Wilson v. . Pearson

9 S.E. 707, 102 N.C. 290

• Court: Supreme Court of North Carolina
• Decided: February 5, 1889
• Status: Published

Opinion

Davis, J.

(after stating the case). The purpose of this action is to recover a debt originally due by note, under seal, executed by W. F. McKesson, with Charles McDowell and James McKesson as sureties. Actions to recover this debt have been pending in some form, against parties sought to be held liable for its payment, since March, i860. After various amendments and many irregularities and inconsistencies in the pleadings, which perhaps would have been fatal to the action if objection had been taken and insisted upon in apt time, but which were either waived'or cured by amendments, it has now assumed ,the simple character oí an action against the representative of the only solvent surety on the administration bond of N. W. Woodfin, administrator of Charles McDowell, for a devastavit and misapplication of assets.

In one form or another its subject-matter has been frequently before this Court, as will be seen by reference to 64 N. C., 154; 82 N. C., 464; 83 N. C., 309; 85 N. G, 34; 92 N. C„ 717, and 101 N. G, 428.

When it was here at February Term, 1885 (92 N. G, 717), Ashe, J., characterized the record, “interspersed with its numerous amendments,” as “ obscure, inconsistent, and voluminous,” and after the new trial granted at that term, and to meet the defects then suggested, it was again amended (both the complaint and the answers), and to the order allowing the amendments there was, at the time, no objection— certainly no exception noted and no appeal taken or right of appeal reserved, and whether the amendments ought or ought not to have been allowed are not now questions for our consideration.

It is said by counsel: “The plaintiff had complained; Pearson had- answered by demurrer; no reply thereto had been or ought to have been filed for three years; this was the end to the pleading between them.” This might have been so, but for the fact that at the first term after the demurrer was filed (September Term, 1883), by consent, the complaint was amended, an answer filed, there was a trial, a judgment and an appeal to the Supreme Court. That the demurrer (if not passed -upon) was thus waived, it seems too plain to need the support of authority.

It is insisted by counsel for the defendant that “ the reference in this action was compulsory and irregular, because it prescribed a determination of the matters pleaded in bar, to-wit: the statute of limitations; that the action was brought in the wrong n'ame; the pendency of another action between the same parties and for the same purpose at the commencement of this action, and the existence of a judgment quando and for this he cites numerous authorities.

The authorities cited clearly show, and it cannot be questioned, that the defendant had a right to have angplea in bar passed upon, before the reference was ordered, but, if he wished to avail himself of that right, it teas his duty to have insisted upon it before the reference was ordered. This is well settled Grant v. Hughes, 96 N. C., 177, and the cases there cited

- The order of reference was resisted by J. G. Bynum, administrator, &c., and the McDowell heirs, and was “ without prejudice as to them,” but there was no objection by the defendant Pearson, and as to him, it “was equivalent to assent and a waiver.” Grant v. Hughes, supra.

But it is insisted that when the order of reference was made, the defendant Pearson could notobject, because there “was no case stated ” as against him, as that was settled by the judgment quando. One of the objections now urged against the reference is that the question, whether there was a judgment quando, was, among others, not passed upon before the reference was ordered.

But the defendant was a party to the action, máde no objection to the order, and the very purpose, and the only purpose of the reference, was to ascertain whether the assets in the hands of Woodfin, administrator, &c., (to whose bond the defendant’s testator was surety) had “ been exhausted or legally applied,” and if he assented to .the order of reference, or made no objection and took no appeal, as he had a right to do, he cannot now be heard to object.

The same may be said in regard to the amended complaint of August 6, 1886. If the defendant had any objection to the order allowing the amendments, it should have been then taken.

But it is insisted that the “referee treated this action as one against this defendant brought on Woodfin’s administration bond,” and the Court had no right to “ permit an amendment which changes the nature of the action, makes a misjoinder of causes of action inconsistent in themselves, and inconsistent with the action originally begun, and with the admissions of the complaint.”

The defendant’s testator, R. M. Pearson, was made a party defendant in the creditor’s action instituted by Michaux and others, and also in the action brought' in June, 1874, by W. M. Walton, on the administration bond of N. W. Woodfin, in both of which the recovery of the debt now sued on was attempted, and when this action was brought the present defendant, his executor, was made a party defendant.

If liable at all, it could only be on the administration bond, and so far as the defendant is concerned, no action could be brought except on the administration bond. However defective the original complaint may have been in failing properly to allege a cause of action against the defendant, and in failing to demand, specifically, judgment against him, the purpose of the action has been apparent. The defendant was made a party with the heirs-at-law for some purpose, and allegations in the complaint show what the purpose was.

