Barnard's Administrator v. Jordan's Administrator, 25 N.C. 268, 3 Ired. 268 (1842)

Dec. 1842 · Supreme Court of North Carolina

25 N.C. 268, 3 Ired. 268

CARTER BARNARD'S ADMINISTRATOR vs. THOMAS JORDAN'S ADMINISTRATOR.

December 1842.

"Where a suit is brought by the administrator of one intestate against the administrator of another intestate for a debt due from the intestate of one to the intestate of the other in their lifetime, the defendant may set off a debt that was due from the plaintiff’s intestate to his intestate.

"Where a suit is brought against an. administrator for a debt due by his intestate, he cannot set off a debt due to himself for goods of his intestate, which he, as administrator, sold to the plaintiff’s intestate.

The rule is, if both parties must sue and be sued in their representative characters, then debts respectively due in those characters may be set against each other; but where oree of the parties must sue or be sued in his representative character, and the other may she or be sued without naming him executor, then the debts, as being due in different rights, cannot be set against each other.

Appeal from the Superior Court of Law of Pasquotank County, at Spring Term, 1842, his Honor Judge Manly presiding.

In the court below the following facts were submitted to the Judge as a case agreed. The plaintiff’s intestate became surety on a note given by the defendant’s intestate, on which an action was instituted and judgment obtained against the plaintiff’s intestate, at Pasquotank County Court, at March Term, 1841. Execution on this judgment issued, tested at March Term aforesaid, and came to the hands of the defendant, who was sheriff of thé county, and was levied on the goods and chattels of the plaintiff’s intestate, and on the 25th of May, 1841, the sum of one thousand dollars was made upon the execution, out of the goods and chattels of the plaintiff’s intestate. The plaintiff’s intestate died on the day of March, 1841, and administration on his .estate was granted to the plaintiff at June Term, 1841, of Pasquotank County Court. The defendant’s intestate died in November, 1840, and on his estate was committed to the defendant in December, 1840, and he sold at auction the perishable property of his intestate in that month. Carter Barnard, the plaintiff’s intestate, lived with the defendant’s intestate at the time of the death of the latter, and in right of his wife was one of his distributees and heirs at law, and when the defendant sold his intestate’s property had it in possession. At the sale thus made by the defendant of his intestate’s property, the plaintiff’s intestate purchased property to the amount of nine hundred and seventy-two dollars and six cents, on a credit of six months, which fell due on the day of June, 1841, and hired negroes to the amount of one hundred and seventy-nine dollars and fifteen cents, which fell due on the first day of January, 1S42. The plaintiff’s intestate afterwards delivered to the defendant a quantity of corn, which was to be sold by the defendant, and the proceeds thereof to be applied in part discharge of the hires and purchases so made by him, without specifying to which it should be applied. — . The corn was sold for $403, and the defendant elected to apply this sum, first to extinguish the amount due for hire, and the remainder towards the purchases of the plaintiff’s intestate from the defendant, leaving a balance due to the defendant as administrator of Thomas Jordan, of $768 20. The plaintiff’s intestate is also indebted to the defendant in the sum of $90, on a note payable to his intestate, Jordan, and due the 20th of September, 1840. If the first sum be allowed as a set off, the plaintiff is entitled to recover from the defendant the sum of $231; and if both sums be allowed as sets off, the plaintiff is entitled to recover the sum of $141 80. If neither sum be allowed as a set off, the plaintiff is entitled to a judgment for $1000, with interest from 25th May, 1841.

Upon this case his Honor was of opinion, that neither of the above sums was a set off, and gave judgment quando for one thousand dollars, with interest from the 25th May, 1841.

From this judgment the defendant appealed to the Supreme Court.

«Ü. Moore for the plaintiff.

Debts tobe set off, must be due to and from the plaintiff and defendant, and in the same rights. And as a necessary branch of this rule, when either of the parties to the original contract is dead, the cause of action which originated in the life time of a deceased party, can be opposed by a set off arising out of a transaction with him in his life time. This principle we think may be deduced from the cases cited in Babington on Set Off, 68 & 69. Shipman v Thompson, Willes, 103. Teggetm&yer v Lnmley, Ibid. 264, n.

