Jones's Appeals , 1882 Pa. LEXIS 130 ( 1882 )

Mr. Justice Trunkey

delivered the opinion of the court, January 2d 1882.

Samuel Jones died in 1862, leaving a widow and five children. In 1870 the administratrix of his estate filed her account, which was confirmed by the court, showing that a large amount of personal property had come into her hands, out of which she had paid certain debts and liabilities, leaving a balance of 822,567.70, which she had distributed to the widow and heirs. On November 8th 1852, Jones became surety upon a guardian’s bond in the sum of $20,000. By final decree in 1878, it was determined that the guardian had in his hands the sum of $115,905.87 of the money of Mary C. Delafield, which sum he wras ordered to pay to her. .He was insolvent. In 1879, Mrs. Delafield obtained judgment against the administratrix of Samuel Jones, deceased, for the amount of the bond. The administratrix had no knowledge or notice of the existence of this debt until in the year 1877.

It is not pretented that Samuel Jones, if living, would have a defence, at law or in equity, against the payment of the debt; nor it is alleged that it is a debt which his administratrix was not bound to pay out of the moneys of the estate. But it is claimed that, under the Act of October 13th 1840, the confirmation of the account more than five years prior to the presenting of the petition by Mrs. Delafield protects the administratrix, and, also, that the laches of the petitioner in bringing-knowledge of the existence of the debt to the administratrix relieves her from the consequences of the devastavit.

In passing it is sufficient to note that the blending of a distribution account with an administration account has often been condemned; an administration account, properly settled, show's nothing more than the balance due legatees, or distributees under the intestate laws, after payment of the debts and expenses of settling the estate. For the purposes of this ease, it may be taken that the court approved the distribution set forth in the account.

As the petition, answer and pleadings, in proceedings in the Orphans’ Court, are regarded as forming part of the decree, so is an administration account. The Act of October 13th 1840, not only gives the right of review' to a party in interest upon proper showing, but fixes a limitation to petitions of review. It is none the less a limitation, because it does not begin to run in favor of an accountant who has perpetrated a fraud upon au interested party until discovery of the fraud by such party. Nothing in the facts of this case shows fraud, or other matter which tolls the limitation. Whether the review is demanded for error in law apparent in the decree, or for new' matter which has arisen after the decree, or for new proof that has come to light since the decree, the statutory limit applies. The error in blending the distribution and administration accounts appears in the decree. If a decree, or part thereof, be void, it would be so treated without reference to this statute.

The right of creditors to be paid out of a decedent’s goods was recognized, both at common law and by statute, long before the right of succession was secured to his children and kindred. When a man dies in Pennsylvania, his estate, real and personal, comes within the jurisdiction of the Orphans’ Court, to be administered, first of all for the benefit of his creditors, and next for legatees, devisees, and heirs: Horner & Roberts v. Hasbrouck, 5 Wr. 169. The personal estate is the primary fund for the payment of debts, but both personalty and realty are carefully hedged by statute against their appropriation to the prejudice of creditors. Before the kindred of a decedent shall be entitled to receive the proceeds of the sale of his real estate, they shall give refunding security as directed by § 45 of the Act of February 4th 1834, and § 2 of the Act of May 23d 1871. § 38 of the Act of 1834, P. L. 80, provides that no administrator shall be compelled to make distribution of the intestate’s goods until after one year from the granting of the letters. Sections 39,40 provide for distribution of assets, after deducting all demands which have been made known to the administrator, under the direction of the Orphans’ Court, and § 41 declares that before any person shall be entitled to receive any share in the distribution, he shall give security to be approved by said court, “ with condition that if any debt or demand shall afterwards be recovered against the estate of the decedent, he will refund the ratable part of such debt or demand, and of the costs and charges attending the recovery of the same.” Where such security shall be taken the administrators “ shall not be liable for the assets so paid or distributed, in respect to any claim or demand upon the decedent not previously made known to them § 57. Administrators may make distribution, without application to said court, upon such security as may be satisfactory to them, nevertheless, at their own risk: § 58.

Refunding bonds are not required of a creditor to entitle him to receive his debt. Where a decree of distribution is made to and among creditors, though a creditor of record who had not given the administrator actual notice of his claim, was omitted, the administrator may safely pay the assets in accordance with the decree: Cramp’s App., 31 P. F. S. 90. The bond is not for the benefit of legatees, or distributees under the intestate laws. Where money has been paid by an administrator in pursuance of an order or decree of the Orphans’ Court, a person entitled to a distributive share, or legacy, cannot charge the administrator personally for such money, nor is he entitled to a review as respects money so paid: Russell’s Administrator’s App., 10 Casey 258; Stewart’s App., 5 Nor. 149; Charlton’s App., 7 Nor. 476; Hendrickson’s Estate, 2 Pitts. R. 360.

