Ross v. Crary

| New York Court of Chancery | Feb 17, 1829

*The Chancellor :—The opinion of the late Chancellor, in Kettle and wife and Wynhoop and wife^(a) against the defendant in this cause settles the principle, that where there are divers suits for general legaciest and there is an allegation of a deficiency of the fund, so that an account of the estate is *necessary, the court will protect the defendant from unnecessary trouble and expense by directing an account in one cause only; and in the meantime stay the proceeding in the others, leaving all the parties interested in the fund, to come in under the decree. From the reservation in the decretal *order in that ease, which has been recently settled and entered as of the 18th of April last, it is evident he did not intend to settle the question as to which suit should be proceeded in. This must always be a matter of discretion in the court, which, while it protects the rights of the defendant, *will also see that no injustice is done to the complainants in any of the suits. It does not distinctly appear by the papers before me, what are the pleadings in the other suit; but, from the opinion of the late Chancellor, I infer that no replication was filed to the answer. If so, it is probable the answer would be conclusive against all persons who should come in under a decretal order in that suit. In this suit, three answers of the defendant have been found insufficient, and a fourth is put in, to wihch the plaintiff has filed a replicatian. The order of reference in the other cause also appears to be defective in *many particulars. I shall therefore direct a reference to James King, a master, to ascertain and report which suit it will be most for the interest of the legatees and parties interested in the estate, to have the account taken in; that notice be given to the complainants in each suit, that they may appear and be heard before the master on the reference; that either of the parties in this suit be at liberty to take out a summons and proceed on the reference before the master; and that the proceedings in all the suits be stayed until the further order of the court. All other directions are reserved until the coming in of the master’s report.

(a) The following is the opinion of Chancellor Jones above referred to:

Kettle and wife v. Crary, Executor, &c.

The Chancellor:—This is a bill by legatees against an executor and trustee, for payment of legacies. The defendant, who is surviving executor of the will of Mary Williams, put in his answer, setting forth the will, which contains the bequests to the complainants and numerous other legatees; and also setting forth the inventory filed by himself and his co-executor, and suggesting the insufficiency of the assets to pay the debts and satisfy the legacies, whereby a proportionable abatement has become necessary; and stating that another bill had been filed against him in this court by Henry H. Eoss and Susannah, his wife, for a legacy bequeathed by the same will to the said Susannah. To which bill he has put in an answer, and which is still pending, and submitting, that according to the course and practice of the court after suit brought by one legatee, the other legatees should be made parties thereto, or come in under the decree that may be made therein; but offering to account as executor and trustee as aforesaid in such manner as the court may direct.

The cause is submitted on bill and answer, and the form of an order is presented by the complainants, directing references on the principle suggested by the answer.

The only point made by the executor is, that all the legatees and cestui que trusts ought to be made parties to the suit, as well because the estate is inadequate to the full payment of the legacies, and the legacies must therefore abate, as because he is a trustee as well as an executor.

It seems to be the settled principle of the court that creditors are not to he permitted to prosecute separate suits for them respective demands, but that the claims of all are to be brought in under a decree upon one bill, and the same principle would seem to apply with equal force to legatees in the case, especially of the inadequacy of the assets to the full payment of all the legacies. The inconveniences attending the simultaneous prosecution of numerous suits against the same party for a participation in a common fund aro alone decisive against the practice. The proceeding is open to the objection of a useless multiplicity of suits, and to all the difficulties consequent upon different decrees and different reports, which, if conducted by different solicitors, may be variant in their results and principle from each other; and the expense to the estate must always be onerous, and may be ruinous.

I am satisfied, therefore, that an order would, in ordinary cases, be proper, directing the proof to bo taken of the legacies claimed by the complainants, and for an account of the estate by the executor and trustee; and that all other legatees be at liberty to come in under the decree, and be restrained ftom prosecuting separate suits for them legacies; and an order, with proper directions to the master for conducting the reference, would have been made in this case if no previous suit had been pending. But Eoss and wife commenced their suit before the complainants filed this bill. That cause has not been brought to a hearing, and the complainants who prosecute it are not before me upon this hearing.

Do they possess any rights resulting from the pendency of their suit which can interfere with the exercise of the discretionary power of the court to make the order in this cause, otherwise usual in similar cases ? I incline to think that the order may be made in the cause which is first ripe for a decree, whether that cause was first commenced or not: and that -when the decree is made in the younger suit, then the proceedings in the elder suit must be stayed, and the complainants in that suit are to come in and prove their legacies under the decree in the second suit. In the case of Jackson v. Leaf, (1 Jacob & Walker, 229,) the Chancellor held that if one creditor filed a bill in this court, and afterwards another creditor files his bill, and the executor answers the second bill directly, and a decree is obtained, it is competent to the executor himself to restrain the first from proceeding; and he shows that the course has lately been, when a creditor is thus stopped, to pay him the costs that he has incurred prior to his having notice of the decree. And the Chancellor said that he took the rule to be universal. That was a case of creditors. But it certainly is not a greater exercise of power to restrain a legatee than it is to restrain a creditor from proceeding in his suit.

