Pharis v. Leachman

20 Ala. 662
CourtSupreme Court of Alabama
DecidedJanuary 15, 1852
StatusPublished
Cited by49 cases

This text of 20 Ala. 662 (Pharis v. Leachman) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pharis v. Leachman, 20 Ala. 662 (Ala. 1852).

Opinion

GrOLDTHWAITE, J.

The bill is filed by a creditor of Charles L. Roberts, on behalf of himself and other creditors, to obtain administration of the legal assets of the estate, and also to subject to the payment of the debts of the estate, certain real and personal property, which, it is alleged, have been fraudulently added to the trust property of the widow and children. The complainant is not a creditor with a lien ; but the bill shows a judgment against the intestate, an execution and return of “no property” during his life, and a report of insolvency by his administrator. The administrator of Roberts, who is also the trustee, and the widow and children, who are the cestuis que trust, are with, others, made defendants to the bill.

The first question presented in the argument is, .as to the [676]*676right of the complainant, upon tbe case made by bis bill, to come into a court of equity. It may be conceded, that ordinarily a creditor, to entitle bimself to tbe assistance of tbe Court of Cbancery upon an allegation of fraud in tbe debtor, must stand as a creditor with a lien, in wbicb case tbe obstacle wbicb prevents its enforcement will be removed, and tbe patb left clear; (Planter’s & Merchant’s Bank v. Walker, 7 Ala. 928; Dargan v. Waring, 11 Ala. 988;) or as one wbo bas exhausted his legal remedies, without being able to obtain satisfaction of bis debt, tbe end wbicb it was tbe object of those remedies to accomplish. Hadden v. Spadder, 20 John. 554; Beck v. Burdet, 1 Paige, 368; Roper v. McCook, 7 Ala. 319.

In tbe one case, a judgment binding tbe realty, or tbe issue and delivery to tbe officer of an execution binding tbe per-sonaljproperty, must be shown; and in tbe other, tbe prosecution of tbe debt to judgment, issue of execution and return of no property. Tbe application of these rules, however, belongs to tbe relation of debtor and creditor purely, and while this relation exists in tbe present case, it is found in connection with other circumstances, wbicb are of themselves sufficient to authorize tbe interposition of a Court of Cbancery. In other words, tbe creditor in tbe present case asserts bis right to tbe aid of that court, not merely because be is a creditor, but for tbe additional reason, that bis claim is connected with matters of administration wbicb render tbe interference of Cbancery indespensable. The equity of tbe complainant, therefore, depends upon considerations applicable to tbe jurisdiction of Cbancery in relation to administrations, rather than those wbicb apply to tbe simple relation of debt- or and creditor.

Upon this branch of Cbancery jurisdiction, while we incline to tbe opinion that it would be necessary to reduce to judgment a claim sounding in damages merely, it is certainly true that in England, for upwards of a century, creditors without a lien, without even having obtained a judgment, have maintained their bills against executors and administrators, for discovery and account of assets, and satisfaction of their debts. Joseph v. Mott, Pre. in Ch. 77; Davison v. The Earl of Oxford, 3 P. Williams 401; In the matter of Sir Charles Cox, 3 P. Williams, 341. In this State we do not find that [677]*677the point berg raised has been expressly decided; but the jurisdiction of equity over executors and administrators, for the protection of creditors, upon considerations which apply with the same force to general creditors, as to those with a lien, or those who have exhausted their legal remedies, has frequently been sustained. Thus, in Kennedy v. Kennedy, 2 Ala. 572, the jurisdiction of equity, in compelling executors to apply the property of their testator to the payment of debts and legacies, is based upon their character as trustees in that court. In Blakey v. Blakey, 9 Ala. 394, the jurisdiction is rested upon the double ground of the fiduciary relation of administrators, and the inadequacy of the powers of the Orphans’ Court to afford a discovery of assets. In Dement v. Boggess, 13 Ala. 143, the court asserts, as a clear legal proposition, that courts of Chancery have jurisdiction over estates in the direction and control of executors and administrators, and in protecting the rights of creditors, as well as decreeing distribution of assets, by virtue of its original powers, which remain unimpaired by statutory inhibition. Again: in Hunley v. Mosely, 17 Ala. 796, Mr. Justice Parsons, in delivering the opinion of the court, says: It therefore follows that a court of equity may restrain the Orphans’ Court, from proceeding to a final settlement, when it is necessary that matters purely of equitable cognizance should be adjudicated and ascertained, in order to reach the end of justice.”

The principle to be extracted from the decisions to which we have referred is, that the jurisdiction of courts of equity in matters of administration, in relation to the enforcement of claims of creditors and the distribution of assets, is sustained upon considerations essentially distinct from those which influence such courts in affording assistance to creditors whose demands are not connected with administrations. In the one case the jurisdiction is original and primary, resting upon its general powers in relation to the settlement of estates ;in the other, it is ancillary, or in aid of the legal tribunals whose powers are found inadequate to the emergency.

A Court of Chancery having jurisdiction of the subject matter, it remains only, as to the question now under consideration, to inquire whether the facts disclosed by the bill, aré sufficient to authorize the withdrawal of the administration [678]*678from a court of concurrent jurisdiction, in wbiclitbe proceedings have been commenced; and this point also we consider determined by our own adjudications. Whenever the powers of tbe Orphans’ Court are inadequate to the exigency, and cannot afford a sufficient remedy, resort may be had to a court of Chancery: Leavins v. Butler, 8 Por. 381; Scott v. Abercrombie, 14 Ala. 270; Dement v. Boggess, supra. Here the bill in effect charges the deficiency of legal assets to satisfy the complainant’s demand, and seeks to supply the deficiency out of property, which, it is alleged, has been fraudulently placed by the intestate under cover of the trust. The Orphans’ Court can deal only with the rightful administrator as such, and Leachman as the personal representative cannot administer the property, the title to which is in him, as trustee, being bound by the fraud of his intestate, (Rochelle v. Harrison, 8 Por. 352; Densler v. Edwards, 5 Ala. 81; Dearman v. Radcliff, ib. 82; Roden v. Murphy, 10 Ala. 804;) although the estate has been declared insolvent, (Marler v. Marler, 6 Ala. 367.) If the legal assets are insufficient, and the rightful administrator as such cannot administer the property subject to the claims of creditors, and fraudulently held, it follows, that the Court of Chancery is the only forum in which relief can be obtained, and the allegation of these facts is sufficient to withdraw the proceedings from a court whose powers are inadequate to the exigency. Neither do we entertain any doubt, that the administrator of the intestate, as such, was properly made a party to the bill, the object of which was, to reach property which could only be made subject to the payment of the debts of the intestate upon a deficiency of assets, which can be ascertained in no other mode than by taking an account with the personal representative.

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Bluebook (online)
20 Ala. 662, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pharis-v-leachman-ala-1852.