Court Opinion

ID: 8010392
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:57:32.087173+00
Date Added: 2024-06-11T16:35:40.990709
License: Public Domain

Black, J.
(dissenting). — Judges Brace, Barclay and myself dissent from the opinion just filed and from the lines of argument by which the conclusion is reached.
The important facts are these: The deceased left an estate consisting of not to exceed $14,000 in notes, and also a landed estate. The executors qualified in September, 1880. Among the assets was a note dated the twelfth of March, 1880, due in one year for $1,000, signed by O. H. Benedict, J. B.. Malone and R. A. Malone. On the twelfth of March, 1881, when the note matured, one of the executors presented it to J. B. Malone. Malone said that, in consequence of high waters out west, collections were slow; that times were close in Kansas City, and requested the executors to wait awhile. No other demand of payment was made until the fifteenth of February, 1882.
*522The executors produced much evidence to the effect that, when the note matured, J. B. Malone was the president of a bank at Macon City, and was reputed and believed to be a wealthy man and had a good credit, líe and the other makers of the note were partners in a wholesale grocery business at Kansas City, and the extent of their business' is to some extent indicated by the evidence which tends to show that the stock of goods invoiced $98,000 on the fifteenth of February, 1882. On that day the bank failed, and the Kansas City house was placed in the hands of a receiver. After these failures it transpires that the makers of the note were all insolvent, and for four or five years had not had sufficient property to pay all of their debts. The note was not a partnership debt, and, hence, did not participate in the partnership assets. It is a total loss. On these facts the executors claim a credit for the amount of the note and accrued interest.
It has been repeatedly held by this court that executors and administrators are liable for the want of due care in collecting the assets of the ‘estate, and the measure of that care is the diligence which prudent men exercise in the management of their own affairs. Merritt v. Merritt, 62 Mo. 151; Booker v. Armstrong, 93 Mo. 49. The administration law contemplates a speedy winding-up of the estate, and, hence, it becomes the duty of the executor or administrator to collect in the assets with all reasonable diligence, and this, too, without any request from the creditors or distributees of the estate. Schouler on Executors & Administrators [2 Ed.] sec. 269. The diligence required is that of a prudent person engaged in a like business, for reasonable diligence can mean nothing short of this.
Now, in this case the executors let the note run for a period of eleven months after it matured, without making any effort to collect it. During that time no demand for payment was made. That the executors acted in good faith, and believed the note was good and *523the makers solvent, is clear enough. But it will not do to say, or hold, that an executor or administrator, whose duty it is to collect in the assets with all reasonable diligence, can thus indulge the debtors of the estate. The fact that the makers of the note were of good credit is no excuse for the delay. The period of the delay in this case was far beyond that usually allowed as a period of credit in ordinary commercial transactions. The rule that the executor or administrator must collect in the assets with all reasonable diligence forbids such delays as that allowed in this case. The executors, in granting this indulgence, took upon themselves the risk arising therefrom. To hole1 otherwise is to encourage a laxity in the administration of estates which must result in ruinous consequences. It must be remembered that executors and administrators are allowed by the law full compensation for their services, and, in view of this fact, they should perform their duties with promptness.
It is true, some of the distributees do not object to the proposed settlement filed by the executors; but how that can affect the right of those who do object is not readily comprehended.
In applying the rule that the executor or administrator must make the collections with reasonable diligence, we are, of course, to take into consideration the established customs of the locality; but, in this case, the makers of this note were all engaged in a hazardous business, and this was well known to the executors. They permitted the debt to stand for eleven months, and that, too, without any effort to find out or ascertain the real and true financial condition of the debtors. We cannot consent to any exposition of the law which approves such want of care and diligence on the part of those who accept a fiduciary position, a compensated trust.
But it is said there is no satisfactory evidence that this note would have been paid had payment been demanded. The testimony of the two witnesses to the *524effect that it would have been paid is, it is true, no more than the expression of an opinion; but it needs no such evidence to satisfy anyone that this note would have been paid had payment been demanded. The proof is that the debtors were doing a large and extensive business, and there is no pretense or claim that they did not pay their obligations when payment was asked. It must be remembered that the burden of proof is upon the executors to show that this note could not have been collected by the use of reasonable diligence. The very fact that these men were doing a large business, with no evidence that they did not pay their obligations as they matured, does not make out, or tend to make out, a case for the executors. It is the best of evidence that the note would have been paid.
But it is again insisted that, although these debtors were doing what appeared to be a flourishing business during this period of eleven months, still we must treat them as insolvent all the while, because it transpired in the end that they did not at any time have property enough to pay all of their obligations. The argument certainly has the merit of novelty. The vast number of persons who fail annually in business of almost every character and description, and yet pay their debts as they mature up to the day of their failure, must show that to give sanction to the argument is to place the estates of deceased persons at the mercy of all the hazards of going concerns, and that, too, in the face of the fact that the law looks to, and contemplates, a speedy settlement of the estates of deceased persons. Should such a doctrine prevail it must furnish a ready relief from liability on the part of executors, and administrators for their own want of due care. To us it seems plain that the duty of the executors and their consequent liability must be measured by the facts as they existed when this note should have been collected.
We think the result reached by the majority of the court is not in accord with the policy of our *525administration law, or with the duties of executors and administrators as heretofore understood in this state, and we, therefore, dissent.
We deem it unnecessary to say any more in this case.