Shelton v. Carpenter

¶1The power of the executor to sell for the payment of debts, is distinct from, and must not be confounded with, the power to sell for the purpose of raising an interest-bearing fund for the benefit of Mrs. Crenshaw, *210during her life, and for the purpose of making a distribution according to the terms of the will. The powers are intended for wholly distinct purposes, and are expressed in different terms. The first is general — to sell any part of the estate of the testator; and the terms of the sale, whether for cash, or on credit, or, if on credit, the time of credit, and whether security shall be taken from the purchaser, and the character of the security, are committed to the discretion of the executor. The debts of the testator having been paid, power is then conferred to sell all the property remaining, on a credit of one, two, and three years, taking notes from the purchasers, bearing interest, with two sureties. The lands were sold by the executor, for the payment of debts, under the first power; and it is not an objection to the validity of the purchase by Dew, that surety was not required and taken on his notes for the purchase-money. The executor was not bound to take such surety, or to any form of sale. His authority was as full and complete as that of the testator himself; and his duty was, for the discharge of which in good faith and with reasonable diligence he was responsible, to obtain a fair and full price, securing payment of the purchase-money. Dew’s solvency may have been, and we may say was certainly, so unquestionable, that it would have been a mere form, or idle ceremony, to have demanded surety of him. The matter of taking surety rested in the discretion of the executor — it was not imposed as a condition on which the power of sale should be exercised, and the validity of the sale is not affected, because surety was not taken on Dew’s notes.—Huger v. Huger, 9 Rich. Eq. 217.

¶22. The facts relied on to avoid the payment of the notes by Dew to the executor, are these : The lands were sold on a credit of one, two, and three years, for equal annual installments, with interest from the day of sale. The first in stallment was paid with the claims which Dew held against the testator, two of which were bills of exchange drawn by the executor, and indorsed by the testator. There is some evidence which tends to show that the bills were drawn for the accommodation of the testator, and that he was in fact the primary debtor; but we do not regard it as sufficient to overcome the presumption arising from the paper. One of these bills wanted a few days of maturity, at the time of the settlement of the first installment between Dew and the executor, and the other had been protested some months previously. The second note, or installment, was paid to a creditor of the testator, to whom the executor had transferred the note. The third was paid, before its maturity, in Confederate treasury-notes. It is insisted that the two bills of exchange *211were the debts of the executor, which he had no authority to receive in payment of the purchase-money, amd that receiving them was a devastavit, in which Dew participated, and for which he is responsible.

¶3"While the power of an executor, or administrator, over the choses in action in his hands for administration, is of necessity large, and he may be dealt with generally as if he was the owner of them, he is without authority to apply them in payment of his individual debts. Whoever accepts them as security for, or in payment of such debts, has full notice of the abuse of his fiduciary power and duty, and must be answerable for them.—Swoope v. Trotter, 4 Port. 27; Waring v. Lewis, 53 Ala. 615; Van Hoose v. Bush, 54 Ala. 342. The bill which had reached maturity, though the executor was the principal debtor, was also the debt of the testator; and it cannot, with any propriety, be said that Dew was receiving, or the executor applying the assets, in payment of his own debt, so far as that bill is concerned. The principle to which we have adverted applies, only when the assets are employed to pay debts of the executor, with which the testator is not chargeable, and for which the assets are not bound.

¶43. The bill which had matured, it is said, was not a debt against the testator, because he had not been duly notified of its protest for non-payment. Notice of dishonor, or a reasonable excuse for its absence, is necessary to fix the liability of an indorser of a bill of exchange. The notice of dishonor was given the testator, by depositing it in the post-office at Eutaw, the place of his residence, and the place of payment and protest of the bill. The notice was sufficient, unless it had been shown that Dew, the holder, resided in Eutaw, a fact of which there is no evidence.—Carson v. State Bank, 4 Ala. 148; Bibb v. McQueen, 42 Ala. 408. The liability of the testator having been fixed by protest and notice, Dew could have compelled payment from the executor, and the payment was a proper application of the assets, and in no sense a devastavit.

¶54. The executor had powér to assign and transfer the second note to Gowdry, a creditor of the testator; and it certainly is not a fact with which the appellant has any concern, whether Dew paid it in Confederate treasury-notes or in gold and silver. It was also within the power of the executor to receive Confederate treasury-notes, in payment of the note last due, even before its maturity.—Van Hoose v. Bush, supra.

