and falls properly within the jurisdiction of the Orphans Court. The administrator is the legal representative of the estate, and as a general rule, he may, at his discretion, and without the assent of those interested in the estate, pay or compromise any claim against it, even though barred by the statute of limitations. Claims against the estate paid by the executor or administrator, constitute properly a part of his account. If the claims are illegal or unfounded, the charges in the account are open to exception, and thus the question is brought within the jurisdiction of the Orphans Court. It is further insisted that the claim was not in fact paid, and that it was not a proper charge against the estate by the administrator, until it was paid by him. The mere fact that a debt or legacy has not been actually paid, constitutes no objection to its allowance upon the settlement of the account, if its existence is clearly established* Accounts are thus frequently settled, where the legatee or creditor is absent, or not in a situation to receive payment. By the settlement, the executor or administrator becomes liable for the amount thus allowed. No prejudice is occasioned to those interested in the estate. But it is urged that the administrator is, or may be, unwilling to assume the responsibility of paying the claim, but by collusion with the claimant, claims allowance for the debt, in order thus to withdraw the cognizance of the question from the ordinary tribunals of law or equity. There is, to my mind, much force in the objection. And had this — 529 — exception been taken in the court below, before evidence had been heard upon the merits, and had the court been called upon, then, to strike the item from the account, upon the ground now urged for reversal, I think the objection should have been sustained, and if overruled, it would have presented a just ground for reversal upon appeal. But it does not appear that this was made a ground of objection before the Orphans Court, either before the evidence was taken and the hearing had upon the merits, or at any stage of the proceedings. It was, in fact, not made the ground of exception in that court, although it appears upon the face of the account, that no voucher had been taken 'for the payment of the money, and the form of the claim shows that the money had not been paid. Nor is this objection made the ground of appeal in this court. The specific ground of appeal is that “ the item of $2000, claimed by the administrator as due to Sophia Vreeland, and allowed by said decree, is unjust and illegal, the said Sophia having no just or legal claim to the same.” It would seem, from the proceedings in the court below, that the parties voluntarily submitted the question upon the merits to the decision of the Orphans Court, for the purpose of having it decided in the most easy and expeditious mode. Under these circumstances, I do not think that it lies in the mouth of the appellant now to complain, that he is deprived of a hearing before the ordinary tribunals of justice, or before the Court of Appeals in the last resort. And as the claim has manifestly been made in good faith on the part of the widow, as there is no reason for suspecting the existence of collusion, or a want of good faith on the part of the administrator, as there has been a full and fair hearing and decision upon the merits, I do not feel justified in now turning the parties around, and permitting the appellants to try the experiment of obtaining a different decision in another tribunal. Exceptions were also taken to two small items of the account, being respectively for $11.81 and $55.08, for which — 530 — the administrator prayed allowance “ as desperate." The exceptions were disallowed in the court below. And this con-, stitutes another ground of appeal from the decree. The items consisted of two vendue accounts for goods, which were included in the inventory, and which were sold by the administrator upon credit, without security.- The purchaser of the smaller bill was known at the time to be irresponsible, but the goods were taken away by him without permission. The other purchaser was regarded as solvent. He gave his note for the amount of his purchase, without security, payable on demand to the administrator, in his individual name. It is a fundamental principle, that the administrator is accountable for all property of the deceased which came to his hands to be administered. He cannot be relieved from this accountability on the ground of loss, where the loss was occasioned by any default of his own. It is a well settled rule, both in England and in this state, that if executors, administrators, or other trustees, loan money without due security, they are liable in case of loss. Loans made on private or personal security, are at the risk of the trustees, who are personally answerable if the security prove defective. To afford complete indemnity to the trustee against the hazard of responsibility for loss, the investment must be made in government stocks, or upon adequate real security. Gray v. Fox, Saxton 259; 2 Williams on Ex’rs 1539, 1541. Sales by executors and administrators, both of real and personal estate, are regularly made for cash, without credit; or by sanction, and under the direction, of some j udicial tribunal, prescribing