Martin v. Ellerbe's Adm'r

70 Ala. 326

• Court: Supreme Court of Alabama
• Decided: December 15, 1881
• Status: Published

Opinion

BRICKELL, C. J.

The death of Ellerbe terminated the trusts of his administration of the estate of Waller, for the due and faithful performance of which the appellant was liable as his surety, according to the tenor and effect of the bond into which they had entered. As surety, the appellant was bound to pay whatever liability then rested on Ellerbe as administrator. ITis liability was not contingent, or conditional: it did not depend upon a judicial ascertainment of the state of Ellerbe’s accounts, by a suit in any court.—Fretwell v. McLemore, 52 Ala. 124; McDowell v. Jones, 58 Ala. 25. A settlement of the administration in the Court of Probate, made between the administrator of Ellerbe and the administrator de bonis non of Waller, or with the distributees of Waller, would not have been evidence against the appellant. As to him, it would have been res inter alios acta; and a-decree in a court, of equity, in a suit against the personal representative of the princijial, for a settlement of the administration, to which the appellant was not made a party, would not have been evidence against the appellant. Neither, as to him, would have fixed and ascertained the defaults of the principal, for which he was bound to answer. Jenkins v. Gray, 16 Ala. 100; Gray v. Jenkins, 24 Ala. 516 ; Howard v. Howard, 26 Ala. 682; Stovall v. Banks, 10 Wall. . The sureties of an administrator, or executor, in the absence of fraud or collusion, are bound by judgments or decrees rendered against their principal, in the course of his administration, as they are bound by acts he is required by law to perform; but they are not bound by judgments or decrees against, or acts done by the personal representative of the principal, for whose fidelity they have not promised to answer. There is no remedy .which can be pursued against the surety of an executor or administrator, after the death of the principal, to fix liability for the default of the principal, other than by bill in equity. There can be, after the death of the principal, no judicial ascertainment of his liability, which would be evidence against the surety; and without it, no action at law on the bond could bo maintained.

The principal, from the moment the bond was executed, was under a legal liability to indemnify the surety — to save him harmless from all loss by reason of any breach of the condition. The liability does not arise from the fact that, subsequently, the surety is compelled to discharge a default for which the principal was primarily liable. The contract, the promise of indemnity, is implied by the law, when the relation of principal and surety is formed. A subsequent payment by the surety, to relieve himself from liability, simply becomes the measure of damages he has sustained by the failure of the principal to keep and perform the contract, and fixes the amount necessary to be reimbursed him, in order to his full indemnity.

It can not be insisted, that a surety may not pay the debt of the principal, for which he is answerable, without’awaiting suit and judgment, if such is not the term and stipulation of the contract. If his liability 'is not contingent and conditional, — dependent upon the common creditor obtaining judgment against him or his principal, — and he is not, for some good reason, wamedjby the principal not to pay without suit, it would be a harsh rule, provoking unnecessary litigation, to compel hiihinto a suit, the burdens of which he may be compelled to bear, in addition to the burden of the common obligation.—Mauri v. Hefferman, 13 Johns. 58; Craig v. Craig, 5 Rawle, 91. It is not important, save so far as the surety maybe involved in embarrassment and difficulty of making proof, that the measure of his liability, and that of the principal, is dependent upon complicated accounts, the matter of exclusive, equitable cognizance, as between the principal and himself as surety, and the parties to whom they are bound. If he deems it proper, he may make an adjustment of his liability, without suit; and if he should pay no more than the principal is justly bound to pay, the latter can have no cause to complain that the. payment was without suit, relieving him from additional burden of costs. "When, by the default of the principal, the surety is involved in liability, he can resort to any measure he may deem best adapted to his own relief, taking care that he does not increase the liability, or detract from the interests of the principal.

