Moye v. Albritton, 42 N.C. 62, 7 Ired. Eq. 62 (1850)

Dec. 1850 · Supreme Court of North Carolina

42 N.C. 62, 7 Ired. Eq. 62

WILLIAM D. MOYE vs. JAMES C. ALBRITTON.

If an administrator gives a preference to a creditor, who is not entitled to it¡ he commits a devastavit, and is chargeable for the same assets to another, ' whose debt is of higher dignity or whose diligence gives him priority ; and this, though it may have been done through an honest mistake. And the rule is the samejn Equity, in this respect, as at law.

Where A. and.B. were eo sureties on a bond of C , and C. died and A. administered on his estate; and then B., in a suit against A. as administra-, for, recovered the amount ofndebt due to B. by the principal, A.’s intestate, and fixed him with assets upon the ground that A. had paid the debt ■•to C. voluntarily, while B.’s suit was pending; and A. alleged, in a bill of injunction to restrain B from collecting his judgment and for contribution, that he had no assets of his intestate out of which he could pay the debt to C., but that he paid the same out of his own funds, which was denied by B. in his answer; Held, that the Court could not determine the question of contribution, until an account of the administration of A, should be taken; and that for that purpose a reference be bad, and the injunction continued over.

Appeal from the Court of Equity of Pitt County, from an interlocutory order made at the Fall Term 1850, his Honor Judge Bailey presiding.

The following case was presented by the bill and answer.

The plaintiff and the defendant were co sureties for Archibald Parker, in a bond payable to John S. Daniel for about $600, Parker died intestate in October.1847, and the plaint iff administered on his estate in November 1847. The estate was not sufficient to pay the intestate’s debts, including the land — which the plaintiff sold under a decree for the payment of debts. Among the debts of ihe intestate weré two on bonds to the defendant; on which he brought suit to February Term 1848. Th® plaintiff claimed therein nine months to plead, as allowed by the statute. In July 1848 the plaintiff paid the debt to Daniel — then amounting to $624 05, without suit; and he took a receipt therefor, purporting to be given him a», administrator. In August following, the plaintiff, being then obliged to plead in the actions, put in plene admins istravil and retainer; and they were afterwards found a.gainst the plaintiff, and judgments recovered for $30p 61,. On the trial the plaintiff exhibited his administration account, and it thereby appeared that the assets of both - kinds amounted to the sum of $5781 31, and that th* disbursements and commissions allowed amounted to $6242 09 : thus, leaving a. balance due to the piaintiffof-$460 78. Among the disbursements, however, were tb.® payment to Daniel and some previously made in.the same manner to other persons, making an aggregate of $837 If* The defendant objected to them, because they were mad® voluntarily after his suit brought; and they were rejected by the Court. That made a balance on the administration-account appear against the present plaintiff, Somewhat exceeding $300; and accordingly the judgments at law were rendered, as before stated.

The bill states further, that the plaintiff made the payment to Daniel under the belief, that he had a right to prefer that debt, notwithstanding the defendant and others had brought the suits, in which he had not pleaded: and that, in fact, the payment was made with the intestate’s assets to the amount of $149 only — being in a bond for that sum, which he had taken as administrator for a .part of the real estate sold — and, as to the residue, with the plaintiff’s own funds. The bill further states, that the administration account, produced on the trial at law and exhibited with the bill, is just and true, as to the amount of the assets and the disbursement thereof 5 and, inas* much as the suits brought-against him bound the assets in law, that there were no assets legally applicable to the debt to Daniel; and that in truth the whole debt to Daniel was discharged out of the plaintiff’s proper money, and that the receipt was taken to him as administrator through a mistake upon that point. The bill then charges, that, 4s in point of fact the plaintiff has accounted for all the , assets of the intestate and paid this debt out of his own funds, the payment is in law regarded as having been made by him, as one of the sureties in the bond ; and, therefore, that he is entitled to have from the defendant contribution of a rateable part thereof, namely, $312 024 with interest thereon, and had requested the defendant to -.discount therefrom the sum of $300 61, so recovered by bim at law; but that the defendant refused to make such ^discount or contribution, and has issued writs of fieri facias de bonis intestati, and upon a return of nulla bona thereon he has sued out writs of fieri facias to obtain executions debonis propriis. The prayer is, that, if necessary, an account may be taken of the intestate's estate, and that the defendant may be declared liable to contribute equally to the satisfaction of Daniel’s debt, by paying one half thereof to the plaintiff or acknowledging satisfaction of his judgments at law, and, in the meanwhile, for an " injunction against suing out executions de bonis propriis.

