Baumgartner v. Haas

68 Md. 32 | Md. | 1887

Stone, J.,

delivered the opinion of the Court.

The principal question in this case is whether Gunther, one of the defendants, shall be held liable as executor de son tort. The facts necessary for us to notice are these:

A certain Frederick C. Baumgartner, now deceased, in his life-time executed several bills of sale, absolute on their face, to the defendant, Henry Gunther, who was his father-in-la wu These bills of sale, among other things, included fifty cowts, which were in the possession of Frederick C. Baumgartner at the time of his death.

Immediately upon the death of Frederick C. Baumgartner, Gunther took possession of these cows and continued to carry on the milk business which his son-in-law, Frederick, was engaged in at the time of his death. Letters of administration were soon after the death of Frederick granted to his widow Mary, and she returned a small inventory not including any of the fifty cows.

Within ten days after the death of Frederick O. Baumgartner, the complainant Haas, one of his creditors, filed a bill against Henry Gunther for the purpose of setting aside the aforementioned bills of sale, as- fraudulent and void ¿gainst him, the complainant, as a creditor of Frederick, and for general relief, and also made the administratrix, Mary, a defendant. Answers were duly filed and testimony was taken, and the Court decided that while there was not sufficient proof to countervail the presumption of the bona fides of the consideration of the bills of sale, the description of the cows was not sufficient to pass any title to them under the bills of sale, and decreed that Gunther should account for them, and from this decree there was no appeal. In the subsequent proceedings in the case Gunther was treated as an executor de son-tort, and his debt postponed to the debts of other creditors, and from this, and the valuation of the cows this appeal was taken.

It has been strenuously argued in behalf of Gunther, that he should not be held liable as an executor d,e son tort because he took possession of these cows under color of title, and that he believed he had the legal right to do so. There are cases to be found where a party has not been held executor de son tort where he in good faith, and believing-he had the title took possession of property, .and to which it was afterwards shown that he had not a perfect legal title. The leading case on this subject seems to be the case of Femings vs. Jarrat, 1 Espinasse, 335. In that case there was a bona fide sale of the ship to the defendant, but the bill of sale was defectively executed, and the Court held that under such circumstances the defendant should not be held liable as executor de son tort. This decision has been followed in several of the States. But in every case to which we have been referred the element of good faith will be found. We by no means intend to assert the extreme proposition that he who takes possession of the goods of the deceased in good faith, and believing he has a good title to them, will be held in all cases as executor de son tort. But there must be at least color-able ground for his claim, and good faith in its assertion. Is this the case with Gunther ?

Within ten days after the death of Frederick C. Baumgartner, the complainant filed a bill against Gunther, attacking this bill of sale and claiming that the property should go into the hands of the administratrix. It is true enough that the bill of complaint alleged a want of consideration for the bill of sale, but it also prayed that it might be declared void as against him, and also prayed that Gunther should account to him, and for general relief. This was notice to Gunther that his right to the property was disputed. An opportunity was then afforded Gunther to state fully and frankly his position and claim to this property. The bills of sale were taken either as a security for a debt or as an absolute conveyance, and it was incumbent on him to state his claim truly. But his answer on that point is evasive. He does not state explicity in his answer to the bill of complaint whether he claimed the property absolutely, or only a lien on it for his debt. But when examined as a witness afterwards he admits that the bills of sale were taken as security only.- Apart from his own evidence there are other facts in the case which would clearly prove the same thing. If then being only in reality a mortgagee, and knowing himself to be such, he took possession of nearly the whole property of the deceased, a pertinent enquiry at once arises, what was his motive in so doing ? Those motives are shown, we think, bv bis subsequent conduct and his treatment of the property. He, Gunther, kept a feed store and he continued to feed the cows out of it, and to run the milk business until his account against the property, according to his own showing, stood profits from the sale of milk, $1500; expenses for feed, &c., $2900, and theu he sold the cows. The difference he evidently expected to be paid out of the sale of the property. As soon as he took possession of this property he took measures to prevent the other creditors either from seeing the cattle, or knowing the amount of milk that he was selling.

These and other circumstances that might he mentioned are utterly irreconcilable with the theory of an honest mistake, which might relieve him from the liability of an executor de son tort. His daughter administered but he seems to have managed the administration, and after causing an inventory of something over one hundred dollars in value, he took possession of all the rest with the result that we have shown. If under the circumstauces we have detailed, the defendant is not to he treated as an executor de son tort, how is he to be regarded? He held and used the property of the deceased, without the right to do so, and it is difficult to see how he can be called to account for it except as executor de son tort, there being at the time a rightful executor.

In Bentley vs. Cowman, 6 Gill & J., 152, the Court distinctly recognize the right to hold a party accountable in equity as executor de son tort. In that case a creditor filed a hill for the sale of the real estate of a deceased debtor, upon the ground that his personal estate was inadequate to pay his debts, and what there was of it had been expended by his heirs without any administration. No account of the personal estate was asked for, and no charge made that the heirs were executors de son tort, hut the sale of the realty was asked, and there was the usual prayer for general relief, and Judge Dorsey in the opinion of the Court says: “ But conceding it (a disclaimer by way of plea) to be an unexceptionable disclaimer as to the land, and a bar to all relief sought in relation thereto, it would not warrant the decree dismissing the complainant’s bill, the allegations in which, not only present a claim against the defendants in respect of the realty of the deceased, but also as executors de so ntort of the personalty. And although there is no formal prayer for an account in the bill, yet the facts authorizing it are sufficiently charged, and the prayer for general relief entitled the complainants to such an account.” This case very clearly recognizes the right to call an executor de son tort to an account in a Court of equity, as well as by suit at law. In many cases he can be effectually reached only in equity.

