Cutter v. Perkins , 47 Me. 557 ( 1859 )

The opinion of the Court was drawn up by

Tenney, O. J.

The trustee has presented a very elaborate argument, to convince the Court that he cannot be holden in his capacity of executor, as the trustee of the principal defendant, and that the opinions of courts, holding different views in their decisions, are not the law of the State.

It is hardly to be expected that we should enter into a minute analysis of the extended argument, notwithstanding it exhibits great research and ingenuity, and some of its criticisms of the reasoning of Judges, in opinions cited, may be just. And we do not regard it as essential to a correct decision of the case before us that we should do this.

“ Any debt or legacy due from an executor or administrator, and any goods, effects or credits in his hands as such, may be attached by the process of foreign attachment.” “ No person shall be adjudged trustee” — “by reason of any money or other thing due from him to the principal defendant, unless it is, at the time of the service of the writ upon him, due absolutely and without depending upon any contingency.” R. S. of 1841, c. 119, § § 43 and 63.

The result of this case must depend upon the correct construction of the provisions just referred to. And the true construction of the latter part of § 63, as quoted, is the matter only which is now in controversy. But the trustee insists that, upon a proper construction of that clause, the Court should have decided upon the question, whether he could or could not be holden as trustee, in his representative capacity, at the term when he made and swore to his disclosure, from which it appears that he had not, at the time of the service of the writ upon him, in his hands, any goods, effects or credits of the principal defendant; and that the continuance of the case, and allowing further disclosures, was unauthorized; and these further disclosures, and other evidence introduced, should not be considered by the Court, in determining the question whether he should be adjudged trustee, or otherwise.

It is quite obvious, that there are cases, where justice and the manifest purposes, intended by the provisions of the statute, in relation to foreign attachment, would fail, if this principle contended for should be rigidly applied. As an example, two suits are instituted under this statute, in favor of different persons, but against the same principal defendant and trustee, and service made on the trustee at different times. At the first term, the trustee makes disclosure in both, upon an examination of the plaintiffs. In the one, when service was first made, he discloses that he had money and credits in his hands, at the time of the service, to a certain amount, which does not exceed the amount of the claim on which the suit is brought, and makes oath to his disclosure. . In the other case, he discloses as before, and adds that he had been previously served with the other process, and had made therein a similar disclosure. On these facts, he can be charged in the suit in which service was first made; but he cannot with propriety be charged in the other, for the reason that the whole fund in his hands may be absorbed in the payment of the judgment which may be obtained in the first action upon the execution which may issue thereon. He cannot properly be discharged in the second suit, because the plaintiff in the first may recover no judgment against the principal; of, if he should, it may be for a sum much . less than his claim; or he may never cause demand to be legally made in order to hold him; and the discharge would be unjust to the plaintiff in the last suit, if he should obtain judgment. And, in such cases, it is the practice to continue the suit in which the service is last made, in order that the trustee may disclose further a state of facts, which will probably take place afterwards in relation to the suits, as between the plaintiffs and principal defendant, and in relation to the proceedings in the former, touching the collection of the judgment which may be obtained thereon.

This practice has the sanction of authority upon argument and mature consideration by the Court, when it is apparent that a full disclosure of the trustee, as to his liability and the extent thereof, cannot be determined on his first disclosure; and when the object of the statute cannot be otherwise secured. N. E. Marine Ins. Co., v. Chandler and trustee, 16 Mass., 275.

Cases are contemplated by the statute, when such delay may ordinarily be necessary. An example of this is, when the plaintiff or trustee may allege and prove any other facts, not stated or denied by the supposed trustee, which may be material in deciding the question whether the trustee shall be charged or not. R. S., of 1841, c. 119, §33; Pease v. McKusick and trustee, 25 Maine, 75. It is provided, also, that, on scire facias, if the supposed trustee had been examined in the original suit, the Court may permit or require him to be examined under § 79. And, if this can be done at so late a stage in the proceedings, it would seem that it might be done at an earlier stage.

