Tompkins v. Tompkins , 18 S.C. 1 ( 1882 )

The opinion of the court was delivered by

McIver, A. J.

James Tompkins departed this life on May 9th, 1864, having first duly made and executed his last will and testament, whereby he appointed his two sons, the defendants, S. S. and J. W. Tompkins, executors. Owing, however, to the fact that these executors were both absent in the Confederate service, they did not qualify until September 25th, 1864, and the appraisement of the estate was not made until February 14th, 1865, a very short time before the termination of the recent war.

This action was commenced on April 25th, 1877, for the purpose of obtaining from the executors an accounting, and effecting a final settlement of the estate of the testator. The referee, to whom it was referred to take and state the accounts of the executors, as well as between the several parties, made his report, to which all parties filed exceptions, and the case came before the Circuit judge to be heard on said report and exceptions, and from his decree all parties have appealed. Without stating in detail the various grounds of appeal, we propose to consider the several questions which we understand are raised by the various grounds of appeal.

The first, and one of the most material questions in the case is, whether the executor, J. W. Tompkins, should be made liable to account for anything more of the proceeds of the sales of certain cotton belonging to' the estate which had been sent to .Liverpool, than the amount which actually went into his hands. It seems that the testator left, at the time of his death, on his plantation, a considerablé lot of cotton, something over one hundred bales, and the executors, fearing that it would be lost or destroyed if allowed to remain there, on account of the disturbed and unsettled condition of things in this State at the close of the war, determined that it should be shipped to. Augusta, Georgia, and the executor, J. W- Tompkins, superintended the removal and shipment.

Some time afterwards, it was shipped to Liverpool by the directions of the other executor, S. S. Tompkins, and sold, and the proceeds of the sale were placed to the credit of the estate on the books of’Warren & Co., factors and commission mcrchants of Augusta. Of these proceeds, J. W. Tompkins drew, at different times, and in different amounts, sums amounting in the whole to $1,775, with which he has been charged; and the balance of the proceeds, amounting- to something over $10,000, was drawn by the other executor, S. S. Tompkins; and the question is, whether J. W. Tompkins shall be charged, in his account as executor, with the whole amount, or only with the amount actually drawn by him.

It is well settled that one executor is not liable for funds which went into the hands of his co-executor, unless it is made to appear that he has paid them over to his co-executor, or has joined in the misapplication of them, or has joined in a receipt, or done some other act which enabled his co-executor to receive the funds. Atcheson v. Robertson, 3 Rich. Eq. 137; Gates v. Whetstone, 8 S. C. 246, where the authorities upon this subject are collected. We see no evidence in this case of any act done by J. W. Tompkins which enabled his co-executor to receive the proceeds of the sales of the cotton. Either of the executors had the authority to order the cotton shipped and sold, and when the proceeds of the sale were placed to the credit of the estate, either of the executors had the right to draw on such proceeds, and one could not prevent the other from so doing. We are, therefore, unable to perceive any ground upon which J. W. Tompkins can be made to account for that portion of the proceeds of the sales of the cotton which was drawn by the other executor.

The next question is, whether any of the parties can be made liable to the estate for the sum of $5,500 advanced by the testator to make the cash payment on the Texas lands. In the view Avhich we take of this matter, it is not important to determine which of the sons of testator were interested in the purchase of these lands, or in what proportions they were interested. The testator eiddently supposed, AVhen he made his will, that, Avhatever may have been the original scheme, or who were the ■parties to it, the eventual arrangement Ayas that he was to have a one-third interest, his son, H. W. Tompkins, a third, and that the remaining third belonged jointly to his sons, Franklin A. "and it. Augustus Tompkins, lit‘turned out, however, that no title had ever been obtained for these lands, nothing having been paid on the purchase-money, except the amount advanced by the testator to make the cash payment, and that the land was surrendered to the vendor, Smith.

Whether this would have given the testator a claim on those of his sons for whom he advanced the money, need not be considered, for any such claim was released by the express terms of the eleventh clause of the will, in which the testator, after stating that, by the preceding bequests, he had attempted to equalize the advancements previously made to his children, uses this language: “ I have also included in the estimate of advancements all notes and debts due me by any of my children, which I hereby declare canceled, excepting, however, the $6,000 and the debt against Tompkins & Macmurphy in the fourth clause of this, my will, which are to be paid by my son, James L. Tompkins, as therein directed; and, also, a debt of $5,500 against my sons, Franklin A. and R. Augustus Tompkins, mentioned in the ninth clause of my will.” If, therefore, any indebtedness existed on the part of any of the sons, to the testator, growing out of the advance made by him to meet the cash payment on the Texas lands, such indebtedness is expressly canceled by the terms of the eleventh clause of the will.

