Court Opinion

ID: 3558760
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:09:27.601835+00
Date Added: 2024-06-11T13:46:15.099988
License: Public Domain

The issue mooted and resolved on the final hearing in chancery was whether the transaction in question, i.e., the charging of the note to the executors' bank account, acquiesced in as it was by the executors, constituted "a preferential payment" of the obligation to the knowledge, actual or presumptive, of the defendant Trust Company, and therefore a "breach of trust" in which the latter was a participant; and I vote to reverse on the ground that the evidence does not sustain the conclusion of the learned vice-chancellor.
Concededly, the estate was solvent at the time. The transfer inheritance tax return, submitted on January 26th, 1932, exhibited a net taxable estate of $107,492.26. The assets consisted in part of the proceeds of insurance policies in excess of $106,000. Numerous claims, some in much larger amounts, were paid in full by the executors before and after the satisfaction of this particular debt from the executors' bank deposit.
The vice-chancellor found that, in the course of their administration, the executors "from time to time paid the most pressing of decedent's debts." But the defendant Trust Company's obligation was no less "pressing"; nor is this a differentiating circumstance. No recovery is sought from these satisfied creditors. They and the defendant are in the same category. The latter's status is not essentially different. They are in paripassu.
While the executors protested at the time the note was so charged to their account, the protest was not grounded in an asserted invasion of the rights of creditors, or a claimed interference with the orderly administration of the estate, but rather in the need — so runs the testimony of one of the executors — of "this money to buy malt and things of that type," by reason of which "it was wrong to charge it against" them. The subsequent insolvency, long after this transaction, was due to losses sustained by the executors in the operation of a brewery.
In my view, the executors' acquiescence is, in the special circumstances, binding upon the present administrator de *Page 405 bonis non. The long delay (the satisfaction of the debt from the bank account was had on August 26th, 1931, while the bill herein was not filed until January 19th, 1938) has plainly disadvantaged the defendant Trust Company as regards the remedy for the enforcement of the note; and the executors' conduct in this regard is justly chargeable to their successor. It would be unconscionable now to decree the return of the money. Assuming that chancery is not under a duty so to decree in obedience or analogy to the statute of limitations, an estoppel by acquiescence or laches has arisen in favor of defendant. Moreover, there is no warrant in the circumstances for a decree directing the return of the full amount so applied to the satisfaction of this creditor's admittedly just obligation.
For affirmance — THE CHIEF-JUSTICE, PERSKIE, HETFIELD, WELLS, WOLFSKEIL, JJ. 5.
For reversal — PARKER, CASE, BODINE, DONGES, HEHER, PORTER, DEAR, RAFFERTY, HAGUE, JJ. 9. *Page 406