Joseph LICHTENFELS, Johanna L. Abrahams, Carolyn L. Green and Helen L. Gumpert
v.
NORTH CAROLINA NATIONAL BANK, a Corporation.
No. 96.
Supreme Court of North Carolina.
September 18, 1963.*362 Williams, Williams & Morris by Robt. R. Williams, Jr., Asheville, for plaintiff appellants.
Uzzell & DuMont by Harry DuMont, Asheville, and Adams, Kleemeier, Hagan & Hannah by Charles T. Hagan, Jr., Greensboro, for defendant appellee.
RODMAN, Justice.
All fiduciaries may be compelled by appropriate proceeding to account for their handling of properties committed to their care. When the fiduciary is an executor, administrator, collector, or personal representative of a deceased, he may, at the instance of an interested party, be compelled to account by special proceeding or civil action, G.S. §§ 28-122 and 28-147; or the court which appointed him may, ex mero motu, compel a proper accounting by attachment for contempt, G.S. § 28-118.
An executor or administrator is liable in his official capacity for breach of his duty to properly handle and account for the estate which the court entrusts to him. Rudisill v. Hoyle, 254 N.C. 33, 118 S.E.2d 145; Davis v. Davis, 246 N.C. 307, 98 S.E.2d 318. His duty to account has not been fulfilled by merely filing a statement of receipts and disbursements. He must also pay over to the parties entitled thereto the monies which they are lawfully entitled to receive. As said by Stacy, C. J., in McGehee v. McGehee, 190 N.C. 476, 130 S.E. 115: "An executor is one named by the testator and appointed to carry the will into effect after the death of the maker, and to dispose of the estate according to its tenor." Where, as here, testatrix did not specifically appoint a trustee but directed the executors to handle the trust estate, *363 the executors could not be required to file their final account and make settlement prior to the date fixed for the termination of the trust. In re Wachovia Bank & Trust Co., 210 N.C. 385, 186 S.E. 510. No matter what title was given to defendant and its parent, Security National Bank, it was nevertheless performing the duties which Mrs. Long had expressly imposed on her executors.
The proper venue for actions against executors and administrators is the county in which they qualify. G.S. § 1-78; Godfrey v. Tidewater Power Co., 224 N.C. 657, 32 S.E.2d 27; Thomas v. Ellington, 162 N.C. 131, 78 S.E. 12; Stanley v. Mason, 69 N.C. 1. True, this statute, by express language, is limited to actions against executors and administrators; but there can, in our opinion, be no doubt that the Legislature intended the words used to encompass all fiduciaries, irrespective of technical titles, who act by reason of a court appointment and are by law required to account to the court appointing them. Testamentary trustees are required to file in the court where the will is probated inventories and annual and final accounts "such as are required of executors and administrators." G.S. § 28-53. Trustees as well as executors and other fiduciaries are permitted to resign; but before the resignation shall become effective, they must file with the court a final account of the trust estate, and the resignation shall not become effective "until the court shall be satisfied that said account is true and correct." G.S. § 36-15. The successor, executor, trustee, or other fiduciary must give such bond as may be required by the court. G.S. § 36-17. By express decision the statute, G.S. § 1-78, has been held to include guardians notwithstanding the only words used are "executors" and "administrators." Cloman v. Staton, 78 N.C. 235. As said by the Supreme Court of Vermont: "An administrator is a technical trustee." In re Watkin's Estate, 114 Vt. 109, 41 A.2d 180, 157 A.L.R. 212; Fricke v. Safe Deposit & Trust Co., 183 Pa. 271, 38 A. 601; Larrabee v. Tracy, 21 Cal. 2d 645, 134 P.2d 265.
Defendant asserts the order of removal was proper notwithstanding state statutes, since state statutes must yield to statutes enacted by Congress prescribing the place where national banks may be sued. It relies on sec. 94, Title 12 (Banks and Banking), of the United States Code, which reads: "Actions and proceedings against any association under this chapter may be had in any district or Territorial court of the United States held within the district in which such association may be established, or in any State, county, or municipal court in the county or city in which said association is located having jurisdiction in similar cases."
The statute does not limit the jurisdiction of state courts. Congress has merely accorded national banks the privilege of having controversies to which they are parties determined in the county of their residence. Mercantile National Bank v. Langdreau, 371 U.S. 555, 83 S. Ct. 520, 9 L. Ed. 2d 523. This privilege, granted for the convenience of national banks can be waived. Michigan Nat. Bank v. Robertson, 372 U.S. 591, 83 S. Ct. 914, 9 L. Ed. 961; Mercantile National Bank v. Langdreau, supra; First National Bank of Charlotte, North Carolina v. Morgan, 132 U.S. 141, 10 S. Ct. 37, 39, 33 L. Ed. 282. Mr. Justice Harlan, speaking in the Morgan case, said: "No reason can be suggested why one court of a state, rather than another, both being of the same dignity, should take cognizance of a suit against a national bank, except the convenience of the bank; and this consideration supports the view that the exemption of a national bank from suit in any state court except one of the county or city in which it is located is a personal privilege, which it could claim or not as it deemed necessary."
One appointed by court order to administer the estate of a deceased is an officer of the court making the appointment. *364 Byers v. McAuley, 149 U.S. 608, 13 S. Ct. 906, 37 L. Ed. 867. This is true whether he be designated in the order of appointment as administrator, collector, executor, or trustee. Hence "(i)t is within the power of a state to make the whole administration of the estate a single proceeding, to provide that one who has undertaken it within the jurisdiction shall be subject to the order of the court in the matter until the administration is closed by distribution, and, on the same principle, that it shall be required to account for and distribute all that he receives, by the order of the probate court." Michigan Trust Co. v. Ferry, 228 U.S. 346, 33 S. Ct. 550, 57 L. Ed. 867; Trust Co. of Georgia v. Smith, 54 Ga.App. 518, 188 S.E. 469.
The right of a defendant to challenge the venue selected by plaintiff may be waived by conduct prior to the institution of the action. Congress, by 28 U.S.C.A. 1391 (a) and (b), fixed the venue in diversity cases. Even so, a nonresident who appoints a process agent in another state waives the benefit of the privilege which Congress accorded him. Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 84 L. Ed. 167, 60 S. Ct. 153, 128 A.L.R. 1437; Oklahoma Packing Co. v. Oklahoma G. & E. Co., 309 U.S. 4, 60 S. Ct. 215, 84 L. Ed. 537; Davis v. Smith, 3 Cir., 253 F.2d 286.
Neither defendant nor Security National were under compulsion to handle the trust estate created by Mrs. Long's will. Undoubtedly they sought and accepted the grant of authority conferred on them by the Superior Court of Buncombe County for pecuniary reasons. We take judicial notice of the fact that both state and national banks seek the privilege of acting as fiduciaries, administering on the estates of decedents and incompetents. When Security National qualified, it did so with knowledge that it was required by law to file annual accounts with the Superior Court of Buncombe County and at the appropriate time distribute the estate under the orders of that court. It looked to the Superior Court of Buncombe to fix the compensation to which it was entitled for services rendered. Defendant, when it entered upon the performance of its duties as trustee, did so with like knowledge.
Defendant's asserted right to remove requires an answer to this question: Can defendant deprive the Superior Court of Buncombe County of its right and nullify its duty to inquire into the accuracy of defendant's final account merely because it best suits defendant's convenience for the inquiry to be made in Mecklenburg, where it has its principal office, rather than in Buncombe, where it qualified and the law requires it to account? Manifestly the answer must be and is no.
Reversed.