Opinion
(June Term, 1838.)
Where a testator by his will gave to his two sisters all his land, "together with all cattle, horses, and other appurtenances thereto, except so much thereof as will pay my just debts, which I think may be done from the growing crop," and afterwards gave all his negroes to the same persons, it was held that the will did not create a charge upon any part of the property for the benefit of creditors, over and above that which the law affixes upon the whole personal estate.
THE plaintiff in his bill set forth a deed of trust executed to him by Benjamin J. Spruill on 28 January, 1834, whereby the said Benjamin, among other real and personal property therein mentioned, conveyed to him all his (the said Benjamin's) undivided interest, whether in law or equity, to the tract of land whereon he resided, it being the same which was devised by John S. Ross, to his sisters, Margaret, then the wife of said Benjamin, and Eleanor P. Ross, and all his undivided interest, whether in law or equity, to certain negroes therein named, cattle, sheep, hogs, corn, fodder, pork, and farming utensils, in trust to be sold for paying debts due from the said Benjamin to the defendant George E. Spruill and others, and of discharging the said George and others from certain responsibilities encountered for the said Benjamin. Sales had been made by the trustee, and he declared himself desirous of accounting for the proceeds to those who might be entitled to receive them, but that he was embarrassed and perplexed by conflicting claims set up to (94) a part thereof, and he filed this bill in order to have these conflicting claims settled. He stated that the undivided interest so conveyed by the deed of trust had accrued unto the said Benjamin as follows: That John S. Ross, the brother of Margaret, the wife of said Benjamin, and of Eleanor P. Ross, died in 1828, having duly made his last will and testament, and thereby besides devising to his said two sisters the plantation whereon he resided and certain negroes to each of them in severalty, after the payment of his debts, which he thought might be paid out of the then growing crop, he gave all the remainder of the negroes to his said sisters jointly, and provided that they should remain on the plantation until his sister Eleanor should arrive at age, and then the property to be divided equally between them; that of this will the testator appointed his father, William Ross, and Edmund D. McNair, executors, of whom the former alone proved it and qualified as executor; that the said William sold enough of the property of his testator to pay the debts, and liquidated the same, or the greater part thereof, by substituting his own notes, or those of others, in satisfaction thereof, and thereupon assented to the legacies which went into the hands of the said Benjamin and Margaret, his wife, and the said Eleanor, and had ever since been held by them; that William Ross had since died, and that Spencer D. Cotton Co., and others whom, he named, alleging themselves to be creditors of John S. Ross, claimed to have a lien on the undivided property so conveyed to him for the payment of their demands, and notified him that they should hold him responsible therefore. The prayer of the bill was that the cestui que trusts under the deed to him might exhibit and establish the amount of their respective claims under the said deed, and that the alleged creditors of John S. Ross might bring forward and establish their claims, and show what lien they had on that part of the estate of the said John, which had been conveyed to him, that an account might be taken of the trust fund in his hands, and that he might be quieted and protected in the discharge of his trust.
No counsel for the other defendants.
The cestui que trusts answered, and, exhibiting the amount of their respective claims, denied that the claims of the alleged creditors of John S. Ross were true in point of fact; insisted that if they did exist in fact against any person, they were personal claims against (95) William Ross, and contended that in any event they did not constitute any lien upon the property conveyed in trust to the plaintiff. The creditors also answered, admitted the will of John S. Ross, the qualification of William Ross as executor thereof, and the death of the said William, and said that since the death of the said William all the personal estate of the said John came to the hands of the said Benjamin J. Spruill and wife, and Eleanor Ross, the legatees in the will, to an amount more than sufficient to pay the debts of the said John; and they exhibited the debts due to them respectively. The defendants Spencer D. Cotton Co. averred that the said John at his death owed them $404.08, by note, and $189.62 by open account; that they furnished the said William, after the death of the said John, with articles for carrying on the farm and supporting the family of the said John to the amount of $23.89; that on 11 September, 1830, after the qualification of the said William, he executed to them his note as executor for $631.86, therein including all the said demands, and also one for $18.31 due from the said Margaret, now the wife of Benjamin J. Spruill, for necessaries furnished her; that upon receiving said note they surrendered to the said William all the evidences of their demands thereby adjusted, which evidences they charged to be under the control of the plaintiff, or of the said