Davis v. Davis, 184 N.C. 108 (1922)

Sept. 27, 1922 · Supreme Court of North Carolina

184 N.C. 108

MRS. M. E. DAVIS, Widow of R. B. DAVIS, Deceased, and Others, Heirs at Law and Distributees, or Next of Kin, and A. S. BUGG and W. M. BAIRD, Administrators de Bonis Non of R. B. DAVIS, Deceased, v. O. C. DAVIS, as Administrator of R. B. DAVIS, Deceased, and the FIDELITY AND DEPOSIT COMPANY OF BALTIMORE, MARYLAND.

(Filed 27 September, 1922.)

Reference — Findings—Judgments—Appeal and Error.

In passing upon the report of a referee, it is incumbent upon the judge to deliberate upon the evidence covered by the exceptions, and thereon find such facts as will sustain his own conclusion; and where the judge has found the same facts as those found by the referee, but has overruled the referee’s conclusions thereon, which the referee’s findings support, the judgment will be set aside in the Supreme Court, on appeal, so that the matter will be further passed upon in the Superior Court according to law.

Appeal by plaintiff from Allen, J., at January Term, 1922 of WahkeN.

R. B. Davis died 28 September, 1914, and on 22 October, 1914, O. C. Davis, one of tbe defendants, qualified as bis administrator, with tbe other defendant, tbe Fidelity and Deposit Company, as bis surety. O. 0. Davis resigned as such administrator in 1918, and A. S. Bugg and ~W. M. Baird were appointed administrators cte bonis non of tbe estate of tbe said E. B. Davis, and these are among tbe plaintiffs in this action. Tbe other plaintiffs are tbe widow and children of E. B. Davis, some of whom are of age, and others are infants, appearing by their guardian, H. T. Egerton.

This action was brought for an accounting against 0. 0. Davis, former administrator, and his surety.

It will appear that the administrator, upon his qualification, instead of proceeding to settle the estate, continued the business of his intestate and engaged in farming, merchandising, running sawmills and cotton gins. Plaintiffs contend that he mixed all these operations with his administrator’s accounts and conducted these affairs without system or bookkeeping from the time of his qualification in 1914 until his resignation in 1918; Plaintiffs further allege that after an effort to secure from the administrator a settlement of his account with the estate of his intestate, three accounts have been filed by him, and that an examination will show that all have been different.

The first account, filed 2 March, 1917, shows that the administrator, 0. 0. Davis owes the estate $165. The next account, filed 3 August, 1917, shows that the estate has to its credit $445.05. In order to reach this balance, particular attention is called by plaintiffs to item “For feeding 7 mules and horses 517 days, at 50 cents each, $1,809.50.” This item, which will be more particularly considered hereafter, was entered as a credit to the administrator. In his recapitulation, following his conduct of the business, there are listed debts and liabilities amounting to $877.23. The clerk appointed a referee, and he went over the account and found a balance in favor of the estate of $2,788.57. The administrator filed still another statement, called a final statement, showing that he has in hand $1.75; indebtedness, $4,242.28; assets, $3,216.58; leaving a balance due by the estate of $1,025.70. One item of assets was a bill due by the administrator himself — a store account — amounting to $175.38.

The clerk thereupon entered judgment, in which he holds that it would be to the interest of all parties concerned to have a new administrator appointed to wind up the estate, the present administrator, 0. 0. ■ Davis, and his bond to be liable, until a proper accounting can be had with the new administrator. This judgment was entered by the clerk 21 March, 1918. Thereupon, O. C. Davis resigned, and A. S. Bugg and W. M. Baird were appointed as administrators, and then this action was brought with these, and the others named, as parties plaintiffs. The account was referred to Mr. Joseph P. Pippen, September Term, 1919.

Tbe evidence is set out, and' tbe administrator’s various accounts, showing bis dealings with tbe estate and bis handling of tbe assets in administration of tbe estate. He conducted tbe business four years, ran tbe store twelve months, conducted tbe sawmill two years, and sold cotton, as plaintiffs allege, without charging himself with it. As to bis compensation, tbe administrator testified: “I was to receive $1,000 per year, commencing 1 October, 1914, and I ceased work on 1 January, 1916.” It seems that be made this contract with tbe widow of tbe intestate. As to bis conduct of tbe business, tbe administrator uses this language: “According to tbe figures, it looks like $2,000 short. I filed three final accounts, each one different.”

Tbe referee filed bis report and found tbe defendant to be chargeable for building a postoffi.ee building with $238.08. He also finds that be is chargeable with tbe sum of $1,809.50 for feeding mules, but that this was an unintentional error on tbe part of tbe administrator. He also finds that tbe mules were allotted to tbe widow for her year’s support, and concludes that tbe estate was not responsible for their feed.

Tbe conclusion of tbe referee is that tbe administrator and bis surety was chargeable with building tbe postoffiee, $238.08. Amount credited to himself for feeding tbe mules belonged to tbe estate, $1,809.50, and rent for bouse for himself and family, $120, which was decided in their favor by tbe referee.

