Worthy v. Battle

54 S.E. 667, 125 Ga. 415, 1906 Ga. LEXIS 180

• Court: Supreme Court of Georgia
• Decided: May 16, 1906
• Status: Published

Opinion

Atkinson, J.

(After stating the facts.) Before undertaking to deal specifically with the questions presented by the motion for a new trial, it is pertinent to observe that the sale conducted by the administrators of J. Randolph Battle, whereby the lands belonging to his estate were disposed of to his widow as the highest and best ■bidder, has never been judicially declared inoperative as between the parties to this litigation, or their privies, or ever been formally set aside. As early as the March term, 1888, of Schley superior court, the sureties on the bond of the administrators elected to abandon their efforts to have the sale declared void, and consented to a decree ■confirming it. The plaintiffs in the present case were not bound by that decree, and by prosecuting their action of ejectment against the purchaser at the sale they evinced an intention to ignore it and treat the sale as inoperative against them as heirs at law. Neither the administrators nor their sureties were parties to this litigation, and, as between them and the plaintiffs, the result of the action in mo way affected the validity of the sale. The plaintiffs recovered possession of the lands from Mrs. Battle, hut they lost the fruits of their victory against her when her mortgage-creditor subjected the lands to the payment of a pre-existing claim which they were unable to defeat. They no longer hold these lands as heirs at law, and therefore there is no occasion to apply the “sound equitable principle that they can not have both the proceeds of the land and the land itself.” Battle v. Wright, 116 Ga. 218. As was held in that case,, when the plaintiffs called upon the administrators for an accounting for the proceeds of the land and obtained judgment therefor, they Estopped themselves from thereafter asserting that the sale was for any reason unlawful-and invalid. So the real question'to be decided upon this branch of the case is whether the defendant to the present proceeding is in a position to assert that as against him,— the legal representative of one of the sureties on the bond of the administrators, — the plaintiffs are equitably estopped from asserting a right to an accounting for the proceeds of the sale of the lands which they recovered in ejectment from the purchaser at the sale. As has been remarked, there is no.estoppel by judgment against them which the defendant can assert in his defense.

1. An estoppel in pais can not be successfully urged in behalf of the defendant, unless, in view of the conduct of the plaintiffs in the past, it would be unconscionable for them now to demand their share of the proceeds of the lands sold by the administrators. The administrators were certainly not authorized to convert these proceeds to their own use simply because the plaintiffs committed the mistake of prosecuting their action in ejectment; and the sureties of the administrators are not in a position to assert the contrary. If the administrators’ sale was voidable because of fraud and-collusion between them and the purchaser, Mrs. Battle, the remedy of the defrauded heirs at law was to proceed to have the sale set aside and the lands resold; not to bring an action of ejectment against the purchaser. But the recovery in that action operated to the prejudice of the purchaser, and in no Avay affected the rights of the administrators or their sureties; and as the heirs at law eventually lost the lands and were remitted to their claim for an accounting for the proceeds of the sale in the hands of the administrators, their sureties can not in good conscience escape liability upon the idea that the conduct of these heirs at law affected the status of the administrators’ sale or in any way changed the responsibility of the sureties on their bond with respect to a proper administration of the proceeds of the lands realized at the sale. It follows that the evidence introduced by the defendant respecting the ejectment suit, as well as the record of the claim case between the plaintiffs and Cleora Wright, had no real bearing upon the merits of the present controversy1, and for this reason should be disregarded. The defendant did not establish his equitable ■ defense that the plaintiffs were still in the possession and enjoymient of the lands which they recovered in ejectment, yet sought to hold the administrators and their sureties .accountable for the proceeds thereof. The truth is, the plaintiffs have lost possession of the lands; and the court did not err in admitting evidence to establish this fact, though the burden of showing it had not been cast upon the plaintiffs. '

