Powell v. Hurt

• Decision Date: 02 July 1888
• Citation: 31 Mo.App. 632
• Parties: J. M. POWELL et al., Respondents, v. P. Y. HURT et al., Appellants.
• Court: Kansas Court of Appeals

31 Mo.App. 632

J. M. POWELL et al., Respondents, v. P. Y. HURT et al., Appellants.

Court of Appeals of Missouri, Kansas City.

July 2, 1888

1. ADMINISTRATION--DUTIES OF EXECUTOR AS TO COLLECTION OF DEBTS.

It is the duty of the executor or administrator of an estate to diligently and speedily collect the debts due the estate especially such as are out on personal security only, pay the debts of the deceased and distribute the residue to the heirs or legatees; and the executor or trustee will become personally liable, if he does not get in the money within a reasonable time.

2. ______ DIRECTIONS IN A WILL--DUTY OF EXECUTOR CONCERNING.

When there is direction in the will as to what shall be done with the testator's effects, all question or debate is closed. The will of the testator is the law for the executor. It is a fundamental principle that a trustee accepting the trust, must comply with its provisions and an executor is a trustee in such sense.

3. ______ ______ EXTENT OF LIABILITY OF EXECUTORS, ETC., FOR DEFAULT OF DUTY.

Although the rule of law is established in this state that executors and administrators are only responsible for want of due care and skill, and that the measure of care is that which prudent men exercise in the management of their own affairs; yet this rule only applies to matters left to the discretion of the executor. If the testator has asserted his own discretion the executor must obey it.

4. ______ ______ STATUTE PROVISIONS AS TO INSOLVENT DEBTORS.

Under section 240, Revised Statutes, providing that an executor shall receive credit for all debts charged in the inventory where " the debtor was insolvent, or that from any other cause, it was impossible for the executor or administrator to have collected such claim by the exercise of due diligence," the word " insolvent" is used as meaning impossibility to collect. (Julian v. Abbott, 73 Mo. 583).

5. ______ ______ DUTY OF DEMANDING PAYMENT--RULE CONCERNING.

The general rule is that all debts in the inventory, not designated desperate, shall be accounted assets in the hands of the executors or administrators, and in order to escape such accountability, he must show that they are desperate, or at least show a demand and refusal. He should take legal steps to recover unless from the notorious insolvency of the debtor a suit would be unavailing. (PHILIPS, P. J., dissents in a separate opinion).

West Headnotes

Appeal from Macon Circuit Court, HON. ANDREW ELLISON, Judge.

Affirmed.

Certified to Supreme Court.

The case is stated in the opinion.

PEAK, YEAGER & BALL and B. R. DYSART, for the appellants.

I. The prevailing rule in the state is that executors and administrators stand in the position of trustees to those interested in the estate upon which they administer, and are liable only for want of due care and skill, and that the measure of care and skill required of them is that which prudent men exercise in the direction of their own affairs. And when the executor acts prudently in good faith for what he deems for the best interest of the estate he is not liable, though it may turn out afterwards he was mistaken in judgment. Merritt v. Merritt, 62 Mo. 150, 157, and authorities cited; Mosman v. Bender, 80 Mo. 585; Van Bikken v. Julian, 81 Mo. 626; Neff's appeal, 57 Pa.St. 91; Kellen's appeal, 8 Pa.St. 288; Watkins v. Stewart, 78 Va. 111.

II. Applying this rule, we contend that under the undisputed facts in this case the court erred in refusing to allow the executors credit for said note of Benedict and Melones.

III. The policy of the law is to deal leniently with executors when they act in good faith, and with sound discretion, as in administering upon estates cases must arise when they are absolutely required to use their discretion. Gamble v. Gibson, 59 Mo. 596; Julian v. Abbott, 73 Mo. 580.

IV. An executor is not an insurer in any sense of the word. Fudge v. Dunn, 51 Mo. 264; State ex rel. v. Meagher, 44 Mo. 356; Foster v. Davis, 46 Mo. 268.

V. The provisions of the will with reference to the manner and time of collecting the assets and distributing the same are merely directory, and do not and cannot change the right, duties or liabilities of the executors. See authorities cited, supra.

JOHN T. JONES, for the respondents.

I. Hurt and Powell by agreement divided the notes of deceased between them for collection, but this relieves neither and each is chargeable with the negligent acts of the other as well as himself. Williams on Executors, 1548, and cases cited; 8 Cent. Law Jour. 63; 11 Cent. Law Jour. 216; 13 N.J.Eq. 308.

