#### *Stephenson v. Taverners.

July Term, 1852,

Lewisburg.

i. Principal and Surety — Principal Dead — Rights ol Surety — Bill Quia Timet — Parties.*—A surety, whose prlucipal-is dead, may file a bill *quia timet*against the creditor and the executor of the debtor, to compel the latter to pay the debt so as to exonerate the surety from responsibility. He may enforce for his exoneration any lien of the creditor on the estate of his principal, and may bring any suit in equity which the creditor could bring, for a settlement of the administration account on the estate of the deceased, and for the administration of the assets, whether legal or equitable; but the "creditor must be a party that he may receive ’the money when it is recovered.

2. Creditors’ Bill — narshaiing†—Administration of Assets— Parties‡ — Amending Bill.§ — A bill to marshal assets and for their administration, should be on behalf of the plaintiff and all other creditors, and the heirs and devisees of the testator should be parties. But if the proper parties are not made, the bill should not be dismissed; but the plaintiff should have leave to amend and make the proper parties, unless a decree for an account had been made in some other creditor’s suit having the same object.

3. Same — Consolidation of Suits.ǁ — If several suits are pending by different creditors, the court will order the proceedings in all the suits but one to be stayed, and will require the several parties to *183come in under the decree in said suit, so that only one account of the state may be necessary.

4. Same— Separate Suit — Costs.¶—A creditor, who with knowledge that there has been a decree for an account in another creditor’s suit, brings a separate suit, for his own claim, will be compelled to pay the costs.

5. Same — Decree for Account — Effect.**—A decree in one creditor’s suit for an account, operates a suspension of all other pending suits of creditors; and they must come in under the decree.

*6.*Same —Several Suits Pending — Order of Making Decree.†† — When several creditors’ suits are pending, the decree may be made in the cause first ready for a hearing, though that is not the first suit brought.

This was a suit instituted in May 1845, in the Circuit court'of Wood bounty by John Stephenson against Thomas and Franklin Taverner. The bill charges that Charles R. Baldwin, late of the county of Wood, died in 1839. That he was indebted by account to Stephenson,' Neale & Co., of which firm the plaintiff was a *partner, for several hundred dollars. That by his will he appointed the plaintiff and Thomas Taverner, the latter of whom was his father in law, his executors, both of whom qualified as such: That Thomas Taverner took almost exclusive charge of the estate, and performed almost every executorial act that was done without consulting the plaintiff, many if not all of which acts were irregular; and for a detail of which he referred to a bill filed in the same court and then depending by J. J. Jackson against said Taverner. That Taverner in managing said estate had made it out insolvent.' That Baldwin in his lifetime, had purchased a lot in Parkersburg of M. F- Holliday, for which he executed his note, with the plaintiff and S. C. Shaw as his sureties, in the sum of 155 dollars and 75 cents, payable on the 1st of September 1839; that this note had been assigned to J. F. Snodgrass, and by him was assigned in May 1841 to Franklin Taverner, the son of Thomas Taverner; and he charged that this was in fact a payment of the note by his coexecutor Thomas Taverner. That such was plaintiff’s understanding, and thus the matter stood until December 1843, when a writ was served upon him in the name of Holliday suing for the benefit of Burnett, Withers & Co., demanding this debt. That Franklin Taverner was active in transacting the business for his father, and plaintiff has no doubt the note was taken from Snodgrass in good faith at the time as paid; and that this subsequent proceeding was a pretence; the firm of Burnett, Withers & Co., not being known in that country.

