
    Bank v. McIntire.
    1. Where a national bank is in fact organized as the successor of a state bank with the consent of more than two-thirds of the stockholders, it may hold and own assets of its predecessor, although in form it was organized as a new bank, and the assets were transferred to it as if I by sale and purchase.
    2. After a mortgage creditor had, in two actions, obtained decrees for sales of the mortgaged premises, the judgment debtor died testate. The will gave power to the executor to sell lands to pay debts. The holder of the decrees and the executor agreed that the latter might sell the mortgaged lands under said power — he promising to pay said decrees in full out of the proceeds, or out of other assets of the estate as preferred claims. The executor sold the lands for more than was due under the decrees; paid nothing on the decrees; paid out and distributed the entire estate to others and died. In an action by the holder of said decrees against the executor’s estate:
    
      
      Held: 1. Said agreement in effect “allowed” the decrees as valid claims against the estate of the mortgage debtor.
    2. The holder of the decrees had a specific interest in so much of the purchase money received by the executor as equaled the sum due on the decrees; and, under the agreement, held alike interest in the other assets of the estate, so soon as the executor applied said purchase money upon other debts.
    3. So soon as the executor, by parting with those assets to others, made it impossible to pay said decrees out of his testator’s estate, he became individually liable to the holder of said decrees.
    4. Such act by the executor was a fraud upon the holder of the decrees, and no statute of limitation could begin to run in his favor until said creditor had notice of the act.
    Ebbob to the District Court of Knox County.
    At April term, A. D., 1859, of the court of common pleas of Knox county, Ohio, the Western Reserve Bank, an Ohio corporation, in an action to' foreclose a mortgage, obtained a decree ordering the sale of a tract of land, in said county, then the property of Daniel S. Norton, in order to satisfy a debt of A. Baldwin Norton secured by said mortgage. This debt was found to be 1535.48. Daniel S. Norton had bought the land subject to said mortgage and assumed its payment. He was a defendant in said action and bound by said decree.
    At same term of said court the same plaintiff recovered a judgment against said Daniel S. Norton and Orange Hollister for $1070.83 and costs. In the same action another tract of land in said county belonging to said Daniel S. Norton and incumbered by a mortgage securing the debt for which said judgment was rendered, was ordered to be sold to satisfy said debt. This debt, also, was one assumed by said Daniel S. Norton.
    On May 31,1859, orders of sale were duly issued under said decrees to the sheriff of the county, who caused the lands to be duly appraised, advertised and offered for sale, but, no bid being made, the writs were duly returned indorsed “ not sold for want of bidders.”
    About November 1, 1859, said Daniel S. Norton died testate; and on November 16, 1859, his will was admitted to probate. Rollin C. Hurd was duly appointed and qualified as executor, but did not publish notice thereof until March 10, 1860. The will gave the executor power to sell arid convey the testator’s lands for the payment of debts. He took possession of the lands covered by said decrees.
    Charles H. Scribner was then the attorney of the bank. An arrangement was made between the executor and said attorney as stated in the following'extract from Mr. Scribner’s testimony in this case :
    “ After the death of Mr. Norton, the subject of the payment of these decrees was the subject of frequent conversation between Judge Hurd, his executor, and myself. I did not understand, inasmuch as there was a decree of foreclosure, that any formal presentation of the claim for allowance was necessary. My view was that he had a right to press a sale at any time; but Judge Hurd was actively engaged in endeavoring' tg effect sales for the payment of debts, under the will of Mr. Norton, and in the conversations I had with him on the subject of the payment of the decrees, he-exhorted me to patience, and said to me that the decrees should be paid as fast as money could be realized from the sales of the mortgaged property. At times the officers of the bank became very pressing; on one or more occasions the cashier came to Mount Vernon to look after the matter; I think his name was Taylor. I introduced him to the judge, and they conversed upon the subject to some extent in my hearing; the same promises were made to him. Many of- these conversations took place between Judge Hurd and myself within four years after the death of' Mr. Norton. I urged payment with all the persistency I could without giving offence. Judge Hurd never questioned the validity of the claims. He always'spoke of them as debts which he was bound .to pay as executor; repeatedly promised to pay them; but insisted that we should not proceed to expose the property to sale under the decrees, claiming that he, as executor, was the proper person to make the sale, and apply the proceeds on the decrees. He spoke the same way on different occasions after he had made a sale of the lands, or some part of them; but on one occasion said he desired to make some sort of a turn of one or more of the notes received upon the sale, with some other person. I have forgotten who it was, but it runs in my mind it was Mr. Israel. He stated, however, that he would make it all right on the final payment of the decrees.”
