Case ID: va_22/html/0173-01.html
Source: Caselaw Access Project
Author: {"author": "JUDGE GREEN. JUDGE COALTER,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Miller’s Executors v. Rice and Others.
    May, 1823.
    Equitable Relief — Judgment against Executor — Depreciation of Assets. — Where an executor confesses judgments, and gives forthcoming bonds, for debts due by his testator, under the belief that the assets of the estate are amply sufficient to pay all claims against it, but afterwards, by an unexpected depreciation of property, the amount of assets proves inadequate, the executor shall be relieved in equity.
    This was an appeal from the Richmond chancery court.
    William Miller and James B. Ferguson, executors of Thomas Miller deceased, filed a bill against Rice and Seabrook, Galt and Johnson, John Forbes, and Isaac Curd and others, setting forth the following case:
    The testator died in 1819, leaving a will, by which he directed -that his executors should have full power to sell all his real and personal estate for the payment of his just debts, except his plantations called Woodville and Fa Yallee, which, he directed, should not be sold, if his other estate should be sufficient for the payment of his debts. The testator left a very large personal estate, appraised to $61,512 95 cents, and a still larger real estate, consisting of various tracts of land in different counties. The executors did not doubt, that this large estate would be more than adequate to the payment of all the testator’s debts; and still less, that they would find any difficulty in selling the real estate, in order to raise the necessary funds. Under this belief, they did not resist the claims of any creditors of the estate, because there were debts of superior dignity; and therefore they paid off many simple contract creditors; and others obtained judgments de bonis testatoris. Among these, are the defendants Rice and Sea-brook, who obtained a judgment for $586.95 principal, who sued out a writ of fieri facias, whicli was still in the sheriff’s hands at the time of filing the bill; Galt and Johnson, who- obtained a judgment for $1,617.79, *and sued out a fieri facias, which was levied, and a forthcoming bond, given by the complainants; John Forbes, who obtained a judgment for $55, on which no execution had been sued out at the time of filing the bill; Isaac Curd, who obtained judgment for $40, issued execution, and the complainant Ferguson gave a forthcoming bond; Archibald Bryce, assignee of Ware, who was assignee of May, obtained a judgment for $100, on which an execution issued, and was returned unexecuted. Another judgment was obtained by John Martin, for $200, on which an execution issued, and the complainant, Ferguson, gave a forthcoming bond. A judgment was also obtained by one Wigglesworth, on an assigned paper, purporting to be a bond, but which, the complainants contended, was only a simple contract debt, in consequence of an irregularity in its execution. The complainants allege, that all the foregoing judgments were founded on simple contracts; and, believing that the assets were fully sufficient to pay all the debts, they did not think that their duty required them to embarrass simple contract creditors with pleas of debts of superior dignity, which would exhaust the legal personal assets. But, they now find, that in consequence of the great depreciation of real property, the whole of the real estate, if brought into marlcet, would barely be equal to the payment of the debts. They allege moreover, that the real estate is so encumbered, that they cannot sell it without the assent of the creditors, who have liens upon it; or, if they should offer it for sale, subject to the liens, no prudent man would bid for it. They aver, that the personal assets are not by any means equal to the specialty debts. If, therefore, they should now be compelled to pay simple contract debts, they will, an all probability, be ultimately liable to make good the amount so applied, to the specialty creditors, out of their own estates. For these reasons, they pray that the several persons abovermentioned, may be made defendants: that they may be injoined from further proceedings at law *on their respective judgments, until a general adjustment can be made of the affairs of the estate, and compelled to wait for satisfaction of the said judgments, out of the real or equitable assets of the estate.
    The chancellor granted the injunction as to John Martin, and denied it as to all other matters; but the injunction was after-wards granted according ro the prayer of the bill, by the judges of the court of appeals.
    Rice and Seabrook, Galt and Johnson, and John Martin, filed their answers. Galt and Johnson aver, that their judgment was obtained by confession; that the complainants had a full opportunity to defend themselves at law: that they are informed that a considerable part of the assets, has been applied to the payment of simple contract debts, after the respofidents had gained a priority by bringing suit: that even as to the specialty debts which remain unpaid, if they should exceed the amount of personal assets, it is not even alleged by the complainants, that they exceed the real estate in their hands, properly applicable to the payment of those debts. The answers of the other defendants, are nearly to the same effect, except in some respects peculiar to their own cases, which it is not material to mention.
    The chancellor dissolved the injunction, upon the motion of the defendants; and an appeal was allowed from the order of dissolution, by one of the judges of the court of appeals.
    Leigh, for the appellants.
    Wickham, for the appellees.
    
