Boyd's Sureties v. Oglesby

• Decision Date: 16 July 1873
• Citation: 64 Va. 674
• Court: Virginia Supreme Court
• Parties: BOYD'S Sureties v. OGLESBY & als.

64 Va. 674

BOYD'S Sureties v. OGLESBY & als.

Supreme Court of Appeals of Virginia.

July 16, 1873

Absent-- Staples, J.

1. An administrator is invested by law with full dominion over the assets, and with full discretion for the liquidation and settlement of all claims due to or from the estate. He may make settlements and compromises with creditors, and give them confessions of judgments.

2. An administrator of a deceased partner may settle and compromise with the surviving partner, with a view to the interest of the estate he represents. And if he acts fairly, in good faith, and with a due regard to the interests of the estate the distributees will be bound by his acts, and he will be protected.

3. The fairness of a contract, like all its other qualities, must be judged of as at the time it was entered into.

4. The administrator of O, a deceased partner, who had the sole management of the business of the concern, is employed by G the surviving partner, to wind up the partnership affairs and after the input capital is returned, he enters into a contract with G to allow the latter a certain sum for his share of the net profits; and G. relinquishes to the administrator all the remaining assets of the partnership. At the time this contract is made there is a large claim in suit against one of the debtors of the firm, who sets up a payment of $1,000 as having been made to O; but which he had not entered on the books of the concern; and this contest delays the trial of the case, until the debtor who was solvent when the contract was made, becomes insolvent; and then the credit is allowed by the jury, and a verdict and judgment for the balance. HELD:

1. The verdict and judgment is conclusive that the debtor was entitled to the credit.

2. It being owing to the conduct of O, the deceased partner, that the administrator and surviving partner were not informed of the true state of the account when the contract between them was made, and also that the delay in the suit occurred; in estimating that contract the estate of O is to be charged with the $1,000, and also the amount of the judgment.

5. The amount of commissions to be allowed to an administrator or executor is not fixed by law, and though five per cent. on receipts is generally allowed, yet this allowance may be increased, and the court of probate is the most competent tribunal to make the allowance; and this court will be disinclined to disturb the allowance, especially after a long acquiescence in it by the distributees of the estate.

On the 23d of October, 1835, Nicholas P. Oglesby and Robert Gibbony entered into partnership for the purpose of carrying on a merchandizing business at the town of Evesham, in the county of Wythe, which was to last three years. Each partner was to put in $4.000 as capital in the concern; and for any other sums put in by either of them, he was to be allowed interest. Oglesby was to have the whole management of the business, for which he was to be allowed $350 a year; and at the close of the partnership, after payment of debts and expenses, and the allowance to Oglesby, the capital furnished by each partner was to be returned to him; and the net profits to be equally divided between them. And it was agreed that the money on hand at the termination of the partnership should be applied first to pay the expenses, then to pay the capital put in first paying any overplus of capital furnished by either, with its interest; and the balance of money, if any, should be equally divided between them; and if they should not at the close of the partnership, make a distribution of the uncollected debts, Oglesby was to have the management of their collection; but either partner might at any time after the expiration of the three years, require a division of said debts.

The partnership was continued until the death of Oglesby. He died intestate, in February, 1838, leaving a widow and four infant children; and the widow having renounced her right to administer on his estate in favour of Thomas J. Boyd, he qualified as administrator of Oglesby in March; and the business of collecting the debts and winding up the business of the partnership was committed to him by Gibbony, the surviving partner.

