Buie v. Pollock , 55 Miss. 309 ( 1877 )

Simrall, C. J.,

delivered the opinion of the court.

Thomas C. Pollock, surviving executor, etc., recovered a judgment against A. M. Buie and K,. W. Buie, executors of Neill Buie, deceased, for $1,866.20. Not being able to find property of the testator, the execution was returned nulla bona. Thereupon he brought this bill in chancery against the executors, and those who are alleged to represent the sureties on their bond, viz., J. M. Buie, administrator of Daniel Buie, deceased, one of the sureties, Prentiss Buie, and Mrs. Blue and Luther Blue, her husband. Prentiss Buie and Mrs. Blue are the children and heirs at law of David Buie, another surety on the bond of the executors.

The bill charges various acts of devastavit committed by the executors, to an amount greater than Pollock’s judgment, and that sundry amounts in value of the property of the estate of Neill Buie, deceased, came to the hands of the defendants, or those whom they represent in privity.

A demurrer to the bill was overruled, from which order an appeal was taken.

It is urged in argument, in support of the demurrer, that a court of chancery has no jurisdiction, because the sureties on the executor’s bond cannot be called in question in that court. If a court of equity is competent to make the investigation and declare the result, it would come short of affording full, adequate, and complete redress, if it did not give to the creditor relief against all who are responsible to him, either primarily or secondarily, for the misconduct of the executors.

The sureties undertake for their good conduct and proper performance of fiduciary duties. Certainly, in any judicial proceeding based upon a non-performance of duty, or a misapplication of assets, it would be just that the responsibility should be imposed by the same decree, on the executors and those who undertake for them. The Supreme Court of the United States, in Payne v. Hook, 7 Wall. 420, held the sureties to be proper parties, on the ground that they stood as indemnitors of the legatees and creditors; and that the suit was to deal with the executors as trustees for those who succeeded to the estate.

Under the Constitution of 1832 the courts of chancery did not entertain such bills, because the Constitution was construed us withholding that jurisdiction from them. But under the present Constitution the Chancery Court has all the cognizance formerly exercised by courts of chancery and the Probate Courts, and we are no longer perplexed to find the shadowy line which separated them.

Section 976 of the Code of 1871 was designed to restore the •chancery jurisdiction to its original dimensions. The verbiage of the section is wanting in perspicuity and precision, but we think the intendment was to enable legatees, distributees, and creditors to bring the executors or administrators into a court of chancery for the investigation and adjudication of questions in relation to the execution of their trusts; and that their sureties, deeply interested in the litigation, could also be made parties; so that, if the principals failed, from insolvency or other cause, to pay what might be decreed against them, a decree over might be made against the sureties. The section does not enact a new rule for the first time, but restores a principle which, for the reason stated, had no place in our chancery jurisdiction.

The end contemplated by the statute is to do complete justice in one suit. The constitutionality of such legislation was indicated in Bank of Mississippi v. Duncan, 52 Miss. 740.

The ultimate principle on which the equity of the complainant reposes is that the law charges on the property of a testator his debts, in preference to the claims of legatees, and imposes the duty on the executor first to satisfy the just demands of creditors, before executing those parts of the will giving bounties to legatees. Such duties impose on the executor the character of a trustee, and impresses on the assets trusts for the benefit of those who have claims upon them. If the executor reverses the order of things, and delivers the property to the legatees before he has paid a creditor, the latter does not thereby lose his priority and preference, but may treat this act of the executor as a breach of trust, in which the legatees have participated, and may follow the assets into the possession of the legatees, and treat them as trustees, with the same responsibility as the executor. Story (2 Story’s Eq. Jur., sec. 1251) classifies this sort of redress as the execution of an implied trust, at the suit of a creditor to-recover his debt from legatees or distributees who have received payment of their claims from the executor before discharging the debts. The legatees or distributees, though not liable to an action at law, will, in a court of equity, be treated as trustees ; because they are not entitled to anything more than the surplus of assets after all the debts of the testator have been paid.

A court of chancery will convert into a trustee in invitum a party who has received money or property which he ought, not, in good conscience, to retain from another. The doctrine is very broad and comprehensive in its application — as, where a person purchases trust property, knowing it to be such. In such case the court substitutes him in invitum in the place of the trustee, and will compel him to hold the property subject to the same trusts as the trustee himself held it. Isom v. First National Bank, 52 Miss. 915; Wilson v. Mason, 1 Cranch, 100. The principle is fully applicable to those who acquire property from an executor through a diversion or misapplication of the assets of the estate. Adair v. Shaw, 1 Sch. & Lef. 262; Prosser v. Leatherman, 4 How. (Miss.) 237. If the property, in its original form, is impressed with a trust, no change of that form, by converting it into another, will remove the trust in the hands of any person to whom it may come, except a bona-fide purchaser without notice. 2 Story’s Eq. Jur., sec. 1258.

It do es appear sufficiently from the bill that Neill Buie was. resident, in his life-time, in Copiah County, and that his will was proved and letters testamentary granted in that county. This suit was brought in the proper court.

The decree of the Chancery Court overruling • the demurrer is affirmed.