Case ID: sc-eq_26/html/0263-01.html
Source: Caselaw Access Project
Author: {"author": "Dunkin, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John Boyce, Adm'r vs. W. W. Boyce and others.
    under a bill to marshal assets, filed by an administrator, the estate, real and personal, of the intestate was ordered to he sold by the Master, and creditors were enjoined from proceeding at law. A creditor, who had come in and proved his debt, had certain lands of the intestate levied on and sold under his Ji. fa. at law, and purchased them himself. Near eight years afterwards, a supplemental bill was filed, to set aside the sale, and it was so ordered :• — Held, that defendant, the creditor, must account for rents and profits from the time of his purchase,
    where a bill to marshal the assets of an intestate is filed, any creditor who comes in and proves Ms debt under the Master’s notice, becomes a party to the decree, an actor in the proceedings, and is entitled to any order to speed the cause or carry the decree into successful execution.
    This cause was first heard at Charleston, March, 1851, before Wardlaw, Ch., who made the following decree:
    Waudlaw, Ch. Of the voluminous pleadings in this case, a brief abstract may suffice for the questions now presented for decision.
    The plaintiff filed his original bill, July 2, 1840, alleging that the personal assets of his intestate were greatly inadequate to the payment of the debts, and had been applied by him, as administrator, towards this end, so ■ far as he could proceed safely — that the real estate was under' mortgages to a large amount — that certain creditors had obtained judgments against him, and others had instituted and threatened suits — and praying the direction and aid of the Court, in the administration of the assets, and injunction against creditors from proceeding elsewhere for the recovery of their debts. William W. Boyce, only co-heir with plaintiff of the intestate, the judgment creditors, and some of the mortgagees of the realty, were made defendants. On July 14, 1840, it was ordered by the Court, that the plaintiff account before the Master for the administration of the estate of his intestate — that the Master take an account of the real and personal estate of the intestate, and of the liens thereon, and report as to the most efficient mode of disposing of the same, and of satisfying the creditors, in the order in which they were entitled to payment out of the real and personal assets — that the Master call in the creditors, by advertisement in the Gazettes, to prove their demands before him — and that all creditors of the intestate, whether parties to the suit or not, upon notice of this decree, forbear and be restrained and enjoined from proceeding at Law, or in Equity, or otherwise than therein provided, for the recovery of their debts; with leave to creditors to apply for the suspension or modification of the order. On July 25, 1840, after this decree for account and injunction, and with notice thereof, E. P. Starr, for Starr <fc Howland, took judgment in the City Court of Charleston, against the administrator, for the debt of the firm against the intestate. On January 29, 1841, the Master made a report upon the debts of the intestate, and among these included the debt of Starr & Howland, which was produced to him and proved by the attorney who had conducted said suit in the City Court; and his report was confirmed, and the Master was ordered to sell the real and personal estate of the intestate, and apply the proceeds of sale to the payment of the debts, according to their legal priority. Various reports were afterwards made by the Master, excusing the non-execution of the order of sale; and other directions for sale were given him by the Court. Afterwards E. P. Starr procured an execution, fieri facias, founded on the judgment of the City Court, to be levied on certain lots of intestate, and on July 5,1842, after explicit notification of the decree of this Court for account and injunction, procured these lots to be sold by the Sheriff, and purchased the same for the price of $80, being about the one two hundredth part of their value, took possession of them, and has ever since received the rents and profits. On April 29,1850, plaintiff filed his supplemental bill against Starr and others, reciting the proceedings of the original bill, and excusing his acquiescence in Starr’s possession, by the statements of his absence from the State, and his trust in the learning and energy of his counsel, to be stimulated, as he supposed, by the interested oversight of his brother and co-heir, and praying, among other things, that Starr should deliver possession of the estate purchased by him, and account for the rents and profits. To this bill Starr demurs, on the ground that plaintiff, as administrator of the goods, chattels and credits, has no right to implead him as to the real estate; and pleads that he is in possession of the lots aforesaid by legal title, namely, by purchase of the whole at Sheriff’s sale, under fi.fa., and by purchase of a mortgage of one portion thereof, and that this Court has no jurisdiction to try the titles to lands. The case comes before me upon this demurrer and this plea. I have much less difficulty as to the proper judgment on the points presented, than in expressing the reason for the judgment, without indicating opinions on matters which should be reserved for future adjudication. It is safer that my reasoning at this time should be in brief, perhaps inconsequent, than that I should seem to prejudge the grave matters in the case which remain behind.
