No. 1. Seaman v. Dee, 1 Vent. 198, 199.

Seaman v. Dee.

1 Vent. 198, 199 (s. c. 2 Lev. 40, K. B. 24 Car. II.).

Devastavit. Assets wasted by Negligence. — Liability.

An indebitať assumpsit, as executor of S., was brought [198] against the defendant by the plaintiff, as an attorney of this Court, by original.

The defendant pleads four judgments against him; one in an action of debt, (upon which the question was) for money borrowed by the testator upon interest, which debt, with the interest, at the time of the action brought, amounted to such a sum, which was recovered against him: and pleads three judgments besides, ultra quæ he had not to satisfy.

The plaintiff demurs, and after being divers times spoken to, the Court resolved for the plaintiff.

*

that usury is [* 199] And tho' it was

First, for that, as HALE said, no action of debt lies for the interest of money, tho' he which borrows it promises to pay after the rate of £6 per cent. for it; but it is to be recovered by assumpsit in damages. So where by deed the party covenants or binds himself to pay the principal with interest, the interest is not to be included with the principal in an action of debt, but shall be turned into damages, which the jury is to measure to what the interest amounts to, which is allowed to be done; tho' indeed the statutes (which permit the taking of interest) say, damned and forbidden by the law of God. objected, that the judgment is but erroneous, and the executor liable while reversed; and it cannot be said, it was the executor's fault. to suffer it: for an executor may plead a judgment against him in debt upon a simple contract; tho' it could not have been recovered if he had pleaded to the action, or without his voluntary consent. To that HALE said, that debt upon a simple contract lies against an executor, if he please; nay, it hath been adjudged, that an executor may retain for a debt due to him from the testator, upon a simple contract: but in this case no action lies by the law, nor any admission of the executor can make it good.

Secondly, it appears, that part of the interest accrued after the testator's death, which is the executor's proper debt, being his own default to suffer the interest to run on: then the action being brought, both for that which is due in the testator's time, and for

VOL, IX.-21

No. 1. Seaman v. Dee, 1 Vent. 199. — Notes.

that which grew due since, is manifestly erroneous; and there is nothing in the defendant's plea to take away the intendment, that he had assets to satisfy at the testator's death.

ENGLISH NOTES.

There is a dictum of Lord HOLT, C. J., to the effect that if an administrator delays bringing an action, and the debtor is thereby enabled to set up the plea of the statute, the neglect of the administrator would amount to a devastavit. Hayward v. Kinsey (1701), 12 Mod. at p. 573. This view, however, would seem to be stricter than obtained at a later period, and the Court of Chancery would certainly have protected an executor or administrator under the circumstances, if it could be shown that the proceedings would be abortive by reason of the insolvency of the debtor. East v. East (1846), 5 Hare, 343. In Pennington v. Healey (1833), 1 Cromp. & M. 402, 1 Tyr. 319, 2 L. J. Ex. 98, an administrator sued a debtor to the estate to judgment, and under the practice then in force, took the debtor in execution under a ca. sa. The debtor while in gaol, petitioned to be discharged under the Insolvent Debtors' Act, and offered £150 in discharge of the debt and costs. The sum, which was not sufficient to pay the costs incurred in the action, was accepted by the administrator, and the debtor was liberated. The plaintiff, who was a creditor of the intestate, brought an action against the administrator, but a verdict passed to the defendant. PARK, J., who tried the case offered to take the opinion of the jury whether the compromise was or was not fair or reasonable, but the offer was declined by the plaintiff. A rule was subsequently obtained to set aside this verdict, but was discharged after argument. In giving judgment BAYLEY, B., said: "The plaintiff contended, that the liberation of Jones was a devastavit in the defendant, and made the defendant answerable to the extent that Jones was answerable; and he cited Brightman v. Keighley (Cro. Eliz. 43), and Cock v. Jenner (Hob. 66), and several other authorities in support of that position. The case of Brightman v. Keighley certainly does decide that if an executor releases a debt he admits assets to the amount of such debt; and PERIAM, J., gives this reason for it that the law presumeth that he has received so much as he doth release.' There is a dictum to the same effect in Hobart 'if an executor release, the debt released is judged assets in his hands.' There are many cases put in the books, but they are all cases in which there was an actual release, and in which it does not appear that the executor had any reason for giving the release, or that he gave it upon an honest compromise. . . . The true question is this: Does the party exercise a reasonable and honest discretion in

making the compromise? If so, it seems to us that the executor is protected not only by going into equity, but at law. The general rule of law is that the executor is accountable for all which he has received or which, in the honest discharge of his duty, he could or might obtain."

