Case ID: va_52/html/0414-01.html
Source: Caselaw Access Project
Author: {"author": "SAMUELS, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Powell v. Stratton & als.
    October Term, 1854,
    Richmond.
    1. Foreign Administrators—Accountability in Virginia—Case at Bar.—Under the circumstances a person who had qualified as administrator of an estate in Mississippi, held to account for his administration in Virginia.
    2. Same—Purchase of Land—Liability—Case at Bar.— An administrator In Mississippi Laving- purchased for the estate, land sold for the payment of a debt due to the estate, held under the circumstances not bound to keep the land and account for the price; but the land is to be treated as the property of the estate.
    3. Same—Loss of Funds Deposited —Case at Bar.—Under the circumstances the administrator not responsible for money which became worthless in his hands by the insolvency of the bank.
    This was a suit in equity in the Circuit court of Powhatan county, and afterwards removed to the Circuit court of Goochland, instituted by Elizabeth Stratton the widow, and three others, the infant children of Milner S. Stratton, against Benjamin H. Powell and Henry Gordon, to recover moneys of the estate of Milner S. Stratton, which the plaintiffs alleged Powell had collected in the state of Mississippi.
    Powell demurred to the bill on various grounds, and among others, on the ground that the court had no jurisdiction to compel him to account for his administration upon the estate of Milner S. Stratton in Mississippi. He also answered, stating in detail his action in his efforts to collect the debts due to that estate.
    On the 16th of October 1839, Henry Gordon and Elizabeth Stratton, the personal representatives of Milner S. Stratton in Virginia, entered into a contract under seal with Benjamin H. Powell, by which they employed Powell to go to Mississippi for the purpose of collecting certain debts due in that state to their testator’s estate. One was a large debt of*about twelve thousand dollars due from John D. King and Samuel M. Puckett, which was secured by a deed of trust on land and slaves. Another was a debt due by account from Richard M. Hobson, for about two thousand three hundred and sixty-five dollars and eighty-one cents; and a third was a certificate of deposit for six hundred dollars of the Brandon Bank.-
    Powell went to Mississippi, and arrived in Jackson about the 1st of December 1839; and finding it would be necessary to become the administrator of Milner S. Stratton, he qualified as such about the end of the month of December. He found King, Puckett and Hobson insolvent, though Puckett had a number of slaves in his possession, which he shortly after carried out of the state. These slaves were included in the deed of trust to secure Stratton’s debt; and Powell attempted to prevent Puckett’s removal of them by an injunction; but the judge to whom he applied for the injunction, held that he could only grant it when his court was in session; and before that time the slaves were gone.
    In order to enforce the collection of the debt due from King and Puckett, Powell directed the trustees Richard M. Hobson and William R. Crane to proceed to sell the land embraced in the deed ; which they did accordingly. Powell having a short time previous to the sale broken his leg, could not be present himself ; but believing as he says in his answer, that it was important to get the land out of the possession of Puckett, and to keep the purchase money out of the possession of Hobson, he authorized Thomas P. Nash to attend the sale and buy in the land for the benefit of the estate of Stratton. Nash did attend and buy the land at the price of four dollars and twelve and a half cents an acre; making the whole purchase money amount to two thousand seven hundred and forty-seven dollars and twenty-five cents: and the trustees in Powell’s ^'absence conveyed the land to him.' This item was the principal subject of controversy in this suit; Powell insisting that the land was purchased for the estate, and the other parties insisting that it was a purchase for himself. The evidence shows that the land was sold for greatly more than land equally good had been sold for, and could be purchased for, in the part of country where it lies. The sheriff of the county says, that such lands had sold for fifty cents and a dollar per acre; and no one estimates it higher. It seems too that there was but one other bidder for the land; and he was the agent of Puckett. It appeared too that when Powell heard the land had been convej^ed to him personally, he said it was an error, and wished to have it corrected; but was advised by his counsel that it was a matter of no importance. And it was further proved that certainly Dr. Gordon, and probably Mrs. Stratton, had been informed by Powell, upon his return to Virginia from Mississippi, that the land had been purchased for Stratton’s estate.
