61 Me. 277 | Me. | 1870
Lead Opinion
This is an action of assumpsit, brought by the administrator of the estate of William Woodman, to recover the sum of seven hundred dollars, given b}r said Woodman to the defendant a few days before his decease. The plaintiff offered to prove the insolvency of Woodman at the date of the gift, and that the estate was rendered insolvent and was so insolvent.
The presiding justice ruled upon the facts, offered to be proved that the action was not maintainable.
. The gift, as between the parties thereto and the heirs of the donor, was valid. So far as the rights of prior existing creditors are concerned it was fraudulent, or evidence from which the inference of fraud must be drawn.
The estate being insolvent, the creditors defrauded cannot institute suits against the donee for the recovery of the money given. The administrator must act for them. He is trustee. It is his duty to protect and enforce their rights. As to them the gift is void, and the money given should be in the hands of the administrator, as a part of the assets of the estate for the payment of its debts.
Assumpsit for money had and received is an equitable action. The gift being void, so far as the plaintiff acts for the creditors, he can recover on the money counts the amount in the defendant’s hands, to be appropriated with the other property of his intestate, for the payment of the creditors entitled thereto and the necessary expenses of administration. The balance, if any, will belong to the defendant. Though the gift may be void as to creditors, it is valid as against the heirs oí’ the giver. Abbott v. Tenney, 18 N. H. 110. It is for the administrator to show the amount required to pay the debts due from the estate to its several creditors, defrauded by his intestate, for that is all which he is - entitled to recover. The remainder, if any there be, belongs to the defendant.
The motion to dismiss cannot avail the defendant. It is not entitled in this suit. It will apply as well to any other cause on the docket as to this. It is not stated in the bill of exceptions that the oath was administered by the plaintiff’s attorney, and if it had
Dissenting Opinion
dissented and delivered the following opinion, stating the grounds of dissent.
This case shows that William Woodman in his life-time gave the defendant, in consideration of love and affection, the sum of seven, hundred dollars. The plaintiff is the administrator of the estate of said Woodman, now deceased, and brings an action of assump-sit upon an account annexed in these words:
“ 1868. Addie C. Weeks to William Woodman, Dr.
Dec. 23. To cash had and received, . $700.00.”
Woodman died the 25th day of December, 1868. There is also a general count for money had and received, both counts averring a promise to the intestate in his life-time. To sustain his action the plaintiff offered “ to show by proper evidence that the estate of said Woodman was rendered insolvent, and to prove'that in fact the said Woodman was insolvent at the time of the gift and of his decease.” The presiding judge ruled “ that an action at law cannot be maintained on the facts offered to be proved.” In considering this ruling it may be well to consider first the condition and rights of the donor and donee after the gift was made, and during the life-time of the donor.
There can be no question that the donor parted with all his title and interest in the money by the gift. This has been too often settled to need any citation of authorities. In an hour after had lie repented of the gift he could not have recovered it back. There was no promise, express or implied, or raised by law, to repay him. He could not maintain an action of assumpsit for it, nor could any other person in his name do it. There was nothing upon which to base assumpsit, or indeed to maintain any form of action for it. He had no cause of complaint to bring before the court.
If there was such a promise, why could not the donor in his life-time maintain a suit upon it ? If there was none, howr can the administrator maintain a suit upon such allegations ? The difficulty with the plaintiff’s case is a failure to distinguish between a promise of repayment and a liability upon the part of the donee to have the property seized and applied in the extinguishment of certain claims against the donor.
The death of the donor creates no promise upon the part of the donee to the dead donor. His death neither enlarges nor diminishes the claim any creditor may have upon the fund. It does not increase or diminish the interest the donee takes in the fund. The donor is a stranger to it from the time he parted with his interest in it.
Second. What were the rights of third parties ?
The transfer being made upon no other consideration than love and affection, and being absolute, not held in trust by the donee for the donor, may have been void as to creditors of the donor existing at the time of the transfer. Assuming it to be so, the donee took it subject to a right in them to seize it and apply it in satisfaction of their claims. They could or not proceed against this fund as they chose. It -was a personal right to be exercised or not. It was not one common to all the creditor’s. The relation of debtor and creditor must be shown to exist at the time of the transfer to entitle the party to proceed against the fund, and the donee held it subject only to the right of such persons to seize it by process of law and apply it to such claims. When seized, the creditor could make no other- application of it than to indebt
In the life-time of the donor the proceeding must be by attachment of the property thus held. If the property be such as can be come at to be attached in specie, and manually, it must be so done; if it be such as cannot be reached in this way it may be reached by our process of foreign attachment. The remedy is against the fund and not against the person holding it. No creditor in the life-time of the donor could maintain assumpsit against the donee for the money. He had simply a right to seize the property, the gift notwithstanding. There was no promise existing between the creditor and the donee, and indeed, as before remarked, no promise between the donee and any one else. He took the property, with the right of the creditor still existing to soize it, for his demand, upon execution process.
