Greiner's Estate

2 Watts 414 | Pa. | 1834

The opinion of the Court was delivered by

Sergeant, J.

The first question is, as to the character of the claim of Philip Greiner, whether it is a specialty or not: for the debts of Klingman, for the use of Brower and Welsten, are admitted to be specialties. Philip Greiner’s claim cannot be so considered. A surety paying the bond debt of the principal, would be placed in the situation of the creditor thus paid, and entitled to all his rights; Dorsheimer v. Bucher, 7 Serg. & Rawle 9; but it is admitted that Philip was not a surety. It is contended, however, that the bond was a joint and several bond, and therefore Ftederick Greiner’s estate was liable upon it. Toll. Exec. 284. The legal construction of such a bond as the one under consideration, was examined in the case of Moser v. Liebenguth, 1 Rawle 255 ; 2 Ramie 428, and the decision was, that it is to be construed a joint bond. If so, the executors of Frederick Greiner were not liable on it, and Philip Greiner was bound to pay the whole as surviving obligor. Whatever claim he had against Frederick Greiner’s estate for contribution, must, rank as a simple contract debt, growing out of matters dehors the instrument.

Jacob Yoder claims the sum remaining in the hands of the administrator, towards the reimbursement, of moneys advanced by him in payment of the debts of the testator to a greater amount. If the executor, in the course of the regular discharge of his duty, advances moneys out of his own purse to discharge debts, it is but just (hat he should stand in the place of the creditors thus paid, and enjoy their privileges. But if he proceeds irregularly, and without regard to the rights of the creditors generally, as where he pays off simple contract debts, when there are specialties and other debts of equal degree, he has no claim to preference on a deficiency of assets. In the present case there can be no ground to allege a want of notice ; because suits were brought in 1818 and 1819, before the settlement of the first account, and, for aught we can tell, before payment of the debts mentioned in it; no dates of these payments being furnished in the account. There was, then, an expenditure of 9t)0 dollars out of funds to which the specialty creditors'were first entitled, and the simple contract creditors had a claim to a proportion of the remainder. These must now be lost, if the executor is to take the fund. Between the years 1820 and 1823, there is another sum of 484 dollars applied in the same unauthorized manner.

Our laws scrupulously provide for the security of the executor, and the fair and equal distribution of the assets among creditors, according to their legal rights. By the fourteenth section of the act of 1794, it is made the duty of the executor or administrator, where there is a deficiency of assets, to apply to the orphan’s court for the appointment of auditors to settle and adjust the proportions payable to the creditors; who are required to present their claims within one year after public notice, on pain of losing a dividend of the assets. This affords a complete protection against the risk of mispayments from want of notice, or otherwise: and it would seem to make it the duty of every executor to avail himself of it wherever the estate is insolvent, if he means to be secure against a charge of devastavit, in paying debts out of their order and proportion. The English law allows an executor to make voluntary payments, as against debts of an equal or superior degree, of which he has not due notice: otherwise it might be in the power of creditors to ruin an executor, by suppressing their debts until the assets were expended. But our act of assembly stands upon a different footing: for it places the means of guarding against hazard in the hands of the executor himself.

By the act of assembly of 1705, the order of paying debts was prescribed ; and it was enacted, that nothing in that act contained should prevent or damnify ah executor of administrator for discharging the decedent’s just debts, as the same should come to their knowledge, without regard to the priority of the same in payment, after the expiration of twelve months from the time of the decedent’s decease. This act, though it prescribed the order of paying debts, did not provide for a pro rata payment, where there was a deficiency of assets. Under its operation, the executor could voluntarily pay one creditor in preference to another of equal degree, of whose debt he had not legal notice : but not in preference to a creditor of superior degree within a year, though after a year he might. But whether within the year or after, a compulsory payment could be enforced in ail cases. Roberts v. Cay’s Executors, 2 Dall. 260.

The act of 1794 substitutes a new and improved system. It prescribes the order of payment, and, in addition, provides for a pro rata payment in case of deficiency of assets, by authorizing and requiting the executor to apply for auditors, and to give- notice by public advertisement. It would seem that by the present system, in casé of the insolvency of the estate, neither a voluntary nor cornpulsoiy payment to .one creditor of his whole debt can take pilacé, without. defeating the provisions of the act. In Ex parte Meason, 5 Binn 167, it was held, that an administrator could not, under the act of 1794, retain for his own debt in preference to creditors of equal degree, on the ground that if he could 'sue himself he could not recover his whole debt, but only a proportion. See also Dorsheimer v. Bucher, 7 Serg. & Rawle 9.

If, therefore, the estate be insolvent, it is the duty of the executor to withhold payment, and apply for the appointment of auditors. He is not at liberty to make voluntary payments, in contravention of the order and proportion prescribed ; and, if sued, should apply to the court to control the proceeding of the creditor: otherwise the beneficial design of the act would be frustrated. If the executor disregards this duty, and undertakes to pay at his own will and pleasure, he ought to be considered as assuming the responsibility, and liable to the creditors who may suffer by bis neglect. On the other hand, when the estate is solvent, it is the right and the duty of the executor to pay off the debts as soon as possible, for the benefit of heirs and legatees, and distribute the surplus.

Decree of the court reversed, and the report of auditors confirmed.