Lancaster v. Wolff

62 S.W. 717, 110 Ky. 768, 1901 Ky. LEXIS 129

• Court: Court of Appeals of Kentucky
• Decided: May 7, 1901
• Status: Published

Opinion

Opinion of the court by

JUDGE HOBSON

Reversing.

Appellant, R. B. Lancaster, in 1888, sold an undivided one-half of his distillery property in Nelson county to George Pearce and B. H. Hurt. They executed to him five. notes for the purchase money. After two of the notes were paid, Pearce died; and Hurt resold Ms one-fourth of the property to Lancaster, and thus paid one-half of the three unpaid notes. Lancaster then filed suit in the Nelson Circuit Court against the heirs of Pearce to sell the property for the purpose of division. The property was sold, and Lancaster purchased it. The sale was confirmed, and a rule was taken on Lancaster at a subsequent term to pay into court the amount of the sale bonds taken for the one-fourth interest of Pearce’s heirs. In response to this rule, he set up the balance of the three unpaid purchase-money notes given to him by Pearce and Hurt, and sought credit on the sale bonds for this amount. The court below overruled a demurrer to this response, but on appeal this court held the response bad, and directed the rule to be made absolute. Pearce v. Lancaster (Ky.) 49 S. W., 12. (20 Ky. L. R. 1218) Lancaster thereupon filed this .action in the Nelson Circuit Court against the administrator and heirs at law of Pearce, setting up the notes and the facts above1 stated; also that the administrator had no assets in his hands, and that the heirs were all non-resi dents of the State. He obtained an attachment, which was levied on the fund cojming to the heirs from the sale of the property. None of the defendants appeared, but the garnishees appeared, and filed a demurrer to the jurisdiction of the court, on the ground that the administrator lived in Jefferson county. Lancaster then moved to dismiss his action as to the administrator. The court overruled this motion, refused to allow an amended petition to be filed, and dismissed the action. From this judgment the -appeal before us is prosecuted.

The amended petition offered by the plaintiff is not made part -of the record by order of -court or bill of exceptions, and can not be considered. It remains, therefore, to determine whether the original petition stated a cause of action, within the jurisdiction of the court: The fund sought to be attached was in Nelson county; the owners of the fund were all non-residents of the State; the fund was derived from the sale of the distillery property; and the suit was brought to enforce the liability of the heir for the debt of his ancestor, from whom he had received the assets. Section 75 of the Code of Practice provides that, subject to certain exceptions, which do not apply, “an action against a defendant who may be proceeded against 'by a warning order, as is authorized by section 57, must be brought in a county in which the defendant resides at the commencement of the action; or in which he has property; or in which a person resides against whom he has a valid claim for money or property.” Under this section, the Nelson Circuit Court had jurisdiction of the action, unless the administrator was a necessary party. It is insisted that the action could onlj- be maintained against the administrator and heirs jointly, and that, as the administrator resided in Jefferson county, the suit .should have been brought there. The lower court seems to have taken this view in refusing to allow the action to be dismissed as- to the administrator, and in sustaining the demurrer to the jurisdiction of the court. The correctness of this ruling depends upon the proper construction of the following statutes: “The same actions which lie against the personal representative, may be brought jointly against him and the heir or devisee of the decedent or both, and shall not be delayed for the nonage of either of the parties.” Kentucky Statutes, section 2085. “When the heir or devisee shall alien before suit brought the estate descended or devised, he shall be liable for the value thereof with legal interest from the time of alienation to the creditors of the decedent or testator; but the estate so aliened shall not be liable to the creditors in the hands of a Iona fide purchaser for valuable consideration, unless action is instituted within six months after the estate is devised or descended to subject the same.” Section 2087. “The heir or devisee may be sued in .equity for any- liability of the decedent. or testator, and he, the -creditor, may also in such suit, if demanded, obtain by the proper procedure a lien on any specified property descended or devised not theretofore aliened, but not so as to prejudice thereby any other creditor.” Section 2089. Proper force must be given to each of these provisions. ' Section 2085 provides for a joint action against the administrator and heir or devisee. This section is taken, from the act of 1792, and puts the heir on -precisely the same plane as the personal representative, so far as the action is concerned. A judgment against a personal representative must be levied of assets, and so must a judgment against the heir under this section. Section 2087 was intended to provide for a different state of case. If the heir bad sold the estate descended to him, there- would be nothing to levy the execution on which might issue on the judgment rendered in the action provided for by section 2085, and so- it was provided that in this ease the heir should be directly liable to the creditor- for the value of the property aliened, and this liability, like any other liability created by statute, may be enforced by a direct action agaiflst the party charged.Under this section, the administrator is not a necessary party, and a personal judgment may be rendered against the heir. Section 2089 provides for still another state of case. The .heir might be in such a condition that a judgment against him, when finally obtained, would probably be valueless. To protect the creditor from loss in this -state of case, and to protect the heir also from injustice, jurisdiction was conferred upon a court of equity to enforce the liability of the heir, and by proper procedure to create a lien on any specified property descended. It will be observed that the two preceding sections do not provide for equitable proceedings. The last section requires the proceeding to be in equity, so that the chancellor may see that equity is- done. This section does not provide for a joint action against the administrator and heir. Its language is: “The heir or devisee may be sued in equity for any liability of the decedent or testator.” In Hagan v. Patterson, 10 Bush, 141, this court, after quoting these three sections, then numbered 6, 8, and 10, said: “By 'section 6 a joint judgment may be had against the personal representative and heirs or devisees, or both. A judgment so obtained must, however, be levied of assets in the hands of the personal representative, or of the estate descended to the heir or devised to the devisee. This section is but a re-enactment of the statute of 1792 (Morehead & B. St., 778), and under its provisions, just as under those of the act of 1792, in order to proceed ai law against the heir or devisee, it is absolutely necessary that the personal representative shall be joined as a defendant. The heir or the devisee has the right to demand that the debts of the decedent or testator shall be satisfied by the personal representative, if there be assets in his hands sufficient for that purpose; and when sued at law they can not have the benefit of this right, unless the personal representative be also sued, and the judgment so framed as to be first levied of the assets in his hands. Conley’s Heirs v. Boyle’s Ex’rs, 6 T. B. Mon., 639.” It will be noticed that the court here speaks only of remedies at law. In Rubel v. Bushnell, 91 Ky., 253, (15 S. W. 520), the court, quoting the same statutes, said: “There cam be no question of the liability when the assets have been received, nor is it material, under the present provision of the Code, that it should appear that the personal representative has no assets. The right to sue is expressly given the creditors, and the only question is, when the liability is conceded, has the distributee received assets from the estate? If so, he becomes liable to the creditor to that extent, and may be sued for the whole sum received, and required to look to his co-distributees for contribution, if he has received assets to the extent of the creditor’s claim.”

