Court Opinion

ID: 9561895
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:18:19.043524+00
Date Added: 2024-06-11T09:13:13.773837
License: Public Domain

Parker J.,
dissenting. This is the second appeal in this case. The opinion in the first appeal appears in 256 N.C. 596, 124 S.E. 2d 563. In that opinion, the original complaint is set forth verbatim. It would *154be supererogatory to repeat it here. The opinion on the former appeal was filed 28 March 1962. On 18 April 1962 defendant filed a written demurrer to the original complaint averring that it does not state facts sufficient to constitute a cause of action. At May 1962 Term Judge Paul sustained the demurrer, without assigning any basis for his ruling, and allowed plaintiff to amend her ■complaint. On 30 June 1962 plaintiff filed an amended complaint as follows — we omit the first three paragraphs because they are identical with the first three paragraphs of the original complaint:
“4. Under the terms of his said last will, Claud T. Cherry left his entire estate to his half-sisters, Madge Belle Davis (the plaintiff -herein) and Sadie Dott Singleton (the defendant herein) in equal shares for the terms of their natural life ‘with remainder to the descendants of their respective bodies;’ providing, further, that: ‘If either of my said half-sisters should die without leaving descendants of her body, then. . .such property as would have gone to the descendants of said half-sister. . .(to) go absolutely and in fee simple to the heirs of said half-sister.’
“5. The plaintiff, who is the half-sister of said Claud T. Cherry, named in his will as Madge Belle Davis, is entitled to- the possession, use and enj oyment of one-half of the estate of said Claud T. Cherry remaining after the payment of all debts, taxes, funeral expenses and costs of administration owed and incurred by said estate.
“6. At the time of his death, Claud T. Cherry was seized of certain real estate situate in Beaufort County, North Carolina, consisting of 17 acres of land described as tract number 2 in deed recorded in Book 227, page 408, Beaufort County Registry.
“7. At the time of his death, Claud T. Cherry was the owner of the entire amount of funds on deposit in a savings account in the Bank of Washington carried in the name of ‘C. T. Cherry or Sadie Cherry Singleton,’ the balance of which said account totaled $9,280.74 at the time of his death.
“8. After the death of Claud T. Cherry, the defendant qualified as Executrix of his estate and when she thereafter filed her Final Account as -such Executrix, on the 14th day of October 1960, the disbursements made by her were shown to have exceeded the receipts by $562.50. The above described real estate and bank account were not listed in said Final Account as assets of the estate. With respect to said deficiency said Final Account provided as follows: ‘The above deficiency, together with all costs and ex*155penses of administration, have been paid by the Executrix from the proceeds of a bank account in the joint names of the Executrix and the deceased, which account was paid to the Executrix individually >as survivor.
“9. The costs of administering said estate, including $15.50 paid to the Clerk of Superior Court, $9.50 paid to the North Carolina Department of Motor Vehicles, and the sum of $200.00 paid to attorneys for the estate, amounted to $225.00, and after deducting said costs from the original amount of the said savings account, there remained a net balance of $9,055.74.
“10. As the plaintiff is informed and believes, all of the debts of and claims against the estate have been fully satisfied and the estate has been fully settled; and the only persons having any right, title, interest or claim in or against the remaining estate of said Claud T. Cherry are the plaintiff and the defendant.
“11. By reason of the foregoing matters and things the defendant personally and individually has wrongfully appropriated and converted to her own use, and has received and now has, the plaintiff’s share of the net funds derived from the aforesaid account.
“12. Under the terms of the Will of Claud T. Cherry, as aforesaid, the plaintiff is entitled to have the possession, use and enjoyment of one-half of the net proceeds of said bank account, namely $4,527.87, which said sum the plaintiff has demanded of the defendant but which the defendant has refused and now refuses to deliver over to the plaintiff.
“13. The defendant now -has in her possession the funds representing the plaintiff’s one-half of said account in the amount of $4,527.87, which belongs to the plaintiff and which funds in equity and good conscience she ought to pay to the plaintiff, and the plaintiff is entitled to recover said sum with interest thereon from the 14th day of October 1960, which is the date said sum was wrongfully appropriated by the defendant.
