Lanier v. Griffin

11 S.C. 565 | S.C. | 1879

The opinion of the court was delivered by

Willard, C. J.

The facts of the case are sufficiently stated in the Circuit decree in order to understand the bearing of the exceptions to that decree. J. Day was one of the sureties for the guardian, J. B. Griffin, and J. H. Hollingsworth is the executor of the other surety, D. F. Hollingsworth. They except to so much of the decree as bolds Day answerable as surety with D. F. Hollingsworth, and awards judgment for the whole amount found due from his principal to the trustee of the ward. The judgment against Day, as surviving surety, was properly allowed, unless there is force in the objection that such judgment is precluded by a former recovery in a previous suit brought by the plaintiffs to foreclose the mortgage given by the guardian as security, in part, for the amount of his indebtedness to his ward at the time he left the state. It is contended that that fact bars the present action against Day as surety on the bond. We do not see any ground for holding such foreclosure proceeding a bar to the present action. It was founded on the mortgage given by Griffin, and not upon the guardian’s bond or his general accountability, an entirely different cause of action. It does not appear that a general accounting by the guardian was had under it. How that judgment could be reached without an accounting by the guardian is a question that could only become important with reference to the validity of that judgment, which is not in question here. Its effect is determined by the fact that a general accounting was neither sought nor had. Day, as guardian’s surety, was interested to have as much as possible realized from the Griffin mortgage, and the suit in that case was in harmony with the equities in the present suit, and, therefore, the sureties have no cause of complaint, and, certainly, no technical bar. Whether Day was a necessary or proper party to that suit cannot be questioned' here. This exception should be overruled.

