Opinion
No. 32923.
December 6, 1937. Suggestion of Error Overruled January 3, 1938.
1. EXECUTORS AND ADMINISTRATORS.
The receiver of an alleged creditor of a decedent could not request appointment of administrator for decedent's estate, unless it appeared that decedent died owing debt to alleged creditor (Code 1930, sections 1629, 1639).
2. EXECUTORS AND ADMINISTRATORS.
The possession and ownership of a decedent's note on which there was a balance due disclosed, prima facie, such a debt as entitled receiver of alleged creditor of decedent to request appointment of administrator for decedent's estate (Code 1930, sections 1629, 1639).
3. EXECUTORS AND ADMINISTRATORS.
A decedent's heirs could not set up that amount of bank deposit due decedent exceeded amount of note held by receiver of bank, to prevent appointment of administrator for decedent's estate on application of receiver, but such issue could only be raised in course of administration, or in suit on note against administrator (Code 1930, sections 1629, 1639).
4. EXECUTORS AND ADMINISTRATORS.
On application by receiver of bank, as holder of a decedent's note, for appointment of administrator for decedent's estate, decedent's heirs could not file claim for judgment against receiver for amount of bank deposit due decedent, exceeding amount of note (Code 1930, sections 1629, 1639).
APPEAL from chancery court of Yalobusha county. HON. L.A. SMITH, SR., Chancellor.
Kermit R. Cofer, of Water Valley, for appellant.
It is the contention of appellant that the heirs of W.B. Carter, the appellees in this case, are not entitled to equitable set-off of the amount of their deceased father's deposit against the note on which he and his estate after him was and is liable as an indorser on the note of the W.P. Moorehead Company.
Amis, Liquidation of Insolvent Banks, secs. 25, 26.
Equity follows the law, is an equitable maxim, ground into the mind of every equity student.
2 Story, Equity Jurisprudence, secs. 1434, 1437.
The appellees rely upon the insolvency of the bank and of W.P. Moorehead as claim to their right to equitable set-off. In two separate Mississippi cases this right has been relied upon for insolvency, and the right and claim has been denied in both of these cases.
Brashears v. Johnson, 106 Miss. 739, 64 So. 722; Paine v. Lewis, 64 Miss. 96, 8 So. 207.
The Brashears case clearly sets out that Mississippi is not one of the jurisdictions where equity holds that equitable set-off is available in the case of insolvency.
Bullard v. Dorsey, 7 S. M. 13; Moody v. Willis, 41 Miss. 347; Peyton v. Planters' Compress, 63 Miss. 410; Walker v. Hall, 66 Miss. 390, 60 So. 318.
Should there be any doubt lingering in one's mind concerning such a statement, then the case of Chandler v. Cooke, 163 Miss. 147, 137 So. 496, dissipates that doubt in the strongest of terms. In the decision of that case, Chief Justice Smith, speaking for the court, said this: "While there is authority to the contrary, this court has aligned itself with those courts which hold that insolvency alone is not a sufficient equity to justify the allowance of an otherwise incompetent set-off, but that there must exist circumstances in addition to insolvency which render it inequitable not to allow the set-off."
An incompetent set-off is an incompetent one, whether it is caused to be incompetent by having been bought after the original suit was brought or whether it is caused to be incompetent by reason of the fact that there is no mutuality between the parties.
It has been contended earlier in this brief and proved that the set-off contended for in the instant appeal is an incompetent set-off. The quest then for solution of the problem was for extenuating circumstances which might make the set-off, though rendered clearly and obviously incompetent through lack of mutuality, allowable nevertheless. As a resort to other circumstances to defeat the incompetency of the set-off, appellees attempted to clothe themselves with the garments of insolvency. But the Chandler case says that this plea and prayer of appellees does not render an incompetent set-off competent; says in other words that they are not entitled to the preference they seek in assets of the closed Peoples Bank; that they must be content to be treated as other general creditors of the bank are treated.
Chandler v. Cooke, 163 Miss. 147, 137 So. 496.
R.F. Kimmons, of Water Valley, for appellee.
One fundamental principle of equity is "He who seeks equity must do equity," and if this principle which has never been denied is enforced then the complainant has no standing in court.
Williams v. Williams, 167 Miss. 115; Strickland v. Webb, 152 Miss. 421; Walker-Durr Co. v. Mitchell, 97 Miss. 231; Griffith's Chancery Practice, 36, par. 32.
