Davis v. Marcum, 57 N.C. 189, 4 Jones Eq. 189 (1858)

Dec. 1858 · Supreme Court of North Carolina

57 N.C. 189, 4 Jones Eq. 189

JACKSON DAVIS and others against WM. A. MARCUM.

When an administrator was ordered by court to sell property for distribution, on a credit, taking bond with sureties for the purchase money, he is only responsible in respect to the sufficiency of the bond, for wilfully or negligently taking sncli sureties as were not good, or such as he had not good reason to believe were sufficient.

A delay by an administrator, of one month, to bring suit on a bond taken on • the sale of property, made under an order of court for distribution, will not make the administrator liable for the loss of the debt by the insolvency of the obligors, where there appeared to be no likelihood of such insolvency at the time.

Appeal from tbe Court of Equity of Chatham County.

The bill is filed by tbe next of kin of Turner Mason, who died in Orange county intestate, against Marcum, who administered on his estate. The defendant submitted to an account; but by his answer objects to being charged in the account for the value of two slaves, whom he sold on credit and for whom he received nothing, by reason of the insolvency of the purchaser and the sureties in his bond. On that point the cause was beard in the court of equity, and tbe master was directed, that in taking the account be should not charge the defendant therewith; and from the order the plaintiffs were allowed to appeal.

■ The material facts with respect to the question, appear, from the pleadings and proofs, to be these ; In November, 1853, the county court of Orange ordered the defendant to make sale of two slaves, left by tbe intestate, on a credit of six months, for tbe purpose of distribution amongst the next of kin, who were numerous, and among whom was the defendant. Early in January, 1851, the defendant offered the slaves for sale at the late residence of the intestate, and they were bid off at the price of $2,265, by one McDuffie, of Cumberland county. Several of the next of kin were present at the sale, and were well satisfied with the price. Bnt the purchaser was unable to give sureties at that place, and, in order to complete the sale, which was deemed advantageous, it was agreed between the parties that the defendant should carry the negroes to Cumberland for delivery, where McDuffie should give a satisfactory bond. Accordingly, in a few days, the defendant took them to Fayetteville, where McDuffie offered his bond with Nathan King, Kobert F. Murphy and A. McMillian, as sureties. The four obligors were then in possession of property to the value of sixty or seventy thousand dollars, and each of them was generally considered to have independent and unembarrassed property. The defendant was a stranger in Cumberland, and declined taking the bond until he could ascertain its sufficiency; and, upon enquiring of the sheriff of the county, and several other respectable men of business in the town and county, he was told by them that the parties were men of large property, and that their bond wTas undoubtedly good, and he thereupon accepted the bond and delivered the slaves. The purchaser and his sureties were, respectively, largely engaged in making turpentine, and soon afterwards the article fell very much in market, and those persons became, in reality, much embarrassed, though the fact was not known to the public until deeds of assignment in trust from them were registered as hereinafter mentioned, but they were still in good credit. In fact, however, McDuffie executed a general assignment of his property on the 2d of April, 1854, which was kept secret until it was registered on the 17th of August, 1851; and King made a similar assignment on the 28th of March, which was not registered until the 2d of November following, and Murphy made an assignment on the 17th of January, 1855, which was immediately registered, and in the latter part of 1851, McMillan’s property was all sold by himself, or under execution, so that in December, 1851, or January, 1855, those persons, all, became notoriously insolvent. The defendant might have brought suit on the bond to the county court of Chatham, where he lived, which sits on the second Monday in August; but he did not; and the answer states his reason to be, that the debtors were still reputed to be intirely responsible and in as good credit as they had ever been, and. that he believed so, and also that he should probably receive payment sooner by not Suing than by suing. Finding that they did not make payment, he brought suit to the next November court, when the defendants put in a plea to delay judgment, so that he could not obtain one until February, 1855, when the debtors had became insolvent, and his execution, then issued, was returned nulla bona.

JEaughton for the plaintiff.

T. Ruffin, Jr., and IJhillips for the defendant.

Ruffin, J.

