Hall v. Windsor Sav. Bank
| Decision Date | 08 May 1924 |
| Citation | 124 A. 593,97 Vt. 125 |
| Parties | HALL v. WINDSOR SAV. BANK. |
| Court | Vermont Supreme Court |
On rehearing. Judgment affirmed and remanded.
For former opinion, see 121 A. 582.
After the decision in this case was announced and the mandate had gone down, but before the enrollment of the final decree, the defendant brought a petition under G. L. 1567, for a rehearing in this court. In due course the prayer of this petition was granted, and by stipulation of counsel rehearing was had at the last November term at Rutland. Realizing the importance of the questions presented, we have carefully re-examined and deliberately reconsidered the whole case. The only questions deemed worthy of further discussion are covered by what follows.
It is urged with much confidence that our holding as to the admissibility of the evidence relating to the purchase of the White River Junction property is contrary to the law of the subject. The argument is that this defendant would be liable only in case it participated in a misappropriation and that misappropriation resulted in a loss to the estate; that this transaction, taken as a whole (as the rejected evidence would have tended to show), did not amount to a misappropriation and did not result in such loss, because the property at White River Junction was bought for and belonged to the estate, and was worth the amount paid for it; and that the misappropriation and loss did not come until some 18 months later, when Enright sold the property and converted the avails.
This argument wholly overlooks the basis of our decision on this question: Enright had been ordered by decree of the probate court to pay over the residue of Mr. Story’s estate, which included the very deposits here in question, to the executor of Mrs. Story’s estate. His only authority over this residue was to comply with this order. Any other use of the property by him as executor of Mr Story’s estate was unlawful. He had no right to buy real estate for that estate, and the White River Junction property never became and never was the property of Mr. Story’s estate. It could not become such until the deal had been ratified in some lawful way and the estate given and accepted the benefit of it.
Moreover the decree aside, Enright was without authority to make this purchase for the estate. An executor is a representative of limited authority. Speaking broadly, his duties are to collect the assets of the estate, pay its debts, and distribute the residue to those entitled. Rich v. Sowles, 64 Vt. 408, 23 A. 723, 15 L. R. A. 850. His powers are only those delegated to him by the will and the statute; and he has no implied powers except such as are necessarily incidental to those so conferred. In re Munger, 168 Iowa, 372, 150 N.W. 447, Ann. Cas. 1917B, 213. Beyond this, his contracts, though made in the name and for the benefit of the estate, bind him alone. If he attempts to pledge the credit of the estate in such a contract, his right to discharge the obligation out of estate funds depends upon its being so beneficial to the estate as to receive the sanction of the probate court. Lovell v. Field, 5 Vt. 218; Reynolds-McGinness Co. v. Green, 78 Vt. 28, 61 A. 556; Rich v. Sowles, supra. He cannot borrow money and pledge the credit of the estate for its repayment. If money so borrowed actually goes to the benefit of the estate, the probate court may authorize its repayment. Merchants’ National Bank v. Weeks, 53 Vt. 115, 38 Am. Rep. 661. An administrator cannot, nor can an executor without authority given by the will, purchase real estate. Lamotte v. Steidinger, 266 Ill. 600, 107 N.E. 850; Wilson v. Mason, 158 Ill. 304, 42 N.E. 134, 49 Am. St. Rep. 162; Abell v. Howe, 43 Vt. 408. There was no lawful way in which this property could be substituted for money in the bank without the consent of those entitled to the money.
The defendant insists, as it did before, that Mrs. Story’s administrator had no right of action against the defendant, and therefore the plaintiff has none. The unsoundness of the argument lies in its false assumption. Mrs. Story’s administrator did have a right of action against the defendant. She was the residuary legatee under her husband’s will. Her rights passed to her administrator. A former representative of the testator joined with the defendant in a misappropriation of the funds of the trust to its loss. In these circumstances, her administrator could have proceeded in equity against this mala fide holder of her legacy to compel restitution of the sum of which the trust had thus been despoiled. Veile v. Blodgett, 49 Vt. 270; note to McBride v. Vance, 112 Am. St. Rep. 732. Though her title to the residue was, during administration, prospective and contingent, it was an equitable interest all the time, Moore v. Brandenburgh, 248 Ill. 232, 93 N.E. 733, 140 Am. St. Rep. 206, and if invaded by the misconduct of the executor equity will lend its aid to protect her interests, Rowell v. Rowell, 122 Wis. 1, 99 N.W. 473.
In discussing this subject, Mr. Justice Dodge, in the case cited, says:
How much more does the legatee deserve the assistance of the court when, as here, his money has been appropriated after his title to it has been made complete by the decree of the probate court.
To this right the plaintiff was subrogated by his payment of the judgment. He then stepped into the shoes of Mrs. Story’s administrator, became possessed of all remedies that the latter had, Hodgson v. Shaw, 3 Myl. & C. 190; 25 R. C. L. 1377, and could enforce every right that the latter could, so far as necessary to secure reimbursement, including the right to follow the trust property into the hands of a purchaser with notice and to proceed against a third person participating in a breach of the trust by his principal, 6 Pom. Eq. § 924; Rice v. Rice, 108 Ill. 199; American Bonding Co. v. National Mechanics’ Bank, 97 Md. 598, 55 A. 395, 99 Am. St. Rep. 466, and note; Browne v. Fidelity & Deposit Co., 98 Tex. 55, 80 S.W. 593; Blake v. Traders’ Nat. Bank, 145 Mass. 13, 12 N.E. 414; Farmers’, etc., Bank v. Fidelity & Deposit Co., 108 Ky. 384, 56 S.W. 671; note to Western Surety Co. v. Walter (S. D.) 24 A. L. R. 1523.
Nor is it made to appear that the plaintiff’s claim is barred by lapse of time. It is urged that Mrs. Story’s...
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