#### *Sarah Russell*vs. *John Walker et al.*

The executor of J. TV. filed a bill against J. S., executor of A. G-., to recover a debt due by A. G-. to J. TV., and had a decree, which was satisfied by setting off against it a debt due by the executor of J. TV., individually, to *J.*S.: *Held,*that a judgment creditor of J. TV., might file a bill to obtain satisfaction of his debt, out of the funds of J. TV., in the hands of J. S.

Creditors or legatees may follow the assets of the estate which have been improperly disposed of by the executor, particularly in payment of his own. debt.

*Before*DeSaussure, Ch., *at Charleston, April,*1831.

The bill was filed by the administratrix of John Russell, who was a judgment creditor of Jane Whitesides, deceased, against *230Esther Parsons, executrix of Joseph Parsons, deceased, (who had been executor of Jane Whitesides,) and John Walker, under the following circumstances : — Angus Graham, in his life-time, was indebted to Thos. Whitesides, Jr. Thomas Whitesides, Jr., died, and left his widow, Jane Whitesides, his executrix, who pursued her claim against John Walker, executor of Angus Graham. Jane Whitesides was also the sole legatee of Thos. Whitesides, Jr. Pending the litigation, Jane Whitesides died, leaving Jos. Parsons her executor and legatee. There were no assets of the estate of Jane Whitesides, except the claim upon the estate of Angus Graham. The complainant’s intestate, John Russell, sued the executor of Jane Whitesides, and obtained a judgment for $750, but the claim against the estate of Graham, being still in litigation, there were no assets to pay this judgment.

Joseph Parsons, as the executor and sole legatee of Jane Whitesides, filed his bill against John Walker, the executor of Angus, Graham, and an account was ordered; and *by the*final report, it appeared, that the estate of Angus Graham was considerably indebted to the estate of Thos. Whitesides, Jr. But it also appeared, that Jos. Parsons became the security to the Ordinary, of one Daniel Joy, who administered upon the estate of one Charles Whitesides. Joy misapplied the funds of Charles Whitesides’ estate, and his security Parsons, became personally liable for his defalcation. John Walker, the executor of Graham, purchased the greater portion of the estate of Chas. Whitesides, and thus became, in that right, the individual creditor of Joseph Parsons. Parsons was the legatee of Jane Whitesides, and thus Walker claimed a set off of the mutual demands. Esther Parsons, who, on the death of Jos. Parsons, became his executrix, resisted this disposition, and claimed the right to administer the fund found due to the estate of Thos. Whitesides, by first paying his debts, and carrying the estate next to the credit of his legatee, and paying her debts, and lastly, by paying the debts of Joseph Parsons, according to their legal priority; and the Court, in their decree, admitted *231that such was the regular and legal course, but, without directing any inquiry, or giving any notice, decreed, that, as no claims prior to those of Walker appeared, as between the estate of Parsons and Walker, these claims should be setoff: Whereupon, the administratrix of John Russell, a judgment creditor, as before mentioned, of Jane Whitesides, filed this bill against the executrix of Jos. Parsons, and John Walker, praying that the funds of the estate of Jane Whitesides, in the hands of Walker, might be applied to pay her debts before they are appropriated to the payment of the debts of her legatee, Jos. Parsons : to which prayer the executrix of Parsons assented, but John Walker, in whose hands the funds were, pleaded the decree between himself and Parsons, as *a*bar, although the complainant was no party thereto.

The presiding Chancellor sustained defendant’s plea, and dismissed the bill.

The complainant appealed on the grounds :

Because, no Court has a right to repeal the law of the land, by which executors and administrators are bound to apply the assets of their testators’ or intestates’ estates to the payment of their lawful debts before their distribution to legatees or distri-butees.

Because, the decree in'case of Walker and Parsons, was not intended by the Court to work injustice to those entitled in preference, and may therefore be fairly construed as conditional: and the complainant, having presented a judgment against Jos. Parsons’s testatrix, is entitled to be paid in preference to Walker, whose set off is a private debt of Jos. Parsons.

Because, the creditors of Jane Whitesides, not being parties, are not concluded by the decree.

Because, all the parties now being before the Court, the assets of Thomas Whitesides, Jr., should be marshalled, and the creditors of the several estates be paid according to their legal priorities, and Walker take only as a bond creditor of Parsons,

*B. F.*Hunt, for appellant.

*232The opinion of the Court was delivered by

Harper, J.

