Case Name: Molloy vs. Elam
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1838-02-06
Citations: 1 Meigs 590
Docket Number: 
Parties: Molloy vs. Elam.
Judges: 
Reporter: Tennessee Reports
Volume: 19
Pages: 590–596

Head Matter:
Molloy vs. Elam.
Executor and Administrator. What i$ assets — not a bond of indemnity.— Neither a bond of indemnity given to a testator, nor a judgment recovered by him thereupon is assets in the hands of his executor, except to be applied to the purpose of the iodexunity ,* and a bill by his residuary legatees against his executor to compel him to account for such judgment on the ground that, with due diligence, it might have been collected, will not be entertained. But the executor will be compelled in equity to distribute to the residuary legatees any part which he may have collected of such judgment, and which remains in his hands unclaimed by the person against whose demand the indemnity was given.
SAME. Devastavit by compromising debt. If an executor or administrator compromise or compound with the obligor in a bond of indemnity given to the deceased, such compromise or compounding would not be sustained to the prejudice of the party against whom the indemnity was given. Williams on Exr. 1107, 8.
CHANCERY. Injunction against bond of indemnity. Equity will injoin the enforcing of a bond of indemnity unless the demand against which it was given has • been, or is about to be enforced.
On the 25th of January, 1800, Daniel Elam, the ancestor of the parties, entered into a written contract with James Mc-Henry, then Secretary of War, for the purpose of furnishing rations or supplies for the troops of the U. S. in the state of Georgia; and on the same day he gave his bond, with two sureties, in the penalty of $10,000, conditioned for the performance of all the duties required in the contract, — and to account to the United States for all sums of money advanced to him, by the U. S., to enable him to furnish the supplies, by way of set off against the amount of such supplies, and to repay the surplus to the U. S. on the expiration of the term of the con-tract, together with interest at six per cent, from the expiration of said term.
Two days afterwards, he took from Solomon and Chas. G. Ellis a bond in the penalty of $10,000, reciting the above facts, and that said Solomon had undertaken to transact all the business which became the duty of the contractor' for the state of Georgia, and for so doing to receive all the perquisites and emoluments, which should or ought to be derived in virtue of said contract, and conditioned — “that if said Solomon, his heirs, &c. should keep and save harmless said Daniel Elam, his heirs, &c. from all suits, plaints, and also from all damages which might, or should accrue or be sustained by said Daniel, his heirs, &c., in-virtue, or in pursuance of, the above recited bond and contract, then this obligation to be void, otherwise to be of full force.”
On the 6th of February, 1801, Daniel Elam, pursuant to the contract, was paid by James Powell, collector of the port of Savannah, $27,079 49 cents, — which money, being one of the perquisites or emoluments of the contract for supplying the troops, was received by said Solomon Ellis.
On the 9th of February, 1802, the U. S. sued Daniel Elam in the District Court of Georgia, by petition and summons, stating in the petition that he had received the said sum-of money; that he had undertaken to account for it, which he neglected and refused to do. And on the 8th May, 1804, they recovered judgment for $31,495 49 cents, debt and damages.
On the 4th of July, 1804, Daniel Elam sued the Ellises, on their boud of indemnity, iu the superior court of Columbia county, Georgia; and at February Term, 1806, recovered judgment against them for said $31,495 49 cents, he hav ing remitted the damages found by the jury of $3779 44 c'íá. A fi. fa. was issued on this judgment, March 4, 1806, which on the 1st of April was levied on 275 acres of land, which being claimed by Thomas Cobb, the levy was withdrawn; and on the 4th of August, it wa3 levied on a still and cap, which Were sold Oct. 7, 1806, for. $13, and then the fi. fa. was returned — “No properly found.'”
On the judgment against Elam, the U. S. issued fi. fas. from Nov. 20, IS05, to Feb. 20-, 1818, on-which last is this return — “Nulla bona — John Eppinger, M. D. G. November 9, 1813.”
On the 5th of February, 1829, Daniel Elam died in Rutherford county, Tennessee, having made his last will, appointing the defendant his executor, who qualified as such, on the 16th of February, 1829. In the will no mention is made of the judgment against the Ellises.
On the 12th of December, 1836, the complainants filed this bill against Elam and A. Ellis, and at the return of the subpoena, February Term, 1837, their amended bill, charging that the defendant had compromised with Alfred Ellis, the son and only heir of Charles G. Ellis, for the sum, as defendant admits, says the amended bill, of $ 1200, giving up the demand of said judgment; and that said Alfred colluded with the defendant, to keep said compromise concealed from complainants; that said Charles G. Ellis, or his estate, was amply able to pay the whole amount of said judgment, which fact was well known to defendant; praying for an account, and a decree that defendant might be compelled to pay said judgment, &c.
Elam’s answer states that in the winter of 1829-30, he weirt to Cape Girardeau county, where Charles G. and Alfred P. Ellis, his son, resided, said Solomon being then dead, and taking advice of a lawyer was told he could not collect the judgment against said Charles G., who threatened that if he attempted it, he would give information to the government, and cause the collection of the judgment against Daniel Elam; that under these circumstances he did compromise with them, and received in full satisfaction of the judgment against Solomon and C. G. Ellis, the two notes of said Charles G. and Alfred P. Ellis, one for § 600, payable Nov, 1. 1830, and the other for §500, payable Nov. 1, 1831; that on the 10th August, 1832, he received payment of the first note, and §47 50 of the second, which remains unpaid except said payment; that said Ellises lived together in the same house; that all the property they had belonged — ‘by common repute — to Alfred P., who seemed to be worth from 15 to 20 thousand dollars.
February 1, 2.
