Miller v. Irby's Adm'r

63 Ala. 477 | Ala. | 1879

BBICKELL, O. J.

It is, in this court, a doctrine which ought to be regarded as familiar, and settled, that if the ' debtor to a testator, or to an intestate, takes probate of the will, and qualifies as executor, or obtains a grant of administration, the debt is extinguished. Incapable of suing himself ; divesting the contract of parties, an essential element to its origin and continuance; converting the debt, for all practical purposes, from a chose (or thing) in action, into a chose (or thing) in possession; by operation of law, the equivalent of a judgment and execution against himself, satisfaction of which it is his duty, legal and moral, to make; voluntarily taking upon himself the right and duty to demand and receive, and the existing obligation of paying and discharging resting upon him; it is the just, natural, logical, legal consequence of his voluntary act, that the debt, he is in his fiduciary capacity bound to demand and receive, and which he is under legal and moral obligation to pay aod discharge, should be presumed conclusively paid and discharged. - Hampton v. Shehan, 1 Ala. 298; Purdom v. Tipton, 9 Ala. 914; Whitlock v. Whitlock, 25 Ala. 543; Ragland v. Calhoun, 36 Ala. 606; Whitworth v. Oliver, 39 Ala. 286; Seawell v. Buckley, 54 Ala. 592. The duration of his administration is not important. The instant the dual obligation, duty and capacity are created by his voluntary act, the presumption the law raises, of necessity obtains. In Ragland v. Calhoun, supra, it was said by this court; “ Where a debt and credit — a right to demand, and an obligation to pay— coexist, even for a moment, in the same person, the debt is extinguished by the presumption of payment.”

If William and J. E. Irby, at the time of their appointment as administrators of Elizabeth E. Irby, had been indebted to their intestate, under the operation of this principle, such indebtedness would have been extinguished. Without regard to their solvency, it would have been converted into assets — money in their possession, which they would have been under the duty of accounting for, and applying in the due course of administration. — Simmons v. Gutheridge, 13 Vesey, 264; Windrop v. Bass, 12 Mass. 199; Bigelow v. Bigelow, 4 Ohio, 138; Prentice v. Dehon, 10 Allen, 353. In Simmons v. Gutheridge, supra, it was said by the Lord Chancellor : “ A debt due by the executor, to the estate of the testator, is assets, for the same plain reason upon which an executor who is a creditor may retain: that he cannot sue himself.”

An executor does not, in this State, have the right of intermeddling, taking control of, and disposing of the assets, before probate of the .will. It is only in a qualified sense that it may be said his authority is derived from the will. The probate of the will, and the grant of letters testamentary, are indispensable to his rightful custody and control of the assets, and to his exercise of the powers the will may confer, or of his authority under the law. A grant of administration is, of course, the source of the duty and authority of an administrator. Letters testamentary, or letters of administration, clothe the executor, or the administrator, with the full legal title to all personal assets, and the right to pursue all legal remedies, Avhich the testator or intestate, if living, could pursue for the reduction into possession of things lying-in action.

Retainer is a remedy by mere operation of law, and is thus explained and defined by Blaekstone : “ If a ¡person, indebted to another, makes his creditor, or debtee, his executor; or, if such a creditor obtains letters of administration to his debtor; in these cases, the law gives him a remedy for his debt, by allowing him to retain so much as will pay himself, before any other creditors whose debts are of equal degree. This is a remedy by the mere act of the law, and grounded upon this reason: that the executor cannot, without an apparent absurdity, commence a suit against himself, as a representative of the deceased, to recover that which is due to him in his own private capacity; but, having the whole personal estate in his hands, so much as is sufficient to answer his own demand is, by operation of law, applied to that particular purpose.” — 3 Black. 18. To constitute a retainer, and, of consequence, a satisfaction and extinguishment of the debt, there was no act to be done by the executor or administrator — no discretion, or volition, to be exercised by him ; no election whether he would retain or not. The moment assets came to his possession, which, in the due course of administration, were and could be legally applied to the payment of the debt, the law, of its own force, made the application. — Smith v. Watkins, 8 Humph. 341.

At the common law, the executor, or administrator, was regarded as the absolute owner of the personal assets, and an unlimited power of disposition was an incident of the ownership. In Woodward v. Lord Darsy (Plowden, 185 a), the reason of the doctrine, that possession of assets operates an extinguishment of the debt, is said to be, “ because, in judgment of law, he is satisfied before; for, if the executor has as much goods in his hands as his own debt amounts to, the property of those goods is altered, and vested in himself — that is, he has them as his own proper goods, in satisfaction of his debt, and not as executor; so that there is a transmutation of ‘property by operation of law.”

