Sugar River Bank v. Fairbank

49 N.H. 131 | N.H. | 1869

Bellows, C. J.

The first question is, whether the plaintiff has now any remedy against the estate of Paul J. Wheeled in the hands of the administrator. It is stated in the bill, that administraton upon the estate of said Wheeler was granted September 29, 1862 ; that a decree of insolvency was passed October 29, 1862, and a commissioner appointed who made his report, and the same was accepted by the judge of probate, June 24, 1863; but that the plaintiff’s claim was not presented to the commissioner, for the reason that, by the fraudulent practices of the said Wheeler, it was wholly concealed from the plaintiff until after the time to which the commission might by law be extended, and it is not stated that any application for an extension had ever been made.

Under the law of July 2, 1822, N. H. Laws 1824, p. 142, it has been decided, that no suit could be maintained against an executor or administrator of an insolvent estate, except by way of appeal from the decision of the commissioners. Judge of Probate v. Brooks, 5 N. H. 82. There, the suit was upon a bond against the heirs and devisors of Brooks, who had signed the bond as security for one Dwight, who was administrator of the estate of one Evans. The estate of Brooks was administered in the insolvent course, and the claims against it paid out of the personal property, and the real estate was divided among the defendants according to the will. The court held, that so long as there was a remedy against the executor or administrator, an action against the devisees could not be sustained, but that such remedy did not exist in that case, and thereupon the plaintiff was entitled to recover of the devisees. 'The same doctrine was held in Ticknor v. Harris, & a., 14 N. H., 272.

This statute 'of 1822, is entitled an act regulating the settlement and distribution of insolvent estates. It provided for the appointment of commissioners, to adjust and allow the claims against estates, and for an appeal from their decisions, and by section seven, provided that all demands against such estates exhibited to the commissioners -and rejected by them, and not prosecuted to judgment in the manner by this act prescribed, and all demands against such estate, which, by virtue of this act, might have been exhibited to and allowed- by them, but which were not so exhibited and allowed, shall be forever barred; and no action against any executor or administrator of any such estate shall ever be sustained, otherwise than in this act is provided. Unless the law of 1822 has been changed, these decisions are decisive of the question here, so far at least as suits at law are concerned. That law expressly provides, that no action shall be sustained against an executor or administrator of an insolvent estate otherwise than is provided in that act, and that if any is commenced, it shall be discontinued, where the estate is represented insolvent, and it was upon the ground, that no such action as was brought in those cases, was provided for in the act, that these decisions went.

Upon a careful examination of the subsequent statutes, we think no substantial change has been made. By sec. 8 of ch. 161 of the Revised Statutes, it is enacted that “ no action shall be commenced or prosecuted against an administrator, where the estate is decreed to be administered as an insolvent estate, but the cause of action may be presented to the commissioners and allowed, with costs of any action pending at the time of such decree.” The same provisions are found in the Comp. St. ch. 170, sec. 8, and they are also retained in the General Statutes, ch. 179 § 8. By ch. 173, § 16, of the Revised Statutes, it is provided that “ all demands against any estate which might be presented to the commissioners, and were not so presented ; and all demands so presented and rejected, and not allowed upon appeal as aforesaid, shall be forever barred.” The same section is found in the Comp. St., ch. 173, § 16, and in General Statutes, ch. 181, § 16. It is obvious that the pi’esent law, is in substance, the same as the law of 1822 ; the only difference being that in the present law, the prohibition of writs against executors and administrators, is not, in terms qualified as it is in the law of 1822, but the effect is the same ; and the provisions of the law of 1822, are separated, and go into different chapters in the present statutes. The sense, however, is not changed.

Our opinion then is, that the remedy against the estate of Paul J. Wheeler is gone, unless in some form it is saved by the fraudulent concealment of the claim, by the intestate. The policy of these enactments very clearly is, to promote the speedy settlement of estates, and to that end, all claims that can be presented within the time limited, must be so presented — otherwise they are forever barred; and although in prohibiting actions against the executor or administrator where the estate is decreed to be insolvent, suits in equity are not in terms included; yet, we have no doubt that, in general, they come within the spirit and policy of those provisions. Where the remedy in equity is concurrent with that at law, and the claim might have been presented to the commissioner and allowed, and is not, we think it is clear that a court of equity will permit no relief, unless the omission to present the claim in season was caused by the fraud of the adm'nistrator, or some one, for whose act he is chargeable.