On the bill an injunction was awarded as prayed.

After admitting the insolvency of the intestate ai.d that, on the defendant’s objection, as mentioned above, the plaintiff’s vouchors to the amount stated had been rejected at the trial, and that thereby a balance of assets appeared to be in the plaintiff’s hands sufficient to satisfy the debts to the defendant, the answer states, that, by establishing such balance of assets, the defendant answered his purpose at that time, and did not think it then necessary to make further objection to the account. But it further states, that the defendant believes, that the.ae* count was not correct, and that the plaintiff had assets to pay the debt to Daniel as well as those to the defendant, and that the payment to Daniel was made in the assets of the intestate ; and. moreover, it insists, that the plaintiff is concluded by the form of the reeeipt taken by him as administrator. It states, also, that, in 1846, the intestate gave to the plaintiff, who was his son in law, a negro, which he afterwards sold for $600, and that the debts to the defendant and also debts to other persons, now re-, maining unpaid, had then been contracted, and that the intestate did not retain property sufficient and available for the satisfaction of those debts ; so that the gift of the' slave was fraudulent and void as against the defendant,- and the plaintiff is chargeable for the value of the slave as assets ; and that, if he were thus charged, these would be enough to pay both Daniel and the defendant. The answer further states, that, at the plaintiff’s sale, the defendant purchased a piece of land at $142, and gave his bond therefor, and that the plaintiff passed the same away and the defendant had been compelled to pay it,' though he has not been able to get possession of the land, for the reason, that the intestate had not title to it; and it insists, that the defendant ought to be allowed therefor out of any sum in which he may be found liable to the plaintiff. ' ■

On the answer the defendant moved for a dissolution of the injunction ; which was refused, and he appealed.

B. F. Moore, for the plaintiff

Biggs, for the defendant.

Ruffin, C. J.

It would seem, that it was intended to raise an equity for the plaintiff, founded on his mistake in applying the assets to a debt, which he could not in law prefer to those of the defendant and others, then, in"' suit. Some such idea obscurely appears in the bill. But no relief could be given on that principle. If an admin istrator give a preference to a creditor, who is not entitled to it, he commits a devastavit and is chargeable for the same assets to another, whose debt is of a higher dignity. or whose diligence gives him the priority. He therefore applies the assets at his peril in that respect. And it is the same in equity as at law ; for, it is not against conscience, that the defendant should insist on his legal priority, and he should have the benefit of the assets which were properly applicable to his satisfaction. However honest the plaintiff’s mistake may have been, still he made a misapplication of the assets, and therefore cannot throw the loss on the defendant.

