Badham v. Badham , 244 Ala. 622 ( 1943 )

The holding of the original opinion that the pleas in abatement filed by the minors were insufficient is rested upon a construction of the final decree rendered in the Barbour County Circuit Court in Equity by way of settlement of the litigation therein pending which reached this court in Badham v. Johnston, 239 Ala. 48, 193 So. 420. Stress was laid upon that part of the decree confirming the settlement between the parties, wherein it was stated that all claims of said minors or on their behalf, filed or unfiled by them, or for them by trustee or guardian, against the estate of Leila J. Badham, were cancelled, satisfied, and discharged and released in full, and the executor discharged from liability therefor. The conclusion was therefore reached that, by this language, all interest of the minors in the residuary estate of the testatrix, as provided for in the will, was surrendered, and that as a consequence the minors had no further interest in such estate. We are persuaded we fell into error in so construing the decree.

This language of the decree has reference to claims against the estate of the testatrix and was used in connection with the settlement of the litigation then pending by the minors against the executor and trustee. It had no reference to the interest of the minors in the residuary estate, as provided for in the will, which we think is confirmed upon reading the entire decree. Illustrative is the paragraph following this language in the decree, relating to the property referred to in the complaint as "Westover," wherein it is specifically provided that this property, or its proceeds when sold, shall be held under the terms and for the purpose expressed in the will and for the payment of such obligations against the trust property as this decree may declare. As we have previously indicated, the language upon which we laid stress in the original opinion had reference to claims against the estate and not to any interest in the estate, as provided for under the terms of the will. Though of course not binding upon the court in its interpretation of the decree, yet the agreement of all counsel that such is its proper interpretation adds weight to this conclusion.

Having determined, therefore, that the ground for holding the pleas insufficient is untenable, their sufficiency must be considered in other aspects. The original bill was by the cestui que trust to call the trustee to account and to increase the monthly allowance for his support. This bill was filed in Jefferson County, where the trustee resided, and the minors were made parties defendant. The trustee filed answer and cross-bill in which he attempts to have settlement and an accounting of his executorship, as well as of his trusteeship. The minors filed these pleas in abatement, both to the original bill and to the cross-bill. These pleas are based upon the theory that the ancillary administration of the estate of the testatrix had been removed into the Equity Court of Barbour County and was there pending where the decree of settlement referred to above was entered, and that any relief sought by any party concerning the accounting of the executor and trustee should be sought in the Equity Court of Barbour County and not that of Jefferson County. We are persuaded this is the correct theory.

Under the will the office of executor and that of trustee were united in the same person. When this is the case, the authorities are to the effect that he holds the estate in his hands as executor until the assets which came into his possession as executor are separated and distinguished from other assets of the estate, either actually or upon some established legal theory. Lane v. Lane, 240 Ala. 447,199 So. 870; Davis v. Davis, 10 Ala. 299. In both of these cases the office of executor and guardian were united in the same person, and in the latter the court observed: "To ascertain the amount in his hands as executor, to which the ward is entitled, it is obvious a settlement of his accounts as executor, would be necessary." And Fleming v. Walker, 152 Ala. 386, 44 So. 536, 126 Am.St.Rep. 46, recognizes the principle that the executor will be held to hold the property in that capacity, unless it be made to appear by some plain and unequivocal act that he elected to hold the fund in his capacity as trustee. Authorities from other jurisdictions are to like effect. Bellinger v. Thompson, 26 Or. 320, 37 P. 714; White v. Ditson,140 Mass. 351, 4 N.E. 606, 54 Am.Rep. 473; Jones v. Broadbent,21 Idaho 555, 123 P. 476. See also 65 C.J. page 641; Springfield National Bank v. Course, 288 Mass. 262,192 N.E. 529, 94 A.L.R. page 1460 et seq.

In the decree rendered in the Equity Court of Barbour County it was expressly provided that the executor render to that court his accounts for final settlement of the estate; and if it could be considered that under the terms of that decree that the two offices of executor and trustee had been merged, yet it must be conceded that the decree anticipated further steps looking to the final accounting in that court. Certainly, the accounting as executor must be had in the Barbour Equity Court, for there the administration of the estate is pending. The pleas in abatement, therefore, to the cross-bill were sufficient. We are persuaded they were also sufficient as against the original bill. The settlement of the trusteeship could not be had with any degree of accuracy without a settlement by the executor. That is the general rule, and there has been no clear and unequivocal act which would take this case from without that recognized principle. True, the decree provides that debts "now or hereafter due by said executor" shall be assumed by him as such trustee and paid by him out of the property in said trust. But, to use the language of the decree, this was to be "to the end that the estate of Leila J. Badham may be finally settled and the executor discharged as soon as practicable." And the decree further shows that this accounting was to be had in the Barbour court and there the final settlement of the administration of this estate had. The parties intended a final settlement of all the matters involved in that case, both concerning the administration of the estate and the trusteeship, but the decree calls for a final settlement of the administration and the court retains jurisdiction for that purpose.

Under these circumstances, therefore, we are persuaded the cestui que trust should have proceeded in the Barbour court for the accounting, which had been expressly provided for in the settlement decree. It is clear enough that an accounting by the trustee necessarily involves likewise an accounting by him as executor, and as we have previously observed, the accounting as executor must of necessity be held in the Barbour court. If the accounting under the original bill should be had in the Jefferson court, it is entirely possible that a conflict between the decrees of the two courts might arise. We are, therefore, of the opinion that these pleas were sufficient as against the original bill as well as the cross-bill, and that the chancellor correctly so ruled.

We are in accord with the original opinion to the effect that the dismissal of the bill and the cross-bill was improper, as the pleas in abatement stood for proof, and no amendment of the original bill was rendered necessary by reason of the ruling of the court that the pleas in abatement were sufficient; and, of course, that the dismissal was error. The writer was first impressed the reversal should not be rested upon this error because of the judicial notice we take of our own records, and that we could hold the error in that regard was error without injury. But upon examination of Alexander v. Letson, 232 Ala. 208,167 So. 265; Id, 242 Ala. 488, 7 So.2d 33, and Crossland v. First National Bank, 233 Ala. 432, 172 So. 255, we are persuaded the pleadings and issues do not justify the application of the principle of error without injury.

We are, therefore, of the opinion that on this application for rehearing the opinion and judgment of this court should be modified so as to affirm the ruling holding sufficient the pleas in abatement and reversed as to the dismissal of the bill. The proper order should therefore be, "affirmed in part and in part reversed and remanded."

Application granted, and judgment of reversal modified. Affirmed in part and in part reversed and remanded.

FOSTER, LIVINGSTON, and LAWSON, JJ., concur.

THOMAS and BROWN, JJ., dissent.

BOULDIN, J., not sitting.