Opinion
09-08-1886
JENKS, Adm'r, etc., v. BREEN, Ex'r, etc., and others.
T. C. Simonton, Jr., for complainants. R. Williams, for defendants.
Bill for discovery of assets and relief by administrators of a widow, who was executrix and residuary life legatee under her husband's will, against her co-executor; the husband's will never having been proved until after the widow's death.
T. C. Simonton, Jr., for complainants.
R. Williams, for defendants.
BIRD, V. C. Cornelius Verduin died March 3, 1883, in possession of a grocery business, leaving a wife and three sons, one of whom was an infant. He left a last will and testament, in and by which he directed that all his debts should be paid, and in and by which he gave to his wife, the said Lentze, all the remainder of his estate during the term of her natural life, and, after her death, he gave the same to his children, and to their heirs and assigns, forever. He appointed his wife executrix, and Peter Breen, one of the defendants, executor. The will is dated December 28. 1876. At the time of his death he was indebted about the sum of $700. The will was not proved, nor did the widow take any steps to reduce the property of her late husband to lawful possession. However, she took possession, and carried on the business until she died, April 5, 1884. She had assisted her husband in the management of the concern during his life-time, and perhaps thereby became well acquainted with it. It was all conducted in her own name. At his death the stock of goods did not exceed $500 in value. But she seems to have acquired a credit and done considerable business. One firm, who are complainants, sold to her about $2,900 worth of goods, and at the time of her death she was indebted to it $358. She was indebted to others about $475.
One of the defendants, Peter Breen, proved the said will of Verduin after the death of his widow, and took possession of all the goods in the store, valued at about $476, and all the assets of Verduin at the time of his death, and also $950 in cash, $850 of which was gold. From all this he realized $1,780.71. He still retains possession of all which he has not disbursed in payment of debts and the settlement ofthe estate. But the widow left no estate, unless it is to be found in that which the executor of her husband has in his possession. As intimated, she left creditors, and they are in pursuit of a portion, if not all, of the assets held by her husband's executor. They procured Mr. Jenks, one of the complainants, to be appointed to administer her estate. He and the complainants, who are creditors, join in a suit against the executor, and pray for a discovery of assets and of expenditures, and that he may be ordered to surrender all moneys and goods to said administrator.
Question, as the case stands, who is entitled to possession of the said assets and to administer them?
First. To go back, in whom was the title at the time of the death of the husband? It is admitted that he carried on the business in his own name, and exercised all the control of an absolute owner up to the time of his death. He obtained a credit in that business, and, when he died, was indebted on account of goods purchased therefor. There is no proof of any act or claim of ownership on the part of Mrs. Verduin before her husband's death. Everything would seem to indicate that his ownership was not only perfect, but undisputed. Therefore I must conclude that Mrs. Verduin had no title except such as devolved upon her by the will of her husband; and, as is above stated, this she never attempted to establish, although it secured to her a life-interest in all the assets of her husband. Her neglect to perfect the transmutation by lawful process cannot inure to the benefit of others who have not been deceived.
Mrs. Verduin's administrator can have no better title than she had. He takes through her. This is plain enough. But the complainants claim that an equity arises in their favor because of these facts: When Mr. Verduin died, he was indebted to several in about $700, and to Crosby & Sons, who are complainants, $233.83. This last sum Mrs. Verduin paid. She also paid other creditors of Mr. Verduin. The whole amount so paid was $488.88. It is said with the goods on hand she obtained a credit which otherwise would not have accrued to her.
As to the equity arising out of these simple facts I think very clearly Mrs. Verduin was entitled to a credit for the amount of money ($488.88) which she advanced towards the payment of her husband's debts. It was her duty to pay these debts, if she claimed at all under her husband's will. It is true, she had not protected herself by clothing herself with the habiliments of a trustee, as provided by law; but, where no fraud is intended, equity will treat such transactions as fiduciary. Therefore the defendant the executor must be charged with the $488.88.
These conclusions would seem to dispose of the whole case, but the complainants go beyond a merely equitable claim, and insist, as a matter of fact, in strict law, that the complainant, administrator, is entitled to the $850, which it is asserted were in the possession of Mrs. Verduin at her death, and to which she directed attention just before that event. The witness who speaks upon the subject says:
"I nursed her in her last sickness, and was present at the time of her death. A short time before her death she was looking for her money. I said, 'Whatare you doing?' I said, 'Shall I get it for you?' She said, 'Yes; that money is to pay my debts with.' Then I took hold of her, and helped her in her bed, and, as I helped her in her bed and covered her up, she was gone. Before this happened I did not know she had any money. I afterwards hunted for and found that money. Mr. Breen, the executor, was with me."
This declaration, and the alleged fact that she had possession of the money, are the grounds on which the complainants rest their claim. I cannot perceive that such declarations are in any sense admissible or relevant to establish title to property under such circumstances, unless made in the presence of the person who afterwards disputes the claim, but at the time acquiesces therein. If such testimony is to have the force of proof, then can creditors easily find relief, and posterity secure a fortune. The alleged fact of possession is as feeble in its influence upon the question of title as the dying declaration. She had no more possession of the gold than of the horse or the household furniture or the store goods. The horse and furniture passed to the executor beyond dispute. The husband and wife, during the last years of their lives, occupied different beds, in different rooms, and the money was found in the room and bed occupied by the husband. This branch of the argument also seems to be against the complainants.
But, to go further, there is not the slightest proof to show that the gold was in fact ever Mrs. Verduin's. It nowhere appears that she had any estate of her own. Some attempt was made to show that she might have acquired such an estate, but it seems to me that no foundation whatever has been laid for a decree. Nor can I find a sentence, in the proofs, that would warrant the faintest presumption. It cannot be pretended that she amassed this gold during the 13 months which she survived her husband, in doing a business on a capital of less than $500, and also discharged debts of his to the amount of $488.88.
But, again, it is said that these creditors of Mrs. Verduin gave her credit for goods which have gone into the estate. This is so; but the proof is that the amount of stock on hand at her death was not greatly in excess of the amount bequeathed to her by her husband. If they have contributed anything of value to the estate now in possession of the executor, I have not been able to trace it.
It ought to be observed that these creditors do not and cannot claim under mistake or fraud. They had full knowledge. They dealt with Mr. Verduin in his life-time, and had claims against him at the time of his death. They had the law to protect them. They could have compelled an administration upon his assets, and it was their duty to have done so, rather than to have encouraged the confusion which has followed. Instead of demanding their rights, they allowed Mrs. Verduin to treat all of the assets as her own. Now, in the midst of the uncertainty which they have created, if any one suffers loss, the court will prefer to let it fall on those who joined in provoking the uncertainty rather than upon the innocent remainder-men.
I can see no reason for giving her estate credit for more than the $488.88, the amount of the debts of her husband which she paid. This,indeed, may be going a great way; for there is nothing to show that she added to the estate; and it is possible that this $488.88 should be considered as part of the capital fund, rather than profits, and therefore her own. Of this sum the executor has already paid, on account of the estate of Mrs. Verduin, $309.30, which he paid in ignorance of his duty. Why did he pay her creditors? He was not executor of her estate. It seems to me that the court can only help him to the extent of the proportion of the $488.88 which will be due to the creditors of Mrs. Verduin to whom he paid the $309.30. I express no opinion as to his right to recover the excess from the persons to whom he made such voluntary payments. Of course, if he paid preferred claims, he will be allowed them in full.
I will advise a decree in accordance with these views. Neither party is entitled to costs as against the other.