Case Name: W. J. HANNAH, Trustee, Etc. v. R. A. L. HYATT et als.
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1916-01-12
Citations: 170 N.C. 634
Docket Number: 
Parties: W. J. HANNAH, Trustee, Etc. v. R. A. L. HYATT et als.
Judges: 
Reporter: North Carolina Reports
Volume: 170
Pages: 634–641

Head Matter:
W. J. HANNAH, Trustee, Etc. v. R. A. L. HYATT et als.
(Filed 12 January, 1916.)
1. Clerks of Court — Receivers—Official Bonds — Sureties’ Liability.
Where lands are ordered to be sold and the court appoints the clerk of the court by name and official capacity as such to sell and to receive and invest the proceeds, without requiring bond, the clerk acts officially in regard to such duties, and the sureties on his bond as clerk of the court are liable for his failure to properly discharge the duties of his trust.
2. Clerks of the Court — Receivers—Orders of Court — Disbursements—Credits.
Where the clerk of the Superior Court is ordered in his capacity as such to sell lands and invest and reinvest the proceeds, and makes payment of certain moneys under the further orders of the court, in pursuance of the management of the property, no personal liability attaches to the clerk in acting accordingly; and where it is established that such orders have been duly made, the failure to record them cannot prejudice him.
8. Appeal and Error — Reference—Exceptions.
Where a referee’s conclusion of law upon the facts found by him has been overruled by the trial judge, and no exception thereto has been taken by the appellant, he may not be heard to complain on appeal.
4. Clerks of Court — Receivers—Orders of Court — Deposits—Interest.
Where the clerk, under order of court, sells certain lands, and deposits the proceeds with a bank which paid 5 per cent on accounts deposited for six months, but no interest on checking accounts, and it appears that the clerk was required to check on this account under the further orders of the court, hut made a special arrangement with the bank whereby, he was to receive 4 per cent on this deposit, wdiich was the best he could do, he is not chargeable with the 5 per cent interest paid by the bank on its time deposits.
5. Same — Two Funds.
Where an officer of the court, ordered to sell land, deposit the proceeds in a bank at the largest rate of interest obtainable, has two funds so deposited, on one of which he can and on the other he cannot draw interest, and he is required to cheek on his account in the performance of his duties, which could have been done on either account, he is chargeable with the interest lost by his checking on the interest-bearing account.
6. Public Officers — Detaining Funds — Penalties—Interpretation of Statutes.
In an action to recover the 12 per cent allowed under Revisal, sec. 284, from the clerk of the court, etc., for money unlawfully detained, it is necessary that the plaintiff show some adequate default; and it appearing in this case that the parties agreed to a settlement, but that the plaintiff had refused to make a proper allowance for certain expenditures, the cause is sent back for further findings as to what had been done by the parties at the attempted settlement, the amount, if any, in defendant’s hands and due the plaintiff, or whether a proper tender had been made and refused.
7. Clerks of Court — Receivers—Commissions—Appeal and Error — Remanding' Case.
The clerk of the court being required to sell certain lands and invest the proceeds, etc., and it appearing that he had rendered services of value, with no indication of conversion, misapplication, or commingling of funds, it is held that he is entitled to his commissions in the settlement of the estate, though he is chargeable with certain interest that he may have received on the funds intrusted to him. Revisal, sec. 2773, relating to the commissions of the clerk, has no application to the facts of this case.
Civil actioN beard by Cline, J., upon exceptions to a referee’s report, at May Term, 1915, of Haywood. Defendants appealed.
