Dancy v. Duncan

• Decision Date: 07 March 1887
• Court: North Carolina Supreme Court
• Parties: DANCY and another v. DUNCAN and others.

96 N.C. 111

1 S.E. 455

DANCY and another

v.DUNCAN and others.

Supreme Court of North Carolina.

March 7, 1887.

Appeal from superior court, Edgecombe county.

T. H. Battle and Battle & Mordecai, for plaintiff.

F. H. Whitaker, Jr., D. Gilliam, and J. L. Bridgers, for defendant.

SMITH, C. J.

James C. Knight died in 1869 seized and possessed of a tract of land in the county of Edgecombe, which in his will is devised to his daughter M. A. Duncan for life or widowhood, and of the remainder, one-third to F. C. Pittman, one-third to Alla W. Burnett, her children by a former husband, and the other third, in equal parts, to R. E. Duncan and P. P. Duncan, her children, the offspring of a later marriage, their father being also dead. The last-named devisees in common have also since died, one of them in infancy, and their shares have descended to their half brother and sister as heirs at law. The said F. C. Pittman, who was appointed and qualified as executor under the will, finding the personal estate of the testator insufficient to pay his debts and the charges of administration, instituted proceedings against the devisees to obtain an order and license to sell the said land, which was granted by the proper court in November, 1875, and pursuant thereto the premises were exposed to sale, and bid off by W. D. Pittman at the price of $2,500. In consequence of the inadequacy of the price, the report of the sale was delayed until the purchaser doubled his bid, in January, 1881, and then complied with the conditions of sale; paying $1,000 in money, and executing four notes each in the same sum, payable in successive years, for the residue of his increased offer. The sale on these terms was reported and confirmed in June; 1882, and title directed to be made to the purchaser on payment of the purchase money. Pending the delay, and to secure a more advantageous disposition of the land, to-wit, in January, 1878, the executor, F. C. Pittman, and the defendants M. A. Duncan and R. E. Duncan obtained the loan of $1,000 from N. J. Pittman, then the guardian of the plaintiff, F. B. Dancy, to be used, and which was used, by the executor in paying off the liabilities of the estate, for which sum they executed their bond to the said guardian, he knowing the intended disposition of the fund, and, to assure the repayment of the money due on the note, S. E. Pittman, wife of the executor, uniting with him, by deed of mortgage conveyed their several estates and interests in said land to the said N. J. Pittman, with a power of sale in case of default in making payment. When the plaintiff arrived at full age, the note, with the mortgage security, was transferred to him by his guardian as part of the trust-estate in his hands. The entire indebtedness of the testator's estate was satisfied out of the borrowed money, and the only assets remaining consist of two of the $1,000 notes given for the purchase money, overdue January 7, 1884, which the executor in December, 1881, assigned to the defendant F. H. Whitaker, who knew at the time that the executor was applying the fund in payment of his own personal debt. The other the executor sold and transferred, in the same month, to Spier Whitaker, who paid him $974 in money therefor. At the time of thus disposing of the notes, the executor was insolvent, and so has since remained. In November, 1883, he was removed from office, and administration de bonis non cum testamento annexo was granted to the plaintiff Thomas H. Battle.

There have been two references ordered, and from their reports it is found that the defendant Spier Whitaker did not participate in the maladministration of the executor in purchasing the note assigned to him, and, having acquired the same in good faith, is entitled to the amount due thereon, but must surrender the same to the said Battle, to the end that he may make title to the purchaser on receiving payment, and must account to said Whitaker for the full proceeds thereof. It is further found that the defendant F. H. Whitaker was a party to the executor's devastavit and perversion of the moneys due on that assigned to him, and has no title thereto against the plaintiffs. The court confirmed the findings of the first referee, except in so much of his conclusions of law as to the plaintiffs having a lien or claim on the note held by the said Spier Whitaker.

The second referee, adopting the findings of his predecessor, and of the judge acting upon his report, announces, as his conclusions of law, summarily expressed: (1) The mortgage does not bind the land, but the purchaser takes it free from the incumbrance, and by a title paramount; (2) the unpaid residue due on the note in the hands of the plaintiff Dancy on October 19, 1886, was $786.18; (3) the said Dancy, his money having been used to pay the indebtedness of the testator's estate, is subrogated to the rights of creditors for the full amount due on his note; (4) the assignment of the note to F. H. Whitaker did not pass to him the equitable title to the moneys specified therein as against the plaintiff's claim.

By consent, the note assigned to Spier Whitaker is eliminated from the controversy. The defendant F. H. Whitaker excepts seriatim, and in general terms, to each of the referee's conclusions of law as above enumerated.

On the hearing the following judgment was rendered:

“FINAL JUDGMENT.

“...