Romig v. Erdman

The opinion of the. Court was delivered by Sergeant, J. The principle determined in Darrach's Executors v. Hay, and in Potter v. Burd, (4 Watts, 15,) that an executor or administrator cannot purchase in a claim against the estate he represents, and set it off in 'a suit against him for a claim upon his-•testator Or intestate, is certainly a correct one; but the present case-does not seem to be one in which it is applicable. The executor here has not purchased in any outstanding claim by a third person against the estate, which he now attempts to set off against the legacy demanded. The ground he takes is, that while the money bequeathed was in his hands, debitum in prcesenti, to the legatee ¿though polvendum in futura, he, at the instance of the legatee himself, became his surgty in a bond to a third person, which bond he subsequently paid as such surety; the time of becoming surety being previous to the assignment hy the -legatee to the plaintiff though the payment was subsequent. And the question is, whether this is not such an equitable payment as enables him to defalk the amount from the legacy demanded; not, in the words of Chief Justice Gibson, in Krause v. Beitel, (3 Rawle, 204,) as a set-off, but as a defence that would be made available hy a chancellor. And I ,am of opinion that it is. In Krause v. Beitel, exactly the same thing was done. One of the defendants had paid a debt for the, insolvent before his discharge, and was su.ed for another debt which he afterwards was compelled to pay; and in a suit by the insolvent’s .assignees he was allowed to defalk them. In Baughman v. Divler, (3 Yeates, 9,) a legatee purchased goods of the executors, and afterwards assigned his legacy; and they insisted on retaining the amount of the sale, against the assignee; and it was held that if .credit was given him on that ground, and was so understood, the a mount of the goods would be an actual payment pro tanto. A surety is more favoured in equity than a vendor. A surety is considered as having a right to all securities and means of payment in the power of his principal; and it would be presumed that the executor became surety on the faith of money in his hands, apd is therefore entitled to retain it against the legatee himself, or one taking it by assignment from him; for such person takes it as an ordinary chose in action, not negotiable, and therefore liable to all equities .existing at the time of the assignment, I am therefore of opinion that the Court below erred in holding that the defendant’s claim as surety could not b.e admitted as evidence óf a defence that might be available in the suit. But the plaintiff has objected here, that even if the defendant’s payments are admissible as a defalcation, yet his claim is barred by the statute of limitations, because they were made more than six [117] years before the institution of this suit. It is however answered, and I think satisfactorily, that the defendant claims by way of retainer, as executor, of moneys in his own hands, which he might apply to the payment of himself at the time the transaction occurred, without being under the necessity of instituting a suit against the legatee for money paid and expended to his use as surety in the bond. This application he would not be compellable to make; but he certainly might elect to do it; and in the absence of evidence to the contrary, the defendant ought to be considered as having done so, if he insists on it, at the first opportunity presented of making his election. Judgment reversed, and judgment for the defendant, on the case stated.