Case ID: sc-eq_7/html/0397-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James K. Douglas v. Robert Fraser, Executor of J. B. Fraser.
    Where a bill was filed against an executor for a debt due the complainant by the estate for which the executor had given his own note, it was held, the bill was well brought, and that it was unnecessary to mate the legatees parties, no distribution having taken place, or being alleged] and an order of reference to inquire into the amounts received by the legatees set aside, not being within the allegations of the bill, and the legatees not being parties. An executor having given his own note for a debt due by the estate, does not exempt the estate from liability, and he may be sued in equity, as executor for it.
    The bill stated that J. B. Fraser, the defendant’s testator, in his life time became indebted to Hugh M’Call & Co,, merchants in Camden, the sum of 8462 70 cents, for goods, wares and merchandise ; that the defendant, after his death, as his executor, took up other goods, wares and merchandise to the amount of 8422 99 cents, for the use and benefit of the estate. That the defendant ^afterwards liquidated the demand by giving- his note for both accounts, amounting in the whole to 8885 69 cents. That the copartnership of Hugh M’Call & Co., of which the complainant was one, was after-wards dissolved, and upon a division of the effects this note was transferred to the complainant. That a suit liad been brought and a judgment and execution obtained upon the said note, and that the Sheriff' had returned nulla bona upon the execution, by which it appeared that the defendant was insolvent.
    The object of the bill was to subject the estate of J. B. Fraser, in the hands of his executor, to the payment of this debt. The defendant put in no answer, but suffered the bill, January, 1825, to be taken pro confesso, against him.
    At February term 1825, Chancellor DeSaussure made the following order :
    Ordered, That tins case be referred to the commissioner to ascertain and report whether the account is properly charged against the estate of J. B. Fraser; also, whether the executor has delivered over the estate to the several persons interested, under the will of the testator; and whether any of them and which of them have settled with the executor for his particular claim against the estate; and whether there are any, and what facts in the case, which discharge such of them as have settled with the executor from the payment of their proportion of the said claim.
    Upon the reference, the Commissioner Mr. Miller, on the 1st of November, 1825, made the following report:
    
      "In obedience to the order of reference in this case, I have been attended by the parties, and find that the account against John B. Fraser, deceased, for articles furnished to him, in his lifetime, by the complainant, and those under whom he claims, amounts to 8462 70 cents. I further find, that after the death of the said J. B. Fraser* his Robert Jane now wife of Thomas Boone, Mary Fraser, now wife of G. S. C. Descharnps, Ladson Fraser, and Elias L. Fraser lived together for some time, during which time the balance of the account exhibited by complainant, amounted to §422 99 cents, was contracted by the executor of the said J. B. Fraser for the benefit of his estate and for his children, and is properly charged against the estate. I further find that the executor has not delivered over to the several persons interested, under the will of the testator, the whole of the property to which they are entitled. I further report that the wife of Mr. Deschamps has a receipt from the executor, dated the 2d of December, 1823, for her proportionable part of the judgment obtained by A. M’Donald, endorsee of Hugh M’Call & Co., against Robert Fraser, the executor of the estate of J. B. Fraser, on the note given by him for the account against the estate. But as the receipt recognises the judgment as an existing demand against the estate; and as no discharge of the estate by Hugh M’Call & Co., or the complainant, has been offered in evidence, I deem this receipt given by the executor, insufficient to discharge the estate, or that portion of it to which Mrs. Deschamps is entitled. I further find that Thomas Boone has a receipt from the executor, dated the 3d of January, 1825, nearly five months after the filing of the bill in this case, for his wife’s proportion of the debts of the estate of J. B. Fraser. None of the other heirs of the estate have exhibited any testimony before me. Upon a review of the evidence, I am of opinion, that the estate of the testator, in the hands of the executor, or of those to whom he has delivered any part of it, is still liable to complainant for $885 09 cents, the amount of his account. I am further of opinion that, under the circumstances of the case, the complainant is entitled to interest on his account from the 1st day of January, 1821, when the account was stated by the executor.”
    *On ^le 2CHh of February, 1826, the commissioner made a further report, as follows :
    
      “ In addition to my first report, I beg leave further to report, that since that report was made out, the Sheriff of Orangeburg has returned, on the execution of A. M’Donald, indorsee of J. K. Douglas v. Robert Fraser, that by the sale of the defendant’s property, he has made upon the said execution $695 83⅛, which he has paid over to the plaintiff, J. K. Douglas.
    The principal of the debt, in said case, was..$1,051 07
    Interest on §885 69 from 10th October 1823,
    to the 7th of November, 1825, two years and one month. 129 14
    $1,180 21
    Cost of said suit. 37 48
    $1,217 69
    Then collected by sale. 695 83½ — $521 86½
    “ I beg leave to report that the balance due to the said complainant is $521 86½, with interest thereon from the 7th of November, 1825.”
    To these reports the defendant’s solicitor filed the following exceptions :
    
      “ The defendant excepts to so much of the report as charges G. S. C. Deschamps and Boone. And on the ground that interest was allowed on the open account. And, likewise, that there was no evidence before the commissioner as to the priority of M’Call and Douglas’ debt.”
    
