Case Name: A. W. Thomson, executor, vs. E. M. Palmer et al.
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1845-10
Citations: 2 Rich. Eq. 32
Docket Number: 
Parties: A. W. Thomson, executor, vs. E. M. Palmer et al.
Judges: Before JohNson, Ch. at Union,
Reporter: South Carolina Equity Reports
Volume: 19
Pages: 32–36

Head Matter:
A. W. Thomson, executor, vs. E. M. Palmer et al.
'Where separate judgments were obtained, on the same demand, against a principal debtor and his two sureties, and one of the sureties paid the judgment against himself, under an understanding that the judgment against his principal should be assigned to him, and then the principal died; held, that the executor of the principal, whose estate was insolvent, might file a bill to have it decided whether the surety was entitled to rank as a judgment creditor.
The executor of an insolvent estate may, when the creditors are numerous, file a bill against the creditors to enjoin them from proceeding at law, and to have the estate administered in equity; and he may, it seems, make the heirs and devisees defendants, in order to compel a sale of the real estate in aid of assets.
Where the executor files such a bill, the practice is to select one 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, ’ or ordered by the court: the rest appear and litigate orally. But all are enjoined, either by order or by injunction issued in conformity to an order, from suing elsewhere.
Where such a bill is filed, the funds in the hands of the executor should be placed in the possession of the court to be administered; and if a sale be ordered, whether, it seems, of real or personal estate, the sale should be made by the master and the funds received by him.
Before JohNson, Ch. at Union,
October, 1845.
The Chancellor. The original bill in this cause was filed against the heirs and devisees of the testator, and the complainant stated therein that the means placed in his power for that purpose by the testator’s will, were insufficient to pay his debts, and that the whole of his estate, real and personal, would be necessary to meet them, and the prayer was, that the whole might be decreed to be sold, and it was accordingly so decreed. The creditors were not made parties to that bill; the complainant, however, procured an order, requiring them to come in and establish their demands and to restrain them from suing at law. Under this order some of the creditors did come in and prove their demands, and others declined to do so, and have sued at law. The present bill is in the nature of a supplement to the bill before referred to, and the suing creditors, about twenty in number, are made defendants. This bill states that the estate of the testator, real and personal, has been sold in pursuance of the decree of the court, and that the whole assets, thus ascertained, amount to about fifteen thousand dollars, and that but an inconsiderable portion of that sum has been received, the sales having been made on a credit, and the time, as to a portion of it, not yet having expired. That the creditors are over one hundred in number, and that their joint demands amount to about twenty thousand dollars. About $3,797 are claimed to be due on judgments and other specialties. The prayer of the bill is, that the defendant creditors may be restrained from prosecuting their suits at law, and that they, and all other creditors who have not acquiesced and come in under the former order of the court, may be decreed now to come in and establish their demands against the' testator, and that they be enjoined from the further prosecution of their actions at law.
To prevent multiplicity of suits, and thus to save unnecessary expenses and costs, is a familiar branch of equity jurisdiction, and from the facts stated in this bill, the defendants not having answered, it strikes me that the case is one furnishing a striking illustration of the necessity and propriety of exercising such a jurisdiction. The funds of this estate fall one fourth short of the demands upon it, and only a small portion of these have been received in money, and every one having experience must know the delay and difficulties that are encountered in realizing funds that are out-standing — creditors become impatient of delay, and the insolvency of an estate is calculated to strengthen that feeling, and they resort to suits at law. The costs must be paid out of the funds of the estate, if that is sufficient, if not, by some one else. Here there is said to be one hundred creditors, and all have the same right to sue, and 1 will not undertake to estimate the expense of such a number of suits ; it is enough that they would be onerous to some.
The only objections that were seriously urged against the bill, are, that the complainant might obtain all the objects of the bill in a plea of plene administravit prater, and the delays incident to suits in equity, and it is true that the plea would prevail at law, but that would not save the expenses. He must plead in every case, and the cost of the pleas must be paid. If the delays in this court are as grievous as they are supposed, they arise out of the organization of the court, which the Chancellor has no power to control, and where a suit is carried on in the manner prescribed by law, the delays incident to it cannot be regarded as a source of reproach and vexation.
