#### *William Swift and Benjamin F. Hunt vs. Executrix of*Miles, *Executors of Ball, Saunders Glover and William T. Raynal.*

Where an administrator misapplied the funds of his intestate by applying them to the payment of simple contract debts, when there were specialty debts unpaid, and afterwards, on a bill for partition of the realty, to which the administrator was a party, a part of the proceeds of the realty was reserved, in the hands of the master, for the payment of the specialty debts; *held,*on the fund thus reserved, falling short of paying the specialty debts, that the administrator was guilty of a *devastavit,*and that his sureties were liable, although the sum reserved out of the proceeds of the realty was larger than the sum misapplied by the administrator.

In a suit by distributees against an administrator for partition and account, it is the duty of the administrator to represent the creditors, and see that their debts are provided for; and the court will never order distribution when it is brought to their notice that the fund is necessary for the payment of debts.

*Before*Johnson, Ch. *at Charleston,*

*June,*1844.

*The Chancellor.*The late William Rouse died in 1829, intestate, and administration of his estate was granted to the defendant, Raynal, and the complainants were sureties to his administration bond. The whole personal estate was sold, and netted about $4230. The expenses of the last sickness, *&c.,*and the cost of administration, including the administrator’s com* *148missions, amounted to about $497, leaving a balance of $3733, applicable to the payment of debts. The defendants, the exec-' utors of Miles, the executors of Ball, Saunders Glover, and the Bank of South Carolina, were, severally, bond creditors of the intestate, to the amount of $5333, but their demands were resisted, and suits were brought against the administrator, which ended, after a tedious and expensive litigation, in 1832, by judgments against the administrator. The simple contract debts, exclusive of those before mentioned, amount to about the sum. of $3682, which were paid by the administrator, pending the suits on the bonds, leaving in his hands a balance of about $51 of the proceeds of the personal estate.

In 1830, a bill was filed by the heirs of the intestate, for partition of his real estate, and on the 22d of May of that year, an order was made, that, for the purpose of making partition, *the*estate should be sold by the commissioner of the court, and that he should take an account of the personal estate which had come to the hands of the administrator, and of his disbursements. And it was further ordered, that he should also take an account of the debts of the intestate, which should be rendered within the period of one year, as prescribed by law, and after making due provision for the payment of the same, he should report the amount remaining in the hands of the administrator, liable to distribution.

On the 21st May, 1831, the commissioner reported, that he had sold the real estate, the net proceeds of which amounted to $12,660.28 ; that there remained in the hands of the administrator a balance of $51.75, derived from the personal estate ; that he had been unable to obtain an accurate statement of the debts against the estate, as they were chiefly in suit, and the subject of much litigation. But that he had retained in his hands, from the sales of the real estate $3766.67, that being regarded by the administrator and the other distributees as fully sufficient to pay the debts ; and the balance of the proceeds of the real estate have been distributed amongst the next of kin of the intestate.

The whole of the sum reserved has been paid out by the commissioner, rateably, amongst the bond creditors ; and it will be observed, by referring to the statements before made, that it fell considerably short of paying them in full, and the defendants severally brought actions at law against the complainants, the sureties to the administration bond, to recover the balance remaining due to them, the administrator himself having become insolvent, and removed out of the State. Defendant, Glover, has *149obtained a judgment, and the amount was paid by the complainants, on a *ca: sa.*issued against them, and the other suits are still pending. The bill prays, that Glover may be decreed to refund the money he has received, and that the other defendants may be restrained from the further prosecution of their suits at law.

The defence rests on the ground, that the defendants, as preferred creditors, were entitled to be paid out of the personalty, and the administrator having applied these to the payment of simple contract debts, he and his sureties are responsible, and that, therefore, the defendants are not bound to look to any other source for payment. To this, it is replied, that the bond creditors (the defendants,) have received out of the sales of the realty, *by the procurement*of the administrator, a sum greater than the amount of the personalty, and, therefore, the defendants are not liable.

James W. Gray, then the commissioner of the court, who made the report before referred to, and who retained the money, on his examination in this cause before the master, testified that complainant, Hunt, was present when the account, on which that report was made up, was-stated, and that in ascertaining the shares of the distributees, the personal and real estates were united, and that the administrator was charged with the whole amount of the personalty, ($4230.50,). and credited with the amount disbursed, in full, thus balancing the amount of the personalty ; that the sum retained by the witness to pay debts, was at the instance of the administrator, and the amount predicated on calculations made by the administrator and the complainant, Hunt.

