Buckle v. Marshall

• Decision Date: 05 September 1940
• Citation: 10 S.E.2d. 506
• Parties: BUCKLE et al. v. MARSHALL et al.
• Court: Virginia Supreme Court

10 S.E.2d. 506

BUCKLE et al.

v.MARSHALL et al.

Supreme Court of Appeals of Virginia.

Sept. 5, 1940.

Appeal from Corporation Court of Danville; H. C. Leigh, Judge.

Suit by Sallie Martin Buckle and others against Frank Marshall, administrator cum testamento annexo de bonis non of the estate of Bethenia Pannill Martin, and Frank Marshall, in his own right, and others, to surcharge and falsify the accounts of the administrator, to hold him personally liable for losses incurred through investments of the assets of the estate, and to deprive him of compensation for his services as administrator. From an adverse decree, the plaintiffs appeal.

Affirmed.

Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, EG-GLESTON, and SPRATLEY, JJ.

W. G. Vansant and W. C. Thompson, both of Chatham, for appellants.

Crews & Clement, of Danville, for appellees.

SPRATLEY, Justice.

The purposes of this suit are to surcharge and falsify the accounts of Frank Marshall, administrator c. t. a., d. b. n. of the estate of Bethenia Pannill Martin, to hold him personally liable for losses incurred through investments of the assets of the estate and to deprive him of compensation for his services as administrator.

Mrs. Bethenia Pannill Martin died, testate, in 1918, and her will was probated in Pittsylvania county. James L. Tredway, one of the executors nominated in her will, was duly appointed and qualified as sole executor of her estate. Tredway died in 1921, and Frank Marshall was, on the 5th day of July, 1921, appointed administrator d. b. n., c. t. a. of the said estate by the clerk of the Circuit Court of Pittsylvania county. Marshall immediately qualified as executor, giving bond with the United States Fidelity and Guaranty Company, as his surety, and entered into the performance of the duties of his trust.

Mrs. Martin, in paragraph four of her will, bequeathed and devised her property as follows:

"In trust, for my daughter Mrs. Sallie Martin Buckle now living at Newark, New Jersey, my entire estate, real, personal and mixed during her life which shall be a trust fund for her benefit and kept invested in some safe interest bearing loans or securities, the net income of which shall be paid to my daughter for her use and support. I desire and direct that this trust shall run during the lifetime of my said daughter and at her death or as soon thereafter as is practicable the said trust shall be disposed of as provided in Section 5 next following."

Paragraphs five and six provided substantially that upon the death of her daughter, Sallie Martin Buckle, the estate should be divided into four parts, a one-fourth part to go to each of her four daughters, namely, Ruth Buckle Adams, Virginia Buckle Beattie (now Miller), Georgiana Buckle (now Settle) and Sallie Martin Buckle, with the further provision that the share of Sallie Martin Buckle, II, should be held in trust for her benefit during her lifetime and, upon her death, should be equally divided among her sisters or the heirs of their bodies, share and share alike. Sallie Martin Buckle is a person of unsound mind.

In paragraph seven of the will, the testatrix gave to her executors full power and authority to sell any "real and personal property at public or private sale, as may seem best to them and to make title to the same; to change or alter any investments of the estate or the trust herein created; if the interest of the estate or the trust funds appear to be benefited thereby, special care being taken in all cases to avoid speculation and to secure safe and profitable investments, " with the direction that her executors should "keep a clear, concise and separate record of all the trans-actions of the estate and the trust herein created, which records shall at all times be subject to the full inspection of the heirs under this will or the beneficiaries under the trust above named."

