Bolt v. Dawkins

1. Where the right of action accrued before the adoption of the Code of Procedure, the Statute of Limitations then of force governs the case. 2. Where the right of action accrued during the life-time of the debtor, the currency of the Statute of Limitations, as to such demand, is not suspended after his death, during the time when there is no administration upon his estate. 3. Admissions and promises of intestate’s heirs, who, without letters of administration, were managing his estate, do not continue or revive the indebtedness of the intestate; and a judgment obtained against such persons, as executors de son tort, cannot have the effect of arresting the operation of the Statute of Limitations. 4. Where the administrator brings an action for the sale of the real estate of his intestate in aid of assets, the personalty being inconsiderable, the court will sustain his plea of the Statute of Limitations to a claim barred thereby, notwithstanding the heirs-at-law have admitted the claim to be justly due and oppose the interposition of the plea. The Court of Equity is bound to apply the bar of the statute to a legal demand in the same manner as a Court of Equity would apply it. 5. If the administrator, in his complaint, after the bar of the statute was complete, had, in the most unqualified manner, acknowledged a debt of his intestate and promised to pay it, such admission and promise would not revive the original debt, or create a new debt against the estate, nor would they estop the administrator from afterwards pleading the statute as a bar. • 6. The administrator is the proper person to interpose this plea, and it matters not if creditors and distributees have not joined with him in such defense. 7. Whether one security operates as payment of another is a question of fact dependent upon the intention of the parties. 8. A promissory note was received in exchange for a sealed note, past due, of larger amount, and the latter was canceled and surrendered to the maker, and, it being found among his papers after his death, was delivered by his son to the payee. Held, that the sealed note was not a subsisting obligation. 9. Where a note for air amount less than the sum due is received in payment of a debt after maturity, the debt is extinguished. 10.A promissory note may extinguish a higher security, as, for instance, a sealed note.

Before Wallace, J., Union, April, 1880. Action by Charles Bolt, as administrator of the estate of Joshua P. Dawkins, deceased, against Sarah A. Dawkins (widow), B. F. Dawkins and Nannie E. Tench (children), and Sarah A. Stringfellow and others, creditors of Joshua P. Dawkins’ estate. The action was commenced January 10th, 1878, and was in the nature of a bill for sale of land in aid of assets, the personalty received by the administrator not exceeding $200. The complaint alleged “that the indebtedness of said estate is very large; that the personal estate is wholly insufficient to satisfy the same, and that it will be necessary to sell the lands in order to pay and discharge the debts.” And again, “That the defendants * and Sarah A. Stringfellow * * * .are creditors of said intestate, and there are'none others.” An order was passed directing the sale of the intestate’s lands, and appointing Joseph F. Gist, referee, to call in creditors, and take proof of claims. The lands were sold in January, 1879, for $12,535, exclusive of one tract sold at private sale, by order of the court, for $5,500, on credit, secured by bond and mortgage. The referee, by his report, filed April 14th, 1880, disallowed the claim of James B. Dawkins (as having been fully paid), the claim of Mrs. Stringfellow and of one other (because barred by the Statute of Limitations). The note held by Mrs. Stringfellow was made in Florida, where both she and J. B. Dawkins resided. The facts connected with these two claims are fully stated in the opinion. The only 'claims against the estate, allowed by the referee, were those of Lyons, administrator, for $301.57, assignees of Choice for $2,782, and S. F. Dawkins for $435.48, making the aggregate indebtedness of the estate on April 14th, 1880, $3,519.05. During the progress of the reference, the following paper was filed with the referee: Chables Bolt, adm’r, v. Sabah Dawkins and others. I, Sarah A. Stringfellow, a defendant in the above-stated case, do hereby authorize and empower Messrs. Steedman and Rawls, my attorneys herein, to file with the record, and to enter upon the proceedings, my consent and agreement that all claims that may herein be established against the estate of Joshua P. Dawkins, deceased, whether simple contract or specialty debts, and all expenses of administration, and