It is alleged that Charles McDowell died; that Woodfin was appointed his administrator; that the defendant’s testator was surety on his administration bond ; that McDowell, in his life-time, was one of the sureties to the debt for the recovery of which this action is brought; that all the per sons or their estates liable for said debt, except McDowell’s estate, are insolvent, and that no part of the debt has been paid; and, by an amendment by consent of all parties, for the purpose of ascertaining whether the assets in the hands of Woodfin, administrator, &c., have been legally applied or exhausted, an account is asked for, to the end that, if it shall appear that there was a devastavit, the plaintiffs may have judgment against the defendant Pearson, executor, &c.

The defects in the complaint were not such as, in the absence of objection, to defeat the action altogether, and when amended by consent or without objection, as they were, they were cured.

The original administration on the estate of Charles McDowell was granted prior to the 1st day of July, 1869v and, except so far as relates to the courts having jurisdiction, “is to be dealt with, administered and settled according to the law as it existed just prior to that date.” The Code, §§ 1433 and 1476.

According to the law as it then existed, a creditor in a court of equity could, by a proper bill, obtain an account of the personal and real estate of his deceased debtor and have a decree for the payment of his debt, out of the proper fund. Martin v. Harding, 3 Ired. Eq., 603 ; Finger v. Finger, 64 N. C., 183. Of course, in such an action it would be necessary to have the real as well as the personal representative before the Court, and the one or the other would be charged with the payment of the debt, as, upon the statement of the account, it might appear that the one or the other was liable.

This action may be treated as a bill to ascertain, by an account, whether the real or personal representatives of Charles McDowell are liable for plaintiffs’ debt, and this seems to have been the view taken in this Court, when the judgment was reversed at February Term, 1885 (92 N. C., 717, and cases there cited).

There 'was but one cause of action in the original complaint, or as amended, and that was the liability of the estate of Charles McDowell for the plaintiffs’ debt, and if liable, whether that liability should rest upon the personal or real representatives, required the equitable aid of the Court to determine. After the amended answer of the heirs of Charles McDowell, in which it appeared that there had been an absolute judgment final, fixing liability upon the personal representative, the plaintiffs very properly abandoned all claim as against them, and sought judgment against the defendant only.

The amended complaint was a reply and not an amendment, so far as it related to the amended answer of the McDowell heirs, admitting the truth and effect of their amended answer; but so far as it related to the defendant Pearson, executor, &c., it was an amendment, alleging, directly, that Woodfin, administrator, &c., had distributed and wasted assets applicable to the payment of their debt, and that the sureties on his administration bond were liable, &c. No new cause of action was alleged, but so far as the heirs of Charles McDowell were concerned, it was conceded that when the record of the judgment in the Supreme Court was filed, that they were not liable, and that no judicial decree was necessary as to them, and the action was thereafter against the defendant Pearson, executor, alone.

It is not the least singular fact connected with this action, the record in which one of our predecessors said “ constituted a moderate sized volume,” and which, we may add, has, with its age, greatly increased its proportions as well as its “irregularities, obscurities and inconsistencies,” that the judgment of the Supreme Court at January Term, 1870, should have been so strangely overlooked by counsel on all sides. We do not know how to account for it, unless it be to prove by the exception the truth of the utterance of the wise man, that “ in the multitude of counselors there is safety,” for in looking through the record it will be seen that there have been more than a score of counselors engaged, at one time or another. It may be, however, as they were not all engaged at the same time, the confusion resulted from a failure on the part of succeeding counsel to properly apprehend the plan of attack and defence arranged by their predecessors.

The first exception relied on was the 5th, and it may be considered with those numbered 6, 10,11, &c. These exceptions rest mainly upon the assumption that the judgment rendered at Fall Term, 1869, of Burke Superior Court, as amended by order of Judge Cloud at Spring Term, 1878, was a judgment guando, and conclusive as to all questions relating to assets and devastavit prior to that time, and that all the- evidence objected to was irrelevant.

Much of the very elaborate and learned brief of Mr. Sond-ley, which does great credit to his ability as well as to his industry, relates to the effect of the judgment guando, and the power of Judge Cloud to make the amendment. Whatever may have been the power of the'Judge in regard to the record of the Superior Court (and he unquestionably had the power to amend the record properly in that Court), he certainly had no power to make any amendment that would affect the records of this Court, and (though it seems not to have been known) the final judgment was in this Court. The appeal having been taken,There was no judgment in Burke Superior Court which the Judge could amend, and we regard all questions relating to this branch of the case as settled by the decision of this Court directly upon the question— Walton v. McKesson et al., 101 N. C., 428 — and we content ourselves with reference to it.

