Opinion
(June Term, 1842.)
1. A court of equity will compel the executor of an insolvent testator, who is prosecuting a claim for money which had been held by his testator as a trust fund, to permit the cestui que trust to receive the money; and the executor will not, by so doing, make himself liable on account of that fund to the demands of other creditors.
2. A creditor cannot, in a bill against an executor for an account in his own name and for his own benefit, make another creditor a party defendant and compel him to desist from prosecuting his suit at law against the executor.
3. Such a bill may be filed by any creditor in behalf of himself and all or the rest of the creditors against an executor for an account of assets; and after such account is decreed, any one of the creditors, on petition or on motion on affidavit, may obtain an injunction against any one or more of the creditors attempting to proceed against the executor at law. All the creditors (on such a bill) may be compelled to come in and prove their debts before the master, and the assets will be paid in a course of legal administration.
THIS was a bill filed in HALIFAX Court of Equity, at Spring Term, 1841, in his own name against the defendants Spier Whitaker, executor of Jesse H. Simmons, deceased, and Redding J. Hawkins and his wife, administrators of James Halliday, deceased. At Fall Term, 1842, the defendants Hawkins and wife filed their demurrer to the bill, and at Spring Term, 1842, his Honor, Settle, J., presiding, the demurrer was overruled and the defendants Hawkins and wife ordered to answer over. From this interlocutory decree these defendants, by permission of his Honor, appealed to the Supreme Court.
The nature of the bill and the grounds of the demurrer are sufficiently stated in the opinion delivered in this Court.
(130) Whitaker for plaintiff.
B. F. Moore for defendant.
The plaintiff, a creditor of the testator Jesse H. Simmons, has, in his own name and for his own benefit, filed this bill against the executor of the said Jesse for an account of the assets, etc. The administrators of James Halliday, another creditor, are made parties defendants. The bill (in addition to the debt due to the plaintiff in his own right) alleges that the plaintiff was master in chancery for Halifax County, and that Jesse, the defendant's testator, had acted as his deputy in the said office, and in that character had lent to one James Simmons $300, a sum of money belonging to the said office, and that the executor of the said Jesse had a large demand against the said James and had obtained a judgment against him for it, including the particular sum belonging to the master's office, borrowed by the said James as aforesaid. The bill further states that the estate of the said testator is insolvent, and that the administrators of Halliday are prosecuting their claim by an action at law against the executor of the said Jesse, and that the plaintiff is apprehensive that the said administrators will obtain a judgment and subject all the assets in the hands of the executor of the said Jesse and also the sum due from James Simmons, including the money borrowed by him from the master's office, before he (the plaintiff) can put his claim in a situation to receive any part of the said assets. The bill prays a decree for an account against the executor of Jesse H. Simmons, and that the assets be brought into court and distributed; and it prays that the court will enjoin Halliday's administrators from proceeding at law. Halliday's administrators demurred to the bill. The court overruled the demurrer, but allowed the said administrators to appeal from the decision to this Court.
First. As to the $300 and interest money received by James Simmons, the demurrer admits that it was trust money which belonged to the plaintiff's office and which the deputy, Jesse, permitted James Simmons to take and use. That money, with its interest, the executor has not as yet collected. He, it (131) is true, has obtained a judgment against James Simmons on account of debts due his testator's estate, which includes this sum of $300 and interest. But as this trust fund is identified, we think that it belongs to the plaintiff and that he may rightfully pursue and take it, and that the executor should permit him to receive it. The executor cannot be made liable for the amount of this judgment as assets until he has collected it or has negligently omitted his duty in collecting it. As the $300 and interest never belonged to his testator, and it was included in the judgment by mistake, his (the executor's) permission of the right owner now to take it can never subject him to any loss on the score of negligence.
Secondly, the bill does not charge that the administrators of Halliday are particularly endeavoring to subject the executor of Jesse H. Simmons to that sum of money as assets which James Simmons obtained from the master's office. The said administrators are only endeavoring to obtain a judgment at law for their debt and to subject such assets to its satisfaction as properly belong to the estate of the testator. This they had a right to do without being made a party to a bill like this or to be enjoined by any case made in and by this bill. Had the plaintiff filed what is called in England the usual creditor's bill in behalf of himself and all or the rest of the creditors against the executor for an account of the estate of Jesse H. Simmons and had obtained an interlocutory decree for an account thereupon, then he or any of the said creditors or the executor might, by petition or motion on affidavit in the cause, have obtained an injunction against any one or more of the creditors who might have attempted to proceed at law against the executor. All the creditors would, after a decree to account in such a bill, be compelled to come in before the master and prove their debts there, and the court would, on the report of the master being made, have decreed the entire assets of the estate to be paid out to the creditors in a course of legal administration. But that course has not been pursued by the plaintiff, and we think that the court erred in overruling the demurrer of Halliday's administrators. This opinion will be certified, with directions that the decree be reversed and the demurrer sustained. See (132) Story Equity Pleader, 97, where the authorities on this subject are all collected.
PER CURIAM. Ordered accordingly.
Cited: Martin v. Harding, 38 N.C. 606; Wilson v. Leigh, 39 N.C. 99; Washington v. Sasser, 41 N.C. 337; Washington v. Emery, 57 N.C. 38; Wadsworth v. Davis, 63 N.C. 252; Walton v. Pearson, 85 N.C. 47; Wilson v. Bynum, 92 N.C. 724; Guilford v. Georgia Co., 112 N.C. 43.