Opinion
03-10-1856
FRANKLIN'S adm'r v. P. DEPRIEST.
Garland, for the appellant: Mosby, for the appellee:
(Absent ALLEN, P.)
1. The official bond of an executor is made payable to four justices, one of whom was not a member of the court at the time. HELD:
1. That the surety having executed the bond he is estopped from pleading that it is not his bond because so executed.
2. That by the act, Code, ch. 168, § 3, p. 640, the suit may be maintained upon the bond, though it is made payable to a justice who was not sitting in the court at the time of its execution.[a1]
2. Testator dies intestate as to one slave who is sold by the executor and purchased by himself. Afterwards the executor having failed to settle his accounts, a suit in equity is brought against him, in which there is a claim for the slave and his hires, and for a settlement of his accounts; and in this suit the sale to the executor is set aside, and he is required to account for the hires of the slave: and in 1850 there is a decree against the executor in favor of the parties interested in the estate for their respective shares of these hires. In an action against a surety of the executor founded on this decree. Held: The statute of limitations in favor of the sureties of fiduciaries, Code, ch. 149, § 5 and 6, p. 591, did not begin to run in favor of the surety until the decree of 1850: And this though the surety was not a party to the suit in equity.[d1]
3. That the decree against the executor was de bonis testatoris, when it should have been de bonis propriis, is an error of which the plaintiff might have complained, but it is not an error which can avail the surety.
4. If the decree was erroneous as to the surety, this would not render it a nullity. So long as it remains unreversed full force and effect must be given to it as well against the surety as the executor; and it cannot be questioned by the surety in an action upon the official bond of the executor.
This was an action in the Circuit court of Campbell county, brought in January 1851, by Williston Talbott, John Organ, Anselm Lynch and Adam Clement, justices of said county, at the relation of Patsey Depriest, against Lewis Franklin, and upon his death revived against his administrator. The action was founded on the official bond of John Rosser, as executor of Henry Wood, and was against Franklin as one of his sureties. The declaration, after setting out the execution of the bond and the qualification of Rosser as executor of Wood, set out the proceedings in a suit in chancery instituted in December 1834, by Patsey Depriest and others against the said executor, which resulted in a decree made in October 1850, in favor of the plaintiffs, for various sums, and among others for the sum of eight hundred and twenty-one dollars and twenty cents, with interest on four hundred and ninety dollars, a part thereof, from the 31st of December 1847 till paid: this being the share of Patsey Depriest of the hires of a slave named Squire, for which the executor was held responsible.
Franklin appeared and pleaded " covenants performed," and the statute of limitations, on which issues were made up. He also tendered a further special plea of non est factum, that the official bond of the executor was not made payable to the justices of the County court of Campbell at the time it was executed; and that Adam Clement, one of the persons to whom it is made payable, was not one of the justices sitting in said court at the time of the execution of said bond, as would appear by the records of that court. This plea was objected to by the plaintiff, and excluded by the court; and the defendant excepted.
On the trial the defendant demurred to the evidence; and the jury having found a verdict for the plaintiff for eight hundred and twenty-one dollars and twenty cents, with interest on four hundred and ninety dollars, a part thereof, from the 31st of December 1847 till paid, subject to the opinion of the court on the demurrer to evidence; the court at the same term rendered a judgment thereon in favor of the plaintiff: Whereupon Franklin's administrator applied to this court for a supersedeas, which was awarded. The evidence is sufficiently stated in the opinion of Judge LEE.
Garland, for the appellant:
1. The first question presented is, Whether the court erred in refusing to receive the plea, stating that the bond was not taken in conformity with the act of assembly? The plea alleges, and verifies it by the record, that Adam Clement, one of the justices to whom said bond is payable, was not sitting in said court at the time said bond was executed. The record would show that but three justices were sitting when said bond was taken, and it was therefore not taken in conformity with the act of assembly. These bonds are statutory bonds, and the requisites of the statute must be therefore complied with.
