Terrell v. Rowland

• Decision Date: 16 June 1887
• Citation: 86 Ky. 67,4 S.W. 825
• Parties: TERRELL v. ROWLAND and others.
• Court: Kentucky Court of Appeals

4 S.W. 825

86 Ky. 67

TERRELL v. ROWLAND and others.

Court of Appeals of Kentucky.

June 16, 1887

Appeal from circuit court, McCracken county.

J. M Bigger, for appellant.

T. E Moss and J. W. Bloomfield, for appellee.

HOLT J.

Isaac Clark died testate in November, 1858, leaving his widow Juliana Clark, and his five children,--Fannie, who married the appellee Reuben Rowland, Ora, Luella, Luther H., and Anna Clark,--as his devisees. The last named died intestate, and without heirs, in 1860. The testator, at the time of his death, owned a large estate, consisting of lands in Illinois and in some two or three counties in this state, town lots in the city of Paducah, and considerable personalty, but embracing no money. His indebtedness at that time was also considerable. He appointed the appellant, T. F. Terrell, in whom he appears to have had great confidence, his executor giving him, by the terms of the will, much discretionary power in the conduct of the estate. Thus he authorized him to sell the Illinois lands "at such time and on such terms as he may think proper for the interest of my estate;" sell certain portions of his estate in Kentucky when his youngest child should become of age, "at such time, and on such terms, as he may deem proper;" improve such of certain town lots as he might deem best; rent out the property save that devised to the widow; compromise any debts due the testator if, in the opinion of the executor, the interest of the estate required it; provide for and superintend the support and education of his children,--the will expressly providing that, by reason of this last provision, no guardian should be appointed for them. In short, the executor was given the entire management of the estate, and the control of the greater portion of the property, with large discretionary power; it providing, however, that the children were to come into possession of certain portions of it, which were not to be sold, at the periods named in the will, while the executor was authorized to sell other portions of it at any time, in his discretion, and other portion at such time after the youngest child became of age as he might deem best. The will also provided that the executor should not be required to settle his accounts in the county court as often as required by the general law, "but that he do so as soon after my death as practicable, say within three months, and at least once every five years thereafter;" and, in speaking of his compensation, it says: It is my desire and wish "that my executor shall receive a full, ample, and liberal compensation for his service in the discharge of his duties in the management of my estate. It is not my wish to confine his compensation merely to what the law would allow him, as in many cases his services to my estate would be worth much more than the law allows."

The appellant, Terrell, at once assumed the execution of the responsible and arduous trust thus confided to him; returned an inventory of the estate to the proper court, but made no settlement until October 8, 1868, when he did so, and it was confirmed by the county court. It embraced a great many items of debit and credit, and a balance was found due the executor of $3,037.13, leaving in his hands, however, unpaid notes belonging to the estate amounting to $14,400.59. In this settlement the executor was allowed for his services $3,464.54, being the 5 per cent. allowed by the statute upon the amount disbursed, and also $5,000, or $500 per year, for the period from his qualification to the date of the settlement. He was also allowed as credits what in that settlement is known as voucher No. 309, for $6,699.30, being an execution debt in favor of the Commercial Bank of Kentucky against the firm of Clark, Terrell & Co., and voucher No. 310, for $113, being the sheriff's half commission upon said debt, and both of which sums were paid by the appellant.

In 1871 the appellees Rowland and wife brought an action against the appellant to compel a settlement of the estate, but abandoned it, expressing regret that they had instituted it, and a belief that the management of the estate by the appellant was the best possible under the circumstances. Thus matters continued until February 18, 1882, when Rowland and wife brought this action, seeking to review and surcharge the county court settlement of 1868, to compel a settlement of the estate by the appellant, and a division of any assets in his hands, and to procure a partition of the unsold lands. The widow and other devisees were made defendants, and they, by cross-pleadings against the appellant, sought the same relief. Upon the one side gross mismanagement and fraud is charged; while upon the other this is denied in toto, and it is asserted that the estate has been so managed that but for it its indebtedness would have consumed it, leaving the widow and children paupers, whereas they now have an estate equal or exceeding in value all the property owned by the testator at his death, and free of debt.

