Court Opinion

ID: 3648427
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:03:51.737755+00
Date Added: 2024-06-11T12:10:37.356572
License: Public Domain

Upon a reference, the master reported (neither party appearing before him) that from the papers on file it appeared that the gross amount of the estate was $14,557.12, and the debts $1,020.33. Interest was charged the defendant upon the several sums received by him from the day they came to his hands, and credited him on his disbursements from the time they were made. The same course was adopted as to several partial payments made to the plaintiffs, and the result of the whole was that the plaintiff owed, of principal, to the plaintiff Margaret, alone, a balance of $417.62, and of interest $169.28. The defendant excepted to the report because of the manner in which the interest account had been settled.
The only question in this case arises on an exception to the master's report, charging the defendant interest. The defendant is an executor, who qualified in 1821. The master charges him with interest on money received by him from the day of the receipt, (370) and in like manner gives him credit for interest on his disbursements, in paying debts and for partial payment of the legacies, from the day of the disbursements. This is admitted to be generally right, when the executor renders no account, and has been dilatory in returning inventories and paying the legacies. But it is said that here the accounts taken by the master show upon their face that the defendant distributed the money received by him amongst the legatees so soon after it came to his hands that it is apparent he could not have made profit. If we were certain of that fact, the exception would be allowed, because the profit made by the trustee is the foundation of the decree for interest against him. When he keeps the fund on hand ready for the legatees and gives them early notice of it, or pays it upon application, he is not liable for interest. If he pays it over immediately, the interest being calculated on both sides produces the same result that would follow the allowance of it on neither. If there be debts falling due which require the money to be kept on hand to meet them, the executor is not chargeable with interest; for the situation of the estate requires him to keep a fund yielding no profit. But here the debts were very inconsiderable and the estate large. If the executor, as between *Page 209 
him and legatees, expects not to pay interest, it must not appear that he has made any use, for his private advantage, of any part of the funds of his testator. If he has, he must be held to a strict interest account for the whole, unless he keeps such accounts, and produces and verifies them before the master, as will show exactly what profit he has made. The fact is within the executor's own knowledge, and that of no other person. It is true in this case that some of the payments of the legatees were made so soon after parts of the funds came into his hands that there was probably a distribution of the very money received. He loses the interest only on the time intervening between the receipt (371) and payment, as the master has credited him with interest from the time of payment. But he ought not to lose that interest if his conduct was fair, and he actually kept the money on hand. With respect to other large sums, however, that is not the fact, for the difference on the interest account is upwards of $700, whereof the plaintiff Margaret's part is $169.28. No account has been rendered by the defendant before the master; much less one from which the profits made could be ascertained. The master has been under the necessity of stating the accounts ab initio. In such cases, executors must expect to be charged interest, unless they positively and unequivocally swear that they have not used the money themselves, nor loaned it to others, but have kept it on hand for the necessary use of the estate. We are obliged to adopt this rule to prevent executors from taking undue advantages, since it is impossible to trace the money and prove the particular uses made of it by the executor. He can always exonerate himself by keeping fair accounts and purging himself on his oath. In the present instance it appears from some of the exhibits that the defendant and his agent have applied to their private use, at times, some portions of the money, and the executor has not personally appeared before the master at all. The exception is, therefore, disallowed, and the report confirmed.
PER CURIAM. Let a decree be entered according to the report.
Cited: Spruill v. Cannon, 22 N.C. 402; McNeill v. Hodges, 83 N.C. 512;Pickens v. Miller, ibid., 548. *Page 210 
(372)