In the case now before us, in consequence of the death of the principal, there was no remedy which could be pursued against the surety, by those having' rights and interests iu the administration, other than a bill in equity; and according to the theory of the appellee, and on which the ruling of the City Cout was based, in that suit, no decree could be rendered, which would be evidence of his liability, except as against the particular represenative who was joined with Mm in the suit. No good reason can be assigned for compelling the surety into a suit of that kind, of necessity expensive and dilatory; and the decree in which, while binding and concluding him, is of the inherent weakness imputed to it, in its operation upon the estate of the principal, which ought to be devoted to the indemnity and relief of the surety. Of course, if the fact is controverted, when the surety seeks to recover of the principal, he must show that he has discharged the debt, or the liability of the ¡arincipal, for which as surety he was liable; and he can recover only the amount of such debt or liability, so far as he has paid it. If he pays more than could have been recovered of the principal, he is entitled to recover only to the extent of the principal’s liability ; unless the principal, may have been discharged from liability to the common creditor by the statute of limitations, or other defense, which the surety could not have made available for his own protection.

The claim of the surety for indemnity from the principal, though he may pay and satisfy a pure equitable demand against the principal, of which, as between the common creditor and principal and surety, a court of equity alone would have had cognizance, is a legal, not an equitable claim. The surety becomes, by the payment, a more simple-contract creditor of the principal; and his only remedy, at common law, was an action of assumpsit for money paid, which; though not in name, is in substanee'preserved by the Code, and the only remedy he can now pursue, unless some peculiar circumstances intervene which would give a court of equity jurisdiction.—Sanders v. Watson, 14 Ala. 198. The claim of the surety is not affected by, ami does not partake of the nature and character of the demand of the creditor against him and the principal. That may have been a specialty, or a judgment, but the claim of the surety is for money paid, which the principal ought, for Ms ease, to have paid in discharge of the primary liability resting upon Mm. When, as in this case, a court of equity only may have jurisdiction to enforce the liability of principal and surety, and the surety pays and discharges it, his only claim against the principal is a legal claim for money paid, which the principal is bound to pay, because of the implied contract, springing up when the bond was executed, that he would indemnify and hold harmless. If the payment is made without suit, as the surety may pay, if the liability of the principal is denied, the surety must prove it. The proof may involve an inquiry into all the accounts of the administration, and the surety may find himself involved in more or less of embarrassment and difficulty in establishing the liability; but the court of law is not called upon to 'exercise equitable jurisdiction. The jurisdiction of a court of equity is to enforce the trusts of an administration,— to marshal and distribute the assets to whoever is equitably entitled to receive them. In the exercise of the jurisdiction, there must be an account taken of the assets, and an audit and allowance of the vouchers of the administrator. Evidence must be heard in reference to these matters, or the jurisdiction can not be fully and beneficially exercised. ' The jurisdiction of a court of law is to enforc.e the liability of the principal to indemnify the surety, and, in enforcing that liability, it may be necessary to receive evidence of like character with that which a court of equity must have received in enforcing the trusts of the admin-. istration, and in marshalling and' distributing the assets. It is not the character of evidence which must be introduced, that determines the jurisdiction of courts, but it is the ends and purposes to which the evidence is directed,, the nature of the claim or demand in controversy, and the judgment which must be rendered.

Laying out of view, for future consideration, the effect of the decree rendered against appellant and the administrator in chief, there can be no doubt the City Court erred in rejecting the evidence proposed to be introduced, tending to show the amount of the liability of the deceased principal as administrator, and that it was equal to, or exceeded, the amount the appellant paid in its satisfaction. The introduction of the evidence would not have compelled the court into the exercise of equitable jurisdiction, or to the rendition of any other than a mere personal judgment, of the same nature and character it would have rendered in any action strictly ex eontraeim. The determination of like questions with those which a court of equity must determine in the exercise of its jurisdiction, it may be, the court must have determined; but it is not infrequent, and is of necessity the case, that courts of law, and of equity, determine the same questions. The court could not pass upon and determine the rights a court of equity must have passed upon and determined ; and this it was not invited to do. But it was bound to determine a fact and right the court of equity could not determine — the extent of the liability of the principal to the surety, and the validity of the claim of the latter to indemnity. The surety, unlike distributees or legatees, stands in no relation of trust to the principal, nor does the principal bear to him the relation of a trustee; and it is this relation which lies at the foundation of the jurisdiction of a court of equity. When the surety pays the debt of the principal, the relation is that of debtor and creditor, simply, purely, and is legal, not eguitcible, whatever may have been the relation of the principal to the party to whom the surety makes payment.

