Case ID: mart-os_10/html/0708-01.html
Source: Caselaw Access Project
Author: {"author": "Porter, J. Martin, J. Mathews, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

NORWOOD'S EX.'S vs. DUNCAN & AL.—DUNCAN & AL. vs. NORWOOD'S EX.’S.
    
    East'n District
    
      Feb. 1822.
    Appeal from the court of the first district.
    If an executor suffer three years to elapse without taking any steps for the recovery of a debt, and afterwards give further credit, taking a mortgage in his own name for the debt, and another due to himself (as if the whole was a debt due to him) he becomes liable to the estate.
    
      Hennen, for the executors.
    This suit was instituted by the plaintiffs, executors of Charles Norwood, deceased, to recover from the defendant, A. L. Duncan, the sum $6000, deposited in his hands on the 21st of December, 1816, by C. Norwood, as security for whatever balance might appear to be due by him, as one of the executors of the estate of the late William Marshall, of Baton Rouge, on a final settlement. See the receipt of A. L. Duncan, annexed to the record.
    It is admitted by the plaintiffs, that on a final settlement, C. Norwood was indebted to the estate of W. Marshall, in the sum of $837 25 cents, and that the defendant, A. L. Duncan, did pay over to C. Norwood, the further sum of $1450, which two sums being deducted from the $6000, leave a balance of $3712 75 cents, which is sought, to be recovered by the present action.
    This recovery is resisted by the defendant, on the ground, that C. Norwood, one of the executors of W. Marshall, received a note for the sum of $2720 37½ cents, dated 11th of November, 1803, and drawn by W. G. Garland, to the order of W. Marshall, payable one year after date, and bearing an interest of 10 per cent, per annum, from the date, until final payment; and that, inasmuch as he did not obtain payment of this note when it came to maturity, he should account for the amount of it.
    The facts relative to it are these, as appears from the evidence on record :—C. Norwood, having used every effort to obtain payment from Garland, without effect, did, on the 14th of November, 1807, by a notarial act, passed before N. Broutin, notary public, of New-Orleans, take a mortgage from Garland, on fifteen slaves, for the very purpose of securing the payment of the sum which still remained due to the estate of Marshall. On the same day, 14th of November, 1807, previously to the execution of the mortgage, C. Norwood took the precaution of obtaining from Garland, an affidavit before J. Lynde, notary public, that his wife had no claim on the slaves thus mortgaged. There is, however, no mention made in the mortgage, that the debt was due to Norwood, as executor of Marshall. And it is for this omission that Norwood is considered as answerable for the debt.
    No evidence has been offered to shew that Norwood could have recovered the amount of the note from Garland when it originally became due, or that he neglected using any means for that purpose; nor is any fraud, negligence or fault urged against him. other than the omission in the mortgage above stated.—It appears, however that a gross fraud was practised by Garland on Norwood, and that he lost by him, as well the sum due to the estate of W. Marshall, as a large sum due to himself; for Garland, soon after the execution of the mortgage, became insolvent, filed his bilan, and his wife made claim of her dotal property, which, with other privileged claims, exhausted the whole of his estate, and Norwood got nothing.
    It is a principle of law fully established, that every presumption is in favour of the diligence of a factor, tutor, curator, executor, and every other administrator. See Curia Phillippica, lib. 1. Comercio Terrestre, cap. 4. Factores, n. 10, 13. Illustracion y Continuacion a la Curia Phillipica. vol. 2, p. 62, n. 11, 12.
    
    
      The facts of the case, however, fully establish the diligence, care, and good faith of Norwood, without any recourse to this presumption of law.
    Marshall, in his lifetime, had loaned this money to Garland (without any security) on his promissory note alone, which, when due, Norwood could not obtain the payment of; but to secure it, he took from Garland the mortgage already recited. Had the note been paid, it would have been the duty of Norwood to put out the money at interest for the benefit of the absent heirs of Marshall; for such was the duty of tutors and curators by the Spanish law. 1 Sala, 84, n. 35, 4 Febrero, n. 84.
    And by a parity of reason, such is the duty of an executor. Now, Marshall himself had placed the money in the hands of Garland, at an interest of 10 per cent. And Norwood not being able to recover it from him, only continued the same loane, while, at the same time, he obtained what was considered an ample security for the payment of it; and certainly thereby made the situation of the heirs better than it had been when the note became due. Moreover, he did nothing contrary to his duty, nor was it in any way material to the interest of the absent heirs to have the insertion made in the mortgage, that he took the security from Garland, in his capacity of executor of Marshall; nor would such insertion at all have benefited them. I am therefore totally at a loss to conceive on what principles of equity, or on what authority of law, it is contemplated to render Norwood’s estate liable for this transaction. The estate of Norwood has not been enriched in any way from this debt due by Garland; nor can it be at all urged that Norwood was deficient in diligence, prudence or care; much less that he was guilty of a fault, or any degree of negligence or fraud. I therefore trust this honourable court, guided by the same principles of equity and justice, which influenced the court a quo, will confirm its judgment, and restore to the executors of Norwood, the deposit made in the hands of the defendant.
    
