Hardwick v. Thomas

By the Court. Nisbet, J. delivering the opinion. [1.] We do not doubt but that what is usually called a cred-tor’s bill in a proper case made, will lie in Georgia. The contrary Was assumed in the argument of this and other cases at the present term. The point being overruled in a previous case, was not pressed in this. The argument to sustain our opinion on this head, will doubtless appear in its proper place. The demurrer to this bill must be sustained on one vital point. On that account, we render no judgment upon the other specifications. [2.] The bill makes, in my judgment, a strong case for relief. If the facts charged be true, it would be a just reproach to a Court of Chancery, if it could afford no relief. Whilst this is so, it is at the same time too clear for doubt, that these complainants cannot recover on this bill. The bill is filed by creditors of Darius Gilbert, deceased, to compel the removed executor, Hardwick, and one Thomas Gilbert, tó account for certain property belonging to the testator’s estate, which fraudulently came into the hands of Thomas Gilbeit, with the assent and through [270] the collusion of Hardwick, before he was removed. The charge of fraudulent combination between Hardwick and Gilbert, is made with quite sufficient certainty. Moreover, Hardwick is charged to be insolvent. The complainants seek the aid of a Court of Equity, to get at this property in the hands of Gilbert. That the property of this estate in the hands of any one who has paid .nothing for it, should be applied to the payment of its just debts, is incontrovertible. But the difficulty here is, that the creditors, according to their own averments, are not entitled to sue. They are not the parties entitled to sue, but under special circumstances, which their bill does not show to exist. As a general rule, creditors cannot sue the debtors of an estate, nor can a debtor be made a defendant to a bill, at the instance of a creditor against the executor, unless there be collusion, insolvency, a refusal to proceed to collect the assets, or some other special facts to warrant it. 3 Kelly, 581, and authorities there cited. It is the privilege and the duty of the executor and administrator, to collect debts, pay debts, distribute and finally settle the estate. The law devolves this trust upon them, and they must execute it at the peril of a personal liability. They are as well made chargeable by acts of omission as of commission. And if an executor or administrator neglects to bring suit to recover assets, which are in law the property of the estate, and which are within his cognizance, he is guilty of a devastavit. Now, the law does not divide the power over the estate between him and the creditors, and thus lessen his means of executing his trust. Nor will it relieve him from responsibility, by dividing it with others. Much less will it hold him to the responsibility of a proper administration, when others not under his control are authorized to take part in the administration. For very good reason, therefore, the law will not permit the creditors to come in between the representative and tiiird persons who are debtors to the estate, or who hold possession of property belonging to the estate, and collect the debts, and appropriate the property in satisfaction of 'their claims. Such a right on their part, would disorganize the beautiful system of the law of administration. It would not, with such right, as now it confessed [271] ly does, work justly, so far as tlie executor or administrator is concerned, nor safely, so far as creditors, legatees and distributees are concerned. But there arc exceptions to the rule. If the representative is insolvent, so as to endanger the funds of the estate when collected, or if he colludes with the debtors to defraud the estate, or if, being required to sue to collect them in, he refuses to do so ; or if, on any other account, the creditors are, in the view of a Court of Chancery, likely to lose their debts unless permitted to sue, then are they admitted into a Court of Chancery in their own names and one side of the legal representation, for the purpose of collecting and applying assets. They are so admitted, only upon an exhibition of the grounds which bring them within any of the exceptions to the rule. That is, they must make a proper case, or they will not be heard. These principles are applicable to this case. Hardwick, the only qualified executor to the will of Darius Gilbert, was removed by the judgment of the Court of Ordinary, and Henry Rogers was appointed administrator de bonis non, with the will annexed. [3.] At Common Law, Rogers became the representative of the estate, with full powers to settle it so far as it was unadministered, but -without power at Common Law to call the removed executor to account. 1 Kelly, 78. 5 Geo. Rep. 58. Even at Common Law, however, if the removed executor has colluded with a purchaser at a sale, as is charged in this bill, I do not doubt but that the administrator de bonis non, could pursue the property and collect it in. A fraudulent sale could not be held an administration by the removed executor. 5 Geo. Rep. 59. [4.] However, by the Act of 1845, it is expressly made the duty of the removed executor or administrator, to accountto the administrator de bonis non. Cobb’s New Dig. 335. By the combined operation, therefore, of the Common Law and the Act of 1845, the administrator de bonis non, Mr. Rogers, was the representative of Darius Gilbert’s estate, with full power to sue for the property in the hands of Thomas Gilbert; to have the sale to him set aside; to collect all debts due to the estate, and to call Hard-wick, the removed executor, to account. [272] [5.] Indeed, all this he is bound to do. The creditors, therefore, have no better right to sue in this case, than they would have in case of an unremoved, living executor or administrator. They are not entitled to sue unless Rogers is insolvent, or colludes with Thomas Gilbert, or refuses himself to sue, or unless some other equitable ground is shown to exist, which would warrant it. The bill does not charge' that he is insolvent —it does not charge that he colludes with Thomas Gilbert, or any body else, nor does it charge any ground upon which they can be exempted from the common rule. [6.] It is claimed by the counsel for the defendant in error, that it does charge a refusal to sue. If it does, the complainants are properly here. We do not think that it shows a refusal to sue, or such neglect to sue as demonstrates a refusal. The only averment in relation to this matter, Is as follows: [7.] It states that he (Rogers) has collected none of the assets, “ and has not brought suit against Hardwick and Gilbert, although requested so to do.” We hold that this averment being taken as true, does not prove that Rogers has refused to sue. I do not consider that it would be a safe rule to allow creditors to sue upon this ground, unless it is clear from the bill that the executor or administrator has refused to sue. His refusal would be established by an averment in so many words, that he had been requested to sue and had refused to sue. The averment here falls short of this. It is that he has not brought suit although requested so to do. It may be true that he had been, at the time of suing out complainant’s bill, requested to sue, and it may be true that he had not at that time brought suit, and notwithstanding he might not have refused to sue. The request to sue may have been made but an hour before complainant’s bill was filed in office, and although at that time he had not brought suit, he may have sued the next hour or day. A mere demand will not do, nor will the fact, coupled with a demand, that at the time of filing the bill, the executor had not sued, be sufficient. The Court cannot thence infer a refusal to do his duty; it cannot thence infer that the rights of the creditors are in jeopardy, unless they are permitted to sue. From aught that this bill exhib [273] its, the administrator de bonis non may have been quite vigilant. It does not appear when he had knowledge of this fraudulent sale to Thomas Gilbert. Facts should be so stated as to enable the Court to see that he has really declined to fulfil the obligations of his trust. As I said before, if he expressly declines to proceed, this Court will take him at his word and hold the creditors at liberty to interfere. So too, a refusal to sue may be inferred from long neglect to sue, after a knowledge of the rights of the estate in the premises. Here, however, it is necessary to be guarded. Not suing within any stipulated time, ought not, per se, to admit the creditors to a right of action. The omission to sue, should be for such a length of time, and under such circumstances, as will raise the presumption that the representative had declined to sue, and that unless the creditors were allowed to proceed, their just rights will be endangered. The fads upon which the complainants rely to take them out of the operation of the usual rule, should be pleaded with as much certainty as the other material facts. General statements, as in this case, are two vague for practical issues. Facts which are intended to demonstrate a refusal, ought to be so charged as to be issuable. -It is impossible for us to say, admitting all that the complainants charge to be true, that they are entitled to be heard on this bill. The decision of the Court below must, therefore, be reversed, and the demurrer sustained.