“WHEREFORE, the plaintiff prays that she have and recover of the defendant the sum of $4,527.87 together with interest thereon from the 14th day of October 1960, and the costs of this action; and that she have and recover such other and further relief as to the Court may seem just and proper.”
The majority opinion states in substance the basic statement of plaintiff’s cause of action is the same in the original -complaint and *156in the amended complaint, and “Judge Fountain was, therefore, without authority to overrule the demurrer; he was bound by Judge Paul’s prior ruling." With that statement I do not agree.
The amended complaint alleges, which the original complaint does not, that defendant in her final account filed as executrix stated that the amount of this savings account in the Bank of Washington was paid to her individually as survivor, and in her final account she does not list this savings account as an asset of the Claud T. Cherry estate, and it further alleges, on information and belief, that all the debts of and claims against the estate have been fully satisfied and the estate has been fully settled. The amended complaint further alleges, which the original complaint did not:
"11. By reason of the foregoing matters and things the defendant personally and individually has wrongfully appropriated and converted to her own use, and has received and now has, the plaintiff’s share of the net funds derived from the aforesaid account.’’
The amended complaint alleges additional facts than appear in the original complaint which Judge Paul passed on, and the question before us is: Does the amended complaint state facts sufficient to constitute a cause of action against defendant as an individual? This does not involve an appeal from one superior court judge to another. Lumber Co. v. Pamlico County, 250 N.C. 681, 110 S.E. 2d 278; Bumgarner v. Bumgarner, 231 N.C. 600, 58 S.E. 2d 360.
The demurrer ore tenus to the amended complaint admits for the purpose of testing its sufficiency the truth of the following facts alleged in the amended complaint: One. Claud T. Cherry by his will left his entire estate to plaintiff and defendant in equal shares and the will of Claud T. Cherry contains the provisions set forth in the amended complaint. Two. Claud T. Cherry at the time of his death was the entire owner of $9,280.74 on deposit in a savings account in the Bank of Washington, which was carried in the name of “C. T. Cherry or Sadie Cherry Singleton.” Three. After Claud T. Cherry’s death, defendant qualified as executrix of his estate. Four. Defendant in her final account as executrix did not list this savings account as an asset of Claud T. Cherry's estate. Five. The proceeds of this savings account were paid to defendant individually as survivor. Six. Defendant used part of the proceeds from this savings account to pay costs of administration, but now has in her possession $9,055.74 of this savings account. Seven. All debts of, and claims against, the estate of Claud T. Cherry have been fully paid and the estate has been fully *157settled. Eight. Defendant refuses to pay one-half of the $9,055.74 to plaintiff, and has wrongfully converted it to her own use. McKinney v. High Point, 237 N.C. 66, 74 S.E. 2d 440; Cathey v. Construction Co., 218 N.C. 525, 11 S.E. 2d 571.
The admissions inherent in a demurrer are not absolute, because the conditional admissions made by 'a demurrer forthwith end if the demurrer is overruled. Erickson v. Starling, 235 N.C. 643, 71 S.E. 2d 384.
In Brown v. Estates Corp., 239 N.C. 595, 603, 80 S.E. 2d 645, 652, the Court said: “An administrator or an executor is personally liable for his own torts even though they are 'Committed in the administration of the estate. [Citing authority.]”
In Lightner v. Boone, 222 N.C. 421, 23 S.E. 2d 313, the Count said: “In the absence of unreasonable delay, diversion of funds, or other wrong doing, an executor or administrator is not personally liable for interest. [Citing authority.]” It would seem that the opposite of this statement that where there is unreasonable delay, diversion of funds, or other wrong doing, an executor or administrator is personally liable for interest.
In 33 C.J.S., Executors and Administrators, sec. 242, it is said: “An executor or administrator is personally liable to those who are interested in the estate as heirs, distributees, creditors, or otherwise, for waste, or for conversion, misapplication, or embezzlement of the assets of the estate. In addition to their remedy against the representative personally for waste or conversion, the beneficiaries of the estate may also maintain an action on his official bond* * *.” To the same effect see 21 Am. Jur., Executors and Administrators, sec. 303.