      Eustis, contra.
    The defendant, in the latter case, is a depository of the sum of money mentioned in his receipt, which belongs to one of the two parties to these suits, which have been consolidated. The heirs of Marshall allege that they are entitled to recover from the executors of Norwood, the amount of William Garland s note, in favor of their ancestor, for the reasons alleged in the brief of the plaintiffs’ counsel. The executors of Norwood claim the sum deposited with A. L. Duncan, as their own, the conditions of the deposit being fulfilled, and no balance being due by their testator to the estate of the late William Marshall. The depository is ready to pay the money to whomsoever the court shall adjudge it to be due. If Norwood made himself responsible for the amount of Garland’s note, there must be judgement for the heirs of Marshall; if he did not, the judgement of the court below must be affirmed.
    There is no dispute as to the facts—Norwood, as one of the executors of Marshall, received a note of W. G. Garland, in favour of Marshall, of date November 11th, 1803, payable one year after date, bearing an interest of ten per cent. per annum; and on the 14th of November, 1807, four years after, took a mortgage on certain slaves to secure the payment of this debt from Garland, and also a private debt of his own; this instrument is in his own name, and imports to be for the security of the payment of a certain sum, due by Garland to Norwood individually. We hold that Norwood, by these acts, made himself responsible for the debt, that there must be judgment for the heirs of Marshall, and the funds received by A. L. Duncan, under the receipt by him given to Norwood, must remain in his hands, as the attorney-in-fact of the heirs of Marshall.
    He made himself responsible; first, because he ought, as a careful administrator, to have protested the note at its maturity. If the drawer, being a merchant, had been in good credit at that time, the menace of protest would have induced him to discharge the debt; and if he was in bad credit, Norwood ought to have required security without delay: (see his bilan as to his having been a merchant.)
    Secondly, because he permitted four years to elapse before any effort was made to secure the debt, during which no information was given to the heirs of Marshall of the state of their business, which amounts to negligencia crassa.
    
    Thirdly, so aware was Norwood of his responsibility, that he took the mortgage of the 14th of Nov. 1807, in his own name; con fused a private debt of his own with that of his principals, and thereby assumed the payment of the latter. In taking the mortgage, and granting an indulgence to the debtor, after a lapse of four years, from the time the debt became due, he acted beyond his authority, and contrary to his duty, which obliged him to collect the debts of the succession, to render his accounts, and to pay the balance due to the heirs. Even were it doubtful whether he acted within his authority, his having acted in his own name, makes him responsible to his principals.
    
      Procurator in dubio præsumitur voluisse contrahere pro scipso, non pro suo principali, si contrahendo non declaraverit se contrahere uti alterius procuratorem. Casaregis, Discuss. 199, n. 31.
    The heirs of Marshall never ratified this act; their intention was formed from the purest feelings of humanity; as Norwood was old and infirm, they purposely avoided distressing him in his lifetime, and as their necessities were many, after his death, there was no reason for them to desist from endeavouring to obtain their rights. See testimony of John Nicholson. Norwood acknowleges his responsibility in his letter to the heirs, and throws himself upon their compassion, and not in vain.
    The authority quoted by the plaintiffs’ counsel, from 4 Febrero, 63, applies only to tutors and curators, who have the monies of their pupils in their hands, for a series of years, and are therefore bound to employ it profitable. The duties of an executor are different, he must collect the debts, pay the legacies, and render his accounts within the year.
    Though the testimony of the witnesses does not establish the fact, it is admitted that the note never was collected by Norwood. See Norwood’s letter.
    It is immaterial how the presumptions are in this case: we have facts on our side sufficient to establish such a want of diligence and care, as will entitle the heirs of Marshall to the balance in the hands of A. L. Duncan.
    This court, if it affirms the judgment of the court below, must determine, that an executor, where the heirs of the testator are absent, has powers more unlimited than any other agent, with duties to perform, the neglect of which produces no responsibilities, for, if this be not one, it would be difficult to conceive of a case, in which the want of diligence in an executor has made him responsible.
    
