Case ID: va_72/html/0414-01.html
Source: Caselaw Access Project
Author: {"author": "ANDERSON, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Smith & als. v. Blackwell & als.
    January Term, 1879,
    Richmond.
    Absent, Moncure, P.
    
    T. Debts — Novation.—B is the guardian of J, and upon J’s coming of age B has a settlement with J of his account as guardian, and being found indebted on the account in the sum of $3,000, he executes to J his four bonds, each for $750, payable in one, two, three and four years, with interest. B pays (the interest during his life, and a part of the principal, and was up to the war able to pay the whole — Heed: The giving and taking these bonds was not a novation of the debt, but the debt due from B to J continued to be a fiduciary debt, and entitled to rank as such in the administration of B’s estate.
    
      2. Interlocutory Decrees. — In a suit for the administration of B’s estate the commissioner classifies the debt of J among the general creditors of 13, and there is a decree confirming the report and distributing a fund in court pro rata among these creditors. There were several'other decrees for accounts of further debts of B, and still a fund in court to be distributed, when J made himself a defendant in the suit and filed his petition insisting that his was a fiduciary debt — Held : The decree confirming the re- ♦ port was an interlocutory decree, and J was not concluded from setting up his claim as a fiduciary creditor of B.
    This was a suit in equity in the circuit court <of Fauquier county brought in March, 1867, by Moore C. Blackwell against the administrator, widow and heirs of his father, James Blackwell, deceased, for a sale of the real estate of said James Blackwell for the payment of his debts, the bill alleging that the personal estate was not sufficient to pay them.
    The bill was taken for confessed as to all the defendants, and on the 8th of April, 1867, a decree was made *directing Joseph H. Blackwell, the administrator, to render an account of his administration before one of the commissioners of the court; and the commissioner was further directed to report to the court the character, situation and value, annual and fee simple, of the real estate of which the said James Blackwell died seized _and_ possessed; the nature, amount and priorities of the liens, if any, upon said real estate; and also to ascertain and report the amount, priorities and dignity of the debts and liabilities of the said James Blackwell, deceased, and for that purpose that he convene the creditors by publication, &c.
    On the 3d -of August, 1867, Commissioner Pugh returned his report, from which it appeared that on October 24, 1866, the administrator was indebted to the estate $540.46; the fee simple value of the land was estimated at $44,041.39, and • its annual value at $1,600; and it did not appear there were any liens upon it.
    The commissioner also reported a statement of debts, which he divided into classes. The first class contained but one fiduciary debt, and that due as committee of a lunatic, amounting to $2,871.45 as of the 1st of September, 1867. All other debts, except voluntary obligations, were included in the second class, and they were forty-six in number, and amounted, as of the same date, to $48,415.90. Of these there was a debt due to James D. Blackwell, due by four bonds of $750 each, dated the 19th of March, 1849, and payable in one, two, three and four years, with interest from date; and on these there was due on the 19th of March, 1867, $3,071.67, and interest on $2,520.20 from that date, $68.04, making due the 1st of September $3,139.61.
    On the 16th of September, 1867, the cause came on to be heard upon the papers formerly read and the report of Commissioner Pugh, to which there was no exception, when the court-recommitted the report and directed the ^commissioner to take a further account of debts, and appointed commissioners to sell the real estate at private sale upon terms stated in the decree.
