Whiddon v. Williams & Co. , 98 Ga. 310 ( 1896 )

Lumpkin, Justice.

Mrs. Annie E. Whiddon, as administratrix, and T. J. Buchan, as administrator, of the estate of W. B. Whiddon, deceased, filed an equitable petition to marshal the assets of his estate. The case was tried by the presiding judge, upon all the issues involved, without the intervention of a jury. Among the creditors who were made parties defendant were J. P. Williams & Co.) who had previously obtained a judgment against the plaintiffs in tbeir representative capacity in an action in response to wbicb there bad been no plea of a want of assets. Tbe evidence shows that, by tbe exercise of ordinary and reasonable diligence, tbe defendants to that action might without serious difficulty have ascertained tbe real condition of tbe estate before tbe judgment was rendered, but that they failed to do so. To tbe plaintiffs’ petition, Williams & Co. filed a plea in tbe nature of a cross-action, in which they set up all tbe material facts relating to tbe rendition of tbeir judgment, against tbe administratrix arid administrator, and prayed for, and obtained, a judgment binding tbeir personal estates. Williams & Co. also sought to make tbe sureties upon tbe bonds given by Mrs. Whiddon as administratrix, and Buchan as administrator, parties to tbe case, and to obtain judgments against them, but upon demurrer tbe court expressly dismissed so much of tbe cross-petition of Williams & Co. as sought a recovery against these sureties. To. this ruling of the court no exception was taken, and therefore tbe latter are not to be considered, nor treated, as parties to the case..

It appears from tbe record that tbe intestate, before bis death, bad purchased a tract of land, taking bond for titles, and that be died in possession of tbe premises. While in life, be made permanent improvements upon the property, wbicb very greatly enhanced its value, and in consequence of wbicb it became, beyond doubt, worth considerably more than tbe amount of tbe purchase money debt, upon wbicb, however, be bad never paid anything. Before tbe petition to marshal assets bad been filed, Mrs.. Whiddon, abandoning tbe estate’s equity in tbe land, and contracting in her own name and right, bad paid off this purchase money debt with money belonging to herself, and bad taken a deed from tbe vendor conveying tbe land, with all the. improvements thereon, to herself individually. It would seem that, she was aided in this; transaction by Buchan, tbe administrator. There was ample evidence to warrant a finding that he participated in the negotiations by which she procured the deed above mentioned; and it also.appears that when this land was afterwards levied on under the execution in favor of AVilliams & Co., Buchan, as the agent of Mrs. AVhiddon, filed a claim alleging that the. property belonged to her.

Among others who were parties defendant to. the petition was W. J. Henderson, who was the guardian of certain minor children of whom the intestate had formerly been guardian. The defendant filed an answer in which he set up a large indebtedness by the intestate on account of the former guardianship, and also in his answer alleged that C. B. Murrell and AV. P. Eastman, deceased, were sureties upon the bond given by AV. B. AVhiddon as guardian, and that Mrs. Caro C. E. Ogden was the-executrix of Eastman’s estate. This answer proceeded further to allege that Mrs. Ogden had “already been .named as a party defendant in this cause, concerning some other matters; but whether she [had] been served or not, this defendant [was] not informed.” In point of fact, Mrs. Ogden, in her representative capacity, was a -party to the case., having been made so originally with reference to certain transactions between her testator and the deceased AVhiddon, in no- way connected, however, with the latter’s liability to the minors of whom he had been guardian. Henderson’s answer contained no prayer that Murrell be made a party, nor did it pray for process against Mrs. Ogden for the purpose of requiring her to answer his complaint with respect to the alleged liability of her testator upon the guardian’s bond.

There appears in the record a transcript of the declaration, demurrer and pleas in a pending action brought by M. Newman, ordinary of AVashington county, for the use of Henderson, guardian, against AVhiddon’s representatives and Murrell and Mrs. Ogden, as executrix, upon this identical bond. This transcript was not attached to any of the pleadings in the present action as an exhibit, and how it got into the record of this case at all is not disclosed, though it seems to have been treated at the trial as a part of the pleadings. At any rate, a judgment was rendered in favor of M. Newman, ordinary, against the administratrix and administrator of Whiddon, and against Murrell and Mrs. Ogden individually; and it was further adjudged “that the sureties on the guardian’s bond of W. B. Whiddon are chargeable with the liabilities of said W. B. Whiddon, guardian, as aforesaid.”

Before the case came on for a final hearing, the plaintiffs’ action was dismissed as to a number of the original defendants thereto; and consequently, the judgment rendered deals only with such matters of controversy as were in issue between those actually parties when it was rendered. The bill of exceptions assigns error upon numerous rulings made by the judge and to various portions of the final judgment. Many of the exceptions are of minor importance, and deal with matters immaterial to a proper determination of the case upon its substantial merits. The nature of those exceptions which are of real consequence will appear from what has been above stated, read in connection with the following brief discussion of the points of law involved.