II. An executor qualifying must follow the direction of the will implicitly or make himself liable. Weigan's Appeal, 28 Pa.St. 471; Brenneman v. Frank, 58 Pa.St. 475; Williams on Executors [Ed. of 1855] 1530, and cases cited; Booth v. Booth, 1 Beav. 125.

III. These executors, to relieve themselves, must show that this note could not have been collected while in their hands. 62 Mo. 460; State ex rel. v. Taylor, 72 Mo. 656; Williams on Executors, 1530; Stiles v. Guy, 4 Y. & Coll. 571, 575; Williams v. Nixon, 4 Beav. 472; Tebbs v. Carpenter, 1 Madd. 298; Julian, Adm'r, v. Abbott, 73 Mo. 580; Powlson v. Johnson, 29 N.J.Eq. 529; Fisher v. Kilnous, 18 N.J.Eq. 229; 16 N.J.Eq. 514; Holcomb v. Holcomb, 11 N.J.Eq. 477, 495.

IV. An executor or administrator is held to a much stricter account than a trustee or guardian. 10 Casey 474; 4 Johns. Ch. 619; Williams on Executors, 1530, 1537, and cases cited.

JOHN F. WILLIAMS, also for the respondents, on motion for a rehearing.

I. The law is, that in all matters of controversy between trustee, and cestui que trust, we must be controlled by the terms of the instrument creating the trust. In this case, the testator directed his personal estate to be converted into money as soon as the same could be done, and distributed amongst his children, while he left it discretionary with his executors as to the time, terms, and manner of the sale of his realty. In the matter of his personal estate, deceased's directions are plain and pointed: collect as soon as you can. Did they do it? Did they attempt to follow the directions of the testator? They don't claim that they did. They rather seem to stand upon the doctrine, that they exercised a wise discretion, in a matter in which they had no discretion. The proof shows conclusively that they made no sort of effort to collect this debt, due March 12, 1881, until February 16, 1882. That they absolutely ignored the directions of the testator and assumed the responsibility of letting the note run, and thus fixing the liability upon themselves without the shadow of an excuse for so doing. Because it is the settled doctrine of the law that if a trustee or executor departs from the directions of the instrument that creates him, he does it at his peril, and if loss accrues he is personally liable. When executors proceed without directions of the will, or an order of court, they assume the risk, and the law holds them to a strict accountability. Tiffany and Bullard on Laws of Trusts and Trustees, 629, 630; Howe v. Earl of Dartsmouth, 7 Ves. 137; 62 Mo. 150; Williams on Trustees, 1530.

II. If these executors had been clothed by the will, with discretionary power, in the matter of the collection of this note, then the court might say, in view of the surrounding circumstances, that they had not abused their discretion. In such case it might so find, but if it did, even in that case, it would run counter to the law as written. It cannot be said even in the absence of directions in a will, that it is prudent for executors to let an unsecured note run for eleven months after it is due, and make no effort to collect it or secure it. The law of trusts does not favor mere personal security, but requires such outstanding debts to be collected at once, even though the testator himself created the debt by a loan (as in this case) on what he considered an eligible investment. Powell v. Evans, 5 Ves. 339; Bullock v. Wheatly, 1 Coll. 130; Styles v. Guy, 1 Mac. & Jer. 422; Tiffany and Bullard on Trusts and Trustees, 581. But that is not this case. Here, the testator gives them no discretion in the collection of his notes and accounts, but ordered them to collect at once; and yet they delay for eleven months. During all these months they made no effort to collect the note. They say the note is good, and let it run, that it is drawing interest. But the making of interest is not the primary object of executors in settling up estates--it is only a secondary matter. Their primary duty under the law, even in the absence of specific directions, is to collect the debts and convert them into cash. Here again these executors stray from the beaten path, and under the settled rule of law, incur a personal liability, even in the absence of instructions to collect as soon as may be. The law compels speedy collections. It directs the executor to take prudent measures for bringing all personal property of the deceased into his actual control and possession. And there is no function of his office which calls for such energy, promptness, and discretion in its discharge as this. Schouler's Executors and Administrators, 269.

III. Collection precedes, in natural order, the settlement of all debts, charges and legacies, and is the primary essential of prudent administration. And in the absence of all direction in the will, the executor must proceed at once to collect every personal debt of the testator. If parties fail or refuse to pay, the court is open, and he must see or show the insolvency of the debtor and that suit would have been unavailing, or he would be held liable. But when the will gives directions, the law tolerates no negligent performance of the duties assumed....