Shell v. Young
Syllabus
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Opinion of the Court
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The opinion of the court was delivered by Mr. Justice McIver.
On the 22d of October, 1885, this proceeding was instituted in the Court of Probate by the plaintiff, alleging that the personal estate of his intestate was insufficient for the payment of his debts, and asking that creditors be called in to prove their demands, and the real estate sold for payment of debts. Under this call sundry creditors came in and established their demands, among whom were the bank of New-berry, J. W. Copeland, as assignee of George P. Copeland, and L. W. Floyd; the claims of the bank and Copeland having been reduced to judgment against the intestate in his life-time, and the latter being based on a cause of action arising prior to the adoption of the present constitution. In the meantime another judgment creditor, Edmond T. Brown, having levied on the lands of intestate, his minor children, who are defendants herein, applied for a homestead, when 178 acres of the land were assigned to them as such, together with what little personal property was left by the intestate. The real estate consisted of a single tract of land, containing about 1,150 acres, and portions of it being under mortgage to different parties, that portion of it which remained after cutting off the homestead of 178 acres, was divided into eight parcels, and the same was so sold, by consent *469 of all parties, under an order of the Court of Probate, and the proceeds of such sale, amounting to a sum more than sufficient to pay the Copeland judgment, as well as those senior to it, are now in the hands of that court.
It was claimed by the creditors that Copeland, being the only one who could resort to the homestead for payment of his judgment, by reason of the fact that the cause of action upon which it was based ante-dated the constitution, should be required to do so, before resorting to the proceeds of the sale of the lands over and above the homestead; but the judge of probate held otherwise, and adjudged that the proceeds of the sale in the hands of the court should be applied first to the payment of the costs of the proceedings, together with a counsel fee to the attorneys of the administrator, and a specific sum of money to the administrator in lieu of all commissions, as well as any taxes that might be due on the land, and that the balance of the proceeds should be applied to the liens which had been established, in the order of their rank'; and in the event that such proeéeds should prove-insufficient to satisfy Copeland’s judgment in full, then he be allowed to subject tire homestead to the payment of such balance as might remain unpaid.
From this decree the bank, Floyd, and Copeland all appealed, the former two substantially upon the ground that the judge of probate erred in not requiring Copeland to exhaust the homestead before he could be allowed to participate in the proceeds of the sale of the land outside of the homestead, and Copeland upon the same ground, as well as upon the further ground that the judge of probate erred in giving the counsel fee of the attorneys of the administrator priority over the liens. These appeals were heard by hiS honor, Judge Fraser, who rendered judgment dismissing all of the appeals, in so far as they imputed error to the judge of probate in not requiring Copeland first to exhaust the homestead before he could be allowed to participate in the proceeds of the sale in the hands of the court, but sustaining so much of Copeland’s appeal as alleged error in giving the counsel fee of the administrator priority over the liens of creditors.
From this judgment the Bank of Newberry and L. W. Floyd now appeal, substantially upon the same ground upon which their *470 appeal from the decree of the judge of probate rested, and the administrator also appeals, alleging error in not sustaining the decree of the judge of probate in respect to the counsel fee of his attorneys; arid that in any event it was error to postpone the payment of such fee to any lien creditor other than Copeland, who was the only one of such creditors who appealed from the decree on that ground.
The real question presented by the appeals of the Bank of Newberry and L. W. Floyd is, whether the other creditors of the intestate, who cannot resort to the homestead for payment of their claims, have now any equity to require Copeland, who could have subjected the homestead to the payment of his debt, to exhaust the homestead before he can be allowed to participate in the proceeds of the sale of the land over and above the homestead. These appellants rest their position on the case of Bank v. Harbin (18 S. C., 425), and the doctrine therein established. If the principles there laid down can be properly applied to the facts of the case now under consideration, then, unquestionably, the position taken by appellants should be sustained; so that the practical question is, whether the principles announced in that case are applicable to the present case. The Circuit Judge, while recognizing the authority of that case, undertook to distinguish it in several particulars from the present case, any one of which he seemed to think rendered that case inapplicable.