      
      Eqnitable Relief — Judgment against Executor. — In Gallego v. Attorney General, 3 Leigb 485, it is said: “Tbe cases cited in which executors have been relieved against the charge of devastavit, on the ground of the reduction of the assets by unforeseen accidents, are not to be questioned. The executor who pays simple contract debts when there were abundant assets, and those assets have been reduced by a general and destructive fire, or by eviction by title paramount which could not be foreseen, is surely entitled to relief. 2 Freeman, 1; 1 Madd. 1, 63; IP. Wms. 354 (Royall v. Johnson), 1 Rand. 421. In Miller v. Rice, 1 Rand. 438, the executor, while the assets were abundant, confessed assets and gave a forthcoming bond, and afterwards, the assets becoming deficient by a general depreciation of property, he was relieved, and justly: for he had not voluntarily paid: he was sued: could he have been required or expected to plead a false plea? When he did plead, he could neither have pleaded plene administraba, nor plane administraba prater, for he had abundant of assets. He was bound then to let the judgment go; and if he had not done so, it would have resulted in the same thing. His plea would have been falsified, and judgment entered. When, therefore, he was about to sutler for his promptness and fair dealing, he was relieved, and properly relieved. In this case, however, the state of things is very diiterent. To justify a departure from the general course of administration, the executors ought to show, that they have done that which, in the execution of this will, with its broad discretion, prudent men ought to have done.” See principal case also cited with approval in Deloney v. Hutchinson, 2 Rand. 188; Davis v. Newman, 2 Rob. 668; Hurst v. Morgan, 31 W. Va. 532, 8 S. E. Rep. 291 foot-note to Davis v. Newman, 2 Rob. 664, containing long extract from Hurst v. Morgan, 31 W. Va. 532 8 S. E. Rep. 291.
      In Braxton v. Woods, 4 Gratt. 30, Daniel, J., after setting out the syllabus of the principal case as the decision therein, says that the decision was the decision of only two judges of a court consisting- of three, and that the third, Judge Gbeen, dissented and expressed it as his opinion that the executor was concluded "by the confession of judgment both in equity and at law. Continuing, Judge Daniel said: “This decision (i. e. in the principal case) was made in 1823, and the judgment in favor of Wood’s ex’ors, (i. e. in the case Judge Daniel had under discussion), as before stated, was confessed by West in 1811. How far our courts would be influenced now by the decision above mentioned, or by the liberal policy observed in the subsequent legislation of the state in respect to executors, administrators and their securities, in interpreting the act of 1807, it is needless to conjecture. For be this as it may, it will be readily conceded that it would have been highly imprudent in an executor, at the period when the judgmentin question was rendered, (if it would not be so now.) to confess judgments without stipulating that he should not be concluded by the judgments, from showing, in any future suits founded upon them, the true state of the assets; unless he had satisfied himself from a previous examination of the condition of the estate, that the payment of such judgments could not involve him in the hazard of a devastavit. Accordingly we shall find that it has not been unusual for the representatives of estates, when sued upon debts of their testators or intestates, in cases where the s late of the assets has not been fully ascertained, to confess judgments with the understanding that the judgments shall be accompanied by an agreement of record to the effect that they are in no event to charge the representative beyond the assets. Such were the terms upon which some of the judgments, the subjects of controversy, in the case of Miller's ex'ors v. Rice, were obtained.”
      See further monographic note on “Executors and Administrators” appended to Rosser v. Depriest, 5 Gratt. 6.
    
   JUDGE GREEN.

May 14.