An executor or administrator acts in a fiduciary capacity. In re Will of Covington, 252 N.C. 551, 114 S.E. 2d 261. “It .is a fundamental principle in reference to both executors and administrators that they cannot be permitted to convert trust funds to their own use, or to make a profit from the use of trust money. In all oases they are personally liable for any misapplication of the assets of the estate.” 21 Am. Jur., Executors and Administrators, sec. 310. See also ibid, sec. 311.
In Hurlbut v. Durant, 21 Hun. 481, the Court held that the mere failure of ¡an executor to pay to a legatee the full amount of his legacy will not, in the absence of proof that he has become personally liable for the residue thereof by reason of some illegal or improper conduct, or that he himself claims to be entitled thereto, authorize an action to be brought against him individually to recover the same. In its opinion the Court said: “The defendant was sued in his individual capacity. In that capacity he was not liable without proof that he had become *158individually responsible by reason of some illegal or improper con-duet, for retaining the moneys and refusing to pay the same over.”
The majority opinion at its beginning states: “Civil action to recover a legacy.” In the opinion of the majority this is stated: “The purpose of this action, in its final analysis, is to secure a proper accounting and settlement of the estate of C. T. Cherry. It is in the nature of a bill in equity to surcharge and falsify the final account of the executrix® ® With this statement in the majority opinion I do not agree. This is an attempt by mere nomenclature to convert plaintiff’s action- — the alleged facts in the amended complaint are admitted as true by the demurrer ore terms — which is in fact and in law an action for wrongful conversion by an executrix of assets of an estate, into a bill to surcharge and falsify the final account of the executrix when the executrix has settled the estate and filed a final account therein, and has never reported the fund in controversy as an asset of the estate, but has been paid this fund individually as survivor of the savings account in the Bank of Washington and manifestly holds it as such survivor in her individual capacity claiming it as her own, and disclaiming that it is any part of the estate of her testate. In my opinion, the facts -alleged in the amended complaint and admitted as true here by the demurrer ore terms do not make it an action involving official capacity o.f an executrix according to the tests stated in Montford v. Simmons, 193 N.C. 323, 136 S.E. 875. Not a case cited in the majority opinion holds that an administrator or an executor is not personally liable to those who are interested in -the estate as heirs or distributees for conversion, or misapplication, or embezzlement of the assets of the estate. Not a ease cited in the majority opinion, as I read these cases, holds that an heir or distributee cannot maintain a suit against the executor or administrator individually for his waste or conversion of the assets of the estate.
In my opinion, plaintiff has made the -choice of suing defendant as an individual for her wrongful conversion of assets of the estate, as she had a right to 'do, and she has a right to -a trial in the county of her residence. The majority opinion is to the effect that she -cannot do this, but must proceed for her remedy in the county of the residence of defendant where -she qualified as executrix. I know of no law to support such a decision.
We are concerned in the instant case with pleadings. The entire will o-f Claud T. Cherry is not in the record. The precise -character of the estate devised and -bequeathed to plaintiff and defendant by Claud T. Cherry’s will is not before us.
*159The demurrer ore terms does not, and cannot, raise the question of a defect of parties, and therefore it is not necessary for that to be decided on this appeal. Short v. Central Bus Sales Corporation, 259 N.C. 133, 130 S.E. 2d 10.
In my opinion, plaintiff in -her amended complaint has alleged facts sufficient to constitute a cause of action to hold defendant personally liable for a wrongful conversion of assets of the estate of Claud T. Cherry allegedly belonging to her, and she has a right to maintain her action in the county of her residence. I think Judge Fountain properly overruled the demurrer ore tenus, and the same demurrer ore terns filed in this Court should be overruled. “If the complaint, in any portion of it, or to any extent, presents facts sufficient to constitute a cause of action, or if facts sufficient for that purpose can be fairly gathered from it, it will survive the challenge of a demurrer based on the ground that it does not allege a cause of action. It is sufficient if the facts alleged entitle plaintiff to some relief, even though they are insufficient to entitle plaintiff to the relief prayed, or to relief upon another theory of liability.” Strong’s N. C. Index, Yol. 3, Pleadings, sec. 19.
I vote to overrule all assignments of error on this appeal, and to affirm Judge Fountain’s order.
I am authorized to state that Justice Higgins joins in this dissenting opinion.