CHAP. V. PRECAUTION equity interpose to prevent this preference, excepting after a ARY MEASURES. decree upon a bill filed, as presently noticed; (s) and if an executor has pleaded to a prior action plene administravit præter a named sum, and then another action be brought, he may and ought to plead to the latter, before the former has obtained judgment, that he has so pleaded to the former action, and has confessed judgment to that extent, and that he has no assets ultra. (t) Nor is it necessary that process should be taken out by the creditor to whom judgment is confessed, and the executor may at once execute a warrant of attorney to confess a judgment to a particular creditor for the precise sum due to such particular creditor, and judgment may be immediately signed thereon, (u) and he may give a cognovit, which would have the same effect; (x) and after pleading the general issue to the first suit, the executor may confess a judgment to another creditor, and plead it puis darrein continuance, (y) and this although under an order to plead issuably.(z) But a warrant of attorney or cognovit must be confined to the debt of a particular creditor, and cannot be given to one creditor as a trustee for several, so as to be effectually pleaded to an adverse suit of an omitted creditor, or one who has not concurred in such security. (a) Nor can an executor, after action commenced, pay another creditor in equal degree, without first confessing a judgment in his favour, (b) though such a payment would be legal and effective pending a suit in equity for an account and distribution. (c) A payment even of a higher security, pending an action, should be pleaded specially. (d) But at law, when an executor or administrator is obliged to apply for time to plead, or other favour, the Court will in general impose terms to prevent such unjust proceeding; and the power to give a preference is confined to debts in equal degree, and does not extend to legacies, and an executor cannot retain for a general legacy to himself in preference to other legatees, but must, in case of deficiency of assets to pay the whole, abate equally with the other legatees. (e) (s) Maltby v. Russell, 2 Sim. & Stu. 227, 228; Waring v. Danvers, 1 Peere Williams, 295; 2 Saund. 51, note 3. (t) Waters v. Ogden, Doug. 452, 3 ed., and see 1 Saund. 333, b., note 8. (u) Mackreth v. Jackson, 1 Maule & S. (x) Davis v. Hughes, 7 T. R. 206. (3) Bryant v. Perring, 5 Bing. 414. CHAP. V. PRECAUTIONARY MEASURES. 22. Of control 22. Of controlling such Power.—But a Court of Equity will (to a certain extent, though not adequately,) by a decree controul and prevent the preference, upon bill filed by any creditor on behalf of himself and all others against the executor or ling such power administrator, requiring him to account and distribute equally, in equity. upon which a proper division and distribution will be decreed, and this is considered in the nature of a judgment in favour of all the creditors; (f) and although by such a decree the legal priorities of creditors, according to the degree in which their debts stand, are not affected, yet the power of preference is taken away, and suits of this kind have now become the usual and proper means of compelling an equal distribution of assets amongst the creditors of a deceased insolvent. (g) When an executor or administrator is pressed by numerous creditors before he has assets to pay all, it is advisable for him to get a friendly creditor to institute such a suit, so as to prevent an accumulation of litigation and costs. And an executor himself, and without the interference of any creditor, may, it seems, if he be desirous to apply the assets as far as they would go in satisfying the debts equally, may file a bill against all the creditors, that they may, if they please, contest each other's debts, and that their preference may be settled, and such a bill, on demurrer, was held proper. (h) If it be doubtful whether there be assets more than sufficient to pay judgments and specialty debts, then a simple contract creditor should not file such a bill, or at least if he do, he might not be allowed his costs out of the assets, though a specialty creditor might appear and avail himself of the benefit of the proceeding. (i) It is the duty of the executor as far as possible to facilitate the obtaining a decree under which the estate may be protected from actions by his putting in his answer speedily; (k) and he will then be allowed his costs out of the assets. (1) But, as already suggested, the controlling power of a court of equity is not perfect nor adequate, for pending suit, and at any time before actual decree, an executor may voluntarily pay or confess a judgment in favour of a particular creditor, though (f) See cases, 2 Williams, 681. (g) See the observations of Sir J. Mansfield, in Brady v. Sheil, 1 Campb. 