    1. As to the demurrer. The administrator with us, although peculiarly charged with the goods, chattels and credits, represents to .some extent the real estate and the heirs: for on a judgment against him the land of the intestate may be sold, as in fact it was in the present case. Under the operation of the statute of Geo. 2, of force here, lands are liable, equally with personalty, for the debts of the deceased, and may be regarded as legal assets, in the hands of the administrator. In England, bills of conformity, as they are called, by an executor or administrator of an insolvent estate, for the directions of the Court, in the administration of the assets, are not very usual, nor much encouraged, (Story Eq. § 544 ; Brooks vs. Reynolds, 1 Bro. Ch. R. 183); but with us, from the equal liability of real estates for debts, and from the indisposition of Courts to spur creditors in the race for diligence, they are common and favored. Our procedure is well justified in Thomson vs. Palmer, 2 Rich. Eq. 35. “ Such a bill is not known to the English practice ; but it has been long established among us, is well known to every member of the profession, and is too wholesome to be abrogated. Among us, the real estate as well as the personal estate, is liable for the debts of the deceased ; but no order for the sale of the former, in aid of assets, can be obtained, except in this Court. It is manifestly for the benefit of all parties, when this is necessary, that the whole of the funds should be brought together, and all the creditors brought in, and that the estate should be administered in one suit. This practice adjusts conflicting claims without prejudice to the trustee, and without injury to any party, and prevents unnecessary litigation. Where the executor files such a bill, the practice is to selecl-pne or two of the principal creditors as defendants; and to bring in the others by an order. None of them need answer except when specially required,” &c., “ but all are enjoined, either by an order, or by injunction issued in conformity to an order obtained, from suing elsewhere.” This extract is so explicit, and so convincing, as to supersede the necessity of much remark upon either demurrer or plea. In the case under consideration, the administrator has exhibited a proper case against heirs and creditors, for the administration of 'the whole estate in one suit, under the direction of this Court.
    2. Then as to the plea. This Court does not undertake to try the legal title to lands, except as incidental to matters of equitable cognizance; but it does undertake to determine whether the legal title has been honestly acquired, and may be honestly exerted. It may relieve against a legal title acquired by fraud, accident or mistake ; or it may impress upon a legal proprietor, against his will, under equitable circumstances, the character of a trustee; or it may inhibit the unconscientious use and employment of any legal advantage. Without improperly dwelling on the circumstances of this case, it is enough to say that there is such suspicion thrown upon the transactions of the defendant, Starr, in acquiring his title, as to justify full investigation. A plausible case is made against him, requiring explanation on his part, of his disregarding the decree of this Court, which should have bound him as it did others, and of his bu3Úng up, at a sacrifice that startles* common sense and justice, the assets which the Court had undertaken to administer. In the answer supporting his plea, he denies that a writ of injunction was served upon him, but he does not deny notice of the decree for account and injunction; he denies that he authorized his attorney to present his demand for proof, before the Master, but he does not deny his employment of this attorney to collect this demand, with general authority to pursue any mode that might seem proper, in his skill and discretion; nor -that after notice he acquiesced in the particular mode of collection pursued by his attorney. The bill, so far as it is not contradicted by the plea, must be assumed to be true, in judging of the validity of the plea. Mitf. 300. If the defendant cannot be protected in his legal title, he is liable, as a matter oí course, • for rents and profits. Martin and Walter vs. Evans, 1 Strob. Eq. 350. I am of opinion the defendant must answer the case made against him. It is ordered and decreed, that the demurrer and plea of the defendant, E. P. Starr, be overruled, and that said defendant make full answer, according to the practice of this Court.
    At March sittings, 1852, the cause was heard before Johnston, Ch,, who made the following decree:
    Johnston, Ch. This case coming up for a hearing, and the bill, answers, previous orders and decrees, as also the report of the Master and the testimony taken before him having been read and considered : it is, on motion of complainant’s solicitor, ordered and decreed, that the purchase of the premises in Society-street, (described in the pleading,) by Edwin P. Starr, be set aside, and that he do deliver forthwith the possession of the same to James T upper, one of the Masters of this Court; and that he, Edwin P. Starr, account before said Master for the rents and profits of said premises, from the time of his purchase and taking possession thereof.
    It is further ordered1 and decreed, that the said Master do sell at public auction the said premises, on terms to be fixed by his discretion, and he also report upon the existing debts of, and liens upon, the intestate’s estate, and how, in what proportions, and in what order, they are entitled to claim the proceeds of the re-sale and of the rents and profits.
    The defendant, Edwin P. Starr, appealed from so much of his Honor, Chancellor Johnston’s decree, as directs the account of rents and profits to be taken from the .time of the defendant, Starr’s, purchase and possession.
    1. Because the account of rents should not go farther back than the filing of the bill.
    2. Because the account of rents should not go farther back than four years prior to the filing of the bill.
    