The next exception is to the finding of the decree that the devisees and legatees under the will of D. F. Hollingsworth are-liable to the plaintiff for the amount that was received by them as such from the estate of their testator, one of the sureties on the guardian’s bond. This exception is also raised by the appeal of Mrs. Harrington. J. H. Hollingsworth and Mrs. Harrington are the only persons standing in the relation of legatees who-appeal from the decree as charging the plaintiff’s debt against the assets of the estate of D. F. Hollingsworth in the hands of his legatees. Mrs. Harrington stands in the case in the additional character of specific devisee of realty; but the questions growing out of that fact will be considered under the objections raised by her appeal. The question that will be now examined relates to the liability of the legatees of D. F. Hollingsworth to-respond to the amount of assets received by them in payment of their legacies. It is contended that the executors of D. F. Hollingsworth having settled the estate of their testator many years prior to the commencement of this suit, the statute of limitations, as applied to simple contract debts, is a bar to any suit against them by a creditor neglecting to present his demands in due time, and that this circumstance affords a reason why the plaintiffs should be held to be barred as against the legatees. It is true, that in the present case no ground appears for a decree against the executors *of D. F. Hollingsworth. Had the plaintiffs sued them on their legal liability as personal representatives of the testator, a plea of plena administravit could have been established by showing that they had paid out all the assets of the estate in due course of administration, by satisfying all creditors who came in and .proved their debt on the usual notice, and distributing the balance. Walher v. Gill, 2 Bail. 105. In such an action, if the executor relied on the statute of limitations, he would have to show such a bar as would be appropriate to the nature of the plaintiff’s demand, for the object of the bar would be to destroy the right of the plaintiffs to establish their debt as against the assets of their debtor, and not merely to shield the- executor from personal liability. If, however, the executor is directly pursued for his personal wrong, as in the case of á devastavit, he can interpose a bar personal to himself, such as the lapse of the ordinary time for barring actions on simple contract debts after final accounting and distribution. But an action at láw on the guardian’s bond against the personal representatives is not subject to the statute bar. Mobley v. Cureton, 2 S. C. 140. Equity applies the statute of limitations to strictly legal rights brought within its jurisdiction in the same manner as the courts of law apply it. Van Blyn v. Vincent, 1 McG. Eq. 310. The demand of the creditor of the testator against a legatee, who has received his legacy, leaving debts of the testator unpaid, without available assets for its payment, is, in equity, in the nature of an action for money had and received, and the statute of limitations is applied in the same manner as to simple contract debts. Brewster v. Dickinson, 10 Rich. Eq. 435; Buchan v. James, Spears Eq. 375. In applying the bar the court looks to the time when the cause of action accrued to the plaintiff, and counts the statute time accordingly, allowing the same effect to disabilities that prevail at law. In McMullan v. Brown, 2 Hill Ch. 457, the legatees had been in possession of their legacies from 1816 to 1817, and the bill which was brought by the creditor of the testator against the legatees was not filed until 1829. It was held that the suit had been brought in due time, as the cause of action did not arise until judgment had been recovered against the executor, and a deficiency of assets established, so as to enable the legacies to be followed. In that case the question whether the creditor was barred as against the legatee was considered independently of the-question whether such a suit by the executor would have been so-barred. It is doubtless true that the equity of the creditor to go-against the legatee is through the executor, who primarily has-the right to call in assets commensurate with the rights of creditors to have such assets applied to their debts; and it would seem a natural inference that a bar that would affect the executor would equally affect the creditor who pursues his rights through the executor. But the executor may lose his recourse to the legatee by delay to prosecute or some act of wrong committed by him, without destroying the right of the creditor to pursue the legatees. In Fripp v. Talbird, 1 Hill Ch. 142, it is said “ there is no doubt about the general rules that if an executor or administrator proves insolvent, creditors may follow the assets in the hands of a legatee or distributee, and compel them to refund, even although the executor may have retained sufficient assets to pay the debt, and wasted them.'’'’ In such a case, if the executor was compelled to pay, he clearly could not go against the legatees to make good the assets wasted by him. Although the creditor has no original equity against the legatee, as standing in his own right, and holds only an equity derived from that of the executor, yet, under the authorities, it is necessary to conclude that it is an independent equity, for otherwise the creditor would be barred wherever the executor is barred, which, as we have seen, is not the case. Though derivative in its origin, yet that it is direct in its character, as between the creditor and the legatee, is clearly to-be implied from the view presented in Brewster v. Dickson, 10 Rich. Eq. 435, defining it as in the nature of an action by the creditor against the legatee for money had and received to his use. Without an equitable priority between the creditor and the legatee, whether original or derived through some other equity, no foundation for the application of the principles of indebitatus assumpsit would exist. If the executor has assets, or their deficiency has been occasioned by his wrong, the creditor must go against him in the first instance, and exhaust his remedy, before, he can go against the legatee, as was held in McMullan v. Brown. This shows that the creditor’s right against the legatee does not depend on the co-operation of the executor, but that it is independent even of any misconduct that the latter may have committed. If, then, the executor has improperly lost the right to recall legacies, by delay or otherwise, the creditor is not prejudiced thereby. It the present case, the complainant was enabled to go against the legatee with the executors, because it appeared that no assets existed in the hands of the executors, and no ground appeared for charging the executor personally with the debt, as in case of devastavit. We must, therefore, look to the plaintiff’s cause of action, to see whether this action was commenced in due time. The plaintiff, M. C. Brunson, who was the ward of Griffin, did not arrive at majority until 1867. She married in 1866, and the trust deed under which the plaintiff, Lanier, as trustee, claims, was executed in the last-named year. The action, the primary object of which was an accounting by or in behalf of the guardian, was brought in 1868, within four years after the execution of the trust deed and the appointment of a trustee, and within one year after the plaintiff, M. C. Brunson, attained majority. It is therefore clear that the action was commenced in due time after the statute commenced running on the removal of the disability of minority as it regards the ward and as it regards the title of the trustee within four years next after the cause of action accrued. The plaintiffs have established a bond debt against the personal representative of D. F. Hollingsworth, and have shown that there are no assets in the hands of-such personal representative for the satisfaction of such debt, and no remedy available against the personal representative; also, that the legatees have received their legacies, thus entitling them to a decree calling upon the legatees to refund their legacies. Newman v. Bartin, 2 Vern. 205; Miller v. Mitchell, Bail. Eq. 437; Fripp v. Talbird, 1 Hill Ch. 142.

It is contended that the bill makes J. H. Hollingsworth a party defendant only as executor of D. F. Hollingsworth, and, therefore, so much of the decree as charges the said J. H. Hollingsworth as legatee is erroneous. The bill charges the fact that J. H. Hollingsworth was a legatee as well 'as executor, and prays an account on the part of the legatees of the estate of D. F. Hollingsworth. The defendant, J. H. Hollingsworth, in his answer, admits the fact of distribution according to the terms of the will, and the decree is in accordance with these admissions. The objection is of a purely technical character, and does not appear to have been urged in objection to the proofs establishing the liability of J. H. Hollingsworth. It is, therefore, too late for advantage to be taken of such objection, if it ever had any force. Independent of the provisions of the code of procedure, objections that may be cured by amendment should be taken before decree. But the provisions of the code are applicable to the decree which was pronounced in 1876 (Section 465), and the decree cannot be reversed for any such technical defect. Section 197. It is not material to inquire whether any such alleged defect existed in the bill as originally filed, or in the amendment; J. H. Hollingsworth is in the same situation as the other legatees as it regards the bar of the statute of limitations. As executor he is not brought into liability by the decrees.

