Iredell v. Langston, 16 N.C. 392, 1 Dev. Eq. 392 (1830)

June 1830 · Supreme Court of North Carolina

16 N.C. 392, 1 Dev. Eq. 392

James Iredell et al. ex’rs. of Samuel Tredwell v. John Langston.

Fpom Chowan.

S. C- by his with crave legacies to the children of J. C. The children died intestate, leaving their father the next of kin. The executor of S.-C. having ..otained a decree against j c. for a mortgage debt, died, and appointed the, Plaintiffs tés executors, 3. C. died also ■insolvent, leaving the debt unpeid ; and the Defendant having ad« ministered on the estates >*fthe children of J. C. upon a petition in •the County Court, obta n, d a decree for their legacies ío/a.n t the 'Plaintiffs, who, thereupon brought their bill to set off the decree in favor of th or testator against that for the legacies — alleging that there were no iFbts due from the estates of the children ot T. C, and that his estate was beneficMl'v entitl'd to the whole of tin. legacies. Held, that the Plaintiff?. were ent t'ed to the relief souiht, which was nothing more than subjecting the funds of an insolvent cestui que trust, in the h<nds of bis trustee, to the payment of bis debts.

Where the Plaintiff and Defendant have mutual judgments in different Courts, and the Defendant is insolvent, a set-off will be allowed in Equity.

'The ease of Holding v. Holding (1 Murph. 1) approved by Hhjdx'R' son. < hief-Justice.

The Plaintiffs alleged that their testator was the exe-outor of Stephen Cabarrus — that John Charrier was a legatee of the said Cabarrus, and made large purchases at ** sale of his effects, to secure which, he executed two Swíifh to íb-lv testator for gg,OüO ere:» — -sí!-.' Gabarras, |i>y hss ■w¡!5, also gave legacies lo John P, hulJúsUm Charrier, children <»f John Chmvier — MiM '.'«•Ir Icotatcr, in his Siibiii.re. procured a decree of forccln'-eco upon a Huh .given by John Charrier. tí» sfcono Ust payment; of rlr* tn-v hoods of S -2.000. and a rale oí :'ii mortgaged proini-.i*v. h no made, under an order of >h«* '■ k of Equity- — tb.-st, after deducting costs atuí diurun-d., there remained d-ie of the original deist, after ¡icky vtt;;; to it the set prw of the sale, the sum of te> 6S4 i l — - John 38, and Jastim. Charrier died intestate, wMioih issue and an->•¡4'- led. and not indebted, leaving their father, John Charrier, .surviving them, who after a arde died, intestate at ft insolvent — that the Defendant hud taken out letters of administration upon all their . si ties, and had recovered a judgment against the Plaintiff-, upon a petition in the Coi-nty Court, for the. sum <f 5^ 916 37, ¡he amount i-f lh-’ legacies given to hut iute-st-des, John H, and Justina Charrier, by Cabarrus, of which the Plaintiffs paid -ill but a sum equal to 1 »ei due them by lh« in™ testare John Charrier, And the Phhitiffs prayed, that ilse dent slue them by John Charrier might, be set (iff against the residue of lue judgment, recovered against them by the Defendant.

The Defendant admitted all the allegations of the Plaintiff’s bill$ but denied their equity, .averring, that the intratares. John B, and Justina Charrier owed lorn, the I) fondant, as did John Charrier, the father- — to w horn the Defendant had also made advances, after the death of his children.

The case was Sieard upon bill and answer.

Hogg, for the Plaintiffs.

Kinney, fo- the Defendant,

cited Bishop v. Church {& Mk. 6di) Holding v. Holding (1 Murph. 1),

Henderson, Chief-Justice,

after stating the proceeded as follows;.

It •appears 'o us that the Plaintiffs have a very plain equity, it i;> nothing more than subjecting the funds of an insolvent csslni que trust, in the hands of his trustee, to the payment of ids debts. Nor does the case of Bishop v. Church, relie'1 on in the argument for the Defendant,touch the qrociion. There the assignees of the bankrupt did not hold Che estate in trust for the bankrupt, hut for his crediiors, of whom the Plaintiff was owe. It was not preterid.!, that, whatever money he wan entitled to receive, as his dividend of the bankrupt’s estate, was in jeopardy, it was a mere attempt to induce a Court of Equity to set off debts at law, where the law afforded complete relief. The very basis of equity was wauling ; viz: the insolvency of his debtor. As the debt, which was due the bankrupt, was not going into the hands of the bankrupt, as here it is to John Gharrier’s administrator, but into the hands of the assignees, who held intrust, not for him, but for his creditors. 'What, ver clear sum therefore belonged to John Charrier, »a the hands of tin- Defendants, this Court will apply to the payment of tht Plaintiff’s decree. An account must therefore be taken of the estates of the infants, ar il what debts are chargeable upon them, regardless of their dignity; for Charrier Could only claim the surplus, after all the debts are paid. As to the debts due from Charrier himself to the administrator, since he became administrator, I am inclined to tiunk that he will be entitled to retain. For l look upon them, as advances made upon the credit of the funds in his hands, rather than as debts. I feel more difficultly as to the debts which John Charrier owed to the ^administrator, contracted prior to that time. I doubt whéther a creditor can call the fund out of the hands of the trustee, without paying all the debts of the cestui que trust to the trustee. Whether this case presents a more favorable aspect for the Plaintiff, I cannot now say. Let an account be taken of the sums due upon the two decree | also of the estates of th« intestates, and .of their-debts } vi the debts due from John Charrkr to the r.¿l-ministrator, and of the advances by the administrator to him, distinguish in-between those contracted or advanced» before end after administration upon the estates of Ms children was committed to the Defendant, if the parties wish, although I think it of no importance, the na-fare and dignify of the debts will he stated by the Master.

It was contended in argument, that if the subject mat-tor of this bill forms any ground of relief, it also afford-¡erf matter of defence to the administrator’s suit, by way of petition. For that petitions are on the Equity side «/ the Court quoad hoc. And the case, of Holding v. Holding was relied ok. That case is law. There the matter set forth in the bill was properly a defence, suo vigore, Xt was in opposition to the causa of action, and should have been made, wherever the action was brought, ft Was like payment, in a action on a bond, or any other discharge of the obligation. The ground, oh which this application is made, admits the demand, it does me5, resist the right of recovery. It only goes to exihiguisfo the debt when recovered, 5»y means of a separate aim distinct demand, It is even stronger than the case of a set-off, for the demands are in different rights. But if fit was no stronger, a person is not obliged to set off ?». debt. He may do so -, or lie may sue upon it. The cas»? of setting off one recovery against another is common iss Courts of Law. Here the Plaintiffs were obligee! to come into this Court, to show the real creditor in the petition. And besides, it is the case, of judgments is different Courts,

Pun Curiam.

— Decree accordingly.