    About the first of August, A. D., 1863, more than two-thirds of the stockholders of the Western Reserve Bank determined to discontinue the existence of that institution as a state bank, and to organize anew as a national bank under the act of Congress passed February 25, 1863, entitled “ An act to provide a national currency, &c.” As a few of the stockholders did not wish to continue in the new bank, all the surplus assets of the old bank (after each stockholder had received his stock) were sold and transferred to one John H. McCombs, who immediately transferred said assets to the new organization which was styled “ The First National Bank of Warren.” Among the assets so. transferred were the said Knox county decrees and the claim on the Norton estate. The sale to McComb was merely a mode adopted for transferring the assets from the old bank to its successor.
    On the 25th of March, 1864, Hurd, as executor of Norton, sold one of the mortgaged tracts for $1600; and on the 21st day of July, 1866, he sold the other tract for $1400. He received all of the purchase money but made no payment on either decree; filed no account in the probate court, and died on February 13, 1874, testate. A. R. Mclntire and Frank H. Hurd were duly appointed and qualified as administrators (with the will annexed,) of the Hurd estate.. To them, on May 18, 1877, the plaintiff duly presented for' allowance a claim for the entire amount of said decrees with the interest and costs. On September 24, 1877, said administrators rejected the claim. On November 3, 1877, the First National Bank of Warren began in Knox county common pleas a civil action against said administrators of the Hurd estate upon said claims.
    The petition as amended contained a count upon each decree; set out the arrangement between Scribner, as attorney, and Hurd, as executor; the transfer to the plaintiff; the sales by Hurd; his receipt of the money, his failure to pay; his death; the appointment and qualification of defendants ; that defendants had received, and still held part of the proceeds of said mortgaged lands and other assets of the Norton estate; asserted a lien upon said proceeds and assets; and prayed for a judgment against the Hurd estate, and the application of said proceeds and assets to pay it.
    The defendants, by demurrer to the petition, as amended, urged (1) the six years bar; (2) the ten years bar; (3) that the plaintiff had not “ capacity to acquire or hold said judgment, decree and claim, or any power or capacity to enforce the collection thereof” ; and (4) that “ the facts stated * * are not sufficient to constitute a cause of action against these defendants, or to entitle the plaintiff to the relief prayed for.” These demurrers were overruled, and except tions noted. The defendants then answered, denying sundry averments in the petition, and setting up, as a separate defense to each cause of action, that the claim was not presented to Rollin C. Hurd, as executor, for his allowance within four years after he had given notice of his appointment as executor.
    The plaintiffs, by reply, set out the facts as to the decrees, the substance of the arrangement made by Scribner and Hurd; the latter’s admission of the claims as valid; his promise to pay them, and that he “ so waived all other formal proofs of the validity of said claim against said Norton’s estate.” To this reply defendants demurred. The common pleas overruled their demurrer.
    By amendments to their answer the defendants specially pleaded as separate defenses, (1) the incapacity of the. plaintiff; (2) the six years bar; (3) the ten years bar; and (4) that before his death Hurd had fully accounted for and paid out all moneys received by him as executor of the Norton estate, and that there was a balance of over 12,500 due from said estate to his estate.
    Trial was had in the common pleas when evidence put in by tbe defense proved that Rollin C. Hurd had received as éxecutor of the Norton estate $76,155.36, and no more; and had “paid out upon the indebtedness of said estate, the expenses of continuing the business of said decedent, the administration of said estate, the sum of $82,164.04.” The court found the issues in favor of the plaintiffs; that $3,994.57 was due to it, and gave judgment against the defendants as administrators of the Hurd estate. In the judgment the common pleas declared this claim a preferred debt and entitled to priority of payment out of the Hurd estate. A motion for a new trial was overruled, exception taken, and a bill of exceptions,' presenting’all the evidence, duly made part of the record. Upon error the district court reversed the judgment of the com- - mon pleas for error in (1) overruling the demurrer to the amended petition; (2) sustaining the demurrer to the answer filed February 16, 1880, setting up the four years statute of limitation; (3) overruling the motion for a new trial.
    The record (as already stated) discloses that the plaintiffs replied to the said answer of February 16,1880; the defendants demurred to the reply, and the common pleas sustained that demurrer.
    The bank, by petition in error, asks this court to reverse the action of the district court.
    
