Grant v. . Bell , 87 N.C. 34 ( 1882 )

^* SMITH, C. J., having been of counsel, did not sit on the hearing of this case. As disclosed in the record, the plaintiff's first two exceptions relate to the admission of certain evidence, but as his counsel failed to advert to the subject in their argument here, we infer their purpose to abandon them, and therefore content ourselves with saying that in our opinion they were properly abandoned.

In lieu of the issues submitted and passed upon by the jury, the plaintiff proposed the following:

1. Was B. F. Lockhart insolvent on the 25th day of November, 1862? (that being the day on which he executed the receipt.)

2. How much money did the defendant then pay to said Lockhart as executor of W. T. Bell?

These, his Honor deemed unnecessary, and rejected, and his action in this particular is the subject of the plaintiff's third and fourth exceptions.

Strictly speaking, the pleadings should present only the issuable facts of the cause — that is, those facts upon which the right of action or of defence ultimately depends. But parties oftentimes, and sometimes properly, in order to give point to their main matters, introduce matters merely evidentiary, that is, such as need only be proved at the trial in support of the essential issuable facts.

Frequently it is difficult to distinguish between the two classes of facts. But still, it is the duty of the court to do so, and to submit only such issues as are directed, not to the mere details of evidence, but to those main conclusions of fact that are indispensable to (42) the right of action, or of defence — or else, there will be no such thing left to the juries of the country as a general verdict, but all their findings must assume the form of special verdicts, ascertaining only "the dry facts" of the case, and leaving their legal effect to be declared by the court.

Doubtless his Honor under the provisions of C. C. P., Sec. 233, might in his discretion have required the jury to find the facts, and reserved to himself the right to pronounce the judgment of the law. But this was not incumbent upon him, and as he deemed it best to submit such issues as were compounded of both law and fact, and left their decision to the jury under such instructions as he might give them, there was no room for either party to complain — since the statute expressly clothes him with that discretion.

The main issuable fact upon which the plaintiff's right of action in this case depends, is the fraudulent procurement of the settlement and acquittance by the defendant. This the latter denies, and so it becomes the conclusive essential fact in the cause, and the insolvency of the executor and the non-payment to him of any money, while material and important circumstances, are but matters or details of evidence, bearing upon it. Suppose both those facts to be established, as contended for the plaintiff, it would still leave the main and more comprehensive issue as to the fraud, undecided. The proposed issues were, therefore, too narrow, and failed to reach the whole merits of the controversy, and were properly rejected by the court. Jenkins v. Conley, 70 N.C. 353; Albright v. Mitchell, Ib., 445.

In this fifth and sixth exceptions, the plaintiff complains of the issues actually submitted, upon the ground that they are not such as are raised by the answer — the allegation of the settlement therein contained being as he says insufficient to raise the issue of in simul computassent, because no account is therein set out, (43) accompanied by an oath as to its being just and true.

The authorities all say, that whenever to a bill for an account the defendant pleads quod plene computent, he must aver that that there has been an account stated between the plaintiff and himself, and that as stated it is just and true; and when practicable, it is proper that a copy of the account so settled should be annexed to the answer.

As far as lies in his power, this defendant seems strictly to have complied with this requirement of the courts.

The complaint itself alleges that the action heretofore brought by Lockhart, as executor, against the defendant, embraced the very matters which are now in controversy, and further that in the progress of that action a reference had been made to the master to state the account of the defendant in his threefold capacity of guardian, trustee and partner, and a report from him presenting the account in two aspects — which report and account have been lost from the files. All this the defendant admits, and alleges that his ultimate settlement took place upon the basis of one of the accounts as reported by the master, and that as thus settled it embraced every item with which he should have been charged, and was both just and true, and its loss from the files and his inability to restate it, owing to the great lapse of time, he tenders as his excuse for not setting it out in his answer — and surely in a court of equity this must suffice.

