McDowell v. First Nat. Bank of Sutton

• Citation: 102 N.W. 615,73 Neb. 307
• Parties: MCDOWELL v. FIRST NAT. BANK OF SUTTON ET AL.
• Decision Date: 22 February 1905
• Court: Supreme Court of Nebraska

73 Neb. 307

102 N.W. 615

MCDOWELL

v.FIRST NAT. BANK OF SUTTON ET AL.

Supreme Court of Nebraska.

Feb. 22, 1905.

Syllabus by the Court.

1. Where an executor in good faith expends money for court costs and attorney's fees in an honest effort to prosecute a claim in favor of his estate, he is entitled to recover for such expenses, although his suit in such behalf may be unsuccessful.

2. But where an executor or administrator advances money for court costs and attorney's fees for his own benefit, or for the benefit of those whose claims are adverse to his estate, he cannot recover against his estate for such advances.

3. Held, that the pleadings in this proceeding are not sufficient to warrant a personal judgment against the executor.

Commissioners' Opinion. Error to District Court, Clay County; Stubbs, Judge.

Action by the First National Bank of Sutton and the Union State Bank against H. E. McDowell, executor of John Wier. Judgment for plaintiffs, and defendant brings error. Modified.J. L. Epperson & Sons and Robert Ryan, for plaintiff in error.

T. H. Matters, for defendants in error.

OLDHAM, C.

On the 1st day of December, 1895, John Wier departed this life testate in the county of Clay and state of Nebraska. H. E. McDowell, the plaintiff in error in this cause of action, was named as executor in the last will and testament of deceased, and duly qualified and entered on the discharge of his duty as such executor. The deceased was possessed of considerable property, both real and personal, at the time of his death, and was also largely indebted to numerous creditors. Among other items of his indebtedness was a note to the Commercial State Bank of Clay Center for $1,789.45, drawing 10 per cent. interest, in which Adam Wier was principal, and deceased was security. This note was allowed as a claim against the estate on the 29th day of June, 1896; the amount of the note and interest then being $1,895.81. Other claims were filed and allowed against the estate--among them, the claims of the First National Bank of Sutton for $3,000, and the Union State Bank of Harvard for $1,000, and also notes to the Commercial State Bank for individual money borrowed by deceased. On the 5th day of December, 1896, the Commercial State Bank took a judgment against Adam Wier, principal on the note filed and allowed against the estate of John Wier, in the district court of Clay county, for the sum of $1,972.85, the amount then due on the note and interest. At the time this judgment was rendered, Adam Wier was the owner of 240 acres of land situated in the county of Clay, on which the judgment became a lien, and in which the interest of Adam Wier, according to the evidence, was sufficient to pay and discharge the judgment in full. In winding up the estate of the deceased, it proved to be insolvent. Dividends, however, were made on the claims allowed by the order of the court as follows: March 4, 1898, 12 1/2 per cent.; November 5, 1898, 32 1/2 per cent.; March 27, 1899, 11 per cent. From these dividends there were paid to the Commercial State Bank from the estate of John Wier the sum of $1,052.11 on the note which he signed as surety for Adam Wier. H. E. McDowell, the executor of John Wier's estate, was also president of the Commercial State Bank during all the time he acted as executor. After these payments had been made on the note, the Commercial State Bank entered into an arrangement with Adam Wier to loan him money to pay off a mortgage on 160 acres of the land owned by him, and, after such transaction, released and satisfied their judgment against Adam Wier on payment by him of the balance of the judgment. On August 30, 1899, the executor filed a petition in the county court, rendering an account of the money received and disbursed as executor of the estate, and asking for his final discharge. Objections were filed to the discharge of the executor by the defendants in error in this case and another creditor. These objections were sustained by the county court, and the cause taken on appeal by the executor to the district court of Clay county, where a hearing was had on June 21, 1900, which resulted in the following judgment and findings: That on July 24, 1895, Adam Weir, who was principal, and John Wier, who was surety, made their joint note to the Commercial State Bank for $1,789.45, drawing 10 per cent. interest; that the relation of principal and surety was known to the bank, though not disclosed in the note; that this claim was filed and allowed against the estate of John Wier, of which H. E. McDowell was then the executor; that on December 5, 1896, the bank also took a judgment on said note against Adam Wier in the district court of Clay county for the sum then due; that at said time Adam Wier was the owner of land in Clay county (describing it) on which land the judgment was a lien; that during the said transactions H. E. McDowell was and still is president of said Commercial State Bank; and that said bank and all its officers had full knowledge of all facts complained of by the objecting creditors. The court then finds the amount paid on the note from the estate of John Wier to have been $1,052.11, and found, as a legal conclusion, that the estate of John Wier became subrogated to the rights of the Commercial State Bank in said bank's judgment against Adam Wier to the extent of the amount paid thereon by said estate; that on March 29, 1899, the Commercial State Bank released the judgment of $1,972.85, and thereby rendered it impossible for the estate of John Wier, deceased, to collect the sums advanced by H. E. McDowell, executor of the estate, out of the property of Adam Wier, the principal of said note; and that the Commercial State Bank thereby became liable to the estate of John Wier for the value of the interest of the estate of said John...