Tbe defendant E. A. L. Hyatt was elected clerk of tbe Superior Court of Haywood County in November, 1906, and in tbe next month be duly qualified as sucb by giving his official bond, with W. T. Lee, E. Osborne, Allen Howell, Jr., and S. C. Welch, defendants, as sureties. S. C. Welch died on 18 December, 1912, and tbe other defendants, I. H. Way and J. C. Welch, are bis executors. E. A. L. Hyatt continued in office, with tbe same bond and sureties, until 21 June, 1909, when be resigned, and E. E. Osborne was appointed bis successor and was duly qualified, and J. E. Leatherwood became bis successor by election of tbe people in 1910 and duly qualified. ■ -
At July Term, 1907, tbe court, in regular proceedings, ordered that part of tbe “Love Speculation Land” known as “Cold Mountain tract” to be sold, and further ordered that “E. A. L. Hyatt, clerk of Haywood County Superior Court, be and be is hereby appointed a commissioner of tbe court to make tbe sale,” but there was no direction that be give a bond. Tbe appointee was directed to pay to Hugh A. Love tbe sum of $1,034.83 from tbe proceeds and deposit tbe balance ($3,224.01) in tbe Bank of Waynesville and “take for tbe same a certificate of deposit, payable to said Hyatt, commissioner of tbe court, obtaining tbe best rate of interest for tbe same that can be obtained.” This tract of land was conveyed by Hyatt, at tbe request of tbe purchaser, Hugh A. Love, by deed to J. E. Abel, for tbe consideration mentioned therein. Tbe deed was drawn and executed in tbe name of “E. A. L. Hyatt, clerk of tbe Superior Court of Haywood County and commissioner of tbe court,” and tbe mortgage from Abel to secure tbe notes for deferred payments described him as “E. A. L. Hyatt, commissioner of tbe court.”
At February Term, 1908, tbe court ordered a sale of another portion of said lands, known as tbe “Martin Tract,” and appointed E. A. L. -Hyatt to make tbe sale, in tbe following language: “It is considered, ordered, adjudged, and decreed by tbe court that E. A. L. Hyatt be and be is hereby constituted and appointed a commissioner of tbe court to make sale,” etc., and tbe order-required him to-give bond in tbe sum of $1,500, conditioned to pay tbe proceeds of sale ($1,020) to such party or parties as be, tbe said R. A. L. Hyatt, may be directed, under and by orders of tbe court; and it was further directed tbat “tbe said sum be deposited in tbe bank and removed therefrom only by order of tbe court.” Tbat tbe bond for $1,500 was given and tbe land sold by Hyatt on 5 March, 1908, and a deed executed to James A. Martin, tbe purchaser, for tbe consideration of $1,020, tbe amount of bis bid. This deed described Hyatt as follows: “R. A. L. Hyatt, commissioner of tbe court under a judgment of tbe Superior Court of Haywood County.”
On 16 July, 1907, be deposited tbe amount paid to him by J. E. Abel ($4,258.83) in tbe Bank of Waynesville on open account, subject to check, in tbe name of “R. A. L. Hyatt, commissioner,” and by special contract with the bank tbe deposit drew 4 per cent interest, and on 5 March, 1908, be deposited tbe amount received by him from James A. Martin in tbe Commercial Bank, on open account, subject to check, and without interest, tbe deposit having been made in tbe name of “R. A. L. Hyatt, commissioner.” He collected. interest to tbe amount of $123.57 from tbe Bank of 'Waynesville on tbe deposit in tbat bank. He checked out of tbe bank deposits divers sums under orders of tbe court, and among others be was directed to pay to one W. W. Stringfield $50 each month for services to be rendered “as agent for tbe Love estate,” and gave checks to Stringfield for tbe said amount each month from 1 August, 1907, to 1 July, 1908; it being $550 in all.
At July Term, 1908, tbe presiding judge signed an order, in chambers, directing R. A. L. Hyatt to pay, until further ordered, from tbe funds of tbe Love estate to W. W. Stringfield tbe sum of $50 each and every month thereafter, for services rendered to said estate. This order was not entered on tbe minutes of tbe court nor was there any entry referring thereto, and tbe order has been lost. There has been no action of tbe court revoking said order. Tbat, pursuant to said order, and acting in good faith thereunder, R. A. L. Hyatt paid to W. W. String-field by checks un tbe bank $50 each month from 4 August, 1908, to and including 1 June, 1909, making $550 in all, and on and after 29 July, 1911, be paid to W. J. Hannah, trustee, and administrator of tbe Love estate, and plaintiff in this ease, tbe $1,020 received by him from tbe sale of the Martin lands, and $980 received from tbe sale of tbe “Cold Mountain tract.”