the extent of the credit and the nature of the security. In some of the states of the Union, personal property is thus sold by direction of the Ordinary, and usually upon pei'sonal security. In this state a,practice has long prevailed, of permitting an executor .or administrator to sell personal property, either for cash or upon short credits, with approved personal secu — 531 — rity, at Ins discretion. The custom of selling upon short credits, and upon personal security, without direct judicial authority, has been sanctioned by long and general usage. In practice, it is advantageous to tbe interests of the estate. Higher prices are obtained, and usually without loss. Cash sales will, in most cases, necessarily be made at lower rates. Where sales are thus made, and security taken with due caution, the executor or administrator is chargeable with no default, and is not liable in case of loss. But in this case, the administrator made the sales in question upon the personal liability of the purchasers, without security of any kind. In the one case, no note was taken; in the other, the individual note of the purchaser. One of the purchasers was known to the administrator to be unworthy of credit; the other, from whom the note was taken, was supposed to be responsible. The conduct of the administrator in both cases was entirely indefensible. I know of no practice to countenance it, and no principle upon which such practice can be justified. On the contrary, I believo the principle to be of universal application, admitting of no exception or qualification, that an executor or administrator cannot sell and part wdth the possession of assets which have come to his hands to be administered, without requiring security for the price. If he sell under judicial sanction, he must pursue strictly the order of the court. If ho sell upon credit, without judicial sanction, and upon his own discretion, he must use due caution in obtaining adequate security. If he do otherwise, he acts at his peril; and if a loss is sustained by the insolvency of the purchaser, he is guilty of a devastavit. I am not aware of any judicial decision upon the point in this state, but I regard the principle as unquestionable, and it is sustained by abundant authority in other states. In King v. King’s Adm’rs, 3 Johns. Ch. R. 552, the administrators sold the leasehold estate of the intestate on credit, and took a promissory note of the purchaser, without security. The purchaser paid part of the purchase money, but became insolvent before the residue could be collected. — 532 — The administrators were held responsible for the loss. The Chancellor (Kent) directed that they should he charged with the whole amount of the purchase money, holding them.guilty of negligence in .parting with the leasehold estate without payment or security. The principle is sustained by numerous authorities. Orcutt v. Orms, 3 Paige 459; Stukes v. Collins, 4 Desaus. 207; Massey v. Cureton, Cheves 181; O'Dell v. Young, 1 McMullan’s Eq. 155; Dillebaugh’s Estate, 4 Watts 177; Johnston’s Estate, 9 Watts & Serg. 108. I have dwelt thus long upon this point, which seems too clear to admit of doubt, or to require discussion, because the administrator was not charged with this loss by the respected tribunal by whom this cause was originally decided. I have looked with some solicitude, to discover the ground upon which that decision could have'been based. It may have been, because they believed that the administrator acted in good faith. I entertain no doubt that he did act in entire good faith, but if the money was lost by his default, the purity -of his motives cannot relieve him from his obligation to make good the loss. Or, the court may have decided, upon the principle that the executor was bound only to use ordinary caution in the management of the estate. That principle is admitted. An executor or administrator is bound to use the same caution and circumspection, that a prudent man would use in the conduct of his own concerns. But no prudent man, influenced by the ordinary motives of self interest, and acting with due caution, will let out his money or sell property on credit, without a responsible security for its payment. But the more decisive answer to the suggestion is, that in parting with the assets of the estate to a purchaser without security, the administrator was violating his,duty, and was guilty of a default. The law allows no exercise of .discretion upon that point. He is bound to •require security. In deciding what security he will accept, he acts at his discretion. He is bound to use ordinary caution only, and if the security prove inadequate, the administrator, acting in good faith,, is not responsible. The case is not altered by the fact that the goods were removed by one — 533 — of the purchasers, without the knowledge or consent of the administrator. He took no step to obtain security, or compel a restoration of the goods. The administrator is responsible for the loss sustained by the neglect to require security. Both claims should have been disallowed, and the decree and account must be corrected accordingly. In all other respects the decree is affirmed. The main question involved in the cause was novel and proper to be heard before this court. Costs will be allowed to neither party as against the other.