2. All that it was necessary for the plaintiffs to show in order to establish the alleged devastavit on the part of the administrators was the rendition of the judgment against them and a proper return of nulla bona. Gibson v. Robinson, 90 Ga. 766. Upon the execution issued on that judgment was an entry by the sheriff of Schley county, dated August 21, 1900, to the effect that he had been unable to find any property of the estate of J. B. Battle in the hands of W. J. Boss and C. L. Boss, his administrators, upon which to levy, nor any property belonging to them individually. There also appeared upon the execution the following entries, one signed by the sheriff of Stewart county and the other by the sheriff of Colquitt county: “No property of defendant, C. L. Boss, to be found in Stewart county, Georgia, upon which to levy the within fi. fa. October 22, 1903.” “Georgia, Colquitt county. No property of the defendant, W. J. Boss, to be found in this county upon which to levy the within fi. fa. This October 26th, 1903.” Such an entry, when made on an execution issued against an administrator in his representative capacity, is to be construed as meaning that the sheriff can find no property in the hands of the administrator belonging to the estate of his intestate. Gibson v. Robinson, 90 Ga. 756(4). The execution also showed a levy, on September 12, 1900, upon two mules and a mare “as the property of C. L. Boss.” The defendant objected to the introduction in evidence of the execution showing these entries, on the ground that a proper return of nulla bona was not thereby made to appear. The first entry shows no property subject to levy in the county in which the intestate resided at the time of his death; another shows no property of the estate in the hands of C. L. Eoss, one of the administrators, in the county of his residence; and still another discloses that there are no assets belonging to the estate in the county of the residence of the other administrator, W. J. Eoss, of which he is in possession as its representative. No further showing was required to establish the fact that no property belonging to the estate could be found upon which the execution could be levied.

3. Upon the close of the plaintiffs’ evidence, the defendant requested the court to grant a nonsuit, on the ground that they had failed to show that sufficient assets of the estate of K. L. Worthy had gone into his hands, as administrator, to pay plaintiffs’ demand, or that any assets had gone into his hands as such administrator for the purpose of administration or for any purpose. All that it was incumbent upon the plaintiffs to show was that the administrator ought to have in his hands sufficient assets of the estate to meet their demand. 3 Wms. Exrs. (7th Am. ed.) 538. This burden the plaintiffs successfully carried by making the following proof: K. L. Worthy made a will whereby he left all of his property, real and personal, to his wife, who was named as executrix. He died seized of personal property worth from twelve to fifteen hundred dollars, and also of a tract of land, known as the “James Mc-Garrah place,” containing some 800 acres, which he held under a deed from McGarrah dated July 25, 1870, and recorded February 17, 1888. At the time of the testator’s death this land was worth six or seven dollars an acre, and at the time of the trial was worth ten to twelve dollars j>er acre. After his death in 1891, his widow took charge of the place and lived there for some time, and his son “Ben” (W. B. Worthy) managed the property after his father’s death; nobody else has exercised ownership over the place. Mrs. Worthy died in 1893 or 1894, and on October 10, 1900, letters of administration upon the estate of IC. L. Worthy were granted to W. B. Worthy, the defendant.

4. The court rejected, as irrelevant, proof, offered by the defendant to show that letters of administration upon the estate of his mother, Lizzie Worthy, had been issued to him on August 7, 1893, and that by virtue thereof he obtained possession of the plantation above mentioned and the personalty used in connection therewith, the same being the property which the plaintiffs claimed was in Ms hands as the administrator of his father, 'K. L. Worthy. As has been seen, Mrs. Worthy acquired possession of these assets of her deceased husband as his nominated executrix and the sole beneficiary under his will, and of course held them subject to the right of his creditors to enforce all just demands against him. Her administrator could hold these assets under no better claim of right or title. When, in 1900, he became the -administrator with the will annexed of Ms father, K. L. Worth]', he placed himself under the legal duty of making proper administration of the éstate of his testator, and was bound to recognize the fact that, in his capacity as the administrator of his mother’s estate, his power of disposition over these particular assets was subservient to the rights of creditors of K. L. Worthy, whose just claims he was bound to recognize in his capacity of legal representative of his deceased father. If he has heretofore exercised dominion over the property as merely the administrator of his mother, it behooves him to promptly install himself as the administrator of his father by asserting proprietorship-over these asséts in that capacity, in order that his father’s administrator and the sureties on his bond may be in a position to legally administer the estate of K. L. Worthy and escape personal liability to his creditors, if any. The plaintiffs have no concern with the administrator of Mrs. Worthy or with his actings and doings as such.

