Court Opinion

ID: 3887498
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:16:46.940598+00
Date Added: 2024-06-11T13:38:34.674563
License: Public Domain

The appellant, an alleged creditor of the estate of Mrs. J. Fuller Lyon, otherwise known as Mrs. Jo Lyon, who died intestate in June, 1940, commenced her action in the Court of Common Pleas for Lexington County on August 12, 1940, against the heirs at law of Mrs. Jo Lyon, three of them having qualified as administrators of her estate, and six of them being grantees of real property conveyed by the intestate, allegedly without consideration, and while indebted to appellant. The three heirs at law who qualified as administrators were made parties-defendants, both in their individual and official capacity.
The complaint, when liberally construed, alleges that appellant is a creditor of the estate of Mrs. Jo Lyon; that the intestate left insufficient personal assets to pay her debts; that the intestate had conveyed practically all of her real property to certain of the respondents while indebted to appellant; that the alienation of her real property was voluntary, without consideration, and left her estate insolvent, and that in making said conveyances it was with the intent to and did hinder, delay and defraud her creditors, and especially appellant, and was a fraud on her creditors, and appellant *Page 207 
as a creditor; and that therefore the deeds should be set aside, and the assets of the estate marshaled.
The prayer of the complaint is: (1) for judgment against the administrators of the estate in a definite sum, (2) for the setting aside of the conveyances and sale of the lands conveyed, and (3) for the payment of appellant's claim and of other creditors from the proceeds of the sale, after the payment of costs and expenses, and (4) for such other and further relief as to the Court may seem equitable and just. Parenthetically, it may be stated that the prayer of a complaint is no part thereof.
The defendants (respondents) filed various demurrers to the complaint, but the only demurrer considered by the Circuit Court was an amended demurrer, and the only ground of same which was passed upon was sub-division (a) of No. 2, reading as follows: "It is an action for the recovery of a debt of an intestate, and is prematurely brought, being within the twelve months."
In passing upon this ground of the demurrer, the learned Circuit Judge quoted from Section 8993 of the Code of 1932, providing that: "Every executor or administrator shall * * * be allowed twelve months to ascertain the debts due from the deceased, * * *." And from Section 418 of the same Code, "No action shall be commenced against any executor or administrator for the recovery of the debts due by the testator or intestate, until twelve months after such testator's or intestate's death." The order, after stating, among other things, that "this action appears to me to be one primarly for the recovery of a debt," dismissed the complaint on the ground that it was an action for debt, brought prematurely.
The appellant, while admitting that the complaint is inartistically drawn, takes the position that it primarily states a cause of action for the marshaling of assets and that the issues raised by the exceptions can be disposed of under the all-inclusive issue: "Is this a creditor's suit to marshal the *Page 208 
assets of the decedent and, incidentally, to set aside fraudulent conveyances and sell real property in aid of deficient personalty?"
It is significant that the demurrer of the respondents, Annie Lee Langford, individually and as administrator of the estate of Mrs. J. Fuller Lyon, deceased, Jo Langford, Susan L. Tillinghast, Rebie L. Tinsley and Pickens L. Langford, in Paragraph 3 alleges: "That the Complaint states three causes of action, viz.: (1) a money demand against the estate of Mrs. Jo Lyon, (2) a nullification and setting aside of deeds made to parties other than these Defendants, and (3) for a marshalling of assets of said estate * * *."
In Simon v. Sabb, 56 S.C. 38; 33 S.E., 799, it is held: Where a complaint states facts entitling plaintiff to some relief, it is not demurrable.
"A cause of action is stated when the facts alleged show some right of plaintiff, and the invasion of that right by' some delict or breach of duty by defendant." Ward  Co.v. Ford, 58 S.C. 557, 560; 36 S.E., 916.
"A demurrer is an admission of the facts alleged in a pleading, but a denial of the law arising on those facts."Spigner v. Provident Life  Accident Insurance Co., 148 S.C. 249;146 S.E., 8, 9.
Where one has a cause of action but no adequate remedy at law, a Court of Equity will supply the deficiency or a remedy. In the case under consideration, and for the purpose of demurrer, it must be taken as an admitted fact: (1) That the estate of Mrs. Jo Lyon is indebted to appellant. (2) That the personal property and real property remaining in the name of the decedent are inadequate to pay the debts of the estate. (3) That the real property which the decedent conveyed was conveyed without consideration, and was therefore subject to the payment of decedent's debts under the principal of law that one must be just before generous.
If a creditor has to wait twelve months before commencing an action to establish a claim, the hope of realizing on *Page 209 
such claim may vanish by the conveyance to innocent third parties, not only of the land fraudulently conveyed, but by the heirs at law and devisee or devisees of the decedent conveying the real property of which the debtor died seized and possessed. See Act No. 950 of 1934, 38 Statutes at Large, page 1600. Hence, a creditor may commence his action in a Court of Equity to impound and marshal assets irrespective of the fact that twelve months has not expired following the death of the debtor.
