Opinion
01-07-1875
HANNAH'S adm'r v. BOYD & wife & als.
Jones & Bouldin, for the appellant. Marshall & Johns, for the appellees.
1. In 1859 testator gives his estate to his widow and six children as in case of intestacy; but those of his children who had not been educated, he wished to be educated out of the general fund at the charge of his estate. At the end of the year the executors turn over the land, slaves and other personal estate to the widow, one daughter who is of age and the guardian of the five minor children, who agree to hold it all together, to be managed by the guardian for the support and maintenance of the widow and children, and the education of the minor children, so far as necessary for these objects; the widow and children to live on the land. And they act on this agreement until 1868. This is an agreement obviously beneficial to the infants, and a court of equity would have approved and confirmed it.
2. The guardian of the minor children was the acting administrator de bonis non with the will annexed of the testator; and the commissioner who takes his account, blends his receipts and payments as administrator, with his receipts and payments, under the agreement between himself as guardian and the widow and the daughter who was of age. HELD:
This is error. The account as administrator should embrace only his receipts and disbursements as such. His receipts and disbursements under the agreement are made, not as administrator, but as guardian of the minor children and agent of the widow and daughter, and are to be stated on different principles.
3. In taking the account of the widow and the several legatees, the commissioner made a conjectural estimate of the amounts deemed necessary for the support and education of the younger children. Under the circumstances, the proper course would seem to be to ascertain the expense actually incurred in educating the infant children, and to allow the same, if not excessive, as a charge upon the estate, together with a reasonable allowance for their support and maintenance during the period of their minority.
4. A fiduciary is not warranted in receiving payment in a highly depreciated currency, of a debt payable in gold or its equivalent, unless it be made to appear, either from the condition of the estate or of the debtor or other circumstances, that the collection of the debt was expedient and proper.
5. An administrator having waived his exceptions to the commissioner's report, under the erroneous impression that the report would be sustained, and the case then finally disposed of, may withdraw his waiver, and renew his exceptions.
Samuel Hannah, of the county of Charlotte, died in 1859, leaving a widow and six children; and leaving a will, which was duly admitted to probate in the County court of Charlotte. By his will he directed his just debts to be paid out of his crops or debts due him, his stocks or other personal estate; and that his estate, real and personal, be divided between his wife and six children as the law directs in cases of intestacy. Those of his children who had not been educated he wished to be educated and supported out of the general fund, at the charge of his estate. Henry E. Edmunds, Hunter H. Marshall and George C. Hannah were appointed executors of the will, and qualified as such.
The testator owned a valuable tract of land in the county of Charlotte, on which he lived; and the personal property, including the slaves upon this land, was appraised at $46,894.88. He owned also a lot of ten acres near Charleston, in Kanawha county, and a house and lot in the city of Cincinnati. His bonds deemed solvent, amounted to $47,872; but of these $45,000 were due from John Morris and others for a tract of land sold to them by the testator; which on a sale of the land under the deed of trust given to secure the purchase money, made at the instance of the executors soon after their qualification, was purchased for the widow and children at $35,000. He owned also $12,700 of the stock of the James River and Kanawha Company guaranteed by the State of Virginia, beside some other property.
In 1859 George C. Hannah, one of the executors of Samuel Hannah, qualified as the guardian of the five minor children, and at the end of the year the executors turned over to the widow, the eldest child who had come of age, and to George C. Hannah, the guardian of the five minor children, the tract of land in the county of Charlotte, and all the personal property, including the slaves, except two horses which they had sold, and afterwards the crop made upon the land in 1859. And soon afterwards the executors were removed, and George C. Hannah and George B. Hannah qualified as administrators de bonis non with the will annexed.
By an agreement under seal bearing date the 8th of May 1861, George C. Hannah, Charlotte E. Hannah, the widow, and Mary E. Hannah, the oldest child, who was then of age, after reciting the death of Samuel Hannah, the estate he left in Charlotte county, the provisions of his will, and the turning over of the property as before stated, states that this property was delivered to the said Charlotte, Mary E. and George C. as the guardian of the minors, jointly; it having been deemed by the adult parties and said guardian, much to the interest of all parties, that the said estate should be kept together and worked for the joint benefit of all the parties interested, and the same having been desired by Andrew, George M. and Lucy L. Hannah, who have arrived at an age in which they are entirely competent to exercise a discretion in regard to such matters, although not legally bound. In view of his legal responsibility as guardian of said minors, the said George C. Hannah was unwilling to incur any hazard of loss either to himself or his wards, and therefore he would not have agreed to the arrangement unless the said Charlotte and Mary E. Hannah had undertaken to indemnify himself and each of his wards against any loss which either might incur by reason of the estate being so kept together. And they covenant so to indemnify both the guardian and the wards; and that this agreement may be enforced in behalf of said wards in the name of said George C. Hannah. The agreement then sets out the interest of the widow and the children in the property. And it is agreed that the said George C. Hannah shall have the exclusive control and management of the agricultural operations and disposition of the crops of said estate; but the said Charlotte to occupy the mansion house and curtilage, outhouses and gardens, & c., on said estate then occupied by her, with the servants then in her possession engaged in the service of the family. And it was further agreed that Mrs. Hannah should draw from said plantation the supplies for the support of the family; and the proceeds of the plantation were to be applied to the support and maintenance of Mrs. Hannah and her six children, and the education of such as were under age. And the said George C. Hannah, in the management of said plantation, was to be at liberty to keep in proper repair the barns, negro cabins, & c., and when necessary, to erect thereon out of the crops, such barns and other buildings as might be found necessary for carrying on the agricultural operations, & c., on said plantation.