In Wankford v. Wankford, 1 Salk. 305, Holt, C. J. said: “ If the executor of the obligee is made executor to one of the obligors, and has assets of the obligor, the debt is extinct, and the .executor cannot sue the other obligor; for the having assets amounts to payment.” So, in Fryer v. Gildridge (Hobart, 10 a), it was held, that if the same person be executor of the obligor and obligee, and there be sufficient assets of the obligor, the debt is presently satisfied, by way of retainer. The surer reason for the doctrine, and that which prevented a revival of the cause of action, it was said, was that, “ when the obligor made the executrix of the obligee his executrix, and left assets, the debt was presently satisfied, by way of retainer, and, consequently, no new action •can be had for the debt.”

When there are assets in the possession of the personal representative, which are legally applicable to the payment of the debt, the doctrine of the common law seems well settled — the debt due him is paid. No laches in making the application, no indiscretion in parting with the assets, can avoid the result. The law works out the result, and it is not in the discretion of the personal representative to keep alive and continue the debt, or by any subsequent act to revive it. Smith v. Watkins, supra; Chaffin v. House, 4 Dev. (Law) 103; Eeichelberger v. Morris, 9 Watts, 42; Thomas v. Thompson, 2 Johns. 471. It is, however, the possession of assets which may be rightfully retained, that works the extinguishment of the debt. — Hall v. Pratt, 5 Ohio, 82. Eor, as was said in Wankford'v. Wankford, supra, if the personal representative has no assets, “ then he is not the person that ought to pay, though he is the person that is to receive.”

The right of retainer, and its consequences, are not limited to debts due the personal representative individually. It extends to debts due him as trustee. — 2 Williams Ex’rs-, 938. And when the same person is the personal representative of both creditor and debtor, he may retain out of the assets of which he is possessed as the representative of the debtor, to satisfy the debt" due him as .representative of the creditor. — 2 Williams Ex'rs, 943.; 1 Lomax on Ex’rs, 650; Toller on Ex’rs, 295; Thompson v. Cooper, 1 Call, 86; Thomas v. Thompson, 2 Johns. 471; Hosack v. Rogers, 6 Paige, 415; Morrow v. Peyton, 8 Leigh, 54.

Unless the insolvency of the estate of the testator, or intestate, who may be indebted, intervenes, we cannot see that, by our legislation, this doctrine of the common law is repealed. It is subject to modification, because of the changes of the common law. as to the title, rights, and duties of executors or administrators, which our statutes have wrought. While the personal representative has the same title to the personal assets that he had at common law, he has not the unqualified power of disposition of such as are not choses in action. Yisible, tangible, personal property, the subject of sale, he cannot dispose of otherwise than by sale made under an order of the Court of Probate, or the decree of some other court of competent jurisdiction ; and, with one or two exceptions, the sale must be at public outcry. Any private sale, or other disposition of such property, is void — a devastavit. — 1 Brick. Dig. 932, §§ 266, 274-77; Waring v. Lewis, 53 Ala. 630. The mere possession of personal property, of that kind which he cannot apply to the payment of the debt due him, or of any other debt of the decedent, will not, of itself, extinguish, or work a presumption of payment of his debt. The reason of the rule ceases, and the right upon which it is founded does not exist. Being under the duty and obligation of paying, and also under the duty of receiving and demanding, it is only when he has assets which he can and ought to appropriate, that the law considers them applied, and the debt extinguished. Having no right to take and appropriate such assets — his only duty being to convert them into money for the payment of debts — the debt will not be presumed paid, until, from the lapse of time, the failure to convert them into money, and make the application, can justly be attributed to his negligence and misconduct. Of such negligence and misconduct he can claim no advantage' — no absolution from the presumption which would attach, if he had been diligent. — Kimball v. Moody, 27 Ala. 130.

The whole property of a decedent (saving exemptions), real and personal, is charged with the payment of his debts, and must be sold for that purpose. — Code of 1876, § 2429. When the personal assets are insufficient for the payment of debts, the lands must be sold, and the proceeds of sale applied to their payment. It is only through an order of the Court of Probate, made upon the application of the personal representative, that a sale of the lands can be made. The personal representative has the power, and it is his duty, to rent the lands. These statutory provisions have not been construed as altering or preventing the descent of lands, or as intercepting the estate of the devisees. As at common law, the heir takes by descent; or the devisee by the devise, immediately on the death of the ancestor, or devisor. There is no chasm, in which the title is in abeyance.. The personal representative has a statutory power, from which results a corresponding duty, that he may exercise; but he has no estate in the lands; and until the power is exercised, the heir or devisee is in as he was at common law. The lands are assets, only through an exercise of the power. — Anderson v. McGowan, 42 Ala. 280. Yet, a want of diligence in exercising the power will involve the personal representative in responsibility. There is no discretion, no volition, committed to him. Subjecting the lands to the payment of debts, is a duty he is bound to perform; not distinguishable from the duty of reducing the personal property which is the subject of sale, to money, or the choses in action, to choses in possession. The power of renting, the power of sale, involves the duty; and for a loss resulting from neglect of this duty, he must be chargeable with the consequences, as he is with the injurious consequences resulting from the neglect of any other duty. — Pearson v. Darrington, 32 Ala. 227; James v. Faulk, 54 Ala. 184

