Opinion
(June Term, 1844.)
1. It is well settled in this State that, after a suit by a creditor, an executor cannot prejudice that creditor by a voluntary payment of another debt of equal dignity.
2. It is also well settled that, after a plea in one action, the executor cannot prejudice the plaintiff therein by availing himself, as a defense for want of assets, of a judgment in another action subsequent to the plea in the first.
3. The plea ought to state the assets truly, as they existed, in the one case at the time of the suit brought, and in the other at the time of the plea pleaded.
4. Therefore, an executor or administrator cannot plead, as a plea puis darrein continuance, judgments recovered against him and no assets ultra.
5. The reason for this rule is stronger in this State than in England, because here the executor is allowed nine months from his qualification before he is compelled to plead.
6. More especially, should this rule be enforced when, as in this action, the justice of the plaintiff's demand is admitted at first and the only contest is about the assets, and the defendant asks to be permitted to plead this plea after six years litigation of the question of assets.
APPEAL from Pearson, J., at Spring Term, 1844, of JOHNSTON.
John H. Bryan and Husted for plaintiff.
Saunders Manly for defendant.
This was a suit against the defendant, as administrator of Ray Helme, to recover a balance due on a bond of the intestate, commenced by warrant from a justice of the peace 10 June, 1837. On the return of the warrant, the trial was postponed, at the instance of the defendant, for nine months from the fourth Monday of November, 1836, which was the time at which the defendant administered. On 31 August, 1837, the defendant, not denying the debt and insisting on his want of assets, the magistrate gave judgment for the plaintiff for $54 principal money, with interest thereon from a day mentioned, and endorsed on the warrant (346) that the defendant suggested the want of assets to satisfy the plaintiff's demand, and that he was desirous to avail himself of such plea, and the proceedings were returned to the succeeding term of the county court. At that term the defendant appeared and pleaded plene administravit, no assets and certain judgments, and no assets praeter, on which issues were joined. At May Term, 1838, the issues were tried and found in favor of the plaintiff, and from the judgment the defendant appealed to the Superior Court. At September Term, 1843, the defendant pleaded puis darrein continuance, two judgments recovered against him at that term, and no assets ultra, to which the plaintiff demurred. On argument, the court gave judgment for the defendant, and the plaintiff appealed.
The only authority cited in support of the judgment is the modern case of Prince v. Nicholson, 5 Taunton, 665, and one or two others founded on it. That case admits that it lays down a new rule not authorized by any precedent; but it is to the point. If, however, we were satisfied with the reasoning on which it goes, we (347) should not be at liberty to follow it. We have supposed it to be settled doctrine in this State, that, after a suit by a creditor, an executor cannot prejudice that creditor by the voluntary payment of another debt of equal dignity, and, further, that after a plea in one action, the executor cannot prejudice, the plaintiff wherein by availing himself, as a defense for want of assets, of a judgment in another action subsequent to the plea in the first. The plea ought to state the assets truly, as they existed, in the one case, at the time of the suit brought, and in the other at the time of the plea pleaded. The former position has been lately stated in White v. Arrington, 25 N.C. 166, which followed many previous cases. The latter was decided on demurrer in Churchill v. Comron, 1 N.C. 637; S. c., 5 N.C. 39. That was a plea of a judgment since the last continuance, and the plea was held bad by the judgment of the whole Court. The question was again made in Collins v. Underhill, 4 N.C. 381, and decided the same way a second time by the Supreme Court of 1816.
These repeated adjudications of our own courts must outweigh the recent decisions of those of another country, introductory of a novel rule into the common law and resting only on general reasoning. Indeed, as authorities, those adjudications of our highest tribunals are conclusive on us at this day, the more especially as we believe they have ever since been regarded by the profession as fixing the law, and the Legislature has obviously acted on the same idea. But we own that, to our apprehensions, the decisions of our courts are sustained by the better reasons. We think the law ought in this, as in other instances, to favor the diligent — not, indeed, to the injury of a faithful executor, by subjecting him to the payment of the same sum twice or oftener for the want of a power conferred by the law fairly to appropriate it once, and protect himself by such appropriation; but no such injustice is worked by the law, for as, upon a deficiency of assets to pay two creditors, the executor cannot compel them to accept proportional shares of their (348) debts, the law allows the executor, as a boon to him and for his protection, to pay one in preference to the other; so upon a like principle, which is explained by Lord Ellenborough in Tollputt v. Wells, 1 Maul. Selw., 395, an executor, when sued by two or more creditors, may confess judgments to some to the amount of the assets, and plead them to actions of the others. Nay, the indulgence to the executor is still more liberal, and properly so.
