Killen v. Sistrunk ( 1849 )

By the Court. —

Lumpkin, J.

delivering the opinion.

[1.] We have carefully examined the calculation of the Jury, upon which their verdict was rendered, and, detect in it the most palpable mistakes. They charged the executor with the whole amount of assets which came to his hands, with interest thereon, at the rate of 16 per cent, compounded annually, without first deducting, at the beginning of each year, the amount of disbursements for the current expenses of the year. In one instance, i. e. in Í836 and 1837, the disbursements, amounting to $6,940 44, seem not to have been deducted till the'end of the second year; so that there is one year’s interest or more too much, at the rate of 16 per cent, on each item of yearly expenditure, malting in the aggregate, between two thousand and twenty-five hundred dollars. In order to do justice both to the estate and the executor, the rule laid down in the leading case of Granberry vs. Granberry, (1 Wash. 246, 249,) was, that the executorial accounts ought to be closed at the end of each year, and interest allowed upon the balance, whether for or against the executor; but the Court ruled, that such interest ought not to be carried to the account of the succeeding years, so as to convert interest into principal ; and this rule has been generally approved in subsequent cases. See 3 Munf. 29. It is only necessary to say, that it has been grossly disregarded in this finding. Interest has been calculated on the receipts from the beginning of the year, the amount of the annual disbursement for the current year taken off, and the balance of interest, often running up to many thousand dollars, converted into principal, and made to bear interest again for the ensuing year, at the rate of 16 per cent.

Again, the amount of interest charged against the executor in the calculation of the Jury, is about $17,000. From this, subtract the interest on the disbursements, as improperly computed, and it still leaves, say $15,000 of interest, on which the executor is entitled to ten per cent, commissions under the Statute ; whereas, in the estimate, $700 only is credited, making thereby a difference against the executor of upwards of $800. This, added to the other mistake, will show in these two prominent items alone, an error of more than three thousand dollars against the defendant. This, of itself, would be ground enough to remand the cause for anew trial.

I will advert, briefly, to one other matter. The Court, in its decision upon the motion for anew trial, directed a remitter to be entered on the decree by the complainant, for one-fourth of the amount of bad debts, lost by the executor. The amount of bad debts, as appears from the answer, is $3000; one-fourth of which, viz : the share of the complainant, would be $750 ; but by an inspection of the calculation it will be seen that this sum is credited already by the Jury. The record shows, that an order was subsequently passed, directing the sum of $336 82, to be written off the verdict, which is ascertained to be the precise difference between the decree and the report of Messrs. Rutherford & Pringle, the auditors appointed by the Court to investigate this matter and report, pending the application for a new trial. We see nothing in the record to justify this order.

The error committed by the Jury, on this branch of the case, was this: in not allowing interest at the rate of 16 per cent, per annum upon the $750, from the time when these insolvent debts fell due, from which time the executor was made chargeable with that amount of interest in the calculation.

We have been called on, in the argument, to look through the entire transcript, voluminous as it is, to see whether there be not inaccuracies in favor of the executor, sufficient to set off those against him, so as to let the verdict stand, as in that event no injustice would have been done.

This would be devolving more labor and responsibility upon the Court than perhaps is legitimate or proper. Still we have, to the best of our ability, within lk>e limited time allotted to us, looked through the bill, answer, exhibits and evidence, and the only discovery which we have made is, the probable error in the amounts credited to the executor, as having been paid by him to the heirs of Joseph Cutts, deceased. The Jury allowed him, at the outset of their calculation, $1,272 86, in addition to the sum of $1600 and upwards, included in his returns to the Ordinary, as having been paid on the same account. This was likely an oversight. It will be remarked, that James H. Killen was the executor of Joseph Cutts, and John Killen is both executor of James, and administrator, do bonis non, cum testamento annexo, of Cutts. We believe there is some mistake as to these disbursements. We are convinced that the executor did not advance $2,800 to the Cutts family out of the assets of JamesKillen’s estate. We should not be surprised if, upon a thorough examination, the true credit dwindled down greatly below that sum. Still there is too much uncertainty surrounding this business to make it the foundation of any judgment, farther than to call particular attention to it in the future investigation which we shall direct to be instituted. The mystery and confusion which at present overhang and cloud it, can only be explained by extrinsic evidence. It is impossible to arrive at any satisfactory result from the records of the Ordinary. Proof can be procured as to the number of the Cutts family; which of them were paid off in whole, or in part, by James Killen, in his lifetime, and which by John Killen, since his brother’s death. Whether or not any assets belonging to tlie estate of Cutts came into the hands of John Killen, by reason of his representation of James Killen’s estate, or otherwise, &c.

I would remark, that the basis of the calculation of the Jury is a very severe one. To charge a trustee with the whole amount of assets, which from time to time have come to his hands, amounting, altogether, to some $35,000, with 16 per cent, interest thereon, compounded annually, is a more stringent rule than I have ever known adopted, after a practice of near thirty years. I find none such in the books; and it is one which I must believe cannot fail to do injustice to the executor. Nor do we think the evidence adduced by the complainants, warranted the adoption of such a rule, in opposition to the sworn statement of the defendant in his answer, as to the actual amount of interest, legal and usurious, received by him. He agreed to be made chargeable with 8 per cent, interest, compounded annually, and $5,825 of usury.