On 16 March, 1911, plaintiff demanded of R. A. L. Hyatt all funds in bis possession, or which should be in bis possession, belonging to tbe Love estate, and Hyatt failed to comply with tbe demand.
Tbe case was referred to Mr. J. S. Bohannon to take evidence and state an account, with bis conclusions of law, and be reported the same to tbe court. Tbe material part of bis findings are substantially stated above. As a conclusion of law be held tbat tbe defendant acted under tbe orders of tbe court in respect to tbe sale of tbe “Cold Mountain tract” and tbe proceeds of tbe sale thereof, not simply as commissioner, but as clerk of tbe Superior Court, and that tbe sureties on bis bond are liable for any default by bim; but as to tbe Martin land, be was acting solely in tbe capacity of commissioner, and bis sureties were not liable for any default by bim in respect thereto; and tbe court, in passing upon tbe exceptions, affirmed these rulings. Tbe referee concluded that tbe defendant E. A. L. Hyatt and bis codefendants, bis sureties, were indebted to tbe plaintiff W. 'J. Hannah, as trustee and administrator of the Love estate, in tbe sum of $1,553.16, with interest at tbe rate of 12 per cent on $1,110.72 from said date until paid, which principal sum included tbe last payments to W. W. Stringfield, under order of July Term, 1908, amounting in all to $550, and interest thereon. This ruling tbe court modified by striking from tbe conclusion of tbe referee tbe said amount of $550 and incidental items, and reduced tbe amount due to tbe sum of $682.46, with interest on $488.05 from 18 January, 1915, until paid, and adjudged that tbe costs of tbe suit be paid by tbe defendants. Tbe referee charged defendants with 5 per cent interest to 16 March, 1911, on tbe clear deposit in tbe Bank of "Waynesville,'being $3,225.01, that i's, $4,258.83, less $1,034.82, amount paid by Hyatt to Hugh A. Love, and 12 per cent interest on tbe same from 16 March, 1911, until it is paid; and this ruling was sustained by tbe judge, subject to a proper deduction of tbe Stringfield payments. Tbe referee charged no interest on tbe $1,020 derived from a sale of tbe “Martin Tract,” and this was approved by tbe judge.
Defendants duly excepted, and from tbe judgment appealed.
During tbe years 1907, 1908, and 1909, tbe Bank of "Waynesville paid 5 per cent interest annually on all money deposited with it “on time certificates or certificate's of deposit, and paid to E. A. L. Hyatt 4 per cent on bis deposit of $4,258.83, and from 5 March, 1908, to 1 January, 1911, tbe Commercial Bank of Waynesville paid 5 per cent interest per annum on all money left with it” on time deposit or certificate of deposit, and which was allowed to remain in tbe bank for six months. That E. A. L. Hyatt attempted to deposit tbe fund of $1,020 received from tbe Martin land with both banks at 4 per cent, but they refused to receive it and pay interest on it if it was subject to check as in tbe case of tbe $4,258.83 deposited with tbe Bank of Waynesville.
J ohn M. Queen and W. J. Hannah for plaintiff.
M. Silver and J. W. Ferguson for defendant.

Opinion:
Wauker, J.,
after stating tbe case: There are five questions presented by tbe defendants' exceptions to tbe report of tbe referee and to tbe rulings of tbe judge thereon.
