Case ID: scl_16/html/0109-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Mr. Justice' Johnson.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Administrators of Happoldt, vs. Elias Jones.
    
      In an action by the administrator of an insolvent estate, defend* ant is not entitled to avail himself, byway of discount, of ane gotiable note, made by the intestate and transferred to defend-. ant after his death, to the full amount due on the note: but only to a reduction, rateably with other creditors.
    
    Assumpsit, oh an account due by the defendant to the plaintiff’s intestate. Amongst other grounds of defence, the defendant offered, by way of discount, a due hill for $150, made by the intestate, payable to John Egleston or hearer, which had been transferred to the defendant after the death of the intestate. It wras admitted that the estate was insolvent and would not pay more than five shillings in the pound; and the question was, whether- the defendant was entitled to the whole; amount of this discount, or only in average proportion with creditors of the same class. The presiding judge instructed the jury that the defendant was entitled to the full amount of the discount, and they found accordingly; and a new trial was mov,ed for on the ground of misdirection in the foregoing partisulagg
    
      
      Hesaussure, for the motion.
    
      Jdunldn, .contra.
   The opinion of the Court was delivered hy

Mr. Justice' Johnson.

At the death of the intestate, Egleston, to whom the due bill was payable and who then held it, stood in the.r elation of a creditor of the estate to that amount; and the act of assembly, Pub. Laws, 494, which prescribes the mode of marshalling assets and paying debts, expressly provides that no preference shall be given to creditors in equal degree. The debt due by the defendant was assets; and it is acknowledged that there were not enough to pay the debts. The effect of allowing the whole amount of the discount, is the payment of that entire demand, in exclusion of others, and is in direct opposition to the provisions of the act. The circumstance that the due hill was-transferred to-the defendant, cannot alter therights of theparties.

In the character of creditor, Egleston could only transfer the rights which he had as such, at the time of the intestate’s, death; winch according to the act, was only to a rateable proportion, in common; with other creditors of equal degree; and the defendant could take no more. A contrary rule would furnish tire greater facilities for obtaining an undue preference, to an extent that would wholly defeat the wise and equitable provisions of the act. The debtor of an insolvent estate would find little difficulty in purchasing up demands against the estate, Sufficient to cover the amount due by him, and thus appropriate so much to himself in exclusion of others. As a matter of expediency, therefore, the eourt Would not be inclined to adopt it. Tile case of Mayhew vs. Flake, 2nd. Nott & M'Cord, 398, which is relied on in opposition to the motion, is clearly recon-eileable with this view. There the discount consisted of a debt due by the intestate to the defendant, at the time of his death, and which operated as an extinguishment, pro tanto, of the debt due by him; so that in respect to this, he-did not stand in the relation of creditor. The discount in that case was, therefore, properly admitted.

The motion for a new trial, is granted.

Cohoclc, Gmitt, .Richardson Huger, Justices, concurred»