148; Barlow, 1 Sim. & Stu. 588; 2 Nunn v. Williams, 682, 685. (h) Buccle v. Asleo, 2 Vern. 37. (i) Young v. Everest, 1 Russ. & M. 426; Rowlands v. Tucker, Id. 635; and see Johnson v. Compton, 1 Clark & Fin. 47. (k) Clark v. Earl Ormond, 1 Jacob, 108. (1) Young v. Everest, 1Russ. & M. 426; Leekmere v. Brazier, 1 Russ. 72. PRECAUTION CHAP. V. after decree it would be too late to do so. (m) Though, accordARY MEASURES, ing to the principle that equality is equity, the propriety of the rule has been questioned. (n) Immediately after decree to administer the assets equally, the executor should give notice to each creditor who has any pending action against him. (0) After decree in such suit, all the creditors must come in, and though at law an adverse creditor may proceed until decree, yet if by so doing he should, after notice of decree, obtain a priority by judgment and execution, a Court of Equity might compel him to refund what he may have thereby levied, (p) and although a creditor may have obtained judgment at law before the decree, he cannot afterwards take out execution. (p) It seems, however, that such creditor is entitled to his costs at law up to the time of notice of the decree. (q) It would seem more just if executors were wholly prevented from at any time giving a preference to a favoured creditor or legatee to the injury of others. (r) If, however, a creditor should so proceed, it is the duty of an executor to make a short affidavit of the state of the assets, and to move the Court of Equity to restrain him, or the executor may be personally responsible. (s) And any creditor may also make such motion; (t) and it seems that an injunction against a creditor's proceeding at law may now be obtained without filing a bill. (u) From the report of Lord v. Wormleighton, it appears that upon such a friendly bill being filed and duly expedited, a decree may be obtained in a very few days, (r) but an injunction will only be granted upon affidavit of the state of the assets and upon payment of costs at law, and in which must even be included the costs of a trial at law after notice of the decree, (m) Darston v. Lord Orford, Prec. Ch. 180; Toller, 229; Parker v. Dee, 2 Chan. C. 200; Drewry v. Thacker, 3 Swanst. 529; Maltby v. Russell, 2 Sim. & Stu. 227; 2 Williams, 683, sed quære, id, 684, note (p). (n) Per the Vice Chancellor in Maltby v. Russell, 2 Sim, & Stu. 227, 228. Inter vivos a debtor may unquestionably, independently of the bankrupt laws, give a preference at any instant before execution to another creditor, Holbird v. Anderson, 5 Term Rep. 235; Pickstock v. Lyster, 3 Maule & S. 371; but then he still leaves the creditor the right to proceed against his person, and take him in execution. But it seems unjust that an executor or administrator, who is a mere trustee for creditors and legatees, should ever be allowed, at least in equity, to give a preference to a relation or other creditor, thereby taking every remedy from the neglected or ad- (0) Clark v. Earl Ormond, 1 Jacob, 122. (r) Supra, note (n). (s) Clark v. Earl of Ormond, Jacob, CHAP. V. PRECAUTION if the executor has pleaded non-assumpsit, and the same and other pleas have been found against the executor. (y) But as ARY MEASURES. upon a false plea of plene administravit an executor is only personally liable to costs, and not for the debt beyond the assets found, the creditor must come in under the decree for his debt. (*) Before paying any legacy, an executor should reserve funds to answer future demands that may arise under any legal contract, of which he has knowledge. (a) an ecclesiastical person. With respect to dilapidations, which the executors of a de- Dilapidation by ceased incumbent are liable at common law and by the ecclesiastical law to make good. (b) The books appear to be silent as to the degree in which a claim of this nature upon the assets shall stand. (c) It should seem that the claim ranks in equal degree or next to simple contract debts, and should at all events be satisfied before legacies. (d) In equity, where a tenant for life has been guilty of equitable waste, a bill may be filed against his executors to compel satisfaction out of the assets, and such a claim will, it seems, be preferred to legacies, though not to simple contract debts. (e) An executor, therefore, having notice of such a claim, or at least after bill filed, should not pay legacies. 