The disbursement of the proceeds of the personalty, in payment of simple contract debts before the bond debts were paid, was clearly a misapplication of them, which rendered the administrator and his sureties liable for the amount so misapplied ; but I apprehend,' that it is equally clear that that liability is fully discharged, if the administrator has provided and applied to the bond debts a sum equal in amount, without reference to the source from whence it was derived; and the case resolves itself into the question, whether the sum reserved by the commissioner is to be regarded as a sum set apart to reimburse the administrator for the money *advanced*in the payment of simple contract debts; or, as is insisted by the defendants, was intended, in aid of the personal assets, to pay their demands.

The defendants were not parties in the proceedings in parti*150Sion, nor were they present or represented at the time the calculations were made, on which the amount reserved was ascertained. The administrator had not, in that character, any thing to do with the proceeds of the real estate, and was not authorized to represent the defendants, but he was entitled to be reimbursed out of it the amount which he had disbursed in payment of simple contract debts, because he was liable for it to the specialty creditors, -and it will not be supposed that he volunteered to protect the defendants, and leave himself and his sureties to suffer loss. It may well be supposed, however, that he said to the distribu-tees, *“*I have misapplied the funds to the payment of simple contract debts, and am personally liable to the bond creditors. The real estates are equally liable to both. I, therefore, desire that you will consent that the commissioner shall retain in his hands a sum sufficient to cover my responsibility.” Such a proposition could not have been resisted, and judging from,alI the circumstances, this, I think, is the necessary and inevitable conclusion. But the evidence of Mr. Gray is conclusive. He says, positively, that the reservation was made at the instance of the administrator. I have no doubt that it was intended to reserve a sufficient sum to pay all the debts, as the estate was ample; and it was stated at the bar, and will probably be found true, that the amount was, at the time, sufficient to pay all the debts, and that the excess of the debts is the consequence of the accumulating interest and costs. But if the administrator was mistaken in his estimate of the amount of the bond debts, that cannot charge him, because he was not bound to provide for them.

The argument for the defendants, that they are entitled, to the fund because it is the proceeds of the real estate, over which the administrator had no control, cannot be sustained. The simple contract debts, which he had paid, were equally a charge on the real estate, and if he, by his greater diligence, has saved his debt, leaving an ample fund for the payment of their demands, and they have lost by their negligence, he ought not to be charged. But the defendants all obtained judgments at law against the administrator for the amount of their several demands, and it is insisted that the complainants are concluded by these judgments. This argument presents the question, whether the complainants, the sureties, can look behind these judgments, and shew that their principal was not liable.

In the earlier cases involving this question, our courts were reluctant to let in the evidence, and - in the case of *Cureton*v. *151Shelton, 3 M’Cord, 402, which was a suit at law against the sureties of an administration bond, after a decree in the court of equity against their principal, the court held that the defendants were only entitled to look into the decree for the purpose of ascertaining whether he had been charged with' any thing for which they were responsible. The *Ordinary*v. Condy, 2 Hill, 313, was also an action against the surety of an administration bond, and it was held that he had the right to oifer evidence to shew that the decree against his principal, on a bill for an account, was in part for his personal debt. All the authorities on the question, as well the English, and other American cases, as our own, are ably reviewed by Mr. Justice Harper, (the present Chancellor,) and from them he deduces the conclusion, that a judgment against the principal, in a cause to which the surety is not a party, is not conclusive, but *prima facie*evidence only against the surety, and that he will be let in to prove any thing to sfrew that he ought not to be charged; and that I now regard as the settled decision of the court.

The defendant, Glover, pleads his recovery at law against the complainants, in bar to this bill, so far as regards himself, and that defence, I think, must prevail. By referring to that case, as reported in l M’M. 381, under title of *Hunt and Swift*ads. *The Ordinary of Charleston*District, it will be found that the matters in issue in this case were directly involved in that, and that the parties were substantially the same. The subject matter was properly cognizable in that court, and all the facts adduced here were within the knowledge of *the*complainants, and then as much under their control as they are now. The rule clearly is, that this court will never examine into a judgment at law when the party has omitted or neglected to avail himself of a defence which might have protected him then.