      The counsel for the heirs of Marshall trusts that the judgment of the court a quo will be reversed, and that his clients will have judgment in their favour.
    
      Hennen, in reply.
    Three reasons are alleged to shew that C. Norwood made himself responsible for the note of W. G. Garland:—
    1. No protest was made.
    2. Four years elapsed before the security was taken.
    3. The mortgage was taken in favour of Norwood.
    To the first I reply, that no protest was necessary. There was no endorser on the note to be rendered responsible by a protest, and interest was due on the face of the note from its date until final payment, agreeably to the contract made with Garland, by Marshall himself, when he loaned the money. Therefore, nothing could have been gained by a protest. At that period, moreover, protests of promissory notes were not usual. Garland was no merchant, but the sheriff of the territory. And recourse to a suit against him might have been worse than useless.
    The second reason will be found, on examination, equally unfounded. Three years, not four, as the counsel of the defendants has miscalculated, elapsed from the time the note became due, before the mortgage was taken. Had the heirs of Marshall made a demand of the amount of this note from Norwood, during this period, the case would present a different aspect. But no such demand was made; it does not even appear that they were known to exist. No proof has been given that Norwood knew of their abode. How could he then correspond with them? As executor, Norwood was not bound by the Spanish law, which alone governs this case, to settle up his accounts at the end of the year. Having then heard nothing of the heirs for more than three years after he had become executor, are his own heirs now to be rendered responsible for his good intentions in securing the loan made by Marshall to Garland, while it continued to produce an interest for the benefit of those unknown heirs? Were not the views of Norwood more than disinterested in this transaction? Were they not praise-worthy? Could he have possibly obtained the payment of the note when due, the money would have remained at his own disposal during this time, without producing any interest to the heirs. But it is shewn, by the evidence, that Norwood acted for the best of the interest of the heirs, and without any negligence, up to the time of taking the mortgage; which brings us to the third reason urged by the counsel of the defendants, that Norwood took the mortgage in his own name. But, I think, I have already shewn, in my argument, that this could make no difference. The authority quoted on this point, can have no application to the present case. It would have been decisive in a contest on the nature of the contract between Garland and Norwood. But I cannot comprehend, in what way it shews, that Norwood made himself responsible thereby, to the heirs of Marshall. Surely a commission merchant never rendered himself responsible for the goods of his principal, because he had sold them as his own, and made out a bill of parcels accordingly.
    The onus probandi in this case, lies upon the heirs of Marshall. It is for them to prove the negligence of Norwood, and establish, by uncontrovertible facts, his liability to their demand. Every presumption is in favour of Norwood, who has returned all the vouchers of the estate into the court of probates. See testimony of J. Nicholson. And with them the note of Garland; this alone discharged him from all responsibility, except fraud, relative to this debt due by Garland. See the authority quoted from Curia Phillippica, Illustrada. Fourteen years have elapsed since this pretended liability occurred. After such an unaccountable delay, this court will require very strong and satisfactory evidence to charge an executor, whose whole conduct has been acknowleged as meritorious in the highest degree.
    A fairer case than the present, was never presented to the equity of a court; and I think, no rigid rule of law has been violated in such manner, as to charge the executors of Norwood, with the payment of a sum of money which would beggar his heirs.
   Porter, J.

The first of these actions in the order they are above stated, was commenced by the heirs of Marshall against the executors of Charles Norwood, alleging that the said Norwood, was appointed executor of the late William Marshall, of Baton Rouge; that he took upon himself the duties of said trust, and that he had received large sums of money in that capacity, which he had refused to account for, or pay over.

The defendants answered this demand, by a general denial, and an averment dial the sum of $6000 was placed by their testator in the hands of A. L. Duncan, to answer any claim which the plaintiffs might have on it; that no suit had been commenced for this money, and that they are about to bring an action for it.