      John C. Devin, for plaintiff in error.
    The statute of limitations has no application as against the claim of the plaintiff. Banh v. Carpenter, 7 Ohio (pt. 1), 21; 5 Ohio, 181; 1 Powell on Mortgages, 279; 2 Id., 519; 4 Kent’s Com., 154; 1 Pet. (U. S.), 388, 441; 4 John., 216.
    When the law creates a trust, or confers authority to execute a trust, it imposes upon the purchaser no obligation to apply the money further than to pay it to the trustee. Miller v. Greenham, 11 Ohio St., 486.
    The statute directs the application of the money arising from sales made by administrators and executors. 1 Swan 6 Critchfield Stats., 594.
    In the case of a continuing and subsisting trust the statute of limitations does not begin to run as against the cestui que trust, and in favor of the trustee, until he repudiates the trust. Roberts v. Roberts, 7 Ky., 100; 3 Johns. Ch., 216'; 8 Geo., 97; 27 Cal., 274; 11 Humph., 369; Angelí on Lim., § 468; Hill on Trustees, 264; 7 Johns. Ch., 316; 2 P. Wins., 145; 33 Conn., 97; 2 Perry on Trusts, 863; 3 Ired. Eq., 102; 10 Id., 22'.
    As to the capacity of plaintiff to acquire and hold the judgment, see National Rank r. Matthews, 98 U. S., 621; Thompson’s Bank cases, 128.
    