Benjamin; that they took the note under the belief that the executor could thereby charge the estate of his testator, and in good faith, and not losing sight of the funds in his hands belonging to his testator, to discharge the same, for that it was perfectly known to them that the said William was insolvent, and he then owed them personally a large sum, which he was utterly unable to pay; and they insisted that in equity they were entitled to have satisfaction out of the estate of the said John in the hands of the plaintiff Eleanor Ross. The defendant Dickens alleged that the estate of the said John was indebted to him in the sum of $72.50, due since September, 1826, for a horse purchased by said John by the direction and advice of his guardian, the said William; also the (96) sum of $84.10 for an account against the estate of the said John, acknowledged to be just by the executor, and for a medical bill of $118.30 for professional services rendered the estate of the said John under the direction of the executor; and he claimed to have a lien in equity on the estate of the said John for the satisfaction of these demands. The defendant Benjamin Jackson averred that while John S. Ross was a minor an account was opened with Barnes Jackson (a mercantile firm since dissolved, the whole business and effects of which had been surrendered to the said Jackson) by William, his father, who was from time to time furnished with the means of carrying on the farm of the said John; that the said John was also during that time furnished with many articles or necessaries; that after his death the estate continued to be managed in the same manner for the benefit of the said Margaret and Eleanor, and the account continued with the defendant on the said terms and in the same manner, by reason of all which he contended that he had a claim for the sum $445.31 due from Margaret Spruill and Eleanor Ross in equal proportions. And all these defendants alleged that they did not believe that William Ross ever assented to the legacies to his daughters, the said Margaret and Eleanor, "inasmuch as the time had not arrived when either could take the share bequeathed to them." The defendant D. Richards answered that John S. Ross, some time before his death, opened an account with D. Richards Co., of which firm the defendant was a member, and continued the same up to his death, a copy whereof was exhibited; that after his death his executor, William Ross, continued to deal with the said firm, and to buy for them such articles as were necessary for the decent subsistence of Margaret and Eleanor Ross, his cestui que trusts, and for the keeping up of the farm and the proper management and support of the slaves thereon; and that the said firm also made advances in money, by the direction of the said William and of Benjamin J. Spruill after his intermarriage with Margaret Ross, to pay overseer's wages and other charges on the farm, an account of all which was also exhibited. This defendant also alleged that E. D. McNair had, for a valuable consideration, assigned to Richards Co. a claim he had, because of money paid (97) by him on a note which he had executed as surety with William Ross, for the hire of a negro employed on the said farm; that Richards Co. forbore from pressing their demands at the request of William Ross, who proposed to pay them off out of the profits of the farm; that at the time when these demands accrued no division had taken place between the legatees and devisees, and the slaves and land were worked under the superintendence of the said William, and this defendant insisted that as well the demands thus arising as the amount of debt due from John S. Ross at his death, were a charge upon the land and slaves aforesaid, prior to the disposition thereof by Benjamin J. Spruill.
The will of John S. Ross, filed as an exhibit, contained the following clauses, and they were the only ones bearing upon the question:
"Imprimis. I give unto my two sisters, Margaret and Eleanor, the plantation on which I now live, together with all cattle, horses, and other appurtenances thereto, except so much thereof as will pay my just and lawful debts, which I think may be done from the crop now growing thereon. I give unto my sister Eleanor negroes Lizette and her children; to sister Margaret, Sabine and her child, together with what others she may have. I wish also that they should have the remainder of my negroes, and that they remain on the plantation until my sister Eleanor comes of age, at which time I wish the property divided."
A reference of the plaintiff's accounts was directed, with instructions to the commissioner to distinguish in his report the funds in the hands of the plaintiff arising from the sale of the property formerly belonging to John S. Ross from those which were created by the sale of the proper effects of Benjamin Spruill.
Upon the coming in of the report his Honor, PEARSON, J., at Edgecombe, on the last circuit, by an interlocutory order declared that the creditors of John S. Ross were entitled to satisfaction out of the fund in the hands of the plaintiff arising from the sale of his assets which came to the hands of Benjamin Spruill upon his intermarriage with Margaret Ross, and directed a reference to ascertain the amount of their debts.
From this decree the defendant, claiming under the deed of trust, (98) prayed an appeal, which was granted.
Badger Devereux for those claiming under the deed of trust.