2. The next question is, Did the court err in refusing to receive the plea of the statute of limitations upon executor's bonds? We insist that it did. The bond bears date the 8th of December 1823. The suit in this case (which is the first proceeding of which the court can notice upon the executor's bond) was instituted on the 10th of January 1851, twenty-eight years after the execution of the bond. By the various reports in the chancery suit, it will be seen that the indebtedness to the appellee Patsey Depriest was entirely on account of the negro Squire and his hires, except sixty dollars and sixty-two cents as of December 31st, 1833, and its interest, which was properly in the hands of said John Rosser, who was at that time her trustee. Upon inspection of the decree, it will be found that there was no general balance upon account due to the several plaintiffs who have brought these suits, except to Patsey Depriest, as above stated; and that the whole sums decreed in their favor to be due arose out of the proceeds of a sale and the hires of the negro Squire. Of course the securities were not bound for any misappropriation of the trust fund of Patsey Depriest, held by said Rosser, as her trustee. The conditions of an executorial bond could not cover such a liability. Jones v. Hobson, 2 Rand. 483.
It is insisted that the right of action to set aside the sale of the negro man Squire accrued from the time when said sale was made. The injury to the legatees was the sale; and thereupon the condition of the bond was broken, and a right of action accrued. Spotswood v. Dandridge, 4 Munf. 289. The plaintiffs, aware of this state of things, made the securities defendants by the amended bill. Two securities appeared and answered, relying upon the act of limitations. The plaintiffs, seeing that the statute would apply, and in order to avoid it, (Rosser not having relied upon it,) dismissed their suit as to the securities and took this extraordinary decree in this case, that the actual indebtedness of the executor to the estate should be paid out of the assets of the estate.
3. The last question is, Did the court err in overruling the defendant's demurrer to evidence and giving judgments for the plaintiff? We think it did.
Because the decree, in " Depriest v. Wood's adm'r, " given in evidence, was both a fraud upon the securities and a nullity.
1. Was it not a fraud? In using this expression, we do not mean to attribute any intentional fraudulent design, but insist that it was a legal fraud. The securities had been dismissed from the case and placed in a situation, in which they could not protect their rights. The decree is such as the plaintiffs had no right to have, and such as no court should have rendered. It is the first instance in the history of our judicial proceedings in which a decree in favor of distributees against an executor for distribution, after a balance found due in his hands, has been rendered payable out of the assets of the estate in his hands to be administered, and not out of his own personal estate.
Whoever heard that legatees were to be treated as creditors of an estate? And yet such is this decree. The legatees could only be entitled to the residue of the estate, after the payment of debts; and for such residue they were entitled to a direct decree against the executor. In this case they could not make the assets of the estate pay the amount of Squire's sale and hires, when the executor alone was in default. This decree, being against all rules and precedents, could have no other object, therefore, than to avoid the statute of limitations which had applied in favor of the securities; and as they had been dismissed from the case and could not protect their rights, it was in law a fraud upon their rights.
This decree should have been against John Rosser's private estate. Moore's ex'x v. Ferguson, 2 Munf. 421; Sheppard's ex'or v. Starke, 3 Munf. 29; 2 Rob. Pr. 392, old ed.
2. We insist, also, that this decree is a nullity.
This suit was on behalf of legatees. It has been found, upon a settlement of the executorial account, that there are certain balances in the hands of the executor due to them as legatees. For these balances, instead of taking decrees directly against the executor, they have taken decrees against the assets of the estate in his hands to be administered. The record, made evidence in the case at bar, shows that the whole estate of the testator is in the hands of the legatees themselves, except these balances. The decree, then, is substantially against the legatees themselves.
We insist, therefore, that the judgment upon the demurrer to evidence is erroneous and ought to be reversed.
Mosby, for the appellee:
The counsel for the appellee submits that two questions only are presented by these records to the Court of appeals. Did the court err:
1. In rejecting the third plea offered by the defendants severally?
2. In overruling the defendant's demurrer to the evidence and giving judgments for the plaintiff?
As to the first: The gist of this plea is, that the bond sued on " is not payable to the parties sitting in the said County court of Campbell at the time it was executed."