An opinion seems since to have prevailed that the executor must, in such oases, apply to the court for an injunction to restrain the other creditors or legatees from proceeding in their suits. But the more simple course of a motion in the cause wherein the decree is made has been introduced into the modern practice of the court and is certainly preferable to the more expensive proceeding by bill; and it is equally efficacious in its operation with an injunction upon suits and proceedings in the same court, and it may indeed be said, substantially between the same parties. If, then, an order is effectual for the purpose, that order may be made a part of the decree, and the legatees who are prosecuting other suits upon notice of the order which directs the proceedings in those suits to be stayed, will be in contempt if they afterwards proceed.

The principle recognized and acted upon by the court in the case to which I have referred had long been in existence, and had become familiar to the English Court of Chancery. In Gilpin v. Lady Southampton, (18 Ves. 469,) where a motion was made for an injunction to restrain a creditor from proceeding at law after the usual decree at the Bolls by consent, upon the bill of a creditor against the defendant as administrator of Lord Southampton, which involved the same principle applied to a much stronger case, Lord Chancellor Eldon said, that ever since he had known that court, suits had been allowed against executors; and, in truth, by executors in the name of a creditor against themselves; and when once a decree was made, it was impossible to permit a creditor to go on at law. And the same reason for enjoining the suit at law, must surely be sufficient to induce the Chancellor to restrain the further prosecution of a suit in his own court.

This rule of equity was first noticed in the Court of Chancery of this state, by Chancellor Kent, in the case of McKay v. Green and others, (3 John. Ch. Rep. 56,) where the case of Gilpin v. Lady Southampton was cited; and the Chancellor expressed a disinclination to follow the rule it prescribed, as he said that he was not sufficiently informed or prepared to assume the entire and exclusive jurisdiction of suits against executors and administrators merely for the purpose of enforcing a rateable distribution of assets; but he soon had occasion, upon more full consideration, to change his first impression; and in the case of Thompson v. Brown, (4 John. Ch. R. 642,) after an able review of all the cases, he fully approves the principle of the English Courj; of Chancery, and adopts their rule. He winds up his review of the English cases with the conclusion, that the doctrine of the English Court of Chancery as finally settled is, that upon the usual decree to account in a suit by one or more creditors against an executor, either simply for themselves or specially on behalf of themselves and all other creditors, the decree is for the benefit of all the creditors, and in nature of a judgment for all: and that all are entitled, and are to have notice to come in and prove their debts before the master; and that from the date of that decree, an injunction will be granted upon a due disclosure of assets, on the motion of either party to stay all proceedings of any of the creditors at law.

Brown v. Ricketts, (3 John. Ch. Rep. 553,) was a bill against executors and trustees by one legatee, in behalf of himself and such other legatees of the testator as might choose to come in and contribute to the expense of the suit, An objection was taken at the hearing for want of parties, on the ground that the other cestui que trusts were neither plaintiffs nor defendants. But the Chancellor sustained the bill. He admitted that, ordinarily, all persons interested in the fund must be parties to the suit, but held that creditors and legatees form exceptions to the rule; and that one creditor or one legatee may sue on behalf of himself and the rest, and the others may come in under the decree. The case of creditors, he observes, is a familiar exception, and the exception as to legatees, (not being residuary legatees,) seems to be equally well known. The cases in the English Court of Chancery to which Chancellor Kent refers, fully support the rule, lord Thurlow, in Parsons v. Neville, (3 Bro. C. R. 365,) where the bill was by some of the residuary devisees in behalf of themselves and the other devisees, ruled that all the devisees must be parties. But Lord Eldon, in Cockburn v. Thompson, while he recognizes the general principle of that decision, qualifies it by the exception of cases where it is not necessary or convenient that all should be before the court; and I deduce from that and other cases the principle, and in the case of residuary legacies, in common with all the cases where it is impracticable to make parties, or when the inconvenience and expense would greatly overbalance the utility of the proceeding, and all the rights and interest of the whole class of persons to be affected by the decree, may be protected and preserved by their subsequent accession to the suit on the reference before the master, this court will dispense with them as parties on the record, and give the opportunity of introducing them into the suit, by subsequent proceedings before the master.

It is not necessary, however, in this case, to pursue that inquiry; for supposing the exception of residuary legatees to remain in its full extent, this is not the case of residuary legatees. The will, it is true, does bequeath a residue of the estate to residuary legatees; but the complainants in this suit, as well as in that of Eoss and wife against the same defendant, sue for particular legacies bequeathed to themselves, and in which no others are interested with them. And each of these legatees had the undisputed right to sue separately for their own legacy; and to their suits the principle clearly applies, that the decree in one suit is for the benefit of all who are similarly circumstanced, and in the nature of a judgment for all. Indeed, if the suggestion of the inadequacy of the estate to satisfy the legacies proves to be true, there can be no residue left for the residuary legatees; and if that suggestion should he groundless, I see no sufficient reason why the residuary legatees may not come before the master and protect their interest, and ultimately be embraced in the decree which is to settle the estate, and determine and adjust the rights of the parties, as beneficially as they could do if made parties upon the record, and brought into court by subpoena. If their interest should be found to involve difficulties not now foreseen, it will be time enough to apply the remedy when the mischief makes its appearance. It is sufficient for the purpose of the pending suits, that the residuary legatees are not necessary parties to them, and that all the special pecuniary legatees are to be satisfied before the residue, belonging to residuary legatees, can be ascertained, or it can be known whether .there will be any residue or not.