The plaintiff further charged that Thomas Taverner had sold the testator’s land in Ohio, made settlements with the court, and done divers other acts without the plaintiff’s concurrence, and had not given him any commission; had not permitted plaintiff to retain his own debt as he had a right to do, and had preferred creditors without plaintiff’s concurrence, and to his injury. *That plaintiff reluctantly consented to the sale of the real property mentioned in Jackson’s bill, which Baldwin,had purchased of Snodgrass in the town of Parkersburg, but that he understood the terms of the sale wholly different from Taverner. The plaintiff understood the sale to be subject to the vendor’s lien : that the estate was to be credited with the proceeds of sale and the purchaser was to state the property subject to the incumbrance: on any' other supposition the price was grossly inadequate, and the sale for cash utterly indefensible. That the will of Baldwin which subjected all his estate to the payment of his debts and authorized his exec-, utors to sell, constituted that estate equi*184table assets to be distributed ratably, which Taverner had wholly disregarded. That plaintiff was entitled to be substituted to the rights of Holliday as to his debt, if the court should be of opinion that the debt had not been paid. That Thomas Taverner had sold the lot purchased of Holliday to his son Franklin Taverner, to which sale plaintiff had not assented, and that it had not been sold for the best price. Thomas and Franklin Taverner, Holliday, Shaw, Neale and Hogan are made defendants to the bill, and are called upon to say whether the debt to Holliday had not been paid. And the prayer of the bill is, that the executorial accounts may be resettled; that plaintiff may have a decree for his account, and be indemnified for his said suretyship. That all the lands sold by Thomas Taverner may be resold; and the proceeds equally distributed. That the judgment of Holliday for, &c., against him may be enjoined; and for general relief. The injunction was granted.

The defendants Thomas and Franklin Taverner, filed separate answers to the bill. Thomas Taverner demurred for want of equity, and also for want of proper parties. He said that as the plaintiff had referred to the bill of John J. Jackson, he referred to and relied *upon his answer filed in that suit, and the exhibits there referred to; and he filed copies of the answer and exhibits which he relied upon as clearly showing that he had fairly and legally administered the estate of Baldwin which had come to his hands. He admitted that he took the almost exclusive control and charge of the estate, with the consent of the complainant; but that in the sales of the real and personal estate of Baldwin he consulted with and had the concurrence of the plaintiff, as was evident from deeds executed by the plaintiff jointly with the respondent, of which he filed copies with his answer. These deeds, he said, shewed the character of the sales and the purpose for which they were made, especially the deed made to Franklin Taverner for the property purchased of John F. Snodgrass. That all complainant ever did in the premises was to consent to the sales and sign the deeds; and defendant submitted to the court whether that entitled complainant .to commissions.

The defendant denied that he ever was the owner of the judgment in the name of Holliday for the use of Burnett, Withers & Co., against complainant and S. C. Shaw, or the single bill on which it was founded; nor did he know that complainant and Shaw were the sureties in said single bill until a few months before the suit was brought. That security having been given for the purchase money the vendor’s lien ceased, and therefore complainant could not be substituted to a lien which did not exist, and especially unless he had first paid the money for which he claims substitution.

The defendant insisted that the sales of all the real estate were fair and at adequate prices; at least they were the best prices that he could obtain: and he therefore denied the right of the court to disturb the settlements or set aside the sales. He knew nothing of the justice of the account in favor of Stephenson, Neale & Co., and called for proof. But if it was correct, *complainant could not enforce the collection of it in this mode of proceeding and in his own name. That as to the real estate in Ohio it was sold under the decree of the court of the state of Ohio, which decree was in full force; and he relied upon said decree as conclusive as to the said real estate.

Franklin Taverner referred to the answer of Thomas Taverner so far as it referred to matters in which Franklin was concerned. He denied that he was active in settling up the executorial accounts of Baldwin’s estate; though it was true he aided his father in adjusting some of the accounts. He said that the single bill on which the judgment was obtained against complainant and Shaw was purchased by himself out of his own means and exclusively for himself; and that Thomas Taverner had nothing to do with said purchaser, and that he had no interest in the judgment. That respondent being indebted to John F. Snodgrass, assigned the single bill to him, and that he instituted the action thereon for the use of Burnett, Withers & Co. : he having done business for them, took the liberty of using their names, though the money, in fact, when collected, belonged to him. He also relied on his answer and the answer of Thomas Taverner in the suit of John J. Jackson.