      A. R. Mclntire and J. R. Critchfield, for defendant in error.
    I. The claim of plaintiff was barred by the statute of limitations.
    As to the class of cases that come within the exception of continuing and subsisting trusts, see Kane v. Rloodgood, 7 Johns. Ch., 90; 20,Johns., 676; Cocke v. McGHnnis, M. & Y. (Tenn.), 261; 63 111., 254; 23 Pa. St., 456; 1 Watts, 271; Talbott v. Todd, 5 Dana (Ky.), 190; Webster v. Webster, 10 Yes., 93; 2 Merivale, 93 ; 4 Mason U. S. C. C., 16 ; 2 Atk., 610; 3 Johns. Ch., 215; 8 Yerger, 145; 4 Wash., 631; Angelí on Lim., §§ 168, 170.
    Before'the Code, it became the settled rule in Ohio that the statute of limitations applied to all cases in chancery where there was a remedy at law. Tuttle v. Wilson, 10 Ohio, 27; Horton v. Homer, 14 Id., 444; Paschall v. Hinderer, 28 Ohio St., 568.
    Hence it was those trusts and those only that were within the exclusive jurisdiction of courts of equity that before the Code were excepted from the operation of the statute. And the foregoing authorities clearly point out what class of trusts was known only in courts of equity, namely, “ continuing and subsisting trusts.” It is clear, therefore, that the legislature, in excepting that class of trusts,-meant to exclude sucli trusts, and such only, as had been exempt from the operation of the statute prior to the Code.. Such was the view expressed in the case of Carpenter v. Canal Co., 35 Ohio St., 307.
    The plaintiff hacía complete and adequate remedy at law. Sect. 182 1 S. & C., 606; § 6110.Rev. Stats.; Q-reer v. State, 2 Ohio St., 575; 7 Ohio (pt. 1), 223; 25 Ohio St., 443.
    But there was still another remedy. The plaintiff could have caused a citation against Norton’s executor for final settlement; and then upon the filing of such settlement could have proceeded against him to judgment, either in the probate court or the court of common pleas. Sec. 1 and 6 of the act of April 17, 1857, S. & C., 1st vol., 619.
    Or the plaintiff could have brought an action for money had and received. 31 Ohio St., 643; 2 Id., 568; § 189 S. & C., 604.
    The plaintiff’s claims constituted the first liens, and hence could .not be affected by the insolvency of the estate. When the claims were made they became, upon the theory that no presentation and allowance were necessary, due and payable ; and the demand for their payment gave the plaintiff a clear right under sec. 182 to bring suit at law.
    This suit is not upon the bond, and hence is barred by the limitation of six years provided for by sec. 14 of the Code. Had the action been upon the bond it would have been barred in ten years under sec. 17 of the Code. Adm'x Mount v. Laheman, 21 Ohio St., 643.
    More than seventeen years had elapsed before the commencement of this suit, since the executor’s default in filing his account; more than thirteen years had elapsed since the cause of action accrued on the first claim, and more than eleven years had elapsed since the cause of action accrued on the second. So that each and all the remedies provided at law were barred before the commencement of this action. And the attempt to make this a proceeding “ on the chancery side of the court ” will not prevent it from coming within the operation of the statute, for the plaintiff had a complete remedy at law for the same right, and that remedy having been barred, the remedy in equity is also barred. So that whether this be regarded as a suit in equity, or at law, in either case it is barred.
    Having neglected the remedy, both^legal and equitable, the plaintiff cannot complain that the statutes which “ rest upon sound policy and tend to the peace and welfare of-society” now interpose a bar to its right of recovery.
    II. The said claims were not only never presented to said executor for his allowance, and never were allowed by him, Wit that it does not appear that said executor had any actual notice of the existence of said claims within four 3rears from the date of his appointment. Section 103 S. & C., 585; 17 Ohio St., 548.
    III. The plaintiff had not the corporate capacity to purchase those claims. 8 Ohio, 287; 4 Craneh, 127; 12 Wheat., 64; 6 P. F. Smith, 14; 4 Wheat., 636; 9. How., 186; 15 Ohio St., 68 ; 23 Minn., 198 ; 16 Albany L. Jour., 316; 68 Me., 43; 39 Md., 600; 42 Id., 581; 47 Vt., 456 62 Mo., 329 ; Morse on Banks, 566 ; 71 N. Y., 161; 2 Dillon, 371; 72 Pa. St., 456; 83 Id., 57; 36 Iowa, 443; 23 Ohio St,, 329; 101 U. S., 79.
   Granger, C. J.

Had the plaintiff power to become the owner of the assets of the Western Reserve Bank, including the decrees and judgments against Norton ?

Congress intended to encourage the conversion of state banks into national banks. To further this intent it provided an easy mode of effecting the change without materially interrupting the business of the bank. When that mode was adopted the national bank' became the owner of all of the assets of its predecessor (the state bank), of whatever nature. In this case the First National Bank of Warren was organized by the stockholders of the state bank; it actually succeeded the Western Reserve Bank of Warren in its location and business, and became possessed of no assets that would not have belonged to it if the statutory mode of transformation had been adopted. In another mode the new national bank was legally constituted and assets of its predecessor transferred to it. As we construe the “Act to provide-a national currency” it clothes a national bank with power tó succeed a state bank; to hold and own its assets, and then pursue the business of banking under the limitations of the act itself. Whether it .becomes such successor in the mode provided by the act, or in the manner adopted by the plaintiff, is immaterial in this case. We hold that the plaintiff is the legal owner of the claims set out in the petition as amended. See first paragraph of the syllabus in Ehrman v. Ins. Co., 35 Ohio St., 324; also the last paragraph of the opinion of Peck, J., in White’s Bank of Buffalo v. Toledo Ins. Co., 12 Id., 610.