¶65. The appellant insists, that the estate being insolvent, and Dew having received his debts in full, he has a right to *212recover of him such portion as would have been applied to his debts, if the money had been paid to the executor, and had remained in his hands for distribution to the creditors. The right is supposed to be conferred by the statute (Code of 1876, § 2585), which authorizes a creditor of an insolvent estate, whose claim is not barred, to recover of any person who has received any dividend of such estate, such an amount of the dividend as will be in the same proportion his claim bears to the debts of the estate. The statute is a part of the system defining the mode of ascertaining the insolvency of the estates of decedents, the ascertainment of the claims of creditors, the distribution to them of the assets, and the final settlement and discharge of the administrator or executor. It is required that all claims shall be filed in the Court of Probate, within nine months after the declaration of insolvency, or after the same accrue, or they are forever barred. There is a saving in favor of infants, and persons of unsound mind, who are allowed nine months after the removal of their disabilities to file claims. — Code of 1876, §§ 2568-69.

¶7"When an estate is decreed insolvent, exclusive jurisdiction of all claims against the decedent is transferred to the Court of Probate, and they cease to be the subject of a suit, at law or in equity, against the ■ personal representative. He is without authority to pay any creditor, nor can he, by any acknowledgment or admission, relieve the creditor from the bar the statute creates, if he fails for nine months by filing his claim to commit it to the exclusive jurisdiction of the Court of Probate. The distribution of the assets to creditors is through the decree of the court, and when the personal representative, in obedience to the decree, applies them, he is discharged from liability. There are claims, which the statute does not bar, though not filed : claims which do not accrue until the bar is complete, and claims in favor of infants and persons of unsound mind. The purpose of the provision of the statute, on which the appellant relies, is, that these creditors, having filed their claims within nine months after their accrual, or the removal of their disabilities, shall receive their just proportion of the assets. Of the personal representative, there can be no recovery; for he has applied the assets under a decree of a court of competent jurisdiction, and in obedience to the statute. The recovery is from creditors who have received dividends under the decree of the court. The statute does not authorize a recovery from a creditor to whom the personal representative, having full and complete power to pay debts, and who, as to creditors, is presumed to know how much he can safely *213pay, has paid more of the assets than the condition of the estate justified. For such payments, in excess of the assets, he is responsible to other creditors ; or, rather, he can claim only to be substituted to the place of such creditors, and take the share of the assets it may be ascertained can be properly applied to the payment of such debts.—McNeill v. McNeill, 36 Ala. 109; Hearrin v. Savage, 16 Ala. 286.

¶8The decree of the chancellor, dismissing the bill as to the personal representatives and heirs-at-law of Dew, must be affirmed.

¶9The payment by Pippin to the executor, of the notes he gave for the purchase-money of the lands, was not, as the chancellor decreed, invalid. There was no want of power in the executor to accept Confederate treasury-notes in payment; and it was on this ground, and not because of any evidence of a want of good faith in the purchaser or the executor, the chancellor proceeded in rendering the decree.—Van Hoose v. Bush, 54 Ala. 342. The decree against John Pippin, William Pippin, and Thomas Dougherty, must be reversed on the cross-assignment of errors by them, and a decree here rendered dismissing the bill as to them.

¶106. The cross-bill of Mrs. Crenshaw, claiming an assignment of dower, should not have been entertained. She ' is not a party to the original suit, in any other capacity than as a legatee under the will of her husband. There is no antagonism between her claim to be endowed of the lands of her deceased husband, and the rights asserted by the complainant as a creditor. If she is entitled to dower, it is a right to be asserted against the personal representative, the heirs, or devisees, and the purchasers of the lands; and may be asserted without any diminution of the rights of the complainant, or any other creditor. The dower interest in the lands was not sold or conveyed by the personal representative, nor had he authority to sell and convey it; and compensation for it cannot be claimed from the assets in his hands.—Williamson v. Mason, 23 Ala. 488-504. A cross-bill can be entertained, only on matter growing out of the original bill, and not on rights or equities which have no connection with, and are independent and distinct from it. —3 Dan. Ch. Pr. 1742; Nelson v. Dunn, 15 Ala. 513. We intimate no opinion as to her right to dower, as the question does not properly arise in the cause. The decree on the cross-bill must be reversed, and a decree will be here rendered dismissing it at the costs of the next friend therein.

¶11The appellant Shelton must pay the costs of the appeal by Pippin and others, and one-half of the costs of his own appeal; the other half will be paid by the next friend of Mrs, *214Crenshaw. The cause must be remanded to the Chancery Court of Greene.