Deloach v. Sarratt

| S.C. | Jul 3, 1900

When this case was called for trial, a motion was made to dismiss the appeal, served only three days before. After discussion, the Court was divided on the question as to whether four days' notice of such motion was necessary, and it was, therefore, dismissed.

July 3, 1900. The opinion of the Court was delivered by This is an appeal from an order granted by his Honor, Judge Gage, made in a proceeding supplementary to an execution, issued to enforce a judgment obtained by the said James E. deLoach and Elizabeth deLoach against the said A.A. Sarratt, in his lifetime. This execution having been returned nulla bona in the lifetime of the judgment debtor, and the judgment creditors, who are the appellants herein, having learned that the estate of their judgment debtor had become entitled to a large sum of money, the proceeds of a policy issued by the New York Life Insurance Company upon the life of said A.A. Sarratt, which had passed into the hands of the respondent, F.G. Stacey, they applied for and obtained an order from his Honor, Judge Gage, requiring the said Stacey to appear before Arthur L. Gaston, Esq., who was appointed referee for that purpose, and be examined touching the same. Copies of this order were duly served upon the said F.G. Stacey, and also upon the other respondents herein, S.G. Sarratt and W.J. Sarratt, who claimed to be administrators of the deceased judgment debtor, A.A. Sarratt. This examination, together with the testimony of other witnesses, was taken and reported to the Court — all of which is set out in the "Case." Thereupon the order, bearing date 16th of September, 1899, was granted by Judge Gage, from which the judgment creditors alone appeal, asking certain modifications thereof, as set out in their exceptions. For a more full understanding of the questions presented, let this order and the exceptions thereto be embraced by the reporter in his report of the case. Inasmuch as it was agreed at the hearing of this appeal that the question as to the right of homestead set up in behalf of the children of the deceased judgment debtor, whereby the sum of $500 should be reserved out of the fund in question, we pass by the exception raising that question, and will not consider or decide that question, but will confine our attention to the other points in which error is imputed to the Circuit Judge. These points are: 1st. The allowance of the witness fees out of the fund. 2d. The allowance of the fee of the referee and his disbursements. 3d. The allowance of the funeral expenses and other expenses of the last illness of the judgment debtor. 4th. The allowance of commissions to the administrators.

As to the first and second of these points, which may be considered together, inasmuch as they both practically relate to the costs of the proceeding, it seems to us clear that this proceeding was rendered necessary by the illegal and improper action of the administrators, and, therefore, they should be held primarily liable for all the costs and expenses incident to the proceeding. The testimony in the case leaves no doubt upon our minds that these administrators, instead of pursuing the usual and proper course in administering the assets of their intestate's estate, saw fit, for some reason, as to which the Court is not at liberty to speculate, though it would not be difficult to form a conjecture, what was their real motive, voluntarily to place this fund beyond their control; and that this alone rendered this litigation necessary to enable the judgment creditors to obtain their just rights. But if these costs cannot be made out of the administrators personally, then the fees of such witnesses as they may have summoned, as well as the fee and disbursements of the referee, whose services they, doubtless, obtained, should be paid by the judgment creditors, or what is the same thing, practically, should be deducted from the fund before applying the same to their judgment.

As to the third point, we agree with the Circuit Judge that the funeral expenses and the expenses of the last illness of the judgment debtor should be provided for out of the fund before applying the same to the judgment. Sec. 2048, gives a preference to claims of that character over judgments, where such judgments have no lien upon the fund to be administered — and here it does not appear that these judgment creditors had ever acquired a lien upon the fund in question — and when the Court takes possession of the assets of an intestate, it should, as far as practicable, conform to the law prescribed for the administrator in the administration of such assets. In this way the provisions of sec. 2048 of the Rev. Stat. can be harmonized with the provisions of the Code in reference to proceedings supplemental to an execution.

As to the fourth and last point, however, we cannot agree with the Circuit Judge, as we do not think that the administrators are entitled to any commissions on this fund, either for receiving or paying out the same, for the reason that they cannot be said to have ever either received or paid out the same. It is true, that the Circuit Judge says in his order that "The administrators once had this money, for they indorsed the check," but this is a mistaken inference from the testimony. This fund was originally represented by a check drawn by the New York Life Insurance Company on the New York Security and Trust Company, payable "to the order of S.G. Sarratt and W.J. Sarratt, administrators," and this check they, by their indorsement thereon, transferred and delivered to F.G. Stacey, trustee, who collected the money and deposited the same in bank — not to the credit of the estate of A.A. Sarratt, or to the credit of S.G. Sarratt and W.J. Sarratt, as administrators of said estate — but to his own credit as trustee. For, as the Circuit Judge finds, and his finding is not only supported by the testimony, but has not been excepted to or appealed from: "The money was deposited with Stacey, not for the trusts of A.A. Sarratt's estate, but in trust for S.G. Sarratt and W.J. Sarratt." Now, if these administrators had indorsed this check to Stacey, for collection, with instructions to deposit the proceeds in bank, when collected, to the credit of the estate of A.A. Sarratt, or to their own credit as administrators of that estate, then it might, with some propriety, be claimed that they had, at least, constructively, received the proceeds of the check, and were, therefore, entitled to commissions for receiving the same. But that is not the case here. On the contrary, it is more like the case of an administrators holding a note, payable to his order as such, who by indorsement transfers the same to a third person, who collects the money due on the note, and deposits the same in bank to his own credit; and in such a case it could not, with any sort of propriety, be claimed that such administrator had received the amount of money mentioned in the note. It seems to us, therefore, that the Circuit Judge erred in holding that the administrators were entitled to commissions for receiving the fund in question; and that in this respect also his order must be modified.

The judgment of this Court is, that the order appealed from must be modified as hereinabove indicated, and when so modified that the order be affirmed.