Court Opinion

ID: 6673403
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:14:04.902675+00
Date Added: 2024-06-11T16:00:36.917482
License: Public Domain

The opinion of the Court was delivered by
Moses, C. J.
The action was a sealed note, dated October 20, 1860, payable at twelve months to E. 0. Jacobs, executor, and signed by John Charles, J. L. Woodside and Thomas Goldsmith. Jacobs was the executor of the last will and testament of his father, William Jacobs, and in that capacity took the note. Before its maturing, Jacobs died, and letters of administration, with the will annexed, on his estate were granted to Charles, the principal of the note, who continued as such administrator from 1861 to April 1, 1872, when his letters were revoked, and administration de bonis non, with the will annexed, was granted to the respondent, (the plaintiff below,) to whom the note was turned over, and this action soon after instituted.
On the trial, it was contended by the defense that the note in question became cash in the hands of John Charles as soon as he was made administrator of the estate of the payee, E. 0. Jacobs, and that he could be made liable therefor only through his administration bond; that the sureties on the note had been discharged by operation of law and were not liable. It was shown upon the trial that John Charles was solvent at the time of administration *498granted; but both he and his sureties were insolvent when it was revoked.
His Honor the presiding Judge was requested by the appellants to charge in conformity with the views thus submitted, and his refusal to do so is the error here assigned.
It is not to be denied that at common law, where the testator appointed his debtor executor, the debt was considered discharged to the same extent as if a gift of it had been made by the will.— Wankford vs. Wankford, 1 Salk., 307; Freakley vs. Fox, 9 B. and C., 130. The rule rested on the assumption that by the act a gift was intended, and if there was a deficiency of assets to satisfy the debts of the testator, the debt of the executor was considered as assets in his hands, subject to the discharge of debts. — See Will, on Ex., 1126.
To what extent the principle may now prevail in England, modified as it has been in its application by decisions both of the Courts of equity and law, from time to time, it is not necessary to inquire, for since 1789 the rule has had no force in this State. An Act passed in that year, (5 Stat., 111,) and embodied in the General Statutes, (Section 2, Chapter 87,) declared that the appointment of a debtor to the testator as his executor “shall not be construed in law or equity to be a release or extinguishment of the debt, unless the testator shall in his will expressly declare his intention to release the same.” The rule which obtained in the English Courts as to executors was never applied to an administrator debtor to the intestate, for his appointment is by operation of law, and cannot be referred to the act of the creditor. — Needham’s case, 8 Coke, 138; Wankford vs. Wankford, sup.
The executor or administrator, thus combining in himself the character both of debtor and creditor, thereby preventing all remedy for the recovery of his debt to the estate, which in law he alone represents, so far from being discharged or released by the mere act of his appointment, or the grant of letters testamentary or of administration, is regarded as holding the amount as cash in his hand, as the other effects of the decedent, subject to a due course of administration. His relation to the debt is changed by the very nature of his office. He cannot occupy a position which, on the one hand, would impose upon him the obligations of a debtor, while on the other it would entitle him to the rights of a creditor. To prevent the loss which might otherwise follow from the complete *499suspension of the remedy, the debt must be regarded as assets either in the hands of the administrator or the executor, and the bond of the former, in his case, will stand as its security. It is not necessary to multiply authorities on the point. A reference to Schnell vs. Schroder, (Bail. Eq., 335,) Griffin vs. Bonham, (9 Rich. Eq., 71,) Winship vs. Bass et al., (12 Mass., 198,) is enough.
The reason of the rule finds sanction in the principle which holds that where an administrator has in his hands a fund belonging to a distributee, of whom he is afterwards appointed guardian, it is at once transferred to him in his right as guardian, and the sureties on his administration bond are discharged. — Johnson vs. Johnson, 2 Hill Ch., 227; Simkins vs. Cobb, 2 Bail., 60; O'Neal vs. Herbert, Dud. Eq., 30; O' Neal vs. Herbert, McMull. Eq., 495.
There is nothing in the case to permit the inquiry as to what might have been the effect of a transfer of the note by the administrator to a creditor ®f the estate, or into any act on his part or that of the creditors or distributees, recognizing the note as an existing demand, and a direct appropriation of it to the debts of the intestate, which might bring it within the exceptions referred to in Clowney vs. Cathcart, (2 S. C., 395.) On the contrary, here it is not denied that the note was retained by the administrator, John Charles, for eleven years, when his letters were revoked, and administration de bonis non of the estate of E. O. Jacobs, with the will annexed; granted to the respondent, Richard H. Jacobs, to whose hands the note in some way came.
The motion for a new trial is granted.
Wright, A. J., and Willard, A. J., concurred.