The appellants are executors of Thomas Miller, who, by his will, subjected his whole estate, real and personal, to be sold by his executors, for the payment of his debts. *He died seised of four tracts of land of great value; the two most valuable of which, were subject to incumbrances for the payment of large debts, not due at the time of his death. His personal assets were appraised to upwards of $61,000; but the debts secured by the deeds of trust upon the said tracts of land, exceeded the whole amount of the personal assets. The appellees, who were creditors of Thomas Miller, severally instituted their suits against the executors for the recovery of their debts, all of which were due by simple contract, except one, which purported to be due upon a bond of the testator, signed by another for him. In the suit brought upon this paper, as the bond of the testator, the executors confessed a judgment for the “penalty of the bond,” to be discharged by the sum due. This judgment was confessed to Wigglesworth, the assignee of the bond. In the other cases, judgments were rendered as follows: In that of Rice and Sea-brook, upon a verdict, (what the plea was, does not appear.) The plaintiffs agreed to stay execution until the 1st of January succeeding, and that the judgment should not be considered as an admission or proof of assets: In that of Galt and Johnson, by the unconditional confession of the defendants; and upon this judgment, the defendants gave a forthcoming bond, which was forfeited: In that of Forbes, by the unconditional confession of the defendants. That of Isaac Curd was rendered upon the verdict of a jury, rendered upon issues made up upon the pleas of non assumpsit, fully administered, and debts of superior dignity; and in this case, one of the defendants gave and forfeited a forthcoming bond. In that of Day, upon the admission of the defendants, that they could not gainsay the plaintiff’s action, and in this case a forthcoming bond was given by one of the defendants, and forfeited. In that of Brice, in like manner. In that of Martin, upon the finding of the jury upon the plea of non assumpsit; and a forthcoming bond has, in this case, been given and forfeited. All these judgments were de bonis testatoris.

*The appellants exhibited their bill against these creditors, praying an injunction to stay further proceedings on those judgments, upon the allegation, that the specialty debts secured by the deeds of trust aforesaid, exceeded' in amount the personal assets, and had a priority to the simple contract debts, in a due course of administration: that the executors had not opposed the judgments obtained upon the simple contract debts, because they were confident that the sales of the real estate, in aid of the personal, would be greatly more than sufficient to pay all the debts of their testator, and that they had a power to1 dispose of the real estate for that purpose immediately; but, that they now find, that they cannot dispose of the incumbered lands, without the consent of the creditors, who have liens upon those lands; and that owing to the great and unexpected depreciation in the value of real property, it is doubtful whether the whole estate, real and personal, will be sufficient for the payment of their testator’s debts; and thus, if they are compelled to pay the simple contract debts out of the assets, they may be bound to pay the specialty debts in part, out of their own estates. The injunction was refused, (except as to one defendant, whose answer negatives the peculiar grounds of the injunction as to him,) by the chancellor, awarded by the judges of the court of appeals, and dissolved by the court of chancery, upon the motion of some of the defendants, who had answered; and from this order of dissolution, the plaintiffs appealed.

Independent of the act of January, 1807,' which provides, “that no executor or administrator shall be liable to1 answer any debt or damages out of his own estate, beyond the assets which may have come to his hands, in consequence of any false-pleading, mis-pleading, or non-pleading, in any action now depending, or which may hereafter be brought,” &c.; and, upon the ordinary principles of a court of equity, an executor might have relief in equity, whensoever from any cause beyond his *controul, he could not make his defence at law, so as to ensure justice to himself, or to the estate of his testator; as, if a portion of the assets of the estate in the hands of the executor, (without which the assets would not be sufficient for the payment of debts,) were in litigation; so that the executor could not safely confess or deny the amount of assets in pleading' at law, until the testator’s title was ascertained; as, in the case of Royal v. Johnson, in this court; or, where the testator had been executor, administrator or guardian, and had not settled his accounts of administration or guardianship, and is indebted thereon, and his executor has not the means of ascertaining the amount which his testator may owe on such accounts. By statute, such debts have priority to all other debts, and the executor is bound to retain assets for their satisfaction. Yet, until the amount due from the testator could be ascertained, it would be impossible for the executor to protect himself by pleading at law. In such cases, and in cases of fraud, accident or mistake, a tourt of equity should relieve upon its ordinary principle, that where a party has a right, and no adequate remedy at law, he is entitled to the assistance of that court. But, where a party has a complete defence at law, and does not lose the benefit of it by fraud, accident or mistake, a court of equity cannot assist him; for otherwise, every cause would be tried twice, once at law and once in equity. The act of assembly before referred to, did not enlarge the jurisdiction of a court of equity, but gave to the executor a strictly legal defence, which, before that act, he had not. Thus, a judgment before that act, in the original action against an executor, was conclusive evidence of assets in the hands of the executor, for the payment of the judgment; whether' he omitted to plead altogether, or omitted to plead “fully administered,” or debts of superior dignity, or pleaded falsely,, or committed some mistake in *pleading; and the executor, although he might, after such a judgment, plead fully administered, or no assets, or no waste to an action on such a judgment for a devastavit, such a plea would not avail him.