If the demands, which the defendant insists upon as sets off in this action, can avail him as such, the claim which the plaintiff sets up could be used as a set off, if the parties on the record were reversed. Now if Jordan’s adm’r. were the plaintiff, if the adm’r. of Barnard could defeat his recovery of a debt contracted by Barnard with the defendant Pool, Pool might be made liable for a devastavit against his consent.— And if Barnard himself were before the court as a defendant, claiming to set off the amount of his purchase by the debt which the estate of Jordan owed him, it could not for a moment be pretended that he would thus measure out the assets of Jordan’s estate. And if Barnard could not do it, it is difficult to perceive how his adm’r. could claim greater rights than his intestate.

In the case of Eure v Eure, 3 Dev. 206, the late C. J. Henderson held that the adm’r. cle bonis non was the proper person to sue upon a note which was made payable to the first administrator, for the reason, that il the action could be maintained in the name of the adm’r. of the adm’r., a claim due from the first administrator might be used as a set off, and thereby make the administrator, who may be insolvent, aet unjustly against his will. To which, the present C. Justice, who delivered a dissenting opinion replied, that if the administrator de bonis non could maintain the action, then a simple contract creditor of the first intestate could avail himself of a demand due by simple contract, and specialty and judgment creditors would be defeated. To avoid result it is insisted, that no claim by way of set off can be used to defeat a recovery upon a note, which has been given to an executor or administrator, in the sale of the property of his testator or intestate. By our act of Assembly, Rev. Stat. ch. 44, sec. 11, page 275, executors and administrators are required to sell the perishable property upon a credit of six months, and after the time of payment is passed, they shall “ take and pursue all lawful ways and means to recover and receive the money, &c. or otherwise shall be chargeable and answerable for the same.” The notes, which are thus taken, are taken in the execution of a duty imposed upon the executor or administrator that was not required of him by the common law ; the price is substituted for the article, and when collected, goes in the same course of administration. The act further preserves the character of the fund by requiring the executor or administrator to use all lawful means to collect the debts when they shall become due, “or otherwise he shall be chargeable for the same.” Now a sale by an executor at common law, subjected him at once to the demands of creditors, whether the sale was to a solvent or-insolvent person, and whether the debt had been collected or not. It considered the sale as ipso fado an appropriation by the executor of the assets to his own use,

2dly. It is insisted that these debts are not due to and from the plaintiff and defendant in the same rights. When Barnard became Jordan’s surety, the law implied a contract on the part of Jordan to indemnify Barnard. The contract then upon which the plaintiff sues, had its inception in the life time of both parties. And when Barnard’s administrator paid the money, the responsibility of Barnard was the consideration upon which the law implied the promise of Jordan to indemnify him. Hence, the contract upon which the plaintiff sues was created in the life-time of both parties. The breach took place after the death of both. The debts, however, which are offered in evidence as sets off, were wholly contracted after the death of Jordan.

Kinney for the defendant.

The defendant insists that stun sought to be set off in this case is within the provi-si0n of the statute : First, because they are both debts due in the same right. To prove this, we have only to consider the facts set forth in the case. If the plaintiff recovers, the fund recovered will be assets in his hands to satisfy the debts of Barnard. If the set off be allowed, it will to that, amount diminish the fund in the hands of the plaintiff to pay the debts of Barnard. The same result would follow, if we suppose the defendant to have brought suit against the plaintiff,'and to have recovered. The recovery would be assets to satisfy the very debt for which the action is brought, and other debts of Jordan. The true principle will be found laid down by Haywood, Judge, in Hogg's Ex'ors v Ashe, 1 Hay. 476 — and is in these words: “when the debt offered to be set off- is recoverable and payable out of the same fund, that the debt to be recovered in the action goes to increase, it may be set off” It is insisted, that, if the defendant had brought suit against Barnaid for the amount of his purchase, the latter could not set off the demand for which this action is brought, and, therefore, that the defendant in this action cannot set off his claim as plaintiff.