all costs in this case, shall take precedence in'the marshaling of said estate, and in the administration thereof, of the claim against said estate presented in my favor, viz., promissory note of J. P. Dawkins in favor of J. B. Dawkins for $5,200, transferred to and now owned and held by me, and the judgment thereon obtained by me against John W. Tench and B. F. Dawkins, as executors of J. P. Dawkins, deceased, so that no part of said estate shall be applied to the payment of said claim until all other demands against the said estate shall have been fully satisfied. April 4th, 1879. Sarah A. Stringfellow. I also consent to the above. James B. Dawkins. • By virtue of the within authority, we do hereby enter consent of Mrs. S. A. Stringfellow that the debts of and demands against the estate of J. P. Dawkins, deceased, within referred to, shall take precedence in the administration of said estate over the demand and debt set up by me. Steedman & Rawls, April 7th, 1880. Attorneys for Mrs. Stringfellow. There were several judgments proven against B. F. Dawkins, Mrs. Tench and Mrs. S. A. Dawkins, who were distributees of the intestate, upon their personal indebtedness. Upon the note held by Mrs. Stringfellow, there was a payment of $1,000 on January 7th, 1875, “by sight draft of Tench and Dawkins on L. D. Mowry & Son.” This draft was paid, and Tench testified that Mr. L. D. Mowry knew that it was a payment on this note. Mrs. Stringfellow obtained judgment by default on this note in October, 1877, against John "W. Tench and B. F. Dawkins, as executors of J. P. Dawkins, deceased. Assignees of William Choice and S. F. Dawkins, and the judgment creditors of the distributees desired the statute to be pleaded to Mrs. Stringfellow’s claim; 'Lyons, administrator, and the distributees, did not so desire. Other facts are stated in the opinion. The Circuit decree was as follows: This proceeding is instituted by the plaintiff for the purpose t of having the land of J. P. Dawkins sold in aid of assets to pay debts. By an order of court, creditors of J. P. Dawkins were called on to prove their demands, and Mrs. Stringfellow offers as proof of her debt the judgment obtained by her against Tench and Dawkins. Is this proof against the administrator here ? After some hesitation it has been held in this State that judgments against administrators would bind the lands of intestates, but not that a judgment against an executor de son tort would so bind. On the contrary, such executors are held to be mere trespassers, as there can be no privity between such trespassers and subsequent personal representatives; nor are heirs in any way affected by a judgment against executors de son tort; nor is the estate itself bound by such a judgment beyond the assets that went into the hands of such executors. He is a trespasser, and the measure of his liability is the assets that went into his hands if he properly pleads to the action. If he does not plead at all to the action, the judgment is against assets in his hands, and for the balance against him personally. The fact that Tench and B. P. Dawkins were in possession of the land cannot alter or enlarge the effect of the judgment. Tench was husband of one of the heirs; B. F. Dawkins was himself one of the heirs, and Mrs. S. A. Dawkins the other heir. These were all in possession of the land, and rightfully and legally so; and their possession will be referred, of course, to their legal right. In no sense, therefore, did they hold the land as execu-' tors de son tort. A judgment against them as such, therefore,, could not bind the land. I am of the opinion, therefore, that Mrs. Stringfellow’s judgment cannot rank as a judgment against, any part of the estate of J. P. Dawkins, except what Tench and Dawkins took into their possession wrongfully, and is not proof of Mrs. Stringfellow’s claim in this action. To the note upon which the judgment is founded the plaintiff interposes the plea of the Statute of Limitations. As to the right of the administrator to interpose the plea I think there can be no doubt. He is the personal representative of the maker, and as to the right to plead the statute, he stands in his place. A case might occur in which the court would compel him. to plead the statute,, but it is hardly possible to conceive a case in which the court would strike out such a plea, or prevent its interposition, or disregard it when there were facts to support it. The note is dated February 1st, 1870, and is payable one day after date. This action was commenced in 1877, more than seven years after the maturity of the note, and more than sufficient to bar the right of action on the note if the statute was running