CASES IN CHANCERY

IN THE

COURT OF APPEALS AND COURT OF ERRORS

OF

SOUTH CAROLINA.

JOHNSTON V. LEWIS.

[RICE'S EQUITY, 40.]

PERSONAL REPRESENTATIVE CAN NOT SEEK, in the hands of a third person, assets of the estate, which such third person has been enabled to obtain, by the collusive action of himself and of the representative.

ADMINISTRATOR DE BONIS NON is bound by the acts of his predecessor in office.

CREDITORS OR DISTRIBUTEES may follow in the hands of third person's assets of the estate which they have been enabled to obtain by their collusion with the representative of the estate; but to any such bill, the personal representative, or in case of his death, his representative, must be made a party.

BILL in equity. It appears that about 1822, James R. Pickett died, and that soon after, his widow took out letters of admin istration. Defendant, who was a partner of Pickett, after his death obtained the control of certain executions against the latter, and caused them to be levied on his property. His intention was to bid in the property, and from its proceeds to pay off the partnership debts. The bill alleged that in order to prevent the administratrix from taking any steps towards the protection of the estate, defendant promised her, she being his daughter, that he would bid off the property for the benefit of herself and her children. That the sale afterwards took place, and defendant bid in the property for the sum of eight thousand nine hundred and eighty-eight dollars. That immediately after the sale defendant turned over possession of the property to the administratrix in trust, that from the earnings of the property the said

administratrix pay what portions of the partnership debts were justly due by the estate of said Pickett, and that she then hold the property for the benefit of herself and her children. Prior to the institution of this suit the administratrix, Mrs. Pickett, died, and plaintiffs, who had married two of her daughters, were appointed administrators de bonis non of her intestate. They now brought this suit to compel the execution by defendant of his agreement with Mrs. Pickett; that he should purchase the property for the sole benefit of herself and her children. Their wives, however, who were the distributees of Mr. Pickett, were not made parties to the bill. They also sought an account, from the defendant, of the purchase money bid by him for the property, and of which he appears to have paid nothing. Defendant upon his part claims to have discharged certain debts due by the estate. An account was ordered below; but the bill, so far as it related to the setting aside of the purchases of defendant, was dismissed, the chancellor holding that the administratrix could not have attacked these, and that her successors in office were bound by her acts.

Clarke and McDowell, for the complainants.

McCall and Preston, for the defendant.

By Court, HARPER, Chancellor. We concur with the chancellor, that the present complainants, the administrators de bonis non, stand in the place of the first administratrix, and are bound wherever she could be bound, and concluded by whatever would conclude her. The object of the bill is to set aside the sale on the ground of fraud. Now, there might be an actual fraud practiced on the administratrix herself, which she herself might sustain a bill to be relieved against; but there is no ground for supposing that any such imposition was practiced on her, and so the chancellor has concluded. The charge is, that she fraudulently combined with the defendant to effect the sale, and so defeat the rights of the separate creditors of James R. Pickett. It would seem from the bill, that there could have been no fraud intended on distributees, for the allegation is that he purchased. in trust for those who were the distributees. The administratrix, in general, represents all creditors and distributees, and they can not be heard but through her, and are bound by her acts. Only in the case of a fraudulent collusion to misapply the assets, these may be followed by creditors and distributees themselves; but certainly not by her successors in administration. In such case, however, it is necessary that the adminis

tratrix herself, or, she being dead, her personal representative should be a party to the suit, as being liable in the first instance; and the bill could not be sustained in its present form, for the want of such a party. It does not appear to us that the fraud, if any fraud existed, could have been in the sale itself. The bill charges that the administratrix fraudulently combined with the defendant to force an unnecessary sale, and so obtain the property at an under price, in trust for the administratrix herself and the children of her intestate. But the evidence is perfectly satisfactory and uncontradicted, that the property sold for a very full and indeed a high price. There could then have been no fraud in this respect, and the purchase in trust would be evidence, not of fraud, but of very liberal bounty. Even if the sale were unnecessary, this would not be conclusive of fraud, when it was made on advantageous terms. But, certainly, the intestate's estate was largely indebted, which rendered an extensive sale necessary. With the existence of the alleged trust, we have nothing to do in the case between the present parties. But there is a claim which the administratrix herself, if she were living, might certainly sustain against the defendant. Though he purchased at an adequate price, it appears that he has not yet paid the purchase money. So far as he paid to the sheriff, we think he must be credited, but beyond that, there remains a large balance, which seems still to be due. If we were to suppose that the administratrix, admitting, however falsely and collusively, the defendant to be a creditor of her intestate's estate, to the amount of the balance, permitted him to retain it as his own, the complainants, her successors, would be bound by her acts. But there is no evidence of this, and certainly we are not authorized to presume it. It is easy, from all the circumstances, to see the true nature of the transaction. There were debts of the firm to which the defendant was liable at law, but to which the estate of the intestate was bound to contribute-or perchance to pay in full. The defendant had also a personal claim on the estate of the intestate. The balance was left in his hands, or retained by him, that he might apply it to the satisfaction of demands to which the estate was liable, and the complainants have a right to an account of the manner in which he has performed this trust. For this reason, we have thought it necessary to enlarge the order for an account so as to embrace not only the partnership, but all other transactions between the parties. This is not a suit to distribute the estate of an insolvent, in which we are to marshal assets and determine priorities.