In a Court of Equity an executor or administrator would have been required to show affirmatively that he had reasonable grounds for believing that an action on his part to enforce payment of a debt would have been fruitless. In re Brogden, Billing v. Brogden (C. A. 1888), 38 Ch. D. 546, 59 L. T. 650, 37 W. R. 84.

By the Trustee Act 1893 (56 & 57 Vict. c. 53), s. 21, an executor or administrator, if and so far as a contrary intention is not expressed in the instrument, if any, creating the trust, is empowered (1) to pay or allow any debt or claim on any evidence that he thinks sufficient, (2) to accept any composition or any security real or personal, for any debt or for any property, real or personal, and to allow any time for payment of any debt, and to compromise, compound, abandon, submit to arbitration, or otherwise settle any debt, account, claim, or thing whatever relating to the testator's or intestate's estate or to the trust, or for any of those purposes to enter into, give, execute, and do such agreements, instruments of composition or arrangement, releases, and other things as to him seem expedient, without being responsible for any loss occasioned by any act or thing so done by him in good faith.

Among acts of commission which are regarded as devastavits at law may be cited: The payment of an excessive sum for funeral expenses, Hancock v. Podmore (1830), 1 B. & Ad. 260. Paying a claim which could be resisted on the ground of illegality, Anon. Noy. 129; Winchcombe v. Bishop of Winchester (1615), Hob. 167; Brownl. & G. 33. Paying a claim which could not be enforced by reason of the Statute of Frauds, In re Rownson, Field v. White (C. A. 1885), No. 4, p. 342, post. At law too, an executor who resided at a distance from a creditor of the estate, was responsible for assets received by him, and subsequently entrusted by him to his co-executor to pay that creditor his debt, if the co-executor subsequently misappropriated the assets. Crosse v. Smith (1806), 7 East, 246. In a Court of Equity, however, the executor would not have been liable, as the facts in Crosse v. Smith are the exact case put by Lord REDESDALE in Joy v. Campbell (1804), 1 Sch. & Lef. 341, 9 R. R. 47. As equitable rules now prevail (Judicature Act, 1873, 36 & 37 Vict. c. 66, s. 25 (11)) it seems that this liability has ceased in those countries to which that act applies. Paying creditors out of the order set out in the notes to In re Williams, Williams v. Williams, No. 23 of "Administration," 2 R. C. 199, would be a devastavit. Payment of legacies before satisfy

ing debts is also a devastavit. Knatchbull v. Fearnhead (1837), 3 My. & Cr. 122. The executors are also protected by the provisions of 22 & 23 Vict. c. 35 (Lord ST. LEONARD'S Act). The effect of this statute and the more important cases will be found in the notes to Jervis v. Wolferstan, No. 19 of "Administration," 2 R. C. 165–172.

At law there was no objection to an executor lending out money on personal security. Webster v. Spencer (1820), 3 B. & Ald. 427, 22 R. R. 427. In equity the contrary rule obtained. There, unless an executor or administrator was expressly empowered to lend money on personal security, he committed a breach of trust in adopting that form of investment. Wilkes v. Steward (1801), G. Cooper, 6, 14 R. R. 211. Even where an executor is authorized to lend on personal security, he is not on that account alone justified in leaving debts outstanding on personal security. Evans v. Flight (1838), 2 Jur. 818.