    In September, 1868, Commissioner Pugh returned his report of additional debts amounting to $6,271.75. And the cause coming on to be heard on the 11th of January, 1869, on that report of Commissioner Pugh, and also on the report of sales of land by the commissioners, these reports were confirmed, except the two sales to William H. Gaines. And James Keith was appointed a commissioner to collect the purchase money of the land. And it being suggested that there were still outstanding debts not reported on, Commissioner Pugh was directed to enquire and report any further debts that might be proved before him.
    There was still another report of debts by Commissioner Pugh, and also of a distribution of the fund in the hands of Commissioner Keith; and on the 20th of September, 1870, there was a decree directing a commissioner of the court to consolidate the reports of Commissioner Pugh theretofore returned, and classify the creditors of James Blackwell, deceased, according to their priorities, crediting all amounts paid to the creditors aforesaid, and to distribute the sum of $10,-007.84 then in_the hands of Commissioner Keith; and to report forthwith.
    On the 30th of September, 1870, Commissioner Shepherd returned his report, in which he consolidated the previous reports, and distributed the fund in hand. The whole amount of debts with interest up to the 1st of October, 1870, was $70,984.25. In this report James D. Blackwell is placed among the general creditors, and his share of the fund to be distributed is stated at $518.82. And on the 1st of October; 1870, the cause came on to be heard, when the court, not deciding any other matter involved in the cause, decreed that Commissioner Keith *should distribute the said fund in his hands among the creditors of James Blackwell according to the distribution thereof made by Commissioner Shepherd. And R. Taylor Scott was appointed a special commissioner to collect the unpaid purchase money.
    In September, 1873, James D. Blackwell filed his petition in the cause,, alleging that James Blackwell was his guardian during his minority; and that immediately upon the petitioner’s coming of age he had a settlement with the said Blackwell, guardian as aforesaid, who executed to the petitioner his four notes for the amount then found due to-him. He states the amount due him as reported by Commissioner Pugh on September 1st, 1867, viz: $3,139.61, which he insists was erroneously reported as not being a fiduciary debt. And he asks that there may be an enquiry before a commissioner as to the true character of the debt due to him. A decree was accordingly made referring the matter to a commissioner for enquiry and report.
    On the 1st of December, 1873, the commissioner returned his report, in which he stated that on the 2d of December, 1831, James Blackwell qualified as the guardian of James D. Blackwell, then a minor. In March, 1849, James D. Blackwell came of age, when his guardian, James Blackwell, had a settlement with him, and upon that settlement brought himself indebted to his said ward in the sum of $3,000. He gave his individual bonds, four in number, for said amount, each for $750, and dated the 10th of March, 1849, and payable in one, two, three and four years. Thus the matter has stood from that day to the date of the report, the said James Blackwell having paid not only the interest due upon said bonds, but a part of the principal. These four bonds, together with a statement of said debt claimed by said James D. Blackwell, were filed before Commissioner Pugh, and he reported said debt in favor of said * James D. in his report of the 3d of August, 1867, as a debt due by said James Blackwell as a bond debt, payable pro rata with the other claims of the same character against said estate; and this report of Commissioner Pugh was confirmed by decree of the court entered on the 11th of January, 1869, in this cause. These are the facts of the case, and the commissioner leaves it for the court to say whether the said James D. Blackwell’s claim is or is not a fiduciary debt:
    The bonds referred to by the commissioner were returned with his report, and they are all in the following form:
