Parker v. Porter, 208 N.C. 31 (1935)

March 20, 1935 · Supreme Court of North Carolina

208 N.C. 31

J. J. PARKER, Administrator of BRITTON VAUGHAN, Deceased; B. R. KENNON, and THOMAS D. CHITTY v. SALLIE PORTER and Husband, JOHN PORTER; SUSIE JENKINS and Husband, JOE JENKINS; ROSETTA VAUGHAN, WALTER VAUGHAN, C. W. JONES, Commissioner, and C. W. JONES, Trustee, and EULA CARTER JONES, Wife of Said C. W. JONES.

(Filed 20 March, 1935.)

1. Executors and Administrators E a—

Personal property of the estate is the primary fund for the payment of the debts of the estate, and it is only when the personalty is insufficient for this purpose that the administrator has the right and duty to apply for license to sell real property of the estate to make assets. C. S., 74.

2. Executors and Administrators B a: Descent and Distribution A b—

Personal property of a deceased passes direct to his administrator, but the real property passes direct to the heirs at law, subject to be divested only if it becomes necessary to sell the realty to make assets.

3. Executors and Administrators E a: Descent and Distribution A b—

The heirs at law have the right to pay off debts of the estate and the costs of administration in order to prevent the necessity of selling the realty to make assets.

4. Executors and Administrators E a — Administrator’s right to attack partition is precluded by tender of amount sufficient to pay debts of estate.

Suit by the administrator against the heirs at law to set aside partition of the lands of deceased upon allegations of necessity to sell realty to malte assets, and inadequacy of the purchase price upon the partition sale and irregularities therein, should be dismissed upon tender into court by one of the heirs at law, the .purchaser at the partition sale, of an amount sufficient to pay the debts of the estate, the cost of administration, and the costs of the litigation, the sole interest of the administrator in the lands being the right to sell same to make assets and pay costs of administration, and the other grounds for relief alleged being available solely to the other heirs at law.

5. Executors and Administrators B g — Creditor’s right to attack partition is precluded by tender of amount sufficient to pay debts of estate.

Suit by creditors of an estate to set aside partition by the heirs at law should be dismissed’ upon tender into court of an amount sufficient to pay all debts of the estate, nor in such instance may a lessee of the lands from the administrator maintain the suit after the expiration of the period of the lease, since any claim he might have on account of the lease is a claim against the estate protected by the tender of money into court.

Appeal from Gowper, Special Judge, at November Term, 1934, of Hertford.

Reversed.

This is an action, instituted by tbe administrator of Britton Yaugban, one creditor of Britton Yaugban and one wbo claims a contract of lease witb said administrator, to bave declared null and void a deed to Sallie Porter from a commissioner appointed in a special proceeding brought by tbe beirs at law of tbe said Britton Yaugban to sell bis real estate for partition among said beirs, and also to cancel a certain deed of trust subsequently given by said Sallie Porter upon tbe land described in said deed. Tbe defendants are tbe beirs at law of Britton Yaugban, and tbe husbands of tbe jeme beirs, tbe commissioner in said special proceeding, and tbe trustee and cestui que trust in said deed of trust from Sallie Porter, tbe purchaser of tbe land under said partition proceeding. However, only Sallie Porter and her husband, and C. "W. Jones, as commissioner and trustee, and bis wife, Eula Carter Jones, as cestui que trust, file answer.

Since tbe validity of tbe deed of trust from Sallie Porter must stand or fall upon tbe validity of tbe deed to her from tbe commissioner, it becomes necessary to consider only tbe facts and tbe law as they relate to tbe latter.

Tbe substance of tbe plaintiffs’ complaint is that tbe administrator has not sufficient personal property in band to pay all of tbe indebtedness and costs of tbe administration of tbe estate of Britton Yaugban, and that it may become necessary for him to obtain license to sell tbe land covered by tbe deed in question in order to make assets to pay debts. It is further alleged that tbe personal property which tbe administrator now has on band consists solely of a deposit of $486.24 in a bank which is now in liquidation, and has so far paid only twenty-five per centum in dividends, or approximately $122.00, and that the estate still owes approximately $400.00; and that the heirs at law of the intestate have had a sale for partition of the real estate of said intestate, and that the purchaser of the land under the partition proceeding was the petitioner in said proceeding, and that said purchaser acquired the land for a price that was inadequate, and that the confirmation of the sale was procured by oversight and inadvertence of the clerk, and that the administrator was not made a party to or given notice of said proceeding; and prays the court to set aside the sale made under said partition proceeding and to declare the deed given thereunder null and void.

