Court Opinion

ID: 6238546
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:38:35.542049+00
Date Added: 2024-06-11T08:58:07.584776
License: Public Domain

Mr. Justice Clark
delivered the opinion of the court, February 7 th, 1887.
It is a general rule that a devastavit by one of the executors will not charge his co-executor, unless the latter has in some way contributed to it, for the testator’s misplaced confidence in one, should not operate to the prejudice of the other. Administrators, by giving bond, become sureties for each other: (Boyd v. Boyd, 1 W., 367), but executors, excepting under special circumstances, are liable only for the amount which comes into their hands, respectively : Stell’s Appeal, 10 Barr, 152.
In Hall v. Boyd, 6 Barr, 270, the rule is thus stated:— “ When several persons are appointed executors, they are generally regarded in law as one person: Bacon’s Abr. tit. Exec. D. 1; and, therefore, the acts done by one which relate' to the testator’s goods, such as sale, delivery, possession, etc., are considered as equivalent to the acts of all, as they possess a joint authority. But in relation to their several responsibilities, the rule is' different; they are liable, personally and individually, no further than assets have come into their hands, or where they have done some act which the law considers as equivalent to an admission that the assets were in their hands and power, and were culpably and negligently parted with.”
In Irwin’s Appeal, 11 Casey, 296, the foregoing is said to be the best statement of the rule to be found in our books. Whilst the cases, not only in this state, but elsewhere, considered with reference to the particular facts upon which they *102arise, are certainly conflicting, we think the language employed by the court in Hall v. Boyd, above quoted, regarded as a general statement of the law, may be taken as the result of all the cases in this court, and as the correct rule of an executor’s responsibility for the act or default of his co-executor, in this state.
Therefore, in Duncommun’s Appeal, 5 Harris, 270, where there was a joint account- settled and confirmed, both of the executors were held to have admitted themselves of record to be liable for the whole balance in their hands, as shown by the account. The confirmation of a joint account discharges a previous separate liabilitjq and establishes an admission and adjudication of a joint one: Haage’s Appeal, 5 Harris, 190; Hengst’s Appeal, 12 Harris, 413.
So in Wiegand’s Appeal, 4 Casey, 471, a testator bequeathed to a daughter the interest accruing on a bond by one of the executors, annually during her life, and directed the principal to be secured by his executors. No steps were taken to secure the principal, and the obligor became insolvent and died; it was held, that the securing of the interest and principal Avas, under the will, a joint duty of the executors, and that the siuwiving executor was .therefore liable to the legatees. To the same effect is Weldy’s Appeal, 6 Outerbridge, 454, Avhere the executors disregarded the plain directions of the will, to invest the fund committed to their charge, and divided the funds betAveen themselves, without any security on part of either; it was held, there was such a neglect of a joint duty expressly enjoined by the will, as rendered them liable, the one for the other, for any loss or misapplication of the fund, or any part of it.
Upon the same ground in Pim v. Downing, 11 S. & R., 71, it Avas held, that Avhen a co-trustee, who does not receive the money, consents that the other should misapply it, particularly when he has it in his power to secure it, he is responsible.
In the case noAV under consideration no express trust duties are enjoined upon the executors by the will; the trust arises by implication only, and the duties of the executors are such as are incident to their office. The $10,000 received by Noble on the Jones & Laughlin mortgage was never in the hands of Wilson. Noble was at the time he received the money in fair credit, his financial standing was. good. He was the owner in fee of eighty acres of land which, it is said, was assessed for taxes at the rate of $500 per acre, but which one of the witnesses, at least, says, and he is not contradicted, was worth $1,400 per acre. When the first $5,000 was received, the land was incumbered to the amount of about $7,000, only; when the second $5,000 was paid he had entered against him, *103in addition to the amount already stated, the official recognizance of R. H. Fite, Esq., High Sheriff of Allegheny county, in the sum of $25,000, upon which he was one of the sureties, but it-does not appear, that he was held for payment, or was ever required to pay any part, of the amount secured by it.
Noble and Wilson were co-executors; they were equal in authority; the will gave no power, or imposed no duty upon one, which was not common to both. They were jointly held for the balance exhibited in their first account, but either of them might receive the money from Jones & Laughliu which was not embraced in that account, without charging the other; they were not liable for the uncollected securities, for which credit was taken in the account: Lightcap’s Appeal, 95 Pa. St., 456. Noble, it is admitted, did receive this $10,000 and the sole question is, did Wilson do anything, or omit to do anything, in the transaction, which would make him liable for the loss of it ?
Jones & Laughliu, it appears, refused to pay the money except upon the receipt of both of the executors, and although the testimony does not seem to establish the fact, the learned judge of the Orphans’ Court states, that the receipts were signed by both. But this circumstance, alone, would not be sufficient to create a joint responsibility of the executors. “At one time,” says Mr. Justice Bkll, in Stell’s Appeal, 10 Barr, 152, “ it seems to have been received as an inflexible rule that where executors joined in a receipt they were jointly chargeable, on the ground that a joinder was unnecessary, unless they intended to be responsible for each other. But this rule has never extended to trustees, created by deed, since it was necessary all should join in the execution of the trust, and consequently were compellable to execute joint receipts, though one of them only received the fund. And even in the case of executors, modern good sense, looking beyond the technical reason of the rule, which was supposed to be applicable to the peculiarity of the trust devolved on them, seems to have broken down the distinction between them, and other trustees, bj'- denying that in reason, an intent to be jointly chargeable is dedueible from the mere fact of joining in a receipt: per Lord Eldon, 16 Ves., 479; McNain’s Appl., 4 R., 148; Brown’s Appl., 1 Dall., 311; Sterrett’s Appl., 2 Penn. Rep., 420-1; Vernon v. Henry, 6 W., 192.”
