Nicholas v. Nicholas

Hudgins, J.,

dissenting.

My views concerning the jurisdiction of a court of equity over estates held in trust are quite different from this expressed in the majority opinion.

The bill alleges (1) that Charles H. Nicholas sues for himself and all other creditors of the estate of William F. Nicholas; (2) that the widow qualified as administratrix, the names of the heirs at law are set forth; (3) that the estate is indebted to the complainant in the sum of §1,565.-00; and (4) that the estate of the said William F. Nicholas ■is insolvent. Then follows an allegation to the effect that the administratrix has not fully disclosed the property which has come, or should have come into her hands, in these words: “That your complainant is advised and alleges that neither the appraisement of the said estate nor the sale bill returned by said administratrix sets forth a correct statement of the assets of said decedent’s estate, but, on the other hand, it is alleged that said papers give only a partial statement of said assets. That an attested copy of said appraisement is herewith filed, marked ‘Ex. Appraisement,’ and an attested copy of said sale bill is herewith filed, marked ‘Ex. Sale Bill,’ and the same are prayed to be read as parts hereof.

“That the said Bernice M. Nicholas, Administratrix as aforesaid, is hereby called upon to give a complete and detailed statement of all of the household and kitchen property, chattel property, farming implements, hay, grain, *406straw, ’phone stock; and other chattel property not listed upon the appraisement or shown by the sale bill.

“That the one year period within which said estate should have been settled has passed, but said administratrix, although often requested, has hitherto failed and refused to make settlement of same. That your complainant is further advised and alleges that had the said administratrix prudently discharged her duties this suit would not have been necessary, and she is therefore personally liable for the costs incident hereto.” (Italics supplied.)

It is obvious, therefore, that the administratrix is not only charged with having failed to have all the property owned by the estate appraised, but specific property claimed to be a part of the estate is pointed out in the words italicized above.

That equity has jurisdiction to entertain or give the relief prayed for in this case, seems settled by previous decisions of this court. This principle is expressed by Judge Lewis speaking for this court in Beverly v. Rhodes, 86 Va. 415, 416, 10 S. E. 572. In that case a bill was filed against a personal representative, alleging a debt due against an estate of a decedent. “The prayer of the bill was that all proper accounts be taken; that payment of the bond be decreed, and for general relief." There was a demurrer to the bill on the ground that the remedy at law was adequate as in the case at bar. In the course of the opinion, this was said, “The first and principal question arises upon the demurrer to the bill. The appellant insists that the complainant’s remedy was at law, and that a court of equity has no jurisdiction of the case. But we do not concur in this view.

“That a single creditor at large of a deceased debtor may sue the personal representative in equity, for an account of assets and the payment of his debt, is well settled both upon principle and authority. The decree for an account, however, whether the suit be brought for the plaintiff singly, or on behalf of himself and other creditors (for it makes no difference), is for the benefit of all *407the creditors, and hence all may come in and prove their debts before the master, and have satisfaction of their demands equally with the plaintiff in the suit, for all are treated as parties * * *.

“In this way a multiplicity of suits is avoided, the assets are marshalled, and complete relief afforded.

“The jurisdiction of a court of equity in such cases is said by some of the authorities to be founded upon the necessity of taking accounts or compelling a discovery of assets, and because there is no adequate remedy at law. By others it is put upon the ground of a trust in the personal representative, which it is the duty of a court of equity to enforce. But whatever may be the correct explanation, the jurisdiction is not only well established, but with us is practically exclusive.

“ ‘One of the most important subjects to which the theory of trusts has been extended,’ says Pomeroy, ‘is the administration of the estates of deceased persons. The relation subsisting between executors and administrators on the one hand, and legatees, distributees, and creditors on the other, has so many of the features and incidents of an express active trust, that it has been completely embraced within the equitable jurisdiction in England, and also in the United States, where statutes have not interfered to take away or abridge the jurisdiction.’ And then he goes on to say what is obviously true, namely, that at common law, although individual creditors might recover judgment for their respective demands, the legal procedure furnished absolutely no means by which the rights and claims of all the parties in interest could be ascertained and ratably adjusted, the assets proportionably distributed, and the estate finally settled, thus making a resort to a court of equity necessary for a proper administration of the assets.

