McGaughey v. Jacoby

54 Ohio St. (N.S.) 487
Ohio Supreme Court·Decided April 28, 1896·Published

Opinion

Williams, C. J.

The rule of the common law, that the appointment and qualification of a debtor as the executor of his creditor ’ s estate, operated as a legacy of the debt and discharged the executor from its payment, never obtained in this state. On the contrary, it has been' the established law from an early period, that the debt becomes assets with which the executor is chargeable, and at its maturity is treated as paid, and thereafter as so much money in his hands, for the faithful administration and distribution of which, in accordance with the law and the will, the sureties on the executor’s [498]*498bond, are responsible. Tracy v. Card, 2 Ohio St., 431; Hall v. Pratt, 5 Ohio, 73; Bigelow v. Bigelow, 4 Ohio, 138. That rule was carried into the legislation of the state as early as the administration act of March 2, 1840, and has since continued to be a statutory regulation governing the accountability of executors, and the liability of their sureties. The provision is now embraced in section 6069 of the Revised Statutes, which declares, as did section 66 of the act of 1810, that: “The naming of any person executor, in a will, shall not operate as a discharge or bequest of any just claim which the testator had against such executor; but such claim shall be included among the credits and effects of the deceased in the inventory and the executor shall be liable for the same as for so much money in his hands at the time such debt or demand becomes due; and he shall apply and distribute the same in payment of debts and legacies and among the next of kin as part of the personal estate of the deceased. ’ ’

The indebtedness of the executor to the testator being regarded by the law as so much money in his hands, and assets in' that form, with which he is chargeable in the administration of his trust, its proper application and distribution by him to the parties entitled thereto, is a duty coming within the conditions of the bond which the executor is required to give, and for the performance of which the sureties undertake to be responsible; so that, their liability for his failure to make faithful administration of that fund is within the express terms of their obligation. That this is so as a general rule is not disputed; but it is claimed an exception exists, or should be made, where the executor is insolvent at the time of his appoint[499]*499ment and continues to be so until the final settlement of the estate, for the reason, as it is said, that it would be a hardship on the sureties in such a case, to hold them for the executors individual debt to the testator, when they contemplated and intended no further responsibility by their obligation of suretyship than that for the performance of his duties in the administration of the actual assets which are within his control; and in that respect, his indebtedness to the testator is, or should be, on no different footing from that of other debtors. This claim was made in Tracy v. Card, supra, where the court, untrammelled by any legislation on the subject, and free to adopt a rule which would seem most salutary, declined to sanction the exception contended for; and it has never found its way into our legislation. The statute declares, in explicit terms, that in the administration of his trust the executor shall be liable for any indebtedness of his to the testator, “as for so much money in his hands” at the time it becomes due, and “shall apply and distribute the same in the payment of debts and legacies, and among the next of kin as part of the personal estate of the deceased. ” The language includes all executors indebted to their testator, imposes the same duties upon all alike, and applies the same rule to all without distinction between those that are solvent and those that are insolvent, or on account of any circumstance or' condition whatever . If such distinction, or any distinction had been intended, it could easily have been made, and would have readily occurred to the legislative body, especially in view of the previous decisionsof the court establishing the same rule declared by the -the statute. The failure to make the distinction sug[500]*500gested, would therefore seem to have been intentional; but if it were not, the courts cannot supply the omission, without a manifest encroachment upon the province of the legislative body. Sureties on the bonds of executors, like other sureties, are presumed to contract in view of the law in force at the time controlling their liability, and it is not a hardship to hold them to the obligation which the law attaches to their undertaking whpn it is entered into, in any other sense than that a security debt is a hard debt to pay. The penalty of the bond is fixed bjr the court g’ranting testamentary letters, with reference to the probable amount of the estate to be administered, and the securities are advised thereby of the extent of their liability, and of its nature 'by -the conditions of the bond; and the rule declaring their liability for the executor’s indebtedness to the testator, as money, has been so long and uniformly adhered to, that its enforcement now cannot with propriety be characterized as a hardship or injustice.

It may well be doubted whether the statute, with a provision like that sought to be engrafted upon it, would be as just and wholesome in its operation, as it now is without it. As the executor cannot sue himself, and all resort to legal process and proceedings for the eollection'of the debt owing by him to the testator is cut off by his appointment, in every case where his insolvency, total or partial, should be asserted for the relief of his sureties, an investigation into his financial condition during the continuance of his trust would become necessary, in which he would occupy the conflicting relations of the representative of the estate, charged with the duty of diligence in its behalf, and of a debtor, whose interest [501]*501it would be to escape the payment, of his debt, and save his sureties therefrom. Such an inquiry, with the difficulties that must necessarily be encountered, would at best be an unsatisfactory and inadequate substitute for the remedies ordinarily afforded by the law for the enforcement of the collection debts. At all events, the uniformity and certainty of the rule as we find it established, has commendedit to both the legislature and the courts as the sounder and safer one, and, as said by Thurman, J., in Tracy v. Card, supra, if it had proven otherwise, “it would not have stood unquestioned so long.”

Nor is the rule qualified or affected by section 6181, of the Revised Statutes, which provides that; “No executor or administrator shall be accountable for any debts inventoried as due to the deceased, if it shall appear to the court that they remain uncollected without his fault.” Debts due from the executor to the testator, are, by force of section 6069, transmuted into money in his hands, and being so, in the language of the court in Hall v. Pratt, supra, “no act of the parties can return them back to an obligation;” so that, they cannot be classed with uncollectible nor uncollected debts, within the purview of section 6181.

The principal contention of the defendants in error is, that they did not become liable on the bond of Jacoby’s executor, or were discharg-ed from liability thereon, on account of his fraud in obtaining their signatures to it, as alleged in the answer; and the case of Campbell v. Johnson, 41 Ohio St., 588, is relied on in support of this contention.

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McGaughey v. Jacoby, 54 Ohio St. (N.S.) 487 (Ohio 1896).

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