Henry Whitted v. . Henry K. Nash , 66 N.C. 590 ( 1872 )

PeaesoN, O. J.

If a simple contract creditor receives pay ment of the executor, a bond creditor cannot afterwards, either at law or in equity compel the contract creditor to refund, for although the bond debt is of higher dignity in the administration oillegal assets, both are creditors, and the creditor who is first paid may in good conscience retain the money, and leave the bond creditor to his remedy against the executors for a de-vastavit.

P It is equally clear that if the simple contract creditor accepts of the executor, property ot the estate of the testator, in satis faction of the debt, it falls within the same principle, provided the property is taken at a full price, liona fide, and without-notice that the executor is contriving to defeat the priority of the bond creditor.

In our case, the property was accepted in satisfaction of the debt, at full price, liona fide and without notice, so it comes within the principle above stated.

In regard to the rent, or more properly the charge for use and occupation, the fact is not distinctly stated, but we take it there was no agreement about it. Miss Nash continued to occupy the residence after the death of her mother, with a “general understanding” as it is called in the case, that the use-- and occupation was to go against the interest accruing upon her debt, and that this matter was included in the arrangement in reference to the purchase of the residence, and of the “coalfield land” mentioned in the pleadings.

If the transaction had stopped here, there could be no objection to the ruling in the Court below. But, unfortunately for Miss Nash, it did not stop here, for, as a part of the same-transaction, she bought of the executor the “coal field land,”' at the price of $4,015. This purchase-money has not been paid. The record sets out, that for the purchase-money she-executed her bonds to certain persons, who were creditors of the executor. (We will remark that the omission to set out the names of the persons to whom Miss Nash executed her bonds is a want of certainty inexcusable in judicial proceedings.) Had she paid the purchase-money ail would have been well.

This Court has never adopted the doctrines of the Courts in-England, by which “a purchaser from a trastee is bound to see to the application of the purchase-money.” But here the purchase money has not been paid and the Court will arrest it and see to its application.

There is a fund in the hands of Miss Nash which in conscience ought to be applied to the payment of the debts of the testator, and the Court will not permit it to be directed and paid to the creditors of the executor, which is the direction attempted to be given in the original transaction. True, the testator was indebted to the executor, but it was a simple contract debt, and he cannot pay himself and commit a devastavit to the prejudice of a specialty creditor who has priority.

It was suggested at the bar that a large part of the debt, for which Miss Nash, substituted her notes, was in fact a specialty ■debt of the testator ; should this be so the doctrine of subrogation will apply, and in regard to that, the executor will not have been guilty of a devastavit; but as to the other part, the right of the plaintiff, who is a specialty creditor, to have the fund arrested before it is paid over, and have it applied to his debt, is dear.

This right the plaintiff cannot set up by the proceeding in its present shape: to say nothing else, the “certain persons”*®ho hold the bonds of Miss Nash are necessary parties, and there can be no adjustment of the equities until they are before the Court, so as to be bound by the final decree. For this defect the judgment in the Court below, dismissing the action, will be affirmed, unless Miss Nash may consent to an order remanding the case, to the end that proper parties be made, and the complaint be amended so as to strike at the purchase money of the coal field land..

In this connection there is another view of the subject., which we feel at liberty to present. Miss Nash says she was induced to become the purchaser of the coal field land because of her solicitude t o be the owner of her father’s residence,her home. She entered the transaction believing from what Dr. Strudwick told her, that his debt and her debt, were all the debts of her father, remaining unpaid, and upon this representation she agreed to pay what turns out to be an exorbitant price for the coal field land, but now she finds another large debt which has to be paid, so that tbe cherished wish of her heart to pay all the debts of her father cannot be accomplish ed without assuming a greater burthen than she supposed she was undertaking at the time of the contract of the purchase. We are inclined to the opinion that these facts create an equity for recission, of the whole contract, so as to remit the parties to their original rights; to the the end that she may, if so advised, consent to the order remanding the case, our judgment affirming the judgment below will not be entered, until she certifies her election, which must be before the end of the present term. Otherwise the complaint wrill be dismissed without prejudice to further proceeding as the plaintiff may be advised.

Per Curiam:. Ordered accordingly.