Opinion
(June Term, 1843.)
1. Creditors of A recovered judgments at law for their debts against A's administrator, but it was found that the administrator of A had no assets. Judgments were therefore entered quando. Afterwards, on a bill filed by the next of kin of A against his administrator, it was declared by the court that certain negroes, which the administrator had in his possession and claimed as his own under a deed absolute on its face from A, were held by the said administrator only by way of mortgage as a security for a debt, and the administrator was decreed to deliver over the said negroes to the next of kin of A upon their payment of the debt and interest, and they were, in pursuance of such decree, delivered accordingly: Held, on a bill, now filed by the said creditors against the said administrator and the next of kin, that the negroes were subject to the claims of the creditors, after deducting the amount due to the administrator on the said mortgage.
2. These negroes, or the right of redemption, were not assets at law, and therefore the creditors are not concluded, by a judgment at law that there were no assets, from now asserting their claims in equity.
3. The plaintiffs have a right to ask a decree in such a case against the next of kin, although it might not have been necessary to make them parties to the suit.
4. In the suit of the next of kin against the administrator, it seems the court should have directed an account of the intestate's debts before decreeing a distribution among the next of kin. Such is the practice in England.
5. Nor will the statutes of limitations bar the plaintiffs' claims, although more than seven years had elapsed before the bringing of this suit, because the plaintiffs had brought suit within the proper time and obtained their judgments, to be satisfied out of any assets that might thereafter occur.
THIS cause having been set for hearing, was transmitted to this Court from the Court of Equity of STOKES, at Fall Term, 1842.
The facts are stated in the opinion delivered in this Court.
The bill is filed by the creditors of George Hauser, (490) deceased, against his administrator and next of kin, for an account of his personal estate and for the satisfaction of his creditors thereout, and particularly that certain slaves may be declared equitable assets to that end. That cause was set for hearing upon the bill and answer and transferred to this Court. Upon the pleadings it appears that there are no assets of the intestate, unless the slaves above mentioned be assets, and as to them the case is as follows: George Hauser died intestate in 1819, and the defendant Christian Lash was appointed his administrator and took into his possession the effects and returned an inventory, and applied in a course of administration, by way of retainer or in payment of creditors, all the effects embraced in the inventory, after which there remained unpaid sundry debts to the present plaintiffs respectively, who had instituted suits at law on them, in which the administrator pleaded fully administered. The plaintiffs being unable to show at law any other assets, the issues upon the administrator's pleas were found for him, and the creditors, in 1819, took judgments quando, under the statute.
In 1828 George Hauser conveyed to Christian Lash five slaves by an absolute deed, expressed to be in consideration of $818 then paid. After the deed the slaves remained with Hauser until his death, but upon that event the defendant Lash took them into his possession, claiming them as his own property under the deed as an absolute purchase, and did not return them in his inventory as a part of the effects of his intestate. Some years afterwards the children who were next of kin of George Hauser filed their bill in the Court of Equity against Christian Lash for an account and distribution of the estate of the intestate, and particularly that the deed for the slaves might be declared a security only for the sums advanced by Lash to Hauser, and that, after satisfying the same, they might be declared a part of the personal estate of the intestate in the hands of the administrator and distributed.
After a tedious litigation that cause was heard in this Court in June, 1839 ( 22 N.C. 212), and there was a decree in conformity to the prayer of the bill and the proper accounts (491) ordered, and at June Term, 1841, after the master's report, it was finally decreed in that cause that the sum of $1,271.64, with interest from certain days therein mentioned, remained due to Lash from the estate of his intestate, which the plaintiffs in the cause were required to pay to him on or before 1 December, 1841, and that upon receiving the same Lash should surrender to them the slaves and their increase from March, 1818, and also execute a release to them of all claim to the slaves by virtue of the said deed. In September, 1841, the present plaintiffs filed their bill, and after stating the foregoing proceedings, alleged that the next of kin were about getting possession of the slaves from Lash and carrying them out of the State, with the view of defeating their father's creditors, and praying for an injunction and sequestration and for relief as above stated. By consent of the parties in the cause the negroes were delivered and released by Lash to the next of kin, and the latter gave bond in a large penal sum to perform the decrees that might be made in the cause.
Waddell for plaintiffs.
Morehead for defendants.
