Opinion
(December Term, 1850.)
1. If an administrator gives a preference to a creditor, who is not entitled to it, he commits a devastavit, and is chargeable for the same assets to another, whose debt is of higher dignity, or whose diligence gives him priority; and this, though it may have been done through an honest mistake. And the rule is the same in equity, in this respect, as at law.
2. Where A and B were cosureties on a bond of C, and C died and A administered on his estate; and then B, in a suit against A, as administrator, recovered the amount of a debt due to B by the principal, A's intestate, and fixed him with assets upon the ground that A had paid the debt to C voluntarily, while B's suit was pending; and A alleged, in a bill of injunction, to restrain B from collecting his judgment and for contribution, that he had no assets of his intestate out of which he could pay the debt to C, but that he paid the same out of his own funds, which was denied by B in his answer; Held, that the Court could not determine the question of contribution, until an account of the administration of A should be taken, and for that purpose a reference be had, and the injunction continued over.
APPEAL from the Court of Equity of PITT, from an interlocutory order made at Fall Term, 1850, Bailey, J., presiding.
B. F. Moore for the plaintiff.
Biggs for the defendant.
The following case was presented by the bill and answer:
The plaintiff and the defendant were cosureties for Archibald Parker, in a bond payable to John S. Daniel for about $600. Parker died intestate in October, 1847, and the plaintiff administered on his estate in November, 1847. The estate was not sufficient to pay the intestate's debts, including the land — which the plaintiff sold under a decree (63) for the payment of debts. Among the debts of the intestate were two on bonds to the defendant; on which he brought suit to February Term, 1848. The plaintiff claimed therein nine months to plead, as allowed by the statute. In July, 1848, the plaintiff paid the debt to Daniel — then amounting to $624.05, without suit; and he took a receipt therefore, purporting to be given him as administrator. In August following, the plaintiff, being then obliged to plead in the actions, put in plene administravit and retainer; and they were afterwards found against the plaintiff, and judgments recovered for $300.61. On the trial the plaintiff exhibited his administration account and it thereby appeared that the assets of both kinds amounted to the sum of $5,781.31 and that the disbursements and commissions allowed amounted to $6,242. 09: thus leaving a balance due to the plaintiff of $460.78. Among the disbursements, however, were the payment to Daniel and some previously made in the same manner to other persons, making an aggregate of $837.18. The defendant objected to them, because they were made voluntarily after his suit brought; and they were rejected by the Court. That made a balance on the administration account appear against the present plaintiff, somewhat exceeding $300; and accordingly the judgment at law were rendered, as before stated.
The bill states further that the plaintiff made the payment to Daniel under the belief, that he had a right to prefer that debt, notwithstanding the defendant and others had brought the suits, in which he had not pleaded: and that, in fact, the payment was made with the intestate's assets to the amount of $149 only — being in a bond for that sum, which he had taken as administrator for a part of the real estate sold — and as to the residue, with the plaintiff's own funds. The bill further states, that the administration account, produced on the trial at law and exexhibited [exhibited] with the bill, is just and true, as to the (64) amount of the assets and the disbursements thereof; and, inasmuch as the suits brought against him bound the assets in law, that there were no assets legally applicable to the debt to Daniel; and that in truth the whole debt to Daniel was discharged out of the plaintiff's proper money, and that the receipt was taken to him as administrator through a mistake upon that point. The bill then charges, that, as in point of fact the plaintiff has accounted for all the assets of the intestate and paid this debt out of his own funds, the payment is in law regarded as having been made by him, as one of the sureties in the bond; and, therefore, that he is entitled to have from the defendant contribution of a ratable part thereof, namely, $312.02 1/2 with interest thereon, and had requested the defendant to discount therefrom the sum of $300.61, so recovered by him at law; but that the defendant refused to make such discount or contribution, and has issued writs of fieri facias de bonis intestati, and upon a return of nulla bona thereon he has sued out writs of fieri facias to obtain executions de bonis propiis. The prayer is, that, if necessary, an account may be taken of the intestate's estate, and that the defendant may be declared liable to contribute equally to the satisfaction of Daniel's debt, by paying one-half thereof to the plaintiff or acknowledging satisfaction of his judgments at law, and, in the meanwhile, for an injunction against suing out executions de bonis propriis.
On the bill an injunction was awarded as prayed.
After admitting the insolvency of the intestate and that, on the defendant's objection, as mentioned above, the plaintiff's vouchers to the amount stated has been rejected at the trial, and that thereby a balance of assets appeared to be in the plaintiff's hands sufficient to satisfy the debts to the defendant, the answer states, that, by establishing such balance of assets, the defendant answered his purpose at that time, and did not think it then necessary to make further objection to the account. But it further states, that the defendant believes, that (65) the account was not correct, and that the plaintiff had assets to pay the debt to Daniel as well as those to the defendant, and that the payment to Daniel was made in the assets of the intestate; and, moreover, it insists, that the plaintiff is concluded by the form of the receipt taken by him as administrator. It states, also, that, in 1846, the intestate gave to the plaintiff, who was his son-in-law, a negro, which he afterwards sold for $600, and that the debts to the defendant and also debts to other persons, now remaining unpaid, had then been contracted, and that the intestate did not retain property sufficient and available for the satisfaction of those debts; so that the gift of the slave was fraudulent and void as against the defendant, and the plaintiff is chargeable for the value of the slave as assets; and that, if he were thus charged, these would be enough to pay both Daniel and the defendant. The answer further states, that, at the plaintiff's sale, the defendant purchased a piece of land at $142, and gave his bond therefore, and that the plaintiff passed the same away and the defendant had been compelled to pay it, though he had not been able to get possession of the land, for the reason, that the intestate had not title to it; and it insists, that the defendant ought to be allowed therefore out of any sum in which he may be found liable to the plaintiff.