For, the judgment would disprove his plea conclusively, and a court of equity could only interfere on the ground of fraud, accident or mistake. But, the statute abrogated this rule of the common law, and permitted the executor, after a judgment, to plead and give full proof of the state of the assets, in a suit for a devastavit, notwithstanding his false-pleading, mis-pleading, or non-pleading, in the original action; except perhaps, where the question as to the state of the assets, had been fully tried and decided in the former action. In all cases not coming within this statute, where the executor would have been so concluded by the former judgment at the common law, he is still concluded; and a court of equity, cannot enlarge the operation of the statute, either by interfering to prevent a personal judgment against the executor, where he is so bound, or where there is no impediment to his defence at law; or after^ a personal judgment against him, by relieving him, when there was no impediment to his defence at law and there be no fraud, accident or mistake, such as justifies the interference of a court of equity, in all other cases.

Let us test the case at bar by these principles. Jt was well observed at the bar by the appellants’ counsel, that the will of Miller did not convert his real estate into personal assets: it only creates a charge upon it for the payment of debts, in aid of the personal fund. It does not devise the lands to the executors, but only gives a power to sell for the payment of debts; so that the lands were equitable assets at most, and not liable to the payment of debts in a course of administration, but only ratably, without regard to the dignity of the debts. It appears from the appellants’ own exhibits, that before any of the judgments in question were rendered against them, they *had the advice of three able attornies, that they had no authority to sell any of the lands until the personal estate was exhausted in the payment of debts. They should have applied the personal assets to the payment of debts, according to their dignity and legal priorities ; and left the simple contract debts, if that became necessary, to be satisfied pari passu, out of the equitable assets. Tf they had pleaded the outstanding debts of superior dignity, to the actions upon simple contracts, this would have been the effect, and there was not the slightest impediment to, or embarrassment in, doing so. These debts were two only, completely ascertained by recorded deeds, of which they must be supposed to have had notice. It was their duty to themselves, the creditors, and the estate, to pursue this course; and if they had, neither they nor any other party interested, could possibly have been injured. They may yet, under the act of assembly, plead these specialty debts at law, against all the judgments rendered against them adversely, and upon which they have not given and forfeited forthcoming bonds; and there is no necessity, in relation to them, for the interposition of a court of equity. As those judgments confessed by the executors, or upon which they have given and forfeited forthcoming bonds, they do not come within the act of assembly; and for the same reason that they are bound at law, they are bound in a court of equity, unless they became so bound, by reason of such a fraud, accident or mistake, or in consequence of such a state of things as would justify the interposition of a court of equity upon its general principles. No fraud or mistake is pretended. The executors knew of the existence of the debts of superior dignity, and the quantity and value of the property of their testator, real and personal, at the time they confessed those judgments and gave those forthcoming bonds; and they deliberately intended to confess the judgments and to give the bonds. They can, therefore, only claim relief upon the ground, that the depreciation in the value of the real property was *such an accident as a court of equity should relieve against. This has been likened at the bar, to1 a case in which the negroes of the estate had perished by pestilence, and the other property been destroyed by accidental fire. I will not say, that in case of such accidents as these, a court of equity ought not to afford relief. But, I am inclined to think, that it ought not; for, as to the property under the abso1lute controul of the executor, it should be converted into money, at least as early as the creditors could get judgments in a due course of law, and the money applied to the payment of the debts, and he ought not to hold it up at the risque of the creditors, of whose claims he has notice; and if not under the absolute controul of the executor, the property is not assets in his hands to be administered, and he is not bound, and ought not to treat it as assets, for which he is already responsible. In this case, the alleged depreciation of the real property, (the precise situation of which, as to their powers over it, in point of fact, was well known to the executors, and they cannot allege a mistake in point of law,) was not owing to any natural accident or great national convulsion. There is no proof in the record, of such depreciation, and the court can only proceed upon the general notoriety of the fact; and we know, that long before these judgments were rendered, property had gradually and greatly depreciated, and was still in a course of depreciation; and a further depreciation might justly have been anticipated. This depreciation was so' gradual, that it can hardly be supposed, that it was very striking and alarming between the rendition of the judgment in question, and the application for the injunction in this case; the judgments being in March, April and August, 1820, and the application for the injunction in December, 1820. It seems to me, that the appellants, not deceived by any one, and with full notice of all the facts which ought to have influenced them, in the course of their administration, have acted improvidently, and now seek to *be relieved against the effect of their deliberate acts, done upon full information of all the facts which ought to have influenced their conduct, and which acts bind them at law. I know of no principle of a court of equity, which can justify such relief. A contrary decision can only be made upon principles which will lead to the consequence, that in all cases in which an executor can shew in a court of equity, that he has not assets to pay the debt recovered at law, in a due course of administration, he is entitled to relief, notwithstanding his acquiescence without defence, in the original judgment at law, and in a judgment establishing a devastavit, and a judgment upon the official bond of the executor; and thus frustrate the policy of the act, which authorises a suit up on the executor’s official bond, next after obtaining the original judgment against the estate, without resorting, as was before necessary, to an action, to establish a devastavit, which was obviously intended to expedite the remedies of the creditors.

