February Term, 1889.
Statute of Limitations, between Distributee and Administrator — Practice, Ordering Reference when Plea in Bar is interposed — The Code, Sections 153, 154, 155, 158 — Appeal, when it Lies.
1. Where the facts upon which a plea in bar is based are admitted in the pleadings, it is the duty of the judge to determine the question of law raised, and if he refuses to pass upon the plea in bar, but orders a reference to state an account, such refusal is a denial of a right, and in effect an adverse ruling upon the plea, which is open to correction on appeal to this Court.
2. Upon such appeal this Court will pass upon the question, whether or not the facts admitted by the pleadings constitute a plea in bar, although such question was not passed upon directly by the court below.
3. An administrator filed his final account, ex parte, before the clerk of the Superior Court in May, 1879, which account showed a balance in favor of the administrator. The plaintiff sued in April, 1888, as one of the next of kin, to have the account restated. The defendant administrator pleaded the six-year statute of limitation as a bar to the account: Held, that such statute did not apply, and an order for a reference to state the account was proper.
4. The statute of limitation applicable to actions against administrators make a distinction between their fiduciary liabilities and their liabilities upon the administration bond.
5. Under The Code, sec. 153(2), a creditor must bring his action within seven years next after the qualification of the personal representative, and the advertisement for creditors.
6. Under The Code, sec. 154(2), an action against the personal representative, on his bond, must be brought within six years after the filing and auditing of the final account. In addition to the protection of this section, the sureties on the bond are exonerated unless action is brought within three years after breach of the bond. The Code, sec. 155(6).
7. No statute of limitations is a bar to an action to recover a balance admitted by a personal representative to be due legatees or distributees on his final account, unless he can show that he has disposed of such balance in some way authorized by law, or unless three years have elapsed since a demand and refusal to pay such admitted balance.
8. An action to impeach the final account of a personal representative must be brought within ten years from the filing and auditing thereof. Such cases are governed by The Code, sec. 158.
9. The Code, sec. 154 (2), expressly applies to actions on the "official bond," section 154(6) to sureties only, and section 155, so far as executors, administrators and guardians are concerned, is applicable only when there has been a settlement, either by acts of the parties or a decree of court.
CIVIL ACTION, tried before Shipp, J., at September Term, 1888, of PERSON Superior Court.
No counsel for the plaintiff.
J. A. Long, W. W. Fuller and E. C. Smith for defendant.
(DAVIS, J. dissented.)
The facts are stated in the opinion.
The plaintiff alleges that he is one of the next of kin and heirs at law of Moses A. Woody; that the defendant, as administrator of said Woody, on 17 May, 1879, "made a final settlement, ex parte, before the clerk of said court, . . . showing a large amount of money received by him and a large amount due him" (defendant) on a final settlement.
The fifth allegation is "that said final settlement is false, and a fraud upon the rights of the plaintiff and all the heirs and distributees of said Woody."
The sixth allegation is "that the facts contained in article five of the complaint did not come to the knowledge of the plaintiff before the last three years previous to the beginning of this action, but were discovered within said three years."
He prays that the said final account "be declared false and a fraud upon the rights of the plaintiff"; . . . "that it be restated by the court, and for other and further relief," etc.
The defendant substantially admits the allegations of the (336) complaint, except articles five and six. These he denies, and, as a further defense, he pleads the statute of limitations, for that more than six years have elapsed since the filing and auditing of said final account.
The plaintiff moved for a reference to state the account.
The defendant objected, and insisted that he was entitled to judgment upon the pleadings.
This action was commenced on 6 April, 1888.
The court declined to give judgment as prayed for by the defendant, and ordered a reference to state an account, without passing upon the plea in bar.
The plea of the statute as a defense to the action, if its applicability depended on any disputed fact, should have been disposed of, before making an order of reference, by the finding of the jury, or of the court, with the consent of the parties. But there was no controversy here as to the facts, and hence, a question of law was raised, which it was the duty of the court to decide, and then put the defense out of the way, or put an end to the action, as the court should determine. It was irregular to postpone the ruling until after a reference and report, even though it was reserved; and the defendant was entitled to a ruling upon the point, and if the objection is valid and a fatal impediment to the prosecution of the action, the refusal to pass upon it, made, as it was, at the proper time, was the denial of a right, and, in effect, an adverse ruling, open to correction, as error in an appeal to this Court, as decided in numerous cases. Dean v. Ragsdale, 80 N.C. 215; Sloan v. McMahon, 85 N.C. 296; Commissioners v. Raleigh, 88 N.C. 120; Humble v. Mebane, 89 N.C. 410; Grant v. Hughes, 96 N.C. 177.
The inquiry is then presented, whether, upon the admitted facts, the action is obstructed by the statutory bar by the lapse of time since the filing and auditing the final administration account in the office of the clerk.
It will be noticed that a distinction is made in the enactments that interpose a barrier to suits, prosecuted against the personal (337) representative in his fiduciary capacity, upon the liability that results from it, and those which seek to enforce the obligation created by his bond.