At the September term 1846 the plaintiff amended his bill and charged that there was an agreement, either in writing or by parol, by which Franklin Taverner was to take the property and pay the Snodgrass debt, let the property sell for what it might, and yet that Thomas Taverner had charged the estate of Baldwin with this debt. This agreement was expressly denied by both Thomas and Franklin Taverner; and there was no proof of it; nor was there any proof to sustain the charges in the original bill of complicity between these parties in the sale off the property purchased by Franklin Taverner. The only *evidence of the account stated in the bill to be due to Stephenson, Neale & Co. is that stated in the bill.

The cause came on to be heard in October 1849, when the court dissolved the injunction and dismissed the bill with costs, but without prejudice to any right the complainant might show himself entitled to retain as executor of Baldwin, or to show assets belonging to the estate of his testator. From this decree Stephenson obtained an appeal to this court.

B. H. Smith, for the appellant, and Fry, for the appellees, submitted the case.

*

Principal and Surety — Rights of Surety. — No principle in equity jurisprudence is better settled than that a surety is entitled to enforce every security for the debt which the creditor has against the principal debtor; and therefore a mortgage or other security taken by the creditor must be dealt with in good faith and held in trust, not only for the creditor's. security, but for the surety’s indemnity. And this right of the surety stands not upon contract, but upon principles of natural justice. Penn v. Ingles, 82 Va. 71, citing the principal case, and Meade v. Grigsby, 26 Gratt. 612. But the surety can enforce for his exoneration only such security as the creditor has against the principal. Barton v. Brent, 87 Va. 390, 13 S. E. Rep. 29, citing the principal case.

In Neal v. Buffington, 42 W. Va. 329, 26 S. E. Rep. 173, the principal case was cited to the point that before the surety has paid anything on the debt of' his principal he is entitled, the debt being due, to come into equity, by bill *guia timet*against the creditor and debtor and compel the debtor to make payment so as to exonerate himself from responsibility. On the subject of Bills Quia Timet, see mono-graphic *note*on “Bills Quia Timet" appended to Devries & Co. v. Johnston, 27 Gratt. 805. As to the rights of sureties, see the principal case also cited in William & Mary College v. Powell, 12 Gratt. 391.

In Watson v. Wigginton, 28 W. Va. 575, the court, speaking through Green, J., said; “In no case, which I have seen, has the right of a surety to come into a court of equity to compel the creditor to make his debt out of the principal debtor been laid down more strongly and in a more unqualified manner than by Judge Moncure in *Stephenson v.*Taverners, *9 Gratt. 404 et seq.,*and I must say, that I should, as at present advised, be disposed to qualify his language somewhat; but I do not deem it necessary to do so as its adoption wopld not vary the conclusion, which must, I think, be reached in this case; and perhaps a thorough investigation of the subj ect might show, that his language ought not to be qualified." The principal case was distinguished in this same opinion at page 577.

†

Marshaling Assets. — In McCrum v. Lee, 38 W. Va. 595, 18 S. E. Rep. 761, the principal case was cited, among others, to the point that a court of equity, in a proper case, will compel a creditor having a lien on two parcels of property so to enforce it as not to injure the rights of him who has a lien on but one of them.

‡

Creditors’ Bill — Administration of Assets — Parties.— A creditor has a right to bring a suit for his claim against his deceased debtor’s estate but he should bring it for himself and the other creditors. Ewing v. Ferguson, 33 Gratt. 558, citing the principal case. See monographic *note*on “Creditors’ Bills” appended to Suckley v. Rotchford, 12 Gratt. 60.

§

Chancery Practice — Amending Bill. — See principal case cited in Holland v. Trotter, 22 Gratt. 139; *footnote*to Parrill v. McKinley, 9 Gratt. 1; Yates v. Law, 86 Va. 123, 9 S. E. Rep. 508. For furtheriuformation, see monographic *note*on “Amended Bills" appended to Belton v. Apperson, 26 Gratt. 207.