Whether the payment made by the surety is in compromise, either to avoid, or to terminate litigation, does not affect his right to indemnity, if he has not thereby injured the principal —if he has made no sacrifice of his rights and interests. Whatever may be the actual liability of the principal, though it may exceed the amount the surety has paid, the amount of that payment is the measure of his liability to the surety; and if the payment is in excess of his liability, the jrrincipal can not, if the payment was not made by the surety, in ignorance of matters which lessen the liability, and without reasonable diligence to ascertain them, be made liable for more than his real liability to the common creditor. Throughout the whole law of the relation of principal and surety, and in all their duties to each other, protection of the surety from loss, by the principal, because of -the liability for the principal he assumes gratuitously, is the end to be accomplished. The surety must not profit by the relation — he can not speculate upon it; and the principal is under the moral and legal duty of indemnifying him -fully, so long as he is not compelled to a sacrifice of his own rights and interests wantonly or negligently by the surety. In no aspect of the case, was the evidence, proposed to be introduced for no other purpose than to show that the amount the appellant had paid was not in excess of the liability of the principal, inadmissible. The principal could have introduced all evidence fixing the amount of liability at a less sum than that claimed of him, which he could have introduced to lessen or relieve him from liability to pay the amount the surety claims of him. The purpose, and only effect of the evidence, would have been to show the extent of the liability of the principal, for which the surety was bound, and indemnity against which, so far as he had paid it, the principal was- bound to make; and it would not have affected the relation or liability of the principal to the eestuis que trust of the administration, —the creditors and next of kin of the intestate.

In relation to the admissibility in evidence of the record of the decree of the Court of Chancery, against the administrator in chief and the appellant as surety of the intestate, we do not conceive that it depends upon the inquiry, whether there is such technical privity or connection between an administrator in chief and an administrator de bonis non, as will render, in all cases, judgments or decrees against, or the acts or admissions of the former, binding upon, or evidence against the latter; as they might be, if the one was clothed only with the rights, and claimed only in succession to the other. By the common law, the two administrations were separate, distinct, independent of each other. The one was not the mere successor to, or continuation of the other. Each was, of itself, an immediate, full administration. The administrator in chief, by the terms of the grant to him, was clothed with title to, and the duty and authority of administering, all the goods and chattels, rights and credits, which were of the testator or intestate at the time of his death. The administrator de bonis non, by the terms of the grant to him, was confined, limited in authority to the goods and chattels, rights and credits of the testator or intestate, which were unadministered — it was de bonis non admm-istratds. The' import of the terms of the respective grants clearly indicates the distinction between them, and, so far as regards the administrator de bonis non, directs attention as to what act of the administrator in chief, or what was done while his authority was of force, within the line of his duty, was an administration. The term administration, in this respect, is of comprehensive meaning. It includes more than the mere collection of the assets, the payment of debts and legacies, and distribution to the next of kin. It involves all which may be done rightfully in the preservation of the assets, and all which may be done legally by the administrator in his dealings with creditors, distributees or legatees, or wdiich may be done by them in securing their rights; and it includes all which may be done, and rightfully done, in relation to adverse claims to assets, which have come to the possession of the administrator as the property of the testator or intestate. Presentment of - a claim, within eighteen months from the grant of administration, is essential to save it from being barred. A vacancy occurring in the administration, before the eighteen months have expired, will not intercept the running of the statute.—Lowe v. Jones, 15 Ala. 545. Custom has rendered it proper, if not the duty of the administrator, if the creditor requests it, to make a written acknowledgment of the fact of presentment. Acknowledgment in writing is not indispensable to the validity of a presentment — the fact may rest in parol. 'But, if a written acknowledgment is given, it is evidence of the fact against a succeeding administrator.—Starke v. Keenam, 5 Ala. 590. If the evidence of presentment rests wholly in parol, the admissions of the administrator, made during the continuance of his authority, are competent evidence to prove it, against a succeeding administrator. —Pharis v. Leachman, 20 Ala. 662. It is settled by several decisions of this court, that an administrator, or executor, may bind the personal assets, by a promise to pay a debt barred by the statute of limitations; and if the promise is made, it is binding upon a succeeding administrator. Newhouse v. Redwood, 7 Ala. 598. It may be true, as a general rule, that there is no technical privity, or connection, between an administrator in chief and an administrator de bonis non, and that the acts or admissions, or judgments or decrees against the former, are not evidence against the latter. The rule must, however, be accepted with the explanation, that the administrator de bonis non is bound and concluded by the rightful administration of his predecessor — that all acts within such administration, not tainted with fraud, he cannot undo, or disturb, or deny their legal efficacy. Otherwise, successive administrations would be fraught with umnixed mischief, and would provoke a multiplicity of litigation.—Wernick v. McMurdo, 5 Rand. 51.