The appeal of Mrs. Harrington, will be next considered. The first and second exceptions taken by her have been disposed of ' so far as they relate to her rights as a legatee receiving her • legacy, leaving unpaid debts of testator outstanding. Mrs. Harrington was, in addition to being a legatee, a specific devisee of certain lands of the testator. As it regards the realty specifically devised, the statute of limitations is inapplicable. The action against the devisee by the creditor of the testator is under the statute of 3 and 4 W. and M., and is upon the bonds of the ancestor, with which the devisee has privity by reason of assets devised. Mobley v. Cureton, 2 S. C. 140. The plaintiff might have sued Mrs. Harrington at law as devisee without joining the executor, and could have recovered to the extent of assets devised and actually received by her. Vernon v. Valk, 2 Hill Ch. 257. In equity the executor or administrator is a necessary party when assets can be reached that should be applied to the relief of the devisee, and the reason assigned is “ that full justice may be done without resort to a second suit.” Vernon v. Valk. In Alexander v. Williams, 1 HiU 522, it is held that in the case of a creditor seeking to subject legacies after assent by the executors, the remedy is in equity as against all the legatees for contribution. It is clear, therefore, that the decree is erroneous in not having adjusted the recovery so as to reach, in the first instance, assets primarily applicable to the payment of the plaintiff’s demand. Legacies are liable to respond before lands specifically devised can be applied. Duncan v. Tobin, Dud. 160. The decree, however, establishes an absolute liability against Mrs. Harrington to the extent of assets devised by her both as legatee and as devisee. This was clearly erroneous, as it permits the plaintiffs to go at once against her to the full extent of her possible ultimate liability without exhausting the remedy against legatees.

For the foregoing reasons the fourth exception of Mrs. Harrington, to the effect that this decree is erroneous and incomplete because there is no adjudication of the defendants’ liability among themselves, is well taken. The decree does not pursue the legacies in the lands of all the legatees within the reach of the court in accordance with the bill, and in this respect fails to give the full measure of justice due as between the defendants. It appears by the decree that the- guardians of three infant legatees received the shares of their wards, and that the sums that were actually received by said wards of their bequests are unknown to the court • no decree is made for contribution on account of such infants’ legacies, although Milton and Herbert Walker, two of such infant legatees, are made parties to the bill, the remaining infant, Oliphant, appearing to have died before the suit was commenced. It is necessary, if not already done, that there should be a representation of the estates of these infants, and such proceedings had as to bring such estates into contribution pro rata with the other legatees.

It appears that part of the premises specifically devised were alienated by Mrs. Harrington to P. A. Eichelberger, and that the sum of $1800 and interest remained due on account of the purchase money in such alienation. The decree holds the personal representatives of Eichelberger, who is deceased, liable for the sum of $1800 and interest, and orders the sale of the lands specifically devised and thus alienated for its payment, making provision for the allowance to the widow of Eichelberger of dower out of said lands. The bonafides of the alienation is not impeached. Such alienation reduced the demand of the creditor of the testator to a money demand against the devisee for the value of the devised assets. No legal or equitable right to follow the lands’ exists under the statute. The question then arises whether the claim for the purchase money due from the estate of Eichelberger can be regarded as assets of the estate of D. F. Hollingsworth, so as to be reached in the hands of Mrs. Harrington and enforced against the personal representatives of Eichelberger.

