Gurganus v. McLawhorn

• Decision Date: 24 November 1937
• Docket Number: 320.
• Parties: GURGANUS v. McLAWHORN et al.
• Court: North Carolina Supreme Court

193 S.E. 844

212 N.C. 397

GURGANUS v. McLAWHORN et al.

No. 320.

Supreme Court of North Carolina

November 24, 1937

Appeal from Superior Court, Pitt County; E. H. Cranmer, Judge.

Suit by Harry S. Gurganus against R. H. McLawhorn, executor of the estate of Ira H. Frizelle, J. F. J. McLawhorn, trustee and individually, Nannie Frizelle, Harriet Zelota McLawhorn infant, and others, heirs at law of Ira J. Frizelle deceased, to have the executor sell certain realty to pay his claim against the executor as such, wherein J. F. J McLawhorn, trustee, individually and as guardian ad litem of the infant defendants and heirs at law of Ira H. Frizelle deceased, set up a cross-action and affirmative defense seeking to "surcharge and falsify" the executor's account. From an adverse judgment, the executor appeals, and the plaintiff files a brief as amicus curiæ.

Affirmed.

In both a consent and a compulsory reference, upon exceptions duly filed, the superior court judge, in exercise of his supervisory power and under statute, may affirm, amend modify, set aside, make additional findings, and confirm, in whole or in part, or disaffirm, the report of a referee.

The plaintiff, at October term, 1932, obtained a judgment against R. H. McLawhorn, executor of the estate of Ira J. Frizelle, for the sum of $3,316. 25 and interest from April 28, 1931, and costs, which is unpaid. It is alleged in the complaint that the personal property of the estate has been exhausted and that demand has been made and refused by the executor to sell certain real estate to make assets to pay the debts, the guardian ad litem be appointed to represent the interest of certain minors, children of Ira J. Frizelle; that the sale be made of a tract of land containing 151.74 acres, known as the "Home Place"; that the said Frizelle died, leaving a last will and testament in which said tract of land was devised in trust to the defendant J. F. J. McLawhorn, for the use and benefit of the three infant defendants, as set out in item 2 of the last will and testament of Ira J. Frizelle.

The defendant R. H. McLawhorn, executor, admits the judgment rendered and alleges that the personal estate has been exhausted. "That the defendant knows of no way to satisfy said judgment except by sale of real estate." Defendant J. F. J. McLawhorn, trustee, individually and as guardian ad litem of the infant defendants and heirs at law of Ira J. Frizelle, answer and say "That as these defendants are advised and believe, the said Executor should have, out of the assets which have come into his hands from the estate of his testator, a sufficient amount of cash to pay the claim of the plaintiff in full," etc. In further answer these defendants set up a cross-action and affirmative defense to "surcharge and falsify" the executor's account, setting forth same with particularity. That upon proper accounting there will be in the executor's hands approximately $6,569.07, considerably more than enough to satisfy the claim of plaintiff, and prays: "(1) That no order of sale for said lands be entered until the executor, in this proceeding, has come to a true accounting with the estate of his testator and has accounted both for the assets which upon a proper administration of said estate ought now to be in his hands. (2) That the executor be required to account in this action for the assets which have come into his hands and which ought now to come into his hands. (3) That the executor be required to satisfy plaintiff's claim out of the personal assets as an accounting will disclose the estate of his testator to be entitled to have. (4) For such other and further relief as may be necessary and proper, and the nature of the same demands."

The executor, R. H. McLawhorn, in his reply denies the material allegations of the cross-action and that the relief demanded by his codefendants be denied and he go without day and recover his costs.

The clerk of the superior court made an order transferring the cause to the civil issue docket for trial, reciting in the order, "In this cause answer having been filed raising issues of fact which should be heard by a jury."

At March term, 1934, Daniels, J., made an order appointing Jack Edwards, Esq., referee, "for findings of fact and conclusions of law thereon." C.S. § 573. The following appears in the order: "The reference herein ordered is a compulsory reference, and all parties hereto except and demand a jury trial."

In the hearing before the referee is the following: "After reading of the pleadings, the defendant, R. H. McLawhorn, executor, entered a special appearance and moved to dismiss the purported cause of action of J. F. J. McLawhorn, trustee, and individually, and the children of J. F. J. McLawhorn first, for in that the answer and cross-action of said defendants does not state a cause of action as against this defendant executor; second, for that there is a misjoinder of action; third, for that the purported cross-action is improperly brought or set out in this proceeding; and fourth, for that under the last will and testament of the late Ira J. Frizelle, the defendants, J. F. J. McLawhorn, and others, named, are precluded or estopped from setting up said cross-action. Overruled. Exception."

