Cook's Administrator v. Brannin

JUDGE BENNETT delivered the opinion of the court. Tlie appellant, W. H. Mnrpliy, as the administrator of S. C. Cook, brought his action in the Daviess Circuit Court to settle the estate of his intestate, Cook, as an insolvent estate. The appellees, as creditors of the estate, together with others, were made defendants to this action. .The appellant having received a lot of tobacco as a — 103 — part of the' personal estate of his intestate, he prized the same, and after the institution of his action he shipped the same to the appellees, as commission merchants, dealing in leaf tobacco, in the city of Louisville, to be sold. After the sale of the tobacco by the appellees they filed an answer, in which they stated that S. C. Cook, in his life-time, as a local dealer in leaf tobacco in the town of Delaware, Daviess county, Ky., made an arrangement with them, by which- they were to advance him money with which to buy tobacco, which he was to ship to-them in the city of Louisville to be sold, and out of the proceeds of sale they were to retain the amount of advancements and interest thereon and commissions; that the tobacco shipped to them by the appellant was bought by S. C. Cook with money advanced to him by the appellees, upon which, according to the agreement with Cook, they had a lien to secure them in their advancements, which .amounted to two thousand six hundred and twenty-one dollars and sixteen cents, besides two hundred and .seventy-five dollars advanced to the appellant to enable him to prize the tobacco and ship it, and eleven dollars and twenty-five cents insurance premium on the tobacco; that the appellant having shipped the tobacco to them pursuant to the agreement with Cook, they had a lien on the same to secure said sums. The lower ■court having sustained the appellee’s contention, the appellant has appealed to this court. The sum of two hundred and seventy-five dollars, advanced to the appellant to prepare the tobacco for market, and the sum of eleven dollars and twenty-five «cents paid for insurance, were reasonable expenses — 104 — incurred for the benefit of the estate, and the lower court’ did right in allowing the appellees to retain these sums out of the proceeds of the tobacco. While the depositions of the appellees proving the agreement with Cook in reference to their advancements of money to him with which to buy the tobacco were incompetent, and were, therefore, properly excluded, yet, from the other facts in the record, it is fairly established that the appellees did have an agreement with Cook to advance him money with which to buy tobacco, and that the same was to be shipped to them for sale, and out of the proceeds they were to retain their advancements and commissions, and that they were to have a lien on the tobacco thus purchased and shipped to secure their advancements and interest, and that the tobacco on hand, at the time of Cook’s death, and which was thereafter shipped to the appellees by the appellant, was purchased with money advanced to Cook by the appellees. But the evidence as to whether the appellant shipped the tobacco to the appellees pursuant to their agreement with Cook is contradictory. It may be assumed, however, for the purposes of this investigation, that the tobacco was shipped pursuant to said agreement. This court, in the case of Brooks, Waterfield & Co. v. Staton’s Adm’r, &c., 79 Ky., 174, decided that Brooks, Waterfield & Co., having advanced money to Staton with which to buy tobacco, with the agreement that Staton was to ship the tobacco to them, upon which they were to have a lien to secure their advancements, and the tobacco having been purchased by Staton with the money thus advanced, and delivered to them, there — 105 — arose an inchoate lien on the tobacco from the moment of its purchase in their favor, which became complete by the delivery of the tobacco to them; but such lien would not prevail as against the intervening equities of third persons. This court, in the case of Hoffman v. Brungs, 83 Ky., 400, recognized the doctrine of Brooks, Waterfield & Co. v. Staton, but held that the doctrine of that case did not apply to a case where the commodity was not actually delivered pursuant to the agreement. S. C. Cook having died insolvent, the question to be determined is, whether the shipment of the tobacco to the appellee, for the purpose of sale, conceding that it was shipped pursuant to the agreement with Cook, perfected the appellees’ lien on the tobacco as against the rights of Cook’s other creditors. Section 33, article 2, chapter 39, of the General Statutes, provides, in substance, that if the estate of a deceased person is insolvent, the same, after satisfying certain expenses and prior liens, shall be equally prorated among the creditors of the decedent. The administrator, as the representative of the decedent, holds such estate in trust for these purposes. The right of the creditors of an insolvent estate to have the estate equally prorated among themselves attaches upon the death of the decedent, which right is subject only to the payment of the funeral and administration expenses, and any prior enforceable lien upon the estate. According to the doctrine of the Brooks, Water-field & Co. case, the appellees’ lien upon the tobacco, at the death of Cook, was not complete; it was only incipient — begun, but not completed; therefore, not — 106 — enforceable as against the intervening rights of third persons. The right of the other creditors to have the whole estate-^including the tobacco — prorated equally among all the creditors having intervened, it follows, as a logical sequence, that the incipient lien in favor of the appellees can not prevail against that right. For, suppose the appellant had never delivered the tobacco to the appellees, and they had come into court asserting a lien on the tobacco as against the right of the creditors to a- pro rata distribution, ■would it be contended that their lien should prevail? Would not the response of the chancellor, that your lien never having been completed, the statutory right of the other creditors to have a pro rata distribution of the estate having attached upon the death of Cook, constitutes an intervening equity that your incipient lien can not overreach, be all-sufficient? We think so. Therefore, as the creditors of Cook, upon his death, acquired the right, under the statute, to have his estate, including the tobacco, equally prorated among them, and as this right was superior to the appellees’ enchoate lien, it seems clear that to allow the administrator to breathe life into the appellees’ otherwise unenforceable lien as against the other creditors, by delivering to the appellees the tobacco, in order to perfect their lien as against the statutory rights of the other creditors, would be in direct violation of his trust, which a court of equity would not uphold ; but having the parties and the proceeds of the tobacco before it for the purpose of determining how the proceeds should be applied, would direct them to be prorated among all the creditors. The judgment of the circuit court allowing the ap — 107 — pellees to retain two thousand six hundred and twenty-one dollars and sixteen cents, the proceeds of the tobacco, is reversed, and the case is remanded with directidns to compel the appellees to pay the same into court for the purpose of being prorated among all the creditors.