As a general rule, courts of equity are bound by a statute of limitations equally with courts of law, and they cannot disregard the plain requirements of such statute; for that would be to repeal it. Fonb. Eq. B. 1, § 3. Even when the statute in terms, applies only to actions at law, which are enumerated, courts of equity act in analogy to it, and refuse to grant relief in cases coming within its provisions. 1 Story, Eq. Jur. § 64 a, and cases cited. Kane v. Bloodgood, & al., 7 Johns. Ch. Rep. 92. In the case of executors and administrators, the limitations imposed by statutes are more stringently enforced than those of the general statute of limitations, both at law and equity; and it has been held that the omission to embody in the former statutes the exceptions contained in the latter, indicates a purpose to make the bar of suits against executors and administrators, absolute. Atwood v. R. I. Agricultural Bank, 2 R. I. 191.

This limitation of suits against executors and administrators, has been stringently enforced in this state, both at law and equity. Judge of Probate v. Brooks, 5 N. H. 82 ; Ticknor v. Harris & al., 14 N. H. 272; Cutter v. Emery, 37 N. H. 567 ; Walker v. Cheever, 39 N. H. 420. The latter was a suit in equity against executors, and one ground of defence was, that the claim was not exhibited to the executors within two years from the grant of administration, nor the suit brought within three years ; and the writ was held to be barred upon both grounds, and no question was made on account of its being a suit in equity. In Atwood v. R. I. Agricultural Bank, 2 R. I. 191, under a law much like our own, it was decided that the statute limiting suits against executors and administrators to three years, was binding upon courts of equity, as well as upon courts of law. In Pratt and wife & al. v. Langley & al., executors and Judge of Probate & al., 5 Mason, Rep. 95, the same doctrine was held by Story, J. He says, “that the statute of limitations as to executors and administrators, is not created for their own security and benefit, but for the security and benefit of the estates, which they represent.” ‘ ‘It is a wholesome provision, designed to produce a speedy settlement of estates, and the repose of titles derived under persous who are dead. If this statute could be avoided by any fraud (and on that point I give no opinion), it must be the fraud of the executors or administrators themselves, and not of third persons with whom they have no connection or piivity.”

We are then brought to the question, whether courts of equity can relieve a creditor against the bar of the statute in question, where the presentation of his claim within the time limited by the statute, has been prevented by the fraud of the executors or administrators, or by some person with whom he is in privity. This is a question of much, practical importance, and but little direct light is thrown upon it by the adjudged cases. It should, therefore, be very cautiously approached. The provisions bearing upon this question, are those which respect estates settled in the insolvent course, and they are, that all demands which might be presented to the commissioners and are not, shall be forever barred; and that no action shall be commenced or prosecuted against an administrator, where the estate is decreed to be administered as an insolvent estate. If by these provisions it is to be understood that the legislature designed to prohibit the bringing or maintaining any suit either at law or equity under any circumstances, even when the presentation of the demand was prevented by the fraud of the executor or administrator, a court of equity would be bound to carry such purpose into effect.

But we do not think such a purpose, is to be gathered from the language of the two provisions. It is very clear that the provision first cited was not designed to bar every species of demand 'which was not presented ; and taking into view the fact that the limitation here, is substantially the same as that of the general statute of limitations, and that it is well settled that the effect of the latter will be avoided, by showing a fraudulent concealment of the demand, we have some reason for supposing that the legislature contemplated, a similar construction of the limitation of suits against an executor or administrator.

By the general statute of limitations, actions of trespass to the person, and actions for defamatory words, are to be brought within two years, and all other personal actions within six years, after the cause of action occurred, and not afterward. General Statutes, ch. 202, § 3, and the Revised Statutes was much the same; and yet, although this limitation is explicit and includes all personal actions, it is well settled that it does not take effect wheu the debt is fraudulently concealed by the debtor, and this is the doctrine both at law and equity; although it doubtless had its origin in equity, upon the ground that it was against conscience, that a debtor should set up the bar of the statute under such circumstances, and thus take advantage of his own fraud. The cases which establish this doctrine here are Bowman v. Sanborn, 18 N. H. 205 ; Way v. Cutting, 20 N. H. 187 ; Douglass v. Elkins, 28 N. H. 26 & 32. To permit a debtor thus to take advantage of his own wrong, would be so repugnant to every principle of natural justice, that it may well be presumed that it was not contemplated by the law-makers in framing this statute. To allow it, would be converting the statute into an instrument of fraud and injustice, and it would require strong language to justify such a construction.