      *On the 21st of February, 1826, Chancellor Thompson made the following decree :
    
      “ The commissioner submitted two reports in this case, to which exceptions were made and argued. It is ordered and decreed, that the complainant James K. Douglas do receive from the said Robert Fraser, as executor of the last will and testament of John B. Fraser, §521.86½ and’interest thereon from the 7th of November, 1825, being the balance reported by the commissioner as due to the complainant by the estate of the said John B. Fraser.”
    From that decree, the following grounds of appeal were taken by Miller for the defendant :
    First. That the legatees ought to have been made parties.
    Second. That some of the legatees showed that they had accounted with the executor for their proportion of this debt, and others of the legatees had no notice.
    Third. That complainant had elected to take this debt as a personal one on the executor, and had discharged the estate, and enabled the executor to charge the legatees for this debt; and, therefore, the executor must account and show that the estate is indebted to him, before any degree ought to pass against the property of the legatees.
    J. G. Holmes, contra,
    urged that,
    1. The executor alone is defendant, and properly so, as the sole representative of the estate.
    2. The demand is not disputed by the executor, and is regularly against the estate.
    3. The heirs of the estate are not, and ought not to be parties.
    4. The executor does not, and the heirs cannot appeal.
    5. The order of Chancellor DeSaussure was improper, but being interlocutory could not be appealed from.
    *6. The first report of the commissioner, and the only important one, was made out six months before the meeting of the court, and no exceptions had been filed to it; although the counsel for the heirs had full and explicit notice of it.
    7. The last report was a mere credit, founded on the return of the sheriff on an execution, which was in court and exhibited to the counsel. But strike out that report, and the only question that can then occur is upon the first report.
    The facts stated in that report and admitted by the exceptions show,
    That the debt was due by the estate.
    
    That the executor gave a note signed by him as executor for the amount of the account.
    That no discharge was given of the debt or account.
    That the executor being sued on his note in his individual capacity was insolvent.
    That the account is still a subsisting one against the estate.
    That the account of Deschamps and wife, heirs of the estate, is a receipt from the executor for money to be applied to the payment of the judgment to him on the note, and, therefore, recognizes the debt after the note was given as a subsisting debt against the estate.
    That the receipt of Fraser, another of the heirs, is five months subsequent to the filing of the bill.
    
      Feb., 1827.
   Curia, per

Nott, J.

The only difficulty which has presented itself to the court in this case, has arisen from certain irregularities which occurred in the progress of the cause. The only object of the bill was to subject the estate of the testator to the payment of a certain debt, which it is alleged was contracted for the benefit of the estate; and for which the defendant, as executor, has made himself personally liable. The legatees, or *next of kin to the testator, are not made parties. They are not called upon to contribute. It is not alleged that there is not property enough in the hands of the executor unadministered to pay the debt. It is not alleged that the executor has paid over the estate, or indeed any part of the estate to the persons interested in the distribution. The simple question, therefore, for the consideration of the chancellor was, whether the estate was properly chargeable with this debt. The order of reference of February, 1825, directing- the commissioner to make enquiry and report the evidence in relation to that question, ivas unquestionably correct and proper. But the other part of the order related to matters not embraceed in the bill; and went to involve the interests of persons not parties to the proceedings. That part of the order, therefore, and all the proceedings upon it, must be reversed. The persons ultimately interested in the distribution of the estate have an interest in the payment of this debt, as it goes to diminish the dividends which they will receive. But they have the same interest in every debt which the executor is called upon to pay. If the executor is wasting the estate, or if he is entering into collusion with the complainant to impair their rights, they have their remedy. But it does not belong to the court to volunteer its aid unasked upon the presumption that they are entitled to such relief.

This view of the subject disposes of the two first grounds of the appeal. Indeed it disposes of the whole case. For as it regards the executor, he admits all the allegations in the bill, and is satisfied with the decree. And the court cannot entertain an appeal at the instance of persons not parties to the proceedings. The decree cannot affect them except in the manner abovementioned, and in which they cannot have relief without being made parties, which they have not asked. But I apprehend that the mere circumstance of the executor having *liquidated demand, cannot exempt the estate from the pay-merit of a debt otherwise chargeable upon it. The executor as trustee to trust estate. Carter v. Eveleigh, 4 Desaus. Rep. 19. James v. Mayrant, 4 Desaus. Rep. 591. Montgomery v. Eveliegh, 1 M’Cord’s Cha. Rep. 267.

The counsel appear to consider this as a decree against the legatees ; and taken with reference to the proceedings as they originally stood in connection with the reports of the commissioner, it might have admitted of that construction. But modified as the proceedings now are, it can only affect the estate of the testator in the hands of the executor to be administered; and as such must be affirmed.

It is, therefore, ordered and decreed that the decree of the chancellor be affirmed, so far as it went to charge the estate of the deceased in the hands of the defendant as executor.

Decree modified.