    As before stated, Powell found, on getting to Mississippi, that Richard M. Hob-son was insolvent. All that he could obtain from him in satisfaction of his debt to Stratton, was the assignment of a debt due to him from another person, which that other person could only pay in money of the Brandon Bank. This, as he could do no better, he accepted. In his answer he says, the Brandon money so received, and that embraced in the certificate of deposit, never was disposed of by him; and he never could obtain for it specie funds or Virginia money, at any discount, however great. On the 6th of February 1840 he deposited what he so received, as well as six hundred dollars which was before in the bank, making the sum of two thousand six hundred and three dollars and seventy-eight cents in the Brandon Bank, and took a certificate of the deposit.
    *It appears that when Powell first arrived in Mississippi, in December 1839, Brandon money was very much depreciated: One of the witnesses for the plaintiffs states, that during the first part of the year 1839, it was worth about fifty cents on the dollar, in exchange for other Mississippi money, which was somewhat below par; hut they had not a fixed exchangeable value; and by the 1st of May had depreciated to forty cents in the dollar; and continued gradually to depreciate during the summer, and were worth about twenty-five cents about the month of October; about which time judgments to a very large amount, probably to about half a million, were obtained against the bank, and its issues depreciated more rapidly; and on the 1st of January 1840, it was worth from about five to ten cents, having no fixed value, and shortly afterwards became wholly worthless, and had so continued. Two other witnesses for the defendant say, that they cannot say that Brandon money was, in the latter part of 1839 and the beginning of 1840, worth any particular amount in specie funds or Virginia money. They did not think it was possible to have purchased with Brandon money, more than a few dollars in specie or Virginia money, at any rate of discount. Notwithstanding its enormous depreciation, it continued to be received at its nominal value, to a considerable extent, by collecting officers and others in ordinary business transactions, until some time in the spring of 1840, when it suddenly commenced to go down, and soon got to be regarded universally as worthless. Many persons continued to receive it up to that time, confiding in the assurances of the managers of the bank, that the return of sales of cotton, which the bank had shipped to Europe, would give it the means of redeeming its paper. And it was proved that in the year 1840, the president of the bank and other directors declared that in the end the bank would be solvent and its notes at par.
    *The plaintiffs filed in the cause two letters from Powell to Henry Gordon. The first from Jackson in Mississippi, dated December 1st, 1839, a few days after he arrived there. In it he says, 1 ‘ Well, this Brandon money; if you have altered your mind about it write me; it is now worth about twenty-four cents in the dollar. I think there are great doubts whether it will be better or not: Write me your notions on the subject.” The second from the same place, written just after he qualified as administrator on Stratton’s estate, and dated December 27th, 1839. In it he says, 1 ‘With respect to the Brandon money, I will, on Monday next, take it out of the bank. If I could have had it when I first got to the state, I think I could have sold it for twenty-five or thirty cents in the dollar. Since that the marshal here has levied on thirty thousand dollars of specie that is said to belong to the Brandon Bank; it here laid in the Planters Bank. Since that it has been going down, and the last accounts from New Orleans it was worth only fifteen cents to the dollar. That market governs all money here, and we get mails from there here every three or four days. There was ten thousand dollars offered the other day in Vicksburg for one thousand dollars in Union post notes. I have been expecting a letter from you several mails with advice on the subject. I think now, as I have for the last twelve months, it will get to nothing. ’ ’
    The fidelity and zeal of Powell in the administration of Stratton’s estate was testified to in the strongest ' terms; and the record affords abundant evidence that he shrunk from no effort, expense or personal liability which seemed to hold out a probability of recovering the money due to the estate of Stratton.
    The court below held that Powell must keep the land he purchased, and account to the plaintiffs for the amount of the purchase money; and that he must also account for the Brandon money, as well the six hundred ^dollars which was on deposit in the bank, as that which he received on account of the debt of Hobson ; and he was charged with it at the rate of ten cents on the dollar. The account thus settled made Powell a debtor on the 31st of December 1844, in the sum of three thousand and forty-six dollars and seventy-one cents, of which two thousand four hundred and twenty-six dollars and thirty-one cents was principal; and for this sum, after deducting one hundred and fifty dollars for his second trip to Mississippi, which by the agreement aforesaid he was to receive, a decree was made in favor of the plaintiff, giving to Mrs. Stratton one^third, and dividing the balance among the three children of Milner S. Stratton. From this decree Powell applied to this court for an appeal, which was allowed.
    Stanard & Bouldin and Irving & Johnson, for the appellant.
    Patton, for the appellee.
    
