Stevens v. Gage , 55 N.H. 175 ( 1875 )

Administration Account — Liability of Administrator for Funds Stolen. "It is said that there is a difference in the rule, as applied to executors in a court of law and a court of equity. Thus, in a court of law, an executor will be charged with all the assets that come to his hands to be administered, and he must discharge himself by showing a legal administration of all of them; and he cannot discharge himself at law by showing that he intrusted them to another in the ordinary course of business; that he used due caution and prudence, and reposed a reasonable confidence in such other person; and that the assets were lost without negligence or default on his part. Such a state of facts would not sustain a plea of plene administravit in a court of law; but a court of equity would adjust the account of an executor upon equitable principles. A court of probate in taking the account would also act upon equitable principles." Perry on Trusts, sec. 407, citing Crosse v. Smith, 7 East 246, Jones v. Lewis, 2 Ves. Sen. 241, Poole v. Munday, 103 Mass. 174, and Upson v. Badeau, 3 Bradf. Sur. 13.

In Jones v. Lewis, the defendant, an administrator, delivered goods for which she was liable to account, to a solicitor, who was robbed of them, and it was held that she was not to be charged for the goods so lost. Lord HARDWICKE said, — "It is certain that if a bailee of goods, against whom there is an action of account at law, loses the goods by robbery, that is a discharge in an action of account at law; and it is proved (and I think reasonably) that if a trustee is robbed, that robbery properly proved shall be a discharge, provided he keeps them so as he would his own. So it is as to an executor or administrator, who is not to be charged further than goods come to his hands; * * and if robbed, and he could not avoid it, he is not to be charged, — at least, in this court. How it would be in a court of law I know not, for I know no case of that at law. The defendant is administratrix: supposing these goods had been in her own custody and she had been robbed, I am clear of opinion, if that fact be made out, she ought to have been discharged of these goods. * * In the present case, what has been done is what she would have done with her own — leaving them with her solicitor in order to be delivered to the plaintiff when proper to do so; — and why might she not do that? * * It would be too hard to charge her with these things lost." See, also, Bacon v. Bacon, 5 Ves. 331.

It is not contended on behalf of the appellant but that the liability of this administrator for the money belonging to the estate, stolen from him under the circumstances shown by the auditor's report, depends upon whether or not he exercised due care in keeping it; but the claim is that he did not exercise such care, and that the money was lost through his negligence. It appears that he took the same care of this money as he took of his own. Ordinarily I should not be inclined to regard that as a conclusive test of due care on the part of an administrator. But the significance of that fact is very considerably increased, as it seems to me, by the circumstance that the appellant recommended the appointment of Mr. Gage as administrator with the will annexed; for where one voluntarily makes another his bailee, there is much reason in saying that he thereby signifies his confidence in the known personal character of such bailee, and his willingness to accept from him the same degree of care and prudence in keeping the thing intrusted to him as he uses in the care of his own goods of the same kind.

But without placing my decision on that ground alone, and without intending to relax the rule which should doubtless hold administrators to the exercise of all due and reasonable care with respect to funds which come to their hands in the course of administration, I am of opinion that Mr. Gage ought not to be held upon the facts stated in the auditor's report. The money was deposited in an iron safe designed and intended to keep its contents in security, as well against thieves and burglars as against fire; and although such places for the deposit of valuables have been broken into and their contents stolen with startling frequency for the past few years, yet it must be admitted that the number thus invaded bears a very small proportion to the whole number in use during the same period of time. I am, upon the whole, inclined to hold that when Mr. Gage deposited this money in the safe, under all the circumstances shown by the report, he exercised with respect to it that degree of care which ought to be regarded as due care, and that he was, therefore, rightly discharged as to the amount stolen, on the settlement of his administration account in the probate court.