It is argued, however, that the indebtedness of $5,500, on the part of the two sons, Franklin A. and R. Augustus, is expressly excepted, and that they, therefore, remain liable to the estate for the same. We do not so understand it. The debt against them, which is excepted, is the debt which the testator supposed he was creating against them by the terms of the ninth clause of his will, and not the indebtedness growing out of the original transaction. Hence, we do not see how any charge can be made against any of the sons for any indebtedness which any of them may have incurred to the testator by reason of his having advanced the money for the cash payment on the Texas lands, because all such indebtedness is canceled by the express terms of the eleventh clause of the will. Nor do we see how any charge can be made against Franklin A. and R. Augustus Tompkins by reason of the debt mentioned in the ninth clause of the will, because no such debt could arise unless these two sons accepted the devise given by the ninth clanse, which, of course, they have not done, and will not do, as the thing devised turns out not to be the property of the testator.

The next point made is that J. "W. Tompkins, under section 415 of the code, was not competent to testify as to any transactions with the testator. This objection came too late, and, therefore, it is unnecessary to consider whether it could have been sustained, even if taken at the proper time.

Our next inquiry is, whether the claim of J. W. Tompkins against the estate for one-half of the losses resulting from the tanning business can be sustained. The facts presented in the record are not sufficient to enable us to determine this question. The original partnership between the testator and his son, J. W. Tompkins, for the purpose of carrying on the tanning business, seems to have been formed in 1863, and was dissolved in January, 1864, when a new partnership was formed, composed of the testator, his son J. 'W. Tompkins, and one Price.

This partnership was, of course,- ■dissolved on May 9th, 1864, by the death of the testator, but the business was continued after that time by the survivors, the allegation being that the partnership was then under large contracts with third parties which it was bound to perform. Price subsequently transferred his interest in the partnership to the estate of the testator and the other partner, J. "W. Tompkins, and retired from the concern. The business of the partnership, when finally wound up, resulted in a loss of something over '$1,200, for one-half of which the surviving partner, J. W. Tompkins, claims that the estate is liable to him, he having paid the liabilities of the firm.

The partnership was dissolved on May 9th, 1864, by the death of the testator, and the rule .is, that after that time the surviving partner could continue the business only so far as was necessary to settle existing demands and complete transactions begun, but unfinished, at the time of the dissolution, but no further. As is said in Gow Part. 231: wFrom the nature of a partnership, engagements may be contracted which cannot be fulfilled during its existence, exposed, .as it is, to sudden and arbitrary terminations; and the consequence, therefore, must be, that, for the purpose of making good outstanding engagements, of talcing and settling all the accounts, and converting all the property, means and assets of the partnership, existing at the-time of the dissolution, as beneficially as may be for the benefit of all who were partners, according to their respective shares and proportions, the legal interest subsists, although, for all other purposes, the partnership is actually determined.

In this case it does not appear how the losses were incurred,, whether in fulfilling contracts existing at the time of the dissolution, and in a legitimate effort to wind up the affairs of the partnership, or whether they were the result of new business undertaken after the dissolution. There must, therefore, be an inquiry as to this point, and so much of the losses as are properly traceable to the effort to fulfill contracts existing at the time of the dissolution, and which the partnership was bound to perform, or to expenses incurred in a legitimate effort to wind up the affairs of the partnership, will constitute a legitimate partnership debt, and the estate will be chargeable with its proper proportion thereof. But so far as such losses resulted from any new business undertaken after the dissolution, they are not chargeable to the estate of the testator.

There seems to have been one item charged twice by the referee against the estate of the testator, ■ viz.: The amount ($72) claimed to have been paid by J. W. Tompkins for one month’s board of six hands, inasmuch as it appears in the general tan-yard account, and is also made a separate charge against the estate. This, also, will be inquired into and rectified if it has, in fact, been twice charged.

The next point is as to the mercantile account claimed by J. W. Tompkins as a charge against the estate. The correctness of this charge depended largely upon a question of fact, and we see no reason for interfering with the conclusion of the referee, concurred in by the Circuit judge, except as to the matter of scaling this account. It does not necessarily follow, that a contract should be scaled because it was made during the war. The question is, whether the contract was made with reference to Confederate States’ notes as a basis of value, and, until that is made to appear, there is no ground for applying the scale fixed by the act. We see no evidence in this case that this account was contracted with reference to Confederate States’ notes, as a basis of value, and, on the contrary, the inference would be, from the prices charged for many of the articles, that it was not.

It is urged, however, that interest on this account should not have been allowed. There is no exception raising this distinct point, and it is not, therefore, properly before us. We may say, though, that while it is true that open accounts do not bear interest, yet sometimes equity allows interest upon demands, as to which interest is not recoverable at law, upon the principle that it would be inequitable to withhold it. Pettus v. Clawson, 4 Rich. Eq. 103. We can, then, vci’y/vyell understand why the referee and the Circuit judge should have thought that it was but just' and equitable to allow it in this instance, inasmuch as. interest had been charged upon the accounts of the executors with the estate, as well as upon the accounts between the several parties.