Plaintiffs further contend that, unless bis conduct of tbe store and lumber business is ratified and confirmed by tbe court, tbe administrator and bis bond are further chargeable with such sums, with reference to tbe expense of same, as have been set out in bis report at pages 53, 54, 55, 56, 57, and 58 of tbe record;

Tbe judge below rendered tbe judgment set out at pages 65 and 66 of tbe record. Tbe plaintiffs waived the court’s overruling tbe exceptions as to tbe following items: Building postoffice, $238; rent of home, $120. But they excepted to tbe ruling of tbe judge as to tbe credit claimed by tbe administrator of $1,809.50, it being for tbe feeding of tbe mules, which was decided in their favor by tbe referee.

Tbe plaintiffs relied upon but one exception to tbe judgment and, for tbe purpose of deciding it, waived their other two exceptions.

We find that tbe report of tbe referee closes with tbe following paragraphs :

“Tbe referee therefore concludes that tbe defendant administrator and bis bondsmen are properly chargeable with $238.08 for building tbe postoffice, etc., and with the sum of $1,809.50 feeding mules, etc., and with reasonable rent for tbe dwelling-house occupied by himself and family, that is, tbe sum of $120; and that unless bis conduct of tbe store business and of tbe lumber business is ratified and confirmed by this court, said defendant administrator and Ms bond are further chargeable with sueb sums with reference to the expense of same as have been heretofore set out.

“The referee desires to state that in his opinion any error of omissions or commissions that may have been made by the defendant were made wholly in error and by mistake, and that the conduct of all of his affairs as said administrator has been done conscientiously and honestly.

“The referee regrets that he cannot make a more illuminating report, but honestly believes that were he endowed with the wisdom of Solomon and with only such records as he has before him he could make but little improvement upon this report so far as his conclusions of facts are concerned. The affairs of this estate were kept in such chaotic condition as to defy intelligent analysis by the ordinary mortal.

“Eespectfully submitted,

“Joseph P. PippiN, Referee.”

The defendant O. C. Davis, former administrator of his brother, E. B. Davis, excepted to the charging of the itefn of $1,809.50 for feeding the mules against him by the referee, as follows: “Exception 4. Defendant excepts to the finding of fact and conclusion of law that defendant O. C. Davis and his bond.are chargeable with $1,809.50 for feeding 7 mules 517 days. Plaintiffs contend, and the referee finds, that this credit allowed by the clerk, and found by Eeferee Baird, to be actually less than it cost, should be struck out of the credit side of the account.”

The judge, after preliminary recitals, not necessary to be stated here, adjudged as follows: “The court, after argument of counsel of plaintiffs and defendants, and after full consideration, being of opinion, from the report of the clerk and the evidence and the findings of the referee, that the defendant administrator, in all of his transactions and dealings with, the property of the estate of his deceased brother, E. B. Davis, acted conscientiously and honestly, at considerable sacrifice of his personal interest and without gain to himself, and that the estate benefited by his administration, doth find and adjudge that the defendants are not liable to the plaintiffs; and the other, or third exception, relating to the cost of the feeding of the mules, is sustained, and it is adjudged thereupon that the plaintiffs take nothing by their action, and that the plaintiffs and their surety pay the cost of the same, including oné-half of $50 to the referee, J. P. Pippin, and one-half of $50 to be paid by the defendants.”

Plaintiffs excepted, and appealed.

B. B. Williams, T. M. Pittman, and Daniel & Daniel for plaintiffs.

T. T. Hicks & Bon for O. G. Davis.

Tasker Polk & Bon for bonding cbmpany.

Walker, J.,

after stating tbe material facts: It is apparent from tbe record and judgment that tbe merits of this case have not been reached, and there is danger of doing grave injustice to tbe plaintiffs if tbe facts are not more definitely stated.

Tbe plaintiffs restricted their case, as presented here, to one exception, which was that relating to tbe ruling of tbe court upon the item as to tbe feeding and keep of tbe mules, asserting that tbe judge bad not properly found and stated tbe facts 'connected with it, and further, and more particularly, that the referee decided this item with them, and that tbe judge should not, therefore, have reversed this ruling and given judgment for tbe defendants without himself finding and stating tbe facts and bis conclusions of law, so that exception could properly be taken to them. The referee finds that this credit, which was allowed the administrator, O. C. Davis, was an unintentional error. This surely must have been overlooked by the usually careful and painstaking judge who presided at the hearing of this case. No specific allusion is made to this item in the administration account of $1,809.50 for feeding the mules, and there is no finding, and certainly no adequate statement of the facts to sustain the judgment, or to enable us properly to consider and pass upon it.