If the defendant is now a creditor of the intestate, on the score of his personal claims, or has made himself so by paying off debts which the intestate's estate was bound to pay, he has a right to retain the balance of the purchase money, as against the complainants, whatever may be his liability to separate creditors. There are no separate creditors before us. It is plain that the administratrix concurred in his retaining the fund for the purpose of paying himself, or discharging any liability to which the estate was subject.

In taking the partnership account, if the defendant contributed an equal amount of capital and was entitled to an equal share of the profits, it may be, as the intestate was the acting partner who had the goods in his hands and for the most part received the profits, that he may be found a creditor. If such were the terms of the partnership, then after exhausting the partnership assets in defendant's hands, the intestate's estate was bound to contribute one half towards paying off the partnership debts. If, as defendant alleges, he only lent his name to the firm and claimed no share of the profits, then the intestate's estate was bound, as between the parties, for the whole of the debts. If the defendant, as surviving partner, has occasioned the loss of assets, as by improperly discharging the suit against Cassidy, or by neglecting to collect debts which he might have collected, he will be chargeable with the amount of this loss. All these things may be inquired of on the reference, and it will determine how far the estate was bound to contribute to the payment of the debt to Robinson and the other partnership debts, which defendant alleges he has paid. If, as suggested in argument, the money advanced to the intestate being the proceeds of his note, indorsed by defendant and discounted in bank, was in fact applied to partnership purposes, this also may be a subject of inquiry-in short, as I have said, all the money transactions between the parties, so as to show the present state of the accounts between them. And it is ordered accordingly.

JOHNSON, DUNKIN, and JOHNSTON, Chancellors, concurred.

ADMINISTRATOR DE BONIS NON was, by the common law, entitled to the possession of the personalty of the decedent which had not been administered upon, and to that only. Hence, if the administrator had administered upon property, reduced it into possession, sold it, and converted the proceeds into money, he could not, nor could his heirs or personal representatives, be required to account therefor to an administrator de bonis non: Chamberlain v. Bates, 27 Am. Dec. 667; Slaughter v. Froman, 17 Id. 33. The powers and rights of administrators de bonis non are discussed in the note to Potts v. Smith, 24 Id. 359, 379. He is bound by the agreement of his predecessor in regard to the disposition of the estate: Hanthorp v. Neale, 26 Id. 594.

PRIDE V. BOYCE.

[RICE'S EQUITY, 275.]

SURETY MAY IN EQUITY COMPEL his principal to discharge the debt. SURETY, ON A Joint and SeverAL BOND, may, in equity, compel the personal representative of his principal to discharge the debt in advance of simple contract debts and on an equality with the specialty debts of the estate; but if he himself pays the bond, his claim against the estate will be merely that of a simple contract creditor.

EQUITY WILL INFER THAT A BOND WAS MADE JOINT BY MISTAKE if it is given

for a pre-existing liability of one of the parties, the other party being merely a surety, and will treat it as if joint and several, in favor of the surety.

BILL in equity. William McCauley died intestate, leaving simple contract and specialty debts. The specialty debts were a balance of four thousand four hundred and thirty-six dollars and eighty-nine cents due Boyce & Henry on a sealed note originally of eleven thousand one hundred and nine dollars and ninety cents, and a sealed note expressed as follows:

"Eight months after date, we promise to pay Boyce & Henry, or order, four thousand dollars, with interest, for value received. As witness our hands and seals, August 7, 1827.

"Signed,

W. MCCAULEY. [SEAL.] "FRED'K J. PRIDE. [SEAL.]"

Defendant Ker Boyce was administrator of McCauley. From assets in his hands he, on July 30, 1828, appropriated two thousand three hundred dollars to the payment of the note and two thousand five hundred and thirty dollars to paying said balance. Afterwards he made further payments on these sealed notes. Pride was really only surety on the noto signed by him; and by this bill, he sought to have the assets of the estate of McCauley applied equally toward the payment of the note and the said balance due. The administrator made no objection. Flemming, Ross & Co., simple contract creditors of decedent, insisted that the remedy against the estate on the sealed note was gone, and that Pride must first pay the note, and then come in for repayment as a simple contract creditor. The case was first heard before Chancellor Desaussure, who declared the complainant entitled to the relief claimed, and directed the administrator to treat this four thousand dollar note as a specialty, and give it preference accordingly. From this decree an appeal was taken to this court. After argument the court took further time for consideration.

In the mean time