5. The court properly declined to allow certain witnesses for the defendant to state that, in their opinion, the estate of J. Randolph Battle was insolvent at the time of his death, and that the liabilities of the estate exceeded in amount the value thereof. Even if this was a proper way to prove the testator’s insolvency, tlie evidence had no real bearing on the issue, which was whether or not the administrators had committed a devastavit. If so, the fact that the estate was insolvent would afford no excuse. It might be that creditors failed to press their demands within the statutory period, or accepted in satisfaction thereof much less than they were entitled to, and that the administrators realized more from the assets of the estate than the real value of the same. At any rate, they and their bondsmen were bound to account for what they actually received, and were only entitled to credit for what they actually expended or were under a duty still to pay before settling with the heirs at law.

6. The “Ross place” became the property of Mrs. Battle, the purchaser at the administrators’ sale of the lands of the estate of J. Randolph Battle. That sale has never been set aside. When she deeded that place to her cosureties on the administrators’ bond, it belonged to her, and she conveyed it to them individually, not to the estate of Battle or to them as trustees for the benefit of the heirs at law. By private agreement, to which the heirs were not parties, the sureties came to an understanding as to what disposition should be made of the “Ross place” and as to how they should protect themselves from threatened liability on their bond. The details as to this private understanding were wholly immaterial, as also was evidence offered to show that the purpose and intention of the sureties who paid the debts of the estate was “to settle and discharge their liability on said bond.”' Obviously they could not, by any such agreement amongst themselves, discharge themselves from liability on the bond to the plaintiffs. Under the agreement had with Mrs. Battle, her cosureties obligated themselves, in consideration of her deeding to them the “Ross place,” to absolutely discharge all the outstanding indebtedness against the estate. The sureties adopted this plan of avoiding liability to creditors because of what they regarded as a fraudulent sale of the lands of the estate at much less than their value. The agreement was entered into for their own protection, and not for the benefit of the estate or for the protection of the wrong-doers, the administrators. The sureties undertook, not merely to advance the money necessary to settle with creditors, taking from them an assignment of their claims against the estate and looking to the administrators for reimbursement, but to discharge its indebtedness out of their own pockets and to suffer the loss, if Mrs. Battle would give up to them the “Ross place.” This fact was fully recognized and pointed out when the suit of the heirs against the administrators was before this court. Ross v. Battle, 113 Ga. 742. When the administrators were called on for an accounting, they sought to receive credit for the amount expended by the sureties in carrying out their agreement with Mrs. Battle, notwithstanding the indebtedness was not settled with any assets belonging to the estate, or with funds furnished by the administrators, or with money advanced to them or paid out in their behalf or for the benefit of the estate. But this court held that: “In an accounting between an administrator and the heirs of his intestate, he is not entitled to credit for sums expended by the sureties on his bond in settling debts of the estate, when it appears that the latter have been fully reimbursed by a conveyance to them of property not belonging to the estate, and under circumstances which will prevent them from asserting, either against the estate or the administrator, any claim based upon the fact that they had settled such debts.” In other words, it was held that the administrators could not claim credit for an amount which they had neither paid nor were under any duty to pay, either as an outstanding charge against the estate or as a personal liability, .or whicji the securities were not seeking to assert against the estate. This court did not, of course, then undertake to determine whether, in a suit against the sureties on the bond, they would be entitled to a credit for the amount expended by them in settling the debts of the estate. ■ Nor was any ruling on this question made in Ross v. Battle, 117 Ga. 877, wherein it was held that the superior court of Stewart county was without jurisdiction to entertain a suit subsequently brought against the administrators and the sureties on their bond. ,

