Dent v. Maddox

| Md. | Dec 15, 1853

Tuck, J.,

delivered the opinion of this court.

A decree for the sale of the real estate of Isaac Maddox, for the payment of his debts, was passed by Charles county court, as a court of equity, in November 1830. A sale was made and reported by James Brawner, the trustee, and an order of ratification nisi was passed in November 1831, the report stating that the purchaser had complied with the terms of sale, by executing his bond with sureties named in the report. At this time, also, the case was referred to the auditor for an account.

Nothing further appears to have been done in the case, until September 1842, when the appellees, heirs at law of' Maddox, who were minors when the decree passed, filed their petition praying that the proceeds of sale might be brought into court by the trustee. An order nisi was passed for this purpose, of which the trustee had notice, but he does not appear ever to have answered, or shown cause against the petition, though he subsequently participated in taking proof, before the auditor, in relation to claims against Maddox, which he sought to have allowed out of the proceeds of sale. Three accounts, A, B, C, were stated by the auditor of Charles county court, in the last of which claims to a large amount were allowed, absorbing nearly the whole purchase money. After this the case was removed to the high court of chancery, and subsequently certified to his Hon. Judge Brewer for decision.

On the 4th March 1846, the auditor in chancery reported another account, from which he excluded all the claims except the complainants, on the ground that they were not proved, and were subject to the plea of limitations, which had been filed against them. In this account the proceeds of sale, after deducting expenses and the complainants’ claim, were distributed among the appellees, as heirs at law of Maddox.

On the 17th July 1846, the heirs at law, by petition, suggested. the death of James Brawner, the trustee, and prayed that the appellant, his executor, might be made a party, and that relief might be had against him. The appellant in his answer denied that he had any part of the trust fund, and, also, insisted that M.addox died insolvent, and that the proceeds of sale had been applied in payment of his debts. He also filed exceptions to the auditor’s account, of March 1846, in accordance with the averments in his answer. At the hearing the exceptions were overruled, and the account ratified. But as there was no allegation or proof of assets of James Brawner in the hands of his executor, the appellees were allowed to amend their petition, for the purpose of having the estate of Brawner administered in the chancery court. The appellant answered accounting for the assets that had come to his hands, and, also, showing that, under the will of his testator, he had sold certain real estate, and that the sale had been ratified by the orphans court of Charles county. But he denied the jurisdiction of the court to charge him in this form of proceeding, at the instance of the heirs at law, and contended that the proceeds of sale of the real estate of his testator, could not be applied to the payment of their claims, as personal assets in his hands. An order was passed 8th February 1850, requiring the appellant to account with the appellees in respect to the personal estate of James Brawner, and also for the proceeds of sale of his land, and that the creditors of Brawner be notified to file their claims. In the account subsequently stated the claims of the appellees, predicated upon the auditor’s account of March 1846, were allowed against the estate of James Brawner; and the executor has appealed from so much of the order ratifying that account, as relates to these claims and to claim No. 11.

The case appears to be one of those which courts of equity are sometimes called upon to decide, where, from irregularity of proceedings, neglect or remissness of trustees, and. lapse of time, the party who succeeds may gain more than in conscience he ought to demand; which consequence however the court has no power to prevent. There are circumstances tending to prove that the administrator of Maddox paid some of his debts, after he had passed an account in the orphans court showing that he had overpaid the estate ; and there is evidence, also, that the trustee paid a large balance due on a debt of the deceased, under a mistaken view of his authority as trustee. For these payments the appellant claims an allowance out of the proceeds of sale. And it is contended, on his part, that under all the circumstances of the cause, the purchase money, if received by the trustee, should be considered as having been properly disbursed by him, and that the defence relied upon by the heirs at law, should not be favorably regarded by the court. With the propriety of this defence courts have very little concern ; it rests with the party interposing the plea. In such cases if the plea be sustained the law must have its course, and the loss, if any, fall on those whose duty it was to have obviated the difficulty by a prompt and faithful discharge of official trust. It is unnecessary, therefore, to examine the evidence on which these allowances are claimed, because as they are resisted by the plea of limitations and were barred at the time when the claims were filed, they were properly rejected by the court below.