As the appellees have chosen to submit the cause here without an argument on their part, and the decree contains no reference to the grounds upon which it was rendered, we are under the necessity of ascertaining these as well as we can by our own unaided suggestions. We much regret this necessity, since it is probable that considerations which influenced the judgment of the court below may altogether escape our notice. The decree, we presume, is founded upon the position that the legacies bequeathed to Margaret and Eleanor Ross were charged — either by express declaration of the testator or by the law of this Court — with the payment of the testator's debts, and that, therefore, so much of the fund in the plaintiff's hands as was produced by the sale of what had been Margaret's share in these legacies ought to be applied to the satisfaction of these debts.
If this position be admitted to be correct, we are nevertheless met with a difficulty, which in the present state of the parties and pleadings we apprehend is insuperable. The bill is in the nature of an interpleader, in which the cestui que trusts of the one side, and the creditors of John S. Ross on the other, are the contending parties. Both of these parties are actors in the controversy, and each are to establish their respective claims. The latter base their claim to the subject matter in controversy on their being creditors of the said Ross, but the former deny the fact of their being creditors. It is indispensable, then, to the effectual assertion of this claim, to establish the legal existence and amount of the debts said to be charged on the estate of Ross; and how can this be done in a suit wherein there is no representative of Ross to litigate these matters? If a bill be filed to subject property in the hands of a third person to the satisfaction of debt wherewith it has been charged by the debtor, it is essential that the debtor be a party thereto. He is primarily liable, and the thing charged is to be applied only in aid of that liability. (99) Whether he be debtor or not, and, if debtor, to what amount, are matters which cannot be determined until he has had an opportunity of being heard upon them. So if a bill be brought against third persons who have possessed themselves of the effects of a deceased person, which are liable for the satisfaction of his debts, the executor or administrator of the deceased must be a party thereto. The executor or administrator is the representative of the deceased — appointed either by the deceased or by the public authority to stand in his place — to enter upon his goods and chattels, to have action against his debtors, to perform his obligations as far as the assets thus collected will be adequate, and then to make such a disposition of the surplus as he has directed, or, if he has been silent, such a disposition as the law presumes him to have intended. The representative of the deceased debtor must, therefore, be heard on the question of debt or no debt. He who is entrusted with the effects with which debts are to be paid, and who in respect thereof is primarily liable for those debts, must be a party where the aid of the court is invoked against persons or property that may be liable in aid of him, or of the effects in his hands. Bank v. Knox, 21 N.C. 53. There is another though a minor difficulty because of the want of proper parties. The creditors do not claim that the disputed fund shall be applied to the satisfaction of their demands in full. They insist that it is part of what was bequeathed to Margaret and Eleanor Ross as tenants in common, and that it ought to be applied ratably, with the part which the latter has received, to the discharge of a burden imposed upon the whole. It follows clearly, then, that Eleanor Ross should be a party to controvert the claim.
But upon the best consideration which we have been able to give to the subject we have been brought to the conclusion that the specific articles bequeathed to Margaret and Eleanor Ross were not, in the proper sense of the term, charged with the payment of the testator's debts. Certainly our law wills that all the debts of a deceased person shall be satisfied to the full extent of all his property, both real and personal; and it has endeavored to make, and as we believe has made, effectual provisions for the accomplishment of this purpose. But (100) among these it has not charged the specific articles or subjects of property with the debts. Even the heir many alien before action brought, and although he may be liable to creditors for the value, they have no lien which enables them to pursue the land. Personal property is regarded as of a mutable and perishable character, and liens upon it are not readily implied. The executor or administrator is liable by reason of the assets; legatees or next of kin who have received their legacies or distributive portions, by reason of the obligation on them to refund; other persons obtaining the assets gratuitously, or by collusion, by reason of the fraud manifested by the act, or of the trust implied from it; but there is no lien in favor of general creditors of the deceased against his goods and chattels. When a creditor has obtained a judgment against an executor or administrator, and issued his fi. fa. thereon, then he acquires the same lien against the things liable to execution as every other execution creditor has against the property of his debtor. And as equity follows the law, if nothing can be obtained by legal process, a court of equity will aid the creditor to enforce his judgment against things which that court regards as part of the debtor's estate because of the lien so acquired by issuing the execution. Angel v. Draper, 1 Ver., 399; Rambout v. Mayfield, 8 N.C. 86.