The common law gave to an administrator the unqualified legal title to all personal assets, and its incident, the power of disposition, approximating the absolute power residing in the intestate. A complete, unqualified alienation of the assets, however improper, though a devastavit, was an administration, changing the title; and no title to such assets would pass to the administrator de bonis non. And by whatever means the property in the assets was changed, the change was regarded as an act of administration — they were goods -administered, and to them the title of the administrator de bonis non did not extend. So, if the property in okoses in action was altered,- — as if the administrator received part of a debt, and for the remainder took a promissory note payable to himself, — the title of the administrator de bonis non would not extend to such note. 1 Lomax on Ex’rs, 548-50.

The title of the administrator de bonis non extending only to unadministered assets — to such as remained in specie, unaltered or unconverted by his predecessor — it was well settled, that he could not compel his predecessor to a settlement of his administration, or recover of him because of his delinquencies, or devastavits. In this respect, the common law was changed by statute, enacted in 1846, which has been since continued of force. Not only is authority conferred, but the duty is imposed of compelling such settlement; and for any want of diligence in the performance of the duty he is responsible, as he would be for negligence in the collection of dioses in action of the intestate.—Whitworth v. Oliver, 39 Ala. 286. The effect of the statute is the substitution of the administrator de bonis non to all the rights and remedies which were vested in creditors,' or legatees, or distributees, to compel a settlement of the preceding administration, and his title, authority and duty are precisely that which is conferred and imposed in reference to the choses -in action of his intestate.—Wearing v. Lewis, 53. Ala. 628-9.

The two administrations are not connected: technical privity between them is not created, nor. any other privity than such as existed prior to the statute. The title, authority and duty of the administrator de bonis non, are simply enlarged, and extended to the reduction into possession of assets for the payment of debts or legacies, or for distribution, to which it was not extended at common law.—Graves v. Flowers, 57 Ala. 402. Standing in this relation of enlarged authority and duty, substituted to rights and remedies of creditors, or of legatees or distributees, it is not the rights only, but the burdens of the relation, whicli must be accepted. Not only is he affected by all the completed acts of administration by his predecessor, as he was at common law, but by all matters of evidence, which would affect creditors, legatees or distributees. A judgment or decree against his predecessor, for a debt of the' intestate, can not be made the basis of an action at law against him, because in the judgment the debt of the intestate is merged. Graves v. Flowers, supra. Such a judgment, though it may be in form de bonis intestat/i.s, has in it many of the elements of a personal judgment against the administrator. On the return of an execution to be levied of the goods and chattels of the intestate, No property^ found, without further proceeding by scire facias, or otherwise, an execution may issue against the administrator personally, to be levied of his own goods and chattels, lands and tenements.—Code of 1876, § 2620. Upon such judgment, an action against the administrator and the sureties on his bond can be maintained; and it is conclusive evidence that he had assets sufficient-for its payment, if he has not reported the estate insolvent, and obtained in the Court of Probate a decree of insolvency.—Reid v. Nash, 23 Ala. 733; Rowe v. Sterrett, 16 Ala. 339; Thompson v. Searcy, 6 Port. 393; May v. Kelly 61 Ala. 489. The statutes, while providing for the revival of judgments obtained by an administrator, in the name of his successor, have made no provision for the revival of judgments against him. There is no necessity for such provision, because of the operation and effect of the judgment as against the preceding administrator. Whether; if the creditor should exhaust his legal remedies against the preceding administrator, and the sureties on his bond, and they should prove unavailing, a court of equity would not compel payrhent from the assets in the hands of the administrator de bonis non, is a question not settled by any decision of this court, and is not now a matter for consideration. The judgment is, however, evidence against the succeeding administrator, and against creditors, legatees and distributees, until impeached for fraud, because it is rendered in the regular course of administration; and because the judgment or decree of a court of competent jurisdiction, rendered between parties, and the only parties capable of, or having an interest in litigating the subject-matter, is final and conclusive, putting an end to the controversy, and entitling the party in whose favor it is rendered to freedom from further vexation, and the jeopardy of another trial; for the like reason, that no man ought to be put in jeopai’dy twice for the same offense.—Freeman on Judgments, § 247.