The opinion of the Court is that the excess in the value of the slaves over and above the money that was due to Lash and secured by the conveyance was in his hands assets for the satisfaction of debts, and that it remains so in the hands of the other defendants, the next of kin, after reimbursing to them the money they have paid to Lash under the decree and the costs incurred by them in establishing the true nature of the conveyance to Lash. The principle upon which the proposition rests is a very plain one. There was a right of redemption in Hauser, which was a valuable interest, and ought therefore to be applied to the benefit of his creditors, at least in a court of equity. Wentr. Exrs., 186. Against this, however, (492) several objections were urged on the part of the defendants. But they all seem easily answered. One was that the plaintiffs are concluded by the judgments on the administrator's pleas of plene administravit in the suits at law, and that as these slaves were then held by the administrator, they are not assets since come to hand. This objection rests on the assumption that the intestate's interest in the slaves could be reached at law, and might have been offered in evidence to disprove those pleas. Without deciding whether, after such a judgment, assets strictly legal, which were in the administrator's hands at the time and by him concealed from the creditors, could be reached in equity upon the subsequent discovery of them by the creditors, we hold that in this case the judgments at law do not conclude the plaintiffs, because these slaves were not recognized at law as belonging to the intestate, but were deemed the legal property of Lash himself, and so were not assets in a court of law. Whether chattels conveyed by an instrument which upon its face plainly shows they were mortgaged or pledged can be in any case deemed legal assets, when the day of redemption had passed in the debtor's lifetime, we are not now called on to decide, though the authorities as well as the reason of the thing seem not to leave much doubt on the question. But certainly in no manner can a court of law hold that a chattel, conveyed absolutely by the deceased, remained his property for any purpose, unless, indeed, the creditor should establish that the conveyance was made to defeat creditors, and so was fraudulent and void under the statute. Neither party raises that point here, and we are to assume that, in respect to creditors at least, the transaction was fair. Being so, the interest of the intestate was a pure equity to have the conveyance, absolute in its terms, declared in that court to have been improperly obtained, or intended by the parties as a security, and that it should stand only as such. This interest was therefore equitable assets, and could not be taken notice of at law, and, as is admitted on all hands, was not then taken notice of. Consequently, the findings upon the administrator's pleas do not (493) affect the plaintiff's rights in this Court in respect to those assets.
It was next said that the plaintiffs were not entitled to relief against the next of kin: first, because they had no equity to follow the assets into their hands, unless in a case of the insolvency of the administrator and a fraudulent collusion between him and the next of kin; secondly, because they were protected by the statutes of 1789 and 1715, barring actions against dead men's representatives. As to the first, it is sufficient to say that so far from this being a proceeding to follow the assets into the hands of the next of kin, it is one to obtain satisfaction out of the assets before they should get into those hands. Perhaps the plaintiffs need not have brought in the next of kin, and if they had supposed that in the former litigation the redemption had been shackled with the payment of too large a sum to Lash, they would probably have brought their bill against the administrator alone to have the slaves declared equitable assets in his hands. But as there is no suggestion of the kind, it was obviously the more fair course to bring in all the parties and allow to the next of kin the benefit of the payment actually made or to be made by them for the redemption of the negroes, and for the costs of the long controversy they had carried on for the purpose of establishing an interest in the intestate, of which the creditors now claim the benefit. The next of kin did not demur because they were improperly made parties nor state the objection in their answer. On the contrary, they got clear of an order in the cause whereby the sheriff made a sequestration, took the slaves from the possession of Lash and prevented the next of kin from getting them, by voluntarily agreeing to perform the decrees in the cause if the parties would allow them to take possession. It is plain that they cannot set up such a possession as in itself defeating the creditor's satisfaction out of that property. Perhaps, indeed, it was the fault of the court not to have directed in that cause an account of the intestate's debts before decreeing a distribution amongst the next of kin. Though not usual with us, it is the established course in England, and under that decree the creditors prove their debts and (494) receive payment out of the funds in court. Gillespie v. Alexander, 3 Russ. C. C., 130. That case also shows that, after distribution by a decree, the creditors may bring back the estate by a suit against the next of kin, who, and not the administrator, is chargeable to the creditors in such case. A fortiori, when no account of the debts was directed in the suit by the next of kin, creditors may, upon a bill against all the parties, claim satisfaction out of the assets while the fund is yet in court or in the hands of the administrator, though ordered to be paid over to the next of kin for division among themselves.
As for the lapse of time, there is nothing in it. The statutes bar if the creditors do not bring their actions. That was done here, and put an end to the operation of the acts. There is no presumption of payment upon such judgments as these; especially it must be so held when no such defense is set up. Therefore the plaintiffs are still entitled to have the fund administered in this Court as equitable assets of the intestate, and the necessary accounts of the clear amount of the fund and of the respective debts of the intestate must be taken.
PER CURIAM. Decreed accordingly.
Cited: Green v. Collins, 28 N.C. 151; Leigh v. Smith, 38 N.C. 448; Gaither v. Sain, 91 N.C. 307.
(495)