What is the nature of these claims ?

Before Norton’s cTeath the Western Reserve Bank had obtained a personal judgment against him in one case and decrees in both for the sale' of the mortgaged premises. Instead of making the executor a party to the cases, and enforcing sales under the decrees, the bank and Norton’s executor agreed that the latter might use the power to sell, given by the will, he agreeing, as executor, to pay the decrees in full with interest and costs, as preferred claims. This agreement entitled the bank to receive from the executor so much of the proceeds of the mortgaged premises as equalled the decrees with the interest and costs, or to receive a like amount out of the other Norton assets, notwithstanding such payment to it might consume those assets and leave other liabilities of that estate unpaid. This arrangement was beneficial to the estate. It saved further costs §,nd expenses in the suits, and gave the executor at least an opportunity for getting higher prices for the land. Such an agreement was within the scope of the executor’s powers, and made it unnecessary for the bank to formally present the claims for allowance. If any such presentation was necessary, this agreement accepted the statements of Mr. Scribner as such presentation, and admitted that both decrees were .valid claims against the estate. We think the four years’ statute of limitation did not apply to either of them under the facts stated in the petition as amended or in the reply, and the common pleas did not err in overruling the demurrer to the reply to that defense.

Under the agreement the executor was required to pay the decrees out of the proceeds of the mortgaged premises, or oxd of the Norton estate as preferred claims. So long as he retained enough of that estate to make such payment, he did not make himself individually liable to the bank. This action is predicated upon such individual liability. It is true that the petition charges that part of the proceeds of the mortgaged premises and other assets of the Norton estate had come into the possession of the defendants, and sought to give effect to a lien upon them; but it prayed for a judgment against the Hurd estate, and the evidence showed that no Norton assets came to the defendants. The defendants are not liable in this action as, in any sense, the representatives of the Norton estate. Their only power and duty touching that estate was to file an account showing Hurd’s transactions while executor, and to deliver to his successor, when appointed, the remaining moneys and assets, if any, of that estate.

Treating the action as one against the Hurd estate, upon his individual liability, when, if ever, did the statute of limitations begin to run ? So long as he retained assets of Norton, sufficient to pay the decrees in full, his mere delay to make the promised payment created no personal liability. So long as the settlement of the Norton estate remained open; so long as Hurd delayed to file his accounts in the probate court, all unpaid claims that he, as executor, had admitted to be valid, remained in full force and effect against that estate. Holding the moneys and assets of the estate in a trust capacity, he held them subject to the right of the bank to priority in payment, and the moment he, by otherwise applying them, made it impossible for him to pay the bank out of the Norton estate, he became individually liable to the bank. But as such payment by him under the case shown was a fraud upon the bank, the statute would not begin to' run in his favor, if at all, until the bank had knowledge that he had so acted as to incur this liability.

The petition does not show when the bank first acquired such knowledge. As it set out a valid claim to the proceeds of the sale of the mortgaged premises and averred that part of said proceeds were in defendant’s hands, the common pleas did not err in overruling the demurrer to the petition as amended.

The defendants sought to avail themselves of the six years’ bar. This imposed upon them the burden of proving that Hurd individually ought to have been sued more than six years before this action was begun. The exhibit from the probate court showed that Hurd had, during his lifetime, disposed of all of the Norton assets, and so made it impossible to pay the bank out of that estate. But there was no evidence even tending to show when Hurd so disabled himself, or ivhen the bank 'first had notice of it. Hence the common pleas did not err in finding that the plaintiffs’ action against the Hurd estate was not barred, or in overruling the motion for a new trial.

But that court did err, as we think, in holding the claim a preferred debt against the Hurd estate, If the record disclosed any specific assets of the Norton estate in the hands of the Hurd administrators, the plaintiff would be entitled to an order applying them upon the judgment; but no such fact is shown.

Judgments of the district court and common pleas reversed and decree for plaintiffs for the amount found by the trial court, with interest and costs. Execution to run against the Hurd estate.  