“In Kennedy v. Creswell, 101 U. S. 641 [25 L. Ed. 1075] the same doctrine is held. In that case the bill was filed against the executor and devisees for the collection of a note of the testator for $12,000 held by the complainant; and the prayer of the bill was for an account of the per*408sonal estate of the testator, a discovery of his real estate, and the application thereof to the payment of his debts. Mr. Justice Bradley, in delivering the judgment of the court, said: ‘The point taken by the appellant, that the court below, sitting as a court of equity, had no jurisdiction of the case, is not well taken. The authorities are abundant and well settled that a creditor of a deceased person has a right to go into a court of equity for a discovery of assets and the payment of his debt. When there, he will not be turned back to a court of law to establish the validity of his claim. The court being in rightful possession of the cause for a discovery and account, will proceed to a final decree upon all the merits’; citing Thompson v. Brown, 4 Johns. Ch. (N. Y.) 619; 1 Story Eq., sec. 546; 2 Williams, Ex’rs, 1718, 1719.” To the same effect, see Duerson’s Adm’r v. Alsop, 27 Gratt. (68 Va.) 229; Carter v. Hampton’s Adm’rs, 77 Va. 631; Hurn v. Keller, 79 Va. 415. See also, Hall v. Hall, 104 Va. 773, 52 S. E. 557. (Italics supplied.)

In Rice y. Hartman, 84 Va. 251, 4 S. E. 621, objection to the jurisdiction of the court of equity was made in a suit brought by a single creditor against the administrator and the heirs of the decedent. The objection was overruled on the ground, among others, that there was a trust in the administrator which it was the duty of the court of equity to enforce.

The majority opinion cites as an authority for its conclusion, Carter’s Adm’r v. Skillman, 108 Va. 204, 60 S. E. 775. I concur most heartily both in the reasoning and in the conclusion reached in that case. The suit was instituted by two heirs at law of Travers H. Carter against his administrator, more than nine years after the administrator had settled his accounts, paid all creditors of the estate, and distributed the net proceeds to one E. J. Carter, as the only heir at law. In settling the estate and making the distribution, the administrator had complied with every provision required by statute (then chapter 121 of the Code of 1887, now chapter 221 of the Code of 1919). Judge Keith in the course of the opinion gave a comprehensive re*409view of the statutory provisions regarding the settlement of estates, and held that a full compliance with those provisions, in good faith, by an administrator, was a complete exoneration of any personal liability. That is the only point decided. It is true that in the course of the discussion, he uses the language quoted in the majority opinion, but he also said that the probate proceedings and settlement of the accounts of a personal representative before the commissioner of accounts was an ex parte proceeding in a court of limited jurisdiction. It is nowhere suggested in the opinion that this court, at that time (1908), thought that the statutory provisions for the settlement of accounts of this nature were exclusive.

The statutory method of settling accounts of personal representatives with slight changes has been the law of this State since the adoption of the Code of 1849. The cases heretofore cited clearly show that this court, long before and since the adoption of that Code, recognized the principle that equity has jurisdiction at the instance of any creditor or distributee to compel the administrator or executor to settle his accounts, pay the debts and distribute the proceeds of an estate. There is no express language found in chapter 221 of the 1919 Code that indicates that the statutory method of settling estates was intended by the legislature to be an exclusive remedy, nor can this fact be gathered by implication from the language -used. On the contrary, the statute expressly recognizes the right of either the administrator or any interested party, to have the estate administered under the supervision of the court of equity. This is clear from the provisions of section 5411 in part reading as follows: “When the account of any fiduciary is settled in a chancery cause, it shall be the duty of the clerk of the court in which said cause is, as soon as may be after a final decree therein, to certify to the clerk of the court wherein the fiduciary qualified, a copy of such account so far as the same has been confirmed, with a memorandum at the foot thereof stating the style of the suit and the date of such final decree.”

*410It is a well established and well known principle that when by legislative mandate another remedy is provided or created, neither the common law remedy, nor the equitable remedy is excluded, unless such an intention is clearly so expressed. In this case, the creditor had the election of remedies. He could have followed the method provided by statute or he could have instituted a chancery suit, as he did.

The Chief Justice in Shield v. Brown, 166 Va. 596, 600, 186 S. E. 33, 34, states another principle which is likewise controlling here. He quoted with approval from Hull v. Watts, 95 Va. 10, 13, 27 S. E. 829: “Granting it to be true, as contended, that appellee had a complete and adequate remedy at law, it is equally true that the existence of a remedy at law cannot deprive courts of equity of jurisdiction in a matter that comes within the scope of their elementary jurisdiction.”

