Badger v. . Daniel

RodmáN, J.

1. The first exception to the report of the referee is joined in by all the defendants ; it is that he admitted the judgment recovered against the guardian Daniel in the Court of Equity for Halifax county at Fall Term, 1871, as conclusive evidence of the amounts then owing by •.the guardian to his several wards and excluded evidence tending to impeach it as erroneous.

By the terms of the reference the referee was authorized to state the indebtedness of the guardian to his several wards “as it may appear upon any judicial proceedings ■theretofore had between them (obviously alluding to the judgment aforesaid); or upon a-statement of the guardian account without reference to such judicial proceedings.” The referee being of opinion that the judgment was con■clusive did not state an account independently of that. He probablvjelt bound by the decision in Brown v. Pike, 74 N. C. 531, as did the Judge who confirmed his report in this respect.

The decision was earnestly questioned by Mr. Batchelor for the defendants, and we were, requested to reconsider it. “We have done so, and the majority of the Court are of opinion that the decision was right. Individually, I think .otherwise, and that the words “ in like manner,” do not ■mean “with the same force and effect,” but are surplusage. 'This exception is overruled. While the exceptions of Burton and Whitfield respectively raise the same questions, or nearly so, they do so in a different order and without regard to any dependence of the questions on each other. It will be more convenient, therefore, instead of taking the questions up in the order adopted by either of them, to take them as nearly as is convenient in what would seem to be something like their natural succession.

2. (Exception 8 of Burton and 2 of Whitfield) Moore the executor of Joyner is liable for the debt to plaintiffs, because having paid off all debts-of his testator except the present one,' after the expiration of two years from his qualification, he delivered to the several legatees their slaves, without taking any refunding bonds ; and their other personal legacies, taking refunding bonds in penalties, less than the value of the legacies, but in the aggregate exceeding the amount of the plaintiffs’ claim. It is admitted that except as to the amount of penalty the bonds were sufficient.

The act (Rev. Code, ch. 46, § 24) requires an executor at the end of two years &c., to pay over to the legatees the .sums properly ' payable to them, taking from them bonds with two or more able sureties, conditioned &c. The amount of the bond is not prescribed, but is apparently left to the discretion of the executor. ■ As this act is intended only for the benefit of creditors and is to stand in the place of the property which the legatee receives, the discretion of the executor can have no guide except the amount of debts which are probably outstanding, and if the aggregate penalties of the bonds are sufficient to meet these, he would seem to have done all that the law requires of him. He was not bound, in the interest of the creditors and even less in the interest of others who might be incidentally affected, to anticipate the insolvency of the legatees and of" the sureties to all the bonds but one. The Court which •decreed the payment of the legacies might have fixed the-penalties of the refunding bonds. It would be an unnecessary inconvenience if a legatee should be required to give a bond in a penalty equal to the value of his legacy, and! in many cases it could not be complied with ; certainly the -legatees and those in privity with them are not entitled to ••complain.' Stack v. Williams, 3 Jones, Eq. 13, sustains these views. ■ This exception is overruled.

3. (Exception 10 of the Burtons). The liability of Hervey surety to the refunding bond of Henry Joyner. -Joyner received a legacy and was also devisee of certain lands which he sold to Whitfield on the 1st of March, 1857, which was -less than two years after the death of the testa•tor, -in September, 1856. . The referee holds that Hervey is liable primarily as between him and the -purchaser of <the land from Henry Joyner, and in this opinion we concur. .It is no defence for Hervey that no judgment ascertaining the debt has been heretofore recovered against the executor of Andrew Joyner. The executor is a defendant in this .-action, one object of which is to establish the debt against him, and all interested in contesting the debt, have an opr portunity of doing so.

As to the extent of Hervey’s liability: — By the terms of his bond it is confined to a ratable portion of the plaintiffs’ debt, supposing all the other legatees responsible for their respective portions. Their insolvency can not extend his liability beyond the terms of his bond. This exception is -overruled. It will be in place to say here that we agree with the referee, that Hervey is liable for his ratable portion of the value of the slave sold by H. Joyner. The exception to that charge is overruled.