ǁ

Creditors’ Bill — Consolidation of Suits. — See the principal case cited with approval in Sexton v. Patterson, 1 Va. Dec. 556; Harvey v. Steptoe, 17 Gratt. 304: Saunders v. Griggs, 81 Va. 515; Paxton v. Rich, 85 Va. 381, 17 S. E. Rep. 531; Beach v. Woodyard, 5 W. *183Va. 233; Bell v. List, 6 W. Va. 474. See principal case distinguished in Barger v. Buckland, 28 Gratt. 868; Patterson v. Eakin, 87 Va. 54, 12 S. E. Rep. 144. See monographic *note*on “Creditors’ Bills” appended to Suckley v. Rotchford, 12 Gratt. 60.

¶

Creditor’s Bill — Separate Suit — Costa.—If a creditor with knowledge that there has been a decree for an account in another creditors’ suit brings a separate suit for his own claim, he will be compelled to pay the costs. Laidley v. Kline, 23 W. Va. 565, citing the principal case, and Kent v. Cloyd, 30 Gratt. 555. See also, monographic *note*on “Costs” appended to Jones v. Tatum, 19 Gratt. 720.

**

Creditor’s Bill — Decree for an Account — Effect.—The settled rule, in respect to a creditors’ suit for the administration of assets of a deceased debtor, is that a decree for an account of outstanding debts operates a suspension of all other pending suits of creditors, who must come in under the decree which is treated as a decree in favor of all the creditors. Paxton v. Rich, 85 Va. 381, 7 S. E. Rep. 531; Kent v. Cloyd, 30 Gratt. 561; Hurn v. Keller, 79 Va. 418; Beverly v. Rhodes, 86 Va. 417, 10 S. E. Rep. 572; Woodyard v. Polsley, 14 W. Va. 219; Laidley v. Kline, 23 W. Va. 571; Craig v. Hoge, 95 Va. 281, 28 S. E. Rep. 317, all citing the principal case. And it is only where a decree for an account of debts against the estate of a decedent is made in a suit Cor the administration of the assets, that the pendency of the suit operates a suspension of all other pending suits of creditors having the same object in view. Robinson v. Allen, 85 Va. 724, 8 S. E. Rep. 835, citing the principal case. Until a decree for an account, each creditor has control of his own suit, and he may dismiss it, if he thinks proper. Piedmont, etc., Ins. Co. v. Maury, 75 Va. 512; Craig v. Hoge, 95 Va. 281, 28 S. E. Rep. 317, both citing the principal case.

See monographic *note*on “Creditors’ Bills” appended to Suckley v. Rotchford, 12 Gratt. 60.

Same — Same—Statute of Limitations. — In Craufurd v. Smith, 93 Va. 630, 23 S. E. Rep. 235, the principal case was cited to the point that, in a creditors’ suit, when a decree is entered to take an account of the debts against the estate of the decedent, the statute of limitations ceases to run against the creditors of the estate. See principal case also cited in *foot-note*to Ewing v. Ferguson, 33 Gratt. 548; Paxton v. Rich, 85 Va. 381, 7 S. E. Rep. 531. See also, in accord, Harvey v. Steptoe, 17 Gratt. 290, and *foot-note.*

††

Creditors’ Bill — Several Suits Pending — Order of flaking Decree, — See principal case cited with approval in Robinson v. Allen, 85 Va. 724, 8 S. E. Rep. 835. See also, monographic *note*on “Creditors’Bills” appended to Suckley v. Rotchford, *12*Gratt. 60.

MONCURE, J.,

delivered the opinion of the court.