As for the acquittance, it is not pleaded, or relied upon, as a technicalrelease, operating proprio vigore as a discharge of the defendant, but as a written acknowledgment of satisfaction of the amount so ascertained to be due, and it cannot be necessary to cite authorities to prove that an account so stated and settled, and its satisfaction so evidenced in writing, must be a bar to an action for another account touching the same matters. Fair settlements, like other contracts, must be observed by the parties, and will be upheld by the courts without stickling as to form. The facts set out in Mebane (44)v. Mebane, 36 N.C. 403, differ so immaterially with those of the present case, as to make it a direct authority for us; and so too in Costin v. Baxter, 41 N.C. 197, and Harrison v. Bradley, 40 N.C. 136. In each of those cases, there had been an "account settled," though not an "account stated," and a receipt given; and it was held that it would be mischievous to allow such settlements to be disturbed after the accounting parties had, perhaps, lost or destroyed their vouchers.

Seventh exception. The plaintiff asked that the jury should be specially instructed that, inasmuch as the burden rested on the defendant to show that a fair and true account of the several matters, now involved, had been stated between the former executor and himself, and he had failed to furnish such proof, they should find both issues, as submitted, against him. This instruction his Honor refused to give, and in the opinion of this court, properly so.

Apart from the defendant's own allegations, his attorney, Mr. Ransom, who aided at the settlement, testified, that except as to an abatement of $1,000 in the rents and hires charged, it was made upon the basis of what was known as "the rent and hire account" — that being one form of the account so stated by the master — and that both parties were then fairly represented by counsel, and both stood upon their rights and contended at arm's length. Without, then, invading the province of the jury, the court could not give the instruction prayed for.

Eighth. The plaintiff prayed the court to instruct the jury that in passing upon the second issue they should not consider the characters of Messrs. Bragg, Ransom and Barnes, the attorneys of the respective parties, who aided at the settlement. This was also properly refused by the court. As disclosed, there is literally nothing in the case which could justify any such instructions. No sort of prominence (45) appears to have been claimed for those gentlemen, and no proof either way as to their reputation, or their abilities as attorneys. But the fact that both parties to the agreement were fairly represented by counsel learned in the law, is relied on as tending to show that no undue advantage was taken by one over the other — and surely it would have been to reverse the rule of every day's experience, for the court to caution the jury against the integrity and intelligence of those, by whose advice, and through whose cooperation, it had been effected.

Ninth. The plaintiff further asked that the jury should be instructed that it is fraud in law for an insolvent executor to take, in payment of debts the estate, his own insolvent paper; and therefore if they should believe that the executor, Lockhart, was insolvent, and gave the discharge relied on by the defendant, on account of the surrender and cancellation of his own notes, he was guilty of fraud, and the defendant likewise guilty of a wilful participation therein. His Honor declined thus to instruct the jury, but told them that it was some evidence of fraud, on the part of the executor, to accept his own insolvent paper in discharge of debts due the estate of his testator.

Admitting that some slight obscurity attaches to this portion of the instructions given, we still can discover no such error as in our opinion would justify us in disturbing the verdict as rendered. The plaintiff's allegations set forth the conduct of the defendant as fraudulent in two particulars: First, in taking advantage of the exposed and impoverished condition of the executor, and by use of the power of a creditor, constraining him to settle upon terms injurious to the estate, and to accept less than the amount justly owing to the same; and secondly, in inducing the executor after the amount was thus agreed upon, to accept in payment his own private debts.

The fact that payment was thus made, either in whole or in part, by the surrender of debts on the executor is nowhere denied (46) in the answer. On the contrary, it seems to have been conceded throughout the whole case, and was proved by the defendant's own witness and counsel. This being so, there was no issue raised as to that branch of the alleged fraud, which needed to be passed upon by the jury; and consequently, his Honor seems to have confined his own and the jury's attention exclusively to the fraud alleged to have been practiced in procuring the settlement.

Taken in this light, the acceptance of his own notes by the executor ceased to be a matter of legal intendment, and become, as we had occasion to say with regard to his insolvency, one of the details of evidence, proper to be submitted to the jury and to be weighed by them in determining the main issue as to the fraudulent procurement of the settlement and discharge.

