1 Conn. 13 | Conn. | 1814
This record presents the claim of a creditor, on an estate which had been proceeded with and settled as insolvent, who had not made out his claim with the commissioners, before the expiration of the time limited, and now rests his title to recover, on shewing further estate not before discovered or put into the inventory.
The action is against the administrator in common form, upon the debt thus barred. In bar of this action, the administrator pleads the settlement of the estate, as an insolvent estate, in the court of probate; and the neglect of the plaintiff to make out his claim with the commissioners, before the expiration of the time limited.
The plaintiff replies, that after the settlement in the court of probate, other estate not before inventoried, was shewn to the defendant, and came to his hands as administrator on said estate, and still remains in his hands as the estate of the deceased unappropriated, more than sufficient to pay all the debts against said estate; and then points out the nature of his claim, and that the administrator had notice of it.
To this replication the defendant demurs, and the plaintiff joins in demurrer.
The question of law is reserved by the superior court for our advice.
The pleadings close in a special demurrer, on the ground of duplicity ; but, as that point was abandoned in the argument, it is unnecessary to notice it.
Whether the plaintiff in such case is entitled to recover is the only subject of enquiry.
A proper decision of this question, depends on the due construction of our statutes respecting the settlement of the estates of persons deceased.
On this subject certain leading principles are admitted by all. If the estate is solvent, all debts, without preference,
Every estate is presumed to be solvent, and will be treated as such, until the administrator, upon a fair comparison of the amount of debts, with the value of property within his knowledge, shall represent it otherwise to the court of probate. When so represented, suits at law are stayed, during its pendency. The court limits a time for the exhibition of claims, appoints commissioners to adjust them, and on their report, the estate is distributed by an equal average. When an estate is thus settled, every creditor who has neglected to make out his claim with the commissioners within the time limited is forever barred of his debt: "unless he can shew estate of the deceased, not before discovered, or put into the inventory.” If, then, the creditor can shew such estate, the bar is removed; but the statute gives no direction with respect to the extent or mode of relief. The general principles of our system for the settlement of estates must then be our guide.
As to the extent of his relief, there is now, I believe, no diversity of opinion. If the estate discovered is sufficient to pay all the debts, whether exhibited before or not, the whole must be paid. If less is discovered than will discharge the whole, the creditor barred is entitled to so much as will make his equal to former dividends, and the remainder is to be equally divided upon all the debts. This course, I understand, has been sanctioned by judicial authority.
The mode of relief has hitherto been a subject on which our courts have differed. In the case of Leavenworth v. Jones, in the year 1789, on a similar state of pleadings, the superior court adjudged the replication sufficient, and that the plaintiff recover the amount of his debt. Their judgment was reversed in the supreme court of errors, on the ground, that an administrator on an insolvent estate, which appears to have been settled in the court of probate, is not liable to any suit, except for neglect, and misconduct in the settlement, specially set forth in the plaintiff’s declaration. This construction, it appears to me, entirely defeats the saving of the statute; for it is not often contended on the discove
The case of Nelson v. Hubbel, 2 Root 421., discloses facts, which show, that the plaintiff was not entitled to recover under the saving clause; for the estate claimed, as the basis of his right, had been discovered by the administrator, and inventoried, and distributed in the settlement recorded, long before any discovery or claim by the plaintiff. He could not, therefore, recover on any principle; and so was the judgment of the court. The reporter, indeed, seems to doubt whether the mode of relief pursued in that case was proper; and suggests that after causing the administrator to inventory the new estate, the creditor ought to move the court of probate to open the commission for the examination of his claim. Others have contended, that the only remedy is by suit on the probate bond. Others again, that a new administration de bonis non is the proper course. As I know of no judicial decision which has pointed out the course proper to be taken in such case, we are at liberty to take that which is most analogous to our general system of settling estates.