The position is admitted, but the consequence denied. The reason why a debt due from a testator to a defendant cannot be set off against a demand of the executor arising after the death of the testator is, mereiybecause it would deprive the executor of .the power of administering the assets according to law, and is a rule ingrafted upon the Statute by construction, and is necessary to preserve the dignity of debts. But in this case no such reason can operate, and “ cessat ratio, cessat lex.” Indeed, in this case, the very converse of the proposition may be, and probably is true.— By admitting the setoff, the funds of Jordan were preserved for payment of debts in due order, and it does not appear that if the plaintiff recover, he will be able to pay defendant his demand.

It is laid down by some elementary writers, and there may be dicta of some of the Judges, but it is in no case decided, that the set off must be mutual, that is, if the parties were reversed that the demand for which the action is brought, must be a set off against the demand sought to set off. It is true that such is generally the case, but to adopt the rule as universal is unnecessary, and would narrow the force and value of the Statute.

It is said that the plaintiff’s debt was never due to his intestate, because, as is insisted, it arose after the death of the intestate, and, therefore, that it is, in truth, a debt due to the administrator, and of the same character as debts which arise from the sale by administrators of intestate’s effects.

It is is insisted that the debt arose to Barnard in his lifetime. The execution was tested in his life-time, and, by operation of law, divested his title to the goods sold, from the teste of the execution. The goods sold were never those of the administrator in contemplation of law, but were those of the intestate, and, consequently, the administrator is not bound to administer them, and cannot be charged with their value, or with due administration. But it is denied that the time at which the several debts accrued is at all material.

The only question to be decided is, whether, the debts be mutual, that is, whether the “debt offered to be set off is recoverable and payable out of the same fund, that the debt to be recovered in the action goes to increase.” An illustration of this position may be found in the doctrine of set off by and against partners.

It is quite clear that to an action by A. against B., a debt due from A. to B. and C. cannot be set off in the life of both, and so vice versa. It is as clear that a debt originally due from A. to B. & C., is the subject of set off alter the death of one of them, and the only enquiry is, whether the debt be due from or to one of the partners at the commencement of the action. This is apparent from the form of plea as set forth in the case of Assignees of Lane v Slidstonef 5th Term. 493, and cited in Babington on set off 41, Law Library, Vol. 4. By the death of one of the partners, the whole interest is, at law, vested in the survivor, and thereby becomes the subject of set off, though the debt had a different character when contracted.

Ruffin, C. J.

The defendant, being sued in an action assumpsit, and having pleaded the general issue and given notice of set off, set up Uvo claims on the trial, of which claimed the benefit as deductions from the plaintiff’s demand. The demand of the plaintiff arose thus : Barnard, his intestate, was the surety for Jordan, the defendant’s intestate, and after Jordan’s death judgment was obtained for the debt against Barnard, on which execution was issued and levied, and the sheriff sold thereon after the death of Barnard, and before the plaintiff administered. For the sum thus paid, this action is brought by the plaintiff as administrator of Barnard against Pool as administrator of Jordan. The demands of the defendant arose thus: One of them is a note for $90, given by Barnard to Jordan in their life-times, and duo before this action was brought; and the other is a debt which Barnard contracted with Pool, after the death of Jordan, for the price of certain goods that had belonged to Jordan and were sold by Pool. His Honor thought that the defendant was entitled to a deduction for neither of those claims, and there were a verdict and judgment for the plaintiff for the whole of his demand, and the defendant appealed.