      Memminger, for appellant.
    
      Cunningham, for plaintiff.
   The opinion of the Court was delivered by

Dunkin, Ch.

The defendant has, very properly, made no appeal from so much of the decree, heretofore pronounced, as set aside his purchase of the premises in Society-street, and declared him liable for the rents and profits. But it is insisted, that the account for rents and profits should not be carried beyond the time of filing the bill, or, at farthest, beyond four years prior thereto. Generally, it cannot be questioned that a party is responsible for the use of property which does not belong to him, and of which he has unlawfully obtained possession. On the other hand, in administering relief against a party who has acted under ignorance or mistake, and in favor of a party who has been supine or negligent, this Court exercises a discretion in relation to the account, which is necessarily modified by the circumstances. The rule declared in Rowland vs. Best, 2 McC. Ch. 320, has been repeatedly recognized. “It is not an uncommon case for a party who lies by and permits another to occupy and enjoy property as his own, under an apparent good title, which he might and ought to have brought into discussion much earlier, to be restricted in his demand for an account of rents and profits, to the filing of the bill, or four years before.” ■

The argument insists that the defendant is entitled to the benefit of this modification. The ground, upon which the decrees heretofore pronounced the defendant’s purchase invalid, was, that he was a party to the decree of July 14, 1840, and that his subsequent proceedings in the City Court were in violation and contempt of the injunction thereby ordered. His possession, therefore, under the Sheriff’s sale, was tortious in its inception. But it is said there was laches. It appears to the Court that this argument proceeds from a misapprehension of the character of the proceedings, and of the decretal orders of 1840 and 1841. The bill was to marshal the assets, real and personal. The settled doctrine,” says Chancellor Kent, Thompson vs. Brown, 4 Johns. Ch., 643, “ is that the decree to account, in such cases, is for the benefit of all the creditors, and in the nature of a judgment for all. All are entitled. And from the date of such decree an injunction will be granted to stay all proceedings of any of the sreditors at law.” “ The establishment of this doctrine and practice,” adds he, “ is to be traced back to the decisions of Lord Hardwicke, Lord Camden and Lord Thurlow.” The decree, therefore, of July, 1840, was for the benefit of all the creditors, and in the nature of a judgment for all. Every creditor who came in and proved his debt under the Master’s notice, became a party to the decree, an actor in the proceedings, and was entitled to move for any order to speed the cause, or carry the decree into successful execution. It has been definitively settled that the defendant presented and proved his demand under the decree, and became thereby just as much an actor in the cause as the original complainant, oí-as any other creditor situated similarly with himself. If the estate was insolvent, and had been surrendered to the control and disposition of the Court, it might well be expected that thenceforth the creditors would be most diligent in stimulating the action of the Court. If proceedings under the decree were unreasonably protracted or suspended, the delay is not more chargeable upon one than another of those who were entitled to expedite them, not more to any other creditor than to the defendant: and it is not unlikely that the irregular proceedings of the defendant-, in the levy and sale of July, 1842, may have created obstacles in carrying into effect the decretal order of sale made by the Court, which did not previously exist.

This Court perceives no error in the decree of the Chancellor, and the appeal is dismissed. «,

Joi-instoN, Dargan and Wardlaw, CC., concurred.

Appeal dismissed.