We do not understand the trustee to deny that the Court have the power to allow a continuance of the cause, that the trustee may disclose further in certain cases; but in this he insists that, for the purposes designed, it cannot’ properly be done, because the additional disclosures are of facts which the Court cannot consider, and the delay is unnecessary. But the power to allow the delay is certainly discretionary, and is not subject to exceptions.

We come to the principal question, what is the true construction to be given to the language relied upon, “ due absolutely, and without depending on any contingency ?” The term “ due,” we do not understand the trustee contends has the same signification as the word “ payable,” because the same chapter provides’that money, &c., is due absolutely and without any contingency, notwithstanding the time of payment had not arrived, when service was made of the process upon the trustee. Same chapter, § 67.

The words of the statute which we are considering were evidently intended to express the positive and the negative idea, entertained by the authors of the statute. The latter part was designed to give the signification of the words “ due absolutely.”

The adjective term “ due,” as used in the statute, has reference to a debt, or something in the nature of an obligation to discharge, resting upon some one, in favor of another. And this debt or obligation, to come within the meaning of this provision of the statute, must not depend upon any contingency, but must be free therefrom; that is, “ absolute” or unconditional. From this, it follows that “ the money or other thing due,” in order to be reached by this process, must be something which is not a contingent debt or obligation. And it becomes proper to ascertain, so far as we are able, what is properly denominated, in law, a contingent debt.

The case of Woodard v. Herbert, 24 Maine, 358, was where a suit was brought against the defendants on a bond, dated Nov. 2, 1841, given by Herbert as principal and French as surety, to procure a release of Herbert from arrest on mesne process, in favor of the plaintiff against him, commenced on May 6, 1843. French had filed his petition in bankruptcy on Feb. 25, 1842, and was duly declared a bankrupt on the fifth day of April following, and obtained his certificate of discharge on January 30, 1844. The plaintiff recovered judgment in the original suit against Herbert, in January, 1843. Herbert failed to give notice of his intention to disclose, according to the provision of the statute, and his bond was forfeited. The defence to the suit upon the bond given by Herbert and French was the discharge of French in bankruptcy.

It was provided by § 5, of the bankrupt Act of 1841, that persons having uncertain or contingent demands, against such bankrupt, shall be permitted to come in and prove such debts under the Act. And the question was, whether the claim in the bond was of this description. In the opinion of the Court, by Shepley, J., the question is asked, “ had the plaintiff any actual demand of a contingent character against French at the time when he was declared to be a bankrupt ?” The answer given is, “ the bond was made according to the provisions of the statute, c. 148, § 17, conditioned that the principal should, within fifteen days, &c., notify the creditor for the purpose of disclosure and examination. The plaintiff had not then recovered judgment against the principal. It was uncertain whether he would be able to recover any judgment. And if he did, it was entirely uncertain whether the principal would not notify him and make a disclosure, and thus perform the condition of the bond. It was, therefore, doubly uncertain whether there ever would be any claim or demand against French upon that bond.” “ It is necessary to distinguish between a contingent demand, and a contingency whether there ever will be a demand. This distinction may be illustrated by the case of a bond, made to liberate a poor debtor from arrest on execution. In such case the existence and amount of the debt has been ascertained by a judgment. The surety in the bond obliges himself to pay it, if the principal does not, or does not surrender himself to the prison keeper, or does not procure his discharge by taking the poor debtor’s oath. The obligation is to pay the debt or demand, upon these contingencies. The debt is a contingent debt, and can be proved against the bankrupt. Not so, in the case of a bond made to release from arrest on mesne process.” The obligors in the bond were held liable.

