Paschall v. Hailman

The Opinion of the Court was deliverd by

Purple, J.

At the May term 1826, of the Randolph Circuit Court, William Morrison, obtained a judgment against John Edgar, for $791-054, upon which execution was issued within one year thereafter. Edgar died oh the 1st of December, 1830, and Morrison was appointed his administrator. During the interval between the years 1831 and 1835, both inclusive, claims to a large amount were filed and allowed against Edgar’s estate; among which was one in favor of Martha Eliza Edgar, now intermarried with appellant, for $10,500-00 on a bond filed and allowed tlie 25th April, 1832; and also the judgment in favor of Morrison, also filed and allowed December 8th, 1833; which, at the time, amounted to $1053-56$. The personal assets of the estate of Edgar amounted to $764-25. Of this sum, $306-36 was applied by Morrison in payment of debts, which by law were entitled to priority; and the residue, $467-89, in payment of his judgment against Edgar. Edgar, at the time of his death, owned several tracts of land, situated partly in Randolph, and partly in other counties of the State. The personal estate being insufficient to pay the debts of the intestate, Morrison applied to the Circuit Court for leave to sell the real estate before mentioned. An order was made for the sale, which took place on the 22d August, 1834, and February 2d, 1836 Morrison died, and Eliza S. Hailman, appellee, was appointed his administratrix cum testamento annexo.

Paschall applied to the Probate Justice of Randolph county for an order, that the money arising from the personal assets of the estate of Edgar, and also the proceeds of the sales of the real estate, deducting the said $306-36, paid upon claims which had priority in law, should be distributed pro rata among the creditors of Edgar, including the judgment in favor of Morrison before referred to. The Court decided that Morrison, in his life-time, and his administratrix since his death had a right, as against the appellant and other creditors by simple contract, to retain the whole amount due upon said Morrison’s judgment out of the said personal assets and the proceeds of said sales.

From this decision, Paschall appealed to the Circuit Court of Randolph county, where, by consent of parties at the November term 1847, a judgment pro forma was rendered, affirming the judgment of the Probate Justice, and the appellant prosecuted an appeal to this Court. Whether the judgment of the Circuit Court affirming the decision of the Probate Justice was erroneous, is the question to.be determined here.

It is insisted by the counsel for the appellee: 1st. That Morrison and his administratrix, by virtue of their appointments as administrator and administratrix, had a Common Law right to retain so much out of assets of the estate of Edgar, as would be sufficient to pay Morrison’s judgment against him, as against other creditors whose claims were of equal degree, and that this provision of the Common Law was in force at the time Morrison recovered his judgment; and that he thereby acquired a vested right to have the judgment enforced according to the Common Law rule against the estate of Edgar, who died on the 1st December, 1830.

It cannot be denied that the Common Law rule in relation to the right of an administrator to retain is as the counsel contend. Toller on Ex’rs, 295; 3 Burrow, 1380, cites Cro. Eliz. 232. But whether the appellee is in a condition to avail herself of its benefits, is a question which must be settled by reference to the statutes of this State.

On the 12th February, 1823, the legislature of the State passed a law providing for the distribution of estates of deceased persons, dying insolvent by paying: 1st. Funeral expenses, Probate fees, or fees incurred on administration; 2nd. All other demands in equal proportions, without regard to their nature, giving no preference to any debts, on account of the instrument of writing on which they might be founded. Laws 1823, p. 127. Under this statute it has been held, in the case of Jones’ administrators v. Bond, Bre. 223, that the same did not apply to cases where the intestate had died before the passage of the law. And also in the case of Woodworth v. Paine’s administrator, Bre. 294, that on a scire facias to revive a judgment rendered in 1822, this law did not apply to judgments rendered before its passage; but upon the express ground that judgments were not named in the Act, and that being of superior dignity to other debts, were not included; and that they retained their priority as at Common Law. From an examination of this last case, it will be seen that the judgment creditor sought only to enforce bis lien against the land of the intestate.

A short time previous to the passage of the law before referred to, on the 28th of January, A. D. 1823, an Act was passed authorizing executors and administrators, in case of deficiency in personal assets to pay the debts of the testator or intestate, to apply to the Circuit Court and obtain an order for the sale of real estate for the purposes aforesaid; the 4th section of which, among other things, provides that the moneys arising from such sales, shall be assets in the hands of the executor or administrator, for the payment of debts •due from such testator or intestate. Laws 1823, p. 90, 93. The Act of the 12th February, 1823, remained in force until it was supplied and repealed by the Act of July 1st, 1829, of “Wills and Testaments.” Laws 1829, p. 190-237.

This Act provides for the distribution of ‘«the effects of deceased persons who died insolvent as follows. 1st. By the payment of funeral and other expenses attending the last sickness of the deceased; 2d. Expenses of proving the wall, taking out letters of administration and settlement of the estate, and physicians’ bills during the last illness; 3d. For the payment of money received by the deceased as executor, administrator or guardian, and not accounted for; 4th. All other debts and demands of whatsoever kind, without regard to quality or dignity, which shall be exhibited in two years from the granting of letters of administration. See section 110. The 114th section provides, that debts of such deceased persons shall be paid in the manner provided in the Act, and when the estate is insufficient to pay the demands of any one class, the same shall be paid pro rata, whether due by judgment, writing obligatory, or otherwise, except as in said Act excepted. Section 115 provides, that executors or administrators having demands against the testator or intestate, shall file the same with the Court of Probate as other persons, and that the Court shall appoint some person to manage the defence. Section 119 provides, that upon each settlement, the Court of Probate shall ascertain the amount of debts against the estate, and of the money which has come to the administrator belonging to the estate of the deceased, and if the same shall not be sufficient to pay all the debts due from the estate, he shall 'make an order, that the samé be paid out pro rata among the creditors, according to their several rights as established by this Act. Section 140 repeals former laws upon the same subject, and provides, “that no rights acquired under former Acts which are repealed, shall be invalidated or affected by the provisions of this Act.”