The administrator, having proceeded in the court of probate to a final settlement of the estate as insolvent, and paid the dividend, the estate is no longer pending before the commissioners. Their powers have ceased. All proceedings are at an end, unless further estate is shewn to the administrator. When this is done, after such final settlement, the administrator must commence a new course of administration. He must inventory the estate, and compare its value with the amount of debts. If he finds it evidently sufficient to satisfy all the debts known to him, he may and ought to treat the estate thenceforth as solvent. But, as all the creditors who were barred, have an equal right to share in the new discoved estate, he ought to present the same to the court of probate, and, for his own safety, obtain a new limitation for the exhibition of claims. He may, also, on such comparison, if he deems it proper, represent the estate still to be insolvent, and obtain a new commission, as well as a new limitation. The creditor has no more controul of the estate thus discovered,
This is a plain and safe path for the administrator. It preserves entire the analogy of our system, and secures equally the rights of all.
In the case before us, it appears by the record, that the new discovered estate has long been in the hands of the administrator, and that it is sufficient to discharge all the debts in full. This being admitted, the only question is, whether a suit like this is a proper mode for the creditor to pursue to obtain his debt ?
If the view I have taken of the subject is correct, I think it of course follows, that this action ought to be sustained. I need not contend, that this is the only remedy. An administrator may so conduct by refusing to receive and inventory the estate discovered, or by neglecting to proceed thereon, as to render himself liable on his bond. Perhaps, too, the creditor may, on the refusal or neglect of the first administrator, to administer on the new estate, obtain for himself ad ministration de bonis non. But it is not a bar to this action, that other courses might have been pursued.
I am of opinion that the replication is sufficient, and that we advise accordingly.
When an estate is represented insolvent, and so appears to the judge of probate, and proceedings have been regularly had thereon, the court of probate and administrator must proceed with it as an insolvent estate, until the settlement is finally completed. The mode of settlement is not to commence de novo upon any and every discovery of
But were the pleadings correct, I can discover no necessity for supporting actions against administrators under the circumstances disclosed in this case. This administrator, it appears, has taken into his hands the new discovered estate; he is bound to represent the circumstances of it to the judge;
The statute of this state has provided, that in case of insolvent estates, the creditors of every description, with the exception of debts due to the public, sickness debts, and funeral expenses, and costs of settling the estate, shall be paid pari passu. The excepted debts must be paid in full. That all creditors should be paid equally is a prominent feature of the statute ; and this principle must be preserved entire ; and any construction of the statute, or any proceeding thereon, which will defeat this principle, or embarrass it, ought to be rejected: for it is as much a principle that creditors should have the estate equally according to their respective debts, as it is that the executor should be answerable to the extent of assets, and no further; or that the whole estate, both real and personal, shall be applied to the payment of debts before a volunteer shall take any part of it.
That this provision may be carried into effect, the statute provides, that when the executor is apprehensive that the estate is insolvent, he may represent to the court of probate that this is the case. The court then appoints commissioners to examine the claims ; which commissioners are a court for hearing, trying, and adjusting all the claims against the estate. They have final jurisdiction over such claims, except
It has been supposed by some, that he who discovers this estate is alone entitled to the benefit of it, as a reward for his diligence. This idea is wholly inadmissible; for in many cases it would defeat the principle of average, whereas the object of the law is to preserve that principle entire ; for the estate discovered might be sufficient to pay the whole debt of the discoverer, so that whilst A. B. and C. who exhibited their claims, receive only 50 cents on the dollar, D. the discoverer, receives 100.
Again, there may be a surplus after all the debt of D. is paid. Now, it is an established principle that a volunteer can never be entitled to any thing as long as a creditor remains unpaid. This surplus ought to be applied to the payment of the creditors who have received only 50 cents on the dollar. But how can this be accomplished ? There is no way provided for them
It may be said, that these creditors may sue the person who holds the estate as executor de son tort, and recover of him to the amount of assets. But I apprehend this never can be done; and that no such character as executor de son tort can possibly exist in our law where the estate is insolvent. A suit against an executor de son tort is altogether a common law proceeding, and a recovery and judgment must be wholly governed by it. There can be no average judgment; and he who first obtains judgment will be preferred to every other creditor in the same degree. If D. who did not exhibit, or A. who did, should sue the executor de son tort, who has assets enough to pay them, then they will take; and thus A. and D. recover the whole demand out of the estate of the insolvent debtor, whilst B. and C. receive 50 cents on the dollar only. This defeats the principle of average; and it is impossible to conceive of such a character, and his liability at common law, where the estate is insolvent, without perceiving that the unequal distribution of the insolvent debtor’s estate will be the consequence in many cases, on the hypothesis that the holder of the property might be sued as executor de son tort.