A general classification of the subjects of equity jurisdiction according to Lord Redesdale and Judge Story is found in volume I, page 11, 3d Ed., of Barton’s Chancery Practice. To the ten general classes named, the author on page 12 includes others in this language: “To these topics may be added these other cardinal subjects of equity jurisdiction,—accident; mistake; fraud; accounts; administration of estates; specific performance of contracts; * * *” (Italics supplied.)

The same author on page 193 says: “One or more creditors of a deceased person may on behalf of himself or themselves and all other creditors of such deceased person file a suit in equity against the personal representative of such deceased person, calling for an account and the application of the assets of the estate, real and personal, to the payment of the debts, but in West Virginia a suit of this character is subject to the rights of the personal representative to bring suit within six months after his qualification. This right of the personal representative is not exclusive for such a bill may be filed by a creditor or creditors to discover assets and enforce a claim against the estate, real and personal, in the hands of the heirs or *411devisees within six months of the date of the appointment of the personal representative of the decedent.

“Creditors who bring such suits against personal representatives need not bé lien creditors as in the case of suits against living persons. The death of the debtor creates the lien.”

No exhaustive examination of all Virginia cases on the subject has been undertaken. We have cited ten, in which the principle has been recognized and applied by this court, in addition to two learned text writers whose statements have been quite generally accepted as conclusive on the subjects treated. Opposed to this, we have the opinion of another learned writer who does not express a positive opinion to the contrary, but simply says: “It would seem, therefore, doubtful, where the executor is in the regular course of his administration, and is discharging his duties with fidelity, if he can be haled into court by every creditor, distributee, or legatee, when under the very statute law he may not within the year distribute the estate.”

It has been held by this court in a suit against an executor or administrator, by one or more creditors of the estate, that all debts due by the estate must be proven before the commissioner, to whom the case has been referred. Separate suits for the same object against the same executor or administrator, will not be permitted in any court. Stephenson v. Taverners, 9 Gratt. (50 Va.) 398; Kent’s Adm’r v. Cloyd’s Adm’r, 30 Gratt. (71 Va.) 555; Ewing’s Adm’r v. Ferguson’s Adm’r, 33 Gratt. (74 Va.) 548; Piedmont, etc., Life Ins. Co. v. Maury, 75 Va. 508; Saunders v. Griggs’ Adm’r, 81 Va. 506; Robinson v. Allen, 85 Va. 721, 8 S. E. 835; Beverly v. Rhodes, supra.

It seems settled that an executor or administrator cannot be harassed by every creditor, distributee or legatee, either before or after the time allowed by statute in which to settle the estate, but he, like any other active trustee heretofore could be compelled by a beneficiary of the trust for the benefit of such beneficiary and all others who are *412interested in the trust estate, to administer the trust under the supervision and direction of a court of equity.

The majority opinion seems to hold that if there are some independent equities alleged in the bill, then equity has jurisdiction.

The bill in this case alleges, as heretofore pointed out that the estate is insolvent; that there is other property, and specific property is mentioned which is owned by the estate that the administratrix has not had appraised or listed among the assets belonging to the estate; that the time permitted by statute for administratrix to have settled her estate has elapsed, and that she had failed or refused to settle. The demurrer admits these allegations. If these admissions do not constitute independent equities even under the doctrine announced in the majority opinion, I am at loss to understand the meaning of the term used.

In the last paragraph of the majority opinion, it is stated that, “* * * it plainly appears from the averments of the bill * * * that the probate court first acquired jurisdiction of the administration of the estate * * * and has been administering the same pursuant to the provisions of chapter 221 of the Code.” The bill, as I read it, alleges that an administratrix was appointed; that she gave bond; had the estate appraised, and filed a bill of sale. All of this was done in the clerk’s office. The commissioner of accounts before whom the statute requires fiduciary to settle the accounts has never done anything so far as it appears on this record. If the foregoing statement in the majority opinion remains, and thus becomes law, then the mere appointment of a personal representative by the clerk, without more, will deprive equity of jurisdiction of one class of active trust estates, except under extraordinary circumstances. These extraordinary circumstances or independent equities are not defined with any degree of accuracy. The result will be to create confusion and uncertainty, where heretofore there has been clarity and certainty.

It was suggested in argument, without any foundation for it in the record, that this was a frivolous or spite suit. *413This may be true, but that cannot be established by demurrer, which admits the allegations of the bill to be true.

For the reasons stated, I think the decree sustaining the demurrer should be overruled, and the case reversed.

Eggleston, J., concurs iñ this dissent.