DEFENDANTS' APPEAL. Green Stancell died in January, 1862, leaving a last will and (208) testament, in which no executor was named, and at March Term, 1862, of the Court of Pleas and Quarter Sessions of Northampton County, S. T. Stancell and L. D. Gay were appointed administrators, with the will annexed, and executed bond in the sum of $125,000, with *Page 187 Edmund Jacobs and J. M. S. Rogers as sureties. Both these sureties are dead and the defendants are their administrators.
S. T. Stancell died in 1873, and R. H. Stancell, one of the plaintiffs, is his administrator, and L. D. Gay, the surviving original administrator of Green Stancell, is also one of the plaintiffs in this action, which is brought by the devisees of Green Stancell, against the defendants, administrators respectively, of Edmund Jacobs and J. M. S. Rogers, sureties on the original administration bond, for an account and settlement of the assets of the estate of Green Stancell, which were collected, or ought to have been collected by his administrators, etc.
By an order in the cause it was referred to Robert O. Burton, Jr., Esq., to state an account of the administration of S. T. Stancell and L. D. Gay, administrators, etc., of Green Stancell, deceased, and to find all issues of law and fact arising on the pleadings in the cause.
The referee made his report, charging the defendants with divers notes and accounts set out therein. The defendants filed numerous exceptions to the findings of the referee, which were passed upon by the court below. Those that were overruled are brought to this Court for review. We deem it necessary to state only the findings of fact in reference to the overruled exceptions and the ground of the exception; such of the items of the account reported by the referee, as are similar in character both as to findings of (209) fact and the ground of exception, will be considered together.
First Exception. — Defendants are charged with bonds of Sol Deloatch, Brittain Edward, and A. R. Deloatch. With reference to these bonds the referee finds (as amended by the court as to the last) that they were inventoried without designation, and no evidence was offered as to the condition of the debtors during the war or since; no efforts were shown to have been made during the war or since to collect, except that suit was brought to Spring Term, 1867, of Northampton Superior Court, and judgment rendered.
The defendants say that, as those bonds were placed in the hands of an attorney, due diligence was shown, and the "judgments unsatisfied" show insolvency, and they ought not to be charged with them.
There are no unpaid debts outstanding against the estate of Green Stancell, and this is an action by the devisees and legatees, and as there were no means of collecting debts during the war except in Confederate *Page 188 currency, and it appearing that no debts remain to be unpaid, the administrators would not be chargeable for not collecting in Confederate money, there being no necessity for so doing. It has been so held in Greenv. Barbee, 84 N.C. 69, and other cases.
It has been often held that an administrator is not an insurer of the estate committed to his charge. If he exercises the diligence and care in collecting and securing the assets of the estate which a prudent and faithful man would in the management of his own property, and losses occur which he could not prevent, he will not be charged with such losses. He is only required to be honest, faithful and diligent. Nelson v. Hall, 5 Jones Eq., 32; Hobbs v. Craige, 1 Ired., 332; Beall v. Darden, 4 Ired. Eq., 76;DeBerrey v. Ivey, 2 Jones Eq., 370; Keener v. Finger, 70 N.C. 35; Dortchv. Dortch, 71 N.C. 224; Moore v. Eure, ante, 11.
In Worthy v. Brower, 93 N.C. 344, it was held that an (210) administrator was not chargeable with bonds entered in his inventory and placed in the hands of an officer for collection, and it was also held in the same case that he was not to be charged with a debt in the absence of any evidence as to the solvency of the debtor. That case like the present had for its purpose the settlement of an administration account of transactions had during and just after the late war, and it is said that if the debt was good the collection of it was so obstructed "as to excuse the administrator for his delaying an effort to enforce payment, and if the debt could not have been collected, by reason of the debtor's insolvency, he is not of course responsible." See, also,Grant v. Reese, 94 N.C. 720.
