Thomas v. Riegel

5 Rawle 266

Opinion

The opinion of the court was delivered by

Kennedy, J.

The principal, and indeed as it appears to me the only question worthy of consideration in this case, is, whether executors who have appropriated the assets of the estate to the payment of legacies instead of the debts of the testator, and upon settling their administration account afterwards in the Orphans’ Court have obtained a discharge from their executorship, remain liable notwithstanding, to the creditors for the assets so applied to the payment of the legacies.

It is proper to bear in mind that the discharge of the executors in this case from their office as such, was upon their own application and wish to resign the same; and not because they were found to be wasting or mismanaging the estate, and had failed to give security according to an order previously made upon them by the Orphans’ Court to that effect. The surrender then of their office being voluntary, it seems tó me that they were only required by the act of assembly of 1797, to pay or deliver over to the administrator de bonis non, the residue of the estate which remained in their hands unadministered, and inasmuch as more than a year, the time for which the payment of legacies is suspended by the act of assembly, had elapsed after the death of the testator before the resignation of the executors, it could not perhaps be well said that whatever of the estate they had appropriated to the payment of legacies, although improperly so applied, formed any part of the residue thereof mentioned in the act as remaining in their hands unadministered. Besides, after the expiration of the year, and having paid all the debts within their knowledge against the estate, it was their duty to pay the legacies, if they had assets, upon receiving from each legatee a bond with at least two sufficient sureties, as the law then stood, conditioned for a return of his legacy, or so much thereof as should be wanting thereafter to pay debts subsequently appearing against the estate: so that if the defendants in this case after the expiration of the year, without any knowledge of the plaintiff’s claim, upon receivr ing the requisite bonds and sureties from the legatees, paid to them all the assets remaining in their hands unadministered, they would only be liable to the plaintiff or other creditors giving notice subsequently of their demands, as long as the legatees or their sureties should remain solvent and able to refund. But if an executor, after notice given him of a debt against the' estate, will appropriate the assets to the payment of legacies instead of such debts, hewill.be responsible to the creditor, whether the legatees and their sureties in the refunding bonds continue to be good or not. So if he pay legacies without taking refunding bonds, or without taking such security as shall be considered good at the time, he will be liable for the amount so paid to creditors„if there be any unpaid who shall seek payment afterwards of their debts: because it is a clear violation of duty on his part either to pay legacies in preference to debts made known to him, or to pay legacies without taking such security as is required by the act of assembly : which I believe, according to the act now in force on this subject, ought to be approved of by the Orphans’ Court. Hence it is not only reasonable but just, that if he pays legacies without taking such security on behalf of creditors as the law requires, that, he should stand himself in the place of such security and be responsible to the creditors of the estate in the same manner and to the same extent as if it had been taken. And this I think may be considered a sufficient answer to a suggestion made by the counsel for the defendants, that their clients were protected against the claim of the plaintiff by the statute of limitations. For as we have no act of assembly barring a suit on a refunding bond, and protecting the sureties from their liability under it after any specific length of time, I do not see how the defendants can claim protection on'such ground. They must be considered liable to the creditors at least as long as the sureties in the refunding bonds would have continued to be liable to them, had they been taken. And if they have failed to take such bonds, they have failed to perform their duty, and have certainly no right to claim to be placed in a better situation than if they had done all that the law required of them.

The plea of the defendants as it appears tome amounts to nothing more than plene administraverunt, and would have been bad and insufficient, notwithstanding all the special matter set forth in it, had not the averment to this effect been inserted in the conclusion of it. The defendants might have given in evidence all the special matter stated in their plea, under the plea of plene administraverunt, according to the principles laid down in Brooking v. Jennings, 1 Freeman’s Rep. 150, ca. 171. S. C. 1 Mod. 174. Garter v. Du, Ibid. 13, Ca. 12. Anon. 1 Salk, 313, reported George v. Pierce, 7 Mod. 31. The replication therefore of the plaintiffs which goes to show that the defendants had not properly administered all the assets which came to their hands, baton the contrary had misapplied and wasted the same to an amount more than sufficient to pay the plaintiff’s demand, by paying legacies with them, was an appropriate and pertinent answer to their plea, and if true sufficient to avoid it. Accordingly it is laid down in Packman’s case, 6 Co. 19, that “ if an administrator waste goods and afterwards administration is committed to another, yet any debtee shall charge him in debt, and if he pleads the last administration committed to another,, the plaintiff may reply that before the second administration committed, he had wasted the goods.’r