In Waters v. Ogden, Doug., 453, an administrator pleaded plene administravit praeter £ 48, and to another action plene administravit praeter the same £ 48; and as to that sum, that he had confessed it in the other action in a plea at the same term. It was held good, because the defendant had in the first action accounted for all the assets and done all in his power to appropriate them. He had not enough to satisfy the whole demand, and therefore could not confess judgment in the first action; nor could he compel the plaintiff in that action to confess his plea and take judgment for the sum confessed, as he might think the defendant had more assets. Hence, as the executor could do no more than he had done, he was of necessity protected in such appropriation of the assets before pleading in the other action. But that clearly excludes the idea that after pleading falsely in one action an executor can confess judgment or confess assets in another suit and plead it since the last continuance. The plea must be in due time; that is, when the executor has been first obliged to plead. A difference is taken, indeed, in Prince v. Nicholson, between it and Waters v. Ogden, namely, that in Waters v. Ogden, the defendant admitted the debt in each of the actions brought against him, while in the other he felt it his duty to dispute the debt by pleading the general issue, so that he could not confess assets therein and plead that in the second suit. Hence the court extended the discretion of the executor to the confessing of judgment, in a subsequent action, and allowed him to plead that puis darrein continuance in a prior one wherein he had before pleaded the general issue, and thereby admitted assets.
(349) It was said by Chief Justice Gibbs, it was to be presumed that the reason why the executor did not defend the second action was because he knew the claim was just, and, by inference, that he defended the first action because he believed the claim to be unjust. From that hypothesis was deduced the necessity for so extensive and, as it seems to us, so dangerous a discretion to the executor. Such a discretion we yield up to the time of the plea pleaded, and that seems ample enough.
Where an action is brought and the executor makes his defense, he should be compelled to make one he can stand by, and, like other defendants, ought to be concluded by his allegations and admissions therein contained. It is then time that he should act definitely, so that some consideration may be shown for the rights of the other party, and that he may know on what points of law or fact they depend. They ought not to rest perpetually or indefinitely in the discretion of the defendant with a power at any moment after heavy costs incurred by the creditor in proving the debt or fixing the executor with assets to defeat the action by diverting the very assets in the concealment of which the executor was about being detected, from the detecting creditor to one more favored because less urgent. An executor, like other persons, should abide by his defense, once made, and especially in reference to the assets, of which his duty requires him to keep true accounts. It is true, there may be a difficulty where the executor conceives that his duty requires him to deny the debt; but the difficulty is not serious, as it seems to us, and was well solved in the argument for the plaintiff in Prince v. Nicholson, by saying that the court always, in a proper case, gave the executor time to plead in the one action till judgment had passed in the other. The argument did not, indeed, prevail in that case, and the reply to it was that the granting of time was but matter of indulgence and the executor ought to be entitled to the defense as a matter of right; but whether in such case the grave, impartial, regulated, and legal discretion of a court, or the arbitrary will of an interested and irritated litigant executor, may be most wisely trusted, let any one judge. That the court (350) had prevented mischiefs to the creditor and executors by regulating the period of pleading in the several actions upon just terms, is unquestionable. It was acknowledged in that case. It is so stated in Tollput v. Wells, where it is said the practice was, if an executor applied for time to plead, to grant it only on condition of his not confessing judgment — a condition so obviously nugatory as to render it ridiculous to impose it if the executor could plead a judgment since the last continuance; and that able lawyer and eminent judge, Mr. Justice Bailey, lays down the law in that case clearly the other way. His words are: "An executor may, pending an action against him by one creditor, confess a judgment to another in equal degree, provided he do it before he is compelled to plead to the action, because up to that extent the law allows him to give a preference." The same principle is laid down in Wentworth Executors, 145.
But if Prince v. Nicholson, be law in England, the very principles of that case forbid the plea in this case. First, that time to plead, which was not there allowed any influence towards upholding the old rule of law, because it was not the absolute right of the executor, but was fettered with conditions and depended on the indulgence of the court, is given in this State, untrammeled and at the mere will of the executor. By the Revised Statutes, chap. 46, secs. 23, 24, and 25, an executor cannot be compelled to plead to an action brought in a court of record before the expiration of nine calendar months from his qualification; and if he be warranted before that period, it is the duty of the magistrate, by entry on the warrant, to postpone the trial to some day after the expiration of that time; and, further, if upon the trial of the warrant the executor be desirous to avail himself of the want of assets, he may suggest it to the magistrate, who shall endorse the same on the warrant, and if he find the plaintiff's claim to be just he shall give judgment therefor, and return the warrant, with the endorsements and judgment, to the next county court, "where the defendant may plead any plea (351) relative to the assets which could be pleaded had the suit been instituted returnable to said term." It is true that it is not in terms enacted that a rule shall be given for pleading in one action when another shall have been decided; but to the purpose in hand, it is substantially so. The long period of nine months from his qualification is given for pleading, if the executor chooses to take it, because the Legislature considered that in the meanwhile the executor could, in almost every case, satisfy himself what claims were just or unjust, dispose of the estate and ascertain the assets, so as to be able to appropriate them among the most meritorious creditors, and thus plead with respect to the assets without any peril to himself. The postponement is not absolute in every case, but only at the instance of the executor in each particular action, and therefore within the nine months he may dispose of all the assets by making payments or confessing judgment; and if that period should, contrary to all reasonable expectation, prove to be insufficient to enable the executor to plead safely, he may still apply, as at common law, for an enlargement of the time which would in a very strong case doubtless be granted. It is plain upon the face of the act that the Legislature either held, according to the cases of Churchill v. Comron, and Collins v. Underhill, that an executor was by law, as it then stood, bound as to the assets by his plea pleaded, or meant that it should in future be so; for to what end is the executor to be allowed arbitrarily to take time to plead and thus delay the creditors if, when he pleads, he is not concluded, but may subsequently appropriate the assets by confessing judgments and plead that appropriation puis darrein continuance in an action wherein he had before admitted assets? But this is placed beyond doubt by the provision for pleading in a case adjourned to the county court by a justice of the peace, which is not that the plea shall relate to the commencement of the suit nor to the suggestion of a want of assets (352) before the magistrate, but expressly that the plea relative to the assets may be any " which could be pleaded had the suit been instituted returnable to that term." Thus showing that the material point of time at which the executor's hands were understood to become tied as to the disposition of the assets in respect to each particular creditor is when he is called on to plead to the action of that creditor. The Court could not sustain this plea without obvious disrespect to the legislative interpretation of the previous law or their intention as to what it should be. We therefore conclude that the plea would be bad were this an original action brought to the county court, and consequently open, when the executor was called on to plead to it, to every defense, as well in denial of the debt as of assets.