Compliance by administrators with the Act of 1834 secures creditors of the estate in receiving their claims, notwithstanding payment of assets to legatees or distributees. “ The object of the statute hi requiring refunding bonds was to protect claims that might arise through mistaken or fraudulent settlements, as well as such that had not yet come to light. The only safe line of conduct for executors or administrators to follow is, to obey all the requisitions of the law. Governed by its directions, they will be protected by its shield. Disobeying its mandates, they must suffer its penalties Musser v. Oliver, 9 Har. 362. It appeared in that case that Jacob Moltz, who was guardian of Barbara Mann, after she became of age in 1835, settled with and took her receipt in full; Moltz died in 1838; his administrators settled their account in 1843 and distributed and paid the balance to the widow and heirs; in 1844 a petition in behalf of said Barbara was presented to the Orphans’ Court, praying that Moltz’s administrators be cited to settle an account of their intestate as guardian, resulting in a decree that a balance was due her of $1,972; and the administrators were fixed with a devastavit. Prior to 1834, there was a similar statute, under which administrators who distributed the assets without taking refunding security were held personally liable to creditors. Among the cases recognizing such liability are Thomas v. Riegel, 5 R. 266, and Pry’s App., 8 Watts. 253. Whenever the question has arisen in this state, it has been ruled that the payment of assets to distributees under the intestate laws, without taking security to refund as prescribed by statute, is so contrary to the duty of administrators as to render them personally liable to creditors to the extent of such payments. Their liability under these circumstances is fixed by the plain terms of the statute. The security required is specially for protection of creditors whose claims are unknown by the administrators; and, before they were authorized to take such security, there was no mode by which they could distribute to heirs and relieve themselves of liability to such creditors.

It is unnecessary to consider whether the confirmation of the account was an adjudication of the distribution. Conceding that it was, the decree must be interpreted in the light of the statute. There is no conflict, no inconsistency between the statute and the decree. Had the administratrix taken security, approved by the court, her liability would have- ceased. She paid without security, and it was at her own risk. It would be absurd to infer, from anything in the account and its confirmation, that the court directed the money to be paid without security and in violation of law. If the meaning of the decree were doubtful, which it is not, it should be understood in the sense which is lawful, not that which is wholly outside the power of the court. The decree merely directed the distribution; the law-declared the terms upon which the distributees were entitled to receive the money and the administratrix could pay it without risk.

The petitioner’s judgment is conclusive of the legality of the claim against the estate. No statute of limitation bars it. No presumption of payment arises from lapse of time, or other thing. The law secures to creditors as full right to recover their claims against the estate of a decedent, as they would have if he -were living. If the administratrix still had the assets in her hands, her duty to pay could not be denied. It is no fault of the petitioner that the assets have been distributed without refunding bonds. No act or laches on her part, exempts the administratrix from-the consequences of the devastavit. Long established principles impel us to the conclusion reached by the court below. It may be a hardship upon the widow and children of the decedent to pay this debt, but it is the inevitable result of his executing the bond, the guardian being insolvent.

In an action at law against the administratrix to charge her personally with the debt, the admitted facts would be decisive. The better place to enforce the right is in the Orphans’ Court, which has jurisdiction of the accounts of administrators, and of the estates of decedents for creditors. It is well settled that a creditor may enforce payment of a debt owing by a decedent’s estate in the Orphans’ Court.

Although we are of opinion that the petition was too late for a review of the decree confirming the account, yet without review the petitioner’s right that the administratrix be charged with the assets improperly distributed, to the amount of her judgment, is clear’, and the mode of doing it which was adopted reached the same result as if the order had been made upon the original petition. That form of procedure prejudiced no one’s rights and is no cause for reversal.

Two appeals were taken: one to the decree ordering a hearing, and the other to the final decree. In the view we have taken, the case has been considered upon the appeal to the final decree, and this would have been so had we thought the review was rightly granted. The Act of 1810, P. L. 1, gives “ like right of appeal to the Supreme Court as in other cases, except that the appeal shall be taken under the provisions of this act within one year after the decree made on the petition of review.” The granting of a rehearing of so much of an account as is alleged to be error, is preliminary to the inquiry respecting such errors, and if the decree be against the petitioner, the original decree stands as it did before the petition and during tbe time of tbe rebearing. If tbe order for a rebearing be called a decree, it is merely interlocutory. The refusal to grant a rehearing is final against tbe petitioner; but if a rebearing be granted, the questions therein are heard and considered, and then tbe decree is made upon tbe petition, from which tbe aggrieved party may appeal within tbe time limited. It is not the intendment of the statute to allow an appeal to an interlocutory decree, or order. '

Decree affirmed, and appeal dismissed at the costs of tbe appellant.