The terms of the statute, limiting suits against executors and administrators, are no more explicit or absolute than those of the general statute of limitations; and taking both provisions of the former into consideration, there is strong reason to presume that the legislature contemplated some exceptions to the general rule. Nor do we perceive any such difference, in the character of the two subjects, as to afford reason to regard the limitation of suits against executors and administrators to be absolute, and not subject to the established principle of equity, which precludes a party from taking advantage of his own wrong. Both are statutes of repose; and if the purpose had been to make the prohibition of suits against executors and administrators absolute, even in cases of fraud, it would be natural to expect a distinct expression of that purpose, instead of using terms so like those of the general statute of limitations, as to lead to the inference that a similar qualification was contemplated.

In many other cases, besides those arising under the statutes of limitations, courts of equity have been accustomed to-afford relief against the literal terms of a statute, as in cases under the registry laws, when the grantor of land, had actual notice of a prior unregistered deed. In such cases, the grantee is guilty of a fraud, is a male fide purchaser, and a court of equity will not permit him to avail himself of a title thus acquired. 1 Story, Eq. Jur. 399, and cases cited. This is the settled doctrine in equity, and in this countiy it has been adopted by courts of law; and this is well settled in New Hampshire, notwithstanding the statute provides, that no conveyence of res 1

estate shall be valid against any person but the grantor and his heirs, unless attested, acknowedged and recorded. Colby v. Kenistor, 4 N. H. 262 ; Emmons v. Murray, 16 N. H. 385 ; Hastings v. Cutler, 24 N. H. 481.

So in cases arising under the statute of frauds, courts of equity will grant relief in some cases, against the express words of the statute, upon the ground, that it ought not to be allowed to be set up as a protection and support of fraud. 1 Story, Eq. Jur. sec. 330; in Montacute v. Maxwell, 1 Str., 236 and same case, 1 P. Wms. 619 ; Lord Chancellor Parker, lays it down that in cases of fraud, equity should relieve even against the words of the statute, and it is upon this ground that equity will decree a specific performance of a parol agreement, to convey land when there has been a part performance, holding that when the vendor, has permitted the purchaser. to act upon the parol agreement by entering upon the land and making improvements and the like, it would be a fraud in the vendor, to insist upon the statute as a bar to a specific performance of the whole agreement. 2 Story, Eq. Jur. sec. 579 : Hawkins v. Holmes, 1 P. Wms., 772 and cases cited in note.

The distinct ground of equitable interference in such cases, is the prevention of fraud, holding that it could never have been the intention of the statute, to enable any party to commit such a fraud with impunity, and Story in the section last cited, lays it down that fraud in all cases, constitutes an answer to the most solemn acts and conveyances.

In Newton v. Swazey & al, 8 N. H. 13, it is said to be the doctrine of equity, that part performance does not overrule the statute, but takes the case out of it, and see cases cited, and in Madd. ch. 377-379. The ground on which courts of equity act in such cases, is well stated in Tilton v. Tilton, 9 N. H. 389.

Equity also grants relief not only against deeds, writings and the most solemn assurances, but against judgments and decrees obtained by fraud and imposition. 1 Johns, ch. R. 401. Barnaby v. Powell, 1 Ves. 120 & 284.

In a case kindred to the one before us, arising under a statute which provides that no action shall be sustained against any administrator unless the demand shall have been exhibited to him within two years after the original grant of administration, Bell C. J., lays it down that if an administrator, by his own wrongful acts, defeats and prevents the presentation of a claim, he cannot take advantage of his own wrongful acts, and he holds that if the administrator, shortly after his appointment, should leave the state and remain absent until the expiration of the two years, he could not take advantage of the want of prosecution, during that time, Walker v. Cheever, 39 N. H. 426.

This provision applies to estates which are settled as solvent, but for aught we can see the policy of promoting a speedy settlement of these estates, applies as forcibly to them as to estates settled as insolvent,; and we think this case is a strong authority, upon the point in question now.

In view of these principles and authorities, we are brought to the ¡conclusion that when the omission to present a demand in due time, has been caused by the fraudulent act of the executor, or, administrator, or of any person with whom he is in privity, a court of equity may, consistently, with its rules, furnish relief and prevent the setting up the bar of the statute, upon the ground that it would be against conscience to insist upon it. We are aware that some inconvenience may arise from the exercise of such a power. It would be so, especially, if in all such cases, a suit at law could be maintained against the executor, or administrator, and a new distribution of the assets enforced; but, if this power is exercised exclusively by a court of equity, as it should be, moulding its decrees to suit the circumstances of each particular case, according to equitable principles, the inconvenieces would be slight, compared with the great injustice of allowing a just claim, to be defeated by the fraud ¡of the debtor, or by his representative.

