Allen v. Leach
| Citation | 7 Del.Ch. 83,29 A. 1050 |
| Court | Court of Chancery of Delaware |
| Decision Date | 10 May 1894 |
| Parties | WILLIAM ALLEN et al. v. JAMES LEACH, Administrator d. b. n., c. t. a., of WILLIAM ALLEN, Deceased |
EXCEPTIONS to the account of an administrator.
Judicial settlement of the account of James Leach, administrator de bonis non, with the will annexed, of the estate of William Allen, deceased, to which William Allen and others filed exceptions. The facts are fully set forth in the first portion of the opinion of the Chancellor.
R. G Harman and J. H. Whiteman, for plaintiffs.
1. As to the question whether the commissions allowed to James Leach in his accounts should not be forfeited by reason of his neglect of duty as administrator of the estate.
If trustee acts honestly up to a certain period and receives a commission, and after that period acts dishonestly, whether or not his unfaithfulness will have a retrospective effect so as to take from him his commissions received during a period when he acted faithfully, is, both upon reason and authority decided in the affirmative.
This must be true, for the intention of an executor administrator, trustee or guardian is wrapped up in his own bosom, and is not known until the passing of his account, and if the law were otherwise he could commit a breach of trust and receive the same benefit as a faithful and honest trustee, because his act would not be known until the passing of his account. He could, therefore, simply pass his account and by so doing could secure his commissions, and afterwards by retaining the funds for a longer period than he could justly claim, appropriate them to his own use, and thereby commit a breach of trust (as was done in this case), all of which may have been his deliberate intention from the beginning. But the case of Berryhill's Appeals, 35 Penn. St. 245, expressly decided that he would be entitled to no commission whatever. The facts in that case showed the trustee acted honestly for ten years and received yearly commissions during the whole of that period. But from that period, the end of the said ten years, said trustee mismanaged said estate. Upon final settlement of the trust, the above-stated facts appearing to the court (said being the Court of Errors and Appeals), said court determined that the trustee was not entitled to commission for the period of his mismanagement of said state, and that said commissions that had already been allowed him during the faithful part of his trust, were, upon said facts, ordered by the court to be taken from said trustee and paid back to the cestui que trust.
If an executor, administrator or trustee deposit trust moneys in a bank in his own private name, or mingle the trust moneys with his own moneys in his own private account, and the bank fails, the executor, administrator or trustee is personally liable, and must bear the loss. Schouler on Executors, § 329; 1 Lewin on Trusts, 295; Adams' Eq., § 60; Hill on Trustees, 376; 1 Perry on Trusts, § 463 (443); 2 Story's Eq. Jur., § 1270; Massey v. Banner, 4 Madd. 219; McDonnell v. Harding, 7 Simm. 178; Freeman v. Fairlie, 3 Meriv-39; Massey v. Banner, 1 Jac. & Walk. 241; Wren v. Kirton, 11 Ves. 377; Darke v. Martin, 1 Beav. 525; Stafford's Case, 11 Barb. 353-355; Jenkins v. Walker, 8 Gill & Johns. 138-141, 142; Baskin v. Baskin, 4 Lans. 90-94; Case v. Abell, 1 Paige, 393-402; Stanley's Appeal, 8 Penn. St. 431-435; Shaw v. Bumman, 34 Ohio St. 25-32; Cartmell v. Allord, 7 Bush, 482-485; Mason v. Whittenne, 2 Caldw. 243, 244, 245; Sommers v. Reynolds, 95 N.C. 404, 414, 416, 417; McCallister v. Commonwealth, 30 Penn. St. 536-538; Williams v. Williams, 55 Wis. 300-309.
If an executor, administrator or trustee place trust moneys in a bank and let them remain for a longer time than was necessary for the carrying out of the purposes of the will or the administration of the trusts, especially if they are left to remain there when, according to the express terms of the will or trust, they should have been paid out and distributed among those entitled to the same, and the bank fails, the executor, administrator or trustee is personally liable, and must bear the loss. Schouler on Executors, 322; Am. & Eng. Ency. of Law, vol. 7,352; 1 Lewin, 296-297; Hill on Trustees, 527-528, 536; 1 Perry on Trusts, 436, 443, 444; Wood v. Myrick, 17 Minn. 408; Dortch v. Myrick, 71 N.C. 224; Moyle v. Moyle, 2 Rus. & Mylne, 710.