      
      Foreign Administrators—Suits by or against.—As a general rule, a foreign administrator cannot sue or be sued out of the state granting him authority. Andrews v. Avory, 14 Gratt. 229, and foot-note. The principal case is cited as an exception to this rule in Davis v. Morriss, 76 Va. 29. But see Andrews v. Avory, 14 Gratt. 240, where it is said, that the principal case is only an apparent exception to the general rule and not a real one. See also, principal case cited in Leach v. Buckner, 19 W. Va. 45; Oney v. Ferguson, 41 W. Va. 571, 23 S. E. Rep. 711.
    
    
      
      See generally, monographic note on “Executors and Administrators.”
    
    
      
      See generally, monographic note on “Executors and Administrators.”
    
   SAMUELS, J.

It is unnecessary in this case, to consider whether a personal representative, holding his appointment under .authority of foreign laws, if found in Virginia, can under all circumstances, be sued here in his official character. There is enough in the peculiar circumstances of this case to give jurisdiction to our courts. The appellant, the defendant below, resided in Virginia at the date of those transactions out of which this litigation arises: those transactions had their origin in this state. The bill alleges a case of fraud, and want of proper diligence against the appellant ; and upon that charge they predicate a claim merely personal and pecuniary. The appellant resists this demand, but admits that he is invested with the legal title to certain land lying in the state of Mississippi, and to certain choses in action payable in that state; the equitable title to all which, on certain *terms, enures to the benefit of complainants. It is not alleged by the appellant that creditors of Stratton’s estate in Mississippi or elsewhere, are in anywise concerned in the property in his hands; nor is it alleged by either party in pleading, or shown by proof, that the subject in controversy is affected in any degree by laws peculiar to the state of Mississippi; the case seems to have proceeded upon the theory that it was governed by the general principles prevailing in courts of equity. The appellant being within the jurisdiction of the court, full effect may be given to its decree by the exercise of its authority over his person. Thus the parties who are exclusively interested are before the court; they are at issue whether the appellant is liable to a demand of the appellees merely pecuniary, or whether he shall be held to be a mere trustee for their benefit, on equitable terms. The facts above stated bring the case within the jurisdiction of our courts. This conclusion is fully sustained by the decision of this court recently made in the case of Dickinson v. Hoomes’ adm’r, 8 Gratt. 353, upon a review of many decisions touching the question.

Passing from the question of jurisdiction to the merits of the case, we are met at the threshold, by the fact that such of the debts due Stratton’s estate in Mississippi, as give rise to this controversy, were either in a very precarious condition, or utterly insolvent. That due from King and Puckett was partially secured by a deed of trust on land and slaves. The land was about six hundred and sixty-six acres in quantity; and the witnesses differ as to its value; some of them estimate it at fifty cents per acre; others at prices ranging from fifty cents up to a dollar and fifty cents. The weight of proof, however, induces the belief that it could not have been sold for as much as fifty cents per acre, payable in specie or its equivalent. This land and the slaves conveyed by the deed *of trust, were in the hands of Samuel M. Puckett, one of the debtors: This party and John D. King, with whom he was bound, are proved to have been utterly insolvent. It is moreover shown that Puckett removed the slaves beyond the limits of the state of Mississippi, with the fraudulent intent to defeat the trust; and thus the security afforded by the slaves was destroyed. No attempt is made to charge the appellant on account of these slaves; it is therefore unnecessary to say more about them. The land, the only remaining security, was in the hands of Puckett, the fraudulent debtor. The trustees were Richard M. Hobson and William R. Crane; and Hobson is shown to have been insolvent. Such was the securitjE and such the means of making it available.

Powell having become the administrator on Stratton’s estate in Mississippi, caused the trustees to sell the land, and caused it to be bought in for the benefit of the estate at the price of four dollars twelve and a half cents an acre. That he bought the land with the view of benefiting the estate, and without any purpose of individual profit, is sufficiently shown by the proof. Powell assigns as a reason for buying the land, his anxiety to get it out of the hands of Puckett, and to prevent Hobson, the insolvent trustee, from receiving’the price, if it had been sold to another. He alleges moreover that the land was run up to the price of four dollars by Prtckett’s agent, with a view to defraud Stratton’s estate by means of collusion with Hobson, the trustee. There is no direct proof of this fraudulent intention ; however, considering the exorbitancy of the price of four dollars per acre, we have reason to believe there was no purpose of paying it in good faith.

Powell says nothing about the pecuniary condition of Crane, the other trustee, nor does he say whether, by the law of Mississippi, he would have been responsible *for money paid to his cotrustee Hob-son, or by him covinously released to the purchaser.

In view of the small intrinsic value of the land, and the utter insolvency of the debtors for all beyond that value, and the insolvency of Hobson the trustee, I am of opinion Powell did the best for the estate which could be done in the difficult circumstances in which he was placed. The land, the only available security, is saved to the estate; this was done at a price nominally far above its value, yet it was paid out of the debt due from King and Puckett, which was of no value; and the estate loses nothing thereby. If Powell, under the circumstances, had in some degree mistaken his duty, yet his great diligence and perfect integrity of purpose should exempt him from liability. The extraordinary embarrassment in the monetary affairs in Mississippi, at the .time of Powell’s administration there, would seem to require some relaxation of the rules governing the administration of estates there; at least, the administrator should not be held responsible when it appears that the ordinary course of administration would probably, not to say inevitably, have resulted in a greater loss. In this case the administrator acted wisely in buying the land, which would not, as far as we can now judge, have sold to another for more than fifty cents per acre, if so much, payable in a sound medium. I am of' opinion the appellant should not be held to a personal liability on account of his purchase of the land.