Another class of debts, which are treated as contingent, is referred to in R. S., 1841, c. 109, § § 13, 14, 15, and 16, in probate proceedings; providing that “ any person liable as surety for the deceased, or having any other contingent claim, may exhibit the same,” &c. Where a debt exists against a principal and surety, wherein the latter may become the creditor of the former; and, if the principal should die insolvent, as the estate must be settled, the surety can file his claim before commissioners of insolvency, and have it allowed, and a part of the assets is set apart for the payment of a dividend thereon; but, as between the principal and surety, while living, the surety cannot become the creditor of the principal, unless he pay the debt, after its maturity, or cause the principal to be discharged, by assuming the debt absolutely himself, by giving new security. Ingalls v. Dennett, 6 Greenl., 79.

The case of Dwinel v. Stone, 30 Maine, 384, was scire facias, wherein the defendant disclosed, he having been defaulted in the original suit against him, as the trustee of the principal defendant therein, that he had certain logs in his custody, which he was to sell, and the avails would belong to the principal, after certain claims against the logs should be discharged; that, when he was served with the original process, no sale or settlement had been made between him and the principal defendant; that he afterwards made a settlement by which the principal surrendered all his rights without compensation. It was contended, in defence, that the interest of the principal was contingent at the time of the service of the trustee writ upon the trustee, and, therefore, that he could not be holden. Shepley, J., in delivering the opinion of the Court, says, — “The statute requires that something should be ‘ due absolutely and without depending upon any contingency.’ ” The contingency referred to in the statute, and in the decided cases, is not a contingency, which may often exist before a settlement of an account, or other business transaction, whether any thing may be found due from the trustee to the principal, who has an absolute right to call upon the trustee to render the account and make the settlement ; but is a contingency which may prevent the principal from having any claim whatever, or right to call the trustee to account, or settle with him. When the service was made upon the trustee, there had been no settlement made between him and the principal. He afterwards made one by which the principal surrendered all his rights without compensation. Such a settlement can have no effect. The trustee states that the logs had not been sold, and there was then nothing due from him. But he was not authorized to make a valuation of them himself, and to declare that nothing was due. It was his duty to close the whole business, by a sale of the logs, and a settlement of all claims upon them, and to make a division of the surplus. If he omitted to do so, as soon as he might have done, that cannot excuse him from accounting when it was done.” And the exceptions taken to the judgment of the Court, charging the trustee, were, overruled. The doctrine -of this case is, that where property is put into the hands of the trustee by the principal defendant, to be sold, and, after the sale, an adjustment of accounts alone is necessary to determine whether the trustee has goods, effects or credits in his hands belonging to the principal, and the right exists with the latter to call upon the trustee to render an account and make the settlement, and thereupon something is found due from the trustee, that debt is absolute and does not depend upon any contingency, as well before the sale and settlement as afterwai’ds, — and that the trustee is. bound to make such sale, settlement and adjustment, after the service made upon him, if not done before; and, if any thing is in his hands as determined by that settlement, he is holden as trustee. The same criterion of a contingent demand is applied in the case of Wilson and Wood, 34 Maine, 123, in which the Court says, — “The contingency named in the statute is one which may prevent the principal from having any claim upon the trustee, or right to call him to account.”

The principle of the two cases last cited is not new in Massachusetts. It was distinctly enunciated in N. E. Marine Ins. Co. v. Chandler & trustee, in the 16th vol. of Mass. Reports,. before cited, so far, that when a person is made the agent of another, to dispose of certain effects, and, from the avails, to discharge certain specified claims against the latter, if a surplus should remain unappropriated, it may be reached in the process of foreign attachment. And, if the trust, assumed by the agent, has not been fully executed-at the time of the service of the trustee process upon him, nor when he makes his first disclosure, the action must be continued, that the same may be completed, by selling the property and paying the debt to be paid by the agent, according to the terms of the trust, and, after that, it may be known for what sum the trustee is to be charged in process of foreign attachment.