It is believed that the foregoing provisions of the laws of this State, are all that have any peculiar bearing upon the present question. Since the date of the passage of the law, they have, without any material change, remained in force.

This right of retainer is said by Blackstone, in his Commentaries, Yol. 2, p. 18—19, to be a “remedy by mere act and operation of la#, and to be grounded upon this reason: That an executor or administrator cannot, without apparent absurdity, commence suit against himself as representative of the deceased, to recover that which is due to him in his own private capacity; but, having the whole personal estate in his hands, so much as is sufficient to answer his whole demand, is by operation of law, applied to that particular purpose, to the exclusion of other creditors in equal degree, in case of a deficiency of assets to pay the whole of that class of claims against the estate of the testator or intestate.

Without stopping to inquire into the soundness of the reasons given, why the claim of an administrator or executor, because he cannot sue himself, should be preferred in the whole, to the debt of another-in equal degree, it is sufficient that we find the law so written; and if the appellee here has shown that she has brought herself within the provisions of the Common Law, her right-is indisputable.

This depends upon the solution of one simple proposition: Whether the distribution of the estate of a testator or intestate, is to be controlled by the law which was in force at the time of the death of the testator or intestate; or that which existed at the time when the debt, or right, accrued tp.the creditor.

We apprehend that there can be but one rational conclusion formed upon the subject. When Edgar died, the Act of 1829 was in force, and that of 1823 repealed, and all the provisions of the Common Law of England, in relation to the right of an executor or administrator to retain in preference to other creditors in equal degree, supplied, by prescribing the manner in which he may prove his demand against the estate; that all moneys in his hands, whether arising from personal property, or the sale of real estate, shall be assets in his hands for the payment of debts due from the testator or intestate; and by declaring', with certain exceptions before mentioned, that the assets shall be distributed, pro rata, among all the creditors who shall file and prove their claims within the time limited by law, without regard to the quality or dignity of the same.

The idea, that because Morrison obtained a judgment against Edgar in 1826, when, it is said, that the Common Law applicable to the distribution of the estates of deceased persons was in force in this State, he thereby acquired a vested right, that Edgar’s assets, whenever he might die, should be applied in payment of his debts, according to the law as it existed at the time his judgment was rendered, cannot for one moment be indulged, and the decisions of the Supreme Court before referred to, fall far short of establishing any such principle. In order to sustain such a position, it would be necessary that Morrison should show that by virtue of his judgment, he had acquired a vested right to administer on Edgar’s estate.

The Court has no hesitation in coming to the conclusion, that the appellee in this case has no right under the law, to retain her demand against the estate of Edgar, to the exclusion of other creditors in equal degree according to the rules of distribution of intestates’ and testators’ estates, as prescribed by the Act of 1829.

The next point made by the appellee is, that being a judgment creditor, she is entitled to priority in payment out of the assets of Edgar over creditors by bond or simple contract; and for the samé reasons, and upon thé same principles substantially, that she has the right to retain; that is, that such was the law at the time of the rendition of Morrison’s judgment. The reasons which have been before given against her right to retain, and the law before referred to regulating the distribution of estates in force at the time of Edgar’s death, are as conclusive upon this as upon the other point. By the Act of 1829, the idea that any such right of priority existed, is totally excluded. So far as the distribution of assets is concerned, judgment creditors and simple contract creditors are placed upon an equal footing.

It has not been seriously urged by the counsel for the appellee, that she was entitled to claim priority in payment, by virtue of her judgment lien upon the land which had been sold and converted into assets.

Such a position, we think, (if taken,) would be untenable. If Morrison had a lien upon any portion of the land, he might, had he chosen to do so, have enforced the same; but he could not sell the land, nor the interest of the heirs of Edgar in the same, and thereby transfer his lien from the land to the money arising from the sale, which the law has declared shall become assets in his hands for the payment of debts, pro rata, of the testator or intestate. If he sold the land itself without reservation of qualification, he will be presumed to have waived his lien. If he only sold the interest of the heirs of Edgar, he may still retain his lien; and in either event, he sustains no injury of which he has any just right to complain.

The order and decision of the Probate Justice of the Peace, and also of the Circuit Court affirming the same, was erroneous. The order should have been made as applied for by the appellant, that the appellee, after discharging such claims, as by the law of 1829 were entitled to precedence, should pay pro rata to the creditors of the estate of Edgar, whose claims had been filed and allowed within the time prescribed by law, all such sums of money as may have come to her hands as administratrix, with the will annexed, of William Morrison, deceased, who was administrator of John Edgar, deceased, whether the same were due by judgment, writing obligatory, or simple contract.

The judgment of the Circuit Court is reversed at the costs of the appellee, both in this Court and in the Court below, to be paid by the said appellee in the due course of administration.

Judgment reversed.