Opinion
17046
August 1, 1955.
Messrs. Pope Greene, of Newberry, for Appellants, cite: As to the bond of the Probate Judge being liable when he failed to require the executor purchasing lands at his own sale to furnish bond to account for the purchase money: 9 Rich. Eq. 217; 28 S.C. 164, 5 S.E. 348; 70 S.C. 1, 48 S.E. 610; 191 S.C. 244, 168 S.E. 697; 174 S.C. 403, 177 S.E. 665; 195 S.C. 23, 10 S.E.2d 152; 92 S.C. 329, 75 S.E. 549. As to estate of deceased Probate Judge not being necessary party in action against his bondsman: 189 S.C. 475, 1 S.E.2d 502; 132 S.C. 45, 128 S.E. 20; 4 F.2d 564. As to doctrine of res judicata being inapplicable: 199 S.C. 363, 19 S.E.2d 648; 118 S.C. 470, 111 S.E. 15; 185 S.C. 169, 193 S.E. 638.
Messrs. Robinson, Robinson Dreher, of Columbia, for Respondent, cite: As to Section 19-520 of the 1952 Code not imposing upon a Judge of Probate an affirmative duty for the failure of which his bondsman would be liable: 223 S.C. 365, 373, 75 S.E.2d 59; 9 Rich. Eq. 217; 28 S.C. 164, 5 S.E. 348; 1 Strob. (32 S.C.L.) 35; 174 S.C. 403, 177 S.E. 665; 195 S.C. 23, 10 S.E.2d 152; 207 S.C. 15, 35 S.E.2d 47. As to there being no hard and fast rule with reference to the matter of privity: 207 S.C. 15, 35 S.E.2d 47.
The following is the opinion of Judge Lewis, in the court below.
This is an action seeking to recover on the official bond of the late Jacob Drafts Boozer, Judge of Probate for Lexington County, for the term of office beginning January 1, 1947. The defendant was the Surety on the bond, the condition of which was the usual one that the Probate Judge should "well and truly perform the duties of said office as now or hereafter required by law," etc. By agreement the case was argued before me at Grenwood, upon the pleadings, the stipulation of facts, and the exhibits attached to the stipulation. From these documents the facts may be summarized as follows:
George W. Corley, Sr., died testate in Lexington County on December 5, 1945. His will appointed a son, Julian Corley, as Executor, and Item 3 granted the Executor full discretion to sell the estate realty at public or private sale, and to distribute the proceeds among the testator's five children, namely the Executor and the four plaintiffs in this proceeding.
Pursuant to the power of sale contained in the will the Executor ran a notice in the Lexington paper and conducted a sale of the home place at the Lexington County Court House in April, 1948. The property was sold to the Executor himself, and he gave a note and mortgage for approximately three-fourths of the purchase price to one Vick Calk. In December, 1948 the Executor, Julian Corley, admitted using these funds for his own purpose, and he has never paid to his sisters and brother their full share of the estate funds.
In 1952 the present plaintiffs brought an action against their brother for an accounting. This was consolidated with an earlier action by Calk to foreclose his mortgage on home place, and the consolidated actions resulted in a decree of the Lexington County Court of Common Pleas adjudging the Calk mortgage valid and foreclosable, and granting judgment to the plaintiffs against their brother in the amounts which he had failed to pay over to them, a total of $2,585.39.
At the time of the sale by Corley to himself in 1948, Jacob D. Boozer was Judge of Probate for Lexington County. He died March 29, 1951, and his widow, the present Judge of Probate, qualified as Administratrix of his estate on April 19, 1951 and was discharged on April 22, 1952.
In June, 1953 the present action against the official bondsman of Judge Boozer was instituted, the complaint alleging that the plaintiffs' losses on account of the malfeasance of the brother were caused by the failure of the Probate Judge to require Julian Corley to furnish bond when he became the purchaser at his own sale in April, 1948. Plaintiffs allege a statutory duty on the part of the Probate Judge to require such a bond under the provisions of Section 19-520 of the South Carolina Code of 1952, which section reads as follows:
Sec. 19-520. If any Executor or Executrix shall purchase any property at the sales of the estate of his or her testator, he or she shall give bond, with surety, to the Judge of Probate of the County, conditioned to account for the purchase money of the said property.
