Scott v. Dunn, 21 N.C. 425, 1 Dev. & Bat. Eq. 425 (1836)

Dec. 1836 · Supreme Court of North Carolina

21 N.C. 425, 1 Dev. & Bat. Eq. 425

JOHN SCOTT, et al. v. JOHN DUNN, et al.

December, 1836.

Where an executor sold lands, and applied the proceeds to the payment of debts, under a mistake of his power, and the purchaser is evicted by the devisee, the land, in equity, will be subjected to indemnify the purchaser, to the extent to which his money was applied to the debts, over and above the personal estate.

The bill charged, that William Kooling the elder, by his last will and testament, whereof he appointed the defendant Dunn, and others, his executors, after directing all his just debts to be paid, devised a certain tract of land, in distinct parcels, to his two sons and five grandsons, the other defendants to the bill. That after thé death of the testator, the defendant Dunn alone proved the will, and finding that there was an insufficiency of personal assets to satisfy the debts of the testator, and believing that, by the will, the land devised was so charged with the payment thereof, as to authorize him to sell it, advertised the same for sale at public auction: that the plaintiffs became the purchasers at said auction, at the price of two hundred and forty-two dollars and fifty cents; have paid the whole purchase-money to the executor, Dunn, and received from him a conveyance, in feei accordingly. The bill further charged, that the title to the land being contested by the defendants, the devisees, the plaintiffs instituted an action of ejectment to establish it, and to recover possession thereof; but failed in said action, because, in law, the executor had no authority to make the sale aforesaid. It also charged, that of the purchase-money so paid by the plaintiffs, all but the sum of one hundred and one dollars and seventy-eight cents, was applied by the executor to the payment of the debts of his testator; and that this sum yet remained in his hands: and it prayed that the defendant, Dunn, might be decreed to refund to the plaintiffs the part of the purchase-money remaining in his hand: and as to the residue, that the necessary accounts might be taken, to ascertain whether the whole personal estate was not administered in the payment of debts, without fully paying the same, (should the matter be denied by'the defendants,) and that the plaintiffs might stand in the place of the creditors who have been thus satisfied, and who might have enforced these demands against the land; and that the land might be decreed to be sold for the payment thereof. The answer of the executor admitted all the substantial allegations in the bill, except that it averred that he received from the plaintiffs, but the sum of one hundred and eighty dollars in payment for the land; and that the whole of this was applied to the payment of the testator’s debts, except the sum of ninety-five dollars eighty-six cents, which it admitted to be yet in his hands; and which sum he was willing to pay over as the court might direct. , To this answer was annexed an account of his administration of the assets of his testator, which showed a result corresponding with that above-mentioned. The other defendants, the devisees, admitted the execution and probate of the will, and the sale of the land, as charged, but insisted that the personal estate was fully sufficient for the satisfaction of all the debts of the testator; and denied the right of the plaintiffs, if the personal estate had been insufficient, to be subrogated to the rights of the creditors of the testator, because the law had pointed out the course to be pursued, in subjecting the real estates of deceased debtors, to the satisfaction of their debts, after the personalty has been exhausted; because they, the devisees, had in no way contributed to the blunders of the executor, in transcending his authority; or to inducing the plaintiffs to purchase at his unauthorized sale; because if the plaintiffs had any relief, it should be sought against the defendant,’ Dunn, alone, and in a court of common law: because the plaintiffs had knowledge of the will, and that it gave the executor no power to sell; because the land was purchased at an under value, by reason of misrepresentation of the plaintiffs, that they were purchasing for the benefit of the devisees; and because, although they purchased at the price of two hundred and forty-two dollars, and gave bond for the payment of that sum, on a credit of nine months, they on the day after the sale, obtained from the defendant, Dunn, a surrender of the land, by paying to him in cash, the sum of one hundred and eighty dollars only.

The cases of Williams v. Williams, (2 Dev. Eq. Cas. 69,) and Saunders v. Saunders, (Ibid. 262,) approved.

The cause was set down for hearing, upon bill and answer.

Badger, for the plaintiffs.

W. A. Graham, and Norwood, for the defendants.

Gaston, Judge.

There is no contest between the plaintiffs and the defendant Dunn, as to the money of the plaintiffs not paid over, and for this sum, they will of course, have a decree against him.

The claim of the plaintiffs to be substituted to the creditors, whose demands they have satisfied, is supported, we think, by well settled principles. By the laws of this state, real as well as personal property, is liable for debts of every description; but personal property is the primary fund, for their satisfaction. It is alleged, that the personal assets were insufficient for the discharge of all the debts. Whether this be the fact or not, can only be ascertained by taking an account of the assets, and of the administration of them. If in taking the accounts, the fact should be established as alleged, then it follows from the doctrine, sanctioned in the cases of Williams v. Williams, 2 Dev. Eq. Reps. 69, and Saunders v. Saunders, Ibid. 262, that the defendant, Dunn, would have a right in a court of equity, to be subrogated to those creditors who have been paid by his advances. As between Dunn and the plaintiffs, if their money were yet in his hands, he could not retain it with a safe conscience, and would be obliged to refund it. And it seems to us clear, that if he could rightfully reclaim it from his co-defendants, he might be compelled to assert this right, or permit the plaintiffs to assert it in his name, in order that it might be refunded. The court would do this upon the same principle by which the surety on making satisfaction to the creditor, becomes entitled to demand every means of enforcing payment which the creditor himself had against the principal debtor; a principle which when traced to its origin, is founded on the plain obligations of humanity, which bind every one to furnish to another those aids to escape from loss which he can part with without injury to himself. (Home’s Princl. of Equity, 84.) As all the parties are before the court, complete justice may be done by deciding direct relief to the plaintiffs. The objections urged in this case, are not, in our opinion, sufficient to repel the claim here advanced. There can be no relief at law, as to the money paid over, either against Dunn or the devisees. Not against him, for it has been applied in conformity to his agreement with the plaintiffs; not against the devisees, for between' the plaintiffs and them, there has been no contract. The doctrine of substitution which prevails in equity, is not founded on contract, but as we have seen, on the principles of natural justice. Unquestionably the devisees are not to be injured by the mistake of the executor, as to the extent of his power over their land; but that mistake should not give them unfair gains. The executor was not an officious intermeddler in paying off the debts of his testator; and his erroneous belief that he could indemnify himself in a particular way, should not bar him from obtaining indemnity by legitimate means. It is not a question here, whether a mistake of law shall confer any rights, but whether such mistake shall be visited with a forfeiture of rights, wholly independent of that mistake.

It is immaterial to the devisees, whether the price at which the land was sold, was a fair and full price or not; for that sale is not sought to be established. It is also unimportant for any purposes now under consideration, to inquire wherefore the land was surrendered on payment of a sum less than its amount; for certainly no relief will be granted, except in respect to the sum actually paid. When the disposition of the costs shall come before the court, then this circumstance, and others of a like kind, will receive the consideration to which they may be entitled. The court therefore declares, that the plaintiffs may have the accounts taken as prayed for; and reserves the further consideration of the case, until the coming in of the commissioners’ report.

Per Cüriam. Decree accordingly.