The disturbed condition of the country during and after the war, the great loss in property and consequently in the value of credits, the obstructions interposed by legislation in the way of stay laws, the interference by military orders giving to debtors the opportunity of preferring such creditors as they might choose to favor, and like hindrances, etc., are matters of general knowledge, and it would be as contrary to right reason as to justice to ignore them in passing upon the accountability of fiduciaries who, by the exercise of the highest degree of good faith and diligence, were frequently unable to prevent losses which in ordinary times could easily have been prevented. Suits were brought against the debtors and the debts were reduced to judgments, and in the absence of any evidence as to the solvency of the debtors, the defendant ought not to be charged with those debts, and the first exception is sustained.
Second Exception. — The second exception embraces divers notes and accounts with which the defendants are charged, numbered 53, 54, 56, 57, 58, 59, 62, 63, 64, 65, 66, 67, 68, 69, 73, 74, 75, 76, 78, 80, 81, 82, 83, *Page 189 and 84, as to all of which the finding of the referee was that they were "inventoried without designation, and the bonds were not produced or their absence accounted for, and no evidence was offered (211) as to the condition of the debtors."
The exceptions of the defendants as to the report of the referee as to these items is as follows: "That he has charged the choses in action in full without scaling them, when they should have been scaled as of the date when due. He should have applied the scale as of January, 1864, two years after the qualification of the administrators. And as to 62 to 69 inclusive, the absence of the bonds is accounted for by exhibit `D,' which is ruled out as evidence against the infant plaintiffs to which defendants excepted."
Exhibit "D" referred to is an account of L. D. Gay and S. T. Stancell, administrators, etc., of Green Stancell, stated by N. R. Odom, "Clerk of the Superior Court and Judge of Probate of Northampton County," on 1 May, 1874, in proceedings instituted by S. T. Stancell and L. D. Gay, as administrators with the will annexed of Green Stancell, against the devisees and legatees of the deceased for the purpose of a final account and settlement. In that account (Exhibit "D") the debts referred to are included in the list of "Bonds due the estate of Green Stancell, deceased, not collected, the parties being insolvent."
As against the plaintiffs, who were infants, the court declined to admit the account contained in the record in the proceedings referred to because not having been properly made parties (Stancell Gay v. Gay, 92 N.C. 462) they were not bound by any judgment or fact found in that record.
The ruling of the court below is undoubtedly in accordance with the well settled general principle that the record cannot be used as evidence against persons who were not parties to it, and who were in no way bound by it, but under the peculiar facts in the case before us we think the rule in its ordinary strictness does not apply: The defendants are the administrators of the surety on the administration bond of S. T. Stancell and L. D. Gay. Neither they nor their intestates were (212) ever charged with the custody and control of any of the bonds in question. Neither L. D. Gay, one of the administrators for whose default the plaintiffs are seeking to hold his sureties accountable, nor the administrator of his deceased coadministrator, is a party defendant, but both occupy adversary relations to the defendants, being plaintiffs in this action, and to them would properly attach the duty of accounting for the existence or nonexistence of the bonds with the custody and disposition of which the administrators with the will annexed of Green Stancell were properly chargeable. They might reasonably be expected *Page 190 to be able to give some account of them; it is not to be presumed that the administrators of the deceased sureties, or that the sureties if living, would be able to do so without their aid. In addition to this, in the action and account in which the bonds in question are reported as not collected because of the insolvency of the debtors, the other plaintiffs in this action who were sui juris, were parties having an interest in common with the infants; and all these facts taken together are sufficient to reverse the ordinary rule which would devolve upon the defendants the burden of accounting for the bonds in question, and discharge them from liability therefor, in the absence of any affirmative proof that they were solvent or had been or could have been collected.
