McDowell v. Goldsmith

Cochran, J., delivered the opinion of this Court. These appellants, with the exception of Needles, Cariss, S. B. Sexton & Co., and R. Me. Eldowney, were all parties to the original and amended bill, and as to them, with the exception of Truitt, the bill was absolutely dismissed by the final decree. The appellee insisted that this dis — 229 — missal bars their right to participate in this distribution, and in reviewing their exceptions to the accounts, finally ratified by the Court below, it will be necessary to ascertain how far the decree dismissing the bill affected tbeir standing as creditors, entitled to payment out of this fund. It will be seen by referring to the record that these ex-ceptants filed the original and amended bill for relief as creditors of Osborne ; that in the course of the proceedings a large mass of testimony was taken for the purpose of sustaining the allegations of the bill and establishing their claims as creditors; that the case was hoard upon the hill, exhibits, answer and testimony, and a final decree passed by the Chancellor dismissing the hill, as to them, absolutely, which decree, on their appeal, was affirmed by the Court of Appeals. This brief review of the original proceedings is sufficient to show that the case was submitted to the Chancellor on its merits, and that the rights and claims of these appellants wore finally adjudicated by his decree. The opinion filed by him, in conformity with Avhich the decree was drawn, bIioavs, beyond question, that these claims were considered and held to he barred by the appellee’s defence on the statute of limitations. Eor is the decree itself less conclusive on this point, for it vacates the deed of 1844 from Osborne to the appellee, not for the benefit of all the parties then before the Court, and dealt with by the decree, but only in favor of Truitt and such other of the creditors of Osborne as should thereafter come in under the decree and establish tlieir claims. These exceptants, therefore, cannot be heard to say that the bill was dismissed as to them for AA'ant of prosecution ; they Avere before the Court, and heard upon proof offered to sustain the allegations of their hill, and they took and prosecuted an appeal from the decree passed thereupon. If the Chancellor intended to leave their rights and claims unaffected by his decree, he should have dismissed the bill — 230 — without prejudice ; and if the case was such as to authorize such a dismissal it was error to dismiss the hill absolutely. Griffith vs. Fred. Co. Bank, 6 G. & J., 424. Story, in his Equity Pleadings, section 793, says, that “a decree or order dismissing a former bill for the same matter may be pleaded in bar to a new bill, if the dismission was upon the hearing, and was not in terms directed tobe without prejudice.” The condition of these claims is not changed for any of the purposes of this case by the administrator’s confessions of judgments. He had no power to waive the appellee’s defence of limitations, nor could he by any such waiver establish the claims of these exceptants against this fund. This is not a case of assets that may be administered by an administrator, but of a fund in chancery, to be disposed of under a decree that the administrator must respect, and to which, so far as these exceptants are concerned, the appellee is entitled. He, as grantee in the deed from Osborne, was held by the Chancellor and the Court of Appeals entitled to the defence of limitations to the claims of the creditors assailing the deed, and it is not to be supposed that the administrator could deprive him of that defence by any admission or act whatever. Duvall vs. Green, 4 H. & J., 270. Byerly vs. Staley, 5 G. & J., 432. Collinson vs. Owens, 6 G. & J., 4. Warfield vs. Welch, 3 G. & J., 259. The claim of Truitt on the note for $2,800 stands on a different, though not more substantial footing. The deed vacated by the decree was executed in Eebruary, 1844 ; the original bill, in which the complainants allege the grantor’s indebtedness to them when she executed the deed, as their cause of action and .ground of their rights to relief, was filed in Agust, 1845, and this note, made in October, 1844, did not mature until October, 1845. It thus appears that the note was given for a debt, not within the description of the bill, but for one contracted after the deed was — 231 — executed, and upon which the right of action did not accrue for some two months after the hill was filed. The claims were, therefore, not within the class of credits alleged, and Truitt, as a complainant, for that reason, had no standing upon it at the time the bill was filed. She undoubtedly had, in such a case as this, the right, at the maturity of the note, if not before, to make herself a party with respect to it; but to bring it within the equity of the bill, already filed, it was necessary to present the note and assert it as a claim in the cause. That, however, appears not to have-been done until December, 1850, when the note was first filed with the Commissioner, and subsequently returned by him, with the testimony taken. The defence of limitations was made and relied on in the answer to the original and amended bill, and this claim, in our opinion, was barred by that defence, as it now clearly appears that limitations began to run in 1845, a period of more than three years before the claim was presented or asserted by any proceeding in the case. The claim was reserved by the decree for further “directions,” and we find, by referring to the opinion of the Chancellor, a statement of the reasons why it was suspended for further consideration; he says “The evidence shows that Osborne removed to New York in November, 1844, before this note matured, and there are no facts in the cause from which it can be fairly inferred that she could ever have been sued in Maryland upon it. Indeed, if it he true that she died in April, 1845, and there had been no administration on her estate, limitations could never have commenced to run against this claim.” He had before decided upon the authority of Hall vs. Creswell, 12 G. & J., 36, that, while other parties might come into the cause as co-complainants with those named in the original bill, yet limitations would run against their claims until they did so come in and file them. Truitt was a complainant — 232 — in the original hill, hut not so in regard to this claim • she had no standing upon it at the time that bill was filed, and, as we have said, it was necessary to assert it by some affirmative proceeding in the case to bring it within the' equities of the bill. This appears to have been the Chancellor's view of her standing in regard to it, and in that view we concur. The questions whether limitations began to run, so as to constitute a defence to the claim when it was first asserted in the case, must, therefore, be determined by the proof now appearing in the record. It is now presented in the form of a judgment, confessed by T. P. Scott, as administrator of Osborne, and we find, by a duly authenticated certificate of the Register of Wills for Baltimore city, filed after the hearing before the Chancellor, that letters of administration on Osborne's-estate were granted to him on the 21th of August, 1845. It thus appears from the present state of the proof that limitations began to run from the day the note matured, and that the claims upon it were barred at the time of filing the note with the Commissioner. The confession of the judgment hy the administrator does not affect the nature of the claim, and for reasons already stated does not remove the bar of the statute. The same may be said of the remaining claims of Needles, Cariss, S. B. Sexton & Co., and R. McEldowney & Co. These were filed in the case under the notice required hy the decree, and all of them rest on judgments confessed by the administrator more than ten years after the death of Osborne, the debtor. The appellee excepted to them on the ground that they were not proved, and if proved, that they are barred by limitations. As against the appellee, these judgments are not to be taken as evidence establishing these claims ; like those obtained or confessed in favor of the appellants, they are wholly inadmissible for that purpose. Without, however, noticing the questions whether — 233 — they are otherwise proved, it will he sufficient for present purposes to determine whether the appellee’s exception to them on the ground of limitations is sufficient to entitle him to the benefit of that defence. It was settled in Banks vs. Williams, 11 Md. Rep., 198, that limitations is a. defence that may he taken Toy way of exception in such cases as this. The only question here is in regard to the sufficiency of the exception. In substance it presents limitations as an objection to these claims, and we think it must he regarded as stating a defence upon which the appellee relies. The substance of the objection or defence must govern in determining its sufficiency rather than the form in which the objection or defence is presented. In our opinion the exception to these claims on the ground of limitations was sufficient, and we shall, for the reasons herein stated, affirm the order of the Court below, finally ratifying accounts of A and B, and sustaining the exceptions taken to account C, with costs to the appellee, and remand the cause. ( Decided March 14th, 1866.) Order affirmed.