As the law requires administrators to sell the effects at auction on a credit of not less than six months, and to take from purchasers bond with good sureties, the defendant was in no default in making the sale, nor in taking the bond on that time. It follows, too, that he is only responsible in respect to the sufficiency of the bond for the purchase-money for wilfully or negligently taking such as were not good at the time of taking them, or such as he had not then good reason to believe sufficient. For, he is not to be held to guarantee the solvency of the purchaser. If he be of good credit, and the administrator were to refuse to complete the sale, and a loss were afterwards to arise from the death or destruction of the property, he would be chargeable with it. He is to act honestly for the estate, as he or any other prudent men would act for themselves, and he will then be justified in either completing or not completing the sale. The residence of the purchaser in another county, cannot materially affect the question, except so far as it may be evidence of a rash confidence in persons whose circumstances the defendant was not acquainted with. But persons from a distance are often the best bidders, and it is the duty of the administrator to get the best price; and when he gets such a bid, he ought not capriciously to reject it, upon a pretense of his want of knowledge of the bidder’s affairs, if upon due inquiry he receives reliable information of the property and the credit of the bidder. The difference is, that when the purchaser is of the neighborhood, an administrator may, with propriety, act on his information of the known wealth and credit of the purchaser and his sureties, without proceeding at the time to make particular inquiry of others on those points; whereas, in the case of strangers, it is clearly incumbent on the administi’ator to enquire in proper quarters as to the sufficiency of the bond offered by the purchaser. But, if he recieve satisfactory information — such as would lead a prudent man to trust to those names for the amount of the bond — then he ought to complete the contract, and therefore the law will not treat him as being in default for having done so. The present defendant seems to have used every prudent precaution which even a suspicious person would have used, and he had the best reasons to think the debt entirely safe, as, indeed, it would have been, but for the sudden fall of turpentine, in which those persons seem all to have been dealers. Then the alleged liability of the defendant for this loss is reduced to the single fact that he did not sue on the bond to the first term of the county court, which came about one month after the bond fell due. That seems to be a very short time, on which to charge an administrator to next of kin, in a case where there was no suspicion and apparently no cause for suspicion, and the defendant swears that he, in fact, believed the debtors to be perfectly responsible, and his sincerity is attested, not only by his obligation to good faith in his office, but by personal interest as one of the next of kin. It may be, that as to creditors the utmost diligence is required, and that the administrator ought to give no indulgence on sale notes; as, at common law, the sale of the goods made them assets at once, and it is a forbearance in the law merely, to allow the sale, and not to make the administrator answerable for the proceeds until the money is received or might have been received. But, without determining that point, it seems to the Court that where there was no likelihood of insolvency, or none known, but the contrary was believed, and was apparently true, one month’s delay in bringing the suit is not, of itself, such evidence of bad faith or gross neglect as renders an administrator liable to the next of kin for losing a debt by the insolvency of the debtors. It is not the custom of this country to put sale notes in suit the day after falling due; nobody does it, unless in particular eases — where the debtors are suspected, or the money may be immediately required for the payment of debts; moreover, in this case, if the defendant had sued to the first court, it is obvious that the suit would not have saved the debt; for the deeds of trust, though unknown to the public, were executed and held ready for registration whenever it might be necessary to give them operation against judgments and executions, and there cannot be a doubt tliat, if suit had been brought by the defendant to August court, it would have been unavailing, by reason of the registration of those deeds in time to defeat the recovery, —one of them, indeed, having been registered on the 17th of August, the week after the first court.' The degree of diligence requisite to exense an executor, will, of course, vary with circumstances — such as the amount of the debt, the necessity the estate is under for the present use of the money, and the probable sufficiency or insufficiency of tfee debtors to answer the demand. There has been no case before the Court on which it has been held that the loss of one court, when the debt fell due a month before the court, would subject the executor; and, if, in an}' ease it would not, we think it ought not in that before us, since the defendant had every reason to think the security ample up to the time he sued, and for some weeks afterwards, so that he might well believe that payment would be received sooner without bringing suit to the first court than by bringing it, and he certainly did not delay with any sinister purpose.

The decree of his Honor is therefore affirmed, and this will be certified to the court of equity so that further proceeding may be there had in the cause.

Pee Curiam, Decree accordingly.