Court Opinion

ID: 8260315
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:53:13.427813+00
Date Added: 2024-06-11T16:43:07.606947
License: Public Domain

Biggs, J.
(dissenting).— I have been unable to agree with my associates concerning the first proposition discussed and decided in the opinion. I think that thequalifieation of Mr. Thrasher as executor, and the recognition by him of his debt to the testator by entering the notes on the inventory, must, under this record, be treated as absolute payment of the notes at the date of the inventory. This would stop all interest on the notes as such, and, if the executor ought thereafter to be charged with interest on the amount, it would have to be done on grounds other than that of a continuation of the original indebtedness. Any other view of the law would, in my opinion, lead tó complications and legal absurdities. At common law the nomination by a testator of his debtor as executor extinguished the debt. The reason was that an executor could not sue himself, and the right of action haying been suspended by the voluntary act of the creditor, it was gone-forever, except as to the creditors of the testator. Out of the hardship or injustice of this rule sprang, the-equity doctrine, which declared such indebtedness to be assets in the hands of the executor and constituted him a trustee for the beneficiaries under the will. Dealing further with the question as a practical one, courts of equity, recognizing the legal difficulties which would arise if such debts were treated as ordinary demands, declared that the acceptance of the trust must be treated as payment of such debts, invoking the principle, that,, when the same person is to pay and also receive a debt,. *337equity will presume that “what is required to be done,— that is payment, — shall be deemed to be done.” Our statute (R. S. 1889, sec. 99) is but the enactment of the equity rule, and in its enforcement' the principles applicable to the equity rule must of necessity be invoked. My associates deny this, and, under the authority of McCarty v. Frazer, 62 Mo. 263, they hold that a proper interpretation of the statute places such debts on the “ ¿ame plane” with other debts. As I have said, this construction is likely to lead to vexing complications in the administration of estates. For instance, the rule is that the sureties on an executor’s bond can only be held for the failure of their principal to collect ordinary demands, when it appears that the executor failed to exercise ordinary diligence in the premises. How could this rule be applied to the executor’s individual debt to the estate ? Again, when may the probate court, for the purposes of distribution, treat such a debt as paid ? Under the majority opinion in this case, this could not be done until the executor had signified by some overt act, such as charging the debt in his probate account, that it had actually been paid. The executor could decline to do this until the final settlement was reached, and the probate court would be powerless. Again, if the executor should resign, or be removed without accounting for the debt, would his successor be compelled to collect the debt like other demands remaining unadministered ? Or if the executor should die, would such a demand have to be allowed against his estate? These questions to my mind present-practical difficulties in the settlement of estates, and they would.be avoided, if the acceptance of the trust and the recognition of the debt by the executor be treated as payment in all contests between the executor and those directly interested in the estate.
In the McCarty case, which was a contest between , the administrator de bonis non and the sureties on the bond of the original executor, whose letters had been *338revoked, the supreme court held that our statute, making the debts of executors to their testator assets, ought not to be so construed as to make the sureties on an executor’s bond responsible for the debt of their insolvent principal. To avoid this result, the court decided that the liability of a surety as to such a debt must be determined by the same rules and tests, applicable to ordinary demands. That was the only question in judgment, and I have no fault to find with the conclusion reached. Under the facts it was in conformity with equity rules. This will clearly appear from the reasoning of the supreme court of Massachusetts in the case of Kinney v. Ensign, 18 Pick. 232. The court in discussing this question said: “On technical
grounds, as well as on considerations of policy, an administrator is not permitted to show that he could not collect a debt due from himself. But this is in the nature of an estoppel, and it is a well-settled rule of strict law, that although a party is bound by an estoppel, as of a fact proved or admitted, yet it shall not be taken as a substantial fact from which other facts can be inferred. Monumoi v. Rogers, 1 Mass. 159. So, in pleading, a party is held to admit all facts not traversed, but it is only for the determination of the issue in which such pleadings terminate. Such admission cannot be used elsewhere as a fact from which other facts may be inferred. Or, the holding the fact of a debtor taking administration upon the estate of his creditor to be a payment, may be deemed a legal fiction, adopted for purposes of justice and convenience, as well as from considerations of policy, and calculated generally to promote justice; but such a legal fiction will never be allowed to go so far as to worlc wrong or injustice." So in the McCarty case the innocent sureties ought not to have been made responsible for the worthless debt of their principal, which would have been a wrong and injustice to them. But in the case at bar the facts are entirely difieren t. *339The contest is between the executor and the legatees, and there is no controversy concerning the solvency of the executor or the validity of the debt. In my opinion the rule ought to prevail that, whenever an executor admits the validity of a debt by entering it on the inventory, the amount of such indebtedness must be considered, prima facie, as so much money in his hands, for the payment of debts and the purposes of distribution. If, however, it is made to appear that the executor was insolvent at the time letters were granted, and it is necessary to the protection of the sureties on his official bond, or to prevent other injustice or wrong, such debt ought to be treated as an ordinary demand. Kenney v. Ensign, 18 Pick. 232; Ipswich Mfg. Co. v. Story, 5 Metc. 310. Under this view Mr. Thrasher’s notes must be regarded as paid at the date of the inventory, and, therefore, the circuit court committed error in •compelling him to charge himself with interest on the notes as such, after that date.