McNeill's Adm'r v. McNeill's Creditors , 36 Ala. 109 ( 1860 )

A. J. WALKER, C. J.

The first argument in favor of the equity of the complainant’s bill is, that it is the privilege of an administrator, at any time before the concurrent jurisdiction of the probate court is put in operation, to seek from the chancery court instruction in the duties of his trust, and to make a settlement under the' orders and decrees of that tribunal. Under our system, the chancery court retains its original jurisdiction over the subject of administrations; and it may be appealed to by a proper party, without the assignment of any special reason, until the concurrent jurisdiction of the probate court has attached. — Gould v. Hays, 19 Ala. 450; Horton v. Moseley, 17 ib. 794; Wilson v. Crook, ib. 59; Pearson v. Darrington, 18 ib. 350; Dement v. Boggess, 13 ib. 143; Blakey v. Blakey, 9 ib. 391; Hunley v. Hunley, 15 ib. 98; Waldron, Isley & Co. v. Simmons, 28 ib. 629; 1 Story’s Eq. Ju. §§ 543-44-45; Cherry & Bell v. Belcher, 5 St. & P. 133; Gayle v. Singleton, 1 St. 566. There is authority which may be construed as favoring the proposition, that an administrator may, as a- matter of course, ask the aid of the chancery court in the execution and settlement of his trust. — Buccle v. Alteo, 2 Vern. 37; Matthews v. Newby, 1 Ver. 133; Howard v. Howard, ib. 134; Mitford’s Eq. Pl. (top page) 155-56. But that doctrine was found objectionable, because it enabled an administrator to delay the payment of just dues, and for other reasons; and it seems to have given place to the more just and reasonable doctrine, that an administrator or executor may go into chancery, “when he finds the affairs of his intestate or testator so much involved, that he can not safely administer the estate, except under the di rection of a court of equity”; and that the court ought only “to interfere in behalf of an executor or administrator under special circumstances, where injustice to himself, or injury to the estate, may otherwise arise.” — Morrice v. Bank of England, Cas. temp. Talb. 217-224; Brown v. McDonald, 1 Hill’s Ch. (S. C.) 300; 1 Story’s Eq. Ju. § 544; Toller on Ex. 455, book 3, chap. 10,. § 2; 2 Lomax on Ex. (marg. page) 388, (top) 623; 2 Will, on Ex. 1624, note g; Willard’s Eq. ju. 560. Such seems to have been the view of the law taken by this court when it decided the cases of Trotter v. Blocker, (6 Port. 269,) and Sellers v. Sellers, at the last term. The equity of the complainant’s bill, therefore, can not stand upon his right to come into equity, as a matter of course, for its aid and instruction, and we must inquire whether such special circumstances are averred as will give jurisdiction.

[2.] One of the special circumstances, upon which the complainant argues that the jurisdiction of the court may be predicated, is, that he, being misled by the magnitude of the estate, and his ignorance of the extent of his intestate’s indebtedness, and not suspecting the insolvency of the estate, within eighteen months from the commencement of his administration, paid the full amounts of sundry debts with his own individual funds. Bnder our law, all claims against an estate, with a few exceptions, are required to be presented within eighteen months; the executor or administrator is prohibited from giving, before the expiration of eighteen months, “ a preference in the payment of any debt over others of the same class”; and he is protected against the rendition of judgments against him, until after fclae expiration of eighteen months. — Code, §§ 1883, 1742, 1917. The representative of an estate is thus favored with the means of ascertaining with sufficient certainty, in most cases, the condition of the estate, and relieved from the necessity of paying any debts, and prohibited from giving any preference among debts of the same class, within eighteen months. It follows, that if an administrator, withiu the eighteen months, pays in full a debt not within a preferred class, the estate being insolvent, he gives a preference in violation of law, and does so by making payment at a time when the law does not require it. The making of payment at such time, iuvolves a hazard voluntarily assumed; and if loss results, he must sustain it, and can not distribute it among creditors of the estate, by obtaining an allowance to himself of the full amount of the claims so paid. The complainant is, therefore, not entitled to charge against the estate now, when it has been declared insolvent, the full amount of the claims . discharged by him with his own funds during the eighteen months, and before the insolvency of the estate was discovered. His only right, as against the estate, is to stand substituted for the creditors whose claims be has discharged, as a claimant against the insolvent estate, and to take the same distributive share to which those creditors would have been entitled. — Watkins v. Dorsett, 1 Bland, 530; Collinson v. Owens, 6 G. & J. 4; Smith v. Hoskins, 7 J. J. Marsh. 502; Hearin v. Savage, 16 Ala. 286-294.