I submit that the bond, on its face, declaring that the obligors are bound to four persons, " gentlemen justices of the county of Campbell, now sitting," they are, upon general principles, estopped (even if the fact were otherwise, as it really was not in this case,) from denying that averment was true. It is not necessary, however, to fortify this position by argument or authority, since the question presented is settled definitively by the 3d section of chapter 168 of the Code, p. 640.
This section provides, that " upon any official bond, executed before this act is in force, suit may be maintained (for the benefit of any person injured by the breach of the condition thereof,) in the names of the judges, justices or other person, to whom such bond is payable, whether any of the obligees be alive or not, and although any justice to whom the bond is payable, was not sitting in court at the time of its execution, or although any other justice was sitting at that time."
As to the second question: The printed argument of the appellant's counsel takes the ground that the decree of 12th of October 1850 was " a fraud upon the securities and a nullity."
As to this latter ground, it may be remarked, at the least, it is most gratuitous. How could the decree of the 12th of October 1850 be a fraud upon or injuriously affect the rights of the sureties? It simply carried out the mandate of the Court of appeals, directing the executor John Rosser to be charged with Squire and his hires, which could not have been resisted either by him or the sureties. It did not bind the sureties, unless they were bound independently of it. It did not and could not possibly affect the operation of the act of limitations, if that act was otherwise a protection to them. It left them exactly where they were, if they had not been made parties by the amended bill of 1850. When sued in the action at law, the forum merely was changed, and they had then and there every right of defense that could at any time or under any circumstances have been made by them.
Equally powerless is the idea that the decree is a nullity, because it directs the executor, out of the assets of his testator in his hands, to pay the plaintiff's demand. It is true, that so far as Mrs. Depriest is concerned, the decree may be regarded as erroneous, because it limits the recovery of the sum decreed her, to the assets in the executor's hands; and for this cause she might reverse it, if her interests should make it necessary to do so. This is the principle referred to in 2 Rob. Pr. p. 392, and sanctioned by the Court of appeals in 2 Munf. 421, and 3 Munf. 29.
But the case is wholly different so far as the executor and his sureties are concerned. They cannot object to the decree because of its limited character. This is beneficial to them, and especially to the sureties. It is admitted the executor had in his hands the hires of Squire. By the terms of the executorial bond he was bound to pay them over to the rightful owner, and his sureties stood responsible for that appropriation. It is not perceived how they were or could be injured by a decree which (though it restricted the appellee's proper remedy) did, in effect, but order the executor to pay these very hires over to her. Following the decree, she attempts to collect them by execution. The return shows an inability to do so, and the verdict finds that the executor has wasted and converted them to his own use. What more can be necessary to fix the liability of the sureties? It is submitted that that liability was perfect and must now be enforced unless the act of limitations is a bar. And this brings up the only point really relied on by the appellants in the court below, viz:
Did the act of limitations bar the plaintiff's action?
The facts are, that the sale of Squire was in May 1825, and the suit of Depriest v. Rosser was commenced the 23d of December 1834, so that, on the ground taken by the appellant himself, his defense fails.
But it is submitted that the appellant's counsel misapprehends the true period at which the act of limitations relied on could apply to the bond in question. The act was passed on the 8th of March 1826, and went into effect on that day. See Supp. R. C. p. 260.
By the 4th section it is provided, " that in computing the time within which rights of entry and of action now existing will be barred by the provision of this act, this computation shall commence from the date of the passage of this act and not before, so that such entries may be made and such actions brought within the same time, as if the right or title thereto had accrued at the time of passing this act." The 8th day of March 1826 being then the earliest day at which the sureties could begin to rely on this act, and the suit of Depriest v. Rosser having been commenced on the 23d December 1834, there seems to be an end of the question, unless indeed the fact that they were not made parties in the suit thus brought against the executor will discharge them. The appellant's counsel, neither in the petition nor printed argument, has contended for such a proposition.