Another question between the parties is, whether Powell the appellant should be charged for his failure to dispose of the debt due from the Brandon Bank? The appellees take no exception on account of the fact that a portion of this debt accrued from receiving it indirectly in payment of a debt due from Richard M. Hobson above named, to Stratton’s estate. They insist, however, that Powell should be charged with *the market value of the Brandon Bank debt, which the commissioner fixes at ten per cent, of the nominal amount. He accordingly charges the appellant one hundred and ninety-six dollars and seventy-seven cents, that sum being ten per cent, on the Brandon Bank notes received on Hobson’s debt as aforesaid ; and the further sum of sixty-five dollars and twenty-two cents, that being ten per cent, on the principal and interest on the certificate of deposit made by Stratton in his life time in that bank.

The principle on which this claim is made, is in conflict with that on which the claim is made to charge the appellant in regard to the land. It is said in regard to the land, that he was going beyond his official duty in purchasing; yet it is said he should ' have sold this Brandon Bank debt,'whereas his official duty required the collection and not the sale of it. I am of opinion the appellant acted with prudence at the time in refusing to sell, although subsequent events have shown that if a sale could have been effected on any terms, it had better been made. The proof shows that the credit of the bank had fallen so low about the date of Powell’s qualification, that its paper was selling at a discount, which is variously stated by the witnesses to be from • eighty-five to ninety-five per cent. ; that it wtiuld have been very difficult, if not impossible, to have disposed of a large amount of it for specie even at that discount. The bank has''since fathed entirely ; and thus the debt is of no value. The appellant had been told, or others had been told, by the directors, that the bank would meet its liabilities; having as they said the means of doing so. Thus the alternative was presented, of selling, if a sale could be made, at a discount ranging from eighty-five to ninety-five per centum, or awaiting the chance of full payment. The appellant decided properly under the circumstances existing at the time; *and he should not be made to suffer because of subsequent events. If the circumstances could be reversed, that is, if the sale had been effected at the discount, and if the bank had become able to pay its debts, he would justly have been held responsible for the loss.

On the whole case, I am of opinion the appellees have shown no right to charge the appellant with any amount on account of the specific charges alleged. His diligence, discretion and perfectly g-ood faith give him a claim to the protection of a court of equity.

The land in the hands of Powell, and any rents and profits received by him, and the Brandon Bank debt, should be regarded as trust subjects, to be administered under the direction of the court, in the manner pointed out by the decree of this court.

The other judges concurred in the opinion of Samuels, J.

The decree was as follows:

The court is of opinion, that the said dei cree is erroneous; it is therefore adjudged, ordered and decreed that the same be reversed and annulled; and that the appellant recover of the appellee Ann Elizabeth Stratton, sometimes called Elizabeth Stratton, and William E. Royall the next friend of the infant appellees, the costs of the appellant expended in the prosecution of his appeal here. And the court proceeding to render such decree, as the Circuit court should have rendered, it is further decreed and ordered, that Benjamin H. Powell be held and treated as a trustee holding the land in the proceedings mentioned, and any rents and profits thereof by him received, and the debt due from the Brandon Bank, as a trust subject to be administered under the direction of the Circuit court. With the purpose of ascertaining the proper application of any funds arising from said ^subject, it is further decreed and ordered, that an account be stated between Benjamin H. Powell and the estate of Milner S. Stratton deceased, in which account said Powell shall be permitted to debit the estate with all reasonable disbursements made by him in Mississippi, with the view to protect the interests of the estate there; also with any money paid over to the executor or executrix in Virginia; also with the sum of one hundred and fifty dollars as a compensation for his second trip to Mississippi ; also with a reasonable commission on money due the estate and received by said Powell. In the said account the estate is to have credit for any money received by said Powell as administrator, and for the avails of the trust subject, which are to be paid to Powell, after deducting the costs of executing the trust. Upon the account so to. be taken, if the appellant shall be in debt to the estate, the several legatees of Milner S. Stratton deceased, may have decrees for the balance, ratably, in proportion of the amounts of their legacies. If, however, the administrator shall be in advance with the estate, the court does not deem it proper to give him a decree against the assets in Virginia.

The cause is remanded, to be proceeded in according to the principles herein declared.