Recognizing in the fullest degree the fidelity, diligence and good faith to which the administrators and like fiduciaries are held, and recognizing further the general principle which would require them to account for all the assets which went into their hands, which general rule would require the administrators to account for the bonds in question, or show some sufficient reason for not doing so, or if they were solvent to account for the amount of them, unless they could show that due and reasonable diligence had been used, and they had failed to collect them, yet this general rule, which thus prima facie charges (213) administrators, is only one of evidence, from which the presumption of fact is raised, that they collected, or ought to have collected the bonds, and devolves upon them the burden of showing the facts to be otherwise if they wish to discharge themselves from liability, but under the circumstances of the case before us, it would be unjust to apply this rule to the defendants, who are the administrators of the sureties on the administration bond, and though the estate of their intestate is liable for any default of the principal obligors, they ought not, in a case like this, to have thrown upon them the burden of accounting for the absence of bonds which have been or ought to have been, under the control of one of the plaintiffs, and of the intestate of another, and in the absence of any evidence as to the solvency of the bonds in question, the defendants ought not to be charged with them.
No exception is taken to the fact that neither the surviving administrator, with the will annexed of Green Stancell, nor the administrator of the deceased coadministrator are made parties defendant, but appear on the side of the plaintiffs in an action against the administrators of the deceased sureties on the administration bond, but it presents the anomaly of a suit by a principal on a bond against his sureties. Smith v. Bryson, Phil. Eq., 267.
The record shows that the administrator received and paid out money during the war. *Page 191
The exception to the refusal of the court to apply the scale as of January, 1864, two years from the qualification of the administrators cannot be sustained.
Third Exception. — This includes items Nos. 51, 52, 66, 72 and 86, as to which the finding was as follows: "Inventoried without designation (as to solvency). No effort to collect during the war. Suit brought to Spring Term, 1867, of the Superior Court, and judgment rendered. No evidence of debtor's condition." The exceptions in regard to these items must be sustained, for the reason given in considering the (214) first exception.
Fourth Exception. — Defendants were charged with Nos. 60 and 61, bonds of W. B. Stubblefield. The finding of the referee is: "Has been insolvent continuously since the administrators qualified. Bonds inventoried without designation. Bonds not produced nor accounted for." Exception: "For that the evidence shows notorious insolvency." For reasons already given this exception must be sustained.
Fifth Exception. — This is No. 71, with which defendants were charged, and in regard to which the finding of fact, as corrected by the court, is as follows: "This bond inventoried as doubtful. Bond not produced, or its absence accounted for. The debtor was insolvent." For reasons already stated this exception must be sustained.
Sixth Exception. — This is No. 89, bond of J. T. Branch, in regard to which the following facts are found: "Bond inventoried without designation. Debtor was solvent to the end of the war, but had the reputation of owing a good many debts. Ever since the war has been insolvent, but had considerable property, four thousand dollars. Suit brought to Spring Term, 1867, of the Superior Court, and judgment rendered. S. T. Stancell individually, by splitting up a claim of $1,400 into notes of $100 each since the war, made the entire claim. Claim could have been collected by due diligence."
The defendants' exception was as follows: "That upon the finding the defendants ought not to be charged, and the facts show due diligence."
As has been already stated, and for the reasons stated, the administrators would not be chargeable in the absence for any necessity for so doing, for not collecting during the war, during which time the debtor was solvent. Could they have collected the claim by due diligence after the war? That is, could they have collected it by any legal process? The referee (whose findings is sustained by the court (215) below) seems to base his findings upon the fact that, though the debtor was insolvent, S. T. Stancell, one of the administrators, made an individual debt of $1,400 out of him, by having it split up into new notes of $100 each. This fact shows quite conclusively that the collection *Page 192 of the $1,400 depended, not upon the power of S. T. Stancell to collect, but upon the willingness of the debtor to pay. He might be willing to pay one debt and not willing to pay another. Neither could be collected, as the delays of the law then were (we take judicial notice of this fact), out of an insolvent debtor who, though having property, might choose to pay one creditor in preference to another. Because the administrator collected an individual debt, which he was only able to do by the voluntary action of the debtor, must he be charged with a debt due from the same debtor to the testator, upon which he had to bring suit, and which he could not collect by law? If it be said that he should have used the same diligence in collecting the debt due the estate as his own, the answer is, that from the facts found, it did not depend upon his diligence or power, but upon the will of the debtor, and the administrator ought not to be charged, unless it was in his power, by due diligence, to collect. Would good faith forbid his collecting an individual debt (which he could not collect by suit) by the voluntary aid of the debtor, because he could not collect, without suit, a debt which he held in a fiduciary capacity? The delays thrown in the way of the collection of old debts by legislative discrimination, and by stay laws and ordinances, obstructed the power of the most diligent in collecting old debts; and though these ordinances and laws were unconstitutional, and so declared (Parker v. Shannonhouse, Phil. Law, 209; Jacobs v.Smallwood, 63 N.C. 112; Greenlee v. Greenlee, 63 N.C. 593), they still place it out of the power of the administrators to make an old debt out of an insolvent debtor, and the exception must be sustained.