In the case at bar, there is both a prayer for an account and for general relief, and the defendant, Gunther, can clearly be held to account as such executor de son tort.

Now an executor de son tort sued at law as such by a creditor of the deceased, is not allowed to retain for his own debt. The current of authorities is uniform on this point, and it is enough for us to refer to the case of Glenn vs. Smith, 2 Gill & J., 493, where the law is definitely settled in this State.

It is true that that case as all the others within our notice were cases at law, and it has been very strenuously argued that a different rule should prevail in equity. It is insisted that, in refusing to allow Gunther to retain any portion of the property in controversy in payment of his own debt, a Court of equity would be enforcing a penalty upon him, which a Court of equity will never do.

The rule of the common law, which refuses to allow executors de son tort to retain for their own debts until the other creditors are paid, is based upon sound public policy. To allow it (2 Black. Com., 511,) would tend to encourage creditors to strive who should first take possession of the goods of the deceased, and would allow a creditor to take advantage of his own wrongful act by paying himself first. Such is unquestionably the rule of the common law from time immemorial. Can a Court of equity annul this rule? A quotation from an eminent American writer (Story) will answer this question: “For example, (1 Story’s Equity Juris., sec. 11,) the first proposition that equity will relieve against a general rule of law, is neither sanctioned by principle’nor by authority. For though it may be true that equity has in many cases decided differently from Courts of law, yet it will be found that these cases involved circumstances to which a Court of law could not advert, but which, in point of substantial justice, were deserving of particular consideration, and which a Court of equity proceeding on principles of substantial justice, felt itself bound to respect.”

This is a bill in equity, and it has been argued that when the-decree was passed against Gunther requiring him to account for this property, and bring it into Court for distribution among the creditors of the deceased, that Gunther being a creditor should participate in the distribution.

If the creditor Haas had brought suit at law and recovered, the defendant could not certainly have retained any thing for his own debt. The plaintiff if his debt amounted to the whole value of the property would have taken it all. This is unquestionably the rule at law. Should an honest and meritorious creditor of the deceased be placed in a worse position, when he seeks the aid of a Court of equity ? Or should a manifest wrong-doer fare better in equity than at law? We think the answer to these propositions must be in the negative.

To allow the defendant to come in and participate in the division of the property recovered from him, is practically to allow him to retain a share of it for his own debt, and thus relieve him from the operation of the rule of the common law, that forbids such a retainer.

The general proposition is laid down in the elementary writers upon the powers of a Court of equity, (See Black. Com. and Story’s Eq. Juris.,) that equity cannot relieve against a rule of the common law however harshly it may operate. Along list of cases where these rules do operate harshly and rigorously, but which equity is powerless to relieve against, is given by the writers.

If we admit that there may be exceptions to this general rule, they must be in cases where there are circumstances to which a Court of law cannot advert, and reach through its procedure, and which are necessary for a Court of ■equity to notice in order to reach substantial justice.

But the case at bar does not come within these exceptions, (if such exist) and the conduct of the defendant has not been such that substantial justice would require any abatement of the rigor of the rule.

But it has been further argued that a Court of equity while it may relieve against, yet will never aid in the enforcement of, a penalty; and that the postponement of the debt of the defendant to the claims of the other creditors is a penalty upon him, and therefore a Court of equity will uot enforce it. There is no doubt of this law. It is laid down in the text writers and fully sanctioned in Cross vs. McClenahan, 54 Md., 21.

But- this law applies to cases where the aid of a Court of equity is sought to enforce a penalty. How this is not a suit to enforce a penalty, but simply a suit by a creditor to recover a just debt. Penalties in civil matters are imposed by statute or by agreement of parties, principally the latter.

The case of Cross vs. McClenahan, above mentioned is an example of the former, and the case of McKim & Kennedy vs. Mason, 3 Md. Ch. Dec., 186, an example of the latter.

But a rule of the common law regulating the order in which an executor de son tort, or wrongful executor, shall pay away the assets in his hands (for the rule amounts to-that) never was and never can (be considered a penalty. He is required to pay all. other creditors before he pays-himself. If there is nothing left after the payment of the-others he gets nothing.

(Decided 9th December, 1887.)

So a rightful executor is required by our statute to pay judgments before bond debts, and if he holds a bond of the deceased, and the judgments take the whole estate he gets-nothing. It may as well be said that our statute imposes-a penalty upon bondholders, by postponing their claims to those of judgment creditors,, as that the rule of the common law, which postpones the debt of a wrongful executor (as far as the assets in his hands are affected) to all other creditors, imposes a penalty on him. We are therefore of opinion that the defendant, Gunther, is properly chargeable . as executor de son tort, and that the report of the auditor and order of the Court thereon excluding him from participation in the assets in his hands, is correct, and must be affirmed.

As to the other question presented,- we think the valuation of the property made by the auditor fully warranted by the testimony, and the order must be affirmed with costs.

Order affirmed.

Robinson, J., dissented.