In pursuance to this intimation, the defendants in the case just stated, filed a petition, in which they stated, that on the 21st of December, 1816, Charles Norwood deposited the sum of $6000, in the hands of A. L. Duncan, for the purposes already mentioned.—That no such balance, as was alleged by the plaintiffs in the first action, was due the heirs of Marshall, and that consequently they were entitled in law, to demand and recover the money above mentioned.

To this the defendant answered. That he received the said sum of money, as attorney in fact, for the heirs of William Marshall, that there is a large sum due to them, that he was never able to procure a settlement with Norwood in his lifetime, nor with the plaintiffs, his executors. since his decease.

By consent of parties, these cases have been consolidated. The statement of facts establishes, that there is a balance due by Norwood, to the heirs of Marshall, of $837 25 cents, and that the defendant Duncan had paid to Norwood, and for him, the sum of $ 1450; leaving a balance in his hands of $3712 75 cents.

It is in regard to this balance, or the greater part of it, that the dispute has arisen in this case, under the following circumstances:

On the death of Marshall, there was due, and owing to him by one William G. Garland, the sum of $2720, which debt was evidenced by an obligation drawn the 11th of November, 1803, payable one year after date, and bearing interest at the rate of ten per cent. Norwood suffered three years to elapse before he took any steps to recover or secure this demand; at the expiration of that time, he obtained a mortgage to assure the payment of this debt, and a large sum due to himself.—This obligation was taken in his own name, and not as executor.

Garland afterwards became insolvent, and it was discovered that a gross fraud had been committed on Norwood; that the negroes hypothecated for this demand, had previously, under different names, been mortgaged to other persons.

The district judge decided, that the loss thus sustained, must be borne by the heirs of Marshall. From this decision they have appealed, and now insist that the executor, by not suing for the money, has made himself responsible for the sum due by Garland.

The executors of Norwood, on the other hand, allege, that if he had recovered the money, it would have been his duty to have lent it out on interest, and that he took every precaution to have the claim secured.

It was the duty of the executor, as soon as he had accepted this trust, to diligently fulfil the will of the testator. Par. 6, tit. 10, l. 6. And if no time was fixed, within one year at farthest, after his death. Ibid. In this case it is proved, that three elapsed before the executor took a single step to recover the money, or secure it for the heirs. This, in my opinion, was such negligence as makes him responsible for the loss that ultimately happened. Had he used the means which the law enabled him to do, years before Garland failed, there is every probability that the money would have been secured for the heirs. Nor can I see that he is at all excused by at last taking security that turned out to be of no value.

This may be a hard case, but the law, in my opinion, is against the defendants, and it is our duty so to pronounce it. If a man undertakes an office of kindness, he must discharge the duty faithfully and prudently, otherwise he is responsible for the consequences. Par. 5 tit. 12, l. 20, 34,

I think, therefore, that the judgment of the district court ought to be annulled, avoided and reversed, and that ours should be, that the heirs of Marshall do recover of the defendant, A. L. Duncan, the sum of $3557 25 cents; that the executors of Norwood have judgment against him for the balance of the $6000 deposited in his hands, after deducting the amount of this judgment, in favour of said heirs, and the sum of $1450 paid to C. Norwood, in his lifetime, viz. for the sum of $992 75 cents; and that the executors of said Norwood pay costs in both courts.

Martin, J.

The executor is bound to complete the execution of the will in the year which follows the testator’s death, unless that period be extended. This seems to impose the obligation to collect the debts; or, at all events, to institute suits within that time. For afterwards he cannot sue. In the present case, Norwood not only neglected prosecuting the debtor of the estate during the time of his executorship, but afterwards novated the debt, by joining it to another debt due to himself, and postponing the payment of the aggregate sum to a distant day, securing himself against the consequences of the delay, by taking a mortgage to himself, I think he made the debts his own, and concur in the opinion of my colleague.

Mathews, J.

I concur likewise.

It is therefore ordered, adjudged and decreed, that the judgment of the district court be annulled, avoided and reversed, and that the heirs of Marshall do recover of the defendant, A. L. Duncan, the sum of $3557 25 cents; that the executor of Norwood have judgment against him for the balance of the $6000 deposited in his hands, after deducting the amount of this judgment, in favour of said heirs, and the sum of $1450 paid to C. Norwood, in his lifetime, viz. for the sum of $992 75 cents, and that the executors of Norwood pay costs in both courts.