all that time. The maker died on August 8th, 1870. Certainly the holder had his right of action after the maturity of the note and before the death of the maker. The statute then began to run before the death of the maker. It can be collected from several of our cases that when the right to sue was perfect thé currency of the statute is not arrested by the death of the maker. Where the right to sue is not perfect before the death of the maker, the statute does not begin to run until there is somebody to sue. Nicks v. Martindale, Harp. 135; McCollough v. Speed, 3 McCord 255; Moses v. Jones, 2 Nott & M. 259. Some of the heirs promised to pay the note within the time necessary to save the bar of the statute, and a payment was made on the note by Tench and Dawkins. For the same reasons that the judgment against Tench and Dawkins does not bind the estate, & payment upon the note by them would not prevent the running of the statute in favor of the estate. Neither would a promise by Tench and Dawkins have any more effect than the payment of a part of the debt. The promise of an heir to pay the debt of the ancestor is a promise to pay the debt of another, for in this case it is not the debt of the heir. Under certain circumstances, property of the ancestor in the hands of .the heir can be made available to pay the debt of the ancestor, but it is still the debt of the ancestor to which the administrator has the legal right to plead the statute, and such plea cannot be defeated by proof of the promise of the heir to pay the debt. It might be that the heir himself, if the promise was made upon sufficient consideration, would be bound, but not the personal representative of the estate. I am constrained, therefore, to hold that Mrs. Stringfellow's claim against the estate is barred. James B. Dawkins held a sealed note on J. P. Dawkins for $8,100, and dated October 11th, 1869, payable one day after date. The note transferred by J. B. Dawkins to Mrs. String-fellow, previously referred to, was given for this note. The Stringfellow note was for $5,200. It is claimed by James B. Dawkins that the sealed note for $8,100 is not extinguished by the promissory note of $5,200. It is a familiar rule that a note is not paid by the acceptance of a smaller sum than the amount due upon the note in payment. The rule does not apply to cases where something other than money is received in satisfaction. In such cases the effect of the transaction is to be determined by the intention of the parties. In this case a promissory negotiable note was given and received for a sealed note, at the instance and request of the holder. The larger and sealed note was delivered to obligor— the words “ canceled by another note, J. B. Dawkins,” written across its face, with lines of cancellation across the face and signature. The negotiable note transferred by J. B. Dawkins to Mrs. Stringfellow as a collateral is now held by her. A letter is produced in evidence from J. B. Dawkins to J. P. Dawkins, bearing date November 14th, 1869, before the exchange of notes, proposing to take a note for a smaller amount, and in which, among other things, he says he cannot reconcile it to his feelings to exact that amount, referring to the larger note. All these facts satisfy me that it was the intention of the parties that the smaller note should operate as payment and extinguishment of the larger note, and that the larger note is extinguished. I need not, then, in this case discuss the question whether or not the acceptance of a negotiable note in payment of a sealed unnegotiable note for a larger amount would operate an extinguishment of the larger, note. The last exception of Mrs. Stringfellow relates to the basis upon which the calculation was made on the note held against J. P. Dawkins by W. Choice and assigned to Mowry. I am of the opinion that the referee properly admitted proof of the note, notwithstanding judgment had been recovered upon it against the executor de son tort. All exceptions to the report of the referee are overruled and the report confirmed. It is ordered and decreed, that funds in the hands of the clerk of this court, and such funds as may be hereafter realized from securities in his hands belonging to the estate of J. P. Dawkins, be paid first to the costs of this action; next, to the debts of the intestate as ascertained and allowed by the referee; next, to the mortgage debt of L. D. Mowry & Son, and, if there be any residue after these payments, that such residue be held by the clerk until the further order of this court. The defendant, Sarah A. Stringfellow, gave notice of appeal from this decree upon the following grounds: 1. Because his Honor decides that a judgment obtained against an heir in possession of the land of an intestate, in a suit brought against the heir, as executor, does not bind the land, it appearing that the heir is also executor de son tort. 2. Because his Honor decides that such a judgment does not affect heirs or subsequent personal representatives, or the estate of the intestate. 