The court is referred to the case of Roberts v. Colvin, 3 Gratt. 358. That was a case much stronger for the surety than this. A ward, soon after coming of age, filed a bill against the administrator of her guardian for an account. After twenty-four years a decree was rendered in the ward's favor. Unable to make it out of the guardian's estate, she then filed a bill against his sureties, and this court held " that the lapse of time during which the ward was prosecuting the claim against the administrator of the guardian furnishes no ground for the exoneration of the surety; and that the statute of limitations does not apply to the case."
LEE, J.
I am of opinion that the third plea offered by the plaintiffs in error that Clement one of the persons to whom the bond sued on was made payable, was not one of the justices sitting in the court at the time the bond was executed, was naught and was properly rejected by the court. By the bond itself the parties who executed it acknowledged and declared that the four persons to whom it was made payable were justices of the county, then sitting, and it was acknowledged by them in open court and ordered to be recorded. They are therefore estopped now from averring the contrary upon the general principles of estoppels. But if there were any doubt about this, the question is put at rest by a provision of the Code which declares that upon any official bond executed before that act was in force suit may be maintained in the names of the judges, justices or other persons to whom such bond is payable, whether any of the obligees be alive or not, and although any justice to whom the bond is made payable was not sitting in the court at the time of its execution or although any other justice was sitting at that time. Code of Virginia, ch. 168, § 3, p. 640.
The defendant in error having given in evidence the bond of Rosser and his sureties, the decree of the 12th of October 1850, the execution sued out upon that decree and the return " no effects" showed herself prima facie entitled to recover in this action unless her right was barred by the statute of limitations; and this is resolved into the enquiry when the cause of action accrued.
By the fifth section of chapter 149 of the Code, p. 591, it is provided that every action upon a bond of an executor, administrator & c. shall be brought within ten years next after the right to bring the same shall have first accrued; and by the sixth section it is declared that the right of action of a person obtaining execution against any personal representative of a decedent or to whom payment or delivery of estate in the hands of such representative shall be ordered by a court acting upon his account, upon the official bond of such representative, shall be deemed to have first accrued from the return day of such execution or from the time of the right to require payment or delivery upon such order. If this provision is to furnish the rule of decision here there is an end of the case; for the decree in favor of Mrs. Depriest was rendered on the 12th of October 1850; the execution sued out thereon and returned " no effects" was dated 21st of November 1850 and was returnable on the first Monday in January 1851, and the suit was brought on the 16th of January 1851. But the argument of the appellant's counsel has assumed that this provision does not apply, for he insists that the wrong to the parties interested was the sale of the slave Squire in 1825 by which the condition of the bond was broken and that the right of action accrued at that time. And to make the argument complete it must be assumed that as the right of action was thus barred by the operation of the act of March 30, 1826, the provision in the Code above cited could not serve to restore it nor could it prescribe any other or different period from which the bar of the statute which its enacts should be computed in a suit brought after it took effect to enforce any right growing out of this original supposed cause of action.
Waiving any enquiry into the correctness of this last proposition, let us briefly consider when the cause of action upon this bond for the matter in controversy should be said to have accrued independently of the provision of the statute.