As between the donor and donee the consideration is a good one, and the transaction gives the donee as good and as sacred a right to the property as that by which any individual holds his possessions. She has as much claim upon the law and the courts for its protection as she has for any other property she possesses. Subsequent creditors have no more legal or equitable claims upon this property than have entire strangers to the estate, and they will not be allowed to obtain by indirection that which the law forbids them to get by direction. They cannot compel the prior creditors to look to this fund in order that they may hold the intestate’s estate for their own benefit. All the creditors alike have a claim upon the estate of the deceased, and should that prove deficient, the prior creditors may recover their balance from any fund thus disposed of. The only ground upon which they can look to such a fund is that the disposal of it was without a valuable consideration and to their injury. It is not to their injury unTless the estate proves insufficient to meet their demand, and it is only to their injury to the extent the estate fails to pay. If these
. There was no legal duty devolving upon the intestate in his life-time to recover back the money for the benefit of his creditors ; as we have seen before, he could not do it. The law would not- aid him in so doing. It lent its aid only to those who were injured by the transaction; those who had a claim upon the fund when it was transferred. The community of interest in the fund was solely in the donee and prior existing creditors. They were the only parties having any interest at all in the fund. The deceased, after the gift, had not the most remote interest in it, nor any person who thereafter became a creditor. As to these the right of the donee is as clear, legal, and equitable, as that possessed by any member of tire court to his property.
By pursuing the inquiry concerning the rights of the donee and the rights of creditors a little farther we shall discover some of the embarrassments attending the mode of procedure adopted in the case at bar. As we have before seen, the intestate parted with all his interest in the property, and the defendant took it, discharged of every claim save that of creditors. The possession of the intestate in his life-time was rightful, and the possession he conferred by the gift and delivery was rightful. She was no trespass er, but the owner in possession, subject to the right of certain persons by process of law to seize. She was not holding in wrong. To be dispossessed of this property any person claiming it must show his right to it. He must prove he is a creditor and was a
Again, in such an investigation, the several parties, claimants under our law, would be witnesses in their own behalf, while in pressing their claim against the administrator they would not. They might be able to make a claim when proved as a collateral matter between the administrator and this defendant, and be wholly unable to do so in a direct issue with estate. As to this defendant it would be a claim, and as to the estate it would not. Suppose the administrator should leave out a creditor whose claim was in fact an existing claim at the time of the gift, does he become responsible for that claim ? Suppose he proceeds upon the general allegation that the estate is insolvent, and was insolvent when the gift was made, and is then held entitled to receive the fund, shall he then, upon his own mere motion or judgment, determine conclusively upon this defendant that A. and B. are prior creditors, and determine conclusively upon C. and D. that they are subsequent creditors and entitled to no part of the fund ? The law invests him with no such power. His powers are not judicial. He cannot thus settle the rights of parties. Neither will the law impose upon him the other alternative of paying or withholding at his peril. The truth is, such claims, viz.: those against
If it be said these questions may be settled by the commissioners of insolvency, it may be answered for this case that they have not done so; but inasmuch as proceedings in insolvency may go forward before the decision is announced, and inasmuch as the question is one important in practice, a few suggestions upon the proposition may be proper.
The first apparent answer is that they are charged by law with no such duties, nor clothed with powers adequate to their performance. Their powers and duties are specifically defined. They are not a court of general judicial power, but exist for a certain specified purpose. It is no part of their duty to ascertain and adjudicate upon the rights of particular persons to any particular property, over that of others. They are not charged with the duty of determining whether claims are or not, with reference to any conveyance or transfer, prior or subsequent. They do not determine whether or not an estate is insolvent. They settle the amount due each claimant from the estate.
The question involved in the case at bar is an important one to persons holding property, and upon both issues that may be raised the evidence may be of such a character as to require an investigation in, and the decision of, a court of last resort. If proceeding were had in such cases before the commissioners of insolvency this could not be done. It is only the administrator, the creditor, and the heirs at law who have a x'ight to appear and contest the claims, and only those can appeal, and the decision made cannot reach a vital question, viz.: that of prior or subsequent origin of claim. This defendant being neither administrator, creditor, or heir at law would be a stranger before them and consequently unaffected by their proceedings.
