Soper v. Pointer

• Decision Date: 27 November 1933
• Docket Number: No. 7018.,7018.
• Citation: 67 F.2d 676
• Parties: SOPER v. POINTER.
• Court: U.S. Court of Appeals — Fifth Circuit

67 F.2d 676 (1933)

SOPER v. POINTER.

No. 7018.

Circuit Court of Appeals, Fifth Circuit.

November 27, 1933.

A. J. Harris and Norman W. Harris, both of Decatur, Ala., for appellant.

S. A. Lynne, of Decatur, Ala., for appellee.

Before BRYAN, FOSTER, and HUTCHESON, Circuit Judges.

BRYAN, Circuit Judge.

Appellee, Mrs. Zoe L. Irwin, now Pointer, executed a promissory note payable to the First National Bank in Decatur or order, and signed it "Mrs. Zoe L. Irwin, Admx. S. W. Irwin Est." The note was given after her appointment as administratrix of the estate of her husband, S. W. Irwin, in renewal of her personal note executed a few days before she was appointed. The proceeds of the original note were used to pay a debt of the decedent. The bank knew the purpose for which the money was borrowed and intended to extend credit not to appellee but to the estate she represented. Appellant, as receiver of the bank, brought this suit against appellee individually. Appellee defended, successfully in the district court, on the ground that she was not personally liable. But she did not plead or prove that she had the authority of the probate court to give the note on behalf of the estate. She makes no contention here that she had such authority, and it was assumed in the argument on both sides that in fact she did not. Besides, the burden was on her to show authority from the probate court if it was her intention to defend the suit on that ground. Error is assigned upon the giving of the peremptory instruction in her favor.

We agree with counsel for appellee that the note showed on its face that it was her intention to bind the estate of the deceased and not herself, and also that the bank accepted the note with intent to look only to appellee in her representative capacity for payment. If this were all, doubtless the judgment should be affirmed upon the authorities upon which she principally relies. Metcalf v. Williams, 104 U. S. 93, 26 L. Ed. 665; Cotton v. Courtright, 215 Ala. 474, 111 So. 7. See, also, American Trust Co. v. Canevin (C. C. A.) 184 F. 657. In the first and last of the cited cases the agent had authority to act for his principal. In the other, the notes of the executors added nothing to the obligations of the estate, but merely evidenced the amounts owing to legatees. The trouble with the defense in this case is that appellee, merely because she was administratrix, had no authority to bind the estate to pay the note sued on. It is true generally that an administrator cannot, without the aid of a statute, create a liability against the estate which he represents; and that, if he undertakes to do so and fails for lack of authority, he is personally bound. Woerner's American Law of Administration (3d Ed.) § 356; Schouler on Wills (3d Ed.) § 2574; Smith v. Peyrot, 201 N. Y. 210, 94 N. E. 662; Carr v. Branch, 85 Va. 597, 8 S. E. 476; Howard v. Leete (C. C. A.) 257 F. 918. The reason for the rule is that the contracting parties are presumed to intend to enter into a valid, binding contract; and since the estate is not bound, in order to give life to the contract, it is necessary to hold the undertaking to be that of the personal representative. Taylor v. Davis, 110 U. S. 330, 4 S. Ct. 147, 28 L. Ed. 163. This rule of liability is recognized and enforced without qualification in Alabama, the state from which this case comes; and it has been applied in cases involving promissory notes. Whiteside v. Jennings, 19 Ala. 784; McCalley v. Wilburn, 77 Ala. 549. It is not impaired by the decision in Richardson v. Fields, 124 Ala. 535, 26 So. 981. There the note of the trustees of an incorporated college was held void on the ground that the trustees received no consideration, because the note was given in payment of an antecedent debt of the college. In this case there was consideration moving from the bank to appellee, for she received from it the amount of money represented by her note. The majority decision in the case of Grafton National Bank v. Wing, 172 Mass. 513, 52 N. E. 1067, 43 L. R. A. 831, 70 Am. St. Rep. 303, held that the executor's indorsement upon a renewal note given for a debt of the estate was not binding on him personally even though the estate was not bound. But we are unable to follow that decision since it stands practically alone and is opposed to the great weight of authority. It is provided by an Alabama statute that an administrator may, by authority of the probate court, give a note for the purpose of paying a debt of the deceased; and that upon doing so the liability thereon is not his, but becomes that of the estate. Alabama Code, § 5830. It was recognized by the court in Cotton v. Courtright, supra, upon which much reliance is placed by appellee, that if the executors had undertaken without authority of the probate court to create a debt or obligation against the estate they would have become personally liable. It is only by complying with the statute and receiving authority from the probate court to execute notes binding upon the estate that the administrator may escape personal liability upon his promissory note although it was signed by him in his representative capacity. Christian v. Morris, 50 Ala. 585.