Is a trustee liable for illegal profits ? If so, and it is recovered out of him, he should undoubtedly be indemnified by the cestui que trust, on account of his liability over to those from whom he has received it. Every dollar of this usury may be sued out of him. And had he continued to do as he commenced, and what he is now blamed for not doing, spread out in his annual returns the amount of usurious interest collected from each debtor, he would have furnished record evidence against himself, from which there could have been no escape. I repeat then, that if, upon the principle that the trustee is responsible for all he makes on the trust fund, lawfully or otherwise, it is sought to charge him beyond the amount admitted in his answer, it is incumbent on the complainants, to prove that he actually collected more. The fact that certain witnesses testify, that in transactions between them and the executor, he charged 16 or 20 per cent; and he stated that this was his usual rate ; and that this was the usual rate of interest in that section of the country, at the period when this estate was administered ; and that he sold money at auctipn, as directed by the will of the testator, at from 8 to 27 per cent, does not contradict necessarily, the answer of the defendant, as to the amount of usury actually received by him. To charge him with a larger sum than he admits he made, the testimony must show that he made more.

Under all the facts and circumstances of this case, we have con-eluded that the following mode of settling the accounts of the executor, would be equitable, both to him and the distributees : Charge lawful interest on all the sums which come to his hands, compounding annually, first deducting at the beginning of the year, the amount of expenditure for the current year. Add to this the usury admitted to be due, with lawful interest thereon, from the time of filing the answer, unless the complainants can show, by sufficient proof, that the executor ought to behold responsible for a larger sum.

Even a rule so rigid as this, will deter many' a prudent ma,n— indeed, nearly the whole of that class of men, to whom it is most desirable that the management of estates should be entrusted— from undertaking the office of executor, administrator and guardian.

[2.] As to the 7th ground taken in the Court below, on the application for a new trial, viz : that the Jury had before them, a paper setting forth all the charges taken from his returns to the Court of Ordinary, against the executor, without any of his credits, and which was not in evidence on the trial, it is needless, perhaps, to consider it. It may not be amiss, however, to remark, that if a paper, not in evidence, is delivered to the Jury by design, by the party in whose favor the verdict is returned, the verdict will be set aside, even if the paper, is immaterial; and this, as a proper punishment for the party’s misconduct. State vs. Haskell, 6 N. H. R. 360, 1. Chitty on C. L. 3d Am. ed. 633, 634, and notes. Rex vs. Burdett, 1 Ld. Raym. 148.

[3.] So, where a paper, which is capable of influencing the Jury, on the side of the prevailing party, goes to the Jury by accident, and is read by them, the verdict will be set aside ; although the Jury may think they were not influenced by such paper, it being impossible for them to say what effect it may have had on their minds. If it was not read, it is the same thing as though it had not been delivered. Hix vs. Drury, 5 Pick. R. 297.

The case of Benson vs. Fish, (6 Greenl. 141,) was very similar to this. A paper drawn up by the plaintiff, containing items and statements, exhibiting the amount of damages to which he claimed to be entitled, was passed to the Jury, with other papers in the case, although they did not regard it -*as evidence regularly before them. It was prepared by the plaintiff, to aid his counsel in the argument; and there is reason to believe that it went to the Jury, by mistake and accident. Nevertheless, the Court held, it furnished a well-founded objection to the verdict, as it was calculated to influence the decision of the Jury.

The case of Sargent vs. Roberts, (1 Pick. R. 337,) is a strong illustration of the solicitude with which every statement or communication with the Jury, not made in open Court, and in the presence, and with the knowledge of the parties or their counsel, is excluded. A new trial was granted, because the Judge, after the Court was adjourned, wrote a letter' to the Jury, respecting the cause which had been committed to them, 'which he directed them to bring into Court with them, to be filed with the papers ; and the substance of which, it was admitted, was wholly unexceptionable. The Court acted upon the opinion, that any communication at all, was improper, and that for that reason, the parly against whom the verdict was, was entitled to a new trial.

New trials are sometimes indispensable for the purpose of obtaining the ends of substantial justice.' But the important right of trial by Jury, should not be disturbed, unless upon the most unequivocal evidences of injustice to the party who complains; otherwise, the rights of the Jury would be literally transferred to the Courts, and they, instead of the Jury, would become the triers of facts, in contravention of one of the leading features, clearly expressed, in our political association. However, if it is manifest to a reasonable certainty, that justice has not been done, the Courts are bound to interfere and give the party another opportunity of having his cause re-examined, especially, where there have been contradictory verdicts, as in the present case, differing some seventeen hundred dollars in amount. Walker, 97.

Our determination is, therefore, to remand this cause, with the following instructions, to wit: 1. That it be referred to auditors, to be appointed by the Court, who shall hear testimony and report upon the case, and which report, when sanctioned by the verdict of the Jury, shall be final and conclusive, either party being at liberty to controvert any matter of law or fact contained therein, before said Jury. 2. That the auditors, in ascertaining the amount in the hands of the executor, charge him with the various sums which he has received from time to time, with eight per cent, interest thereon, compounded annually — first deducting therefrom the current expenses of each year ; and in addition thereto,, the usury admitted by the defendant in his answer to have been received by him, with eight per cent, interest thereon, from tho time when his answer was filed — unless it can be shown by sufficient testimony, that he has collected," and ought to be made chargeable with a larger amount. 3. That the fact that several witnesses testify, that they paid to the executor a certain rate of interest on loans, and that he stated that this was his customary charge, and that it was the rate of interest usually paid in that part of the country, at the period when these transactions took place; and that the executor sold money at public outcry, as directed by the will of the testator, at from 8 to 27 per cent. prem. does not necessarily controvert the answer of the defendant as to the amount of interest actually collected by him. . 4. The auditors will direct their attention, particularly, to the various items in the returns of the executor alleged to have been paid out to the heirs of Joseph Cutts, deceased, and find which of these are legitimate credits in his favor, and which not.