Opinion
(January Term, 1868.)
1. The Act (R. C., c. 46, s. 31), which provides that "the appointing any person executor shall not be a discharge of any debt or demand due from him to the testator," includes cases where the executor acts under the appointment, as well as those where he does not.
2. A bill seeking to compel an executor to execute a general power to sell real estate for the payment of debts, can not be maintained without making the devisees of such estate parties.
3. A creditor can not, merely as such, sustain a bill against an executor, seeking to have his debt paid.
BILL, filed to Fall Term, 1867, of WAKE; at the same term, a demurrer was filed and set down for argument, and at December Special Term, 1867, the cause was transmitted to the Supreme Court by consent.
Haywood, for the complainant.
(362) Bragg, contra.
The complainant was a bond creditor of Thomas C. Miller, deceased, and the defendants were Annie W. Miller, executrix of said deceased, and William E. Boudinot, surviving executor of Dr. F. J. Hill, deceased.
The bill alleged that Mr. Miller had been appointed and qualified, and had acted as one of the executors of Dr. Hill, and that at the death of his testator he was indebted to him by bond in a large amount; that this debt, as a part of the residue of his estate, had been bequeathed by Dr. Hill's to his widow, and afterwards at her death was by her bequeathed in trust for the sole and separate use of the defendant Annie, then the wife of Thomas C. Miller; that before completing the execution of Dr. Hill's will, Mr. Miller had died leaving an estate of realty and personalty sufficient to pay his own bond debts, but insufficient (360) to pay also his debts due by simple contract; that the defendant Annie, as executrix, by virtue of a power of sale given her in the will, was selling land belonging to the estate of said Thomas, and applying the proceeds and other assets to the payment of the debt claimed by the defendant Boudinot as surviving executor of Dr. Hill, whereas she and Boudinot both had notice that the complainant held a debt of higher dignity, i. e., the one which is the subject of this suit, and that such debt would be defeated by such misapplication of assets.
The prayer was that Mrs. Miller should admit assets, or failing that, that Boudinot should account for and pay over for the complainant what he had received as above, and that Mrs. Miller should account with the complainant, either as executrix or personally, for any balance of his debt unpaid; also that a receiver should be appointed. An alternative prayer — in the event Boudinot should not be held liable, was that Mrs. Miller should admit assets, or come to an account for the personalty and the realty of her testator, and if the former should not be sufficient, should be ordered to sell land and pay the debt, and that a receiver should be appointed, to whom Mrs. Miller should deliver up the assets in her hand, and account for her devastavit, and in the meantime that she should be enjoined from further intermeddling, and removed from her office as executrix; and for further relief, etc.
To this bill the defendants filed a joint general demurrer.
The case turns upon the construction of the Act of 1794, Rev. Code, ch. 46, sec. 31. "The appointing any person executor shall not be a discharge of any debt or demand due from him to the testator." This is short, and seems at first blush to be very clear; but when considered in reference to the law as previously understood, and the great learning which has been brought to bear on it, we confess the question of construction presents some difficulty.
At common law, if a creditor is appointed administrator or executor of his debtor, he not only has a right to retain, in preference to any other creditor of equal degree, on the ground that his right of action is suspended, but he is presumed to retain the moment he receives assets, and the debt is extinguished, so that he can not apply the assets to another debt and sue another obligor on the debt due to himself. Chaffin v. Hanes, 15 N.C. 103.
On the same principle when a debtor is appointed administrator or executor of the creditor, the action is suspended, and the administrator or executor is chargeable with the debts as assets, on the (363) presumption that he has paid himself; but in regard to an administrator it was held that the debt was not extinguished, as the appointment was by act of law, unless in point of fact he had brought the debt into account and had applied it in the course of administration. Otherwise after his death the debt was not extinguished, and his personal representative or another bound for the same debt, might be sued for it. In regard to an executor, however, not only the action was suspended, but the debt was extinguished or discharged, on the ground that the appointment was by the act of the party, and if a party suspends his right of action, it is gone forever, and after the death of the executor the debt could be recovered neither from his personal representative nor any other who was sued for the debt, either as co-obligor or as surety. If one named executor by his creditor did not qualify, but renounced, there was no suspension of the action or discharge of the debt, except in the single instance where another besides the debtor was named executor — in which case, although he renounced, yet if the other qualified, that inured to the benefit of the debtor, as he could come in and qualify at any time afterwards; and not only the action was in such case suspended, but the debt was extinguished.
We think the construction contended for by Mr. Haywood is too narrow, and that the distinction which he took, between appointing one executor and his acting as such, was not in the mind of the law makers, but the word appointing an executor was used in a general sense, and can not be restricted, so as to mean simply naming one executor without reference to his qualification; for this would make the act, except in the single instance where more than one are named executors and the debtor does not qualify, inoperative and useless. So that construction would remedy a particular instance of the evil, and leave the general mischief unprovided for, besides imputing to the Legislature ignorance of the fact that the mere naming or appointing one executor who does (364) not qualify and act as such, did not operate as a discharge of the debt.
We believe the intention of the statute was to remedy the general mischief, by abolishing the distinction taken at common law between the effect of the act of the law and the act of the party in the appointing of administrators and executors, and to put them on the same footing; that is, that in regard to both there is a suspension of the action, but the debt is not to be extinguished in regard to either. So that after the death of one executor, his personal representative, or his co-obligors or sureties may be sued, as in case of an administrator, and the debt will retain its original character in the administration of the assets.
It follows that the main scope of the bill, which is to charge Mrs. Miller with a devastavit in paying the assets to the defendant Boudinot as upon a bond debt, and to charge him with complicity by reason of the insolvency of Mrs. Miller, fails for, as we have seen, the debt due by Miller and his sureties to Dr. Hill still retains its dignity as a specialty debt, which Mrs. Miller had a right to prefer over other bond debts until the right to make preference in favor of one creditor in equal degree by voluntary payment is put an end to by action, or a creditor's bill and a decree quod computed.
It also follows that the bill must be dismissed; for so far as it seeks to compel Mrs. Miller to execute the general power to sell the real estate for the payment of debts, that relief can not be given unless the devisees are made parties, and allowed an opportunity of showing that the personal estate is sufficient; and so far as it is a bill by a single bond creditor to have his debt established and an account of the (365) assets, and a decree for the payment of his debt in the due course of administration, it is disposed of by Wilkins v. Finch, ante, 355 Demurrer allowed.
PER CURIAM. Bill dismissed.
Cited: Taylor v. Miller, post, 366; Ruffin v. Harrison, 81 N.C. 215; Smith v. Brown, 101 N.C. 354.