I think the order dissolving the injunction is right, and ought to be affirmed.

JUDGE COALTER,

delivered the following opinion, in which JUDGE BROOKE concurred:

I am of opinion, that under the circumstances of this case, as set forth in the bill, (and in which I think I am supported by the case of Pickett v. Stuart, and other cases in this court,) the appellants ought not to be made answerable out of their own estates, in default of assets of their testator, for the debts sought to be injoined, by reason of the proceedings at law. The confession of judgment, under the circumstances), ought not, I think, under the equity of the statute, to place the party in a worse situation than a false plea. The giving delivery bonds, was necessary to prevent the assets from being taken to *pay those debts; and, therefore, they had no opportunity to make a defence at law, except in the first suit, and consequently, had no remedy but in equity. I, therefore, thifik, that the injunction ought not to have been dissolved, until an account had been taken of the legal assets of their testator, which came to their hands, and of the debts of superior dignity to those sought to toe injoined, and of which the appellants had such notice as would have given them priority to the judgments in the bill mentioned; and also, an account of such debts of equal dignity, which the appellants, in a due and legal course of administration, had a right to pay off and discharge, and over which the appellees had obtained no legal priority, at the time of such payment.

The decree must, therefore, be reversed1, with costs, the injunctior' re-instated, and the cause remanded to have an account taken, according to the above principles, and proceeded in to a final decree.

The following was entered as the decree of the court:

The court is of opinion, that the injunction in this case ought not to have been dissolved, until an account had been taken of the legal assets of the testator which came to the hands of the appellants, and of the debts of superior dignity to those sought to be injoined, and of which they had such notice as would have given those debts priority to the judgments in the bill mentioned; and also, an account of such debts of equal dignity, which the appellants, in a due and legal course of administration, had a right to pay off and discharge, and over which the appellees had obtained no legal priority, at the time of such payment.

The decree is, therefore, reversed, with costs, the injunction re-instated, and the cause remanded to have an account taken according to the above principles, and to be proceeded in to a final decree. 
      
       Ante, p. 421.
     
      
      Jtjdgb Cabtsll did not sit in this cause.
     
      
       See Appendix, No. 2.