As to the claim for overseers’ wages, we see no reason for interfering with the finding of fact by the referee concurred in by the Circuit judge.

The next question is, whether the executors should have been charged with the Confederate bonds and Confederate treasury notes on hand at the death of the testator. It will be observed that these assets were not money in the legal sense of the term, and should, therefore, be treated as any -other personal property. It must also be remembered that, owing to the condition of things existing at the time of the testator’s death, the currency of the war, and the absence of the executors in the Confederate service, together with the disturbed and unsettled condition of things generally, these assets did not come into the hands of the executors until a very short time before the end of the war, when they lost what little value they may have previously had. It seems to us, therefore, that if these assets became valueless in the hands of the executors without any fault upon their part, and without some evidence that they were used, or could have been used, for the benefit of the estate, the executors should not be charged with them.

As has been said, they did not come‘into the hands of the executors until a very short time before the war terminated, and there is no evidence that, within that short time, they could have been used in payment of debts of the estate, or otherwise made available. Indeed, in the condition in which the country then was, it is not at all likely that they could have been so used; and even if they had possessed the legal attributes of money, it would, perhaps, have been hazardous for the executors to have appropriated such money to the payment of any particular debt, when the estate seemed inevitably doomed to insolvency, before they had taken time to look around and ascertain the rank and amount of the heavy debts due by the estate.

It is urged, however, that, at least, the claims now presented by the executory J. W. Tompkins, should have been extinguished by the Confederate treasury notes on hand. But these assets went into the hands of the other executor, and he certainly would not have been justified in applying them to simple contract claims of his co-executor, when he knew that there were very heavy outstanding specialty claims against the estate, with every prospect that the assets of the estate would prove insufficient for the payment of its debts. We see no ground, therefore, for charging the executors, or either of them, with the Confederate bonds or notes left by the testator, especially when the executor who was principally active in the management of the estate, and who, according to the testimony, was possessed to the fullest extent of the testator’s confidence, testifies that he understood that these assets were investments made by his father, of the funds of his wards, and did not really belong to the estate.

Our next inquiry is, whether the estate should be held liable to J. W. Tompkins for the amount furnished by him to the testator to take up the note of Tompkins & Macmurphy to the bank of Hamburgh. It seems that the testator and J. W. Tompkins were the sureties of Tompkins & Macmurphy on a note to the bank of Hamburgh, and that, a short time before his death, the testator took up this note, using for that purpose some money belonging to J. W. Tompkins, not amounting, however, to one-half of the sum paid on the note. How this could give J. W. Tompkins any claim against the estate of the testator, we are at a loss to conceive. He and the testator were both liable to the holder of the note for the full amount of it, and, as between themselves, each was. liable for one-half, and unless J. W. Tompkins furnished more, than one-half of the amount used in taking up the note, he could have no claim against the estate of the testator.

It is contended, however, that inasmuch as the testator, by his will, undertook to dispose of the note, the transaction must be regarded as a loan by J. "W". Tompkins to the testator of the amount advanced by him, and, therefore., that the estate is liable to refund to J. IT. Tompkins the amount borrowed from him. It is true that the testator does undertake, by his will, to give to ■his son, J. L. Tompkins, one of the. firm of Tompkins & Macmurphy, the note in question, but the bequest is upon the ■condition “ that he account or pay to.-my estate for the sum paid by me and interest, in fair cotton,, at seventy-five cents per pound.” This gave to J. L. Tompkins the right of election, and, as he has not and, we are given to understand, will not accept the bequest upon that condition, it necessarily fails, and the matter stands as if no such bequest had been made, and leaves the transaction as it originally stood, by which the testator was entitled to a claim against Tompkins & Macmurphy for the amount paid by him as their surety,’ and J. W. Tompkins was entitled to a similar claim against Tompkins & Macmurphy for the .amount advanced by him for the.purpose of taking up the note. ■ •

The next question to be considered is, whether the executors should be held liable for the uncollected 'notes and accounts due the.testator at the time of his death. These assets were produced or accounted for by receipts of .attorneys with whom they had been lodged for collection, and the evidence on the part of the'executors is, that they tried to collect them, but were unable to do so. There is no evidence that "any one of them could, by proper diligence, have been collected; and ih the absence of such evidence, and under all the circumstances surrounding this case, the condition of the country, and the disasters resulting from the'war, we do not see any sufficient ground to warrant the conelusion that these uncollected assets should be charged against the.executors. As was held in Pettus v. Clawson, 4 Rich. Eq. 92, before an administrator should be charged with notes marked by the appraisers on the inventory as good, there should be some proof of their collection or of negligence in collecting; and the same doctrine would apply to executors. To have required- proof that the debtors had beeü sued to insolvency, or to have taken up each one and offered evidence as to his insolvency, would have involved an expense to the estate, which, in our judgment, would not have been justified.