The charge in the appellant’s bill that the note of Baldwin to Holliday, in which he was a surety, and which was assigned to the appellee Franklin Taverner, had been paid *185by the other appellee Thomas Taverner, coexecutor with the appellant, of said Baldwin ; and all the other charges in the bill tending to implicate the said Franklin, or subject him to liability on account of any of the claims therein asserted, being denied in his answer and unsustained by the evidence, it was therefore proper to dissolve the injunction and dismiss the bill as to him.

In regard to the claim of the firm of Stephenson, Neale & Co., of which the appellant was a partner, asserted in the bill, the account is not in the record, though professed to be exhibited; the amount is not stated in the bill except vaguely as amounting to several hundred dollars; the other members of the firm were not made parties to the suit; the appellee Thomas Taverner denied any knowledge of the justice of the claim and called for proof thereof, and relied on the act of limitations, and objected that the other members of the firm were not parties; and there is no evidence in the record to sustain the claim, except that*in “a list of claims, due and unpaid, against the estate of Charles R. Baldwin deceased,” which appears to have been exhibited by Thomas Taverner, is an “account in favor of J. Stephenson & Co., amount not known,” which may have been the claim in question. The bill was therefore properly dismissed as to that claim, without prejudice however, as the dismission in effect was, to any proceeding which may be properly instituted in the name of the said firm for the recovery of said claim.

In regard to the claim of the appellant to a part of the commission charged by Thomas Taverner as executor of Baldwin, it is charged in the bill and admitted in the answer that Thomas Taverner took almost the exclusive charge of the estate, and did almost all the business connected with the administration thereof. He appears to have received all the money of the estate that was received. There is no evidence in the record to show whether the appellant is entitled to any, and if any, what part of the commission. His claim for it, if he have any, is a personal claim against his coexecutor, and could not be asserted in this suit for the recovery of claims against the testator, withottt rendering the bill multifarious and liable on that ground to be dismissed. It was therefore proper to dismiss the bill as to that claim.

In regard to the remaining claim, to wit, the claim of the appellant to have the debt to Holliday, for which he is bound as suretlypaid out of the estate of Baldwin, the principal debtor: when the suit was brought, the appellant had not paid the debt, and probably has not yet paid it. But he is entitled nevertheless, the debt being due, to come into equity by a bill quia timet, against the creditor and the debtor, and compel the latter to make payment of the debt so as to exonerate himself from his responsibility. Story’s Eq. Jur., § 327, 639 and 849. He may enforce *for his exoneration, *s.ny*liens of the creditor on the estate of the principal; and if the latter be dead, may bring any suit in equity which the creditor could bring for a settlement of the administration account of the estate of the decedent, and for the administration of the assets, whether legal or equitable. The only difference is that he must bring the creditor into court along with him, in order that he may receive the money when it is recovered. The appellee therefore had a right to bring this suit for the recovery of this claim. He ought to have brought it, not only for himself, but for all other creditors of Baldwin, who might elect to become parties, and contribute to the costs of the suit. His object was not only to have an account and payment in a course of administration, but to have the assets marshaled if necessary, and the equitable assets, if any, apportioned pari passu among all the creditors; and all the creditors were necessary parties, at least in that general way. 1 Story’s Eq. Pl. § 99. The creditor who was entitled to receive the debt, for which the appellant was bound as surety, should also have been a party ; and so should the heirs or devisees of Baldwin, who were interested in the real estate, sought to be marshaled and applied as equitable assets. The suit was therefore defective for want of parties; but it ought not on that ground to have been dismissed. The appellant should have been permitted to amend his bill and make the necessary parties, unless a decree for an account had been made in some other creditor’s suit, having in view the same objects; in which case it would have been proper to have stayed or dismissed the appellant’s suit, and required him to become a party to the other suit by petition or motion, or proving his claim before a commissioner. “If several suits are depending in favor of different creditors, the court will order the proceedings in all the suits but one to be stayed, and will require *the several parties to come in under the decree in such suit, so that only one account of the estate may be necessary.” Story’s Eq. Pl. § 100, note 2; Hallett v. Hallett, 2 Paige’s R. 15; Ross v. Crary, 1 Paige’s R. 416, note a. If a creditor, with knowledge that a decree had been made in another creditor’s suit for an account of outstanding claims against an estate, should bring a separate suit for his own claim, instead of coming in under the decree, he would have to pay the costs of his suit. And where in a suit for the administration of assets, a decree is made for an account of outstanding claims against the estate, it operates a suspension of all other pending suits of creditors who must come in under the decree, which is considered a decree in favor of all the creditors. This is the settled practice of equity, dictated by the interest of all concerned and the obvious necessity of the case. When the appellant brought his suit, the bill of John J. Jackson, another creditor, for an account and administration of the assets, was pending *186in the same court; and the appellant had knowledge of the pendency of that bill, for he refers to it and makes it part of his bill. Jackson’s bill was not filed in behalf of other creditors, but as it appeared from the answer thereto at least, that there would-be a deficiency of assets, it was proper in the decree that might be made in that suit to give an opportunity to all other creditors of the testator coming in and agreeing to bear their proportions of costs, to prove their debts before a commissioner within a reasonable time, and participate so far as they . might be entitled, in the distribution of the assets. Story’s Eq. Pl. *§*100 note; 2 Paige’s R. 18; Kinney’s ex’ors v. Harvey, 2 Leigh 70. But it does not appear that any decree had been made in that suit when the appellant’s bill was filed; and until such decree, it was competent for another creditor to bring his suit; Jackson’s bill not being on its face a bill for all the creditors. Where ^several such suits are pending at the same time, it seems the decree for an account of outstanding claims “may be made in the cause which is first ripe for a decree, whether that cause was first commenced or not: and that when the decree is made in the younger suit, then the proceedings in the elder suit must be stayed. ’’ Ross v. Crary, 1 Paige’s R. 417, note (a); Jackson v. Leaf, 1 Jac. & Walk. 229, therein cited.