In such cases, the court would require very clear proof of the fraud; also, that proceedings were commenced promptly after the discovery of the fraud, and, without unreasonable delay, considering the situation of the particular estate, and Avould shape its decree, so as not to disturb a distribution under a decree of the probate court duly made.

If, then, the estate was actually insolvent, and the assets duly distributed, the creditor, Avhose demand had not been presented, Avould have no remedy, but, if after the claims allowed by the commissioners were paid, there Avas still a surplus, the equity of the creditor, whose demand Avas so postponed by fraud Avould clearly be superior to that of the heir or legatee, in respect to that surplus, and, Ave think, it Avould be in accordance Avith the course of the court to enforce it.

The next question is, whether the allegations in the bill, which by the demurrer are admitted to be true, make a case of fraudulent concealment within the principle referred to.

The allegations in the bill are, that the intestate was the cashier of the Sugar River Bank, and that he fraudulently made an over issue of its bills, and fraudulently converted and appropriated the amount of such over issue — being six thousand three hundred dollars — to his own use, and by his fraudulent practices while in life, the conversion of said bills was wholly concealed from the knowledge of the plaintiff, and wholly unknown to it until long after the time to which the commission might by law be extended; to wit, until after October 29, 1864.

Strictly speaking, the character of the fraudulentpractices, ought to be disclosed in the bill, that the court may see that a case of fraudulent concealment is alleged, and that the respondent may have notice of the charge, but as no objection on this account is made, to the bill, we pass it.

The great question is, whether a fraudulent concealment of the claim by the intestate, will so affect his representative, that he will be estopped to set up the statute bar. Upon this point, the court can well conceive that acts of concealment by the intestate, as by the making of false entries, may continue to operate until long after his death, and as the administrator represents the intestate, and is in privity with him, it must stand, for aught we can see, as if the fraudulent concealment Avas the act of the administrator. As the representative of the intestate, it would be against conscience to interpose the statute equally, as if the act was his own. See 1 Green. Ev. § 189, and cases cited.

The bill alleges, that the existence of this claim was wholly unknown to the plaintiff until long after the time to which the commission by laAv could be extended; to Avit, until after October 29, 1864. The bill was filed November 19, 1868, more than four years after, and as it is not stated when the knowledge of the claim Avas in fact gained, it cannot be assumed that the procéedings were commenced within less than about four years from the time the existence of the claim became known, and no reason is assigned for the delay.

The proceedings should be commenced upon the discovery of the claim, promptly and without unnecessary delay, and without fixing upon any precise time, we have no hesitation, in saying that under ordinary circumstances, a delay of four years would be altogether unreasonable. By statute, a time not less, than six, nor more than nine months, from'the date of the commission pf insolvency, is- allowed to the creditors, to present their claims, with power to extend, it so as to make, in all, two years, on-good cause being shown; and adopting the policy of this law as a guide, we think, the delay in commencing proceedings after the discovery oí the existence of the demand, .ought not to extend, ordinarily beyond a few months, depending in some degree upon the condition of the estate, Had the claim been known when the decree of insolvency was passed, it ordinarily must have been presented in six months, and this court interposes, simply to relieve the plaintiff from the effects of the alleged fraudulent concealment. A delay of any time like four years in commencing proceedings, must, under ordinary circumstances, be regarded as laches.

As the bill now stands, it is defective in this respect, and the demurrer must be allowed.

The representative of the estate must be made a party, but as the administrator appears to have abandoned his trust and gone to parts unknown, and beyond the reach of process, a proper case is shown for his removal from the trust and the appointment of another by the probate court, and upon that being done, he would be made a party. •

If the case required it, the court might appoint a receiver to prevent the destruction of the property, until an administrator was appointed, and that ought to be done, that there maybe some one to represent the distributees as well as creditors.

As the bill does not undertake to charge the heirs, as such, but goes upon the ground that all the assets, are still subject to be charged by the creditor in the hands of the administrator, we have not thought it necessary to consider, whether this claim is to be regarded as one, that could not be allowed by the commissioners, because it depended upon a contingency that did not happen during the pendency of the commission. At present, the question does not arise, and may not, at any time.

The demurrer musí be sustained.