In the case at bar, as before remarked, no such proceedings appear to have been had or instituted. It simply appears that the
Another inquiry suggests itself and that is, whatever the form of remedy, what has the administrator to do with the matter ? It is a proceeding against property the intestate had at his decease no interest in, and property that has never to come to the possession of the administrator for the estate. It is simply property some of the creditors may seize for their own benefit, a security they have beyond that found in the assets of the deceased. It is the duty of the administrator to administer upon the estate of the deceased. It is not his duty to administer upon property in which the deceased had no interest at all; upon property he had parted with all interest in. It is his duty to enforce all the claims the deceased might if he was living, and discharge all obligations he was in duty bound to do, so far as assets come into his hands, and if creditors have a claim upon other property or upon other persons for the security or liquidation of their demands, he is not bound to pursue that property and those persons for the creditors. Each creditor must look for himself to any means he has beyond that possessed by the deceased to liquidate and discharge his claim.
Suppose the creditor holds the guarantee of a third person, for the payment of the claim he holds against the intestate, must the administrator pursue that guarantee for the creditor to pay any balance the assets in his hands fail to meet ? Clearly, that is no
He is not bound to sue indorsers upon the deceased’s paper for the benefit of the creditor. They constitute a security the creditor holds beyond the property left by the deceased, and a security the administrator has nothing to do with. He administers upon that which the deceased left. He demands that which the deceased could demand, and lie pays and discharges, as far as assets will permit, all that the deceased was bound to pay and discharge. He is in no sense the representative of the creditors, and in assuming that he is lies the cause of some diversity of opinion as to the remedy that may be pursued in cases of this kind. He is' tli e representative of the deceased alone. That he will do that which the deceased was by law bound to do for the benefit of the creditors he is required to give bond to the judge of probate, for their use. He could not act as agent for the creditors in those cases where their interests were not identical, but antagonistic. He could not be their representative in such cases. He could at best but represent a part. In settling the question of a priority or preference of one claim over another to liquidation from a certain fund, interests arise which render such a relation to all the creditors impracticable, if not impossible. The creditors in such cases become contestants. The administrator and creditor are often contesting and adverse parties in court. They are always so before the commissioners of insolvency, and each may appeal from their decision made against them and litigate the questions in this court. Every proceeding in probate court by the administrator must be after due notice given the creditor, that he may appear and oppose tlie proceeding, and any creditor has the right to appear and contest the claim of the administrator. He is to every
In those cases where the intestate had not parted with the title to property, but had secreted it in the hands of the party called to account, in order to keep it beyond the reach of creditors, the remedy sought in the case at bar might avail. In such, the title still remaining in the intestate would pass to the administrator, if personal, and any promise arising from the circumstances to the intestate might be enforced by the administrator. But where all interest has passed irrevocably, and there is no promise, express or implied, the rights of creditors arise under the law derived from the Statutes of Elizabeth concerning fraudulent and voluntary conveyances. Such conveyances under those statutes wrere void and of none effect only as against creditors. In the leading case in this State upon that subject, Andrews v. Marshall, 43 Maine, 272, Mr. Justice Cutting says: “In Osborne v. Moss, 7 Johns. Rep. 161, citing Hawes v. Loader, Cro. Jac. 270, and Yelv. 196, as also in Anderson v. Roberts, 18 Johns. Rep. 527, it was decided that if
In Brownell v. Curtis, 10 Paige Chancery Rep., the cases referred to by Mr. Justice Cutting are referred to as establishing the doctrine of the common law and the law of the Statutes of Elizabeth adopted as the common law of this country, and the chancellor says, “ a similar decision was made by the court of appeals in Maryland in the case of Dorsey v. Smithson, 6 Har. & Johns. Rep. 61.”
The case of Osborne v. Moss was a case where the defendant justified the taking of goods, as administrator of the former owner, upon the ground of “ fraud between the intestate and the plaintiff to cheat the creditors of the intestate.” The court say the case of Hawes v. Loader “ is an answer to this defense and completely destroys it.” The administrator farther suggested that he was also a creditor of the intestate. The court say “ this does not alter the case; as creditor he had no right to take the goods without suit.” That his remedy as creditor would have been to have sued the plaintiff for his debt and charged him as executor de son tort. This he could have done, notwithstanding he was administrator; and the case of Ashley v. Child, Styles, 384, is expressly to this point.
