Williams v. Benedict

THIS was an appeal from the District Court of the United States, for the Northern District of Mississippi, sitting as a court of equity.

The appellant, Thomas Williams, was complainant below, in a bill setting forth, that letters of administration on the estate of Benjamin J. Baldwin, deceased, were granted to him in October, 1838. That at the time he entered upon said administration and made an inventory of the estate, he confidently believed that his intestate's estate would be amply sufficient to satisfy all his creditors. That at November term, 1839, the respondents obtained a judgment against him in the District Court of the United States, for a debt due to them by the intestate. That the complainant, having then discovered that the estate would not be sufficient to pay the debts of the deceased, suggested its insolvency to the Probate Court on the first Monday of December following; whereupon the court adjudged the estate insolvent, and appointed commissioners to receive and audit the claims. That, to the great wrong of the intestate's other creditors, an execution has been since issued on the judgment of Benedict & Benedict, and levied by the marshal on a large portion of the most valuable property of the intestate, thereby preventing the sale of it by the administrator under the order of the Probate Court. Wherefore he prays the court to grant him a writ of audita querela, and to order a writ of supersedeas to issue to the marshal, to stay the execution, and for further relief.

On this bill, the judge ordered an injunction to issue. The respondents afterwards appeared and demurred to the bill for want of equity, and afterwards, at June term, 1845, upon hearing, the court decreed that defendants' demurrer to plaintiff's bill of complaint be sustained, and the bill dismissed. At the same term, it was ordered that the final decree be enrolled, and an appeal allowed to this court. A writ of error was also issued.

The 80th section of the statute of Mississippi concerning the estates of decedents (Howard & Hutchinson, 409) provides that 'when the estate both real and personal of any person deceased shall be insolvent, or insufficient to pay all the just debts which the deceased owed, the said estate, both real and personal, shall be distributed to and among the creditors, in proportion to the sums to them respectively due and owing; and the executor or administrator shall exhibit to the Orphans' Court an account and statement, &c. And if it appear to the said Orphans' Court that such estate is insolvent, then, after ordering the lands, tenements, &c. of the testator or intestate to be sold, they shall appoint two or more persons to be commissioners, with full power to receive and examine all claims of the several creditors of such estate,' &c., & c. And the court are afterwards required to make distribution pro rata among the creditors, after paying the funeral expenses, &c.

The 98th section provides, that no execution shall issue on any judgment obtained against any such insolvent estate, but it shall and may be filed as a claim against it, &c.

The case was argued by Mr. Frederick P. Stanton, for the appellant, and Mr. Featherston, for the appellees.

Mr Stanton said that the equity of this case was dependent upon the peculiar statutes of the state of Mississippi, which require the assets of insolvent estates to be divided among the creditors, in proportion to their respective demands. See Hutchinson's Miss. Code, ch. 49, § 103, p. 667.

This law creates a lien in favor of the creditors from the time of the debtor's decease; and a judgment by any creditor, against the administrator or executor, cannot affect the right of the other creditors to their due proportion of the estate. Same Code, p. 673.

The supreme court of the state has given an authoritative exposition of these several provisions, in the case of Dye's Administrator v. Bartlett, 7 How. (Miss.), 227.

Mr. Featherston, for the appellees.

It is contended for the appellees, Benedict & Benedict, that the court below did not err in sustaining the demurrer to the appellant's bill of injunction. It is rather a matter of surprise that said bill should have been granted by the district judge. Appellant shows, by the allegations and admissions in his bill, that the estate of his intestate was rendered insolvent by his own negligence and maladministration. The largest debt due the estate of said Baldwin, to wit, a note drawn by Henry A. Fowlkes, of Alabama, for seven thousand dollars, was lost to the estate by the refusal of the administrator to sue on it. Other acts of maladministration are apparent on the face of the bill.

Appellant has not, therefore, made out such a case as would entitle him to relief in a court of equity. Administrators are bound to exercise such prudence, diligence, and caution in the administration of estates, as a prudent man, looking to his own interests, would exercise in the management of his own affairs. See Bailey et al. v. Dilworth, 10 Sm. & M. (Miss.), 404.

They are also required by the statutes of Mississippi, to be prompt in reporting the insolvency of the estates of their intestates. See Bramlet v. Webb et al., 11 Sm. & M. (Miss.), 439.

But it is said by the solicitor for the appellant, that 'the equity of this case is dependent upon the peculiar statutes of the state of Mississippi, which require the assets of insolvent estates to be divided among the creditors in proportion to their respective demands.' See Hutch. Miss. Code, ch. 49, § 103, p. 667.

It is equally true that the statutes of Mississippi give judgment creditors a lien on all the property of defendants from the rendition of the judgment. See Hutch. Miss. Code, 881, 882, 885, 890, 891, 894; Dye's Administrator v. Bartlett, 7 How. (Miss.) 226.

Benedict & Benedict acquired a lien on all the property of Benjamin J. Baldwin, deceased, in the hands of Thomas Williams, his administrator, from the rendition of their judgment in November, 1839. This lien could not be defeated by any act of the defendant Williams. The plaintiffs in the court below could alone by their acts raise their lien. See 1 Bland. (Md.), 449, 452.

Nothing subsequent could divest plaintiffs' lien without their consent. This judgment was rendered before the appellant declared the estate insolvent. The other creditors, who had not obtained judgments, acquired a lien (if at all) from the time the Court of Probates declared the estate insolvent, and not from the death of the intestate, as insisted by counsel for appellant. See Hutchinson's Code, 673.

The plaintiffs, therefore, in the court below, acquired by their judgment a prior lien on the estate of Baldwin over the other creditors. A prior lien gives a prior right to satisfaction. See Andrews v. Wilkes, 6 How. (Miss.), 554.

This judgment was entitled to satisfaction, to the exclusion of all other creditors. Nor will it do injustice to other creditors to give it such preference.

The case would not be altered if Baldwin were alive; it would still be a prior lien. It is an advantage gained over other creditors by the superior vigilance of the appellees in the prosecution of their claim to final judgment,-an advantage recognized and sustained by the law.

There is no provision of the statutes of Mississippi which operated per se as a stay of execution on this judgment in the court below. Nor is there any, it is believed, which would by any fair or rational construction authorize the district judge in enjoining it.

Section 103 of Hutchinson's Mississippi Code, pages 667, 668, relied on by appellant's counsel, provides that no suit shall be commenced against an administrator after his intestate's estate has been declared insolvent, &c., & c. This section can have no bearing on this case, because the judgment was obtained and the suit ended before the estate was reported or decreed insolvent.

Section 1, art. 2, of the same code, p. 673, is also relied on. This section provides, that, when suits are pending against administrators, and undetermined at the time the estates of their intestates are decreed insolvent, execution shall be stayed after judgment, &c. This provision is equally inapplicable to this case. This suit was determined, and judgment rendered, before appellant reported the estate of Baldwin insolvent.

Would not a decision, bringing this case within the meaning of the above sections, (and they are the only statutes relied on,) be an act of a legislative rather than a judicial character?

The decree of the district judge dismissing the bill of injunction must therefore be sustained. No injustice will be done to the other creditors. They have their remedy against the administrator and his securities on his official bond, for all acts of maladministration, &c. See Edmundson v. Roberts, 2 How. (Miss.), 822; Lerhr v. Tarball, 2 Id., 905; Prosser v. Yerby, 1 Id., 87.

Mr. Justice GRIER delivered the opinion of the court.