It is insisted, however, that it is settled in Walton v. Pearson, 85 N. C., 34, that Judge Cloud had the right to make the amendment in the Superior Court of Burke, so as to declare it a judgment guando, and that this is conclusive. However this might have been as a question of) res adjudícala, if judgment had been entered in that case in conformity with the opinion of the Supreme Court, it was not done, and a judgment of “ nonsuit” was taken by consent, or without objection, and a new action brought; and it now appears that there had been an appeal from the judgment sought to be amended by Judge Cloud, and a judgment absolute and final in this Court, which facts did not appear when this case was before the Court at October Term, lb81 (85 N. C., 34).

But it is insisted that the plaintiffs are estopped b'y their allegations, in seeking to subject the real estate to the payment of their debt, from alleging a devastavit, Ac. As we hare seen, this is an action equitable in its nature, and the plaintiffs had a right to have an account in order to ascertain whether- the real or personal representatives of Charles McDowell were chargeable with the payment of their debt, and if there was any inconsistency in the allegations it was cured by the amendments, and the very purpose of the account was to determine whether there was or was not a devastavit.

But it is said that an action for such a purpose could only be brought in the name of the administrator de bonis von of Charles McDowell.

It is undoubtedly true, as the authorities cited by the defendant abundantly show, that, nothing else appearing, the action should have been in the name of the administrator de bonis 'non. This is well settled in this State, though a different rule prevails elsewhere. See Merrill v. Merrill, 92 N. C., 657, and the cases there cited; also Tulburt v. Hollar, at this term. But it is in this case found as a fact that the administrator de bonis non was, “ before the institution of this suit, requested by plaintiffs to bring suit to collect the assets of his testator’s estate to pay their debts, but refused to do so without indemnity against costs.” He was a necessary party, either as plaintiff or defendant, and whether under sec tion 185 of The Code, or under the old equity practice, he could be made a party defendant. Smith v. Sheppard’s Heirs, 2 Hay., 163 (349); Hardy v. Miles, 91 N. C., 131; Lunn v. Shermer, 93 N. C., 164, and cases cited. Besides, the alleged defect appearing upon the face of the complaint, if relied on, it should have been by demurrer. Lunn v. Shermer, supra; Davidson v. Elms, 67 N. C., 228.

Under the old equity practice, all parties whose rights or interests were involved were required to be brought in, and now creditors may bring special proceedings against the personal representatives (The Code, § 1448); and if it shall appear at any time that the’personal assets are insufficient, the heirs or devisees may be made parties. The Code, 1474.

It is insisted that when this action was commenced, February 8, 1883, another action was pending between substantially the same parties and for the “ same cause of action as this,” and that the “ nonsuit” taken in that action, in vacation, February .6, 1883, and also the “ nonsuit” taken thereafter at the February Term, 1883, were void. At Spring Term, 1882, it was agreed in writing, “by consent of all parties,” “ that the plaintiffs have leave to take a nonsuit and enter the same in vacation, between this and Fall Term, if they desire.” This was not done, but, without objection, there was a “ nonsuit ” entered at Spring Term, 1883, nunc pro time, as of Fall Term, 1882.

Whether this was to carry out the written agreement of the parties, made at Spring Term, Í882, or not. it was, in effect, as much a part of the proceedings of Fall Term, 1882, as if then made, and the defendant cannot impeach it now collaterally.

The 7th exception was properly overruled. It is based, it seems, upon the misapprehension that the action was brought on a judgment, whether quando or not, and that the amendment of August 6, 1886, introduced a new cause of action; whereas, the only cause of action against the defendant, from the issuing of the summons, was on the administration bond, and this sufficiently appeared, though indefinitely stated, in the first complaint; besides, there was no objection to the order allowing the amendment.

The plaintiffs’ action, so far as the defendant is concerned, is for a breach of the administration bond, in distributing and wasting the assets without paying plaintiffs’ debt; the judgment was evidence — not the cause of the action. Being a judgment absolute, it fixed Woodfin, administrator, &c., with assets.

The 8th exception relates to the order of reference, and has already been disposed of.

The 9th exception, relates to the first finding by the referee. The finding is fully sustained by admissions in the record, the fact found is alleged in the complaint, it was within the scope of the order of reference, and there was no evidence that the bond was paid, and the exception was properly overruled. The assignment carried with it whatever interest Walton had.

The 12th exception relates to the 9th finding of fact. The finding was material, -in that it was proper that the action should have been brought in the name of the administrator de bonis non, unless he declined or failed to do so after request, when he might be made a party defendant. It was within the' scope of the reference, it was supported by evidence, the defendant Bynum having testified that he never intended to bring any suit on Woodfin’s bond unless indemnified.

But, as already said, the objection relates to a party to the action, and this appearing on the face of the pleadings, should have been taken by demurrer, so, in any event, the fact found could not be objectionable.

The 22d and 23d exceptions are to the 17th and 18th findings of fact. Both findings were clearly within “ the prov- iace of the referee,” and as to the 18th, there has been no adjudication to the contrary,” as the judgment was absolute and not quando.