Upon recurring to the report of the case of Hawes v. Loader, it seems Loader was administrator of Cookson. That Cookson in his life-time conveyed certain goods to defraud his creditors, retaining the possession of them himself. While thus in possession he died intestate. The grantee of the goods (Ilawes) brought an action against the administrator, into whose hands the goods came, for the goods thus conveyed; the administrator pleaded the Statute of 13 Eliz. of fraudulent deeds of gift, etc., and the fraudulent conveyance and the indebtedness of the deceased. There was a demurrer to the plea, and it was adjudged for the plaintiff on several grounds, one of which was, “ that the defend
In this case it was also held that the goods, as to creditors, “are liable in the hands of the plaintiff as executor de son tort, if the deed of gift be fraudulent.”
This same doctrine is declared in 1 American Leading Cases, 43, in a note to the principal case reported. It is there said “ the' general principle is clear that a fraudulent conveyance is good between the parties and their representatives ; and that the fraudulent donee may recover the property from the executor or administrator, even if the latter be a creditor. The creditors also have their remedies independently of the administrator; for a fraudulent donee taking or keeping possession of the goods is at common law liable to the creditors as executor de son tort; and creditors are entitled to go into equity against the property in the hands of the fraudulent grantee.” “ The better opinion is, that at law such property is not assets from the testator’s death, for the profits of which in his hands from that time the administrator is responsible ; or which he can recover, as administrator, from the fraudulent grantee.”
In the case of Allen v. Kimball, 15 Maine, 116, such an action was sustained against a fraudulent grantee who had sold, after the decease of the,fraudulent grantor, the property thus conveyed to him. This case recognizes very clearly this remedy of a creditor against a fraudulent grantor.
In an earlier case Morrill v. Morrill, 13 Maine, 415 such an action was not sustained, because the sale and disposition of the property by the fraudulent grantee took place before the death of the fraudulent grantor ; therefore the grantee was not an intermeddler after the decease and in no wise executor in his own wrong. The court say the doctrine has never been carried so far as to unravel transactions in regard to property of this description, which had
In the case cited from Maryland it is held, “ the executor of the donor has no right to the goods the donor has fraudulently conveyed, and is estopped to allege that the deed is a fraud upon creditors. The property is not assets in his hands and he is not accountable for it as executor.”
In a case in Alabama it is held that “ if one in his life-time makes a fraudulent conveyance of his property, his grantee may, after his death, be charged as executor de son tort, although there is a lawful representative, because the latter being bound by the fraud of his testator or .intestate cannot be charged at all in his representative capacity.” Simonton v. McLane, 25 Ala. 853.
As to the liability of the fraudulent grantee or donee as executor de son tort to the creditor, see also in North Carolina, Bailey v. Miller, 5 Iredell, 444; McMorine v. Story, 3 Dev. & Batt. 87; McMorine v. Story, 4 Dev. & Batt. 189; Norfleet v. Reddick, 3 Dev. & Batt. 221; Bayner v. Robinson, 3 Dev. & Batt. 439 ; Sturtevant v. Davis, 9 Iredell, 365. South Carolina, Tucker v. Williams, Dudley, 329. Georgia, Howland v. Dews, R. M. Charlt. 383; Clayton v. Tuck, 20 Geo. 452; Gleaton v. Lewes, 24 Geo. 209. Alabama, Densler v. Edwards, 5 Ala. 311; Simonton v. McLane, 25 Ala. 353. Kentucky, Hopkins v. Tower, 4 B. Monroe, 124. Missouri, Foster v. Nowlan, 4 Mo. 18. Maryland, Dorsey v. Smithson, 6 H. & T. 61.
Numerous other cases might be cited showing the practice of other courts to be the same as that adopted in this State in the case of Allen v. Kimball.
This practice seems to be sustained not only by this great weight of authority, but would seem to be almost the necessary result of a correct construction of the law concerning fraudulent conveyances arising under the Statutes of Elizabeth.
The legal proposition made in Andrews v. Marshall, before referred to, that such conveyances “ remain good as against the party,
In some cases bills in equity, in the name of the administrator, have been sustained to set aside gifts donatio causa mortis, the interests of all the creditors being identical. This method of proceeding “ has been much disputed,” and is subject, indeed, to much criticism when attempted to be sustained upon principle.
Where the interests of the creditors are identical, there is perhaps no impracticability or inconvenience in allowing the creditors to move in equity in the name of the administrator.
In such cases, however, he proceeds not as administrator binding his sureties upon his administrator’s bond, but as a trustee of the creditors.
If the interests of the creditors are not identical many serious embarrassments may be supposed in such a proceeding. '
In Caswell v. Caswell, 28 Maine, 232, the remark is made by the learned judge who drew the opinion, that the “administrator of an insolvent estate, as trustee of the creditors, is entitled in proper cases to the aid of this court, as a court of equity, to obtain property belonging to the intestate, which creditors may lawfully claim, to apply in satisfaction of their debts where the same is held in fraud of their just rights. And the court has power, upon satisfactory evidence that a conveyance was made by the intestate for the fraudulent purpose of delaying or defeating creditors of the grantor, to pronounce the conveyance inoperative and void, and thereby enable the administrator more effectually to obtain means to be appropriated in discharge of the debts.”