It is therefore ordered and decreed, that the defendants, the creditors of the testator, do forthwith desist from the further prosecution of their suits at law referred to in the bill, until the further order of this court, and that the complainant do forthwith account before the commissioner for the administration of the estate of his testator.
And it is further ordered and decreed, that the defendants, the said creditors, do prove their several demands against the said testator before the said commissioner, and that the said commissioner do summon all the other creditors of the said testator, who are known and reside within the limits of this State, to come in, within a time to be prescribed by himself, and establish their respective demands, and that he cause to be published in two of the newspapers published in the town of Columbia, a notice requiring all other creditors also to come in and prove their demands within the said time.
The defendants appealed, and moved to reverse the decree, on the following grounds, viz :
1. Because, from the case made by the bill, and the other facts brought before the Chancellor, the injunction ought not to have been granted, especially as to the specialty creditors.
2. Because the decree does not require any security to be given by the complainant; and the decree is, in other respects, against law and equity.
Herndon, for the motion.
A. W. Thomson, contra.

Opinion:
Curia, per JohnstoN, Ch.
There is no doubt whatever, that, upon any principle assumed in argument, this bill is well filed. The claim of Reives is sufficient ground for it. It is stated that one Wells obtained three several judgments in the federal court against the testator, and against Williamson and Rieves, his sureties ; and that Rieves paid off the judgment against himself, under an understanding that the judgment against the testator should be assigned to him ; and he claims to rank as a judgment, instead of a simple contract, creditor, against the testator's estate. Now, consider that this is an insolvent estate, with scarcely a possibility that the assets, real and personal, shall extend very far towards the payment of the simple contracts — that there are nearly a hundred creditors, holding every variety and amount of claim ; and that the executor is liable to be sued, and has been sued, in every court, from that of a justice up to the highest jurisdiction : and it will be perceived, at once, that his position is one of indescribable embarrassment. How is he to meet all these creditors at once ? How shall he frame his pleadings, so as to protect himself, or the estate in his hands, from loss 1 Is he to determine at his own hazard, whether the facts, upon which Reives founds his claim, really exist, or can be substantiated ? or is he, at his peril, to decide the law applicable to the facts as they may be made out 1
The case stands as that of a trustee in possession of funds, upon which numerous parties have conflicting claims; and who calls them together, to interplead, and to determine their claims among themselves; being ready, himself, to disburse the fund according to the result.
It is true that, independently of the claim of Reives, such a bill as the present 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 select one 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, or ordered by the court. The rest appear and litigate orally. But all are enjoined either by an order, or by injunction issued in conformity to an order obtained, from suing elsewhere.
It appears that the plaintiff in this case has incautiously required answers from all the creditors. But leave is hereby granted him to amend his bill in that matter, so as to indicate those from whom he requires an answer.
There remains another point, requiring the special notice of the court. When an executor, or administrator, comes for the aid of the court in administering the estate in his hands, the court should be placed in possession of the fund to be administered. And when the court is called upon to order a sale of land in aid of assets, it should have the command of the proceeds of sale, to be administered. We should not be required to enjoin creditors iron proceeding elsewhere, unless we are placed in possession of the funds to which the creditors are entitled; so as to enable us to satisfy all the just rights with which we have interfered. •
The sale which the executor was allowed to make, should have been made by the officer of this court: by which not only the fund would have been in the hands of the court, but the sale would have been made at far less expense, the commissions of the master being less than those of the executor. As a different course was taken, however, we must endeavour to restore matters to their proper posture, as best we can. And it is ordered that the executor do, before the 1st of February, 1846, deliver to the commissioner all the securities of the estate, including those taken for the sale of property sold under the order of Chancellor Johnson, together with whatever monies he may have collected or received belonging to the estate, or arising from sales made by him, eicept such sums as he may have already disbursed in his administration.
Finally, it is ordered that the decree be modified as atove indicated. In all other respects, it is affirmed and the appeal dismissed.
Johnson, Harper and Dunkin, CC. concurred.