Court Opinion

ID: 6485851
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:09:00.314293+00
Date Added: 2024-06-11T15:54:20.171640
License: Public Domain

DISSENTING OPINION OF
PERRY, J.
The condition of the bond sued on in this case is that if the Security Trust Company, Limited, which had been appointed executor of the decedent’s estate, should “faithfully perform the duties of said office, according to law,” then the obligation would be void, otherwise of full force and effect. The surety thereby guaranteed the .fidelity and the diligence of the executor but did not guarantee its financial ability. The nature and the extent of the liability of the surety are to be found in its contract and it is immaterial in this case what the liability of the principal was at common law or whether the common law rule in that regard was incorporated as a part of the law of this Territory under section 1 of the Revised Laws of Hawaii. Even though this court would be obligated by virtue of the statute to hold, as against the principal, *669that by a fiction of the law the sum of $82,000 in question in this case became realized assets in the hands of the executor upon its appointment as such, it does not follow that the liability of the surety would he the same. The latter is to be ascertained purely from the contract.
It was the duty of the Security Trust Company as executor to exercise in the collection of this debt of $82,000 the same degrée of care and diligence which an ordinarily careful and prudent executor or administrator would have exercised in the attempted collection of a debt from another person as. debtor. Assuming that the evidence in this case requires the finding, as it probably does, that the trust company was not diligent but on the contrary was negligent in the matter of the collection of this claim on behalf of the estate, the question next arises, to what extent were the heirs or other beneficiaries of this estate damaged by the failure of the executor to exercise due care and diligence? In my opinion it is impossible to say in this case, upon the evidence now before the court, that the finding must necessarily be that the trust company at the time of its appointment was financially able to pay to itself as executor the full amount of $82,000 simply because it had at that time assets of that value. Findings of fact are not within the province of this court to make in a law case such as this when the evidence is susceptible of more than one alternative finding. There is evidence in this case from the Avitness Collins (Tr. pp. 22-23) that if at the time of the appointment demand had been made upon the trust company, and pressed, for the payment of $82,000 on this one claim of the decedent, “they could not have made it because they had only $36,000 cash in the bank to the credit of the Security Trust Company, Limited,” and that the company “Avould have to suspend and close its doors.” Whether or not this statement Avas true or exact is not for this court to *670say. The matter would have to be left to the trial court for a finding on the point. To say now that by being active and diligent the trust company as executor could have collected from itself as debtor the sum of $82,000 as a preferential payment is not the equivalent of saying that an ordinarily careful and prudent executor using activity and diligence could have finally obtained that much money for the estate as a result of his efforts. To arrive at any such result we would have to shut our eyes to the ordinary procedure of human beings similarly situated. The ordinary course of ordinary creditors under similar circumstances (the evidence shows that at that time the Security Trust owed large amounts to other creditors) would have been to step in immediately and with the aid of bankruptcy or receivership proceedings endeavor to secure for themselves a share of the assets of the moribund corporation. Whether the financial condition of this corporation at that time was such as to have permitted it to borrow the money or otherwise to secure the funds for paying, even preferentially, Branco’s claim, was a question of fact for the trial court alone to determine. If it were to believe Mr. Collins’ evidence, it might also Avell have believed that any legal compulsion at that time made in the collection of that much money Avould have resulted in bankruptcy or receivership proceedings and, consequently, in a pro rata division of the available property amongst all the creditors in the same classes. Receivership proceedings were in fact instituted less than six months after the appointment of the executor.
In my opinion the judgment ought to be set aside and a neAV trial granted in order to permit of findings of fact in accordance Avith these principles.