At the foot of this agreement Andrew Hannah and George B. Hannah, two of the minor children, expressed their approbation of this agreement.
This arrangement seems to have been continued until 1868. In the meantime Andrew Hannah was killed in the war soon after he attained the age of twenty-one years, and Lucy L., another of the children, died a minor.
In February 1867, Mary E. Hannah married Robert Boyd, her estate having been previously conveyed in trust to William Townes Boyd; and in August 1867 these parties instituted their suit in equity in the Circuit court of Charlotte, making Mrs. Hannah and the surviving children of Samuel Hannah, and George B. Hannah and George C. Hannah, administrators de bonis non & c., defendants, and asking for a division of the land in Charlotte; and that the administrators render an account of their administration. The parties all answered, the infants by guardian ad litem, concurring in the prayer of the bill. And at the August term of the court a decree was made appointing commissioners to divide the tract of land in Charlotte county, allotting to the widow her third as dower and her part of Andrew's share, and dividing the remainder among the four children, and the administrators were directed to settle their accounts before a commissioner of the court; who was directed also to report an account of all advances made and chargeable to any of the parties.
The commissioner returned his report on the 4th of August 1868. He states an account of George C. Hannah, acting executor of Samuel Hannah, from September 1862 to February 4th, 1867, and of George C. and George B. Hannah, administrators de bonis non, from that time until April 6th, 1868. In the first account the proceeds of the land, and the expenditures for Mrs. Hannah and the children are included with the proper receipts and payments as executor, and there is a balance found in favor of H. H. Marshall as executor of $829.74, being one-half the commissions on the sale of the Mason land; and in favor of George C. Hannah, the acting executor, of $5,704.08. On the second account the balance against the administrators is $885.76, which the commissioner says is to be paid by George C. Hannah.
There is also a statement of advances made to Mrs. Hannah and the children for expenses and investments, coming down to 1870, in which allowances are made to three of the children on account of board and tuition, viz: to George B. Hannah $1,500, to Emmet Hannah $4,000, and to Samuel Hannah $4,500.
George C. Hannah excepted to the report because the commissioner has scaled the Confederate money received and disbursed by him at the end of the account, instead of at times during the time the account was running.
2d. Because he did not, at the least, scale the said Confederate money at the end of each year, instead of adopting the time of scaling which he did.
It appears that the amount ascertained by the report to be due in Confederate money to the executor George C. Hannah on the 10th of April 1865 was $7,862.10, which the commissioner scaled at sixty for one, and credited him with the sum of $131.03 as the scaled value of that sum.
The cause was removed to the Circuit court of Halifax county; and in April 1871 the devisees and legatees filed seventeen exceptions to the report.
The first, fifteenth and seventeenth exceptions are to the blending the executorial account with the accounts with the widow and the children, and the expenses of the family.
The sixth exception is to the allowance of commissions to the executor. It appears that the accounts had been regularly settled before a commissioner of the court of probate up to September 1st, 1866, and that the executor had laid his accounts for 1867 before the commissioner, but the commissioner died in 1867, before he made the settlement, and the papers were then put into the hands of another commissioner, who was engaged upon the account when the order for an account was made in this case.
The tenth exception was because the executor had received Confederate money in payment of a debt of Henry Edmonds for $1,000, which was contracted before the war. A bond of Edmonds for $1,000 is named in the inventory among the solvent bonds.
The other exceptions need not be set out.
The cause came on to be heard on the 13th of April 1871 when the court confirmed the report of the commissioners of the division of the land; and the executor waiving his exceptions to the report of the commissioner, the court overruled all the exceptions of the devisees and legatees, and having had a statement made showing the balance due to George C. Hannah, from the estate, after charging him with the balance due from him, decreed that George B. Hannah, the then acting administrator, should, out of the assets, & c., pay to the said George C. Hannah $5,927.24, with interest on $4,429.68, from the 6th of April 1871; and to H. H. Marshall the sum of $1,037.68, with interest on $829.74 from the same date. And George B. Hannah, administrator, & c., was directed to render before the commissioner an account of his transactions as sole administrator, & c. And the commissioner was directed to take an account of all the estate, real and personal, of Samuel Hannah, deceased, with a view to a further division, and also an account of any further advancements which may have been made to any of the legatees of said decedent. From this decree George B. Hannah, the administrator, applied for an appeal; which was allowed.
Jones & Bouldin, for the appellant.
Marshall & Johns, for the appellees.
OPINION
STAPLES, J.