The bill, however, states another ground for relief and for the injunction, which appears to the Court to he a good one in itself, and not to have been sufficiently answered ; which is the liability of these parties, as co-sureties, to contribute equally to the debt to Daniel. It is admitted that the principal did not leave property sufficient to pay his debts and that the plaintiff paid this debt. The only other point material to the question of contribution is, as to the fund, out of which the payment to Daniel was made and ought to have been made. If at the time the plaintiff paid the debt he was bound or at liberty to discharge it out of the assets of the principal, he ought not to have contribution from the defendant, since he had in his own hands the means of saving harmless both himself and the defendant, and the principal, in truth, could not, to this purpose, be deemed insolvent. On the other hand, if, at that time, he had no assets applicable to the debt, that is, liable in law therefor, so that, as administrator. he might then have been charged therewith in an actiott-by Daniel, it would seem manifestly unjust, that, asco surety,.he should be liable for more than a moiety. He s not bound to pay that debt instantly upon admin istering, in order to found a claim for contribution from his co surety; but was entitled to a reasonable time to convert the property into money for that purpose. lie. could not compel the creditor to bring a suit, so as lo en* able him to confess a judgment and thereby appropriate the assets to this in preference to other debts in suits. If, therefore, before he had the means of payment in hand, or before he could confess judgment for this debt, other creditors tied up the assets by bringing suits, so that he could not legally appropriate to Daniel’s debt, it is the same, for the purpose of the present question, as if there had been no assets at all — since it was not the plaintiffs fault, that he did not apply them in discharge of this debt, but he was prevented from doing so by the law itself, which makes a suit brought so attach upon the assets, as to render a voluntary payment of another debt in equal degree or devastavit. How, then, is it to be understood in this ease, the assets stood at the time of the payment to Daniel 1 It is to be noted, that, upon]the trial at law, the plaintiff was content to take a credit for this sum as a disbursement of the assets, and so stated it in his administration account and that, thus stated, the assets would be exhausted and nothing left to answer the defendant’s demand. The defendant then objected that the assets, thus applied by the plaintiff, were bound to him by his prior suit, and he sue. ceededon that ground in having that credit struck out of the account. That does not, indeed, prevent the defendant from showing, now, that there were assets applica» ble to Daniel’s satisfaction. For, the point on the trial was, whether it was not a devastavit, as against the plain* tiff at law, even if the payment to Daniel was made out of the assets, and the creditbr was not called on to go further. But when the plaintiff claims contribution, as between co-sureties, it is open to the defendant to allege that thc principal left assets, with which.the plaintiff, as Iiis administrator, might and ought to have, paid the debt. The question is. bow the fact is in that respect. And up-on the circumstances stated, the Court thinks that it is prima facie to be understood, that there were no assets for that purpose. According to the account exhibited» connected with the judgment obtained by the defendant, there were none ; and the bill states explicitly that there were none, and that the account is just and true. The answer does not dispute a single item in it. It does not' allege, that the payment of any one of the debts was improper, saving only that the voluntary payments were erroneous, as against his prior suit; or that the plaintiff ought to have paid Daniel before he paid any of the other debts, mentioned in the aecouut. Without entering into any particulars, the defendant merely states in general terms his belief, that, after paying his judgments, there are assets sufficient to pay Daniel. But such a gpneral statement cannot overthrow the positive and precise alle-gationsofthe bill, accompanied by the account. In support of his belief, the defendant adduces one allegation of-fact and one only; which is, that the intestate fraudulently gave the plaintiff a slave which thereby became assets. But that does not answer the plaintiff’s case, so as to require the dissolution of the injunction. The answer is not on that point responsive to the bill; but brings forward new matter in avoidance of the plaintiff’s prima facie case. Besides, the answer does not profess to state this as a thing within the defendant’s own knowledge. For those reasons it is proper to reserve the consideration of that question, until the parties can enter into proofs, upon the hearing or before the Clerk in taking the account.— In fine, it is apparent that the Court cannot make a decree with any confidence of its justice, until, by an account, it can be ascertained, whether there were in the hands of the plaintiff assets of the intestate applicable to the payment of Daniel to any anti what amount. Prima fads it is to be taken, under the circumstances, that there were not, and therefore that the defendant is chargeable to the plaintiff for a moiety of the debt. While thus ap* parently chargeable, he ought not to coerce from the plaintiff personally the payment of his judgment at lawf instead of letting one of the demands stand against the other.

The alleged defect of tille to the land purchased by the defendant cannot affect the question. The defect is not sufficiently stated. If it were, it cannot be presumed, that the plaintiff made himself liable for the title, or knew of the defect before he disposed of the bond for the purchase money in the course of administration, as stated in the administration account, on which the defendant fixed him with the assets, in respect of which, in part, he took his judgment.

There was, therefore, no error in the order appealed from.

PfiH CuiUAM. Ordered to he. certified accordingly,