Wisconsin Trust Co. v. Chapman

Siebeokee, J. Defendant Oscar II. Pierce, as administrator of the estate of Sherburn Biyant, deceased, under a license duly granted him by the county court for Milwaukee county, made and executed the notes and the mortgage under the circumstances given in the foregoing statement of facts. The main controversy on this appeal pertains to the liability of the defendant Oscar PI. Pierce, who was duly appointed, and who duly qualified, as administrator of the estate of Sherburn Bryant, deceased. That he, as such administrator, — 486 — has no interest in the real estate of the deceased, nor power to sell or incumber it, is elementary in the law of administration. The only authority to deal with real estate must come from the court from which he received his appointment, under the statutes providing for the disposition of lands by executors and administrators. Under these statutes, the real estate of the decedent may be-applied in satisfaction of the decedent’s debts, to the extent they remain unpaid after applying his personal property. The statutes grant county courts the power, under the procedure prescribed, to accomplish this object. To render a sale or mortgage of the lands valid within these provisions, there must be a substantial compliance therewith under the direction and authority of the county court. In exercising these powers administrators act as the instruments of the law, and they are strictly bound by the special authority vested in them for this purpose. A transfer of the real estate by an administrator, under the power and direction of the court, should therefore be viewed in the light of his relation to the property and the objects to be accomplished, and the words of the transfer should be given an interpretation limited to the occasion. Applying these considerations to the instant case, what was the undertaking of the defendant Oscar H. Pierce under the notes and mortgage given the Wisconsin Trust Company to evidence the amount loaned by it for the purpose of paying the claims against the decedent by mortgaging his real estate ? We must observe at the outset that this transaction of the administrator differs widely from the duties imposed on him by the law in the administration of the decedent’s personal estate. As to the personalty, he was the owner and held the title for the beneficial interest of the creditors and heirs. In dealing with it he acts voluntarily and as owner, and solely in his personal capacity. In such transactions he represents no principal, and upon well-established rules he assumed all liabilities as personal in character, relying upon — 487 — his lien, for indemnity out of the estate for expenses and liabilities incurred in a proper administration of his trust. In the disposition of real estate his duties are imposed by law and directed by the court, under the authority of the statute, and can be carried out only in the prescribed manner. He has no interest in or control over the property, except as he executes the mandates of the court to enforce the creditors’ claims against the decedent’s real estate. These grounds have been held to furnish the distinction between the administrator’s liability in his personal and representative capacities in performing his duties as administrator of the estate. It is contended that the instruments show on their face that the administrator assumed personal liability, in that the agreements and covenants cannot be held to bind the heirs, the only other persons concerned in the transaction, and that the notes must be treated as separate and distinct obligations from the mortgage. Erom the nature of the proceeding authorizing the execution of the notes and mortgage, it follows that they cover the same transaction and must be construed together. The conditions of this loan 'by the trust company were submitted to the county court before the loan was authorized. The hind of notes to be given to evidence the amount loaned and when payable, as well as the amount of the interest and when due, were covered and directed by the court’s orders. This furnishes a good and sufficient explanation why the notes were executed, and that they were made by the parties under the license to mortgage, and intended as an execution of the authority given and directed by the court. The notes bear evidence on their face that this was the understanding, by reciting the administrator’s authority in these words: “I, Oscar H. Pierce, administrator of the estate of Sherbum Bryant, deceased, acting under an order of the county court for Milwaukee county, 'Wisconsin, dated July 1st, 1898, promise to pay to the Wisconsin Trust Company ” etc. These are apt Words to show the source of his authority — 488 — and that he acted in his representative and not in his personal capacity. The same considerations are applicable to the mortgage, which recites that he, as administrator of the estate of Sherbum- Bryant, deceased, is a party to the instrument, and that the covenants and agreements therein were made by him as such administrator, without assuming any personal liability in the transaction. It is, however, asserted that the purchasers of the notes obtained them as negotiable paper, and had a right to rely upon the administrator’s personal liability. We cannot