Randle v. Carter

BRICKELL, C. J. It is not important to determine whether the bequest to the appellee and her deceased brother, is vested or contingent. The period for the payment had not arrived, and whether the legacy is vested or contingent, the only relief she could claim, was payment into court, or security for payment, if the debts of the testator were paid, or in the course of proper administration, ought to have been paid, and the administrator had assets which were liable to satisfy the legacies. Formerly, it seems, a court of equity would not intervene, at the instance of a pecuniary legatee, whose legacy was payable in the future, to compel the executor to give security for its payment, or to pay it into court, unless the legacy was absolute. The modern doctrine is, that the court will intervene though the legacy is contingent, and may require security, or order its payment into court. And, though generally, the court will not withdraw assets from the custody of an executor or administrator, unless he has been guilty of misconduct, or there is just cause to apprehend loss; in the exercise of its jurisdiction for the protection of future rights and interests, it will intervene though there has been no misconduct, no devastavit or reason to apprehend it. — 1 Story’s Eq. § 603. The intervention necessarily depends on the existence of assets, which it is the duty of the executor to hold for the satisfaction of the legacy, when it becomes payable, and which would be liable to its satisfaction, if the period of payment had arrived. The court may, if the necessities of the case require it, as it would when necessary for the recovery of a legacy payable presently, marshal the assets, and draw to itself the entire administration of the estate. So it may, if the facts require it, withdraw the assets from the custody of the executor or administrator, and commit them to a receiver. .It is not necessary to inquire whether, in any case, the Court of Chancery can remove an administrator deriving his authority from the grant of another court of exclusive jurisdiction. If the court has the power, it is only an extreme case, which will justify its exercise. The statutes have committed the power to remove executors or administrators to the Court of Probate granting the letters, and have carefully defined the causes of removal. The Court of Chancery can protect its suitors against the delinquency of executors or administrators, in nearly every possible case, without resort. — 102 — ing to the extreme measure of removal, which can be justified only when actual fraud, or some of the distinct grounds of removal in the Court of Probate are shown to exist. Eraud can never be imputed lightly, and though in the course of an administration, there may arise an antagonism of interest between the administrator or executor, and the distributees, or legatees, or creditors, it furnishes no ground of removal. Priority of right in the grant of administration, the law confers on the next of bin, or on the residuary or principal legatee. It will often occur that the interest of distributees will conflict, and that the principal, or residuary legatee, will stand in the attitude of adversary to pecuniary, or specific, or demonstrative legatees, or to specific devisees. Such conflicts cannot deprive the next of bin, or the principal, or residuary legatee, of the priority of right to the administration. — Bingham v. Crenshaw, 34 Ala. 683. As they do not in the first instance deprive of priority, when they arise subsequently they cannot of themselves, in the absence of misconduct, justify removal. The bill abounds with allegations of fraud and collusion imputed to the administrator. The evidence, however, does not beep pace with the freedom and liberality of allegation. Indeed, there has been no attempt to support them by evidence ; and they stand positively denied by the answers. It is, therefore, difficult to understand on what ground the Chancellor proceeded to decree the removal of the appellant from the administration, unless it was because he was the husband of the principal legatee, and it was supposed his interest was adverse to that of the appellee. Admitting the conflict, it did not warrant the decree of removal. A court of equity, in all eases, exercises with caution the jurisdiction to appoint receivers. There must be a legal or equitable right, reasonably clear and free, from doubt, attended with' danger of loss. — High on Receivers, §§ 55-9. A strong case is required to induce the appointment of a receiver to tabe assets from the custody of an executor or administrator, displacing his authority. The executor is appointed by the testator, who has the right to declare in whom the management of his estate after his death shall be reposed. The administrator derives his authority from, and is in a qualified sense, the officer of another court of exclusive jurisdiction, compelled to give and beep a bond with sufficient sureties for the prompt and faithful discharge of the trusts of the administration. The court is, therefore, reluctant to interfere with them by the appointment of a receiver. There must be actual misconduct, or fraud, and immediate danger of loss, or the appointment of a receiver can not be — 103 — justified. A different rule obtains, and should obtain, than in the case of trustees. The Court of Probate has, by the Constitution, a general jurisdiction over the grant of letters testamentary, and of administration, in which is involved the power of revocation. The grant may be revoked whenever gross misconduct is shown, or whenever a necessity exists, additional security may be required. Protection against loss to creditors, legatees, or next of kin, and security for a faithful administration, are within the power of the parties and the competency of that court. There can but seldom be a necessity for the exercise of any other preventive or protective remedy, than such as that court can afford, and hence, though a court of equity has the jurisdiction to appoint a receiver of the