1, 2. In the case of Gibson v. Robinson, 90 Ga. 156, this court again recognized the doctrine, which had already been established by numerous adjudications, that where an administrator is sued upon an alleged debt of his intestate and fails to plead a want of assets, a judgment rendered against him in- such suit is conclusive upon him as to his having, at the time of its rendition, a sufficiency of assets in his hands belonging to. the estate with which to pay the debt. The case cited was an action at law upon an administrator’s bond, and the rule in question was directly applicable to it and to cases of like character.

In Gause v. Walker, 55 Ga. 129, however, it was held, in effect, that in equity this rule was subject to some relaxation in a case where, upon equitable principles, the administrator, although he had failed to- plead plene ad/nwivistravit prceter before judgment against him was rendered, might be entitled to relief from personal or individual liability. ■ Such a case would arise where the administrator showed a reasonable and satisfactory excuse for failing to file this plea at the proper time; but in the absence of such excuse, the rule of law above stated would obtain in all its rigor. The case of Gause v. Walker was decided upon its own peculiar facts, and is not controlling in the case at bar. The only excuse presented by the representatives of Whiddon’s estate for a failure to plead a want of assets in defense to the action brought by Williams & Co. was, in effect, -that neither of them knew, when this action was pending, the real condition of the estate. It was the duty of these'representatives to know the condition of their intestate’s estate, and the evidence; as a whole, was certainly sufficient to authorize the judge in finding that their failure to do so was the result merely of gross negligence and inattention to duty on their part. In other words, the trial judge was fully warranted in reaching the conclusion that if they had made proper inquiries and exercised reasonable diligence, they would have been able to easily possess themselves of the real facts, and to have governed themselves accordingly in presenting their defense to the action brought by Williams & Co.

We are therefore of the opinion that there was no error in rendering a judgment in favor of the latter, binding the personal estates of Mrs. Whiddon and of Buchan. Such a judgment could, unquestionably, have been obtained'by Williams & Co. in a proper action against these representatives. True, the sureties on an administrator’s bond are usually also made parties to a proceeding of this kind; but no good reason occurs to us why, in the present action, Williams & Co., having been brotight into court by the plaintiffs’ petition to marshal the assets of their intestate’s estate, could not, by an answer in tbe nature of a cross-petition, establish their right to a recovery against Mrs. Whiddon and Buchan personally, as effectually as might have been done in an original and independent suit brought against them. As has been stated in the preliminary summary of facts, the sureties on the bonds of Mrs. Whiddon and Buchan are not parties to the present proceeding; but this surely can make no difference, so far as their principals are concerned, for in ño event can it ever be of any legal benefit to a principal to show that his surety is equally bound with him. Nor was it essential that Williams & Co. should show that the execution in their favor had been issued and a return of mella bona made thereon, because the plaintiffs not only themselves alleged the insolvency of the estate, but had also enjoined Williams & Co. from proceeding with their execution; and one of them, through the other as agent, had filed a claim to land which Williams & Co. sought to subject as the property of the estate.

3, 4. During his lifetime, W. B. Whiddon bargained for certain land, of which he went into possession under a bond for titles, and for which he contracted to pay the sum of $800. At the time of his death, however, he had paid no part of the purchase money, although he had made permament improvements upon the land, which so greatly enhanced its value that it was undoubtedly worth very much more than the amount of the purchase money debt. The proof shows, beyond question, that if this land had been exposed to sale, it would have realized enough to discharge this debt and leave a considerable surplus. We therefore think that Whiddon’s estate had, undoubtedly, a clear equitable interest in this land; and it is obvious that if the matter had been properly managed, this interest would have been made available for the benefit of creditors. No effort to accomplish this result was made by the representatives of Whiddon’s estate. On the contrary, Mrs. Whiddon, in effect, endeavored to rescind the contract of purchase which had been made by her intestate, and with money belonging to herself paid off the purchase money debt and had the land conveyed to herself individually. As already indicated, the evidence warrants the conclusion that Buchan aided her in bringing about this result. There is testimony to show that he participated in the negotiations leading up to it, as the agent of Mrs. Whiddon; and it is certainly time that, as her agent, he filed a claim alleging that the land in question was her property, when it was levied on under the execution in favor of Williams & Co. If, therefore, the act of Mrs. Whiddon in thus procuring title to this land was a devastavit, Buchan is, in law, as much chargeable therewith as she is. Under the facts disclosed, what were the duties of these representatives with reference to the. equitable interest of their intestate’s estate in this land? They were certainly trustees for the creditors, and, as such, bound to exercise good faith in malting the estate realize as much as possible from all its assets, both legal and equitable, in order to settle, us far as practicable, all just and legitimate demands in favor of such creditors. Of course, it would not do to hold that an administrator, under such circumstances, was bound to take money of his own and pay off the purchase money debt, for the purpose of obtaining title in the estate and then administering the land as a .part of its assets. Nor do we mean to say that an administrator could appropriate money of the estate in his hands which was subject to the payment of debts, of higher dignity, for the purpose just indicated. But certainly, where it was perfectly apparent that a settlement of the purchase money debt would result in bringing into the estate property worth much more than the amount of that debt, a court of equity, upon a proper application by the administrator, would unquestionably grant appropriate relief. For instance, it could order the property sold, and direct that out of the proceeds the purchase money debt be first paid, which would give to the vendor his full rights in the premises; and then the surplus would go into, the hands of the representative of the estate for administration. An extreme case, as an illustration, is sometimes of service to prove the truth of a rule announced. Suppose Whiddon had purchased a city lot for five thousand dollars, this being its fair market value, and, with cash in hand, had erected thereon a magnificent building costing one hundred thousand dollars, and had subsequently died without paying a cent. of the purchase money of the lot. Who would seriously contend that his widow and administratrix could, by paying off the five thousand dollars, obtain for herself, as against the rights of creditors of her deceased husband, this improved property, worth more than one hundred thousand dollars? The principle which would control a case like tire one suggested is equally applicable tO' the facts of the present case.

