Poindexter v. First National Bank of Winston-Salem

92 S.E.2d 773 (1956) 244 N.C. 191

Mrs. Mary Crews POINDEXTER and Mary Elizabeth Poindexter
v.
The FIRST NATIONAL BANK OF WINSTON-SALEM.

No. 384.

Supreme Court of North Carolina.

May 23, 1956.

Eugene H. Phillips, Winston-Salem, for plaintiffs, appellants.

Dallace McLennan, Ratcliff, Vaughn, Hudson, Ferrell & Carter, Winston-Salem, for defendant, appellee.

HIGGINS, Justice.

In passing on the question of nonsuit this Court is required to accept and interpret the evidence offered in the light most favorable to the plaintiffs. If there is conflict in the evidence, or if it is susceptible of more than one interpretation, these must be resolved in the plaintiffs' favor. Williamson v. Clay, 243 N.C. 337, 90 S.E.2d 727; Marshburn v. Patterson, 241 N.C. 441, 85 S.E.2d 683; Singletary v. Nixon, 239 N.C. 634, 80 S.E.2d 676.

Applying the recognized tests, did the plaintiffs introduce enough evidence to entitle them to have the jury pass on their claim of loss by reason of the failure of the defendant properly to discharge its duty as administrator of the estate of Nat S. Poindexter? Under the law of this, as well as other jurisdictions, an administrator is not an insurer of the assets committed to his care in the settlement of his decedent's estate. In the ordinary course of the administration all that is required of him is that he act in good faith and with such care, foresight and diligence as an ordinarily sensible and prudent man would act with his own property under like circumstances. Turnage v. Worthington, 204 N.C. 538, 168 S.E. 823; Tayloe v. Tayloe, 108 N.C. 69, 12 S.E. 836; Syme v. Badger, 92 N.C. 706; Patterson v. Wadsworth, 89 N.C. 407; Green v. Rountree, 88 N.C. 164.

The plaintiffs contend it was the duty of the administrator to liquidate the assets of the estate and that it had no right to operate a furniture business with plants in Winston-Salem, Hickory, Thomasville and Troy. G.S. § 28-73 provides: "Every executor and administrator shall have power in his discretion and without any order, except as hereinafter provided, to sell, as soon after his qualification as practicable, all the personal estate of his decedent." G.S. § 28-190 provides: "When any person shall die while engaged in farming operations, his executor or administrator shall be authorized to continue such farming operations until the end of the current calendar year, and until all crops grown that year are harvested."

In the absence of statutory provision, it seems that a personal representative may also carry on a business (1) where a binding contractual obligation made by the intestate so requires; (2) where a temporary operation is necessary to prepare the assets for sale as a going concern or for liquidation; (3) when authorized by the court. The clear implication is that subject to these exceptions it is the duty of an administrator to proceed with dispatch to liquidate and settle the estate. Schuler, on Executors and Administrators, paragraph 325, 2d Ed., states the rule: "An administrator is not justified in placing or leaving assets in trade for this is a hazardous use of trust monies and trading lies outside his scope." The rule is stated in Am.Jur., Vol. 21, Sec. 255, pp. 518 and 519, as follows: "The characteristic duty of the personal representative of a decedent is the settlement of his estate * * * it is no part of his duty as an administrator to carry on a business conducted by the decedent; but it is on the contrary * * * a breach of trust for a personal representative of a decedent to carry on a trade or business on behalf of an estate. Accordingly, it may in general be said that unless expressly authorized by statute, by an order of court, by the will of the decedent, or by the terms of a partnership agreement, neither an executor nor an administrator has any authority or power to continue the estate of his decedent in trade or business enterprise engaged in by him at the time of his death except for the purpose of disposing of his stock in trade in order to settle the estate or by disposing of the business of a going concern. The personal representative of a deceased person may, in order to settle speedily an estate, continue a business for a reasonable time and sell the stock in the ordinary course of trade, but he cannot without specific authority undertake generally to carry it on." In support, the decisions of courts of last resort in many jurisdictions are cited in the footnote.

It may be stated as a general rule, an administrator is relieved of responsibility for loss to the estate if he acts honestly, with ordinary care, and within his authority. If he acts without authority, he is responsible for loss to the estate which proximately results from his unauthorized acts.

It is generally the practice of this Court when a judgment of nonsuit is reversed and the case sent back to the Superior Court for trial on the merits, to discuss the evidence only to the extent necessary to give the reason for the decision. This Court does not attempt to pass on the credibility of the witnesses or to reconcile conflicts in the evidence. The matters set up in the defendant's answer, including its plea of estoppel, are not now pertinent to this decision. Such matters are for the trial court. We conclude the plaintiffs offered evidence sufficient to entitle them to present their case to the jury. To that end the case is sent back to the Superior Court of Forsyth County for hearing on the merits.

Reversed.

DEVIN, J., took no part in the consideration or decision of this case.