On the answer the defendant moved for a dissolution of the injunction; which was refused, and he appealed.
It would seem, that it was intended to raise an equity for the plaintiff, founded on his mistake in applying the assets to a debt, which he could not in law prefer to those of the defendant and others, then in suit. Some such idea obscurely appears in the (66) bill. But no relief could be given on that principle. If an administrator give a preference to a creditor, who is not entitled to it, he commits a devastavit and is chargeable for the same assets to another, whose debt is of a higher dignity, or whose diligence gives him the priority. He therefore applies the assets at his peril in that respect. And it is the same in equity as at law; for, it is not against conscience, that the defendant should insist on his legal priority, and he should have the benefit of the assets which were properly applicable to his satisfaction. However honest the plaintiff's mistake may have been, still he made a misapplication of the assets, and therefore cannot throw the loss on the defendant.
The bill, however, states another ground for relief and for the injunction, which appears to the Court to be a good one in itself, and not to have been sufficiently answered; which is the liability of these parties, as cosureties, to contribute equally to the debt to Daniel. It is admitted that the principal did not leave property sufficient to pay his debts and that the plaintiff paid this debt. The only other point material to the question of contribution is, as to the fund, out of which the payment to Daniel was made and ought to have been made. If at the time the plaintiff paid the debt he was bound or at liberty to discharge it out of the assets of the principal, he ought not to have contribution from the defendant, since he had in his own hands the means of saving harmless both himself and the defendant, and the principal, in truth, could not, to this purpose, be deemed insolvent. On the other hand, if, at that time, he had no assets applicable to the debt, that is, liable in law therefor, so that, as administrator, he might then have been charged therewith in an action by Daniel, it would seem manifestly unjust, that, as cosurety, he should be liable for more than a moiety. He was (67) not bound to pay that debt instantly upon administering, in order to found a claim for contribution from his cosurety; but was entitled to a reasonable time to convert the property into money for that purpose. He could not compel the creditor to bring a suit, so as to enable him to confess a judgment and thereby appropriate the assets to this in preference to other debts in suits. If, therefore, before he had the means of payment in hand, or before he could confess judgment for this debt, other creditors tied up the assets by bringing suits, so that he could not legally appropriate to Daniel's debt, it is the same, for the purpose of the present question, as if there had been no assets at all — since it was not the plaintiff's fault, that he did not apply them in discharge of this debt, but he was prevented from doing so by the law itself, which makes a suit brought so attach upon the assets, as to render a voluntary payment of another debt in equal decree or devastavit. How, then, is it to be understood in this case, the assets stood at the time of the payment to Daniel? It is to be noted, that, upon the trial at law, the plaintiff was content to take a credit for this sum as a disbursement of the assets, and so stated it in his administration account; and that, thus stated, the assets would be exhausted and nothing left to answer the defendant's demand. The defendant then objected that the assets, thus applied by the plaintiff, were bound to him by his prior suit, and he succeeded on that ground in having that credit struck out of the account. That does not, indeed, prevent the defendant from showing, now, that there were assets applicable to Daniel's satisfaction. For, the point on the trial was, whether it was not a devastavit, as against the plaintiff at law, even if the payment to Daniel was made out of the assets, and the creditor was not called on to go further. But when the plaintiff claims contribution, as between cosureties, it is open for the defendant to allege that the principal left assets, with which the plaintiff, as his administrator, might and ought to (68) have paid the debt. The question is, how the fact is in that respect. And upon the circumstances stated, the Court thinks that it is prima facie to be understood, that there were no assets for that purpose. According to the account exhibited, connected with the judgments obtained by the defendant, there were none; and the bill states explicitly that there were none, and that the account is just and true. The answer does not dispute a single item in it. It does not allege, that the payment of any one of the debts was improper, saving only that the voluntary payments were erroneous, as against his prior suit; or that the plaintiff ought to have paid Daniel before he paid any of the other debts, mentioned in the account. Without entering into any particulars, the defendant merely states in general terms his belief, that, after paying his judgments, there are assets sufficiently to pay Daniel. But such a general statement cannot overthrow the positive and precise allegations of the bill, accompanied by the account. In support of his belief, the defendant adduces one allegation of fact and one only; which is, that the intestate fraudulently gave the plaintiff a slave which thereby became assets. But that does not answer the plaintiff's case, so as to require the dissolution of the injunction. The answer is not on that point responsive to the bill; but brings forward new matter in avoidance of the plaintiff's prima facie case. Besides, the answer does not profess to state this as a thing within the defendant's own knowledge. For those reasons it is proper to reserve the consideration of that question, until the parties can enter into proofs, upon the hearing or before the clerk in taking the account. In fine, it is apparent that the Court cannot make a decree with any confidence of its justice, until, by an account, it can be ascertained, whether there were in the hands (69) of the plaintiff assets of the intestate applicable to the payment of Daniel to any and what amount. Prima facie it is to be taken, under the circumstances, that there were not, and therefore that the defendant is chargeable to the plaintiff for the money of the debt. While thus apparently chargeable, he ought not to coerce from the plaintiff personally the payment of his judgment at law, instead of letting one of the demands stand against the other.
The alleged defect of title to the land purchased by the defendant cannot affect the question. The defect is not sufficiently stated. If it were, it cannot be presumed, that the plaintiff made himself liable for the title, or knew of the defect before he disposed of the bond for the purchase money in the course of administration as stated in the administration account, on which the defendant fixed him with the assets, in respect of which, in part, he took his judgment.
There was, therefore, no error in the order appealed from.
PER CURIAM. Affirmed.
Cited: Coggins v. Flythe, 113 N.C. 113.
(70)