The creditor must bring his action within seven years next after the qualification of the representative, "and his making the advertisement required by law, for creditors of the deceased to present their claims, when no personal service of such notice, in writing, is made upon the creditor," and this bar is applicable alike to a surety to the debt. The Code, sec. 153, subsec. 2.
To give effect to this provision, both conditions must concur, and to show the prescribed period of inaction, and the making the advertisement directed in the case. Cox v. Cox, 84 N.C. 138.
The action upon the bond, as superadding a legal to an equitable obligation, incurred in the assumption of the office, must be begun "against any executor, administrator, collector or guardian," on his official bond, within six years after the auditing of his final account, by the proper officer, and the filing of such audited account." The Code, sec. 154, subsec. 2.
While the sureties have this protection in common with their principal, they have a further exoneration, unless sued within three years after breach of the bond. Section 155, subsection 6.
The rulings upon this subject, in cases that have come before the court requiring a construction to be put upon the statute, do not seem to be in entire harmony; yet on examination, they will be found to be so. In Bushee v. Surles, 77 N.C. 62, the action was for the recovery of the distributive shares, claimed by the plaintiffs, against the administrator of one Patience Bushee, and, delivering the opinion, Bynum, J., says: "The defendants relied upon the statute of limitations in (338) the court below, but do not press the point here. The statute does not run in favor of administrators against the suit of the next of kin for their distributive shares."
In Vaughan v. Hines, 87 N.C. 445, the suit was instituted by the administratrix de bonis non of one Henry Vaughan, appointed on 21 February, 1881, on 4 April thereafter, against a surety to the bond of the former administrator, who died in 1874, to recover the unadministered assets in his hands. The recovery was resisted, on the ground that more than six years had passed since the return of the final account by the deceased, in May, 1873, before the issuing of the summons. It was held that the statute was a bar to the action, and this ruling was sustained in this Court. This was an action on the bond, not at the instance of the next of kin, but of the succeeding administrator, and yet it was declared that the statute began to run against the next of kin, and continued to run against the plaintiff. This determines, in effect, that, in an action on the bond, it must be prosecuted within the six years after the filing the specified account, as well by the next of kin as by creditors, in order to escape the statutory obstruction.
In Grant v. Hughes, 94 N.C. 231, the administrator de bonis non sued the executor of the first administrator for an account and settlement, and the qualification of the former was during the same year, at the death of the latter, and the suit was instituted shortly after the plaintiff's appointment. The defense was two-fold, the alleged conclusiveness of the final account of the state of the assets, and the bar of the statute. Both objections were overruled, and Merrimon, J., speaking for the Court, declares: "The court properly held that the statute of limitations invoked by the defendant did not bar the action. The action is not brought upon the official bond as administrator of the testator of the defendant. It is brought to compel an account and settlement of the estate of the intestate of the plaintiff in his (339) hands in his lifetime. He was a trustee of an express trust, and the statute of limitations did not apply." In Andres v. Powell, 97 N.C. 155, the action was by the administrator de bonis non of one A. J. Shipman against the executors of A. F. Powell, one of the sureties to the administration bond of J. W. Ellis, the first administrator, who relied upon the six years' bar under section 154, and the defense, as in Vaughan v. Hines, ante, was sustained.
This view of the adjudications establishes the proposition that confines the operation of the section, which fixes the filing and auditing the final account as the initial point at which the statute begins to run, to actions upon the bond for a breach of its obligations, but leaves the representative, in his fiduciary capacity, exposed to the demand of the fiduciary or creditor, the latter losing his remedy under the conditions set out in section 153. It would be a singular, and not to be accepted result, unless plainly declared, that the representative, holding the trust fund in his hands, an uncontested residue of the estate, could, after the defined period, disown responsibility to any one therefor, and keep and apply the fund to his own use. And this might happen, when there has been no violation of fiduciary duty under the bond or otherwise, and when the estate is kept intact, awaiting the demand of the party entitled to it. It is most obvious this was not intended in the discriminating provisions of the statute, and that the representative is left, under such circumstances, responsible as any other trustee.
We do not mean, however, to say that in no case does the statute bar the next of kin. Until a final account is filed and audited there can be no bar; nor is there any as to a balance admitted to be due by such final account, unless the executor or administrator can show that he has disposed of it in some way authorized by law, or unless there has been a demand and a refusal to pay such admitted balance, in which case the action is barred in three years after such demand and refusal (sec. 155). When such final account is filed and audited, (340) an action to impeach it, must be brought within ten years from the filing and auditing of the same. The period of limitation is not specifically declared, but we think such a case falls within section 158, which applies to actions "not herein provided for." It must come within this section or none, as section 154, subdiv. 2, expressly applies to actions upon the "official bond," subdiv. 6 to sureties only, and section 155, so far as executors, administrators and guardians are concerned, is applicable only when there has been a settlement, either by act of the parties or a decree of court. The final account having been filed within ten years before the commencement of this action, there was, therefore, no error in disregarding the plea, which is unavailing as a defense, and in ordering the reference, the reservation of the ruling thereupon being without prejudice to the appellant. The judgment must, therefore, be affirmed.
No error. Affirmed.