This principle was also agreed to by three of the judges in Brooking v. Jennings, 1 Freem. 150. Vaughan, Chief Justice, dissenting. In Chandler v. Thompson, Hob. 266, this question was debated, though not decided, but the court say, “ perhaps he (meaning the creditor) may have an action against the former executor for so much as he had not lawfully administered.’.’ And in Oxford v. Rivett, Cro. Car., 79, 93-4, although the point was not directly made and decided, yet it seems to be plainly inferable from what is there said by the judges, that if the defendant who had been administratrix durante minore estate of the executor appointed by the will, had been found guilty by the jury of a devastavit during her administratorship, and before the executor attained full age, that she would have been liable directly to the plaintiff in the action who sued as a creditor of the testator. It is true that in opposition to this doctrine, Chief Justice Vaughan is reported in Brooking v. Jennings, according to 1 Mod. 174-5, to have said, “ when an infant executor comes of age, the power of an executor durante minore <state ceaseth; and the new executor is then liable to all actions : if the former executor wasted, the new one hath his remedy against him; but he is not liable to other men’s suits;” in which Atkins, Justice, is said to have concurred. , But in Freeman, 150, where the case is also reported, no mention is made of such opinion haying been expressed by Chief Justice Vaughan. On the contrary, it is said “ that three of the justices did seem to agree, that if an executor durante minore estate, commits a devastavit and then obtains a release from the heir, (but meaning the rightful executor) being come of age, that this will not secure him against the creditors who had once a right of action attached in them, which shall not be divested by his release;” of which Chief Justice Vaughan is merely reported to have doubted. So far then as the weight of judicial authority or •opinion is entitled to regard on this point, it seems to be in favour of the creditors having the right to maintain their respective actions •directly against the first executor or administrator when he has committed a devastavit. But it, has been objected that this would defeat the provisions of our act of assembly, which requires the assets to be apportioned among debts of the same grade, according to the order therein prescribed, when they are found to be insufficient to pay the amount of the several grades. The case of Jewett v. Jewett, 5 Mass. 275, has been cited and relied on to sustain this •objection, in which the Supreme Judicial Court of Massachusetts held, that to an action against an administrator, it was a good plea in bar that after the commencement of the action against him he had been removed from office by the judges of probate; because by the laws of that state the creditors of a deceased were to be paid pari passu, excepting debts due to the United States, to the commonwealth, and charges on account of the last sickness and funeral of the deceased; and in order, as the court say, that this might be effected, it was necessary that all the assets unadministered should be brought into the hands and possession of the administrator for the time being. And it seems from the case of Coleman v. Hall, 12 Mass. 570, that the administrator has the right, and indeed that it is his duty to apportion the assets at any period,, however late, when he shall have discovered that the estate is insolvent; even in regard to judgments obtained against him for the whole amount of the debts therein claimed, at a time when the assets were amply sufficient to pay all the debts which had then come to his knowledge. The law-of this state however has been held to be different in this latter particular ; for where an executor or administrator having assets sufficient to pay all the debts within his knowledge, is sued for a debt, and judgment rendered against him for the amount thereof, but before it is paid by him, other debts of equal or even superior grade are made known to him, still he is bound to pay it, and will be justified in doing so, out of the assets in preference to these latter debts coming to his knowledge after the rendition of the judgment. Besides, by our act of assembly on this subject, it is the duty of the executors or administrators, whenever the assets are insufficient to pay the debts of the deceased, to apply to the Orphans’ Court of the proper county for the appointment of auditors to settle and adjust the rates and proportions of the assets due and payable to the creditors, in the order prescribed by the act; and no such application having ever been made by the defendants in this case, although they continued in the office of their executorship two years beyond the time allowed by the act of assembly, for settling and paying the debts of the estate, we are bound to presume that they considered the assets amply sufficient, and that they were so in fact, to pay all the debts against it. Indeed it is not alleged now by them that the assets were not sufficient for this purpose; and if the conduct imputed to them by the plaintiff’s replication be true, that they paid legacies to a large amount, it is clear that they never could have thought the estate insolvent. It would seem then that there is no pretence for deciding on this ground that the plaintiffs ought not to recover in this action. But it may also be observed, that the defendants in this case were not removed from their offices for mal-administralion, as was most probably the case in Jewett v. Jewett. This in most, if not in all cases, would certainly make it not only expedient but necessary for the safety of all those interested in the'estate, that the party turned out of office for such cause should be made accountable immediately to the administrator de bonis non, for all errors committed by him in the administration of the estate which might ultimately prejudice the rights of those concerned. As such pressing necessity however did not exist in this case, it may as well be that the plaintiff should maintain her action directly against the defendants, in case they be liable in any course of proceeding for the payment, or for assets to make payment with, of her claim. This will certainly tend to prevent circuity of action, and at the same time to promote the speedy administration of justice, as well as to prevent the accumulation of costs unnecessarily, without producing the least injustice, that I can perceive, to any one. I am therefore inclined to think that the replication of the plaintiff was sufficient to avoid the plea of the defendants, and that the court below erred in rendering a judgment on the demurrer in favour of the defendants. The judgment is therefore reversed; and I am strongly inclined to believe that we ought to render a judgment for the plaintiff, notwithstanding the earnest declarations of the counsel for the defendants, that the merits of the case, when all the facts and circumstances connected with it are fully disclosed, will be found to be in favour of their clients; because unless they can either set aside the plaintiff’s bond, Show payment, or repudiate the facts set forth in the plaintiff’s replication, I confess that I do not, see well how they are to escape from a recovery by the plaintiff.. And if they can do either of these things, it is unaccountable that the demurrer should have been resorted to and relied upon. Such experiments are not to be encouraged, when made without any colourable grounds to support them; but as this'case was not free from difficulty altogether, it is thought more advisable not to enter a judgment for the plaintiff, but to remand the cause to the court below, that the defendants may have an opportunity of withdrawing the demurrer by leave of the court there, and rejoining to the plaintiff’s replication, either by putting the facts of it in issue, or.alleging some new matter in avoidance of it, for the trial whereof, when the issue shall be joined, a venire facias de novo, if necessary, is awarded.

Judgment reversed.