There was proof taken by the complainants, showing that the estate of Charles G. Ellis, in Missouri and elsewhere, was considerable; and, therefore, that the defendant might easily have collected a greater amount of the judgment than he had reported he had done. But it is unnecessary to repeat the testimony, because the question debated and decided in this court, was — whether the judgment recovered by Daniel Elam against the Ellises was assets at all?
Ready, for the complainants,
insisted that the judgment against Sol. and Chas. G. Ellis is conclusive against the parties. The record shows that both parties were in court; judgment, therefore, cannot be re-examined by a court equiiy here. Winchester-vs. Evans, Cooke 420; Lawrence vs. Roberts, 2 Tenn. 236; Mills xs. Duryee, 7 Cranch, 487.
Appellant is liable unless he prove the insolvency of Sol. and Chas. G. Ellis. Cartwright vs. Cartwright, 4 Haywood, 134.
The inventories in the record are conclusive as to the solvency of Charles G. Ellis.
Appellant was guilty of a devastavit by compromising and releasing the judgment, and is liable for the whole debt. Tol-ler on Executors 425-482; 9 PétersdorfF’s Abridgment, 361. Title, Executor, Devastavit, note ‡; 7 Johns. Rep. 404.
He took the note payable to himself, and is therefore liable. Toller, 425.
F. B. Fogg, and Meigs, for the defendant,
argued that if an executor find a bond of indemnity among the valuable papers of the deceased, it is his duty to make enquiry, and ascertain whether the deceased has been damnified. If he finds the deceased has been damnified, then he is advertised that he had a right of action against the! indemnifier; and the executor is bound to enforce the right of action But if he sees that the deceased had not been damnified, so far frotó being his duty to sue upon such bond, it is his duty not to sue upon it, but wait until the condition oí the bond of indemnity is broken. As soon as it is broken then a right of action accrues, but there is no right to sue till the condition is broken. The fact that the deceased kept the bond in his hands without suing on it, is evidence that he had no cause of action.
Febuary 6.
In this case, as soon as the Ellises went to Missouri, the judgment recovered in Georgia could be enforced only by suit; and it is, therefore, just like the case of a bond of indemnity, the condition of which is not broken. Daniel Elam had no right to sue upon the Georgia judgment till the United States enforced their, judgment against him. He, therefore, held the copy of the record of his recovery against the Ellises in his hands, in order to enforce it for his indemnity whenever he should be damnified, — just as he would have held the bond of indemnity, awaiting a breach of the condition. -
It follows that this Georgia judgment is not assets Hable to be distributed, any more than a bond of indemnity would be assets, the condition of which remained unbroken. And when the condition is broken, it is only the damages that he is entitled to recover, which are assets. So, in this case, no more of the judgment against the Ellises is assets, than will be sufficient to pay the damages sustained by D. Elam, because of the failure of the Ellises to account to the U. S.
2 Yerg. 484 — conclusiveness of the judgment in Geo., 7 John. 404.
9 Petersdorff Ab. 361 — liability of executor by release of debt — release of cause of action — the judgment in Georgia was a cause of action.
Toller 481 — executor’s compounding debt — how liable.
2 John. Cas. 376 — held him responsible for the real value.
Ram. on Assets, 495.

Opinion:
Reese, J.
delivered the opinion of the court.
We are of opinion that the decree of the chancellor, so far a's it directs that the defendant shall account for so much of the judgment obtained by the testator in the State of Georgia against Ellis, as might by reasonable care and dili gence have been collected from his representatives in Missouri, cannot be sustained.
The bill itself and other parts of the record, before us show, that the judgment referred to was obtained, to indemnify the testator against a judgment which the United States had recovered against him in the same State, and that the first named judgment was founded upon a bond executed by Ellis to the testator and which stipulated to indemnify him against the claim of the United States. The record also shows that the judgment on behalf of the United States has not been satisfied. If that judgment had been barred by the statute of limitations, extinguished by the lapse of time, or released by the United States, then the judgment of Elam against Ellis, could not in equity, have been collected; or rather all .attempts to have collected it at law, would have been enjoined by a court of chancery.
There are but two grounds upon which the executor of Elam could have compelled the representatives of Ellis to have satisfied the judgment. 1. That the judgment in favor of the United Stales had been paid by Elam or his representatives; 2. That it was in force, and that the executor was liable to pay it and wished to obtain the means to do so from the representatives of Ellis.
It is not alleged or pretended that the first ground exists. The record shews that it does not. And upon the second ground, if we had the representatives of Ellis before this court, and had placed, as we certainly would place, the compromise mentioned in the record out of the question, we might decree against those representatives; but we would look to it, that the money so enforced from them, should be paid, ¿not to the complainants as distributees, but to their creditor the United States.
In this view of the case, we cannot hold the defendant responsible to the complainants for the non-collection of a judgment, which he ought not, and could not have collected except for the purpose of paying it over to the United States.
2. The views above stated have made it somewhat difficult for us to sustain so much of the decree, as directs that the defendant shall account to the complainants for the sum, he may have received upon the pretended compromise. For he might well have paid over that sum to the United States, and the complainants could not have murmured. The United States might now claim the amount, and may hereafter claim it.
But as we think that the United States have no specific lien upon this fund; as it was not, and is not, the purpose and intention of the defendant to pay it over to the United States; as he made the pretended compromise in the character of executor, and seeks to keep for his own benefit money received in that character, — we are of opinion that the relations between the complainants and the defendant entitle the former, upon their giving refunding bonds, to be severally, as well as the defendant, the depositories of the money until it may be recovered by the Uuited States, and if not so recovered by the United States, or other creditors, to be kept, by them as their own.
The defendant will therefore account for such sums as he has received with interest from the time, he may have received them, and he will be allowed his reasonable expenses for the collection, and the costs will be paid out of the fund,