It was not the question whether O. C. Davis, as administrator, had acted “honestly and conscientiously” in the execution of his trust, but whether he had negligently collected the assets of the estate, as the law required of him, and legally disbursed them, and when we come to consider the question as to the item of $1,809.50 raised by the plaintiffs’ exception, we must necessarily inquire whether the defendant fed the mules from corn, fodder, etc., belonging to the estate, as was contended by the plaintiffs, or whether, in doing so, he used his own money in the purchase of their food, or his own corn, fodder, etc. This was the vital question for decision, and yet there is no finding of fact by the judge upon which we can base that crucial decision in the case. ¥e cannot adopt the findings of the referee and sustain the judgment, as he found with the plaintiffs, and we are required, in order to sustain the ruling of the court, to do so in total ignorance of the real facts as to the disputed item, and injustice may thereby be done to one or the other of the jmrties, which must not happen, if we can fairly and legally avoid such an untoward result.

In Smith v. Smith, 123 N. C., 229, a case in principle somewhat like-this, at p. 234, the Court, after questioning the justice of permitting the statute of limitations to be pleaded at that stage of the case, says: “The court allowed the motion of defendant for leave to amend the answer and plead the statute of limitations, and defendant filed his plea accordingly. And thereupon the Court doth adjudge that the plaintiff’s cause of action is barred by tbe statute of limitations. Tbe judgment further declared that tbe defendant’s exceptions to tbe report and account filed are allowed, and tbe plaintiff’s application for an injunction to restrain tbe defendant from selling tbe land to collect tbe debt referred to in tbe pleadings as per note and mortgage is disallowed. Tbe last was clearly only tbe conclusion of tbe Court as to tbe legal effect of tbe statute of limitations upon tbe indebtedness of tbe defendant to tbe plantiffs as set out in tbe complaint; for it was made without any finding of facts by bis Honor. When tbe judge finds no facts, it is presumed that be adopted those found by tbe referee. McEwen v. Loucheim, 115 N. C., 348; Bancroft v. Roberts, 91 N. C., 363. But it is apparent that be did not adopt tbe findings of tbe referee, for tbe referee found them all in favor of tbe plaintiff, and tbe judgment is against tbe plaintiff. In order that tbe defendant’s exceptions to tbe report of tbe referee should have been sustained, it was necessary for tbe court to have reviewed and set aside tbe facts found by tbe referee, and to have found tbe facts himself in favor of tbe defendants. This be did not do. As, therefore, there was no finding of facts by bis Honor, and tbe findings of tbe referee were not approved, there is error in that part of tbe judgment which sustains tbe defendant’s exceptions and denies tbe application for tbe injunction.” Tbe judgment in this case is not as much warranted as was tbe one in that case, for here tbe judge approved tbe referee’s findings of fact, and then decided contrary to them, as tbe referee found tbe facts with tbe plaintiffs and disallowed tbe credit of $1,809.50, for feeding tbe mules, to tbe defendant, which now appears to have been tbe correct view of this item in tbe account. This evidently was an inadvertence on tbe part of tbe learned judge, as tbe referee’s findings of fact and tbe allowance of tbe credit for $1,809.50 cannot well stand together. If tbe judge intended to allow tbe credit, be should have found facts, as said in Smith v. Smith, supra, which would have sustained bis- ruling, and to that extent be should have disapproved tbe findings of tbe referee.

We held in Thompson v. Smith, 156 N. C., 345: “If there is any evidence to support tbe findings, and no error has been committed in receiving or rejecting testimony, and no other question of law is raised with respect to tbe findings, we accept what tbe judge has found as final, as we do in tbe case of a jury. When exceptions are taken to a referee’s findings of fact and law, it is tbe duty of tbe judge to consider tbe evidence and give bis own opinion and conclusion, both upon tbe facts and tbe law. He is not permitted to do this in a perfunctory way, but be must deliberate and decide as in other cases — use bis own faculties in ascertaining tbe truth, and form bis own judgment .as to fact and 'law. This is required not only as a check upon tbe referee and a safeguard against any possible error on bis part, but because be cannot review tbe referee’s findings in any other way.” Malloy v. Cotton Mills, 132 N. C., 432; Lambertson v. Vann, 134 N. C., 108; Clark’s Code (3 ed.), p. 564, and cases there collected; Ramsey v. Browder, 136 N. C., 251; Comrs. v. Packing Co., 135 N. C., 62.

The trouble in this case is that there is confusion, if not contradiction, in the ruling of the court, when considered in connection with the referee’s findings of. fact, and we cannot proceed to judgment without having the two in some way reconciled with each other.

The judgment will be set aside, which will leave the report of the referee before the court for its further consideration, but with special reference to the item of $1,809.50 for feeding the mules, about which the judge may adopt the referee’s findings of fact, and his conclusion of law in favor of the plaintiffs, or he may reverse or modify the same and find the facts himself, or take such other action as may conform to the course and practice of the court, and as will disclose the legal and equitable rights of the respective parties, a final judgment to be rendered, subject to exception and appeal.

There is error in the judgment and proceedings, and this will be certified.

Error.