With the decisions, and the reasoning of the Court therein, of the cases referred to, from 16 Mass, and the 30th and 34th of Maine, we are satisfied, and, as applied to cases where similar questions may arise upon transactions which have taken place since January 1, 1858, and which may hereafter arise under existing laws, these decisions have been adopted by the Legislature in the R. S. of 1857, by reenacting the statute of 1841, c. 119, § 63, in the revision of 1857, c. 86, § 55. Starks v. New Sharon, 39 Maine, 368. But this adoption will not embrace this case, as it falls under the provisions of the repealing Act of the former statute, as contained in § 2, of the R. S., of 1857. Yet it shows that, the construction of the Court was satisfactory.

The testator, in his will, provided that all his just debts and funeral and administration expenses should be paid. He directed his executor to cause to be erected, around the graves of his father and grandfather and their wives, a granite fence, at an expense of one hundred and fifty dollars, and a marble monument within, in such style, &c., for them and himself, as he should think appropriate, at an expense of the the same amount. He made certain devises of real estate in fee simple, to individuals named. He gave particular legacies to the amount of $1300. He gave to his sister Eunice Perkins two-fifth parts of all his estate, which might remain, after paying all debts, administration expenses, and the burying yard appropriations. After all other legacies and devises mentioned in the will should be paid and satisfied, what should remain, he gave to the two sons of his sister Eunice Perkins, one of whom is the principal defendant in the original suit. It is provided in the will, if the estate should fail from any cause to satisfy all said legacies, each bequest is to contribute proportionally to the deficiency, and, excepting'those lots of real estate which were devised in the will, the testator therein directed his executor to sell and convey all his real and personal estate for the purpose of paying all said legacies, and the balance according to said residuary clause.

The design of the testator, in his will, cannot be mistaken. He made therein no devise of real estate, excepting to George W. Wallingford one acre; to Q. A. Swan, two acres, and to Edward E. Bourne, about four acres of land in fee simple. But all his estate was to be converted into "money, and the bounty intended as specified in the will was to be paid therefrom, and is properly denominated legacies.

The personal property and real estate, after excepting the particular devises, was that from which, on sale and conveyance thereof, the funds were provided to pay the debts, funeral and administration expenses', grave yard appropriations and the legacies. Eor this purpose, all was in the hands of the executor absolutely, and not depending upon any contingency. If he had died, resigned, been removed, or in any manner had ceased to be executor, an administrator with the will annexed would have been appointed to administer the estate so far as the executor had omitted to complete the administration, and he would possess the same power for such purposes, as that which the executor had.

Whether there would be any thing remaining for the residuary legatees, was to be determined by the result of the sales, and the settlement generally of the estate of the testator. The fact that a part of the fund, with which to make payment of debts, &c., was to be acquired from the sale of real estate, placed the residuary legatees in no different relation to the executor, from that which they would have held if all the testator’s estate had been personal property. It was in his hands, and he was bound to dispose of it as he would a ship or merchandize, and apply the avails according to the provisions of the will. All this and the personal property was in his possession at the time of the service of the trustee process upon him. And when as specie it was changed into money, it was neither more nor less in his possession. By the process of change, and the settlement of the estate, he was able to determine whether those named as residuary legatees were entitled to any thing from the testator’s estate, and, if so, how much. Being named in the will, as they were, they had a right to call upon the trustee to render his account in probate and make the settlement, and this, notwithstanding it might in the end turn out that the estate was all absorbed, without leaving any thing for them. The trustee’s obligations to do this, in the discharge of his trust as executor, were just as strong and binding as they would have been, if, in his first disclosure, he had stated the value of the property in his hands, and had admitted that this would exceed the sum necessary to pay all expenses, appropriations and legacies, excepting that contained in the residuary clause. This admission would not be the test, and he could not with propriety be charged on such admission; he had not executed the trust devolved upon him as executor, and, to enable him to do so, the action was continued as a matter of necessity. And, as it turned out, on the sales, that a residue was found in his hands,- for the testator’s two nephews named in the will, this was substantially in his hands and possession when he was served with the process, as much as though the sales and conveyances had all taken place, and the avails been received before the service was made. Exceptions overruled.

Rice, Appleton, Goodenow, Davis, and Kent, JJ., concurred.