Broderick v. Reid

139 S.E. 18, 164 Ga. 474, 1927 Ga. LEXIS 215
CourtSupreme Court of Georgia
DecidedJune 18, 1927
DocketNo. 5755
StatusPublished
Cited by38 cases

This text of 139 S.E. 18 (Broderick v. Reid) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Broderick v. Reid, 139 S.E. 18, 164 Ga. 474, 1927 Ga. LEXIS 215 (Ga. 1927).

Opinion

Gilbert, J.

This case, on preliminary phases, has been twice before us. Columbia Drug Co. v. Reid, 158 Ga. 375 (123 S. E. 269); Broderick v. Reid, 159 Ga. 395 (126 S. E. 15). After an examination of the case made by the present record, we affirmed the judgment of the trial court, directing a modification in one respect. Before the remittitur was sent out, a motion for rehearing was filed. We granted a rehearing to clarify one of the rulings, and in order to deal specifically with an assignment of error made by the Columbia Drug Company. The opinion and the headnotes as originally prepared have been withdrawn, and the case is now decided upon the whole record in the light of the motion for rehearing.

The evidence authorized the findings that J. .H. Reid died intestate in January, 1917, owning a retail drug-store, the liabilities of which exceeded its assets; that for about four years prior to the death of J. H. Reid, E. E. Broderick had managed the business under a power of attorney; that after the death of Reid, Broderick continued to manage the business for about two years, under an agreement with the deceased, and later with the heirs, that the business would eventually be given to a son of Broderick; that the purpose of continuing the business by Broderick was to free it from debt as far as possible, to the end that it might become of some value to his son; that such plan was later changed, the son deciding to become a physician and not to take over the drugstore; that then Broderick advised R. S. Reid, brother of the deceased, of his desire to be relieved of the burden of managing the business, and suggested that R. S. Reid become administrator; that R. S. Reid was duly appointed temporary administrator, and obtained from the ordinary a judgment authorizing him to continue [481]*481tbe business as a “going concern” for the purpose of making a. sale thereof; that Eeid was never appointed permanent administrator; that among the debts due by J. H. Eeid just prior to his death, and while the business was managed by Broderick, was an amount due his bank; that it became necessary to secure funds with which to continue the business and to protect the credit of the concern at the bank, and accordingly E. S. Eeid and E. E. Broderick became indorsers on a note or notes for the amo ant due the bank; that at the death of J. II. Eeid this indebtedness existed, and thereafter the bank pressed its claim upon the indorsers, and thereupon a new note for $6,425.16 was executed as a renewal, Eeid alone signing as indorser, Broderick having declined to do so; that Broderick retired from the management, and Eeid began to direct and manage; and that after the management was turned over to Eeid by Broderick, the former reduced the indebtedness on said note to $3200. Eeid distributed, equally to the heirs, the insurance collected on the life of J. H. Eeid, amounting, after payment of funeral expenses, to $2800, donating one half of the $700 due him to E. E. Broderick.

The general rule, varied in some States by statute, is well settled that an executor or administrator who carries on a business or trade on behalf of the estate without being empowered by law to do so becomes individually answerable for all debts contracted by him while so engaged. Robert v. Tift, 60 Ga. 566; Stephens v. James, 77 Ga. 139 (3 S. E. 160). In this State there are certain statutory exceptions, but they are not applicable to the present case. Civil Code (1910), § 4012. The above rule is especially applicable, forbidding a temporary administrator to carry on such business or trade. Irvine v. Wiley, 145 Ga. 867 (90 S. E. 69); Henry v. Collins, 155 Ga. 886, 891 (118 S. E. 729), and cit. Substantially all of the authorities, however, agree that there are exceptions to the foregoing rule, or perhaps it is more accurate to say there are instances where the rule does not apply. Compare Hosher v. Fitzpatrick, 146 Ga. 525 (6) (91 S. E. 780). The authorities cited by plaintiff in error in the course of the discussion of the subject mention such cases. See 11 R. C. L. 142, § 149; 24 C. J. 59, § 3. The case of Swaine v. Hemphill, 165 Mich. 561 (131 N. W. 68, 40 L. R. A. (N. S.) 201), involved facts constituting such an instance. The facts in some particulars are strik[482]*482ingly like those in the present case. The business of the deceased was carried on, by the consent of the heirs, for a number of years. During some of these years the business was successful, and no complaint was made by the heirs. Afterwards, due to causes not within the control of the administrator, the business incurred losses, and then the heirs made complaints. Also, as in the present case, there were interested minors. The case was decided by the Supreme Court of Michigan, and was very fully considered. In the report in 40 L. R. A. (N. S.) are elaborate annotations in which authorities are collected, establishing the general rule and the exceptions. In the opinion is found a quotation from an opinion written by Mr. Justice Cooley in the case of Brown v. Forsche, 43 Mich. 492 (5 N. W. 1011), as follows: “Formal proceedings for the settlement of an estate are never necessary if all parties concerned cazi agree-to dispense with them. [Citations.] Family arrangements for this purpose, it is said, are favorites of the law, and, when fairly made, are never allowed to be disturbed by the parties, or by any others for them. . . Such an arrangement may be made after an administrator is appointed, as well as before; and if the administrator is afterwards summoned to render his accounts, the court will accept as satisfactory, so far as it goes, the settlement the parties concerned have made.” As to family agreements as a consideration for contracts of settlement, see Belt v. Lazenby, 126 Ga. 767 (3) (56 S. E. 81).

The same principle' is laid down in Merkel’s Estate, 131 Pa. 584 (18 Atl. 931), in which-the principle applicable to the exception is applied to creditors. So far as it has been observed, these authorities in discussing the acts of administrators we assume had reference to permanent administrators. Since permanent administrators can not carry on the business or trade of the estate without first obtaining permission from the ordinary, it appears that in the absence of such permission the same rule applies as to temporary administrators. Certainly in this State temporary administrators have no such authority as a matter of law. If the temporary administrator in this case depended for his protection upon any authority under the law as administrator, it would necessarily follow that judgment would have been rendered against him. He claims authority, however, not under any such authority givezi him by law as administrator, but solely by reason of the con[483]*483sent of all the interested parties, heirs at law and creditors. He went through the form of obtaining authority from the ordinary. If he had rested there, such effort would have availed him nothing. The order does tend to show his good faith in the matter. He asserts that all interested parties consented. If so, such authority does not rest on the appointment as temporary administrator, but rests upon the consent of all heirs and the conduct of creditors in extending credit to Eeid as temporary administrator of the estate of J. H. Eeid. The auditor found, under the evidence, that there was such consent and course of dealing by the creditors.

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Bluebook (online)
139 S.E. 18, 164 Ga. 474, 1927 Ga. LEXIS 215, Counsel Stack Legal Research, https://law.counselstack.com/opinion/broderick-v-reid-ga-1927.