If an executor, administrator or trustee deposit trust funds in his own private name or mingle the trust funds with his own moneys in his own private account, or permit the trust money to remain in bank for a longer time than was necessary to the carrying out of the purposes of the will, or the due administration of the trust, and especially if they are permitted to remain there when, according to the express terms of the will or trust, they should have been paid out or distributed among those entitled to the same, the executor, administrator or trustee is chargeable with interest upon said trust moneys. Schouler on Executors, 538; 1 Lewin, 338; 1 Perry on Trusts, 463-468; English Cases: 1 Brown Ch. 384; 15 Beav. 389-397; American Cases; Lind v. Lind, 41 N.H. 359; Mickle v. Cross, 10 Md. 362; Wistar's Appeal, 54 Penn. St. 60, 66; Duffy v. Duncan, 35 N.Y. 191; Estate of John B. Clark, 55 Cal. 355-357; Miller v. Bumly, 4 Henn. & Munf. 415, 417, 418; Estate of McQueen, 44 Cal. 590; Handy v. Snodgrass, 9 Leigh, 409; Utica Ins. Co. v. Lynch, 11 Paige, 520, 521, 522; Gwynn v. Dorsy, 4 Gill & Johns. 313-319; Norris' Appeal, 71 Penn. St. 106-123; Monteith, Ex. v. Ballery, 21 Md. 427-432; Smith's Admr. v. Hooper, 23 id. 285; Stanley's Appeal, 2 Wright, 525-530; Munford v. Murray, 6 Johns. 1-17; Garniss v. Gardiner, 1 Edw. Ch. 128-130.
At common law the office of trustee was purely honorary and commissions were not allowed. Robinett's Appeal, 12 Cas. 174; Berryhill's Admr. Appeal, 35 Penn. St. 249; Clauseis Estate, 84 id. 51 (1877); Stehman's Appeal, 5 id. 417; Swartsoalu Appeal, 4 Watts, 77-79.
2. As to the plea of the Statute of Limitations in this cause, the provisions of section 21 of article 6 of the Delaware Constitution plainly brings this administrator without its bar. No notice of the settlement of his account has ever been given to the parties entitled to shares in the estate, as the mandatory language of the Constitution requires. His neglect to perform that duty will certainly not hasten the operation of the statute for his own benefit, and to save him harmless from his further wrong.
The following cases will fully support the position we take upon this point:
Statute of New York requires executor and administrator to publish notice of grant of letters testamentary, or of administration, and for creditors to present their claims against estate, etc., and if claims are rejected or disputed, to bring action within six months after such rejection, or be forever barred.
Held, to enable executor or administrator to take advantage of such statute -- six months -- he must prove that he gave the written notice. If he does not prove this, the Statute of Limitations (six months) is no bar.
To subject a creditor to the short Statute of Limitations -- of six months -- relating to the duties of executors and administrators, it is incumbent on the latter to show the publication of notice to creditors to come in, etc. Clark v. Sexton's Admrs., 23 Wend. 477.
An executor or administrator cannot avail himself of the six months' Statute of Limitations above cited, unless he has strictly complied with the statute requiring him to obtain an order of the surrogate for the publication of a notice to creditors of the deceased to present their claims, and has published the proper notice. Hardy v. Ames, 47 Barb. 413; 1 Denio, 159.
The above cases embody the principle that governs our own -- namely, if a statute makes it the duty of the executor or administrator to do a certain act, give notice, etc., and that when he does that act, the Statute of Limitations shall then (after a certain time) be a good bar to an action, the doing of that act (giving notice) is a condition precedent to the running of the Statute of Limitations; and if the executor or administrator, through neglect or otherwise, fail to do as the statute commands him to do, he shall not be permitted to plead the Statute of Limitations as a shield, for that would be to violate his duty and then take advantage of his own wrong at the expenses of, and loss to, innocent persons.
Statute of Missouri requires executor or administrator to give notice to creditors of the grant of letters testamentary or of administration, within thirty days after such grant, and if he does so and creditors do not present their demands three years thereafter, they shall be forever barred, held, that executors or administrators can only insist on the Statute of Limitations -- three years -- upon the condition precedent of their having given the statutory notice of the grant of letters. If they did not give such notice, the Statute of Limitations -- three years -- is no bar.
If publication of notice to creditors required by the twentieth section of second article of the act concerning the administration of estates be not commenced within thirty (30) days after grant of letters, debts against the estate are not barred after the lapse of three years. Hawkins & Bleckwell v. Ridenhour, 13 Mo. 125.
An administrator cannot avail himself of the lapse of three years as a bar to a demand against the estate of his intestate unless he has given notice of his letters in the manner and within the time prescribed by law. Bryan v. Mundy's Admr., 17 Mo. 556, 557; Clark v. Collins, 31 id. 260; 54 id. 102.
Statute of Mississippi requires executor or administrator...
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