But a lien was probably considered as expressly created by the testator. From the terms of the decree, "that the creditors are entitled to satisfaction of their debts out of the funds in the hands of the plaintiff arising from the assets of John S. Ross," we collect that in the opinion of his Honor this charge was confined to the personalty bequeathed, and did not apply to the land devised in the first clause of the will to Eleanor and Margaret Ross; and if there be a charge created by the words, "except so much thereof as will pay my debts, which I think may be done by my crop growing thereon," we believe that it is confined to the cattle, horses, and other appurtenances mentioned in this clause. These were the subjects immediately anteceding the exception. The fund which he supposed would be first appropriated, and which he trusted would be sufficient, was of the character of appurtenances — "the then growing (101) crop." Creditors could not wait until his sister Eleanor might arrive at age; and until that time, at least, he contemplated that the plantation should continue entire, and the negroes, who are certainly given without any charge, were to remain thereon. We do not think that it was the purpose of the testator, by the language here used, to charge any part of his property to his creditors. It is to be recollected that the supposed subject of this charge is personalty, and personalty of that kind which is peculiarly perishable. We are to bear in mind that all legacies are by law postponed to debts, and that all the personalty comes into the hands of the executors subject to the demands of the testator's creditors. When a testator, therefore, directs his debts to be paid out of a particular portion of a fund, all of which is by law primarily and directly applicable to the satisfaction of debts, the direction is, as between the legatees, of different portions of this fund, which shall bear the burden of the debts. We must be careful not to mislead in the construction of words like these, by a supposed analogy to the English decisions on the subject of charging lands by will for the payment of debts. In that country lands are not (or at least were not when those decisions were made) liable for the payment of the simple contract debts of the deceased. He cannot alter the law and make them directly liable, but, having a right to devise his lands, he may devise them either absolutely or subject to any reasonable condition. When, therefore, a court of equity collects from a will, so executed as to be effectual to pass lands, that the testator devises that his lands shall be subject to the payment of all his just debts, they give effect to this will in the only mode by which it can operate. They hold that it is a devise in trust for the payment of debts; that the lands are by force of the will charged with the payment thereof. But we can find no case — no dictum — where in that country a testamentary disposition is made of chattels, subject to the payment of debts, that the liability of those chattels to the creditor is in the slightest degree affected thereby. The testator can give no chattels, but subject to the payment of debts. All his chattels to are immediately liable to his creditors. The chattels do not pass by his gift to the legatee, but they go first to the executor, and the law (102) has prescribed their liability, and his liability by reason thereof, to the creditors, and the liability of legatees, if the executor delivers the mover without satisfying or providing for the satisfaction of their demands. There is no ground from these words to presume a specific charge upon such chattels. But there is reason for holding that, as the testator desired that they should be so applied in preference to other parts of his personal property, the legatees of the latter, as between them and the legatees of the former, have a right to exoneration from the debts of the deceased.
The contending parties disagree whether the interest which Benjamin J. Spruill acquired in the chattels so bequeathed to his wife was a legal interest. The cestui que trusts aver that the executor assented to the legacies, whereby the chattels bequeathed to Spruill's wife became her property in law, and upon the marriage became his absolutely; but the creditors allege that they do not believe this, because the period for receiving the property had not then arrived. If by the period referred to they mean the time fixed for a division, they assign an unsatisfactory reason for that belief. The legatees were as competent to take jointly as severally, and the bequests are made to them, and not to the executor in trust for them.
From a joint possession an assent to a joint bequest is as presumable as from a several possession that to a several legacy. The division was not to precede their possession — of course not to precede the assent to their legacy. If the question of lien depended on the fact whether there had been an assent or not, an inquiry, or an issue in regard to that matter, should have been directed before pronouncing for such lien; but we think the question of lien is not affected by it. The plaintiff must account for the proceeds of the sales in his hands to those for them he is express trustee, unless it is shown that they belong to others, and no other claim is set up to them here but as being liable, in his hands, to the general creditors of the deceased. This claim we think unfounded. If in truth the things sold be yet in law the assets of John Ross's estate, the decree in this cause cannot prevent the surviving executor, or any administrator de bonis non with the will annexed, who may be hereafter appointed, from asserting his right to the possession thereof; or (103) be in the way of any creditor endeavoring to charge the proper representative of that estate with the value thereof, or otherwise subjecting them to the satisfaction of his demands, as the assets of that estate.
It is the opinion of this Court that so much of the interlocutory decree as is appealed from is erroneous and ought to be reversed, and it is ordered that the same be certified to the court below.
PER CURIAM. Reversed.