Court Opinion

ID: 6442091
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:18:01.613155+00
Date Added: 2024-06-11T15:52:35.587021
License: Public Domain

Field, J.
This action of contract on an account annexed for goods sold and delivered was tried before a judge sitting without a jury. There was a finding for the plaintiff. The case comes before us on the defendant’s exceptions to the refusal of the judge to rule as requested.
The defendant is the administratrix de bonis non with *350the will annexed of Charles M. Ide. Ide was one of the executors of the will of William T. Abbott. Those executors were authorized by decree of the Probate Court to carry on the business of the deceased, which was conducted under the name of William T. Abbott and Company. This action is brought to recover the price of tea sold and delivered by the plaintiff to William T. Abbott and Company while the business was being carried on by the executors of William T. Abbott. The questions raised by the exceptions and argued by the defendant relate to the individual liability of Charles M. Ide.
The judge found specifically that a ‘' contract was entered into by the executors of the estate of William T. Abbott through their agent to take the tea” referred to in the declaration. There is no dispute that “all the tea was purchased of the plaintiff and used by the William T. Abbott & Company to fill orders of their customers while the business was being operated by the executors of William T. Abbott under license of court, and was not paid for. There was evidence tending to show that the plaintiff had knowledge of the bad financial condition of William T. Abbott & Company prior to the date of the sale of the goods; knew that the executors, Mrs. William T. Abbott and Charles M. Ide, were acting under an order of court; knew that at the death of William T. Abbott there was money due it from William T. Abbott & Company and, further, knew that the executors were operating the business in an attempt to sell it as a going business or to liquidate it; and knew also that the estate of William T. Abbott was insolvent and placed this account in the hands of its attorney. The plaintiff sold goods to the representatives of William T. Abbott & Company after it learned that the estate of William T. Abbott was insolvent.” There was also evidence tending to show “that the beneficiaries of the estate of William T. Abbott as well as the executors agreed that the business should be operated by the executors and they signed the petition in the Probate Court asking the court to allow the executors to operate,” and to show “that the executors were not negligent in the way *351they carried on the business,” but that they “conducted themselves faithfully, exercised sound discretion and acted in the conduct of the business as men of prudence, discretion, and intelligence managed their own affairs.”
The defendant contends that as matter of law (a) a finding “against Charles M. Ide as executor” does not make him liable personally, (b) the plaintiff in all the circumstances is estopped from setting up its claim and (c) there was not sufficient consideration between Charles M. Ide and the plaintiff.
These contentions cannot be sustained.
1. The defendant's first contention is in substance that Charles M. Ide — one of the executors of the will of William T. Abbott — as matter of law was not liable personally on a contract found by the judge to have been “entered into by the executors.” But an executor carrying on the business of his testator under authority of a decree of the Probate Court (G. L. [Ter. Ed.] c. 195, § 7) is liable personally to a third person on a contract made with him by the executor in carrying on such business, at least in the absence of an agreement, express or implied, with such third person excluding personal liability of the executor. See Luscomb v. Ballard, 5 Gray, 403, 405; Rosenthal v. Schwartz, 214 Mass. 371, 373. This is the rule applicable generally to trustees and like fiduciaries. Carr v. Leahy, 217 Mass. 438, 440. Larson v. Sylvester, 282 Mass. 352, 357. And it is not limited to such fiduciaries acting without authority. Mason v. Pomeroy, 151 Mass. 164, 167. Absence of authority in an executor or trustee to contract might leave the person contracting with him to recourse solely against such executor or trustee personally. King v. Stowell, 211 Mass. 246, 250. Hines v. Levers & Sargent Co. 226 Mass. 214, 217. But authority in such executor or trustee to contract would entitle him to allowance in his accounts for losses or expenditures resulting from the contract, subject to the ordinary principles of accounting, and would permit the person contracting with him to resort to the estate, in a proper proceeding, for payment of his claim. Poole v. Munday, 103 Mass. 174. Mason v. Pomeroy, 151 Mass. 164, 167. Mooers v. Greene, 274 Mass. *352243, 253-254. The authority to carry on the business of the testator conferred on the executors by decree of the Probate Court went no further. It did not relieve them from personal liability on contracts entered into in carrying on the business. The defendant, however, relies on the principle that an executor or trustee is liable not for mere errors in judgment but only if he acts in bad faith or fails to exercise sound discretion. Pine v. White, 175 Mass. 585, 590. Mal-den Trust Co. v. Brooks, 291 Mass. 273, 284. This principle defines the duty of an executor, acting within the scope of his authority, to account, but even when his transactions are authorized it does not govern his personal liability to third persons with whom he has contracted in behalf of the estate. No question of an agreement between the executors and the plaintiff excluding personal liability of the executors is here involved. And since this action is not brought on a negotiable instrument, G. L. (Ter. Ed.) c. 107, § 42, is inapplicable.
2. The plaintiff is not as matter of law estopped to assert its claim. Mere knowledge on its part that the business was being carried on by the executors under decree of the Probate Court would not raise such an estoppel. Larson v. Sylvester, 282 Mass. 352, 359. Nor would such an estoppel be raised by the plaintiff's knowledge of the financial condition of the business of William T. Abbott and Company, the circumstances under which it was being carried on, and the insolvency of the estate of William T. Abbott. Very likely the plaintiff believed that the continued operation of the business would be for its advantage. But there is no evidence warranting a finding that the executors were induced to continue to operate the business or to purchase goods of the plaintiff by fraud, misrepresentation or other unfair conduct of the plaintiff (see McLearn v. Hill, 276 Mass. 519, 527) which would estop the plaintiff from enforcing the personal liability of the executors. Donnelly v. Alden, 229 Mass. 109, relied on by the defendant, is materially different. In that case the business of the testator was being carried on by his executors without authority, and persons selling goods to the executors sought unsuccess*353fully to collect from the estate of the testator claims arising out of such sales.
3. Even if we assume that the contention of the defendant that there was no sufficient consideration between Charles M. Ide, individually, and the plaintiff is open under the exceptions, the contention is without merit. The tea — ■ for the price of which this action is brought — though used in the business of William T. Abbott and Company, was sold and delivered to the executors on their personal credit and such sale and delivery were sufficient consideration for their implied promise to pay for such tea.

Exceptions overruled.