The subject sought to be recovered was the share of Mrs. Depriest in the hires of a slave named Squire as to which the testator appears to have died intestate; for which hires she claimed that the executor was liable to account. Rosser the executor had sold this slave in 1825 and purchased him, himself, and he claimed to hold him afterwards as his own property; whilst Mrs. Depriest insisted that he was to be considered as a part of the estate of the testator notwithstanding the sale, and so that the executor should account for the hires for all the time the slave was held by him. The executor had not settled his accounts, and there was therefore nothing to show the balance in his hands by which a foundation could be laid for the present demand. A suit in chancery became necessary to set aside the alleged sale, restore the slave to the estate and hold the executor to an account of the hires. This was accomplished by the decree in the chancery cause of the 27th of April 1841; for although the bill did not charge the fact of the sale of Squire, it charged that a negro man whose name was left in blank, not named in the will, came to the hands of the executor, and called for a discovery in relation to him and to the manner in which he had been disposed of: Rosser in his answer stated that he had sold Squire for six hundred dollars, having previously held him about a year or sixteen months, and expressed his willingness to account for the amount of the sale and a reasonable hire while the slave was thus in his possession. The court however by its decree adjudged the sale invalid and set it aside, and declared that Rosser should account for the hires from the time he qualified as executor until the slave should be sold as therein after directed. And this decree was affirmed by the Court of appeals on the 17th of October 1848, that court declaring that the accountability of Rosser for the slave was just the same as if such sale had not been made no title having been thereby acquired by him. Thus after a controversy of nearly fourteen years, it was finally adjudged that the executor was to be regarded as having held the slave as the property of the estate of his testator during all that time and as then liable for the whole amount of the hires. And an account having been taken on the principles of the decree of the Court of appeals, the court on the 12th of October 1850 rendered a decree against the executor for the amount of the hires.
Now upon this simple statement of the case it would seem impossible to say that this cause of action upon the executorial bond accrued at such a period that it was barred in January 1851 when this suit was brought. The case was simply that of an executor who in 1850 was found to have in his hands assets of the estate of his testator which he was required by the decree of the court to pay to a distributee but failed so to do. Concede that the executor violated his duty and the condition of his bond by making an illegal sale of the slave instead of making distribution or by failing to settle his accounts, it does not follow that the period of the limitation for the present demand is to be computed from the time of such delinquency. It is not always that the right of action upon a bond with condition shall be deemed to have accrued from the time the condition is broken. Thus in an action upon a marshal's bond, the breach of the condition alleged was that by the order of the District court of the United States for the district of Louisiana, in an admiralty case, the marshal was directed to sell the schooner Estrella and her cargo and to hold the proceeds subject to the order of the court; that the sale was made and the money received by the marshal; that the court by its final decree directed the vessel and cargo or the proceeds thereof to be restored to the libellants, and that the marshal had failed to pay over a part of the proceeds. By law it was made the duty of the marshal to bring the proceeds of sale into court to be deposited in bank in the name and to the credit of the court. This he had failed to do and this violation of his duty took place more than six years before the suit on the bond was commenced. The act of congress of 1806 in relation to suits on marshals' bonds enacts that suits thereon for cause of action thereafter to accrue, shall be commenced within six years after the right of action shall have accrued and not afterwards, and this statute was relied on as a bar to the action. The court held however that its mandate was not fully performed till the proceeds were brought into court or paid over to the libellants and that if the condition of the bond was broken by the failure to bring the money into court, yet that the plaintiffs' right of action should not be deemed to have accrued until the order directing the proceeds to be paid over to them, nor (an appeal having been taken) until its affirmance: and this affirmance being within six years before the institution of the suit, that the action was not barred. Montgomery v. Hernandez, 12 Wheat. R. 129. So in an action brought in October 1845 against the sureties of a constable upon his official bond in North Carolina, it appeared that certain claims against persons who were good had been placed in the constable's hands for collection in February 1842 and the statutory limitation of three years was set up as a bar to the recovery: and the argument was that if the officer could have collected the claims between February and October 1842, his failure to do so was a breach of the condition of his bond for which a right of action at once accrued and so the sureties were protected by the statute. But the court held otherwise. " The omission to collect, (said Pearson, J.) was a breach of a continuous nature. Admit there was a breach by a failure to collect before October 1842, non constat that there was not a breach for a failure to collect after October 1842 to which latter breach the statute was no bar." State v. Patton, 13 Ired. R. 421. From these cases it may be deduced that although there may be a right of action upon the first breach of the condition of a bond with a penalty, and the whole penalty may be recovered to stand as a security for such other sums as may be afterwards assessed on scire facias, yet the plaintiff is under no necessity to bring his action at once. He may waive the first breach and when a subsequent breach occurs, he may bring his suit and assign the latter; and the right of action as to it will not be deemed to have accrued until the time at which it occurred. And this result is supported by other cases. Sanders v. Coward, 15 Mees. & Welsb. 48; Blair v. Ormond, 7 Eng. Law & Eq. 318; Arnott v. Holden, 16 Eng. Law & Eq. 142; Austin v. Moore, 7 Metc. R. 116.