The decree contained no direction to the trustee to bring the proceeds of sale into court. It “appointed him trustee for carrying the decree into effect.” But we do not think, as contended by the appellant’s counsel, that this can be construed into an authority to disburse the trust funds. Trustees sometimes pay away the proceeds of sale, without bringing the money into court, after an audit has been made and ratified, bat certainly they have no such power before the fund has been distributed by such account and ratification. Mackubin vs. Brown, 1 Bland, 410. If they do pay, it must be at their own risk, and they can be in no better condition than the creditors whom they may have paid. The case before us illustrates that no such power should be recognized. If Brawner had not paid these claims, and his creditors had filed the vouchers in court claiming payment out of the real estate, the heirs at law or other creditors might possibly have shown that the alleged claims had been paid, or were otherwise liable to be excluded' from the distribution. The trustee and administrator, by paying them and retaining the vouchers for so many years, have denied this opportunity to those interested in the estate. Such payments only entitle the party to be subrogated to the rights of the original creditor. If, in -consequence of the terms of the decree, he felt any embarrassment as to his course, he should, as a faithful agent, bound to carry out the design of the trust, have sought the aid and direction of the court. Comegys vs. State, use of Dyckes, 10 Gill and Johns., 186.

There is, to be sure, no- direct proof that the trustee received the proceeds of sale, but we think that there cannot be a reasonable doubt on this point. At any rate, under the circumstances of this case he must be presumed to have collected the money, or to have lost it to the estate by his neglect. It is to be remarked, that the trustee did not, nor did the appellant, deny that it was received. The effort on the part of the trustee and his executor has been to show, not that he did not receive the money and why he could not have done so, but that it had been properly disbursed in paying off Maddox’s debts. In his report he states, that the purchaser had given bond with sureties, according to the terms of the decree. If the parties had become insolvent or for any cause the purchase money could not have been collected, he should have shown it. As it was his duty to have collected the proceeds of sale or shown why he did not, he must be dealt with as if it had come to his hands. 1 Bland, 416.

The case of Reigart and Stevenson, vs. Stevenson, in this court, not reported, is relied upon to show that the court below had no jurisdiction in this case. There was no opinion filed — nothing to show whether the court meant to apply that decision beyond the case before them, which we suppose was not intended. The eases, however, are materially different. In the one before us we do not perceive any available remedy at law that the heirs could havé resorted to; Suits on the trustee’s bond could not have been maintained until after an audit, confirmation, notice and demand of the trustee. Oyster vs. Annan, 1 G. & J., 450. Scott vs. Ducker, 2 Md. Rep,, 284. The same reasons would apply to an action of assumpsit against the trustee for money had? and received. The effect would have been to have had an Investigation of the trust estate of Isaac Maddox in a suit at law when there was already a case in equity pending for that very purpose; The practice of calling upon trustees and their representatives to account for the trust funds is of long standing in this State. We are not aware of any case in which relief has been refused merely on the ground that the application’ for an account was filed in the Cause in which the original decree was passed. 1 Bland, 410. 3 Bland, 284. It is eminently proper that it should be so. The most summary and economical mode should be pursued. Why have an original bill? The fund belongs to the case in which the decree passed; the heirs at law and the trustee are in court, and the creditors, if not already in, may come in under the decree, and all matters in dispute may be considered and finally disposed of with less expense and delay than by a new bill. The effect of the proceeding has been, as suggested by the appellant’s counsel, to distribute the estate of James Brawner in' a case not originally instituted for that purpose. But how could it have been Otherwise without injustice to his executor and other creditors? The right of the heirs al law of Maddox to have their proportions of his estate ascertained in this case cannot be questioned. But the payment must have depended on the sufficiency of James Brawner’s estate, unless the court below had directed satisfaction to be made by his executor, which would have been manifestly unjust, because in a suit on his testamentary bond, that order would, we apprehend, have the same conclusive effect against him as a judgment at law against him would have had. Iglehart vs. Mackubin, 2 G. & J., 235. To-avoid this result, it was necessary to call in Brawner’s creditors and have his estate marshalled before any final determination of the rights of the appellees. We do not say that air original bill could not have been maintained, but we think it was unnecessary in the case before us. In the case of Baltzell vs. Foss, 1 H. & G., 504, land was sold for partition. A creditor of one of the heirs was allowed to come in by petition as against his share of the proceeds, on the allegation-that he left no personal estate to pay his debts. The court said it could not be questioned at that day, but that creditors might, by way of petition, instead of pursuing the accustomed course of an original bill, affect funds situated as in that case.Yet unless the petitioners were the only creditors of the party,they could not have the entire fund applied to their claim. Such a course would be doing injustice to other creditors, if such existed; but they could be permitted, as on original bill by a single creditor, to come in for their distributive share.