assets, practically taking the administration into its hands, the jurisdiction is not exercised, unless there is manifest danger of loss which may be irreparable. — Ex parte Walker, 25 Ala. 81. In the present case, without any evidence of misconduct on the part of the administrator, and without allegation or proof of his insolvency, or of the insufficiency of his official bond, the Chancellor appointed a receiver of the assets, from whom no bond or security was required. Creditors, legatees and devisees are deprived of the security afforded by the bond of the administrator, and the assets committed to the custody of the register of the court, as receiver, without security. We add, only the decree is in this respect erroneous. The decree of the insolvency of the estate the Court of Probate had jurisdiction to render. Whether it was regular and unassailable-on error by any party to it, we have not, and could not, examine in this controversy, though not even irregularity has been imputed to it by the appellee. _ The bill charges it was obtained by the fraud of the administrator, and the collusion of the creditors. The charge is denied, and no evidence was given to sustain it, yet the Chancellor pronounced against it a sentence of nullity. It is possible the conclusion was reached, on the supposition that it was essential to the validity of the decree, that the appellee and other legatees, or the devisee, were necessary parties to the proceedings. A decree of insolvency in the Court of Probate merely ascertains as between the personal representative and the creditors, the status of the estate, and its operation is, to transfer to the Court of Probate exclusive jurisdiction of all claims against the estate — claims of creditors, of course, not the claims of legatees or next of kin, for the whole proceeding is founded on the fact that the assets are insufficient for the payment of debts to which they are primarily liable. There are no other parties, or were not under — 104 — the statutes existing when this decree was rendered, than the personal representative and the creditors. As to the next of kin, or legatees, the record is res inter alios actce, not affecting their rights, and not evidence against them of any fact ascertained by it. — McGuire v. Shelby, 20 Ala. 456; State Bank v. Ellis, 30 Ala. 478 ; Lambeth v. Garber, 6 Ala. 870 ; Edwards v. Gibbs, 11 Ala. 292. The regularity of the decree of insolvency is not affected, -because the appellee was not a party. There was no process by which she could be made a party, and it would at least have been irregular if any had been resorted to for that purpose. Nor is the appellee entitled to impeach the'decree if it was tainted with fraud, for the simple reason that it is not in its operation, of the slighest injury to her. Strangers may collaterally impeach judgments or decrees for fraud or collusion between the parties to them, but they must have a right the judgment injuriously affects, if it has full effect. When allowing the judgment full operation, their rights are unaffected ; they can no more be heard collaterally to assail it for fraud, than they could be permitted directly to question it for error or irregularity. — Freeman on Judgments, §§ 334-337. The decree of insolvency not being evidence against the appellee, operating only as between the creditors and the personal representative, the Chancellor was in error in pronouncing it void at her instance. Subsequent proceedings ascertaining the validity and amount of the claims of creditors stand upon a different ground. The ascertainment of the validity and amount of the demand of a creditor in the course of proceedings in insolvency in the Court of Probate has all the attributes of a judgment in personam against the personal representative, obtained in the regular course of a suit at common law by the creditor. In Heydenfeldt v. Towns, 27 Ala. 429, it is said, that the decree in favor of the creditor in the course of the insolvency proceeding, has, as matter of evidence, a larger operation than a judgment at common law against the personal representative; that it is as against the heir or devisee, prima facie evidence of the debt or demand. However that may be, it is as against legatees who claim privity with the personal representative, as are all judgments rendered by a court of competent jurisdiction, prima facie evidence of the debt or demand. The legatee may assail all such judgments for fraud, and, if successful, deprive them of all force. Or, if the personal representative claims reimbursement from the assets for their satisfaction, may show that valid defenses existed, which, if he had been diligent in ascertaining and had preferred, they could not have been obtained. The appellee — 105 — has assailed the claims of the creditors for fraud, and has also averred that as to some of them valid defenses existed which ought to have been made. But of these averments, denied by the answers, no evidence whatever was offered. The judgments of the Court of Probate, ascertaining the demands of the creditors, remain prima facie evidence against the appellee, and the Chancellor was in error in pronouncing them void. The decree of the Court of Chancery of Macon county in favor of Mrs. Bandle, against the administrator, was also, by the Chancellor, declared void as to the appellee. The decree of the Chancellor is not accompanied by any statement of the reasons which led to his conclusions, and we have not been furnished with any argument in support of many of them. We can hardly suppose this decree was pronounced void, because the appellee was not a party to the suit in which it was rendered. That is one of the grounds on which the bill impeaches it, but it seems scarcely necessary to say the appellee could not properly have been made a party to the suit, which had for its purposes simply an account of the testator’s trusteeship of personal property of the complainant, and a decree against the administrator, for the balance found due on such accounting. The only proper parties were