,We are of opinion, that the decree must be reversed, and the plea overruled. The rule is familiar, that none are bound by a decree or adjudication, but parties. and privies, or those claiming under them. If A. sues B. for a specific chattel,'or a tract of land, and A. establishes his title and recovers, this is no bar to C’s. suing A. for the same chattel of land, claiming by a distinct title. It is true, that an executor, in general, represents creditors and legatees or distributees, and .they will be bound by a judgment /or or against him,-if there be no collusion. If an executor is sued for a debt, and without collusion a judgment is had against him, creditors or legatees cannot have that judgment reviewed as being erroneous. Or, if he sues a supposed debtor of the estate and fails, the same rule applies. If, in the case of Parsons against the present defendant, the decree had been,, that Parsons, as representing the estate of Thomas Whitesides, was entitled to no account against Walker as the executor of Graham ;• or if, upon an account had between them in those characters, it had been determined that nothing was due, then no doubt the present complainant would have been bound. But such was not the character of the decree. It established the right of Parsons, as representative of Whitesi/es, to an account, and on' the accounts’, being had, established a considerable amount due by Walker. It further éstablished, however, that Parsons, in his individual capacity, was indebted to Walker, and that, under an agreement between them, Walker'was entitled to set off this demand against the amount recovered by Parsons as executor of White-sides. If such an agreement appeared to the Court, no creditors of Thomas or Jane Whitesides being before them, they could do no otherwise than to give it effect. It is, as if, after obtaining the decree in his representative capacity, Parsons, by an arrangement- with Walker, had credited it with the amount, of his personal debt. If Parsons had sued as executor *at*law, and failed to recover, this had been conclusive, whether the recovery had been prevented by set off or any other defence. At law, *233only mutual demands in the same right can be set off, and we can only look into the judgment to see upon what it is founded. Equity exercises a larger jurisdiction: it may, upon equitable circumstances, as upon the agreement of the parties where third persons are not likely to be injured, set off demands in distinct rights. All the proceedings in the cause go to make up the decree, and we may look into them to ascertain in what right, and upon what grounds the decree is made. The present bill does not derogate from, or seek to review the former decree. It does not controvert the fact of Parsons’ personal debt to Walker, but shews a better right to the fund out of which that debt was satisfied, to wit, Walker’s debt to the estate of Whitesides.

It is said that this is a suit by the complainant against the debtor of her debtor, and that, by the rule of law, such a suit cannot be sustained, unless in case of collusion. That is a distinct question, which does not arise under the plea. The doctrine is laid down, nearly as contended for, in *Utterson*vs. Mair, *2*Ves., Jr., 95, and it is said, that, in the case of an executor’s insolvency, the proper course is to have a receiver appointed. In *Alsager*vs. Rowley, however, 6 Ves., 748, the Chancellor seems to think that a debtor to the estate may be made party to a bill against the executor, in case of either collusion or insolvency, and he cites the case of *Beckley*vs. *Dorrington,*decided by Lord Hardwicke, in which it is said, *“*the Court will interfere, if there is such special case, as collusion or insolvency.” But the present does not seem to me to come within that class of cases. It is not a case in which the executor himself could sue, or a receiver, standing in the place of an executor, and it would be to no purpose that a receiver should be appointed. It is embraced by the principle of another set of cases, which authorizes creditors or legatees, whether specific, pecuniary or residuary, to follow the assets of the estate, which have been improperly disposed of by the executor, particularly in payment of his own debt. The doctrine is very fully considered, and the previous cases on the same subject *234referred to, in *McLeod*vs. *Drummond,*14 Ves., 353. That was a bill by two, out of four executors, stating . that the plaintiffs, who resided in Scotland, had 'never interfered’in the management of the estate, and that certain bonds had been improperly pledged and assigned to the defendants, the Drum-monds, by the other executors in England, who had become bankrupt. . The Master of the Rolls, regarding the plaintiffs as standing in the situation of creditors or legatees, determined the case on the distinction between the transfer of assets, in satisfaction of a previous debt of the executor, and for money'advanced at the time, and as it appeared that the bonds in question had been pledged for money advanced at the- time, he dismissed the bill. Lord Eldon, 'in reviewing the decree, seems to think there, is no ground for' the distinction, provided the person advancing the money knew at the time that it was to be used for the executor’s own purposes, and not for the estate. He sustained the decree, however, on the ground that, as the. plaintiffs had reposed confidence in the other executors, and had not, for a long period, interfered in the.affair’s of the estate,, and as there were no other persons, before him, interested in the estate, as creditors or legatees, the plaintiffs could not sustain the bill. There are other circumstances relied on, as grounds of distinction, in the other Gases on- the subject, as whether the transfer were made soon after the testator’s death, or after a considerable time, when it might be presumed that, by having advanced his own money, the executor had made the assets his own. It is not necessary to enter on the cpnsideration of such circumstances.at present— we have-only to decide on the plea. There can be no doubt but that the debt due by Walker, as executor of Graham, was assets, first of the estate of Thomas Whitesides, and then o'f Jane Whitesides. It was, in effect, transferred or released to Walker, in payment of Parsons’ previous individual debt, and by Parsons’ own act. Certainly, it can make no -difference whether it was exclusively by his own act, or by his agreement, which rendered, it necessary for the Court of Equity to direct *235it, by way of sett off. The plea must be overruled, and the defendant directed to answer, which is ordered accordingly.

Johnson and O’Nball, JJ., concurred.

*Decree reversed.*