The crux of this case therefore is whether the above code language places a ministerial duty on a Judge of Probate to require the furnishing of bond under circumstances such as are here present, so as to warrant a finding of liability against his bondsman for his failure so to do.
The section of the Code now identified as 19-520 was part of an Act of 1839 entitled "An Act concerning the right of Executors and Administrators to Purchase Property at their Own Sales", 11 Stat. 62, and the other portion of that same Act is now Section 19-519 of the Code, which reads as follows:
Sec. 19-519. It shall be lawful for any Executor or Executrix, Administrator or Administratrix to become a purchaser at the sale of the estate of his or her testator or intestate under whatsoever authority the said sales may be made, and the property so purchased shall be vested in him or her; but he or she shall be liable to the parties interested for the actual value of the property at the time of sale in cases where it shall have been sold at an under price.
Although the quoted sections have been part of the Statute Law of this State for 115 years the exhaustive briefs of counsel do not produce any case holding a Probate Judge or his bondsman liable for the failure of the Executor to post bond when he purchases at his own sale. These statutes were referred to in passing, in the recent case of Honeywell v. Dominick, 223 S.C. 365, 373, 76 S.E.2d 59, but the only cases which contain any discussion of this law are the early ones. Huger v. Huger, 1857, 9 Rich. Eq. 217 and Finch v. Finch, 1887, 28 S.C. 164, 5 S.E. 348, 350.
Neither of these cases involved the duty of the Probate Judge with regard to this statute, but both were concerned with the powers, duties, and responsibilities of Executors. In the Huger case the Executors bought a large amount of the estate property at their own sale and the question was the validity of this purchase, which was contested on the ground that trustees could not buy at their own sales. The Court held that the Act of 1839 permitted such purchase and that the failure to give the bond required under that Act did not invalidate the sale and that the bond requirement was only directory, not a condition precedent to the validity of the sale. The Court went on to require the Executor in that case to give the required bond some year or more after the sale took place.
In the Finch case the Court pointed out that the two sections were originally part of the same Act of 1839 and should be construed together, saying:
"These sections were originally parts of the same act, (1839), and, of course, must be construed together. They declare the terms on which an executor is allowed to purchase at his own sale. It will be observed that the first section includes administrators as well as executors, and simply declares the liability of both; for purchasers at their own sales 'shall be liable to the parties interested for the actual value of the property at the time of sale in cases where it shall have been sold at an under price,' etc. The second section includes only executors, and was really unnecessary except for the purpose of requiring them to give bond to the judge of probate 'to account for the purchase money of the said property;' that is to say, to make good the liability required in the first section. Only executors were required to give bond to the judge of probate, as administrators had already done so under the general law. * * * We rather suppose that, as to the purchases of the executor at his own sale, the bond was intended to be a continuing security under the control of the probate judge, somewhat like an administration bond. Both the nature of the liability declared and the use of the word 'account,' show that such was the intention of the legislature. It is true there is no evidence that this executor gave the bond required by law. It does appear, however, that he received and enjoyed the property which he bid off, and we cannot doubt that the question of his liability should be considered under the terms and principles declared by law, just as if he had executed the bond. Lipscomb v. Seegers, 19 S.C. [425] 430."
The case of Lipscomb v. Seegers, cited in the Finch case, was a suit by the superintendent of the penitentiary, on behalf of the state, against a director of the pen who had hired convicts and then permitted them to escape. An Act of 1878 permitted such hiring, upon bond being given to insure payment to the State of $50.00 per annum for each year of the unexpired term of any convict escaping through neglect of the hirer. The defendant had failed to give the required bond, but the court held him liable for payment of the liquidated damages provided in the statute. The opinion contains no intimation of a positive duty on the part of the superintendent to require the bond; and if the judgment against Seegers had proved uncollectible, I do not believe the State could then have sued Lipscomb for failure to require the bond.
