Parker v. Donnally

Berkshire, President. The appellant founds his claim to the fund in controversy, upon an alleged lien created on it by virtue of an attachment sued out in August, 1867, in the suit previously instituted and then pending against the president and directors of the Farmers’ Bank of Virginia (as a foreign corporation) and others, referred to in his petition or cross-bill filed in this cause. The suit against the bank and others was for the purpose of enforcing the collection of a large debt due from it to the appellant’s testator, as a depositor in said bank, and to settle up and close the business of the bank by collecting and distributing its assets amongst its creditors. And it is charged in the bill, among other things, as it is in the petition and cross-bill in this cause, that the alleged assignment by McFarland, as president of the bank, to I. N. Smith, of the debt due to it from the estate of Andrew Donnally, was illegal and void for want of authority in said McFarland to make it, and that it was made in opposition to the wishes of a portion of the stockholders in said bank, and against their protests. Among others named in the attachment as being debtors to, or having effects in their hands belonging to said bank, are Andrew F. and William Donnally, and Andrew F. and Dryden Donnelly, administrators of Andrew Donnally. It does not appear, howmver, to have been served on any of them but Andrew F. Donnally; but whether as an individual or as a representative of his deceased father, the original debtor to the bank, does not appear. In the supplemental bill to the petition and cross-bill filed in this cause, it is alleged that Andrew F. and William Donnally were indebted to said bank on account of the debt due from their father, which they assumed to pay for him, in consideration of certain valuable real and personal property conveyed by him to them. But there is no proof [655] in the record to sustain this allegation. It is also averred that Andrew F. and Dry den Donnelly, qualified as administrators, with the will annexed, of their father, Andrew Donnally. Andrew F. Donnally did not answer as garnishee or other-wise, and no proof was taken as to his alleged individual or joint indebtedness to the bank, nor does it appear that there was any personal assets of the estate of the intestate, then in the hands of the administrators, unadministered, upon which the attachment could operate, even if such assets could be attached in their hands. It is clear, I think, that the personal representatives of a decedent debtor are not, as such, the debtors of the creditors of their testator or intestate, within the sense of the statute. They are not liable in the debit, but in the detinet only. The personal estate is in their hands to be administered according to law, and is not, therefore, the subject of garnishment by the creditors of the estate of the decedent. Drake on Attachments, secs. 98, 99. It may he, however, that in a suit and attachment against the creditors of such decedent debtor, an equitable lien on the debt against the estate of the latter, in favor of the former, might be created by the service of the attachment on the personal representative of Such decedent, carrying with it all the rights, liens and sureties of such debtor. On this point, however, I express no definitive opinion, as the view I take of this cause renders it unnecessary to decide it. The controversy here, in my judgment,must hinge mainly on the question, whether at the time of the payment by I.N. Smith of the debt due from the estate of Andrew Donnally to the bank, and the alleged assignment or transfer of the debt to him by McFarland, the latter had authority to receive payment of the debts due to the bank; or in other words, whether a payment to him in good faith by the representatives of Andrew Donnally or other debtors, of the debts due from them to the bank would, under the circumstances, have been a valid payment as between the parties? [656] For if it would, it is clear, I think, that a payment of the debt by Smith, with the assent and approbation of the administrators and the bank, would be equally valid and binding on the bank and its creditors; and consequently, there being no debt due from the estate of the debtor Andrew Donnally, when the attachment was issued and levied, it must of necessity fail. Looking to the whole case, and the very special circumstances by which McFarland was surrounded at the time, and under which he acted in the premises, after careful and anxious consideration, I am brought to the conclusion that he had such authority, and that such payments ought to be sustained. It is not shown by the record that either the bank or its creditors were, in fact, injured by such payment. It is not so alleged either in the petition or cross-bill, or the supplemental bill to the same, and in my view they are each clearly defective in this respect. , It does not appear, nor is it suggested on the record, that the funds received from Smith, in payment of the Donnally debt, or any other funds received by McFarland, were wasted or misapplied by him, or that any loss was sustained by the bank or the creditors in consequence of such receipts, or that the funds received were under par at the time, and therefore the question as to the amount received by McFarland does not arise. And for aught that appears, the funds received from Smith did in fact enure to the benefit of the general creditors of the bank. How this may be in point of fact, cannot be ascertained from this record, as only small fragmentary parts of' the record of each of the cases referred to, are brought into it. It appears to me, therefore, that under the peculiar circumstances of this case, it would be very severe and rigorous doctrine for a court of equity to hold that payments thus made to the president, with the continuous acquiescence of the bank, for many years, should, at the instance of its creditors, be set aside and the debtors compelled to pay their debts again; and that too, in the absence of any suggestion [657] that either the creditors or the bank were in fact injured by such payment! From the foregoing view it follows that, as it was competent for the representatives of Andrew Donnally to pay the debt due from his estate, there could be no ground of complaint on the part of the creditors at large of the bank, who are not shown to be injured thereby, that Smith should have paid the debt for them, and with their consent, as well as the assent of the bank, taken a transfer of the debt, together with the trust or lien by which it was secured. I am of opinion, therefore, to affirm the decree complained of, with costs and damages. Maxwell, J., concurred. Decree affirmed.