The court is of opinion that the arrangement entered into on the 8th May, 1861, between the widow of Samuel Hannah, the guardian of his infant children, and the adult legatee, Mary E. Hannah, was an advantageous one to all the parties concerned, and such as a court of equity, under all the circumstances, would sanction. The testator having by his will directed that those of his children who had not been educated should be educated and supported out of the general fund at the charge of his estate, that object could not be more satisfactorily accomplished than by keeping the estate together, and appropriating the rents and profits of the farm, or so much thereof as was necessary, to the support of the family and the education of the minors, according to the respective rights of the parties.
This arrangement, although beneficial to the legatees, did not, however, justify the commissioner of the Circuit court in blending with the executorial transactions the accounts of disbursements for the children and supplies to the family of the testator. The law is too well settled either to be misunderstood or disregarded by the courts, that payments to legatees and advances to distributees should never enter into the general executorial accounts. In the present case there was the less reason for a departure from this rule, inasmuch as the executors who first qualified, as early as the year 1859 delivered over to the parties entitled, the slaves, and nearly all the perishable property belonging to the estate. And thereafter the farm was managed, the crops sold, and the proceeds disposed of by the appellee, not as executor but as guardian of the infants, and agent of the widow and the adult legatee, under the arrangement of the 8th May 1861, already mentioned.
In this respect the report of the commissioner ought to be reformed, so as to separate therefrom the entire executorial transactions, which require for their settlement the application of different principles from those governing guardian's accounts and advances to the legatees. The Circuit court therefore erred in overruling appellant's first, fifteenth and seventeenth exceptions to said report.
The court is further of opinion that the said report being reformed in the manner just indicated, may be properly relied on as showing the disbursements and receipts of the appellee as guardian and as agent aforesaid, and also as constituting a proper settlement of his accounts as such guardian and agent, with the exceptions and modifications hereinafter to be stated. In taking the account of the payments made to the widow and the several legatees, the commissioner has made a sort of conjectural estimate of the amounts deemed necessary for the support and education of the younger children. It does not appear upon what principle he acted in fixing these amounts. Under the arrangement already mentioned the children resided in the mansion-house with their mother, deriving their support from the entire estate, including her dower, from the year 1859 down to the year 1870, and, it may be, for a longer period. And yet the commissioner has allowed one of them the sum of four thousand and five hundred dollars, and the other the sum of four thousand dollars as a charge upon the estate for their support and education. This would seem to be clearly excessive. Certainly there is nothing now in the record to justify it. Under the circumstances the proper course would seem to be to ascertain the expense actually incurred in educating the infant children, and to allow the same, if not excessive, as a charge upon the estate, together with a reasonable allowance for their support and maintenance during the period of their minority.
The court is further of opinion that the Circuit court did not err in overruling the appellants' third, fourth, fifth and fourteenth exceptions to the report of the commissioner.
In regard to the sixth exception the court is of opinion that the facts are not presented by the record with sufficient certainty to enable the court properly to decide the question of the executor's right to commissions upon the sale of the land in Kanawha. The subject matter of this exception is therefore left open for such further evidence as either of the parties may desire to offer before the commissioner.
The court is further of opinion that the Circuit court ought to have sustained the tenth exception, so far at least as to re-commit the report for further inquiry in regard to the circumstances under which the executor collected the debt mentioned in said exception. The doctrine of this court, as expressed in several cases, is that a fiduciary is not warranted in receiving payment in a highly depreciated currency of a debt payable in gold or its equivalent, unless it be made to appear, either from the condition of the estate, or of the debtor or other circumstances, that the collection was expedient and proper.
In the present case nothing appears by the record, except the collection by the executor in Confederate currency in the year 1863, of a debt contracted long anterior to the commencement of the war. The executor may have refrained from adducing any evidence upon the point, by the fact that no objection was made before the commissioner to the credit and by the failure of any of the parties for more than two years to file any exceptions to the report.
As the report is to be recommitted upon other grounds, no injustice can be done by permitting farther inquiry into the circumstances under which the debt was collected. And so with respect to the seventh, eighth, ninth, eleventh, twelfth and sixteenth exceptions, the court deems it advisable to leave them open for further investigation before the commissioner, if desired by either of the parties.
The court is further of opinion that so much of the decree of the Circuit court as directs the commissioner to take an account of all the estate, real and personal, of the decedent, and also any further advancements which may have been made to any of the legatees, should be executed in connexion with the provisions of this decree, with a view to a final division of the estate, and with a farther view to ascertain and settle the rights and liabilities of the several legatees with respect to each other, and with respect to the appellee.
The court is further of opinion that the appellee having waived his exceptions to the report of the commissioner, under an erroneous impression that said report would be sustained, and the case then finally disposed of, ought now to be permitted to withdraw his said waiver and renew his exceptions if he shall desire so to do.
It is therefore adjudged, ordered and decreed, that so much of the decree of the Circuit court as is in conflict with this opinion be reversed and annulled, and the residue affirmed; that the appellee, George C. Hannah, pay to the appellants their costs by them expended in the prosecution of their appeal here.
DECREE REVERSED.