This Court cannot close its eyes to the practical operation of our Courts of Probate. Where a person applies for letters of administration on the estate of a decedent the Probate Court has the positive duty of requiring the furnishing of bond, and the official bondsman of the Probate Judge would clearly be liable for any failure of the Judge to follow this requirement. In such a case however the Probate Judge has it within his power to condition the grant of letters upon the furnishing of proper bond. Such is not the case with an Executor named in a will. The Executor qualifies and enters upon his duties without any requirement for the furnishing of bond, and it is only when he becomes a purchaser at his own sale that the law requires him to furnish bond. Depending upon the power contained in the will, such a sale may be either public or private, and upon such terms and conditions as the Executor sees fit to impose. It would be a manifest impossibility for a Judge of Probate to follow and police every such sale, in order to determine whether the Executor becomes his own purchaser and must therefore furnish bond.
It is also noted that the statute reads, "He or she shall give bond", referring thereby to the Executor or Executrix. This places a positive duty on the Executor and he is derelict when he fails to carry out the mandate of the statute. Under the authority of the Huger and Finch cases the plaintiffs here could have required their brother to furnish the necessary bond, but this they have not sought to do. They evidently reposed the same confidence in him which their father did in naming him as Executor, and which trust he has betrayed.
If the Legislature had intended an affirmative duty on the part of the Judge of Probate in this situation it could so easily have said, "The Judge of Probate shall require the giving of a bond" in place of the words "He or she shall give bond". Compare Section 19-500 of the Code of 1952.
In their able brief counsel for plaintiffs have cited several South Carolina cases wherein the official bondsman of a Probate Judge has been held liable for various actions or inactions of the Probate Judge. However, none of these cases involve a situation similar to this one, and several of them had to do with the requirement of guardianship bonds, involving an affirmative duty on the part of the Judge of Probate to require such bond. See Section 31-4 of the Code of 1952.
In their trial brief and reply brief plaintiffs' counsel relies strongly on the case of Hunter v. Boykin, 195 S.C. 23, 10 S.E.2d 152. This was actually a contest between an administrator's bondsman and the Probate Judge's bondsman as to who was liable for the misapplication of funds of a particular estate. The Probate Judge had instructed the administrator to make certain checks payable to him and he would see that the distributees were paid, and the Probate Judge thereafter converted the funds to his own use. The Court very properly held the Probate Judge's bondsman liable, since he was the real culprit in the case. By the same token, however, in the instant case Julian Corley is the real culprit, and no charge of malfeasance is made against the late Judge Boozer. The following language of the Court in Hunter v. Boykin clearly points up the distinction between that case and this one.
"There are other details, unnecessary to consider, of acts of fraud and imposition of this then Judge of Probate upon the administrator who was thereby misled to put it within the power of this perfidious official to prey upon the undistributed funds of the estate by converting the most of them to his own use, which he promptly did; and these acts of fraud were committed while he was clothed with judicial authority as the result of the willingness of his survey to furnish, for consideration, a written financial guaranty, his official bond, that he would well and truly perform the duties of his office.
"Let us see whether these regretable facts bring this case within the authorities relied upon in the Court below whereby the loss would be visited upon the surety of an honest and conscientious layman instead of that of an unfaithful and culpable Judge of Probate who was also an attorney at law. Unless we are so bound we feel that justice requires the contrary result." 195 S.C. 23, 31-32, 10 S.E.2d 152, 155.
In the present case the answer of the defendant Surety Company raises several other defenses in addition to the proper interpretation of Section 19-520, including the defense that the plaintiffs failed to file a claim against the Boozer Estate, and the defense of res judicata based on statements in the Special Master's report in plaintiffs' action for an accounting against their brother. It was admitted on oral argument, however, that if Section 19-520 does not require affirmative or ministerial action on the part of the Judge of Probate, then it would be unnecessary to decide the questions raised by the other defenses.
I have reached the conclusion that under the circumstances of this case there was no duty on the part of the then Judge of Probate, Mr. Boozer, to require the furnishing of bond on the part of Julian Corley when he purchased at his own sale in April, 1948, and therefore the defendant Surety Company has no liability in this matter. No opinion is expressed as to the duty of the Probate Judge in cases where an Executor's sale is conducted by the Probate Court itself or under order of that Court, as such a case is not now before me.
It is therefore ordered that the complaint be and the same is hereby dismissed.
August 1, 1955.
The Order of Honorable J. Woodrow Lewis, has been carefully considered in the light of the record and the exceptions, and we find no error.