The tenth and last exception is taken to the refusal of the judge to grant the plaintiff judgment non obstante veredicto. This we think he was entitled to, not to the full extent claimed by him, but to the extent to which the defendant discharged his indebtedness to the estate of his son by the surrender of debts upon the executor.

No principal seems to be better supported by reason, or more firmly established by authority, than that the payment by an executor of his own private debt out of the assets of his testator is a cleardevastavit; and that he, who knowingly accepts the assets in extinguishment of his private claim upon the executor, is guilty of collusion to make a devastavit, and will not be allowed to retain them against creditors or legatees, or those who represent them. The executor, although complete owner of the legal title of the property in his hands, is still in equity regarded as a trustee for creditors and legatees, and perfect good faith, on his part and those dealing with him, is exacted by the courts; and, as in all other cases, where a trustee has parted with the property in breach of his trust, the cestui que trust may follow it into the hands of any one who has been guilty of a (47) collusion with the executor.

It is no answer to say that he believed the executor to be solvent, and that he would replace the amount to the credit of the estate. The assets are a fund for the payment of the testator's debts and the legacies bequeathed in the will, and not the debts of the executor; and when his private creditor, who knows his representative character and duty, consents to accept payment out of a fund appropriated to other purposes, that circumstance is all that is needed to fix him with notice; and the later and better doctrine is, that in such case he acts at his peril and takes upon himself the risk of the executor's right to so apply the assets, and of his ability to replace them in case of necessity. Petricv. Clark, 11 Sergt. Rawle, 377; Colt v. Lanier, 9 Cowen, 320.

Objection, however, is taken that the action is improperly brought in the name of the administrator de bonis non, and that it can only be maintained by the defrauded legatees, or creditors, if there be such. This we do not regard as an open question. In Colt v. Lanier, supra, it is said that an administrator de bonis non is the full representative of the testator as to all effects not duly administered, and that he can therefore seek a discovery and account of assets in whosoever hands they may be, as long as they belong to the estate, and accordingly he was allowed to have his action against one who had taken the assets of the estate in payment of the executor's private debt. The same was held in Dobson v. Simpson, 2 Randolph, 294, and it must needs be so in this state, where it has been so long held that none but an administrator de bonis non can sue for adevastavit committed by a previous representative of the estate.

Nor can it materially alter the case that the executor in this instance was a legatee, as well. At most he was only a legatee for life with remainder to his children, if any, and if not, then to his (48) brother's children. But above all this, the defendant had notice that the executor was applying the assets out of the ordinary course of administration, and he participated therein, and must be taken to have dealt at his peril in this particular also, and he cannot be permitted to retain the fruits of his collusion so long as a single debt of the testator remains unpaid, or a legatee of any description, unsatisfied.

Of course, he should be allowed to have the interest of Lockhart in the estate, whatever that may be. But this could only be to stop interest on the amount thus misappropriated during his life; and that, provided it may not be needed to pay creditors who have the first and highest equity.

Our conclusion therefore is, that the settlement made in 1868, between the defendant and the acting executor cannot be disturbed — its bonafides being fully established by the verdict of the jury. But that the plaintiff is entitled to judgment in this court for so much of the sum then ascertained to be due, as is unpaid, including such amounts as were attempted to be paid in the private debts of the executor, whether endorsed or not, together with interest from the death of the executor, unless otherwise directed after a reference, which, if the parties so desire, may be had to the clerk of this court to ascertain the sum still due, and to inquire touching the debts of the testator. The plaintiff is also entitled to recover the costs of the action.

Error. Judgment accordingly.

Cited: Suttle v. Doggett, 87 N.C. 206; Grant v. Bell, 90 N.C. 560,563; Grant v. Bell, 91 N.C. 495; Grant v. Edwards, 92 N.C. 444;Coppersmith v. Wilson, 104 N.C. 32; Cornelius v. Brawley, 109 N.C. 548;Patterson v. Mills, 121 N.C. 266; Jackson v. Telegraph Co., 139 N.C. 357;Durham v. R. R., 185 N.C. 244; Dulin v. Dulin, 197 N.C. 219.

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