The heir here has aliened the property which he received from his ancestor. By reason of this alienation, he has become liable to the creditor for the value of the property, with legal interest from the time of alienation. This personal liability of the- heir, if he resided in this State, might be enforced against him in the county in which he resided or was served. Being a non-resident of the State, the suit against him to enforce the liability 'may be brought in the county where the fund is. As it is immaterial' whether the personal- representative has as sets or what other distributees may have received, none of these are necessary parties to the action. Conley’s Heirs v. Boyle’s Ex’rs, 6 T. B. Mon., 637, was decided under the act of 1792. Sections 2087 and 2089 were enacted after this decision was rendered. They were first embodied in the Revised Statutes passed in 1851. We therefore conclude that the court below erred in overruling appellant’s motion to'dismiss the action without prejudice, and in sustaining the special demurrer to the jurisdiction of the court.

Lancaster had a lien upon^the one-fourth interest in the distillery owned by Pearce for the payment of Pearce’s half of the balance of the purchase money due thereon. But, when Lancaster had the distillery sold without setting up his lien for purchase money, he lost his lien on the property. Yet in equity the proceeds of the property will be charged with the lien as between the original parties, and this lien may be enforced. The fund in court stands in the place of the property. While Lancaster can not assert a lien against the property after ‘the judicial sale made at his instance, there is no reason why he may not assert his lien against the proceeds of the property in the bands of the heirs. The rule on this subject is that the fund may be followed as long as it can be clearly identified, The right would substantially be the .same if Pearce and Lancaster had jointly sold the property to another, and Lancaster had then brought this suit before the purchaser had paid for the property, and •sought to have his purchase-money notes paid out of the amount due by the purchaser. 2 Story, Eq. Jur., 1219, 1258, 1259; 2 Pom. Eq. Jur., section 1051, and note; Allen v. Russell, 78 Ky., 105; Steele’s Adm’rs v. Gay (Ky.) 58 S. W., 586 (22 Ky. L. R., 689).

It is insisted that this question was settled against Lancaster in the other case. Pearce v. Lancaster (Ky.) 49 S. W., 12 (20 Ky. L. R., 1218). Rut no such question was presented in that case. That action was for a sale of the property for partition. The question of Lancaster’s right to enforce his notes could not be set up in that action by an amendment of the pleadings after final judgmenl, or by a response to a .rule for the payment of the parchase money. This court said, speaking- of the judgment: “The only question reserved by that judgment was the rights of appellants between themselves in the division of that fund as heirs of George Pearce.” What follows in the opinion was only stated to show that the question proposed to be raised could not be tried in that suit. In saying that, if the estate of Pearce was indebted to Lancaster, his remedy was -against the administrator, like any other creditor, and that the lien 'against the distillery property was lost, the court was only disposing of the response to the rule. The action had accomplished its purposes. The distillery property was the only thing in litigation in it. No question was presented as to the right of Lancaster to extraordinary remedies in equity, on proper averments under the statute in another action, or of his right to follow the fund by an appropriate proceeding. The court, in referring to the ordinary legal remedy, did not pass on the right, under the requisite showing, to extraordinary equitable remedies, when the legal remedy might he inadequate. The court had nothing before it to present these questions, and its language must be referred to the- case before it. Judgment reversed, and cause remanded, with directions to overrule the demurrer to the petition, and to sustain the motion to dismiss the action against the administrator, and for further proceedings not inconsistent with this opinion.