How far this general proposition can be maintained or how far it is practicable to proceed in equity as administrator, may admit of some doubt. The statutes of this State authorize administrators to sell lands which the deceased has fraudulently conveyed to defraud creditors. R. S., c. 71, §22; R. S. of 1857, c. 71,” § 22 ; R. S. of 1841, c. 112, § 31.
It seems to me that a careful consideration of the statute will lead to the conclusion that its design was to provide for a summary and safe mode of selling the interest creditors had in the land, leaving the purchaser to seek any remedy he might afterward need and afforded by the law. It may well be supposed that the Legislature thought it more wise and prudent, to do so than to allow administrators to enter upon a litigation that might 'consume all the estate left and result in the end unsuccessfully. It would indeed, we think, be a dangerous policy, and one which might well be avoided by authorizing the sale of the interest in the estate which might ultimately be found in the creditors.
It will be remembered that in none of the sales of administrators does the law require a warranty of title in the deceased. It is such only as he lias, if any, that the administrator undertakes to sell, and he only warrants the regularity of his proceedings. There would be very little propriety in requiring him to go forward in the very class of cases doubtful, and establish a title at tbe expense of that which is not doubtful.
These statutes, however, refer to lands and do not in terms reach personal estate ; and personal estate, in which the deceased himself had no interest, can receive no aid from these provisions, however we may construe them.
If each of the creditors upon the decease of the debtor took a separate, vested, ascertainable interest in the property, it is easy to see how a bill in equity could bo maintained by making such creditors respondents as did not desire to be complainants, and thus have them all before the court to settle their several interests.
As has been before suggested, the rights of prior and subsequent creditors may be materially different, and in such case it would be very difficult for the administrator to serve both parties in a bill, and equally difficult for both classes to proceed together as complainants, or, indeed, as respondents. The gist of the thing seems to be that it is not a fund of the deceased nor one belonging to the estate as an estate, but is one creditors, any one or more, may look to for the purpose of extinguishing any demand they may have.
Another question of practice of some importance might arise, and that is, whether or not the creditors’ claims must be established in a court of law, before the creditors could proceed by bill in equity to obtain the fund. This would seem to be necessary. It would be very difficult in a single bill to settle a hundred different claims, and that, too, where the claimants, who are also complainants, are adversely interested against each other.
If the bill was prosecuted by the administrator, it would be equally necessary that these claims should be settled at law, for, as before remarked, the administrator could not well represent different and* conflicting interests. It would indeed be serving two masters whose interests were adverse. And were all the claims reduced to judgments, still a question of priority of claim to the fund may arise, and here again the interests of the judgment creditors might be antagonistic.
Many other difficulties might be suggested of more or less force in the way of proceedings by bill in equity, either in the name of the administrator or by general creditors’ bill.
The gift being good as to all others, remains undisturbed unless he see fit to disturb it.
If it should be regarded as assets falling to the administrator and vesting in him for the benefit of the creditors, it might well be argued that it becomes his-duty to collect such before resorting to the realty, and the heir might insist that he should do so, to save the realty for him, and thus one as to whom the gift is valid might derive an advantage from the fact there were persons against whom it is invalid. It must be remembered that a gift or fraudulent sale made with a view to defraud creditors is equally invalid as to such creditors, whether the party be or not insolvent. It is the purpose and design of the transfer that affects its validity.
It does not become necessary in this case to determine whether or not in any given case a bill in equity could be maintained, nor indeed what remedy remains for the party. The simple question here to be decided is whether this action can be maintained upon the facts proved and offered to be proved, and that is all that is hc-re decided. The suggestions here made are made in view of other possible ulterior proceedings, by way of suggesting some of the difficulties which may be found to attend a proceeding in equity, and aiding the party, in some degree, in the solution of the question of what in fact the true remedy is.
Had these queslions been fully argued by the able counsel who appear on either side of this case, we might have thought it advisable to determine the question and make this case a precedent for future practice.
Perhaps the suggestions here made and a farther examination of the question will lead to the conclusion that, the right to ignore the sale or gift is a personal right, attaching to each prior creditor tobe exercised or not as lie chooses, regardless of the wishes of others possessing a similar right, and that when done it must be done on his own motion and responsibility, and that the simplest and most
At all events we think this action cannot be maintained, and that the ruling was right. Exceptions overruled.