It follows from what has been said, that the decree of the Circuit court, so far as it dissolves the injunction or concerns Franklin Taverner, should be affirmed with costs; and so far as relates. to the partnership account claimed in the bill, and the commission therein claimed, it should also be affirmed; but in all other respects, it should be reversed with costs, and the cause remanded to be proceeded in according to the principles hereinbefore declared. The court declines expressing any opinion on the questions arising on that branch of the case in regard to which it is reversed, considering it premature to do so, as the proper parties are not before the court.

The decree was as follows:

The court is of opinion that there is no error in the said decree so far as it dissolves the injunction, or concerns the appellee Franklin Taverner, nor so far as relates to the partnership account, or the commission claimed in the bill. But the court is further of opinion that instead of dismissing the bill in other respects, the Circuit court should have permitted the appellant to amend it, and make all other creditors of Charles R. Baldwin, who might elect to become parties and contribute to the costs of the suit, plaintiffs with himself; and make the creditor entitled to receive the debt to Holliday in the bill mentioned, for which the appellant is bound as surety, and the heirs or devisees of said Baldwin, defendants; unless a decree had been ^rendered in the suit of John J. Jackson in the proceedings mentioned, or some other creditor’s suit for account and administration of the assets of said Baldwin, and for an account of outstanding claims against his estate; in which case, the appellant should have been required to become a party to any such suit, and prove his claim on account of said debt to Holliday therein; and his own suit should have been dismissed, or further proceedings therein stayed. Therefore, without expressing any opinion on the questions arising on that branch of the case in regard to which the decree is considered erroneous (deemr ing it premature to do so, as the proper parties are not before the court), it is decreed and ordered that so much of the said decree as the court is of opinion is not erroneous as aforesaid, be affirmed with costs to the appellee Franklin Taverner; and that the residue thereof be reversed with costs against the appellee Thomas Taverner, to be levied de bonis testatoris; and that the cause be remanded to be further proceeded in according to the principles above indicated.