Where an executor is entitled to lend money on personal security he may not lend to his co-executor, v. Walker (1828), 5 Russ. 7;

nor may he permit his co-executor to retain assets for his own purposes, as in the case of a business. Booth v. Booth (1838), 1 Beav. 125, 8

L. J. Ch. 39, 2 Jur. 938.

With the exceptions above pointed out, that which amounts to a devastavit may also be made the subject of proceedings in equity. The payment of an excessive sum for funeral expenses will be disallowed, but an executor or administrator may disburse a reasonable sum. Stag v. Punter, No. 16 of "Administration," 2 R. C. 147. Where an executor or administrator permitted debts bearing interest at 5 per cent to run on, when he had in his hands a fund to pay them, he was charged interest at that rate. Hall v. Hallett (1784), 1 Cox, 134, 1 R. R. 3.

An executor or administrator ought not to keep large balances in his hands uninvested. Littlehales v. Gascoyne, No. 20 of "Administration," 2 R. C. 172. Since the publication of Volume 2, R. C., the question of the rate of interest has been reopened by NORTH, J., in In re Dracup, Field v. Dracup (1893), 1894, 1 Ch. 59, 63 L. J. Ch. 238, 69 L. T. 858, 42 W. R. 264, and by KEKEWICH, J., in Re Goodenough, Marland v. Williams (1895), 1895, 2 Ch. 527, 65 L. J. Ch. 71, 73 L. T. 152, 44 W. R. 44. The latter decision has been followed by STIRLING, J., in an unreported case. It must now be taken that the ordinary Court rate of interest is 3 and not 4 per cent until these authorities are dissented from in the Court of Appeal or the House of Lords. Neither In re Dracup, Field v. Dracup nor In re Goodenough, Marland v. Williams otherwise affect the decision in Littlehales v. Gascoyne, or the principles deducible from the cases cited in the notes.

An executor may be made liable for wilful default. The distinction between wilful default and breach of trust or devastavit is pointed out in a case in Ireland, Blount v. O'Connor (1886) 17 L. R., Ir. 620. Wilful default consists in the non-recovery of assets; devastavit in the waste of assets actually received. An executor or administrator may be charged on the footing of wilful default, although his omission may be unintentional or due to forgetfulness. Elliott v. Turner (1843), 13 Sim. 477.

A devastavit was a personal wrong, and accordingly the death of the person committing the wrongful act put an end to any right of action. The first change was effected by the Statute 30 Car. II., Stat. 1, c. 7. This statute was made perpetual and extended by 4 & 5 W. & M. c. 24, ss. 11 & 12. An action may now be maintained against the executor or administrator of an executor, executor de son tort, or administrator, for a devastavit committed by a person filling the latter character. Where there has been a decision or award, negativing a plea of plene administravit by an executor, his executor or administrator is estopped by the finding. Jewsbury v. Mummery (Ex. Ch. 1872), L. R., 8 C. P. 56, 42 L. J. C. P. 22, 27 L. T. 618, 21 W. R. 270. An administrator de bonis non was held entitled to revive a suit in equity, on the ground that he was within the equity of the earlier statute. Owen v. Curzon (1691), 2 Vern. 237. Where a devastavit is shown or admitted to have been committed it is no defence that the executor of an executor has no goods of the original testator in his hands. Coward v. Gregory (1866), L. R., 2 C. P. 153, 36 L. J. C. P. 1, 15 L. T. 279; 15 W. R. 170. Liability for a claim founded on a devastavit ceases at the expiration of six years. In re Gale, Blake v. Gale (1883), 22 Ch. D. 820, 48 L. T. 101, 31 W. R. 538. Where, however, the claim is not founded on a devastavit, the executor continues liable after the lapse of six years. In re Hyatt, Bowles v. Hyatt (1888), 38 Ch. D. 609, 57 L. J. Ch. 777, 59 L. T. 227. The distinction between the two classes of cases is thus expressed by CHITTY, J., in the latter case: "An executor, by virtue of his office, owes certain duties to creditors, and the duties he owes are legal duties laid down in all the ordinary books on the subject. Among these are the duties of paying the creditors before the legatees, and of paying the creditors, where there is an order of priority, according to their priorities. When an executor sued as such at common law puts in a plea of plene administravit, he is not allowed up his own devastavit in order to escape payment. The reason is plain. A man cannot take advantage of his own wrong, and consequently, when he is sued at common law in his character of executor, and only in that character, there must be disallowed to him all pay

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