Boyd seems to have proceeded with great diligence and efficiency, to collect the debts due to the partnership, and to pay the debts they owed. The former were numerous, and generally for small amounts, nine-tenths of them ranging from twenty-five cents to fifty dollars. To pay the debts of the concern, he borrowed near $5.000, for which he bound himself personally; by which means he seems to have prevented all suits by the creditors of the partnership. He sold to Gibbony the one-half of the goods on hand to which Oglesby was entitled; and in August, 1840, Gibbony being then indebted on account of goods received by him, in the sum of $2.213 89, they entered into an agreement, by which Gibbony was to retain of that sum, $2.013 89, in full satisfaction of his entire interest in the net profits of the partnership; and in consideration therefor, he surrendered all claim to any part of the uncollected funds of the partnership. And he was not to be responsible for any debts of the concern, or for the failure to collect any part of any due to it, except for one-half of so much as George R. C. Floyd should obtain credit for, on an account due by him to said firm, then in suit in Wythe county, unless Gibbony could show that by law Oglesby should lose the whole of such credit.

In 1842 commissioner Mathews settled the accounts of Boyd as agent of Gibbony, the surviving partner, and also as administrator of Oglesby. In the first account it appeared, that including the money he had borrowed to pay the debts, he had received up to March 1839, $14,516 98; and including payments of part of the money he had borrowed, the disbursements amounted to $14,097 89. And the commissioner allowed him a commission of five per cent. on $16,324 74, which is the balance of receipts and disbursements for the year, after excluding $12,290 14, which made up the money he had borrowed and paid back, and moneys collected or paid by Gibbony; on which no commissions were allowed. In the year ending March 1840, his receipts were $7,751 57, and his disbursements were $8,565 39; but there was included in these disbursements, moneys retained by Boyd, as adm'r of Oglesby. And he was allowed 5 per cent. commissions on $6,399 84, which sum was the balance of receipts and disbursements, after deducting the sum of $9,200 for moneys retained by Boyd as above stated, that being double the sum so retained. From March 11 to August 1st 1840, when Gibbony and the administrator contracted for the adjustment of the partnership accounts, as before stated, the receipts were $4,165 35, including the debt of Gibbony to the partnership, and the disbursements including the moneys retained by the administrator, were $4,165.35; and the same commissions were allowed on $1,836 48, the balance after deducting Gibbony's debt, and the amount retained by the administrator.

The administration account of Boyd is stated by the commissioner, and he brings into it all moneys received by him, whether of Oglesby's individual estate, or from the partnership effects, and he credits the administrator with the payments made to the widow and guardian of the children; and allows him five per cent. on receipts and disbursements. And the account shows that the administrator paid over the moneys received by him, to the widow and guardian as fast as he received it.

In April, 1858, Jane C. Oglesby, the widow of Nicholas P. Oglesby, and his four children, one of them an infant by his next friend, filed their bill in the Circuit court of Wythe county, in which after setting out the partnership, the death of Oglesby, the qualification of Boyd as his administrator, and the agency of Boyd in settling up the partnership business, and the settlement of his accounts by commissioner Mathews, they say that in the conduct and management of Boyd in his agency, and in the settlement of that, apart from the individual estate of Oglesby, they find nothing of which they propose to complain. But they do object to the purchase made by said Boyd of Gibbony's interest, after returning all capital advanced, and allowing him, as surviving partner, the sum of $2.013 89, on the score of net profits; because Boyd, after returning to the estate of Oglesby, all capital stock which had been paid in, failed to realize for the benefit of the estate an amount of profits equal to that allowed and paid to the surviving partner. And they object further to the allowance of five per cent. commissions on the receipts and disbursements in the settlement of Boyd's account of his administration on the estate of Oglesby. And making Boyd and his sureties and Gibbony defendants, they pray that the administration account of Boyd be surcharged and resettled as to the allowance of $2.013 89 to Gibbony, and the commissions of five per cent. upon receipts and disbursements; and for general relief.

Gibbony and Boyd answered the bill. They both relied on the account settled by Mathews, and the time that had since elapsed, as forbidding the opening the account at this late day. Boyd insisted that he had authority to make the contract with Gibbony, and that it would have been favourable to the estate, but for the action of Oglesby in relation to moneys received by him on Floyd's debt, and of which Boyd was not informed when the contract was made. He insisted further that the question of his commissions had been well considered by commissioner Mathews, when he made the allowance; and indeed, under all the circumstances of the case, was a small compensation for the time, labour, and...