4. (Exception 4 of Whitfield). It is of course conceded that the sale by Henry Joyner, of the lands devised to him, to Whitfield having been made within two years after the -death of Andrew Joyner was void as to the plaintiffs. Whitfield held the land as Henry Joyner did, and sales by Whitfield after the two years, passed unincumbered estates -to his vendees, Whitfield holding the price paid him in lieu -of the land and subject to its liabilities. Those to whom he sold within the two years held as he did, and if their lands should be taken, they must look to him for redress. Each devisee or heir is liable for the debt of the devisor or ancestor to the value of the land devised or inherited and in proportion to their respective values. The whole debt to an amount not exceeding that value may be made out of any one of them, and one who pays beyond his due proportion is entitled to contribution from the others. This was held at a very early period as to heirs who were bound by the cognizance of their ancestor, or by his bond in which they were bound as obligors under the style of his heirs. Harbert’s case, 3 Rep., 11 b. and notes. 2 Williams, Saunders, 6 n. 10; Jefferson v. Morton, Petersdoff’s Abridgment. Title, Heirs.

The liability of an heir for the debts of his ancestor by reason of assets by descent, does not seem to have been essentially changed since the time of Coke, three hundred years ago, but the method by which the creditor enforces it, has been very much changed. As all the devisees are parties to this action, contribution between them will be provided for in the decree. Those if any who sold their land after the two years and have become and are now insolvent, are liable to judgments in favor of all devisees who by consequence of such insolvency shall be compelled to pay more than what would otherwise have been their ratable portions.

It is a consequence of this doctrine that each legatee, or’ distributee, or devisee, or heir, is, to the extent of what he receives either in personalty or land from the testator or intestate, a surety to all creditors of the testator or intestate, for all the other sharers in the estate; so that if one of two distributees or heirs squanders his property, the other is bound to make the debt good, although it may take every dollar he has received from the common ancestor. To some, this may seem harsh and inequitable, but we take it to be the established, law for over three hundred years; and if it shall seem to the legislature to be inequitable, they have the power to change the law. If I may be permitted to express my individual opinion on what is a question not of present law but of legislation, I would say that the time within which a creditor of a deceased, person should be permitted to commence an action against his distributees, heirs, &c., might be safely limited to two years from the death of the intestate, &c., when the creditor had actual notice of the death, and when his debt could be sued on before that time. This would require some provision by which holders of debts not due, and of contingent and uncertain debts, would be enabled to sue for and recover the pre’sent value of their debts, as I believe has been done in England, especially as to bonds securing annuities,, and what would be more difficult, some just and adequate provision for debts to persons under disabilities.

5. (Exception 2 of Burton.) The legacies to the femes plaintiff were clearly not intended in satisfaction of the debt by the testator, Andrew Joyner, now sued on. (1) It doe's pot appear that the testator knew of his indebtedness to the plaintiffs by reason of his suretyship for Daniel, which was contingent, and in fact most of it arose after his death. (2) He provides by his will for the payment of .all his debts. 2 "Williams Executors 1167. This exception is overruled.

6. (Exception 6 of Burton.) If the referee has charged Joyner as surety of Daniel with any sums received by Daniel, after his guardianship as to any of the wards ceased, by their arrival at full age or marriage, we think he erred. Such sums were properly chargeable against Daniel, but the surety is only liable for what the guardian received as guardian. This exception seems to be founded in fact and is therefore sustained.

7. (Exceptions 3, 4, 5, of Burton). If we understand these exceptions they present this question: — Whether the plaintiffs are not. bound to apply all the personal estate which came to them under the will of Andrew Joyner to the payment of his debt to them before having recourse to the lands devised?