The other defendants rely on the judgment of the law court in that case, as conclusive authority on their behalf, and if the cases were the same, I should certainly feel bound by it. In their general features they are very much the same; but the important fact proved by the witness, Gray, that the fund reserved was at the instance of the administrator, did not enter into that case, and I have already shown that the inevitable deduction from that, and the other circumstances of the case, is, that it was intended to reimburse the administrator for the funds misapplied to the payment of the simple contract debts. They differ in another respect, In the opinion of the Court of Appeals, it *152is stated that the bond creditors were parties to the proceeding in partition, and *“*were seeking to obtain payment of their debts out of the real estate, as the personal estate was exhausted from whence it might be inferred that the money was reserved at their instance, and in aid of the personal estate. No such fact appears here. On the contrary, the evidence shews that they were not parties, nor is it now insisted on. I cannot, therefore, regard that judgment as authority in the case of these defendants, in opposition to very strong convictions as to the correctness of the conclusion at which I have arrived.

It is ordered and decreed, that the bill be dismissed as to the defendant, Saunders Glover, and that complainants pay his costs. And it is further ordered and decreed, that a writ of injunction do issue perpetually to restrain the defendants, the executors of Miles, and the executors of Ball, from the further prosecution of their actions at law against the complainants, referred to in the pleadings, and that they pay the complainants’ costs out of the funds of the estates of their testators in their hands.

The defendants, the executors of Ball and the executors of Miles, appealed, giving notice of appeal as follows :

It is respectfully submitted, that the decree of the Chancellor is erroneous, inasmuch as it rests on a supposed difference in the cases of the executors of Ball and the executors of Miles, and the cases of *Hunt and Swift*ads. *The*Ordinary, and states as the difference, 1st. That Mr. Gray proved that the $3766.67, which he retained for the payment of debts, was retained by him, not under the order of Court, but at the instance, and by the orders of Raynal, the administrator. And, 2dly. That the said cases differ in another respect, viz., that in the opinion of the Court of Appeals in *Hunt and Swift*ads. *The*Ordinary, it is stated that the bond creditors were parties to the proceedings in partition, and the evidence in this case shews they were not parties. Now it is submitted,—

1. That it is immaterial what directions the administrator may have given Mr. Gray; his only authority for retaining any sum for the payment of the debts of Col. Rouse, was the order of Chancellor Harteu, made 22d May, 1830, directing him to sell the real estate of Rouse, and to make provision for the payment of the debts rendered to the administrator within a year ; and the evidence of Mr. Gray, according to its true interpretation, is simply that the amount to be retained, under the order of court *153aforesaid, was fixed at the instance of the administrator, and predicated on the statements and calculations made by himself and Col. Hunt, his counsel.

2. That it is immaterial whether the present defendants, executors of Ball and executors of Miles, were or were not parties to the proceedings in partition. They, however, were parties in the only way in which it was proper or necessary to make them parties, viz., by giving the court to understand that they were bond creditors of Col. Rouse at that time, suing in the court of law, and seeing that an order was made that their debts should bo provided for.

3. That the amount retained by Mr. Gray, under the order of court, was $3766.67, and the amount of the personalty, afterpay-ing preferred debts, according to the decree of Chancellor Johnson, was $3733, making $7499, clearly applicable to the payment of the bond debts, which amounted only to $5333, in preference to the simple contract debts ; and as it is clearly proved that the fund retained by the court has been properly applied to the payment of the bond debts, and as it is equally clear, from the evidence in the case, that the personal estate, to the amount of $3733, has been misapplied by the administrator to the payment of the simple contract debts, it follows, as a necessary consequence, that the fund misapplied by the administrator was the personalty, and constituted a *devastavit*by the administrator, which fixes his sureties.

4. That the fact stated by the Chancellor, as proved, viz., “that Raynal *advanced*the amount for the payment of the simple contract debts, and was, therefore, entitled to be reimbursed out of the fund in the hands of the master,” was not, and never could be proved, for Raynal never had the means to make the supposed advance, but, as *his*administration account shews, he received the net proceeds of the personal estate, and after notice of these very bond debts, paid to the simple' contracts $2773.21, of the said proceeds of the personalty in his hands as administrator.

5. That the debts of Glover, of Miles, and of Ball, having been established by the judgments at law as bond debts against the estate of Col. Rouse, and assets sufficient having come to the hands of the administrator, which he wasted or misapplied, fixed him with a devastavit, and is conclusive against his sureties.

6. That the case made by the present proceedings is identi*154cally the same as that made in the cases of *Swift and Hunt*ads. *The Ordinary,*decided by a full bench of the Law Court of Appeals in 1841, and is conclusive of this case.

