Dudley v. Griswold

The Surrogate.

Julius Dudley recovered a judgment for $150 in the Supreme Court, in June, 1851, against Nathaniel L. Griswold, as executor of the deceased. The judgment was for costs accrued in the defence of a proceeding instituted by the executor, for the removal of Dudley from premises leased to him by the executor.

Upon an application for leave to issue execution upon this judgment, the executor claims an equitable offset, on the ground that he is the owner of a judgment in the Supreme Court against Dudley, recovered by Conklin Brush, May 17, 1848, and assigned to Griswold as executor, December 20, 1850.

There can be no doubt that an executor or administrator cannot set off a debt due to him personally, or purchased by him since the death of the testator or intestate, against a demand due by the estate of the deceased, or accruing in the life-time of the deceased. The question is whether that rule is applicable to the present case. A court of equity will, in regulating the right of set-off, regard a debt as due in the right of him who is beneficially entitled to it; but the rule prevails as well in equity as at law, that demands due in different rights cannot be set off against each other. The consequence is that the executor cannot set off against a demand upon him as executor, a debt due to him individually.

In the present case, the judgment for costs is against the executor in his representative capacity, and the amount is to be collected of the assets of the deceased. (2 R. S., 3d ed., p. 152, § 34; p. 178, §§ 21, 22; p. 706, § 23; p. 709, § 44.) It stands, then, in effect as if it were a debt against the testator, and it must abide the course of distribution of his estate. How, suppose the case reversed, and a creditor of the executor individually should seek to set off a debt due to him personally, against a demand due by him to the testator. That could not be, because it would alter the course of administration, and in the case of an insolvent estate, secure to a debtor of the estate the means of defeating the right of creditors of the estate to a rateable share of the assets. For the same reason, if an executor sues for a- debt created in his favor since the testator’s death, the defendant cannot set off a debt due to him from the testator. To authorize a set-off, the debts must be mutual, and due to and from the same persons in the same capacity. Therefore, a debt arising with the executor, cannot be set off against a debt due from the testator. The judgment for costs in this case is substantially, though not in form, the same as a debt against the testator; it is against the estate, and to be paid out of the assets, rateably with other debts. The judgment sought to be set off, has been purchased by the executor since the testator’s decease, and as between these parties, is to be treated as the individual property of the executor. The principles on this subject appear to be well established; and I think the set-off claimed, cannot be allowed without ■ making a serious inroad upon the established course of administration of estates. (Duncan vs. Lyon, 3 J. C. R., 351; Dale vs. Cooke, 4 J. C. R., 11; Fry vs. Evans, 8 Wendell, 530 ; Hills vs. Tallman's administrator, 21 Wendell, 647 ; Irving vs. De Kay, 10 Paige, 323.) Besides, I am satisfied that it would, in the language of the late Chancellor, “ be inconsistent with the principles of sound policy to permit an executor to buy up claims against creditors of an estate for the purpose of obtaining a set-off in equity.” (Mead vs. Merritt, 2 Paige, 405.) The business of an executor or administrator is to settle the estate, pay the debts and distribute the surplus, and not to speculate in demands against the creditors. It is not a legitimate purpose for which to employ the trust funds, to buy up- debts against claimants; and if he does so he must take the risk of such dealings upon his own individual responsibility. On the other hand, if such transactions be lawful, the money advanced to purchase such claims may be legally charged to the estate ; and the consequences of such a doctrine may, in many cases, be most disastrous. There might be no harm accruing in this particular instance, but a bad rule always overcomes in permanent evil any transient and partial benefit. I must, therefore, permit the execution to issue, unless insufficiency of assets be alleged.