The defendants deny that the purchase price was inadequate and that the deed was procured by oversight or inadvertence of the clerk, and aver that more than two years had elapsed from the time of the qualification of the plaintiff administrator and the institution of the partition proceeding by the heirs at law.

Before judgment was entered the answering defendants tendered into court cash money sufficient to pay all the indebtedness and liabilities of the estate of the intestate, including all costs of administration and all court costs in connection with this action, and upon such tender moved the court for a judgment that the plaintiffs be granted no further relief. The court denied this motion and the defendants excepted. The court then, upon the pleadings, ordered, adjudged, and decreed that the deed to the defendant Sallie Porter from the commissioner appointed in the partition proceeding be declared null and void, and from a judgment to that effect the answering defendants appealed to the Supreme Court, assigning errors.

C. W. J ones and A. T. Costelloe for defendants, appellants.

D. G. Barnes and Lloyd J. Lawrence for plaintiffs, appellees.

S oheNOK, J.

¥e are of the opinion that when the defendants tendered into court cash money sufficient to- pay all of the indebtedness and liabilities of the estate of the intestate, including all costs of administration and all court costs in connection with this action, that his Honor should have entered judgment to the effect that the plaintiffs recover nothing more, and that the action be dismissed. The only interest that the plaintiff administrator could have in this action was the payment of the liabilities of his intestate, and when the defendants offered to make available sufficient cash money to pay all the liabilities of the estate, including costs of administration as well as of litigation, the said administrator had no further legal interest in or right to pursue the litigation. Since the plaintiff Kennon was simply an alleged creditor of tbe intestate, be was protected by tbe tender of casb money sufficient to pay tbe liabilities of tbe intestate, and likewise ceased to have further interest in or right to pursue tbe litigation. Tbe claim of tbe plaintiff Cbitty, if indeed be asserts any individual claim, is based upon an alleged lease for tbe year 1934. That time has now passed and be has no further interest in tbe land, and if be has any just claim against tbe estate of tbe intestate it is but a liability of tbe estate included in tbe liabilities to cover which tbe defendants tendered casb money. It would seem, however, that Cbitty took tbe alleged lease with constructive notice, at least, of tbe deed to Sallie Porter, since said deed was duly placed of record prior to tbe date of said lease.

While it is well settled that an administrator has the right, and that it becomes bis duty under certain conditions, to apply for license to sell tbe real estate of bis intestate to make assets with which to pay debts, it is necessary that tbe personal property shall first be exhausted. When this has been done and it has been ascertained that tbe personalty is insufficient to discharge tbe debts, resort may be bad to tbe realty. Tbe personalty, however, is always tbe primary fund for tbe payment of debts. C. S., 14; Shaw v. McBride, 56 N. C., 173; Clement v. Cozart, 107 N. C., 697.

Personal property passes direct to tbe administrator and is by him passed to tbe distributees, while real estate does not pass to tbe administrator and from him to tbe heirs at law, but passes direct from tbe intestate to tbe heirs. Tbe only right that tbe administrator can have in tbe real estate of bis intestate is tbe right to subject it to tbe payments of tbe debts and costs of administration when tbe personal property is insufficient for that purpose. It follows, then, that tbe heirs at law, upon tbe death of tbe intestate, become seized and possessed of tbe real estate, subject to be divested if it becomes necessary to sell tbe realty to make assets. It is therefore logical that tbe heirs at law, and those claiming under them, should have a right to pay off tbe debts of tbe intestate, or tbe costs of administration, or both, that they may thereby take tbe real estate of tbe intestate free from any claims of tbe administrator. James v. Withers, 126 N. C., 715; 24 C. J., pp. 570, et seq.

This case is remanded to tbe Superior Court that, upon tbe payment by tbe defendants of sufficient casb money into court to pay all tbe debts of tbe estate of tbe intestate, together with all costs of tbe administration, as well as all costs in connection with this action, judgment may be entered dismissing tbe action.

Tbe disposition we have made of this case in no wise precludes any of tbe heirs at law of tbe late Britton Yaugban from attacking the deed from the commissioner to their joint heir, Sallie Porter, for lack of consideration, fraud, or any irregularity in the partition proceeding of which they may be advised. We simply hold that the tender of cash money sufficient to pay all liabilities of the estate and all costs is a satisfaction of any cause of action alleged by the plaintiffs in this case.

Eeversed and remanded.