yield our assent to this contention, .under the circumstances of this case. The notes on their face gave notice to the purchasers that they were made in a representative capacity, and that their execution was referable to the official duty of the administrator, and were limited in their effect by the authority of the county court to mortgage the decedent’s real estate. With this notice before the purchasers, they were apprised of the real nature of the contract, and they, as well as others, were bound by the record in the county court where the estate had been administered. This imputes notice to the purchaser of the facts and the authority under which the instruments were executed, and thus gave them no more advantageous position than that of the trust company as the original holder. It follows that the trust company contracted with the administrator in his representative capacity to loan the amount-upon the conditions submitted to the court-, and accept the real estate mortgaged as security for the payment of the amount due under the contract, and, in default of it, it and its assigns can only enforce payment out of the proceeds of a sale of this real estate. The following cases bear upon the question of an administrator’s liability, in his personal and in his representative capacities, in administering and dealing with the decedent’s estate: McLaughlin v. Winner, 63 Wis. 120, 23 N. W. 402; Shontz v. Brown, 27 Pa. St. 123; Sumner v. Williams, 8 — 489 — Mass. 162; Peirson v. Fisk, 99 Mich. 43, 57 N. W. 1080; Chouteau v. Suydam, 21 N. Y. 179; Thomas v. Parker, 97 Cal. 456, 32 Pac. 562; Kingsbury v. Wild, 3 N. H. 30; Van Bibber v. Reese, 71 Md. 608, 18 Atl. 892; 2 Woerner, Administration, § 480. Error is assigned upon the ground that the court awarded costs in this action to defendant Oscar H. Pierce. The conclusions we have reached make it apparent that the defendant Pierce had a good defense to the claim made against him by the plaintiffs. Nor do we find grounds for criticism of his course in pleading the matter set up in the counterclaim. This course was evidently adopted to bring to the court’s attention all the matters available to him under the different phases of the case presented by the proof. His action is amply justified by the findings of the trial court in awarding him the relief demanded in his counterclaim as a good and sufficient avoidance of the demands of the complaint, though we deem the counterclaim immaterial in view of his complete defense in the action upon the grounds above stated. The defendant Ethel Bryant Chapman appeared by attorney in the proceeding in the county court wherein the court authorized the mortgage in question. She also appeared at the settlement of Mr. Pierce’s final administration account, and assented to its approval and his discharge by the court. She- also accepted the partition of the estate, which gave her the property in suit, subject to the mortgage. Under these circumstances she is estopped by the court’s decrees from raising the question of the irregularity of the proceedings in the county court which are involved in this litigation. O’Dell v. Rogers, 44 Wis. 136; Heminway v. Reynolds, 98 Wis. 501, 74 N. W. 350. No grounds are suggested by her upon which she can rest an objection that the Wisconsin Trust Company is not a corporation and that it had no power to make the contracts in question. We think the court properly held that the trust company was a duly — 490 — organized corporation, and that this defendant is not in position to question the legality of these instruments. The furthei’ objection is made in her behalf that, at the time of the alleged transfer of the notes by the trust company to the other plaintiffs, no formally stamped assignment of the notes or interest in the mortgage securing their payment was made, and for that reason the assignment is invalid as violating the federal statutes prescribing the revenue stamp tax. This objection, if applicable to the holders of the notes, can in no way affect the right of the Wisconsin Trust Company, the original owner and holder of the notes and mortgage. The trust company is a party plaintiff to this action, and, if the other plaintiffs are not the owners of the notes and the interest in the mortgage, under the suggestion of appellant, then the judgment must stand as properly awarded in favor of the trust company and against Bthel Bryant Chapman. We find no reversible error in the record upon this ground. These considerations cover all the material questions of the case, and make it unnecessary to consider other questions discussed in the briefs of counsel. The judgment of the circuit court was properly awarded as to the amount due, and in directing a foreclosure of the mortgage and a sale of the premises, and in applying so much of the proceeds as may be required to pay the debt, and that Oscar H. Pierce is not personally liable for the amount due on the notes and mortgage. The reformation of the instruments as prayed for in the counterclaim of Oscar H. Pierce, and the decree of the court directing the insertion of the express stipulation that Mr. Pierce be not personally liable upon the notes and mortgage, become immaterial in our view of the case. By the Court. — The judgment of the circuit court is affirmed.