the cestui que trust, and the administrator. Nor was it at all material whether the will of the grandfather had been admitted to probate before the testator received the trust property, or whether it was subsequently irregularly admitted to probate. The undisputed fact remains, that during the minority of the cestui que trust, the testator, claiming and acting as trustee under the will, received funds and property which were never reclaimed from him, and for which he was under the same moral and legal obligation to account, that he would have been if there had been, before his acceptance of the trust or subsequently, a formal probate of the will creating the trust. If any inference unfavorable to the decree could be drawn from the fact that the court of probate allowed far less than the whole amount, the answers afford a full explanation, removing such inference. Neither the testator, if the suit had been prosecuted against him, nor the administrator could deny the title of the cestui que trust ,to the property and funds which he received as trustee. The principle is general, if not universal, that after an acceptance-of a trust, and obtaining possession of property or funds in the capacity of trustee, which has not been reclaimed from him by a title paramount, a trustee will not be heard to deny the validity of the trust, or the title of the cestui que trust. It is but another expression of the settled principle that trustees — 106 — shall- not take advantage of their relation to obtain, at the expense of the cestui que trust, a personal benefit.— Godwin v. Yonge, 22 Ala. 553; Foscue v. Lyon, 55 Ala. 440. Whether Mrs. Randle was under the will of her grandfather entitled to the funds received by the testator as trustee, could be important only, if they had been claimed adversely to her. No such claim having been made, the testator was bound to account to her for them. We find in the record no reason for impeaching the decree in her favor, as a just claim against the testator, to the extent it was allowed by the court of probate. The estate of a testator, real and personal, is primarily chargeable with the payment of debts. Until these are satisfied, legatees of no class or character, can lay any claim to the assets, or compel the personal representative to appropriate, or give security for their appropriation, to their satisfaction. It is of the essence of the title of the appellee, that the assets in the hands of the administrator, or with which he is legally chargeable, should be sufficient for the payment of tire debts, and an excess remaining on which the legacy claimed, is a primary charge. If it appears the assets are insufficient for the payment of debts, her title to relief necessarily fails. The court can not compel the administrator to give security for, or to pay into court, funds for the satisfaction of the legacy, when it becomes due and payable, which the law compels him to apply to the satisfaction of debts. The debts have been established by the judgment of a court of competent jurisdiction, in the course of proceedings authorized by law, and the only proceedings to which the creditors could resort. In the absence of fraud or collusion, this judicial ascertainment of the existence and validity of the debts against the administrator, is evidence against the appellee. The administrator was clothed with the legal title to the personal assets; the appellee, a pecuniary legatee, had an equity, and the relation between her and the administrator was that of trustee and cestui que trust. If any valid defense to the debts was shown, and it was shown the executor was wanting in diligence in preferring it, he could not protect himself against liability. But there is want of any substantial objection to the debts, and the assets of the testator, real and personal, stand charged with their payment. If these assets are exhausted in payment of the debts, the appellee must yield obedience to the inflexible maxim of the law, commanding that justice be done, before generosity can be consulted. The decree of the court of probate for the sale of the land of the testator, may be void, and the legacy may be charge — 107 — able on the lands. But if the decree is void, it is only as to the devisee, in whom the title resided. If she does not complain of it, the appellee can not, unless it was shown its invalidity was of injury to her. Injury to the appellee could not result, unless it was shown the sale of the lands under the decree was for a sum disproportionate to their value, or that there had been a misapplication of the proceeds of sale. The lands were sold for their full value, and the devisee, the only party adverse to the personal representative in the application for an order of sale, acquiesces. The proceeds of sale have been partially applied to the payment of debts judicially ascertained, creating in any event an equity in favor of the purchasers to compel a confirmation of the sale, or to charge the lands with so much as they have paid. There is no averment that the full value of the lands was not realized by the sale, and no averment that more could be realized by a re-sale. Why should the sale be disturbed at the instance of the appellee ? If there are assets in other States, chargeable with the legacy to the appellee, the grant of administration to the appellant has no extra-territorial operation, does not extend to them, and except so far as he may have received, he is not chargeable with them. So far as he has received, he has accounted to the creditors, who had the paramount right. It is, without doubt, apparent and conclusive that the estate of the testator was insufficient for the payment of debts. There was, consequently, no.relief the court could grant to the appellee. The original bill should have been dismissed. A decree must be rendered, reversing in all things the decree of the Chancellor, dismissing the bill of the appellee, and taxing her next friend with the costs in the Court of Chancery, and with the costs of this appeal. Stone, J., not sitting.