3. Because his Honor should have decided that, as J. W. Tench and B. F. Dawkins represented and managed the estate of J. P. Dawkins by the consent and acquiescence of all the heirs and creditors of the said J. P. Dawkins, the judgment of Mrs. S. A. Stringfellow, fairly obtained against them as executors, found the real estate in their possession and managed by them, so far as heirs, creditors and subsequent personal representatives are interested therein. 4. Because his Honor should have decided that the administrator, in seeking the aid of this court to reach the real estate of J. P. Dawkins, deceased, in aid .of assets, must do equity, and will not be permitted, by pleading the Statute of Limitations, to defeat the just claim of Mrs. S. A. Stringfellow, which had been continually assented to and recognized as a subsisting debt of the estate by all parties interested in the same. 5. Because his Honor should have decided that, as the heirs of J. P. Dawkins refused to plead the Statute of Limitations, and all the creditors of J. P. Dawkins and others interested in his estate were protected by the agreement of Mrs. S. A. String-fellow to give precedence to all other claims against said estate over her own, the administrator will not be permitted to plead the bar of the Statute of Limitations to defeat a just claim, continually recognized by all interested in the estate since the death of J. P. Dawkins. 6. Because his Honor should have decided that the administrator of J. P. Dawkins, deceased, was equitably estopped from pleading the bar of the Statute of Limitations to the claim of Mrs. S. A. Stringfellow. 7. Because his Honor decided that the Statute of Limitations continued to run after the death of J. P. Dawkins, and was not arrested thereby until letters of administration were granted in respect to a debt owned and held by parties living “beyond seas.” 8. Because his Honor should have decided that J. W. Tench and B. F. Dawkins were the agents of all parties interested in the estate of J. P. Dawkins and of the estate itself, and their continual recognition of the debt in question, and their promises to pay the same, arrested the Statute of Limitations and prevented it from barring the debt. 9. Because his Honor should have decided that the payment made in behalf of the estate upon the claim of Mrs. S. A. String-fellow, by parties rightfully in possession of the estate and legally representing the intestate, made with the knowledge and assent of all parties interested in the estate, arrested the Statute of Limitations from running in their favor. 10. Because his Honor should have decided that the payment made in behalf of the estate upon the claim held by Mrs. String-fellow, by an heir of the intestate in possession of the estate, there being no administrator or other representative of the estate, arrested the Statute of Limitations. 11. Because his Honor should have decided that the promises and payments of the heirs in possession of the land of the intestate prevented the bar of the Statute of Limitations from arising in respect to the land against the claim of Mrs. S. A. Stringfellow. 12. Because his Honor should have decided that Mrs. S. A. Stringfellow was entitled to establish her claim against the estate of Joshua P. Dawkins by producing the sealed note of Joshua P. Dawkins given as evidence of the debt, which sealed note has not been paid. 13. Because his Honor should have decided that, as L. D. Mowry & Son took a mortgage upon the land in question, with notice of Mrs. Stringfellow’s claim, their lien should be postponed to hers. 14. Because his Honor should have decided that, as the debt established against the estate of J. P. Dawkins by L. D. Mowry & Son was held by them as cumulative collateral security for the payment of the debt represented by the bond and mortgage of S. A. Dawkins, B. F. Dawkins, N. E. Tench and J. W. Tench, any payment made upon the said debt-from the estate of J. P. Dawkins will discharge the same pro tanto ; and his. Honor has erred in directing the debt established by said creditors against said estate to be paid from the fund in court, and, also, the bond and mortgage referred to, instead of directing the amount received by said creditors from said estate to be applied as a credit upon the bond and mortgage debt. The defendant, James B. Dawkins, appealed from this decree upon the grounds: 1. For that his Honor, Judge Wallace, overruled the exceptions of this defendant to the referee’s report. 