The plaintiffs are' bound by their election to claim the proceeds realized from a sale of the lands of the Battle estate, rather than to repudiate the administrators’ sale and have the lands resold. Battle v. Wright, 116 Ga. 218. This being true, it is clear that the sureties were liable under the bond for any failure of the administrators to properly account for such proceeds and other assets of the estate coming into their hands for administration. While the judgment against the administrators in favor of' the heirs at law is not conclusive upon the sureties as to whether or not a devastavit has been committed (Gibson v. Robinson, 90 Ga. 756), yet the defendant does not pretend that upon the accounting had with'the administrators they were not given credit for the full amount of their expenditures or were charged with any item for which they were not liable. On the contrary, he merely sets up the equitable plea of subrogation and asks that there be taken into account the claims of creditors which were settled by the sureties on the bond but were never paid, as they should have been, out of the assets of the estate. The question is: were these sureties, relatively to the heirs at law, subrogated to the rights of these creditors, to the extent of the amount expended in order to discharge their just demands against the estate? The administrators ought to have paid the creditors in fuil, if possible, and the heirs at law were not entitled to receive a cent until the indebtedness of the estate was settled in full. By the arrangement made with Mrs. Battle, one of the sureties, all of .the indebtedness was discharged by the payment of a sum far less than the aggregate amount of the claims of the creditors, who were pressing their demands by suit and otherwise. The advantageous settlement made with creditors operated directly to the benefit of the heirs at law, who stood little chance of receiving anything as their distributive share of the badly involved estate. This much appears from the record before us. Under the terms of the agreement under which the sureties discharged this large indebtedness, they waived all right to reimbursement by the administrators out of the assets of the estate, agreeing among themselves to suffer an individual loss and to permit the administrators to deal with the assets coming into their hands as though no debts were outstanding, and to administer the estate according to law. They did not, however, contemplate or consent to a devastavit by the administrators, or waive any legal or equitable defense which they would be in a. position to assert against the heirs at law if ever sued upon the bond. Had the sureties paid the debts of the estate as mere volunteers, they would have no standing even in a court of equity, since as intermeddlers with the affairs of the estate they could not assert the rights of creditors unless they took a legal transfer or assignment of the claims which they undertook to settle, and duly called upon the administrators for payment thereof. But these sureties did not act as-mere volunteers. The administrators had subjected them to threatened liability on their bond, and they settled with creditors in order to' escape being held responsible to them for an improper administration of the estate. What the sureties in effect did was h> remove an “incumbrance” upon the estate which had to be discharged before the plaintiffs could hope to receive any of its assets upon their claims as heirs at law. If the facts set up in the defendant’s equitable plea be true, it would be unconscionable to allow the plaintiffs to take the benefit which they derived from the payment by the sureties of the indebtedness of the estate, and at the same time ignore the fact that the superior claims of creditors were discharged with private funds furnished by the sureties for that purpose.

The defendant introduced as a witness W. M. McG-arrah, one of the sureties, who testified, that in carrying out the agreement made with Mrs. Battle, whereby she deeded to her cosureties the “Boss place,” they paid out in the neighborhood of $3,400 in settling with the creditors of the estate; that he, K. L. Worthy and another surety each contributed about $860, while another of the sureties contributed $400, and still another $100. The defendant offered to show by Mrs. Battle that she contributed as her part the “Boss place,” the value of which'at the time was $1,500; and also offered to prove that the sum received by her cosureties from the sale of that place was $1,500, which amount went towards extinguishing the debts paid by them. The trial judge declined to admit this additional evidence, and ruled that the defendant was not entitled to credit for the amount actually expended by the sureties in discharging the indebtedness of the estate, or credit for the amount realized from the sale by them of the “Boss place,” or even for the sum paid by the sureties out of their own pockets in addition to the proceeds of the land, contributed by Mrs. Battle. It was, of course, incumbent on the defendant to introduce satisfactory proof that the amount expended by the sureties was paid out in discharging “valid and lawful debts or demands against the estate” which the administrators were under a legal duty to pay. Clement v. Hawkins, 96 Ga. 811. But the ruling of the court was virtually a holding that the equitable plea of subrogation was without merit, and proof in support thereof would be entirely unavailing. This being so, the direction of a verdict can not be upheld, and the judgment denying a new trial must -be set aside in order that the defendant may have an opportunity of showing what particular demands against the estate were settled by the sureties! When it is ascertained what was the precise amount paid out by them in satisfying valid claims against the estate, that amount should be credited to the defendant before he is called on to account to the heirs at law for what they may be entitled to receive as distributees of the estate left by their father. Taylor v. Taylor, 8 B. Mon. 419 (48 Am. Dec. 400).

Judgment reversed.

All the Justices concur, except Lumpkin, J., disqualified.