(216) Seventh Exception. — This is to the charge of the account against E. C. Davis, No. 98, in regard to which the finding is as follows: "Inventoried without designation. Solvent during the war. Land sold in May, 1868, and has not had property sufficient to pay his debts since the war."
The defendants except for "that the finding shows that the defendants ought not to be charged."
For reasons applicable to this exception already stated, it must be sustained.
Eighth Exception. — Defendants are charged with a bond of N. Pruden, No. 102, in regard to which the finding is: "Bond inventoried doubtful. Bond not produced, or its absence accounted for." Defendants except, "For that upon the finding, they ought not to be charged."
This exception should have been sustained for reasons applicable already stated, and for the further reason that the bond, having been inventoried "doubtful," was not prima facie chargeable against these defendants. *Page 193
Ninth Exception. — This includes bonds Nos. 103, 104 and 105, with which defendants are charged, and in regard to which the findings is as follows: "Inventoried without designation. Solvent during the war. Land sold by sheriff in May, 1868. Has not had property sufficient to pay since the war. No effort shown by administrators to collect, except suit brought to Spring Term, 1867, of the Superior Court, and judgment rendered. Bond not produced or absence accounted for."
Defendants except, "For that upon the findings of fact, they ought not to be charged."
For reasons already stated and applicable to this exception, it must be sustained. It should have been stated, as one of the reasons for the nonproduction or absence of bonds in all cases in which suits were brought and judgments obtained, the judgments themselves accounted for the nonproduction of the bonds. They ought to have been canceled and filed as "specialties" with the judgments. (217)
Tenth Exception. — This exception embraces notes and accounts (Nos. 107 of S. T. Stancell, the deceased administrator, with regard to which the finding was as follows: "They were inventoried without designation. S. T. Stancell was insolvent from 1862 until his death, but was able to pay these claims. $1,400 were collected for him after the war from Joseph F. Branch, and from $5,000 to $6,000 were collected out of him by executions since the war, and $5,500 of assets came into the hands of his administrator."
Defendants except, "For that, upon the finding, they ought not to be charged with S. T. Stancell's indebtedness."
This exception cannot be sustained. Though there seems to be some conflict in the findings of fact, it was the duty of the administrator, when he had funds in his hands, to have discharged these debts. He could not sue himself — other creditors made their debts out of him by execution — he could have paid, and he was clearly chargeable. The defendants must be charged with these debts.
Eleventh Exception. — The defendants are charged (No. 108) with the value of certain personal property bought at the sale, 22 December, 1862, by the administrators S. T. Stancell and L. D. Gay, scaled as of the day of sale.
The defendants excepted, "For that the scale was applied as of the day of sale, when it should have been applied as of the day when the sale notes became due and collectible" — that is, six months later.
This exception cannot be sustained. The administrators had no right to purchase at all, and having done so, they were properly chargeable with the value of the property purchased by them on the day of sale.
Twelfth Exception. — This exception relates to the proceeds of the sale of land made by the administrators, with the will annexed, of Green *Page 194 Stancell, deceased, and though the writer had entertained a (218) different view of the construction of the statute empowering administrators, with wills annexed, to sell land devised to be sold, that question has been settled by the judicial construction put upon the statute by this Court, and the defendants' exception in relation thereto is disposed of in the plaintiffs' appeal.
The account will be modified in accordance with this opinion.
Modified and remanded.
PLAINTIFFS' APPEAL.