First. Tbe referee held that tbe money derived from tbe sale of that part of tbe "Love Speculation Land" which is known in tbe case as the "Cold Mountain tract," it being $4,258.83, was received by tbe defendant R. A. L. Hyatt by virtue and under color of bis office, and therefore his sureties were liable with him for any default in respect to that fund. The judge confirmed this ruling of the referee, and we concur therein. The clerk was appointed, in his official capacity, to make the sale and receive, invest, and disburse the imoceeds of the sale made by him, and this Court has often adjudged that in such a case, as he acts officially, he is necessarily liable in the same way for any failure to properly discharge the duties of his trust. The Judges v. Deans, 9 N. C., 93; State ex rel. Saunders v. Gaines, 30 N. C., 168; Broughton v. Haywood, 61 N. C., 380; Cox v. Blair, 76 N. C., 78; McNeill v. Morrison, 63 N. C., 508; Boothe v. Upchurch, 110 N. C., 62; Kerr v. Brandon, 84 N. C., 128; Waters v. Melson, 112 N. C., 89.
In Kerr v. Brandon, supra, the Court held that the appointment of the incumbent of the clerk's office as receiver of an infant's estate did not impose any liability upon the sureties who signed his official bond; but there he was not appointed receiver in his official capacity as clerk, but independently; and in Boothe v. Upchurch, supra, Justice Avery refers to that case, and states that the act of 1868 (Battle's Rev., ch. 53, sec. 22) was afterwards amended, to meet the decision of this Court therein, by The Code, sec. 1585 (Revisal of 1905, sec. 1813). .
In Waters v. Melson, supra, Shepherd, G. J., further explains and distinguishes the case of Kerr v. Brandon, supra. But it will be seen by a careful examination of the latter case that the reasoning of the Court sustains fully our conclusion that the clerk's bond is liable for this fund. See, also, Thomas v. Connelly, 104 N. C., 342, and Smith v. Patton, 131 N. C., 396.
In the case last cited the present Chief Justice states the rule definitely and collects the principal authorities. No further discussion, therefore, is required.
Second. As to the payments to "W. "W". Stringfield from 4 August, 1908, to 1 June, 1909, both dates inclusive, amounting to $550 in all, the court was clearly right in reversing the referee's ruling by which defendant was charged with that sum and interest. The amount was paid by defendant to Stringfield under an order of the court previously made, and it authorized the disbursement for services rendered the estate.. The mere fact that the order had been lost cannot deprive the defendant of his right to the credit. There is not any doubt as to its having been made, and the referee finds that it was made and signed by the court. As this finding of fact was approved by the judge, it concluded the matter. The failure to record the order could not prejudice the defendant's right to pay or W. ~W. Stringfield's right to receive the money. In re Blade, 162 N. 0., 457, 459. But while this is true, we do not see that the plaintiff is in any position to object to this ruling. He bas not perfected any appeal or assigned any errors. The judge properly overruled the referee's conclusions of law upon this finding.
Third. The exception of the defendant as to the charge of interest at the rate of 5 per cent on the fund realized from the sale of the "Cold Mountain tract" must be sustained. He should be charged only with interest at the rate of 4 per cent, the amount he received. The defendant was ordered by the court to deposit this fund, less the amount of the payment to Hugh A. Love, in the Bank of Waynesville and take for the same a certificate of deposit payable to himself and bearing "the best rate of interest obtainable for the same." He complied with this order as nearly as the requirements of the trust and the necessity of his cheeking upon the fund would permit. The court afterwards ordered certain amounts to be paid from this fund by the clerk, and he could not comply with the order without drawing checks on the bank for the same. In order to deposit the fund so that it would draw interest at the highest rate, and at the same time be subject to his checks, he agreed with the bank to deposit the fund with it at 4 per cent interest, this rate being the best he could secure on a checking account. It appears by the findings of the referee, approved by the court, that the bank would not allow 5 per cent, or any greater rate than 4 per cent, unless the entire amount was allowed to remain in the bank for six months on special deposit, called "time deposit" or "certificate of deposit" in the referee's report. As to the proceeds received from the .sale of the Martin tract, which was $1,020, he was not able to deposit it so that it would draw interest, as in the case of the other fund. We are unable to understand, though, why the contention of- the plaintiffs is not the correct one, that defendant should have checked first upon the noninterest-bearing account in the bank before he resorted to any part of the other deposit which bore interest. The referee and the court ruled in accordance with this contention, and the account, in this respect, was properly stated. The defendant was not charged with any interest on the fund derived from the sale of the Martin tract of land, $1,020, and was allowed commissions on the same. He should be charged only with interest at the rate of 4 per cent on the other fund, as that was all he received or could have obtained under the circumstances, and his management of this fund was in substantial compliance with the order of the court. There is no evidence that he applied any part of the money to his own purposes or that he made any profit therefrom for himself.