A debt due to him individually, or a debt due to him as trustee, or a debt due to him as the personal representative of another, would not be extinguished, merely because there were lands subject to its payment, which he could, by pursuing and exercising the statutory power, have reduced to money he must have appropriated to its payment. But, if there is negligence in the exercise of the power, rendering him liable to creditors, which would make him answerable for the debt, if a stranger had the authority, and was under the duty of demanding and receiving; can the, presumption of payment and extinguishment be repelled ? If it can, by his negligence, the debt is kept alive and continued, which he has not the power and capacity of doing by positive action; and is effected, if effected at all, only by his mere inaction and dereliction of duty. When the debt is due to him as trustee, or in the capacity of personal representative of the creditor of his testator or intestate, he would be chargeable with it, in favor of creditors, legatees, or next of kin, having the beneficial interest, and to whom he stands in the relation of trustee. The mere negligence of the personal representative, his folly or indiscretion, can not, nor can his immediate direct action, prevent the extinguishment of the debt, when there are assets which, by the fair and just performance of his duty, he could legally appropriate to the payment of the debt. If he paid the debt from his own means, there can be no doubt he would, from the proceeds pf the sale of the land, be allowed to retain for his indemnity. — Livingston v. Newkirk, 3 Johns. Ch. 312. And if he is charged with the debt, because of his negligence, on the settlement of his administration of the estate of the creditor, he must be credited with it on a settlement of his administration of the debtor; and if he is not otherwise in default, for the balance due him on the latter settlement,' the lands can be made liable.

The intestate of the appellant, the creditor of the intestate of the appellee, died in September, 1870, and administration of her estate was, on the 16th November, 1870, committed to J. E. and William Irby, who were then, and had been since the 12th December, 1867, administrators of the estate of the intestate of the appellee. Property, real and personal, of the estate of the debtor, had come to their possession, which the law subjected to liability for the payment of the debts, and required should by sale be converted into money for that purpose. The value of this property, as appraised (and the appraisement is not controverted), exceeded the amount of the debt due the intestate of the appellant. What disposition has been made of this property, real or personal, is a, fact in reference to which the record is silent. By sale, it may have been converted into money, which the law, by its own operation, would have appropriated, without the act or volition of the personal representative, forever extinguishing the demand and debt due the intestate of the appellee. True, J. E. Irby died soon after he became administrator of the estate of the appellant. But, for near three years he had been, with William, joint administrator of the estate of the debtor, having ample time and opportunity to reduce the assets, real and personal, to money, as it was his duty to do, and apply the money to the payment of debts. His death caused no interruption or vacancy in the administration of either estate. The survivor, William, was required to complete each administration. — Code of 1876, § 2413. And administration continued with him, until his death in May, 1875.

There was, then, a period of near five years, during which the administration of both estates, that of the creditor, and that of the debtor, was united in the same person.' In the one capacity, it was his duty to demand and receive; in the other, it was his duty, so far as he had assets legally chargeable, to pay and satisfy. There was no deficiency of assets, and he was chargeable with the debt as money in his capacity of administrator of the estate of the creditor, and entitled to a credit for it when so charged, in his capacity of administrator of the debtor. Unless negligence, delinquency in the discharge of trusts, violation of duty, is presumed, the presumption of payment and extinguishment must be iudulged. For all purposes, the debt is extinguished, and as to all persons. Changes in the administration can not revive it. As we have seen, in obedience to the settled doctrine of this court, if the debt had been due from the administrators individually, it would have been extinguished, eo instanti their appointment and qualification. The only distinction which can be made, when the debt is due from them W a. Representative capacity, depends upon the sufficiency of assets which they may receive, and which they can rightfully appropriate to its payment. Assets which can be applied, only after they have been converted into money, are not immediately appropriated to the extinguishment of the debt. But, when the period during which debts should have been paid, by the appropriation of the assets in the mode prescribed by law, has passed — when only gross negligence can have prevented the appropriation — when the representative stands chargeable with the debt as money, — it must be regarded as extinguished. It results, therefore, that the demand on which the suit is founded must be considered as extinguished. — Kimball v. Moody, 27 Ala. 130.

This conclusion compels an affirmance of the judgment, without the decision of the other question which has been discussed.