In the words of Baron Fortescue in Shipman v Thompson, Willis’ Rep. 103, the court is not to consider the convenience or inconvenience on one side or the other in cases like this, but must go according to the act; and if the statute has not remedied all the inconveniences, we must yet take it as- i-t is, and cannot extend it farther. Now the act of 1756, e. 57, s. 7, “ for preventing multip'icity of law suits,” says that “ where there are mutual debts subsisting between the plaintiff and defendant, or if either parly site or he sited as-executor or administrator, where there are mutual debts subsisting between the testator or intestate and either party, one debt may be set against the other.” Upon this statute it has been held repeatedly, that if an executor sue on a cause cf action, which arose wholly in his own time, he may sue in his own name, without calling himself executor, and, therefore, the defendant in such action cannot set off therein a demand due to him from the testator. The leading case on this point is that of Shipman v Thompson just cited, but there are mauy others in confirmation of it. The decision is founded on the words of the act, that the parties, when ecutors or administrators, must sue and be sued in their representative characters. When, therefore, the action is for a sale by the executor himself, or for money received for him, he declares without naming himself executor, inasmuch as there had arisen no duty to the testator. And if, in such case, the executor in fact declare as executor, it makes no difference ; for that is but surplusage, and if he fail in the action he shall pay costs. Jenkinson v Plombe, Salk. 207. 6 Mod. 92, 181. Goldthwayte v Petrie, 5 Term Rep. 234. Ballard v Spencer, 7 Term Rep. 358. But besides the language of the statute, its policy also forbids its extension, so as to change the course of administration; and for that reason, likewise, the courts have held that a debt of the testator cannot be set off against one contracted with the executor, since the executor may need the money to answer debts of higher dignity. Tegetwayer v Lumley, Willes 264. Note by Mr. Durnford. These positions, if well founded, make it clear, we think, that the note for $90 is a proper deduction in this action. The plaintiff here has not only named himself administrator, but he could not sue without thus naming himself, as the money was raised on a judgment and execution in the time of his intestate, and before administration granted to the plaintiff, Curry v Stephenson, Carth. 335 ; and for that sum of $90 this defendant could not sue but as administrator. That debt, then, is due to and from the parties respectively in the same representative character, in which the one claims and the other owes the debt for which the plaintiff sues.

But we think it is otherwise with respect to the sum of $768 20 due for the goods sold by the defendant himself to Barnard. For that debt the present defendant may declare in his own name, as has just been shewn ; and, for the purposes of set off, it is considered a debt to himself, to all intents, according to the cases. Indeed the counsel admitted, that if this defendant had sued Barnard for this sum, he, Barnard, could not have set off the debt for which this suit is brought; because the sum which Pool would be then seeking1 to recover would be a debt due to himself. Yet it is contended, that when Pool is sued as administrator, he may set off this debt to himself. We entertain a contrary opinion. & seems very clearly to us,1 that if the debts be not within the act, when one of the parties is plaintiff and the other defendant, they do not become so by reversing the parties. The statute was not designed to alter the law, so as to affect rights or .change their character, but simply to prevent the multiplicity of suits, by allowing that to be done in one action, that before required two. If, when Pool should sue Barnard, the latter could not set off the demand now in suit, neither when Barnard becomes plaintiff could Pool set off the debt to himself; for the debts must be “ mutual,” and the right of set off is necessarily “ mutual.” Then it is very clear, that, if Barnard himself could not use his demand as a set off, his administrator, it sued, could not; and it follows, that, when he is plaintiff, the demand of Pool cannot defeat his action. Pool cannot have a right of set off against a debt, which the plaintiff can only recover as administrator, when sued by the plaintiff, unless he could have used the same set off, if the intestate, Barnard, had himself brought the suit. The distinction, we think, is this.: that if both parties must sue and be sued in their representative characters, then debts respectively due in those characters may be set against each other ; but when one of the parties must sue or be sued in his representative character and the other may sue or be sued without naming him executor, then the debts, as being due in different rights, cannot be set against each other.

As the judgment was, in our opinion, erroneous with respect to the sum of $90 and interest, it must for that reason be reversed, and a venire d.e novo awarded.'

Per. Curiam. Judgment reversed and venire de raoro awarded.