Opinion
(January Term, 1878.)
Guardian and Ward — Proceeds of Ward's Real Estate — Action to Recover by Administrator — Parties.
1. The administrator of a deceased ward is not entitled to recover, in an action against the administrator of the deceased guardian, moneys which came into the guardian's hands as proceeds of real estate belonging to the ward sold under a decree of court for partition.
2. In such case the heirs at law of the deceased ward are necessary parties to the action, in order that the rights of all interested may be adjudicated in the same action.
SMITH, C. J., dissenting.
CIVIL ACTION on an administrator's bond, tried at July Special Term, 1877, of CABARRUS, before Cloud, J.
This is an action brought by the administrator d. b. n. of Margaret A. Blackwelder, deceased, to recover certain moneys belonging to her estate, which went into the hands of her guardian, L. B. Krimmenger, who, dying, the defendant Robinson became his administrator with the will annexed; against whom and the sureties upon his administration bond the present action is instituted.
Margaret, the ward, was one of the heirs at law and distributees of Wilson Blackwelder, and as such was entitled to a considerable real and personal estate, all of which came into the possession of her guardian, Krimmenger. By a decree of court, at the instance of the guardian, the land was sold for partition, and the ward's part of the proceeds of the sale was paid over to her said guardian. The ward died, an (223) infant and unmarried. After the pleadings were in, references were made to ascertain and report, first, the indebtedness of the late guardian to his ward; and, second, to state the amount of assets in the hands of the administrator of the said guardian, applicable to the plaintiff's claim. Such proceedings were had upon these references that reports were made and confirmed by the court: (1) that the late guardian was indebted to the ward in the sum of $2,617.90, of which sum $1,132.75 was personal estate and $1,485.15 was proceeds of the sale of the land aforesaid for partition; and (2) that the defendant Robinson, administrator with the will annexed of the guardian, had in his hands $1,949.80 presently applicable to the payment of this debt, and certain notes for $584.54, which had not been collected.
Upon this state of facts the plaintiff moved for judgment against the defendant for the full amount of assets in his hands, to wit, $2,535.34, This was opposed by the defendant upon the ground that the plaintiff as administrator, in law, was not entitled to recover the proceeds of the sale of the real estate, which, not losing its character as land, upon the death of the ward descended to her heirs at law. And of this opinion was the court, and gave judgment for $1,132.75, the amount of the personal estate only. From this judgment the plaintiff appealed.
R. Barringer and W. H. Bailey for plaintiff.
Wilson Son, W. J. Montgomery, and P. B. Means for defendant.
So the question is, Can the administrator of the ward in this action recover the proceeds of the sale of the real estate which had been sold for partition (224) by the decree of the court, and paid to the guardian?
Before the adoption of the new Constitution, when the courts of law and the courts of equity were kept distinct and separate, the courts of law only looked at the legal relations of the parties to the action, as debtor and creditor, and not at the fund, as impressed, by its origin and history, with certain properties which in a court of equity imparted to it a different ownership and mode of transmission.
The law looked upon the fund as money only, no matter how derived, and upon the death of the owner devolved it upon the administrator; while equity went further, and looked into the derivation of the fund and stamped it with the character and laws of devolution of its origin. Hence, in S. v. Satterfield, 31 N.C. 358, which was an action at law, the administrator of the ward was allowed to recover upon the guardian bond the proceeds of the sale of land for partition, which had gone into the hands of the guardian. But the Court said: "Without deciding how the rights of the parties may be considered in a court of equity, we are of opinion that in a court of law the defendant having received money belonging to his ward, was after her death bound to pay it over to her personal representative, and that his refusal to do so was a clear breach of the bond, to the amount of the principal and interest." This case was followed by Latta v. Russ, 53 N.C. 111. That was an action at law upon an administration bond. There the administrator with the will annexed died, having in his hands money arising from the sale of land decreed to be sold for the payment of debts, being a surplus remaining after the payment of the debts, and which money belonged by law to the persons to whom the land was devised. It was held that the administrator d. b. n. c. t. a. of the original testator was the proper person to bring suit for such money, and not the devisees. But (225) this decision was rested upon the statute, Rev. Code, ch. 46, sec. 50, which provides that: "All the proceeds of the sale of real estate which may not be necessary to pay debts and charges of administration shall be considered, real estate, and as such shall be paid by the executor or administrator to such persons as would be entitled to the land had it not been sold"; thus making it the duty of administrators to pay over the excess of the sale of real estate to devisees and heirs, just as it was before their duty to pay over the personal estate to legatees and distributees. "When, therefore," say the Court, "an administrator dies before he has completed the settlement of the assets derived from the sale of the real estate, by paying debts and paying over the excess to the devisees or heirs at law, this unfinished duty cannot be performed by his administrator, for there is no privity between him and the devisees and heirs at law, and it is consequently necessary that both of the deceased persons should be represented, so that the representative of the administrator should pay over the fund to the representative of the first intestate, whose duty it is made to complete the administration by paying off all the debts and paying over the excess to such persons as would be entitled to the land had it not been sold."