Now, while we do not propose to indorse all of the distinctions drawn by the Circuit Judge between the two cases, we do think that the one first mentioned by him is quite sufficient to withdraw this case from the operation of the rule laid down and applied in the case of Bank v. Harbin. There the land was sold under an order reserving all the equities of the parties, while here it was sold without any such reservation ; and hence the moment it was sold the proceeds became at once applicable to the payment of the liens in the order of their priority, and though not in fact, must be regarded in law, as actually so applied; and if so, then there were no longer two sets of creditors — one having a lien on two funds, and the other having a lien upon only one of those funds — rfor the persons who might previously have been regarded as standing in that relation to each other could no long *471 er be regarded as creditors at all, as in the view of the law their claims had been satisfied. As the Circuit Judge very pertinently suggests, after the land had been sold for the express purpose of paying the debts, for an amount sufficient to pay Copeland’s judgment, as it is conceded, any other levy and sale under such judgment might well be regarded as wholly without authority, and therefore void.
In the case of Jones v. Miller (17 S. C., 380), the question was whether a widow was entitled to dower in certain lands which had been sold under judgments obtained against her husband in his life-time. The defence was that some of the judgments under which the lands were sold antedated the marriage, while others were obtained subsequent to the marriage. It appeared that a large amount of personal property, in addition to the lands, was sold on the same day; and the court, finding as matter of fact that the amount for which the personal property was sold was sufficient to satisfy the ante-nuptial judgments, held that the proceeds of the sale of the personal property must be regarded as instantly applied to the ante-nuptial judgments, whereby they were satisfied, and that the lands must be regarded as sold under the judgments obtained subsequent to the marriage, and therefore subject to the right of dower; although the court expressly recognized the doctrine that the lien of the ante-nuptial judgments was paramount to the claim of dower, and would therefore have been sufficient to have defeated the claim but for the fact that the ante-nuptial judgments were satisfied by the proceeds of the sale of the personal property, which, though not in fact, were in law, applied to them the moment the sale was made.
The decision in that case'rested alone upon the principle which we have applied to this case, that where property is sold to satisfy judgments, the proceeds of such sale must be regarded as instantly applied to their satisfaction, though in fact the application, as is most usually the case, may not really be made until afterwards. For in that case the property was all sold on the same day — one continuous proceeding — and yet the court, assuming, in the absence of evidence to the contrary, that the personal property was sold first, held that the proceeds of the sale of that *472 must be regarded as instantly applied to the satisfaction of the ante-nuptial judgments, whereby the sale of the lands, following immediately afterwards on the same day, should be regarded as made free from the lien of the ante-nuptial judgments, which were the only liens paramount to the claim of the d’ower. Where, however, the sale is made, as in Bank v. Harbin, supra, under an order reserving the equities of the parties, the rule above stated would not apply, and the application of the proceeds of the sale could not be regarded as made, either in fact or in law, until such equities have been adjusted.
It seems to us, therefore, that the conditions necessary to the application of the rule invoked by appellants do not exist in this case, and that they have failed to set up any equities to which they may have been entitled at the proper time. See Ex parte Kurtz, 24 S. C., 468, and Ex parte Carraway, 28 Id., 233.
The only remaining inquiry is that presented by the appeal of the plaintiff in reference to the counsel fee of his attorneys. Inasmuch as none of the lien creditors except Copeland appealed from that portion of the decree of the judge of probate which gave priority to this claim over all the lien creditors, they are all, except Copeland, precluded from raising the question; and it is therefore necessary to consider only whether Copeland should be postponed to the claim for counsel fees. We agree with the Circuit Judge that there is no authority for postponing a lien creditor until counsel fees and expenses have been paid, unless it appears that the proceeding in which such fees and expenses were incurred was instituted at the instance of the lien creditor, or was necessary'properly to provide-for the payment of his claim. Now, in this case it is not pretended that this proceeding was commenced at the instance of Copeland, and we think it clear that it was not calculated to promote his interest, but rather the reverse. Having a judgment which was enforceable against the whole of the real estate, including the homestead, he had an expeditious and inexpensive mode of enforcing his claim ; and this proceeding, instituted by the administrator, tended rather to delay than to promote the enforcement of his rights.
It seems to us, therefore, that so much of the judgment of the Circuit Judge should be reversed as gives the lien creditors other *473 than Copeland a preference over the counsel fees, on the’ground that they are concluded by acquiescence in the decree of the judge of probate, but that in all other respects it should be affirmed; and such is'the judgment of this court.
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