This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
At common law an executor was regarded as the owner of the personalty of the testator, subject to his duty to account for the proceeds of the estate. Accordingly, the appointment by a creditor testator of his debtor as executor, created a situation in which the debtor owed himself. No means of enforcing such liability of course existed. The law, then, had the choice between treating such appointment as a merger or extinction of the debt on the one hand, or of treating the executor as holding his debt to the estate as assets of the estate. As between these two theories the common law adopted the theory that the appointment of the debtor as an executor operated as a discharge of the debt, if the estate were solvent, and the creditors were not prejudiced thereby.1 Under the theory which controls the rights and liabilities of joint debtors,2 the appointment of one of two joint debtors as executor operated as a discharge of the other.3 This rule is not recognized where the estate is insolvent and where the application of the theory of merger will operate to discharge the debtor so as to defeat the rights of the testator's creditors.4 Even at common law, the fact that the same person was executor of the debtor and of the creditor, did not operate as a discharge.5
15 Wilson v. Wilson, 36 Cal. 447, 95 Am. Dec. 104.
16 Carlton v. Carlton, 72 Me. 115. 39 Am. Rep. 307.
17 Carlton v. Carlton, 72 Me. 115, 39 Am. Rep. 307.
18Long v. Kinney, 49 Ind. 235; Gos-nell v. Jones, 152 Ind. 638, 53 X. E. 381
19Long v. Kinney, 49 Ind. 235.
20 In re Callister, 153 X. Y. 294, 60 Am. St. Rep. 620, 47 X. E. 268 [affirming, In re Callister, 88 Hun 87, 34 N Y. Supp. 6281.
21 In re Callister, 153 N. Y. 294, 60 Am. St. Rep. 620, 47 X. E. 268 [affirming, In re Callister, 88 Hun 87, 34 X. Y. Supp. 6281.
22 In re Callister, 153 N. Y. 294, 60 Am. St. Rep. 620, 47 N. E. 268 [affirming, In re Callister, 88 Hun 87, 34 X. Y. Supp. 6281.
23 In re Callister, 153 X. Y. 294, 60 Am. St. Rep. 620, 47 X. E. 268 [affirming. In re Callister, 88 Hun 87, 34 N. Y. Supp. 628].
At a rather early period equity doubted the propriety of the common-law rule,6 and it finally adopted the rule that the appointment of the executor did not operate as a merger of the debt, but that the debt of the executor became assets of the estate in his hands.7
The common-law rule has been changed by the general statutes with reference to the assets of decedents, which appear to contemplate an accounting on the part of the executor for all property received by him and for debts owing by him to the estate.8 It has also been changed by special statutes which provide specifically that debts owing by the executor are to be treated as assets of the estate in his hands.9 In some states the common-law rule was never adopted.10 In some states the equity rule has been followed in the settlement of decedents' estates,11 although it has been said that the appointment of a debtor as executor operated as a quasi-release at law.12 Whatever the theory, the general result in the United States is that the appointment of a debtor as executor does not operate as a merger or extinction of his debt.13
1 Probate Judge v. Sulloway, 68 N. H. 511, 73 Am. St. Rep. 619, 49 L. R. A. 347, 44 Atl. 720 (obiter); Marvin v. Stone, 2 Cow. (N. Y.) 781; Gardner v Miller, 19 Johns. (N. Y.) 188.
It "is quasi a release at law, because he can not be sued." Dorchester v Webb, Croke Car. 372.
2 See Sec. 2074 and 2456.
3 Cheetham v. Ward, 1 Bob. & P. 630. 4 Robinson v. Hodgkin, 99 Wis. 327,
74 N. W. 791 [disapproving, Lynch v. Divan, C6 Wis. 490, 29 N. W. 213].
5 Dorchester v. Webb, Croke Car. 372.
6 Brown v. Selwyn, Cas. Temp. Talbot 240.
7 Hudson v. Hudson, 1 Atk. 460; Carey v. Goodinge, 3 Bro. C. C. 111;
Berry v. Usher, 11 Ves. Jr. 88; Simmons v. Gutteridge, 13 Ves. Jr. 262; Tomlin v. Tomlin, 1 Hare 236; In re Hyslop , 3 Ch. 522.
8 Probate Court v. Merriam, 8 Vt. 234.
9 Probate Judge v. Sulloway, 68 N. H. 511, 73 Am. St. Rep. 619, 49 L. R. A. 347, 44 Atl. 720; Baucus v. Stover, 89 N. Y. 1.
10 Davenport v. Richards, 16 Conn. 310; Potter v. Titcomb, 7 Me. 302; Bassett v. Fidelity & Deposit Co., 184 Mass. 210, 100 Am. St. Rep. 552, 68 N. E. 205.
11 Bigelow v. Bigelow, 4 Ohio 138; Raab's Estate, 16 O. S. 274; Jones v. Willis, 72 O. S. 189, 74 N. E. 166.