The referee made his report, setting forth fully the findings of fact and conclusions of law thereon. All the attorneys for the litigants were present at the hearing; Nannie Frizelle, who although summoned, failed to answer.

The plaintiff made certain exceptions to the report of the referee as to the finding of facts and conclusions of law, setting them out in detail, and set forth:

"Upon the foregoing exceptions and objections, the plaintiff tenders the following issues and demands a jury trial thereon in the manner provided by law. Issues submitted as follows:

1. Has the personal estate of Ira J. Frizelle, deceased, been exhausted by R. H. McLawhorn, Executor, as alleged in the complaint? Ans. ------.

2. If not, does R. H. McLawhorn, Executor, have in hand sufficient personal estate of Ira J. Frizelle to pay and satisfy the judgment of plaintiff in the amount of $3,316.25 with interest thereon from April 28, 1931. Ans. ------.

3. In what amount, if any, is the defendant R. H. McLawhorn, executor, indebted to the estate of Ira J. Frizelle, by reason of the mismanagement of and sale of personal property as alleged in the answer of J. F. J. McLawhorn and others? Ans. ------.

4. Did W. H. Woolard, R. H. McLawhorn and the Atlantic Christian College wrongfully conspire, collude and agree that the said R. H. McLawhorn should acquire the Tuten farm from the Atlantic Christian College upon payment to it of its legacy of $2500.00, and thereby procure the foreclosure sale by the said W. H. Woolard, Trustee, at less than its actual value at the time of sale as alleged in the answer of J. F. J. McLawhorn and others? Ans. ------.

5. If so, what was the reasonable market value of the Tuten farm on April 27, 1931? Ans. ------.

The plaintiff Harry S. Gurganus tenders and files the foregoing exceptions and issues arising thereon. This the 30th day of March, 1927."

The defendant R. H. McLawhorn, executor, made certain exceptions to the report of the referee, as to the finding of facts and conclusions of law, setting them out in detail. The first as follows: "Exceptions of R. H. McLawhorn, Executor, to the report of Jack Edwards, Referee: In the above entitled action, the defendant R. H. McLawhorn, Executor, excepts to the report of Jack Edwards, Esq., Referee, which has been filed in this cause, and herewith files the following specific exceptions thereto: (1) To Findings of Fact No. 7 on page 2 of the report, as follows: 'The personal property belonging to said estate was sold at public auction on May 9th, 1931, by said executor, and purchased by said executor, R. H. McLawhorn, through his brother Dennis McLawhorn, the same being delivered by Dennis McLawhorn to said Executor and kept by him on the premises of lands known as the Tuten farm, which farm thereafter came into possession of said executor. Said personal property sale was held on the premises of said Tuten farm. After the purchase of the said personal property by the executor, same has thereafter been in his possession on said Tuten farm.' For that:-There is no evidence in the record to support such finding, in fact it is contrary to all evidence offered. The evidence of D. T., or Dennis McLawhorn, appearing on pages 60-64 of the report, is contrary to said finding, as well as the evidence of R. H. McLawhorn, Executor, appearing on page 83." The other exceptions to the findings of fact are of a similar nature.

The defendant R. H. McLawhorn further set forth: "Should the Court deny or overrule the motions to dismiss made by this answering defendant, Executor, and thus reverse the Referee, said Executor reserves all rights thereunder and all rights under the exceptions to both findings of fact and conclusions of law, and tenders the following issues, demanding a jury trial thereon, as required by law:-

(1) Has the personal estate of Ira J. Frizelle, deceased, been exhausted by R. H. McLawhorn, Executor, as alleged in the petition? Ans. ------.

(2) Did the personal property bring a fair and reasonable price at the sale held by R. H. McLawhorn, Executor? Ans. ------.

(3) Was the sale of the Tuten farm by W. H. Woolard, Trustee, valid? Ans. ------.

Motion to overrule Exceptions of R. H. McLawhorn, Executor, to report of Referee to confirm the report, and exceptions to issues tendered by the plaintiff, and issues tendered in lieu thereof: The defendant, J. F. J. McLawhorn, Trustee and others * * * reserving their right to a trial by jury upon the report of Honorable Jack Edwards, Referee, and upon...