    One year after date I bind myself, my heirs, executors and administrators to pay to James D. Blackwell, his heirs or assigns seven hundred and fifty dollars, value received, to bear interest from date.
    As witness my hand and seal this nineteenth of March, eighteen hundred and forty-nine.
    James Blackwell [Seal],
    James D. Blackwell was examined as a witness in his own behalf, though he was objected to as incompetent. He proved that the bonds were given by his guardian upon a settlement made with him the day after he came of age, and the guardian not being able to pay in cash what was due him, gave him the said bonds. James Blackwell had during his lifetime made to him the payments stated in Commissioner Pugh’s report. He made no objection to this mode of settlement at the time or subsequently. He regarded it as safest in his hands, as he was a man of reputed wealth, and witness was in no immediate want of it. And Joseph H. Blackwell, the administrator of James Blackwell, who was also examined as a witness, stated that he knew the debt was a correct one, and that it was due to said James D. Blackwell *from witness’ father as the guardian of James D. Blackwell.
    It appeared from a report filed in December, 1873, by J. Taylor Scott, acting for Commissioner Keith, who had been elected a judge of the court, that of the $9,691.13 to be distributed under a former decree, he had disbursed $9,146.40, leaving still in his hands of that fund $544.73. And that he had received the further sum of $6,377.39, of which he had disbursed $1,051.68, leaving to be disposed of $5,325.71; and that no part of either of these funds had been paid to James D. Blackwell. And it was a fact agreed in the cause that James Blackwell was a man of large means and ample estate, and, further, that he was perfectly solvent and able to pay the debt due James D. Blackwell, and all other debts due by him from the 19th of March, 1849, to the commencement of the war.
    The cause came on again to be heard on the 20th of December, 1873, when the court confirmed the report of Commissioner Scott; and being of opinion that the debt due to James D. Blackwell was fiduciary in its nature and character, decreed that the report of the commissioner be recommitted to him, and that he reform the reports of Commissioner Pugh of August 3d, 1867, and all reports of debts thereafter made in the progress of the cause; in accordance with the principles of this decree, by giving to the said debt due James D. Blackwell priority, as a debt due by the said James Blackwell, deceased, as guardian of said James D. Blackwell, and that he report forthwith.
    On the 33d >of December, 1873, the commissioner returned his report. He states the debt of James D. Blackwell as stated by Commissioner Pugh, except that he credits it with $518.33, the amount of the fund' to be distributed at that time, to be paid upon that debt; *though it does not appear that it was paid. The other debts, as heretofore reported, to be paid ratably.
    On the 33d of December William Smith and several others of the creditors of James Blackwell, whose debts had been reported by the commissioner, upon their motion were made defendants in the cause; and they thereupon filed exceptions to the report of Commissioner Shepherd returned on the 23d of December, 1873, because said commissioner has reported the debt due James D. Blackwell as a fiduciary debt, and as such entitled to priority in the administration of the assets of the estate of James Blackwell, deceased. But the court overruled the exceptions and confirmed the report; and decreed that R. T. Scott as special commissioner should pay out of the funds in his hands to James D. Blackwell or his attorney the amount ascertained to be due him by said report. And thereupon William Smith and the said other creditors applied to this court for an appeal; which was awarded.
    A. D. Payne, Brooke & Scott, and Johnson & Royall, for the appellants.
    John S. Mosby and William J. Robertson, for the appellee.
    
