Court Opinion

ID: 6672573
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:13:31.233327+00
Date Added: 2024-06-11T16:00:35.618676
License: Public Domain

The -opinion of the Court was delivered by
Willard, A. J.
The main question brought up by the appeal, in this case, grows out of a decree directing the distribution of an insolvent intestate estate among creditors. The assets, at the .date of the decree, June, 1860, consisted of the proceeds of realty, personalty and ehoses in action, including an award of arbitrators, under which the defendant, J. TI. Súber, and one A. L. Lark, were bound to contribute, equally, to the payment of the debts of the intestate to the extent of $2,000, provided so much was-necessary for the full payment of said debts, after first having exhausted the whole assets of tho estate, both real and personal.
*14The decree of distribution merely confirmed the report of the Commissioner, on which it was based, and ordered the dispositions recommended thereby.
The Commissioner’s report sets forth an insufficiency of assets to pay debts, also, that there were unsatisfied judgments, specialty and simple contract debts outstanding, and estimated that the assets, exclusive of the award, would pay the judgment and specialty creditors and twelve and three-sevenths por cent, on account of the simple contract debts. The award not having been realized, was not included in the estimate, but was set forth as part of the assets of the estate.
The Commissioner, after paying the sum of $568.48 on 'the decree, deposited the balance of the proceeds of the realty, as realized, in the Branch Bank of the State, at Columbia. The bank invested the deposit in six, per cent. Confederate bonds, and it was accordingly lost. Lark has paid the sum awarded against him,'but Súber has not yet complied with the terms of the award.
Under an order of July 6th, 1866, to ascertain what funds remained to be distributed, and the proper application thereof, a controversy arose between the specialty and simple contract creditors as to the proper application of the balance of the assets. The former contended that, as the proceeds of the realty had been lost and their demands still remained unsatisfied, they were entitled to be paid out of the proceeds of the award, preserving their priority in the order of payment.
The simple contract creditors, on the other hand, contended that the portion of the assets lost was specifically appropriated, by the decree of distribution, to the payment of the judgment and specialty creditors, and to the simple contract creditors to the extent only of 12 3-7ths per cent, of their demands, and that it was placed in the hands of the Commissioner at the risk of such creditors; and, having been lost, they are not entitled to recourse against the balance of the estate, but that the entire proceeds of the award ought to be devoted to the payment of the simple contract creditors to the extent pf 87 4-7ths percent, of their demands not provided for, to the exclusion of the specialty creditors. The Commissioner sustained the view of the case contended for by the simple contract creditors, and, on exceptions, the Chancellor sustained the Commissioner’s conclusions, and decreed accordingly. The specialty creditors now appeal.
An attempt was made, in argument, to charge the specialty credi*15tors with responsibility 'for the loss, through want ‘of diligence in not withdrawing the fund from the hands of the Commissioner; but the case before us presents no foundation of fact for such a conclusion. We must assume the loss to have occurred without fault on the part of any of the creditors, as the case now stands before us. The question then arises, whether the original decree of distribution operated so as to separate the particular fund in bank, and lost from the body of the estate, devoting it to special objects, namely, the payment of specialty creditors and a certain per centum of the simple contract debts, and withdrawing, it wholly from the necessity of contribution to other general objects. A decree of this kind, accepted by the parties affected by it, might operate as payment of the demands provided for by it, even while the fund was still in the hands of the Commissioner, and might throw the risk of loss entirely upon such creditors. Such a decree would have to be regarded as exceptional, and, in general, inconvenient; and, accordingly, such intent cannot be made out constructively from the terms of a general decree. We find no warrant for such a conclusion in the present case. The report of the Commissioner, which, by confirmation, became the decree of the Court, should be regarded rather as an estimate for the information of the Court than as an appropriation for the specific benefit of any of the parties interested under it.
The fact that the simple contract creditors were recognized as having an interest in that fund to the estimated extent of 12 3-7ths per cent, of their demands, shows that there was no such appropriation intended as is asserted by the simple contract creditors. At most, all the advantage that the specialty creditors enjoyed, in regard to this particular fund, over the simple contract creditors, was that of priority of payment — precisely what they enjoyed in reference to the entire assets of the estate; and as they gained nothing by the special designation of that fund, they should lose nothing by the disaster which occurred to it without their fault. The decretal order of the Chancellor is erroneous in that it did not admit all the creditors of the intestate to participate in the balance of the assets according to their respective legal priorities.
The second ground of appeal was conceded on the argument by the appellees, and is sustained.
It is ordered, adjudged and decreed, that the decretal order of April 20th, 1868, overruling the exceptions to the report of the Commissioner, and confirming and adopting the same as the judg-*16meat of tlie Court, be in all things reversed and set aside,- and that the appellants’ exceptions to the report of the Commissioner, of the 2d of September, 1867, be sustained.
And it is further ordered and decreed, that this case be remanded to the Circuit Court for further orders and proceedings. And it is further adjudged, that the specialty creditors áre not chargeable with, nor, as to their legal priorities, affected by, the loss of assets mentioned and set forth in the report of the Commissioner, dated April 2,1867.
Moses, C. J., and Wright, A. J., concurred.