I therefore conclude, that the true construction of the statute is, that when new estate is discovered not before inventoried, those who have not exhibited their claims have a right to have it applied to the payment of their debts as much as if they had discovered it.
Upon the idea of a reward for diligence, what would become of estate discovered by some person who was not a creditor ? The reasonable ground is, that when it appears that there is other estate, the creditors who lost all benefit of the estate by their neglect, may now avail themselves of this discovery. The words of the statute are such as furnish no ground to conclude, that all are to be excluded from the benefit of the estate unless they had made the discovery ; for the words are, that the creditor who does not exhibit his claim within the time limited shall be barred, "unless he or she can
One question then arises, how? I ought to have observed, that the statute has provided that where a judgment is recovered against the executor the execution is stayed; and when the proceedings are finished in the court of probate, this is to be averaged also, and execution goes out for the average. This provision must refer to judgments obtained against the executor before a representation of insolvency; for no suit can be maintained, or judgment obtained, whilst the insolvent estate is pending; and it cannot relate to a judgment obtained after the business is closed in the court of probate, because the statute provides, that the execution shall be stayed whilst the insolvent estate is pending, subject to the average made when it is closed.
Since, then, creditors are to have the benefit of the estate before volunteers, those who did exhibit, as well as those who did not, within the time limited, are entitled to the new discovered estate. The question is, how is this to be done?
If when the average was struck the statute had spent itself, and the proceedings must be at common law when new estate is found, then indeed no principle intended to be secured by the statute is violated. If the suit is brought, it must be brought before the common law courts; and all the proceedings must be as the common law directs. The executor must pay debts according to the rank recognized by the common law, and must pay them in full without reference to any average ; and so judgment may be rendered for the whole debt, and the executor be bound to pay to the amount of assets in his hands to the proper claimant ; and if sued by a creditor, when he has paid all that has come to his hands, may plead plene administravit.
Upon this hypothesis, if the estate which is discovered is real, he will not be answerable; for real estate is not assets in the hands of an executor. It will descend to the heirs, and in their hands will be liable to creditors of a certain description, viz. judgment and specialty creditors, but not to simple contract creditors ; and when they are paid, however
Whoever attends to our statute respecting the estates of deceased persons must, I think, be satisfied, that the legislature never meant that the common law of England in these respects should be admitted. They formed a system on this subject utterly diverse from the common law ; and doubtless intended that it should operate upon all the property of the deceased. They meant to subject the real as well as the personal property, to the whole extent of it, to the payment of debts. They intended in every case of insolvency, that the estate of the insolvent should be equally distributed among the creditors. They meant to discard the idea, that one honest debt should be paid according to a certain established rank among debts, whilst another honest debt remained unpaid, They meant that a volunteer should in no case receive the benefit of the deceased’s estate, either real or personal, whilst creditors were not paid through a deficiency of assets by reason of the volunteer’s taking the estate. They meant in case of a representation of insolvency, that all the claims of creditors should be adjusted by commissioners, as the statute directs, before any demand should be enforced in a court of law.
I apprehend, that the mode contended for by the plaintiff must often defeat the intention of the legislature in every one of the before mentioned cases, and always in the last, if a creditor can enforce a claim in a court of law before that claim has been adjusted by commissioners.
There is no intimation in the statute, that upon new estate being discovered, it is the duty of the executor to represent the estate insolvent again. It has been already so represented; and it is not the fact of its being insolvent that makes it necessary to take the steps pointed out by the statute, but its being represented so. It may in any event turn out to be a solvent estate, but if represented as insolvent these steps must be taken.