On October 18, 1937, Sallie Martin Buckle, Ruth Buckle Adams, Virginia Buckle Beattie (now Miller) and Georgi-ana Buckle (now Settle) filed their bill in equity in the Circuit Court of Pittsylvania county against Frank Marshall, as administrator, etc., and in his own right, U. S. Fidelity and Guaranty Company, a corporation, etc., and Sallie Martin Buckle, II, a person of unsound mind. The bill alleged that the accounts of the administrator failed to disclose a complete and itemized statement showing-the dates when and from whom collections on principal and interest were received and how and when investments of the trust funds were made; that the reports did not show accurately the commissions due to the administrator; that the administrator transferred $500 from the principal to the income account and paid out that amount as income; that the administrator failed to invest the funds of the estate in accordance with law and negligently allowed the investments to become depreciated in value and subject to large losses; and that he failed to collect the income from the said estate and pay it out according to the terms of the will. It prayed that the administrator be required to make a complete and itemized account of his transactions as such, showing the dates when collections on principal and interest were received, the dates when investments were made, the nature and character of the investments and to whom made; that he be held liable for the loss in such investments and for sums paid out of the principal account; and that he be denied compensation for administering the estate because of his improper acts and his negligence in failing to perform the duties of his trust.

A guardian ad litem, who was appointed for the defendant of unsound mind, filed the answer of that person committing her rights and interests to the protection of the court.

Frank Marshall, individually and as administrator d. b. n. c. t. a., filed a joint and separate answer in which he denied every allegation of negligence and personal liability and averred that he had faithfully and prudently performed his duties with the care usually required of a fiduciary, and that he had made an honest, true and accurate statement of his accounts as administrator and had properly accounted for all property, money and estate belonging to the said trust coming into his hands.

After the evidence had been taken by depositions, the judge of the Circuit Court of Pittsylvania county, being of the opinion that he was so situated as to render it improper for him to decide the case, ordered that it be removed to the Corporation Court of the city of Danville.

On July 30, 1938, a decree was entered by the Corporation Court of the city of Danville holding that Marshall was not guilty of negligence in his investment of the funds of the said estate. That court, however, ordered that an issue out of chancery be directed to determine whether or not the administrator was negligent in delaying the collection of a note of J. J. Patterson for $8,000 after the said Patterson became bankrupt and in arrears in the payment of the interest thereon. The decree further ordered that the cause be referred to a commissioner in chancery, as a special master, to take, state and settle an account of the transactions of the administrator, showing a full and comprehensive statement of his transactions from the time he assumed his duties, and to "ascertain and clear up the matter as to one percent (1%) interest on the $4,000 Grace Securities bond which bore seven percent (7%) interest." The special master was required also to "ascertain by items and dates the amount that came into the administrator's hands and each change in the status in the assets and the respective dates of the income from said principal and from what source." The expense of taking the account was charged to the administrator.

Upon the trial of the issue out of chancery, the jury found that the administrator was negligent in not having earlier foreclosed a deed of trust securing the Patterson note and fixed the amount of the damages caused by this negligence at $800. The trial court thereupon entered judgment against Marshall in the sum of $800; but directed that execution should not issue thereon until the ultimate amount of the administrator's liability should be determined in the other matters pending before the court.

The special commissioner in chancery duly proceeded to take evidence and to make investigation for the purpose of preparing the report required by said decree. Considering the mass of evidence and fig-tires covering a long period of years, the commissioner well performed a difficult task.

Marshall appeared before the special commissioner, subjected himself to an examination, produced his records and made and stated his final administrator's report as of March 31, 1938. On the latter date, he tendered his resignation as administrator and delivered the assets of the trust estate, or the evidence of title thereto, to the clerk of the Circuit Court of Pittsylvania county.

The commissioner's report, filed April 3, 1939, showed that the principal of the estate as of March 31, 1939, consisted of $9,115.16 in cash and $3,344.84 represented by balances due on participating certificates of deposit for 7% and 6% Grace collateral security bonds, in the respective sums of $2,864.40 and $347.60, and a balance due on the Patterson deed of trust note of $132.84; and that all principal and interest received by the administrator to the date of his resignation, including interest at 7% upon the Grace collateral security bonds, had been shown and accounted for in his final report made before the special commissioner.

The plaintiffs and defendants filed exceptions to the special commissioner's report.

The trial court, on July 11, 1939, being of opinion that the administrator had filed with the commissioner satisfactory statements of his accounts as such administrator for the period from the date of his qualification to the date of his resignation, overruled the exceptions of both parties to the commissioner's report...