The general rule certainly is that the personal estate of a testator is to be applied to the payment of his debts.' in preference to his lands. If the executor had paid this debt .he would have paid it out of the personal estate and diminished pro tanto each legacy. 2 Williams Executors 1532, 1526, n. 2; Hinton v. Whitehurst, 68 N. C., 316. We see nothing in this case to take it out of the general principle. If all the legatess had remained solvent, each would have contributed pro rata to make up the plaintiffs’ debt, and the plaintiffs would have lost only their pro rata share; and they are now entitled to personal judgments against all of such legatees who have not some special defence, and they may make such judgments available if they can. But they . are not entitled to go upon the lands of the testator as in the hands of his devisees by special execution to make any portion of his debt, until they have applied to the payment of that debt the value of the legacies to them (excepting the slaves), and such other sums as they may be able to make out of the other legatees. The reason for excepting the slaves will be mentioned presently. Passing them by, the rule has been long settled. An heir sued on the bond of his ancestor can not plead that there are personal assets in the hands of an administrator, but if he pay the bond debt, he may come on the personal assets for indemnity. 2 Williams Executors, 1532, notes n and o.

As to the slaves: It seems that with the exception of ■ one sold by Henry Joyner, they were all kept by the legatees until they were lost by emancipation. It is settled law, that if this destruction of them as property by vis major had happened while they were in the hands of the execu"tor, he would not be charged with them as assets. 2 Williams Executors, 1508.. It was held in Hinton v. Whitehurst, supra, that this principle applied after they have been delivered to the legatees,, if they remain in their hands unconverted. The peculiarity of..the case compelled such an extension of the doctrine,-, to that class of property; most inequitable results would have followed a refusal to do so. It is not probable, however, that any other class of cases ■will hereafter arise which can stand upon the same necessity.

It may be said of this rule, as was said above of a similar rule applied to devisees or heirs of land, it makes each, to a certain extent, a surety for all the. others, so that the misfortune or extravagance of one legatee may cause another to lose perhaps his whole legacy. The only remedy for such á hardship, if it be one, isas was there snggested. This •exception is sustained.

8. (Exception 12 of Burton.) We are of opinion that the sale to Boekover was bona fide, and upon a valuable consideration, and having been made more than two years after the death of the testator, he holds free from any liability for the plaintiffs’ debt.

9. (Exception 14 of Burton.) In respect to the Graham land: This land was devised to the plaintiffs and sold by their guardian to Henry Joyner for about $10,000 (the sum is not intended to be accurate). Afterwards the guardian purchased it from Joyner, taking a deed to himself, and paid for it mostly with money (or notes) belonging to his wards. After this the plaintiffs filed a bill in equity, and obtained a decree declaring their guardian a trustee of the land for them to the extent that he had used their money in the purchase, and directing the land to be sold and the proceeds applied as far as might be necessary to reimbursing the plaintiffs. It was sold under this decree and purchased by the plaintiffs for, say $8,000 (this sum is not stated as accurate) which, by order of the Court, was credited to the" guardian upon the charge made against him for the original-price of the land, and the referee in the -present case, if I understand it correctly, states his account accordingly. It' is clear that the guardian ought to be -charged with the sum for which he sold the land to Henry Joyner with interest from the time he received it. It is equally clear that ■as the plaintiffs have since got the land from the guardian,, they must be charged, or what is the same thing in effect,, he must be credited with the sum at which they purchased it. There is no grouind for saying that the plaintiffs inequitably have both the land and the price of it. They have the sum it was sold for to H. Joyner under the will, and they have the land because they bought and paid for it. If the guardian were not credited with the sum at which plaintiffs bid off the land, there would be ground for the complaint, 'This exception is sustained.

10. -(Exception 13 of Burton.) But for the act suspending the statute of limitations, it is probable that some of the plaintiffs would be barred. On that act we concur with the-referee. As to Whitfield, he was made a party in 1875, and the action against him was begun only at that date. But' as his liability did not or does not accrue until a failure of the personal estate derived from the testator to pay the-plaintiffs’ debt, he is not protected by the statute.

Judgment reversed and case remanded to be proceeded in-according to law.