6 Paige Ch. 415 | New York Court of Chancery | 1837
The order of the vice chancellor was clearly wrong in directing the executor of A. Gracie to pay into court the small sums in his hands received under the Neapolitan treaty, or any other funds which were in nowise connected with the French claims. If the complainants, and other creditors of A. Gracie and Sons who accepted the assignment and released the two junior partners, are to be considered as having released the senior partner also* except so far as related to his interest in the French claims, the complainants had no right to call upon the executor to account for any other portion of the property of the decedent which had come to his hands or which belonged to him in his general character of executor. On the other hand, if the complainants and N. Rogers & Sons still retained their claims against Gracie, so that he and his other estate were still liable for the payment of the deficiency in case the proceeds of the claims both upon the English and French governments were not enough to pay the whole, the executor is undoubtedly entitled to retain for his own debt in preference ; as the law was at the time the testator died, in 1829. Previous to the revised statutes the right of the executor to retain was unquestionable. Even the payment of the money into court, or into the hands of another executor or a receiver under the direction of the court, would not deprive him of that right. (Langton v. Higgs, 5 Sim. Rep. 228. Chissum v. Dewes, 5 Russ. Rep. 29. Decker v. Miller, 2 Paige’s Rep. 149.) The right to retain extended also to debts due to him jointly with others, or in the character of trustee, as well as those due solely to himself in his own right, as he could not in either case bring a suit against himself as executor to recover such a debt. (2 Will, on Ex’rs. 685.) And the right to retain for his debt, out of any future assets which might come to his hands as executor, having
For reasons similar to those before stated, it may be improper to express a definitive opinion upon the question whether Gracie’s judgment against the underwriters, so far as it remained unpaid at the date of the assignment, was a part of his claims upon the French government within the
I have no doubt upon the question that the covenant of Gracie to pay the creditors out of the monies which should be received by him or his representatives on account of his French claims, was an equitable mortgage or specific appropriation of that fund for the payment of the creditors
Although the defendant N. Rogers was not entitled to retain for his whole debt out of this special fund, in his character of executor, he was clearly entitled to his proportionate share of that fund after deducting his commissions and expenses. The vice chancellor’s order was, therefore, wrong in compelling him to bring the whole of that fund into court to abide the litigation between him and the other claimants of the residue thereof. Even if the English creditors are entitled to come in and share with the other creditors under the assignment, a very large sum will still belong to N. Rogers, in any event, which is primarily chargeable upon the proceeds of these certificates. And as it appeared from the complainant’s own showing that N. Rogers’ property was embarrassed with debts, it was unreasonable thus to deprive him of the power of paying off those debts with that part of the fund in his hands which clearly belonged to him.
There is no sufficient cause shewn for taking out of his hands the general trust committed to him, as surviving exec
This decision is to be without prejudice to the rights of the parties as tq any of their equitable claims as against each other, either as to principal or interest, in the final settlement of the account; so that the executor may be charged with interest, as may be just, upon any monies in his hands from any source and which he has appropriated to his own purposes, if it shall in the end be found he was not entitled to such monies. Neither party is to have any costs on the first appeal, unless the appellant finally succeeds in his claim to retain for the whole amount of his debt out of the fund arising from the French claims. In that case he is to have the costs of the appeal and of resisting the application in the court below; to be paid out of that fund.
Upon appeal to the court for the correction of errors, in December 1837, the decree in this cause was so far modified as to declare that the creditors who accepted of the assignment and the covenant of A. Crracie had no equitable lien upon the fund arising from the French claims ; and that tí. Rogers therefore had aright to retain for his whole debt as against other debts of the same rank.