When we examine what the law requires of the executor or administrator, it will point out the method that should be adopted. They are directed to make an inventory of the deceased’s estate, and penalties are inflicted upon them if they do not. They have also a power to represent the estate in
But has not the estate of the deceased been represented insolvent ; and must not this as well as other claims be adjusted by commissioners ? The words of the statute are very explicit, that when estate is represented to be insolvent, all the claims of creditors are to be adjusted by commissioners, and no suit can be maintained upon any until this is done. The mode of ascertaining all claims is prescribed by the statute ; and all that is effected by the clause is letting in the creditors where there is new discovered estate who have not exhibited their claims, so that they may now have all the benefit of them. But there is no intimation that these claims can be enforced in any other way than all other claims are enforced. Nay, it is impossible that they should be; for all claims against the estate must be adjusted by commissioners, and these are claims. There can be no conceivable reason why these claims are not to be ascertained in the same manner that other claims are. As the executor was bound in the first instance to exhibit an inventory of all the estate that
If this course is taken, the whole estate is operated upon in the manner the statute directs. No feature in our law is defaced. The whole estate, both real and personal, is applied to payment of debts ; and volunteers take nothing unless there is a surplus after paying debts. The average law is preserved entire. There is no preference of one debt over another. Every claim is adjusted by the commissioners, and eventually settled in the court of probate without appeal, as it is most apparent it was the intention of the legislature it should be.
The question now arises, what is to be done when this estate is discovered ? It certainly would be unreasonable to sue the executor without it is made known to him that such estate is discovered. Upon its being made known to him, it becomes his duty to inventory it; and if he does, every thing will be done of course as pointed out.
But if he refuses, what is the remedy ? This is answered by enquiring what would be the remedy if the executor, after having proved the will, undertaken the trust, and given bonds to perform his duty, should refuse to inventory the deceased’s estate, or any particular part of it ? The remedy in such case is most apparent, by suit on the bond given to the court of probate, as trustee for the creditors and others interested.
How much is to be recovered upon the bond? D. who has discovered the estate, holds a demand of 100 dollars only, and the estate discovered is of the value of 1000 dollars.
I cannot conceive of any reasonable objection to this mode of conducting the business. Why should the judgment be only to the amount of the debt of that creditor who brings forward the suit when there is more due from the executor to the creditors ? Why should not the plaintiff recover all that is due ? He is trustee for all the other creditors as well as for the one who brings the suit.
So too, where there is a refusal to inventory a part of the estate in the first instance, or the new discovered estate in the last instance, and yet there is no insolvency, nor representation of insolvency. Enough has been inventoried to pay all the debts, so that no creditor has any claim; but legatees have, who will be defeated in whole or in part, because the estate was not inventoried. One legatee procures a suit on the bond, whose legacy is 100 dollars. He recovers, and on the principle that there is estate of the value of 1000 dollars which ought to have been inventoried. Shall the recovery in this case be only 100 dollars ? This would be the case if the suit was in his name; for that would be the extent of the injury to him. But it is in the name of a trustee, who is as much entitled for the cestuy que trusts to 1000 as to 100 dollars. Why then should he not recover the whole ? To my mind it is apparent that he would; and I can conceive of no necessity of having as many suits as there are legatees.
This is precisely the course taken in a court of chancery, where, for good reasons, an executor is sometimes compelled to give bonds for the faithful discharge of his duty, and he fails; the bond is sued, and all for which he is liable to any person is recovered, where a single creditor is the applicant
And why should not this be the case ? If the suit is only for the benefit of him who procures the suit, when a second creditor, or second legatee comes, there must be a second suit, and so on ; whereas the whole may be determined in one suit.
I can conceive of but one event in which it would be propper to institute a second suit; and that is, when it is discovered that there has been a failure, which was not known at the time of the first suit. When the bond was sued, it was known that a span of horses, a coachee and library were not inventoried; and further, there was a complete recovery. But it is now discovered, that there was a large quantity of plate which was not inventoried. In such case, there must be a second suit.
It is not necessary that any creditor should apply for a suit on the bond. The trustee, the judge of probate, may bring a suit on the bond, if he chuses ; and, upon the principle that no more is to be recovered than what a creditor is entitled to at whose request the suit is brought, nothing more could be recovered in such case. The money recovered on the suit is in the hands of the judge as trustee for those to whom it belongs, and it is his duty to pay it out.
And in the case of new discovered estate, if the executor refuses to do his duty, and on the application of a creditor it suit is brought, the court must first indemnify the creditor by paying him his actual costs, then pay him an average sum equal to the sums received by the creditors who did exhibit; and if any thing remains, make a second dividend among the creditors. In this way, every principle of law is preserved unhurt, and every object of the statute is attained, and complete justice is done.
Judgment for the plaintiff.
Tit. 61. c. 1 s. 3.
Ch. 2. s. 2.