      
      He was related to some of the parties.
    
    
      
      Debts — Novation.—See Gilbert v. W. C., etc., R. Co., 33 Gratt. 586 and note; Coles v. Withers, 33 Gratt. 186 and note; 1 Min. Inst. (4th 33)d.) 471.
    
    
      
      Interlocutory Decrees. — Where the decree affirmed, on its face, orders that the cause be referred to a master to take further account and report, &c., such decree is interlocutory. Upon the cause being remanded to a court below for further proceedings, such interlocutory decree may be modified upcm exceptions to the master’s report on motion or otherwise. Miller’s adm’r v. Cook’s adm’r, 77 Va. 806, citing the prii> •cipal case.
      Practice — Action by Assignee of Debt— Assignor as Party. — The principal case was cited in Daily’s ex’or v. Warren, 80 Va. 512, to support the proposition that where one files petition in a pending cause to assert claim as assignee of a debt reported therein, the assignor must be made party to the petition and summoned to answer.
    
   ANDERSON, J.,

delivered the opinion of the court.

The court is of opinion that the bonds .executed by James Blackwell, deceased, in his lifetime, to his ward, James D. Blackwell, and which are the subject of this contention, were given for the balance' due him by the said James Blackwell as his guardian; and that said bonds were given as an acknowledgment of the amount of his indebtedness to him and to get time for the payment *thereof; that the giving of said bonds and their acceptance by the ward did not merge the debt due to the ward by the obligor in his fiduciary character, and was riot a discharge or extinguishment of the same until paid; and the bonds being executed for a pre-existing debt, due from the obligor as guardian, were not a novation of the debt; and did not change its fiduciary character. In Hamlin’s adm’r v. Atkinson, 6 Rand. 574, the question whether a bond taken by the ward for the amount appearing due from the guardian on settlement merged the original right of action, Judge Allen remarks in Yerby & wife v. Lynch & al.. 3 Gratt. 439, “was in effect decided by this court. It was there decided that such subsequent bond was no discharge of the official bond unless given and received in full satisfaction. A bond to perform that for which the party was before bound by another bond is no discharge of the latter.” And in the same case Judge Stanard concedes “the inefficiency of one security to merge another of equal or higher dignity.” And in the same case Judge Brooke said that the bond given by the guardian to the husband of his ward did not merge the official bond, is settled in the case of Hamlin’s adm’r v. Atkinson. “In that case the bond of the guardian was given to his adult ward when she was sui juris and competent to contract for herself. Yet the court held that a bond for the same thing did not extinguish the official bond, and the ward might recover from the sureties in that bond what was due to her from the guardian, treating the bond given her as proof of what was due; and in this the whole court concurred.” In a note, it is said, Judge Green, in a manuscript opinion in Hamlin’s adm’r v. Atkinson, said: "The bond given: by the guardian to his ward for the amount due to her by settlement was not a discharge of the surety in his official bond. No bond can, in any case, be a bar or satisfaction of another by the same ■ person.” *By giving and receiving the bonds in this case the debt did not lose its fiduciary character, it not appearing that there was any agreement by the ward to receive it in full discharge and satisfaction of what was due to him from his guardian in his fiduciary character; of which it is necessary that the proof should be full and satisfactory. And the bond being for a debt which was fiduciary, it could not lose that character by lapse of time. It continues to be fiduciary until it is satisfied.

The court is further of opinion that the decree of January 11, 1869, is interlocutory and not final; which appears on its face and from subsequent decrees. It confirms the report of sales, except the sale to William H. Gaines, which it reserves for the subsequent action of the court. It confirms the report of the master, John W. Pugh, which arranged the debts into three classes. First class, such as constituted a lien upon the lands; second class, fiduciary debts; and, third class, all other debts except voluntary obligations. And the bonds in question are placed in the third class; and the decree directs the money in hand to be distributed and paid according to said classification. The decree further directs James Keith, who is appointed a commissioner for the purpose, to collect the bonds of the purchasers returned with the report of sales, except the bonds of William H. Gaines, and when the whole of the purchase money due from any purchaser is collected, to make him a deed for the land purchased by him; but no direction or authority is given for the distribution or disbursement of said fund when collected; and said commissioner is directed to report his proceedings to the court; and it is further ordered that Commissioner Pugh do make report to the court of any further debts which it was suggested were still outstanding, and not reported, against the estate that may be proved before him. So that there could not at that time have been a final disposition of *the whole fund which was subject to the control of the court, and the decree for disbursement was properly limited to so much of the. money as was in hand.