5. The character of the petition in the present case has already been stated. Undoubtedly, Henderson, as guardian of the minors, was a proper party, and one in whose favor, as such guardian, a judgment could be rightly rendered. But the rendition of a judgment, even upon complete pleadings, in favor of Newman, ordinary, for the use of Henderson, against Murrell, one of the sureties on the bond given by Whiddon as guardian, or against Mrs. Ogden, who was the executrix of Eastman, deceased, who had been a surety upon that bond, would hardly have been allowable.. On the pleadings as they stand in the record now before us, certainly no such judgment was warranted. We do. not, however, rest our decision on this point upon this latter view. Assuming that Newman’s action upon the guardian’s bond (the appearance of which in the record has already been referred to) could properly be treated as an answer or intervention in his name, we still think the judgment against Murrell and Mrs. Ogden was unauthorized. An examination of the record will show that the rendition of such a judgment practically necessitated a marshaling of the assets of Eastman’s estate. There is generally enough trouble and confusion in marshaling the assets of one complicated estate, without drawing into the proceedings for this purpose pleadings and evidence appropriate and necessary in marshaling the assets of still another independent estate. The action of Newman was in no way germane to the objects sought to be accomplished by the plaintiffs’ petition. It was legitimate and proper to ascertain and fix the liability of Whiddon’s estate to these minor children by a judgment in favor of Henderson as guardian, but this was going far enough, and the controversy arising upon Whiddon’s bond between the ordinary and the sureties thereon should have been disposed of in another and distinct proceeding. Henderson — or perhaps Newman — could, in the present action, have prayed for and obtained any proper relief against the representatives of Whiddon, but neither Henderson nor Newman could use this proceeding as a vehicle for obtaining redress against others in whose affairs Whiddon’s estate had no interest, and as to whose liability it was in no way concerned.

The court was right in adjudicating that Whiddon’s estate was liable to' the .minors represented by Henderson as guardian, but the judgment against the administratrix and administrator of Whiddon should have been in favor of Henderson, and not in favor of Newman, ordinary. The error thus indicated has been corrected by appropriate direction.

6. The judge by whom this case was tried made a general finding in the nature of a decree, which embraced several distinct judgments upon the issues presented by the pleadings and evidence. One of the errors assigned in the bill of exceptions is that the judgment, as a whole, does not fully and finally- dispose of the entire case. As already seen, several of the original defendants- were no longer parties at the- time the case was- tried; and so far as concerns the par-ties who were properly before the court when the case was finally disposed of, we fail to perceive any merit in tbe exception complaining tbat tbe judgment then rendered was not sufficiently full and explicit.

We bave carefully examined and considered tbe evidence, and, in our opinion, it warrants tbe several findings of tbe court upon questions of fact, including tbe amounts of tbe devastavits committed by tbe plaintiffs as tbe representatives of Wbiddon’s estate, and tbe amount found to be due tbe minors represented by Henderson, guardian.

Tbe judgment against Murrell and Mrs. Ogden, in view of wbat lias been above stated, cannot, of course, stand. In other respects, tbe judgment of tbe court below is affirmed, subject to tbe following directions: First, tbat tbe judgment rendered in favor of M. Newman, ordinary, be so amended that tbe same shall be in favor of W. J. Henderson, as guardian of tbe minor children named in bis answer; and, secondly, tbat this judgment, save only as to tbe extent of tbe devastavits found by tbe trial judge, is not to be construed as conclusive upon the question as to tbe sufficiency of assets in tbe bands of tbe plaintiffs, as administratrix and administrator, with which to pay the same.

Judgment affirmed in part, and in part reversed, with directions.