Marshall v. Kemp

• Decision Date: 18 November 1925
• Docket Number: 290.
• Citation: 130 S.E. 193,190 N.C. 491
• Parties: MARSHALL v. KEMP ET AL.
• Court: North Carolina Supreme Court

130 S.E. 193

190 N.C. 491

MARSHALL v. KEMP ET AL.

No. 290.

Supreme Court of North Carolina

November 18, 1925

Appeal from Superior Court, New Hanover County; Dunn, Judge.

Action by H. J. Marshall, as administrator of the estate of Frank Ryan, deceased, against E. T. Kemp and another. Judgment for plaintiff, and defendants appeal. New trial.

Liability of public officer differs from that of trustee or bailee.

Generally officer, entering into obligation to account for money received by virtue of his office, insures safety of all funds received by him in his official capacity.

Frank Ryan died in Pender county August 1, 1922. On August 14 1922, letters of administration upon his estate were issued by the clerk of the superior court of New Hanover to the defendant Kemp, who was a resident of Brunswick county; and afterwards (on September 25) similar letters were issued to the plaintiff by the clerk of the superior court of Pender. Thereafter (September 29) the plaintiff filed a petition before the clerk in New Hanover to recall the letters issued to Kemp and to remove him from the office of administrator on the ground that the deceased at the time of his death was domiciled in Pender county. C. S. § 1. The petition was allowed and the appointment of Kemp was revoked on the 9th day of October. Upon Kemp's appeal to the superior court the clerk's order was affirmed, and upon his appeal to the Supreme Court the judgment of the superior court was affirmed. In re Ryan, 187 N.C. 569, 122 S.E. 289. At the time of his death the intestate had on deposit in the Liberty Savings Bank of Wilmington the sum of $2,489.30; and after his qualification as administrator the plaintiff drew a check for said amount and the bank refused to make payment for the alleged reasons that it did not recognize the plaintiff as the personal representative of the deceased and that the defendant's attorney objected to the payment. The plaintiff alleged that the administration in New Hanover had been procured by an agreement between Thomas E. Cooper and the defendant Kemp for the purpose of keeping the deposit in said bank and preventing its withdrawal therefrom.

The defendant Kemp filed an answer admitting the appointment of the two administrators, denying certain allegations of the complaint, and alleging, by way of further defense, that he had executed a bond with his codefendant as surety, and that all acts performed by him as administrator had been directed and supervised by the clerk for the purpose of preserving and protecting the estate; and, further, that his check for the amount of the deposit had been dishonored because the plaintiff had objected to its being paid. The Fidelity & Guaranty Company filed an answer of similar import, setting out the bond it had executed as surety for Kemp. The money remained in the Liberty Savings Bank until the day of its failure. On September 2, 1924, the plaintiff brought this suit to recover of the defendants the amount of his intestate's deposit, namely, $2,489.30. On the trial two issues were submitted to the jury:

(1) Did the defendant wrongfully refuse to pay over to the plaintiff, as administrator of Frank Ryan, the money on deposit in the Liberty Savings Bank to the credit of said Frank Ryan? Answer: Yes.

(2) What damages, if any, has plaintiff sustained on account of said wrongful refusal to pay over said moneys? Answer: $2,489.30, with interest from September 25, 1922.

The following instruction was given:

"The court being of the opinion, as a matter of law, that the refusal of the defendant to pay over said moneys was wrongful, and that thereafter he held said moneys at his peril, it being admitted that the letters of administration issuing to the said defendant were declared void and canceled by the clerk of this court on the 9th of October, 1922, the court instructs the jury upon the first issue, if it finds the facts as testified to by all the witnesses, to answer the first issue, 'Yes,' and the second issue, '$2,489.30, with interest from the 25th day of September, 1922.' "

Judgment was rendered in favor of the plaintiff, and the defendants appealed.

Rountree & Carr, of Wilmington, for appellants.

John D. Bellamy & Sons, of Wilmington, for appellee.

ADAMS J.

The clerk of the superior court of New Hanover revoked Kemp's letters of administration on October 9, 1922. The jury were instructed that Kemp thereafter held the money on deposit at his peril, and, if they found the facts to be as the witnesses had testified, the answer to the first issue should be "Yes," and to the second the full amount of the plaintiff's claim, with interest thereon from September 25, 1922. The instruction implied either that Kemp's liability was definitely fixed when the letters were recalled, or that by virtue of his qualification as administrator he was an insurer of the assets coming into his hands. In our opinion neither of these positions can be maintained.

The liability of a public officer differs from that of a trustee or a bailee. The general rule is that an officer who enters into an obligation to account for money received by virtue of his office insures the safety of all funds received by him in his official capacity, insures, as Justice Rodman said, against loss by any means whatever, including such losses as arise from the act of God or the public enemy. Comm'rs v. Clarke, 73 N.C. 255. In Havens v. Lathene, 75 N.C. 505, Chief Justice Pearson expressed the same opinion by saying that such officer is accountable as a debtor who can relieve himself only by payment. His liability is founded on public policy and the evil consequences which would follow from a less rigid rule, as well as on the language of his official bond. Wilmington v. Nutt, 78 N.C. 177; Morgan v. Smith, 95 N.C. 396; Board of Education v. Bateman, 102 N.C. 52, 8 S.E. 882, 11 Am. St. Rep. 708; Presson v. Boone, 108 N.C. 78, 12 S.E. 897; Smith v. Patton, 131 N.C. 396, 42 S.E. 849, 92 Am. St. Rep. 783. See, also, U.S. v. Prescott, 3 How. 578, 11 L.Ed. 734; U.S. v. Morgan, 11 How. 154, 13 L.Ed. 643; U.S. v. Dashiell, 4 Wall. 182, 18 L.Ed. 319; Smythe v. U. S., 188 U.S. 156, 23 S.Ct. 279, 47 L.Ed. 425.

The rule laid down for the administration of estates is not so exacting. An executor or...