In Harvey & wife v. Bronson, 1 Leigh, 108, cited in Ambrouse’s heirs v. Keller, 22 Gratt. 769, 774, Baldwin, J., said: “When the further action of the court in the cause is necessary to give completely the relief contemplated by the court, then the decree is to be regarded not as final, but interlocutory.” Further action of the court in this case was necessary to’ give complete relief, because the decree provided for only a partial distribution of the decedent’s estate, and directed enquiry as to outstanding and unreported debts. And pursuant to said decree the commissioner, on the 6th of March, 1869, reported additional debts to the amount of $7,394.75, which was confirmed by decree of April, 1869, and said commissioner was required to report to the next term of the court anyx other debts which had not been reported; and on the 16th of September, 1869, he reported other debts which had not theretofore been reported, to a considerable amount, and corrected his report of August 3, 1867, by allowing credits which he says had recently come to his knowledge, which should be allowed on several of the debts therein reported; which report is confirmed by decree of 17th of September, 1869. And other collections having been made from the sales of lands by the commissioner of sales, James Keith, on the 20th of September, 1870, it was decreed that a master do consoli date the several reports of Commissioncr Pugh theretofore returned, and classify the creditors of James Blackwell, deceased, according to their priorities, and make distribution of $10,007.84, then in the hands of said Commissioner Keith, as reported by him, according to the rights of the parties entitled thereto, and to report the same to court. Pursuant to said decree, Master-Commissioner Shepperd, on the 1st of October, made a *report to the court, in which he arranged the debts into three classes— first, vendor’s lien; second, fiduciary; and, third, all other debts — and placed the debt due the appellee, James D. Blackwell, in the third class. He also reported the amount which each creditor would be entitled to receive of the fund of $10,007.84. now in the hands of the commissioner, showing the amount which James D. Blackwell would be entitled to receive of that sum to be $518.82. The Hon. James Keith having been appointed the judge of said court, the disbursements were made in the execution of said decree of 20th of September by R. Taylor Scott, as agent and attorney for the said James Keith, the bonded commissioner, and as special ^ commissioner. He reports a statement showing payment to each of the creditors of their proportion of said fund, except to James D. Blackwell the proportion due to him of $518.82, but that there is a balance in his hands of $544.73, out of which it may be presumed it was intended he should be paid. Said special commissioner also reported that he had since said decree made further collections to the' amount of $6,377.39, which sum had not been disposed of by any decree of the court. But of this sum he had disbursed $1,051.68,. leaving a balance of $5,325.71; of which $4,005.18 were in h's hands, the residue having been loaned to Samuel B. Chilton by authority of the court.

Prior to the making of this report, to-wit: on the 9th of September. 1873, on motion, James D. Blackwell was admitted a party defendant to this suit, and by leave of the court filed his petition, alleging that his debt had been erroneously reported as not a fiduciary debt, and asking that the error might be corrected. And on the 20th of December following there was a decree rendered in which it was held that the said debt was a fiduciary debt, and recommitting the report of Commissioner Pugh of 3d of August, 1867, and all other reports of *debts thereafter made, with instructions to the master to reform the same in accordance with the principles of this decree. On, the 22d of December the master filed his report, classing the said debt due James D. Blackwell as a fiduciary debt, and reporting that all the other debts of that class had been paid, and staling the amount of this debt, with interest; from which he says: “Deduct amount paid by Commissioner R. T. Scott, October, 1870, $518.82.” But when we turn to that report we do not find that said sum had been paid to James D. Blackwell, but we find that there was a balance of the fund in the hands of the commissioner sufficient to pay him said sum, after the payment to the other creditors their respective portions of said fund. Whether it had been then paid to the said James D. Blackwell or not, he had a decree for it, which decree it was not asked should be set aside. And it was not necessary to the attainment of what was due him that it should be set aside, because it appeared from the commissioner’s report that the fund then in hands, which was undisposed of and undistributed, was ample to satisfy what was due the said Blackwell without-disturbing the distribution which had been made. But as he had a decree for the sum of $518.82 out of the sum which had been decreed to be distributed, and the commissioner had in his hands enough to satisfy it, it was not proper that it should be included in a decree for his debt, which was to be paid out of the fund which had not been distributed.

From this recital of the proceedings of the court it is manifest that the appellee was not concluded by any proceedings theretofore had in the cause, even if he can he regarded as a party thereto, of his right to file a petition to have the master’s reports reformed so as to have his debt classed with the fiduciary debts, if it were a debt of that character, and that he was not debarred of that right by any acquiescence in what had been done, *or by delay in filing his petition. And we have seen that his debt was originally fiduciary in its character, and that it had not been novated or changed in its fiduciary character; and the rights of other creditors were not prejudiced by the delay in reforming and correcting the report of the master in this respect, inasmuch as they would have been no better off if his debt had been classed with the fiduciary debts from the beginning.

The court is of opinion, therefore, that there is no error in the decree of the circuit court, and that the same be affirmed.

Decree affirmed.