In Pickens v. Yarborouyh, 30 Ala. 408, there had been a recovery of slaves, in an action against an executor; and in the absence of fraud, the verdict and judgment was held conclusive on the creditors of the testator. There are numerous authorities, which hold judgments against an executor, or administrator, conclusive as between the parties obtaining them, and the legatees or distributees—Redmond v. Coffin, 2 Dev. Eq. 443 ; Mason v. Peter, 1 Mun. 437; Sanders v. Godley, 23 Ala. 473 ; s. c., 36 Ala. 55. The reason is, that they bind and affect the legal title with wdiich the personal representative is clothed— that he is the party capable, and having the right and interest in litigating the subject-matter; and that the order and peace of society require that they should put litigation to rest. In controversies between the administrator, or executor, and legatees or distributees, such judgments are evidence. Prima facie,. they are deemed correct; but they may be impeached for fraud, or because they are not founded on just demands, and there was a want of diligence by the personal representative in defending against them.—Gaunt v. Tucker, 18 Ala. 27; Pearson v. Darrington, 32 Ala. 227; Teague v. Corbitt, 57 Ala. 529.

It is said by several of our decisions, and especially in Rogers v. Grannis, 20 Ala. 247; Thomas v. Sterns, 33 Ala. 137; and Graves v. Flowers, 51 Ala. 402, to which we are now referred, that an administrator de bonis non is not bound by a judgment against his predecessor, nor is it evidence against him. The expression may have been correct in the particular cases; it certainly was in the latter case, in -which it was attempted to support an action at law against the administrator de bonis non, founded on a judgment against his predecessor. For the reasons we have previously given, the action was not maintainable, and, of itself, the judgment was not evidence to charge the .assets in his hands to be administered. Whenever the expression may be found, it must, as we have already said, be accepted with the explanation, that whatever was rightfully done, in the course of regular administration by the preceding administrator, is not, by the change in administration, deprived of legal efficacy: it is a matter finished, which can not be undone, in the absence of fraud; and it is evidence against the administrator de bonis non, to the same extent to which it is evidence against creditors, legatees, or distributees.

There can be no doubt that the decree of the Court of Chancery is conclusive on the complainants in whose favor it was rendered. If they were now seeking to re-open the controversy, and to charge the administrator de bonis non, because of the liability of his intestate, the decree could be pleaded, or given in evidence as a final, conclusive bar. In operation it is mutual; it is equally final and conclusive upon all who can have the rights and interests of the intestate which are affected by it. It established the liability of the intestate, for which the appellant as his surety was bound; and of that liability, and of the relation of appellant, it is evidence against the appellee.

The City Court erred in sustaining the demurrers to the third and fourth counts of the complaint, and in its rulings as shown by the bill of exceptions.

Reversed and remanded.