The third, fowrth and fifth points of the appellant relate to the will of James Brawner and the effect of the act of 1831r ch. 315. It cannot be denied, that his creditors were entitled to have his land sold for payment of debts, if, as is apparent from the record, the personal estate was inadequate for that purpose, even if his will had contained no authority to-the appellant to sell the realty. The will does create a trust, but it at the same time authorizes the executor to sell the land as he may deem best for the benefit of those interested in the estate. It is quite consistent with the intention of the testator, that the appellant, as executor, should sell the land under the act of 1831, and after closing the estate hold the balance for the trusts of the will. The tenth and eleventh sections of the act, we think, authorised this sale. It applies to all cases where executors are authorized and directed-to sell real estates. Its object was to save the expense and delay incident to chancery proceedings. The proceeds of-such sales are to be accounted for in the orphans courts in-the same manner as the sales of personal estates, and the testamentary bond is made answerable as fully as for the personal assets of the deceased. To deny its application to a case like the present would be to defeat the manifest intent of the act. Besides, the appellant himself appears to have entertained this view of his authority under the will. The record shows that he made the sale as executor, and that it was so reported to, and ratified by, the orphans court.. In a case of doubtful construction, we should not willingly listen to an argument, the effect of which might be to shake the title of the purchasers acquired in the manner we have stated.

The widow is to be considered as a purchaser for value, and entitled to an investment for life. But of what? Surely not of the whole proceeds of the real estate to the prejudice of creditors, but only of so much as might remain after the settlement of the estate. It does not appear that she renounced the will. If, standing by the will, she has permitted the land to be sold by the executor, we do not perceive that she has any cause of complaint if she obtains all that, the testator could rightfully devise to her. And if she claim as widow and not as devisee, the auditor’s report shows that the balance in the executor’s hands, after paying debts, is more than she would be entitled to in lieu of dower, and consequently she is not injured by the decree.

Whether the widow, heirs and devisees should have been made parties depends on the character of the proceeds of sale —whether realty or personalty. If the sale was rightfully made, as we suppose it was, according to the act of Assembly, the executor represented all parties in interest as fully as he would in any case involving the personal estate of a deceased person.

For the reasons assigned, we thing that claims Nos. ], 2, 3, 4, 5, 6, 7, were properly allowed. But -we do not take this view of claim No. 11. The court below treats this as having been fully established by the adduction of a judgment against the appellant, as executor. If this were the fact we should, without hesitation, agree in allowing the claim. But we find no such evidence in the record, except a copy of the docket entries of a case between the claimant and the appellant, referred to the register of wills, upon which there does pot appear to have been any award or judgment. The cause appears to have been very irregularly conducted from the beginning almost; to the end; and the record exhibits numerous defects whjch may account for this apparent error of the pourt below. As the cause will be remanded that the assets may be brought into court, as required by the order from whiph the appeal is taken, and that the suspended claims may be disposed of, .plaim No. 11 can be settled according to the aptual condition of the proof.

Cause remanded.