The 32d exception is to a failure of the referee to find a conclusion of law which was not within his province; and the exception was properly overruled.

The 33d exception relates to the admission of the testimony of Folk. Plis testimony covers eight pages. No exceptions were taken at the time, either to the competency of the witness or the admissibility of his evidence, and this broad exception cannot be considered. It is proper, however, to.state that the defendant, being a party to the action, is charged with a knowledge of what transpired, and was made of record in its progress, and he is bound by the pleadings and admissions of fact filed in the cause. Folk was his counsel of record, and he was charged with a knowledge of that fact, as well of the pleadings and admissions filed.

We are unable to see the force of the 34th exception. It does not specify the testimony objected to, and there is nothing to direct our attention.

The 35th 'exception is that the 18th finding of fact and the 6th conclusion of law are inconsistent. The fact that assets, wasted by Woodfin, administrator of Charles McDowell, ought to be in the hands of the defendant J. Gf. ■Bynum, administrator de bonis non of Charles McDowell, is not inconsistent with the legal conclusion that the plaintiffs are entitled to have their debt paid by those liable for the wasted assets, which were applicable to the discharge of the debt; and as they are not in the hands of the present personal representative, the plaintiffs can (he having failed to collect them) maintain an action against him and the sureties on his predecessor’s bond, to subject them to the payment of their debt.

It is insisted that the note on which action was brought in 1868 was the original cause of action, and that it was merged in the judgment rendered at Fall Term, 1869, of Burke Superior Court, and is barred by the statute of limitations. This is a misapprehension. As to the defendant Pearson, this action is on the administration bond of Wood-fin, to which his testator was surety. When the case of' Walton v. Pearson was before this Court, 1881 (85 N. C., 34), it was said: “ The defendant insists tha^t, having obtained a judgment against all the makers of his note, it became merged in the judgment, as being a security of higher dignity, and could not therefore constitute a good cause of action in any suit subsequently instituted, and heñce he argues that the plaintiffs can only complain of the non-payment of the judgment as a breach of the administrator’s ■ bond,, and as that was obtained in 1869, the case falls under section 34 of C. C. P. (The Code, § 155), which limits actions against the sureties of executors, administrators and guardians on the official bond of their principal to three years after the breach thereof complained of. We cannot yield our assent to the position assumed by the defendant or the conclusion he deduces therefrom. Every administrator owes the duty of faithfully administering the assets that come to his hands, and any default in that duty constitutes a breach of his official bond, which then and there gives to the creditors and others interested in a proper administration a sufficient cause of action against him and his sureties; and this breach of his bond can be cured only by a full satisfaction or by a release. Very sure it is, we think, that it cannot be cured, or in any wise affected, by any change short, of actual payment, which may occur in the mere character of a claim against the estate. The dereliction of duty for which the administrator and his sureties are chargeable, and the one assigned, is the misapplication of assets of the estate-in December, 1859, by making distribution thereof amongst the legatees, without taking refunding bonds from them ; and the moment this occurred each creditor had a right, the plaintiffs among them, which right continued to subsist, notwithstanding his claim against the estate might subsequently assume the shape of a judgment.” It was then adjudged that, for purposes of action for breach of the administration bond, the doctrine of merger has no effect.

This action is on an administration bond executed in 1859, and for a breach prior to August 24,1868, and the statute of presumptions, and not the statute of limitations, applies. The Code, § 136.

The question of the statutory bar is settled by'the case in 85 N. C., 34, and this action was brought' within less than one ¡year alter the nonsuit taken in that case. But the statute only raises a presumption of payment, which may be, as was, rebutted.

The original action to recover this debt from the McDowell Restate was within ten years (deducting the time during which the statute was suspended), and it has been persistently pressed ever since; for immediately after the last “ nonsuit,” a new action was commenced, and if such a thing as continual claim could rebut a presumption it would avail in this case. The continued pendency of actions, less than, a year intervening after nonsuit, defeats the plea of the statute.

The defendant moves in this Court to dismiss the action because, the bond being payable to the State, the action should have been in the name of the State, and insists that this defence was taken before Boykin, J., in the trial below; and in answer to this motion, the plaintiffs move to amend so as to sue in the name of the State to the use of the present plaintiffs, and insist that the objection is taken here for the first time.

The objection does not go to the. merits of the case, and, without passing upon the conflicting affidavits, we think the case a proper one, under § 965 of The Code, for the exercise of the power of amendment, and the motion of plaintiffs is allowed Grant v. Hughes, 94 N. C., 760.

But, for this amendment, the plaintiffs must pay the entire costs-of the action. Under the peculiar circumstances that have marked the progress of the cause, we think it is proper that they should be required to do so.

We think, upon an examination of the record, that there is no error in the ruling of his Honor below, and the judgment is affirmed.

No error. Affirmed.