It is said, however, that Wilson consented to a misapplication of the money. If John Noble retained the money under the claim that he was the natural guardian of his daughters, who were yet in their minority, and applied it to his own use, this was, without doubt, a perversion of- the money to an improper purpose, a plain misapplication of the trust moneys; *104but, after an examination of all the evidence, we are unable to agree with the learned judge of the Orphans’ Court, that Wilson ought'to be held for the result. If .the testimony of Wilson is believed, and he is not- contradicted or in any way discredited, he made a vigorous resistance to Noble’s retention of the money for this purpose. He consulted Robert Woods, Esq., a highly respected member of the Pittsburgh bar, who was their counsel in the settlement of the estate, and Mr. Woods “backed” Noble’s pretensions to the money. Mr. Wilson says: — “He (Noble) claimed that he was the child’s legal guardian, and Woods, our attorney, he backed him up on it; I was not satisfied, and I went to see Mr. Miller (Jacob H. Miller, also a member of the bar) and paid him for counsel ; he came over, and they talked the matter over together, and they asked me whether he was responsible; I told them that he was, that he was well known to be (and so he was), and they agreed to give him the money.” This was on the 15th May, 1875, some seven days after the first $5,000-was paid. After the consultation, Mr.-Woods wrote, and Roble signed, a paper in the following form:
Mr. David M. Wilson, one of the executors of William Noble, deceased, on the 8th day of May, A. D. 1875, as executor of William Noble, deceased, I received from and receipted to Jones & Laughlin for the sum of five thousand dollars, for which I am alone accountable.
May 15th, 1875. , (Signed) John Noble.
A similar paper was given on receipt of the second $5,000. Denying the right of Noble to retain the money, or to apply it to the purpose stated, what could Wilson do more than to place the whole responsibility of the transaction on Noble? The latter had a right to receive the money, Wilson could not gainsay his right, and, having received it, he might either deposit it to the joint account, or otherwise, as he chose. He was not bound to submit himself to the consequences of a joint control, and, therefore, to a joint responsibility, against his will; he was in good financial credit, and had a right to the custody of the fund on his own responsibility; and this was precisely the right which Wilson permitted him to exercise. Wilson did not consent to the proposed misapplication of the money; to that he objected, and applied to counsel for relief against it; but, being advised that if Noble was responsible, he had an undoubted right to take the money on his own responsibility, he suffered him to do so, taking a receipt to show the measure of his individual liability to the estate. Won constat that Noble would use the money as.'his own, or otherwise misapply it; it was his duty to invest it to answer the call of those eutitled when their right accrued, and certainly Wilson was *105not called upon to guard the interests of the estate until its rights were invaded.
It is contended, further, that Wilson should be charged ■with this portion of Noble’s defalcation, because he made no effort to secure the estate against it. It is doubtless the duty of all executors to watch over and, if necessary, as far as practicable, to correct the conduct of each other; an executor of trustee who stands by and sees a breach of trust committed by his co-executor, without any effort on his part to prevent it by the use of such remedies as the law may afford, becomes responsible for that breach of trust. In 1877, it is said, Wilson became aware that Noble was financially embarrassed and, in 1881, that he was using the trust funds, which he had collected, for his own purposes. Whether this embarrassment was supposed to be of a temporary nature, or of such a pronounced character as to seridusly affect his credit or to threaten insolvency; or whether his use of the trust funds was beyond the amount for which he then took Noble’s note, does not appear. The testimony on these points is certainly very meager and unsatisfactory. The sheriff’s recognizance appears to have been entered for the purpose of lien only as directed by law; it is not shown that Noble at anytime was obliged to pay any part of the money secured by it. The other liens were small in proportion to the estimated value of the property, and it does not appear that Wilson knew, or had any reason to suspect, that he was otherwise largely indebted.' Wilson, we think, acted in this matter in entire good faith; he stopped the further receipt of the trust money by Noble; from the year 1880, when he received the first information, he refused to permit Noble to make an}*- further collections; they agreed upon a receiver, and thereafter the collections passed into a receiver’s hands, and Wilson now stands charged with all the moneys which he received. He took Noble’s notes for the amount he had used of the trust estate, and with these notes he has been surcharged. Under these circumstances we hesitate to say that it was gross negligence in Wilson not to proceed without delay against Noble for an account, for his removal from office, and for a surrender of the trust estate in his hands, such a proceeding he would certainly not be required to institute against his co-executor, if he were required to do so at all, unless he knew, or had the means of knowing, and therefore ought to have known, that he was wasting and mismanaging the estate under his charge, beyond the amount for which he had already accounted to Wilson in the notes referred to, or that he was likely to prove insolvent, and of his knowledge, or means of knowledge, in this respect the evidence is, we think, slight indeed. Upon the first and second assign*106ments of error, therefore, the decree of the Orphans’ Court must be reversed.
The third and fourth assignments of error are not sustained. Having taken the notes referred to in the second assignment, it was Wilson’s duty under the circumstances to secure them by lien or otherwise, as any other loan or investment; not having done so, he must be held for payment thereof. The Plunkett loan was upon the personal security of the debtor alone, and the subsequent advance of funds in relief of the original loan was, under the facts shown, at the risk of the accountant.
The decree of the Orphans’ Court is reversed, and the record is ordered to be remitted, that distribution may be made in accordance with this opinion.