« ΠροηγούμενηΣυνέχεια »
The same general principle applies to the responsibility of a representative or trustee for the acts of their agents, and they are liable for all losses to the estate occasioned through the negligent management by such agent. They are also liable for all wrongs to third persons committed by him while acting within the scope of his employment.
104. To what extent estate bound by representa
It is a very well settled doctrine that an executor or administrator may not bind the estate by any contract creating a new liability, which is not founded upon an obligation of the decedent. In making contracts affecting the estate they do not act as agents, but as principals, and they bind nobody but themselves. Therefore, if they sign an obligation, even adding the title of their office, the other party cannot ordinarily hold the estate upon it. The representative alone is liable, and must be sued in his individual capacity.
We use the word “ordinarily” advisedly, for there are cases where, in a court of equity, the act of the representative may give rise to an estate obligation. A good illustration of the distinction is the case of an executor who, by virtue of authority in the will, made a contract for the sale of testator's land. He was unable to convey a good title and the purchaser sued him as executor to recover $400 paid down when the contract was signed, and for $50, the expenses of searching the title. It was decided by the court that as the estate had had the benefit of the $400, the action was properly brought against the executor as such, so far as the recovery of that sum was concerned; but that the estate could not be charged with the fifty dollars for the search.
Upon the same principles stated above, an executor has no power to waive the statute of limitations, nor to revive a claim already barred.
It must not be supposed, from what has been said, than an executor who has made a contract has no recourse against the estate for whose benefit he considered he was making it. If, upon the representative's accounting, it be shown that the contract was properly or necessarily made, and the amount paid by him pursuant thereto was just and reasonable, it will be allowed to him, and the transaction approved. Nevertheless, the representative acts largely at his own risk and must take the chance of having his conduct approved by the court.
105. Same; borrowing money.
Before a representative negotiates a loan, he should make sure either that the will authorizes it or that the borrowing of money is demanded by paramount necessity, i. e., that it is for the positive benefit of the estate, or those interested in it. He certainly will not be allowed for interest paid upon a loan raised for any improper purpose, as, for example, money to be used in continuing the testator's business, which he is not authorized to conduct, or for margin to protect a speculative stock account, or for advances to beneficiaries on account of legacies before they are due.
106. Same; expenses of administration.
Upon the same principle the estate is not liable for the expenses of administration incurred by the representative. He is primarily liable for them in his individual capacity, and can be reimbursed out of the funds of the estate only upon his showing that they are necessary and reasonable in amount. Hence the representative may not create a lien upon the funds of the estate for the services of an attorney employed by him. But if the attorney agrees to look only to the estate for compensation, the representative is thereby relieved from personal liability, and the attorney takes the chance of having his claim approved by the court and ordered paid.
The expenses of administration which commonly regarded as proper, and for which the
representative will be given credit, depend entirely upon circumstances and the nature of the duties he is called upon to perform. Hence, there is no recognized rule serving as a guide. As it is the executor's duty to probate the will and to defend it against attack, he may be allowed the expenses incurred therein, as well as in resisting an application to revoke the probate, even though such proceeding result adversely. So, too, the expense of employing expert witnesses, if their services are reasonably necessary. Disbursements incident to any litigation in which the estate may properly be involved, such as counsel's fees and the expense of procuring testimony, are included within the rule and are allowed almost as a matter of course. The same thing may be said of the personal disbursements of the representative, but not of the services which he may himself officially render, and for which his commissions are deemed to be adequate compensation. This, however, does not apply to legal services which the executor, who is a lawyer, is called upon to render. For these he is entitled to such compensation as may be fixed by the court.
Generally, an executor or administrator must keep his own books of account, but there are many instances where, by reason of the size of the estate, and the intricacy of its affairs, the employment of clerks may well be justified. And where real property is to be sold, he may secure the services of a broker, whose commission will be regarded as an expense of administration.
In all cases the representative must bear the responsibility of deciding for himself, in a given case, whether the contemplated expenditure is legally necessary and reasonable in amount, and the burden of sustaining its propriety rests upon him. No expense should be allowed, unless related to the administration of the estate, and made necessary to the performance of some duty imposed upon him by the will or by law. In no event should he charge the estate with the expense of contesting valid claims on technical grounds, especially where there is no money out of which they may be paid; nor of resisting a successful application for an accounting or for his removal.
107. Ascertainment and payment of debts.
It is no part of a representative's duty to resist payment of his decedent's just debts. On the contrary, he should bear in mind that he is a trustee for all creditors, as well as legatees, and that, except where the law gives a preference to certain classes of debts, all creditors should be treated equally. He should, of course, exercise