Numerous cases might be cited in the support of this maxim of equity. But why multiply citations. In the case at bar the complainant comes to a court of conscience and in effect says that he owes W.B. Carter more than five hundred dollars, and yet prays a court of conscience to render a decree appointing an administrator of his estate so that he may have the privilege of suing to recover a judgment against his estate. In addition to this he would force his heirs to pay administrator's commission, attorneys' fees, and other cost of administration.
A receiver has no greater right than the defunct institution which he represents. And a bank whether a going concern or one that has failed has no greater privilege than any one else, unless such rights are specially bestowed by law.
Bank of Greenville v. Kretschmar, 91 Miss. 608.
The right of the defendants in this case does not depend on mutuality of the debts. When a court of equity obtains jurisdiction of a cause its power to grant absolute and perfect justice between the parties does not depend on the mutuality of the accounts.
Citizens Bank of Greenville v. Kritschmar, 91 Miss. 608; Eyrich v. Capital State Bank, 67 Miss. 60.
In every case that has been called to my attention where a set-off has been denied by a court of equity because of a want of mutuality is where the court had no jurisdiction, but in every case where circumstances were such that the court obtained jurisdiction of the rights of the parties full relief has been granted and the true balance due to either of the parties has been fixed by the court and the true balance alone is required to be paid.
Bettman-Dunlap Co. v. Gertz, 149 Miss. 892; McIntyre v. Fobbs Piano Co., 100 Miss. 517; Sterling Products Co. v. Lbr. Co., 131 Miss. 145.
Equity delights to do complete justice and not by halves. When jurisdiction of a cause is taken, complete relief will be given.
Griffith's Chancery Practice, page 31, sec. 28.
Therefore, the complainant having chosen the forum in which to litigate, and having entered a court of conscience, must abide by the judgment or the decree of a court which is interested only in equal and exact justice.
The appellant filed a petition in the court below under sections 1629 and 1629, Code of 1930, alleging that he was the receiver of the Peoples Bank in liquidation; that in June, 1932, W.B. Carter "executed a note jointly with the W.P. Moorhead Co., W.P. Moorhead, and C.E. Carter, to the Peoples Bank, then a going concern, in the principal sum of $624.00 which note was payable on December 15, 1932," a copy of which was attached to the petition; that there remained a balance due thereon of $305.55; that Carter died intestate more than thirty days prior to the filing of the petition, leaving an estate worth several hundred dollars. The petition then prayed that letters of administration on Carter's estate be issued to the sheriff of Yalobusha county, of which county Carter was a citizen and resident at the time of his death.
By permission of the court Carter's heirs appeared and objected to the granting of the letters of administration, alleging, in substance, that when the Peoples Bank closed its doors and became insolvent Carter had on deposit with it a sum of money more than sufficient to pay this note, which deposit should be applied as a set-off thereto, and if this is done it would appear that a balance is due Carter on his deposit, for which they prayed a decree over against the petitioner.
The appellant filed an answer, which included a general demurrer, to these objections admitting the facts set forth in the objections, but denying that Carter's bank deposit could be set off against the balance due on the note. There was no separate ruling on the demurrer, and after hearing the evidence which disclosed the existence of this deposit, and that its amount exceeded the balance due on the note, the court declined to grant letters of administration and further decreed that the objectors were not "in this proceeding" entitled to a decree against the petitioner for the excess of Carter's deposit over the balance due on his note.
No statute has been called to our attention permitting objections to be filed to the request of a creditor of a decedent for the appointment of an administrator of his estate, on the ground that the person requesting the appointment is not in fact a creditor of the decedent, but as no point is here made thereon, we will not decide it, but will assume for the purpose of the argument that such an objection can be made. In order for the appellant to have the right to request the appointment of an administrator for Carter's estate, it must appear that Carter died owing a debt to the bank the appellant represents. The possession and ownership of Carter's note on which there is a balance due discloses such a debt prima facie.
Assuming for the purpose of the argument that the objectors had the right to show that nothing was due on the note, the only way in which they have attempted to do this was to show that in a suit on the note, which would have to be brought against the administrator in event an administrator should be appointed, this bank deposit could be used as a set-off against the note. Whether this could be done presents a question of interest and difficulty, but it has no place here. That question can only arise in the course of the administration, or in a suit brought on the note against the administrator, and he then seeks the benefit of the alleged set-off. The merits of this controversy can be then, but not until then, properly decided.
The objectors' request for a judgment over against the appellant has no place here as the court below correctly so held. The appellees' request for the granting of the letters of administration should have been granted.
Reversed and remanded.
McGowen, J., did not participate in the decision of this case.