The judgment is reversed, and the cause remanded for further proceedings not inconsistent with this opinion.

HUTCHESON, Circuit Judge (dissenting).

The difference I have with the majority resides not in the reasons advanced to support the opinion, but in the failure of the opinion to set the case out as it was tried, and as it stands before us. The majority opinion proceeds on the tacit, though unexpressed, assumption that the note was given without the authority of the probate court. Neither of the pleadings alleged this to be so, and not one syllable of evidence was offered on the point. Plaintiff merely sued on the note, saying nothing whatever about the estate, its liability, or its solvency. Defendant pleaded want of consideration moving to her; that the consideration of the note moved to the estate, and a definite agreement that she was not to be looked to for payment, that the estate alone would be. On the trial the plaintiff offered the note, proved that it had been given in renewal of a note given by the defendant before she had qualified as administratrix, the proceeds of which were used in settlement of liabilities of the estate, and that the defendant was appointed administratrix, was duly qualified, and is still acting as such. Plaintiff proved the agreement of the bank to look to the estate and not to her. No other proof was offered. The majority opinion makes no reference to, it ignores entirely, the express, the undisputed agreement that defendant was not to be liable. Ignoring this, it proceeds on the assumption that appellee defended the note solely on the ground that she had added to her signature on the note, "Administratrix S. W. Irwin Est."

If the case stood thus, the majority would be right, for it is settled in Alabama that on a note so signed, nothing more appearing, the liability is personal to the signer, unless she shows that, executed as required by the statutes of Alabama, the note is in fact and in law the obligation of the estate. McCalley v. Wilburn, 77 Ala. 549; Whiteside v. Jennings, 19 Ala. 784.

The reason of this is that, apart from the statutes authorizing her to do so, an administratrix does not represent the estate to charge it with notes, and when she attempts, but fails to bind it, nothing else appearing, she stands personally charged, on notes signed by her on behalf, and for the benefit, of the estate. Conner v. Clark, 12 Cal. 169, 73 Am. Dec. 529; Winter v. Hite, 3 Iowa, 145; Studebaker Bros. v. Montgomery, 74 Mo. 101; Perry v. Cunningham, 40 Ark. 185; Kirkman v. Benham, 28 Ala. 501; Christian v. Morris, 50 Ala. 585; McLean v. McLean, 88 N. C. 394; Kerchner v. McRae, 80 N. C. 219; Carr v. Branch, 85 Va. 597, 8 S. E. 476.

But appellee did not defend on the ground that the addition to her signature of the words "Administratrix S. W. Irwin Estate" saved her from liability. She pleaded and proved an absolute, an admitted agreement made at the time and as a part of the whole transaction, of which the giving of the note was a part, that she was not to be personally liable, but that the estate, for whose benefit the debt was incurred, would be solely looked to. Her testimony was brief; it came in without objection; its truth was not questioned.

"I signed the note sued on. At the time the note was signed it was agreed that I was not to be personally liable, but the note was to be binding on the estate of S. W. Irwin. That the credit was given by the payee bank to the estate of S. W. Irwin deceased alone, and not to me, and it was agreed between us that the estate alone was to be looked to for the payment of the note, and I was not to be looked to for payment."

"The note sued on is a renewal note. I used the proceeds of the note to pay a debt of S. W. Irwin incurred by him in a cotton transaction."

This agreement and testimony, to which the majority opinion does not refer, gives the case a wholly different character; it operates to prevent recovery on the note not in contradiction but in explanation of it, by establishing that the agreement was only partly stated by the plaintiff when he sued setting out the note alone, and that...