But if that were otherwise, then, secondly, this particular case, we think, is clearly one in which there is no pretense for admitting the plea. The peculiar nature of it seems to have been overlooked, for it is entirely distinguishable from Prince v. Nicholson. The main ground of that case is, that it was unavoidable to entrust the executor with a discretion to defend or not defend the actions by denying or not denying the debt, as he did in that case, and that it was to be presumed that he did so bona fide, and, therefore, that he ought not to be prejudiced by denying the debt and not confessing assets in a first suit, so as to protect himself in a second, in which judgment was first recovered to the amount of the assets. Now, that wholly fails in the case before us. Here the defendant did not and could not deny the debt by plea in the county court. The debt to the plaintiff was established by the judgment of the magistrate, and the executor made no resistance to it. If he meant to deny the debt, he must appeal as in ordinary cases. Under this act of 1828 he cannot call that in question again, and the only point, that could be made after the case got into the county court was "relative to the assets." Then this case is that of a creditor claiming a debt, admitted from the beginning, to be just, and is therefore not analogous to Prince v. Nicholson, but rather Waters v. Ogden, which protects the executor as to the assets, where he had confessed them to a prior action or one (353) brought to the same term with that in which he is called to plead. The defendant said to this plaintiff, when he brought his suit: "I know the debt you claim is due to you, and therefore I admit it, but I have no assets to pay any part of it, and that is my only reason for not paying you." The plaintiff, not believing the representation about the assets, took issue on that point, and undertook to prove that the defendant had assets. Then, after protracted litigation of six years, and when the executor discovers that the plaintiff is about to prove the assets on him, the executor comes forward and says, again: "It is true, when I falsely denied having any assets, that I had a sufficiency to pay you, and as I knew your debt was just, I ought then to have paid you, but now you ought not to compel me to do so, because the other day I found out another just debt of my intestate, for which I have confessed judgment, in order to defeat your suit and escape a judgment against me for the costs." Surely, there is as little law as fairness in such a defense. If it was sustained, it would present strong inducements to executors to be careless in their accounts and dishonest in their administrations. When an issue upon the assets is found for the plaintiff, his judgment is for the debt and costs de bonis testatoris, et, sin, non, de bonis proprius executoris as to the costs. It can hardly be doubted that in every case in which an executor found that a creditor was about to prove assets on him he would, if possible, defeat that creditor by finding another and confessing judgment to him. Where an executor answers, as to assets, in an action for a debt which he does not dispute, common honesty requires that he should answer truly and enable that creditor to have the benefit of the assets which no other creditor is then claiming. The question, in that stage, is between creditors only, and as between them diligence certainly creates a preference. If the executor willfully endeavors to baffle a just creditor by falsely denying assets, he gets no more than his deserts by being (354) made at all times to answer for the assets which he unquestionably ought to have confessed in the suit at the first.
It may not be amiss to mention that these principles have the sanction not only of the opinion of the present members of the Court, but also that of the late Judge Gaston. A year or more ago a bill in equity by the present defendant against the plaintiff and several other creditors who had suits in like circumstances, stating the whole case and seeking relief upon some equitable ground of a mistake as to a sum of money not being assets, which turned out to be assets, was submitted to Judge Gaston for an injunction. He thought proper to consult his brethren, and upon consideration we were all of opinion that the plaintiff had concluded himself by his incautious pleading at law, and that he could have no relief in equity, and we declined making any order on the bill.
Upon reconsideration of the question, the present Court is also unanimous that the judgment must be reversed and the demurrer sustained, and the cause remanded, with instructions to proceed therein according to law.
PER CURIAM. Reversed and remanded.
Cited: Bryan v. Miller, 32 N.C. 130; Wadsworth v. Davis, 63 N.C. 252; Howell v. Reams, 73 N.C. 392.
(355)