2. For that his Honor, Judge Wallace, held that the promissory note for $5,200 acted as payment and extinguishment of the sealed note for $8,100. Did the admissions, promises and payment of the heirs, in possession of the land, sustain , the subsisting legal obligation of the debt and prevent the bar of the statute as to the real estate of the intestate ? If so, the note was not bai’red. 3 Strobh. Eq. 43; 9 8. C. 430. The personal property is not before the court to be administered. The heirs are sued on their ancestor’s debt. 9 S. O. 436. Lands' descended are assets, but, in general, the cause of action must be established against the heir. Spears Eq. 250; 2 Hill Gh. 257; Bice Gh. 387; 1 S. G. 198; 1 Hill 579; 4 McG. 131; 6 /S'. G. 156. The creditor has an immediate right of action against the heir, and is not bound first to exhaust his remedy against the personal representative. 2 8. G. 145. His remedy does not depend on cooperation of administrator; he has an independent equity. 11 8. O. 582. In equity, the executor is a necessary party only for the protection of the heir. Id.; 2 HUI Ch. 260; Rice Ch. 239; 2 8. C. 140; 4 Id. 296. Action will be sustained against him alone unless he object. 9 8. C. 436; 12 Id. 9; see, too, 1 Desaus. *427; 1 McC. Ch. 325; Spears Eq. 250; 6 8. C. 66. Administrator does not represent intestate as to real estate; only as to the personalty. 1 Rice Dig. 315, No. 24; Spears Eq. 401; 3 Rich. Eq. 91, 95; 4 Desaus. *325; 13 Rich. Eq. 29; 13 8. C. 326; Cheves Eq. 27; Rice Ch. 19. See his oath and bond. Gen. 8tat'., Chap. LXXXVIII., § 4. His sureties are not liable for rent. 1 McM. 249. His admission does not bind real assets in the hands of the heir or devisee, or affect their right to plead the statute. 6 Johns. Ch. 373; 3 Russ. 188; 12 Eng. L. & Eq. 191; 18 Eng. Ch. 257; 1 8. C. 195. The heir is, therefore, the organ through which real assets are generally to be reached, and the administrator the organ through which personal assets are to be reached. The acknowledgment of the heir should, therefore, continue the liability of the real estate to the payment of the debt. Heirs in possession are trustees for the benefit of creditors. 6 8. C. 156; 9 Id. 436. It is this equity, and the statute 5 Geo. II., Ch. VII., and the insufficiency of personal assets, which give the creditor the right to come directly against the heirs. 2 8. C. 145; 4 Kent *420; 16 Ret. *63. It would seem, therefore, that as the admission of the administrator before action barred, prevents the bar of the statute as to personalty (Bailey Eq. 311), so the admission of the heir would prevent the bar as to the lands. In neither case should the promise or admission of the one bind the property represented by the other. Tench and Dawkins, under the agreement with intestate, were trustees for creditors. 14 8. C. 211. And were agents for the heirs. 10 Rich. 332; Story Cont., § 131. The heirs, here, all admit the debt and refuse to plead the statute. Ang. Dim,., § 7. Equity being invoked, will the court lend its aid except on ' fair terms? The administrator has only an equity. 1 Story Eq., § 551, note 2. And the court will require him to do equity. Id., § 557. The plaintiff, here, is clerk of the court, and its mere hand. 14 Mich. 156. And the court has undertaken the administration. 10 Rich. Eq. 439. And should protect the rights of all parties. 4 Rich. Eq. 491; 1 Story Eq., §§ 64, 553. The heirs, here, could not plead the statute, therefore the administrator should not be allowed to do so in this action. The administrator’s promises could not prejudice the heir; he should not be allowed to interfere to the prejudice of the creditor. The Court of Equity will sometimes refuse to allow the statute to be pleaded. 1 Eq. Cas. Ab. 305; 2 Williams Ex. *1283, *1454; 2 Hill Ch. 91; Rich. Eq. Cas. 261; 3 Barr. 161. After their demands are satisfied, creditors are straugers. The allegations of the complaint, and the use of Mrs. String-fellow’s claim to procure a sale, should estop plaintiff from afterwards pleading the statute. 2 Q. B. 117 ; 6 Jur. 389;. 12 Q. B. 925; 8 Rich. 117; 10 Rich. 338; 6 S. C. 46. The administrator alone has pleaded the statute. The only persons interested in sustaining the plea are creditors of the heirs ; the heirs cannot set it up, nor can their creditors. 22 Bean. 1; 2 Jur. N. S. 602. The court here should not permit the plea. 4 Strobh. Eq. 196; 1 MaC. Ch. .174; 4 McC. 424; Harp. 205. The intestate here created a trust for his creditors, and the trustees admitted the debt. Ram Assets, Ch. XXXTV1, § 7.