Whether therefore, Rosser the executor committed a breach of the condition of his bond by the illegal sale of the slave, or by failing to settle his account, or (if the sale be treated as a nullity) by failing to pay over the value of the slave and his hires to those entitled at an earlier period, it seems clear that after the amount of those hires was ascertained in the chancery suit and declared to be a part of the assets of the estate of his testator with which he was chargeable and when he was required by the decree of October 1850 to pay over the same to those entitled and execution in favor of Mrs. Depriest for her share was returned " no assets," there was a clear right of action in her favor upon the executorial bond to which the statute of limitations could have no application. See Beale's adm'r v. Botetourt Justices, 10 Gratt. 278, (opinion of MONCURE, J.) which commenced some years before the Code of 1849 took effect.
Whether therefore the period, at which the cause of action upon the executorial bond for the matter in controversy here, shall be said to have accrued, be determined by the provision in the Code already referred to, or upon general principles, the result is the same. In neither case has the statute of limitations any application. The provision of the Code is in effect but declaratory of what the law would have been without it in this precise case.
That the securities might have been made parties in the chancery cause and in fact were at one time made parties but the bill was afterwards dismissed as to them will not impair the present right of action on the bond. Parties may often proceed in equity against an executor and may also make the sureties parties in the cause with a view to their ultimate liability. But they are under no necessity to make them such parties and the failure to do so will in no manner affect the right to proceed against them by action on the bond after they shall have established their demands against the executor, either under the statute of limitations or otherwise. Creditors upon legal demands sometimes may, and upon equitable demands must, come in the first instance into equity to assert their claims and may make the sureties parties but they may omit them and after establishing their claims against the executor and failing to get satisfaction by execution, may then sue upon the official bond, and their failure to unite the sureties in the chancery suit as defendants with the executor will in no manner affect the question as to when the cause of action upon the official bond accrued. That a decree creditor might sue upon such a bond as well as a judgment creditor was settled even before the provision of the Code, (ch. 130, § 23, p. 544,) which covered both. Bush v. Beale, 1 Gratt. 233. And it is now held even in England that an action of debt will lie upon a decree ascertaining a certain sum to be due and requiring its payment. See cases cited 2 Rob. Pr. (ed. 1855,) p. 124; 1 Ibid. 204.
That the decree was de bonis testatoris and not de bonis propriis is a matter which cannot avail the appellants. The appellee might complain that the decree was restricted to the assets in the hands of the executor, and for that cause might have claimed a reversal in an appellate court. Moore's ex'x v. Ferguson, 2 Munf. 421; Sheppard's ex'or v. Starke, 3 Munf. 29. But it could not prejudice the sureties and certainly cannot render the decree fraudulent and void as to them. The form of the decree was the act of the court and not of the party or her counsel and there is nothing in the case upon which fraud in fact or in law can with any justice be imputed to either of these. If the decree were even erroneous as contended by the counsel, this would not render it a nullity. As long as it remains unreversed full force and effect must be given to it as well against the sureties as the executor himself and it cannot be questioned in this collateral way.
I think none of the grounds of error assigned can be maintained: and I am of opinion to affirm the judgment.
The other judges concurred in the opinion of LEE, J.
JUDGMENT AFFIRMED.
[a1] Code, ch. 168, § 3, p. 640. " Upon an official bond, executed before this act is in force, suit may be maintained (for the benefit of any person injured by the breach of the condition thereof) in the names of the judges, justices or other person to whom such bond is payable, whether any of the obligees be alive or not; and although any justice to whom the bond is made payable, was not sitting in the court at the time of its execution, or although any other justice was sitting at the time."
[d1] See the opinion of Judge LEE for the statute.