7. That the Chancellor rests his decree, 1st. Upon the fact that Mr. Gray, the master, retained *not*under the order of Court of *2'2d*May, 1830, but by the order of Raynal, the administrator. 2dly. That Raynal *advanced*the money to pay the simple contracts out of his own pocket; neither of which allegations were true, and never could be established by competent evidence.

Grimke,,íor the appellant.

Hunt, contra.

*Curia, per*Dunkin, Cii.

The court is of opinion that this case cannot be distinguished in principle from the *Ordinary*vs. *Hunt and Swift,*1 M’M. 381.

It was held by the Court of Appeals, in the *Ordinary*vs. *Cole,*Mss. Charleston, February, 1830, that in a suit by the distribu-tees against the administrator for partition and account, the creditors of the estate are represented by the administrator; that he is bound by law to see that they are paid; and that a court of equity would never order distribution, when it was brought to their notice by the administrator, that the fund was necessary for the payment of debts.

In the case now under adjudication, the *bill*was filed by the distributees within the year from the death of *the*intestate. In the order for the sale of the real estate, made by Chancellor Harper in May, 1830, it is said to be an amicable suit. The commissioner was directed to take an account (among other things) of “ the debts which should be rendered within the period prescribed by law, and that after making provision for the payment of the same, he report the amount remaining in *the*hánds of the administrator, for distribution.” The law required the creditors to render statements to the administrator; and they were accordingly rendered. Under information derived from him, the commissioner reported that $3766.67, was sufficient to discharge them, and that from the proceeds of the real estate he had retained that sum to discharge those debts. This report was made and confirmed in May, 1831. The administrator had already misapplied the proceeds of the personalty towards the satisfaction of simple contract creditors, with notice to him, at the same time, of the existence of these specialty debts. The Chancellor places his decree on the ground that *“*the sum thus reserved by the *155commissioner must be regarded as set apart to reimburse the administrator for the money advanced in the payment of simple contract debts that “ the reservation was made at the instance of the administrator, and that- as he had thus provided and applied to the bond debts a sum equal in amount to that appropriated by him in discharge of the simple contract debts, his liability was fully discharged.”

We cannot regard the transaction in this light. The fund was neither provided nor reserved by the administrator. As is 'said in the *Ordinary*vs. Cole, it was his duty to represent the creditors and take care that their debts were paid. The commissioner was ordered to take an account of the debts as they should be rendered to the administrator,. and to report the provision to be made for their payment prior to., a distribution. The report was made on the testimony derived from the administrator, and this sum was accordingly reserved, as the report recommended, for the payment of these debts, and not to reimburse the administrator for a misapplication, as manifest when the order was passed as it is now. The effect of sustaining the decree, would be to send the specialty creditors for payment of their demands to insolvent distributees, who have been enabled to receive their funds from the custody of the court, in consequence of the neglect of duty on *the*part of *the*administrator. The sureties to *the*administration bond have no cause of complaint; for, as is said by the court, in the *Ordinary*vs. Hunt, *“*whatever was received by the creditors out of the sales of the land, diminished their liability to that extent.”

But there is another view of the testimony, which seems to place the liability of the administrator and his sureties beyond doubt. It is not pretended that the administrator disbursed any more than the fund arising from the sales of the personal estate, amounting to about $4000. But the sales of the real estate exceeded $12000. There were three distributees, the share of each amounting to $5558.21, after deducting his proportion of the amount retained for debts. But two of the distributees were indebted to the estate, J. W. Rouse $1220.61 and C. B. Rouse $6557.89. By the decretal order of the court, their share of the realty was appropriated to the extinguishment of' their debts. Raynal, the administrator, was the purchaser of the realty, to an amount exceeding ten thousand dollars; and.in settlement with the master he received from him $4055.59, pver and above his *156distributive share, thus placing in his hands that sum as applicable to the payment of the debts of the estate, in addition to the amount reserved by the master. In other words, the amount of the personalty, actually received by him, exceeded eight thousand dollars, out of which he has disbursed less than four thousand dollars.

It is ordered, that the decree of the circuit court be reversed as to the executors of Ball and the executors of Miles, and that the master take an account of the amount due on their judgments respectively, and report thereon, and that as to the defendant, W. T. Raynal, the cause be remanded to the cirduit court.

Johnston, Ch. concurred.

Johnson, Ch.

The fact that J. W. and C. E. Rouse were indebted to the intestate, and that these debts constituted a part of the personalty, was not brought to the notice of the circuit court at the hearing. In not applying that fund to the payment of debts, the administrator was guilty of a devastavit for which his sureties are liable.