But what is the rule in a court of equity? It is the inflexible rule in equity that the proceeds of land sold for partition, to which an infant is entitled, remain real estate until he or she comes of age and elects to take them as money. In Scull v. Jernigan, 22 N.C. 144, Elizabeth Sharpe was one of several heirs of Jacob Sharpe, and entitled to a part of his lands, which were sold for partition by order of court, and her part of the proceeds was paid to her guardian. She intermarried with Jernigan, and her guardian then settled with the husband and paid to him her estate, including her share of the price of the land. The (226) wife died without having had issue. The bill was brought by the heirs at law of Mrs. Jernigan, against the husband, to have the proceeds of the land declared to be real estate, and to belong to the heirs at law. It was held that they were entitled to recover. So in March v. Berrier, 41 N.C. 524, a part of the ward's land was sold by a decree of the court, and the proceeds paid over to the guardian of the infant. The ward died intestate and an infant, and the defendant Berrier administered on her estate, and received the money from the guardian, claiming it in right of his wife as personalty. The heirs of the infant filed their bill and recovered it as real estate. This last case, in connection with Scull v. Jernigan, is important as showing the true grounds upon which courts of equity take jurisdiction and administer the rights of the parties. The first ground is, that when courts of equity order a sale of an infant's land in order to raise money for any purpose, or for partition, they would not upon their own principles or independent of any provision by statute allow their decrees to affect the right of succession to a surplus remaining after answering the purpose. The money stands for the land. But the second ground, by itself, seems conclusive without the aid of the general principles of equity. It grows out of the express provisions of the statutes, Bat. Rev., ch. 84, sec. 17, which is taken from Rev. Statutes, ch. 85, sec. 7. After enacting that there may be a sale of land for division, it further enacts that if any party to the proceeding shall be an infant, etc., "it shall be the duty of the court to decree the share of such party in the proceeds of sale to be so invested or settled that the same may be secured to such party or his real representative." In commenting upon this statute, in Scull v. Jernigan, Ruffin, C. J., says: "The last are the material words, as the question is, how the fund is to be treated after the death of the party when claimed by the two classes of representatives, personal or real. To that purpose the language is unequivocal. It is secured to the real representative, and is, of course, land in this court. (227) . . . Had Mrs. Jernigan died an infant and unmarried, there can be no doubt that her heirs could have followed this money in the hands of the guardian, as real estate. There is nothing in the case to alter their rights."
To the same effect is Gillespie v. Foy, 40 N.C. 280; Dudley v. Winfield, 45 N.C. 91; Bateman v. Latham, 56 N.C. 35. The principle running through all the equity cases is that the heir at law may follow and recover the fund in whosesoever hands it may be, whether the guardian or his administrator, or administrator of the infant, or the husband. Their dealings with one another cannot change the equitable nature of the fund so as to disturb the rights of the heirs at law.
But now both legal and equitable rights are administered in the same action, upon the rational principle that there shall not be two actions for the same subject-matter, when a single action will afford a complete remedy. Assume that at law, prior to The Code, the administrator of the ward could sue for and recover a part or all this fund, it is clear that in equity the heirs, by another action, could have followed and recovered the proceeds of the land. As both actions are now combined, it would seem to follow inevitably that all the parties which were necessary to maintain the two actions must now unite in the one action, which comprehends both. The general rule in equity is, that all persons interested in the subject of dispute must be parties, because that court seeks to arrange in a single action all the claims arising upon the subject of controversy. In this case it is evident that unless the heirs at law of the ward, as well as the distributees who are represented through the administrator, are before the court, their several rights to the fund cannot be determined, for the fund is not sufficient to satisfy the claims of both parties — those entitled to the personal estate of the ward (228) and those entitled to the real estate — supposing them to be different persons.
If the administrator, plaintiff, had alleged and shown a deficiency of personal assets in his hands to discharge the debts of his intestate, and had made the heirs at law of the ward parties to this action, he would be entitled to condemn all or so much of the real fund as would be necessary for that purpose. But he makes no allegation of want of assets, and his only claim to recover this fund is that he is the proper party to recover and pay it over to the heirs at law. But as in this Court the real fund is land, and descendible as such, why should the heirs, in this more than in other cases of descent, be compelled to reach it in this roundabout way, instead of directly and immediately from the intestate? And suppose there had been no administration, or he had refused or delayed to bring an action for the recovery of this fund, are the heirs thereby to be hindered or delayed in coming to their inheritance? The heirs do not claim through, but above, the administrator, and immediately from the intestate; and whoever holds the real fund at the death of the ward holds it for the heirs and is directly amenable to their action to recover it. If the heirs had brought the action against the defendant Robinson, the administrator of the ward would have been a necessary party, as a representative of the creditors and distributees of the intestate. For the same reason the heirs are necessary parties to this action, that the rights of all may be adjudicated in the same action, instead of putting the heirs, as it may be, to another action against the administrator of the ward.
It does not appear why the action was not brought upon the guardian bond, instead of the bond of the administrator. As the only point presented by the appeal is that which we have discussed, we can notice no others. We think the court did not err in refusing to give the plaintiff judgment for the amount of the entire fund, and if nothing else (229) appeared, we would affirm the judgment. But as it also appears that the heirs at law of Margaret A. Blackwelder are necessary parties to the action and may be prejudiced by the affirmance of the judgment, we think it best and least expensive, not to dismiss the action for want of proper parties, but to vacate the judgment and remand the case, to the end that the heirs at law aforesaid may be made parties plaintiff or defendant, with leave to amend the pleadings as far as the new parties are concerned, and that the case may be then proceeded with according to law. The accounts as reported and affirmed will not be reopened. The plaintiff will pay the costs of appeal.