D’ Urphey v. Nelson, 4 McC. 128. In this case it was held that, under the 5th Statute of George II., Chapter VII., “ lands of the debtor are made liable for all his debts, and are made assets for satisfying the same in like manner as such estates are liable in England,” and that “ they are liable though devised by the debtor,” and when alienated by the devisee or heir, he is answerable for their value. It is also held that “ the lands of the debtor are made liable for all his debts, and are made assets for satisfying the same, in like manner as such estates are liable in England by specialty,” and that “they are.liable though devised by the debtor,” and when alienated by the devisee or heir he is answerable for their value. It is also held that “ the lands of the debtor are made'subject to like remedies for seizing and disposing thereof for his debts, in like manner as personal estates in the plantations are seized and disposed of for satisfaction of debts, that is to say they are made liable to be taken by a writ of ji.fa. in all cases when chattels are so liable and sold, &c., or to whatever other remedies chattels are liable to in the respective colonies of America. Being made liable in like manner as personal estates, the act cannot be construed to make any distinction between lands and personal chattels, but they must be construed as equally liable for satisfaction of debts and to be assets for that purpose in the hands of the personal representative of the debtor.” The question in that case was whether such lands could be seized and sold under execution against the personal representatives of the debtor as against the heir entitled to them by descent, and it was held that they could be so seized and sold. Much discussion has arisen as to the limits of the doctrine of this case, but it has been conceded that the case must stand as a sound exposition of 5th George II., and, also, that it does not apply to the lands descended or devised where they have been bona fide alienated before suit brought by the heir or devisee. The features of that case that are still open for discussion have no bearing on the present question. Martin v. Latta, 4 McC. 28 ; Vernon v. Valk, 2 Hill Ch. 257; Jones v. Wightman, 1 Hill 579; Bird v. Howze, Spears Eq. 250; Gilliland v. Howell, 1 S. C. 124. It is clear that the doctrine of that case includes the proposition that such assets may be followed in equity in like cases in which personal assets could be followed, and subject to the same rules as it regards the remedy for such assets when they have become converted into some form different from that they originally possessed, but can be traced in such new form. It must be contended that while the lands were in the hands of the devisee they were to be regarded as assets capable of being reached, as such, in equity by the personal representatives or by creditors of the testator. There can be no doubt but that when the lands are alienated by the heir or devisee, the proceeds of their sales can be pursued in the hands of the heir or devisee as assets. It would follow from familiar principles that a chose in action or an obligation held by the heir or devisee for the recovery of the purchase money of the lands devised and alienated, might, at the election of the creditor or personal representative of the testator, as the case might be, be held to represent the assets of the testator’s estate, and be specifically pursued as such. That is the present case, for the plaintiffs seek to reach, specifically, the right of action possessed by Mrs. Harrington for the Unpaid purchase money. It is true, as already held, that such claim for the purchase money of the lands specifically devised takes the place of the lands themselves, and, as such, cannot be reached until the remedy against the legatees is exhausted. The plaintiffs, therefore, cannot have an absolute decree as against the devisee, Mrs. Harrington, as to the demand for such purchase money remaining unpaid, but a contingent right for that purpose depending on the insufficiency of the funds derived from the legacies. In this respect the decree is erroneous, and must be modified accordingly. But in the event that it is necessary to go against the lands specifically devised, a decree against Mrs. Harrington, as it regards the unpaid balance of purchase money» would be ineffectual to obtain full relief, and would necessitate subsequent proceedings against the estate of Eichelberger. As an asset of the estate, the claim for the unpaid balance purchase money can be enforced in this suit as against the personal representative of Eichelberger by a proper accounting, should that course become necessary for the satisfaction of the plaintiff’s debt, the representatives of Eichelberger being a party. That enforcement must be dependent on the insufficiency of the assets primarily liable for such purpose, and the decree must be modified accordingly.

The remaining question is as to the right of the plaintiffs to have the devised lands in the hands of the persons claiming under Eichelberger sold for payment of the amount of purchase money due. It does not appear that Mrs. Harrington holds any special lien on the land sold to Eichelberger by way of mortgage or otherwise that is capable of being enforced in her right. If the lands are general assets for the payment of Eichelberger’s debts, they must be applied in a course of administration according to all legal priorities. If such a remedy can be had in this case, it can only be obtained through an accounting of Eichelberger’s personal representatives and due proceedings thereunder, to which the creditors of Eichelberger should be made parties, and for this purpose application may be made to the Circuit Court in the event that it should become necessary for the plaintiffs to resort to the specific devises. As no appeal has been taken from the order assigning dower it must stand as between the present parties.

The appeal of Mrs. Eichelberger must be denied as it regards the mode of assigning dower. It appears that the land has been sold by consent under an order of the court, and it must be assumed that the intent of such consent was that the amount for which it should be sold should be the test of the extent of dower. All other questions growing out of the actual sale of the land must be reserved for further consideration by the Circuit Court, on the due ascertainment of the rights of the various parties in respect thereof.

The decree must be modified in accordance with the foregoing conclusions, and set aside where inconsistent herewith, and the cause remanded to the Circuit Court for further proceedings in conformity herewith.

Decree modified.

McIver, and Haskell, A. J.’s, concurred.