The next question is as to the credits allowed for the payment of the judgment in favor of Jennings, Smith & Co. We see no error in the conclusion reached by the Circuit judge in reference to this matter. Even though there may have been technical in-formalities in the judgment, yet there is no evidence that the debt on which the judgment was recovered was not a valid claim against the estate, which has been extinguished by the executors, and they, therefore, should have credit for the amount paid by them. There does, however, seem to have been a mistake in crediting $1,500 of this amount to the executor, S. S. Tompkins, which he admits to be an error; and the Circuit judge has fallen into an error in sustaining plaintiffs’ tenth exception to-the referee’s report in toto, while it should have been sustained only as to the $1,500 erroneously credited to S. S. Tompkins, there being no evidence assailing any of the other credits allowed.

The next question is as to the mode of stating the accounts of the executors, it being alleged, in their behalf, that the referee erred in not deducting the payments made in each year before striking a balance to bear interest. The position taken by the executors is correct, and is fully sustained by the case of Pettus v. Clawson, 4 Rich. Eq. 92.

Our next inquiry is, whether there was .any error in ascertaining the amounts chargeable to B. A. Tompkins and E. A. Tompkins on account of cotton received by them from the estate in 1865. B. A. Tompkins received two bales of cotton on July 24th, 1865, and sold them for $215.16, in gold; and E. A. Tompkins received two bales on November 24th, 1865, which he sold for $443.90, in currency. In adjusting the accounts of the several parties, the referee converted the amount, for which K. A. Tompkins sold his two bales, into currency, by adding thereto the premium on gold, thus ascertaining the amounts chargeable to these parties by the same standard of value. In this we see no error. The other transactions between the parties, and the dealings of the executors with the estate, since the termination of the war, were, doubtless, made in currency, and not in gold; and, hence, it seems to us fair and equitable that the amounts with which N. A. Tompkins and F. A. Tompkins were chargeable for this cotton should lie ascertained by the same standard of value.

Next, it is contended by the executors that they should not be charged with interest after the order of Chancellor Lesesne was made, in the case of Clark v. Tompkins, 1 S. C. 119, requiring them to account. If it had been made to appear that the executors had collected in the assets of the estate, and retained the same in their hands unemployed to meet any balance that might be ascertained on the accounting ordered, there would have been good ground to claim an exemption from liability for interest; but as this has not been made to appear, we do not see any ground upon which the position taken by the executors can be sustained.

The next question is, whether the executors were entitled to commissions after 1866, when they ceased' to make annual returns to the ordinary. There is no doubt but that, by the terms of the act of 1789 (5 Btai. 112), an executor forfeited his right to commissions by a failure to make the returns required by that act (Lay v. Lay, 10 S. C. 208); but we have always understood the rule to be, that, when an executor or administrator is required to account before the Court of Equity, it was no longer necessary for him to make returns to the ordinary, inasmuch as a court of superior jurisdiction had assumed the duty of taking the account.

In this case it appears that these executors were required to account before the Court of Equity by an order passed in the case of Clark v. Tompkins, 1 S. C. 119, which case seems to have been heard in June, 1867, and although it does not distinctly appear when the bill was filed, it must, necessarily, have been in the latter part of 1866 or early in* the year 1867. This, we think, rendered it unnecessary for the executors to make annual returns to the ordinary after that time, and their failure to do so should not deprive them -of their right to commissions. In addition to this, the act of 1789 was repealed on February 10th, 1872, by the adoption of the General Statutes, and the provision inserted therein, in lieu of the act of 1789, contains no clause by which an executor or administrator loses his right to commissions by a failure to make annual returns; and, therefore, in any event, the executors would be entitled to commissions since 1872. Davidson v. Moore, 14 S. C. 266.

In regard to the commissions allowed by the referee on the proceeds of the sale of the White House place, the Circuit judge seems to have fallen, into an error of fact in saying that no money passed through the hands of the executor, for, as we understand the testimony, the proceeds of the sale did, practically, pass through the hands of the executor. We think, therefore, that the Circuit judge erred in sustaining the exception relating to this matter.

. The only remaining error alleged is the omission to charge the assignees of H. W. Tompkins with the amount of an account due by him to James Tompkins & Son. This matter seems to have been overlooked, both by the referee and the Circuit judge. From the testimony beforp us, this seems to be a proper charge against the assignees, and the accounts should be rectified accordingly.

The judgment of this court is that the judgment of the Circuit Court be modified so as to conform to the principles herein announced, and that the case be remanded to that court for such further proceedings as may be necessary to carry into effect the views herein presented.