We perceive no reason why this substitution could not he as well recognized in the.probate court, as in the chancery court. By the payment of the debts, the administrator became, in effect, the assignee of the debts he has’ paid; and the probate court may take cognizance of his rights as such, and give effect to them by making the proper allowance upon his settlement. — Graham v. Abercrombie, 8 Ala. 552. As the probate court is clothed with the power requisite to afford the complainant all the relief to which he is entitled in consequence of the payment of claims against the estate, the fact of such payment is not a special circumstance upon which the jurisdiction of the chancery court can be predicated. And it is just and right that it should not be; for, if it were, the carelessness and recklessness of an administrator would bo a reason for subjecting the creditors to the delay and expense of a chancery suit, instead of the cheap and expeditious proceeding in the probate court.

[3.] The bill is totally without equity as an application to redeem, or for authority to redeem, the land alleged to have been sold under Hitchcock’s mortgage, because more than two years had elapsed before the filing of the bill, or the making of any application to redeem. — Code, § 2116. Tbe payment by the complainant, as the surety of his intestate, of a part of the purchase-money of'the land bought from Hitchcock, affords no reason for equitable interposition. By such payment, the complainant became a creditor of the estate, and is entitled to his pro-rata, share with other creditors, which the probate court is fully competent to allow. Nor has the complainant any right of substitution to a lien of Hitchcock as vendor’, who convoyed the laud, for a part of the purchase-money paid by him.as his intestate’s surety. — Foster v. Trustees of Athenæum, 3 Ala. 302.

[4.] The bill also fails to make out a case for equitable jurisdiction upon the ground, that Hitchcock was a mortgagee of the land bought from him, and sold the land under his mortgage, and bought at his own sale. “Exhibit C”, which is made a part of the complainant’s bill, and is referred to as containing a copy of the mortgage under which the land was sold, shows that the mortgage upon the land was not given to Hitchcock, but was given by Hitchcock to one Ferguson, to secure tbe payment of the purchase-money due by the former to the latter; and that, upon the subsequent purchase by the complainant’s intestate from Hitchcock, there was an agreement that the complainant’s intestate should discharge the unpaid purchase-money due by Hitchcock to his vendor, and that the land should remain bound by the mortgage. Hitchcock, therefore, was not a mortgagee of the land, and could not have been a purchaser at a sale made by himself as mortgagee.

[5.] If McDowell, Withers & Co. had a lien upon eighty bales of cotton, which they rightfully asserted by retaining the proceeds of the sale, it does not justify the complainant’s resort to the chancery court. It is as competent for the probate court, as it is for the chancery court, to relieve him from the charge for the eighty bales of cotton, or their value, if he is entitled to such relief.

[6.] When it would promote the interest of an insolvent estate, the administrator has authority to discharge incumbrances upon the property of the'estate. But he certainly can not charge the estate with removing an incumbrance, after the property so incumbered has been sold, when there is no liability upon him on account of the defective title, and when the estate is not interested in the removal of the incumbrance. The complainant, as administrator, sold, under an order of court, lands which were incumbered with a mortgage in favor of Mrs. Givhan. After this sale was made, he discharged in full the debts secured by the mortgage; and he now claims to have been justified in doing so, bdcause there was a mortgage lien upon the land for the debts. When the sale was made under the order of court, nothing was sold save the interest of the estate, which was the equity of redemption in the land, or the land incumbered by the mortgage; and the maxim, caveat emptor, applied to the pui’chaser. — Duval’s Heirs v. McLoskey, 10 Ala. 636; Doe v. McLoskey, 1 ib. 708; Perkins v. Winter, 7 ib. 855; Vaughn v. Holmes, 22 ib. 593. After the sale was made, the equity of redemption was vested in the purchaser, and the complainaut was under no legal obligation to remove the incumbrance. In paying the entire debt secured by the mortgage upon the land, the complainant has acted without any legal authority, and is entitled to no relief as against the insolvent estate, or its creditors, on account of the fact that the debt was secured by a mortgage on the land.

Upon principles heretofore announced, the complainant must come in as a ereclitoiuof the insolvent estate in the probate court, for the money paid by him, as the surety of his intestate, to Hutchinson.

[7.] It was manifestly improper to make the judge of the probate court a defendant, and we concur in and adopt tbe language of the chancellor disapproving it.

The bill contains no equity, and the decree of the court below is affirmed.