After a careful reading of the entire and voluminous record we are satisfied that the charges of bad faith and fraud upon the part of the executor are unfounded. The case was referred to a commissioner, before whom the appellant appeared, with a full statement in writing of his receipts and expenditures, and its correctness is supported by his testimony. In addition to the compensation allowed him in the settlement of 1868, he claimed $7,092, of which $3,026 is for 5 per cent. upon the disbursements by him since 1868, and $4,066 is for extra services for that period, or at the rate of $300 a year. Among the credits claimed by the executor is one represented by voucher No. 119. A brief history is necessary to a correct understanding of it.

In 1856 the firm of Terrell, Clark & Co. was formed for the purpose of engaging in the rolling-mill business. It purchased, at heavy expense, a rolling-mill in Paducah, Kentucky, and operated it for a short time. The firm was composed of the appellant, Terrell, who owned one-sixth interest, J. H. Terrell, who represented a like interest, D. Watts and D. A. Given, of the firm of Watts, Given & Co., owning one-third interest, and the testator, Isaac Clark, who had a like interest. The enterprise proved a disastrous one pecuniarily, and in the midst of it Clark died. At this time the business was in such condition that it could not be settled as between the partners. The war came on. The military took possession of and used the mill, and it was finally sold by the surviving partners at a heavy loss. While it was operated by the firm, their accounts were kept upon the books of the banking firm of Watts, Given & Co. All of the members of this firm were not members of the firm of Terrell, Clark & Co., and the latter became largely indebted to the former firm. Some of this indebtedness, according to the testimony of the appellant, Terrell, accrued before, and some of it after, the death of Clark; but it is not shown what portion was in existence before his death, or what accrued after; and, indeed, the items of it are not shown at all. The appellant, Terrell, attended mainly to winding up the business of the firm; and he testifies that he, as one of the survivors, and as the executor of Clark, together with the other surviving members of the firm, made a settlement with the survivors of Watts, Given & Co., and after examination of the books of the latter firm in 1868, it was then ascertained and agreed between them that Terrell, Clark & Co. were indebted to Watts, Given & Co. in the sum of $34,549.77, of which Clark's portion was one-third, or $11,515.59. Watts, Given & Co., by written assignment, transferred $8,000 of this last-named sum to one Britt; and when Terrell, as executor, paid it off, it amounted to $8,840. They also gave an order on him, as executor of Clark, to one J. H. Terrell for the balance; and, when paid, it amounted to $3,663.11.

The appellant presented to the commissioner an account of what he had paid out for Terrell, Clark & Co., not including, however, the sums paid to Britt and J. H. Terrell, credited by what he had received of firm assets, leaving a balance in his favor of $2,795.02, of which Isaac Clark's portion would be the one-sixth, or $931.67. He also filed an account against his testator's estate in his favor, and as growing out of the firm matters of Terrell, Clark & Co., for the sums thus paid Britt and J. H. Terrell, and the $931.67, crediting it by vouchers No. 309, for $6,699.30, and No. 310, for $113, of the county court settlement of 1868, leaving a balance due him of $6,622.48, for which he claims credit with the estate of his testator; and this claim is known in this record as "Voucher No. 119." The commissioner allowed the credits for vouchers Nos. 309 and 310 as given in the settlement of 1868 to stand; allowed to the appellant the balance of $6,622.48 as per voucher 199; and remitted the question of the executor's compensation to the court. It reduced the claim of $7,092, for services, to $5,000; charged the executor with the amount of vouchers Nos. 309 and 310 of the county court settlement; and rejected voucher No. 119,--thus refusing to allow him the sums paid by him to the Commercial Bank, Britt, and J. H. Terrell, and the $931.67 aforesaid. Of this he now complains; and this action of the lower court, as this record stands, is alone to be considered.

The charges against the executor, that he improperly compromised the Boone and Larman debt; that he negligently failed to sell the rolling-mill at a fair price, and when he could have done so, or the Illinois land, and with the proceeds of the latter have improved the Paducah lots; and that he negligently failed to rent them out for a term of years, and...