Fourth. The exception by defendant as to the charge of 12 per cent interest after plaintiffs' demand for payment under Revisal, sec. 284, cannot be passed upon without additional findings of fact. It appears by the plaintiffs' own admission in the testimony that the parties agreed to settle, and were proceeding to do so, when the plaintiff "broke up the settlement" because he was not willing to allow the defendant the receipts for tbe money paid to W. W. Stringfield. If defendant was able, ready, and willing to pay tbe defendant all tbat was tben due, except tbat item, and offered to do so, or if plaintiff refused to accept tbe undisputed part, if there was sucb a part, unless tbe Stringfield receipts were excluded from tbe settlement, and not allowed in reduction of tbe amount to be paid by defendant, the defendant was not in default, but tbe fault was all tbe plaintiffs', and tbe latter could not recover tbe higher rate of interest.
It was held in Bond v. Cotton Mills, 166 N. C., 20, 23, tbat "interest, by way of damages, is not allowed as a conclusion of law, unless there has been some adequate default on tbe part of a debtor in reference to withholding tbe principal sum or a part of it," citing several authorities, tbe exception being in those cases governed by Revisal, sec. 19 54. ¥e cannot decide tbe question, though, without specific findings as to what was done by tbe parties at tbe attempted settlement, and as to what amount, if any, was tben in the defendants' bands and due to tbe plaintiffs, tbe amount paid to Stringfield being allowed to defendant as a credit. Was there any clear balance? If so, bow much? If there was a balance, defendant's liability for tbe higher rate of interest will depend upon whether a tender was made by him of it or whether a tender was excused by tbe conduct of plaintiff. Tbe facts may be found by tbe judge, a referee, or otherwise, as provided by law, unless tbe parties can agree upon them. When they are ascertained, tbe judge will rule upon them as to this item of interest.
Fifth. Tbe defendant should have been allowed bis commissions. We see nothing in bis conduct of tbe business to indicate tbat be was unfaithful to bis trust. It is said in 18 Cyc., 1162, where tbe law is fully and clearly stated, tbat compensation should be allowed unless there has been some act or omission calling for punishment. In this case there is no evidence of fraud, willful default, or gross negligence which caused detriment to tbe estate, but it appears tbat it has been benefited by tbe services rendered. We find nothing in tbe report of tbe referee or in tbe administration of bis trust by defendant to indicate any conversion, misapplication, or commingling of funds, or any other improper conduct in receiving and disbursing tbe same. It would not be right tbat plaintiff, and those be represents, should enjoy tbe benefit of defendant's services and not pay him for them. 18 Cyc., 1162, 1163, 1164, 1165.
This Court said in Perkins v. Caldwell, 79 N. C., 441, 445: "It is stated by bis Honor that tbe executor acted in good faith and with strict integrity, and as we see nothing to tbe contrary, there i.s no reason why commissions should be withheld from.him." In revising tbe account, commissions will be allowed, at a rate to be fixed by tbe court, as tbe law directs. Tbe contention of plaintiff, based upon Revisal, sec. 2773, as to commissions of tbe clerk, cannot be sustained. That section does not apply to tbe facts as tbey appear in this record.
No question was raised as to whether this action should have been brought by the clerk's successor under Bevisal, sec. 906, 907, 908, and, therefore, we have not considered it, and do not express or mean to intimate any opinion in regard to it.
The report and judgment will be modified in accordance with this opinion, and the case will proceed further in the court below as indicated by us.
Error.