23. The Legacy Duties payable under the English act, 55 23. Legacy Geo. 3, c. 184, and the Irish act, 56 Geo. 3, c. 56, (and regu- duty. lated by the prior acts, and inter alia by 36 Geo. 3, c. 52, as to stamped receipts on legacies, and 46 Geo. 3, c. 52, s. 6,) are to be paid before, and deducted out of the assets, before payment of legacies or division of the residue; and if not paid they become the personal debt of the executor or administrator, as well as of the legatee; and if the executor pay the legacy, without retaining the amount of duty, he may, after paying the duty, recover the amount from the legatee; (f) and the legacy duty is (y) Ante, 546, n. (x); Fielden v. Fielden, 1 Sim. & Stu. 255, and as to costs, post, 557. (2) Id. ibid. 255; Lord v. Wormleighton, Jacob, 150. (a) Johnson v. Mills, 1 Ves. 282. (b) Ante, 393; Wise v. Metcalfe, 10 B. & Cres. 299-308. (c) See the cases in general, Sollers v. Lawrence, Willes, 421; 3 Woodes, 265; Radcliffe v. D'Oyley, 2 T. R. 636; Watson's Cl. Law, chap. xxxix.; Vin. Ab. Dilapi. 15; 2 Burn's Ecc. L. 146, 153; Jones v. Hill, 3 Lev. 268; Salkard v. Beckwith, 1 Lutw. 116, and 2 Chit. Pl. 785, 786, 5 ed. VOL. I. (d) The late Mr. Serjt. Hill gave an opinion to that effect. The personal representative is clearly not liable without assets, Gibs. 753; Carter v. Pecke, 3 Keb. 619; Lil. Ent. 21, 67, 68. (e) Landsdown v. Landsdown, 1 Madd. Rep. 116; 1 Jac. & Walk. 522; 1 Chit. Eq. Dig. 375; Id. Waste, 1345, Account. (f) Hales v. Freeman, 1 Brod. & Bing. 391; 4 Moore, 21, S. C. See the cases on the Stamp Acts, Williams' Exec.; Chit. Col. Stat. tit. Stamps, 1017 to 1020; Id. on Stamp Acts, 227 to 231; Hill v. Atkinson, 2 Meriv. 45; 3 Price, 404, S. C.; AttorneyGeneral v. Wood, 2 Young & J. 290 00 CHAP. V. PRECAUTION ARY MEASURES. 24. Payment of legacies. (i) to be paid upon the aggregate amount of the residue of the testator's property, at the time of the executor's delivering into the stamp office the note of what he intends to retain as residuary legatee. We have seen that gifts donatio mortis causa are subject to this duty; (g) and if a will forgive a bond debt, the principal and interest in arrear is subject to the duty, as in the nature of a legacy. (h) 24. Payment of Legacies.-With respect to legacies we have seen, that when specific, whether of a chattel personal or real, it is the duty of the executor, as far as possible, to preserve them entire, such as heir looms, according to the testator's wish, and unless compelled by suit, he ought not to apply them to the payment of debts; (k) and where the legatee of a specific bequest of wine, which was reported before the death, but the entry was not made till after that event, it was held that the legatee was not subject to the payment of the duties, but that the executor was bound to pay the same out of the general assets. (1) A specific bequest, or rather devise, of land, as a legacy, is not bound to contribute, in case of deficiency of assets, to pay legacies, (m) nor are specific legacies in general to be abated from, unless in favour of creditors. (n) An executor should cautiously withhold his assent to the bequest, by any, even very slight, expression of congratulation or approbation, (o) until he be confident that the other assets will certainly be sufficient to pay every expense and all debts; and in cases of the least doubt, he will not be safe in assenting to the bequest until a year has elapsed; (p) for if he assent to a bequest of a term, he thereby vests the legal interest in the legatee, who might afterwards maintain ejectment against him, should possession be withheld; (q) but before assent, the legatee could not legally withhold the chattel specifically bequeathed from the executor. (r) If an executor should incautiously (g) See 55 Geo. 3, c. 184, ante, 547; 36 Geo. 3, c. 52, s. 7. A note given to evade the legacy duty would be void, Holliday v. Atkinson, 5 B. & Cres. 501. (h) Attorney-General v. Holbrook, 3 Young & J. 114. (i) See in general, the cases fully col- (k) Clark v. Earl Ormond, Jacob, 108. Toller, 339, 344. (0) Doe dem. Hayes v. Sturges, 7 Taunt. 217; Doe dem. Sturges v. Tatchell, 3 Bar. & Adolp. 673; Toller, 6 ed. 308, 309; Com. Dig Administration, C. 6; Shep. Touch. 456. (p) Davis v. Blackwell, 9 Bing. 5.. Assent to a bequest of stock is essential, Franklin v. Bank of England, 9 Bar. & Cres. 156. (q) Doe dem. Lord Saye and Sele v. Guye, 3 East, 120; 4 Esp. R. 154, S. C. What not an assent, Doe dem. Hayes v. Sturges, 7 Taunt. 217; 2 Marsh. 505, S. C. (r) Toller, 6 ed. 307. |