Tell City Furniture Co. v. Stiles

Cooper, J., delivered the opinion of the court. The order of the Chancery Court, made on the 5th day of October, 1876, authorizing the administratrix to sell the stock of goods of her intestate at private sale in the usual [855] course of business conducted by him in his life time, was without authority of law and void. Art. IX., Chap. 9, of the Code of 1871, comprises a complete scheme for the administration of estates, and regulates the exercise of the probate jurisdiction by the Chancery Courts. Although jurisdiction in matters of administration is conferred upon the Chancery Courts, by the Constitution, the manner of its exercise is prescribed by the statute. It has a plenary jurisdiction which is regulated but not restricted by law. Sects. 1144, 1145, 1146, 1154, and 1173 of the Code directed the manner in which sales should be made of the personalty of estates being administered, and while the jurisdiction of the court over the subject-matter was not thereby abridged, it had no power to authorize a sale to be made in any other manner than in some one of those prescribed. By section 1146 it was provided that, “ when any person shall die, leaving a stock of goods, wares and merchandise of any description, the court may, in its discretion allow the executor or administrator to dispose of the same at private sale, the terms and conditions of said sale being first made known to and approved by the court.” By this section authority was conferred upon the court to permit a private sale to be made, the terms and conditions of which had been communicated to and approved by the court. Clearly reference is only made to cases in which some definite oifer or proposition had been made to the administrator by one proposing to buy the vphole or a part of the stock, and itis the terms and conditions of such proposed sale and purchase which must be submitted to and approved by the court before a valid order for a private sale can be made. Ordinarily a stock of goods exposed to public sale at auction in an agricultural community will sell for but a small per cent of its value or cost, and the object of the statute ivas to avoid the probability of a sacrifice by permitting the Chancery Court, when advised of the practicability of a sale in private upon agreed terms, to authorize such sale to be made. It [856] was not contemplated that authority should be granted to an administrator to employ clerks and book-keepers, to rent a store, pay license fees and incur other expenses incident to sales by retail according to the custom of those engaged in mercantile business. The sale contemplated by the statute is in substance made by the court, which, before the order is made permitting it, must be informed of and approve its terms and conditions, and it is impossible that the court, which is only periodically in session could be pre-advised of the terms and conditions of the innumerable transactions incident to a sale by retail. The order was a nullity, the sales were unauthorized and, in law, a wasting of the estate, the expenses incurred were not charges on the estate, and the exceptions challenging the credits asked therefor should not have been stricken from the files. The creditors of the estate are not barred of their right to object to the fee paid by the administratrix to Hill & O’Reilly by the order of the court directing its payment. By an act approved March 28, 1872, it was provided “ that in all annual or final settlements by executors, administrators, or guardians, they shall be entitled to a credit for all such reasonable amounts as they may have expended in the employment of legal counsel in the management of such estates, if, in the opinion of the court, such services were necessary and rendered in 2'ood faith.” It-is admitted that the fee paid has not been allowed by the court upon any annual account filed by the administratrix; but it is said that payment was made by virtue of an order of the court made on the petition of the attorneys against the ad-ministratrix, and that this decree can only be attacked by appeal. Admitting the decree to be final and conclusive as between the administratrix and the petitioners, Hill & O’Reilly, it has no such effect as between the administratrix and the creditors of the estate. The attorneys had no shadow of claim against the estate for professional services rendered to the adminis857 tratrix. Their demand was against the administratrix as an individual, and it was her duty as administratrix to defend the suit brought against her in her representative capacity to fix upon the estate a debt which she alone owed. That she failed to do this cannot affect the rights of creditors whose interests it was her duty to protect. If the services of the attorneys “were necessary and rendered in good faith,” the court may on final hearing allow her a credit for such sum as 'may appear to be reasonable and proper. As to the credit asked by the administratrix on account of inventoried debts due to the estate which were not collected, it is only necessary to say that the administratrix, in presenting the account, stands in the attitude of a plaintiff, and it devolves upon her to establish the facts which entitle her to the credits asked. It is not sufficient for her to report that the debts have not been collected; she must show why they have not been ; that she has used such diligence as the law requires, and has been unable to collect the choses in action. Prima facie she is chargeable with them, and to discharge this liability she must show the- facts entitling her to be relieved. She accounts with the creditors, not they with her. Cole v. Leake, 27 Miss. 767. The credit asked of $151.20 for “ amount paid James Kil-liea on old claim,” should have been allowed only on proof that it was a debt due by the estate, and then only to the extent which the other creditors will receive on their demands. All creditors are entitled to a pro rata distribution of the estate, and the administratrix cannot give preference to one creditor over another. If the debts paid by the administratrix to Hardenstein & Morris were due by her intestate, and they are the same parties who are indebted to the estate, it was her duty to set-off the debts due by them respectively to the demands propounded by them against the estate. Decree reversed and cause remanded.