As stated by appellant in his brief, this action is quite similar to the case of Sheppard v. Green, 48 S.C. 165;26 S.E., 224, 227. In the Sheppard case there were allegations that the plaintiff was a creditor of the decedent; that decedent left a personal estate insufficient to pay creditors; and that he had voluntarily conveyed his real estate to certain defendants, without consideration, and with the intent to hinder, delay and defraud his creditors. The case at Bar is essentially the same. In Sheppard v. Green, the Court held that the action was "manifestly in the nature of a creditors' bill," and that its single object was "to have the assets of the estate of the testator * * * marshalled, and applied to the payment of his debts"; and further that "there is but a single cause of action stated in the complaint, and all other matters therein stated are merely incidents of that single cause."
Quoting from the opinion in Sheppard v. Green, supra, at pages 173, 174 of 48 S.C. at page 227 of 26 S.E.:
"* * * If the plaintiffs have a valid claim against the estate of the testator, Vaughan, there can be no doubt that they are entitled to the aid of the Court in subjecting the assets of such estate to the payment of their debt; and, if any such assets have improperly or fraudulently gone into the hands of third persons, they may, in the same action, be brought back, and subjected to the payments of the debts of the testator, and this is practically the scope and object of this action. To such an action the personal representatives of the alleged debtor are not only proper, but necessary, *Page 210 
parties, and so, also, are those in whose hands any of the assets of the debtor necessary for the payment of his debts, have improperly or fraudulently gone, as well as those who may have acquired, or may claim to have acquired, any liens upon such assets; so that the Court of equity, having all parties in interest before it, may do complete justice, and avoid multiplicity of actions. * * *"
In Temple v. Montgomery, 157 S.C. 85; 153 S.E., 640,642, which was an action in the nature of a creditor's bill and included an attack on voluntary deeds of conveyance, without consideration, the Court through Mr. Justice Blease as its organ, reviewed and reconciled the older cases, and stated in part as follows:
"While the complaint was not as full and clear as perhaps it should have been, we are inclined to concur in the view of the circuit judge that the action was one in the nature of a creditors' suit to marshal the assets of a deceased debtor and to require the executrix to account for the estate in her hands. And the action may be regarded as one to subject and sell real estate in aid of personalty for the payment of the debts of a decedent, and that action is close akin to a suit to marshal assets of a deceased debtor. In Ragsdale v.Holmes, 1 S.C. 91, it was held that specialty and simple contract creditors of a decedent need not exhaust their remedies at law before exhibiting a creditors' bill in equity against the executor of a decedent for an accounting of assets, payment of debts, etc. And it has been decided that the Court, on the petition of a creditor, as well as on the petition of the administrator, may order a sale of land in aid of assets. Scruggs v. Foot, 19 S.C. 274. See also State v.Foot, 27 S.C. 340, 3 S.E., 546, and 24 C.J., 558. In the complaint in the case at bar, it was distinctly alleged that the personal property of the decedent was insufficient to discharge the debts against her estate, so the complaint looked to relief by the way of sale of realty in aid of personalty to pay debts. *Page 211 
"The complaint here lacked, it is quite true, some of the matters usually alleged in a complaint in an action by creditors to marshal assets. It was not as full as the complaint inSheppard v. Green, 48 S.C. 165; 26 S.C. 224, 227, but, as in that case, the main object of the suit was to have the assets of the testatrix marshaled and applied to the payment of her debts. * * *"
In the next sentence, there was quoted from Sheppard v.Green, a goodly portion of that which we have hereinbefore set out of said opinion. And later in the opinion, it is stated: "An action to marshal the assets of a deceased person and to subject real estate to the payment of the lawful debts of such person is, of course, properly cognizable in a court of equity; and the purpose of this action, as gathered from all the pleadings, was to accomplish those things."
Construing the complaint liberally, we think it sufficiently stated a cause of action for the marshaling of assets, and while necessarily it had as its final goal the collection of any debt that may be established, this of course is the purpose of all actions for the marshaling of assets.
In the opinion of Mr. Justice Stukes, written after the foregoing was written, he cites and quotes from the case ofO'Daniel v. Lehre, 2 Strob. Eq., 83, 85. The second paragraph quoted is apposite to the facts of the instant case, and supports the very principle the writer had in mind in the preparation of this opinion.
The order appealed from should be overruled, and the case remanded to the Circuit Court for further proceedings on the cause of action stated.
MR. ASSOCIATE JUSTICE FISHBURNE concurs. *Page 212