Opinion
(May Term, 1796.)
Suit commenced against an executor returnable to the Superior Court, and suit afterwards commenced returnable to the county court, which sat first. To these latter suits the executor put in such pleas as made the assets responsible for their payment, and to the suit in the Superior Court he pleaded that he had no assets except what was liable to the payment of the other suits. The latter plea is not good; he ought to have confessed judgment to the suits in the county court, and then plead those judgments to the suit in the Superior Court.
ACTION against an executor, who pleaded that he had fully administered all the assets of the testator except so much which was liable to former judgments and suits. This action was commenced prior to some others, which were the suits alluded to in the plea; but this action was returnable to the Superior Court and the others to the county court, which was held before the Superior Court; and to these suits in the county court the pleadings were such as admitted assets of the testator sufficient to satisfy them.
In support of this plea is was argued for the executor that although before any suit commenced an executor, in case of deficiency of assets, may pay which of two creditors of equal dignity he may think proper, yet where one of them hath commenced suit, he cannot pay the other to his prejudice; and, therefore, he who first commences his action is first entitled to payment. The executor in the present case could not with any safety plead otherwise than he hath done; he hath pleaded the truth of his case to the suits he was first bound to plead to; he hath admitted assets, and made an appropriation of them to the creditors in these suits; and to this suit which he was afterwards bound to plead to, (296) he hath pleaded in substance that appropriation. There was no other course for him to take. This method of pleading is sanctioned by Waters v. Ogden, Doug., 453, 454. There the executor had assets, but to a certain amount, not adequate to the payment of the demand of either creditor; but he confessed what assets he had to the demand of one creditor, and to the other demand of the other creditor he pleaded the other suit, and the confession of the assets he had to that demand, and it was held well. In the present case the executor had not assets to satisfy all the creditors; but he pleaded to the suits in the county court so as to admit and appropriate to these demands all the assets he had, and he has pleaded that appropriation to this suit. It would be excessively hard should he be compelled to satisfy this demand also, which must be out of his own pocket if satisfied at all.
It was argued that amongst creditors of equal degree it is not the first suit that entitles to priority of payment, but the first obtaining of judgment. Off. Ex., 138, 144. Where there are several demands of equal dignity, and the creditors all sue, and the executor hath assets but for part, if he pleaded to each of these demands that he hath assets but to a certain amount, each of them may have judgment to that amount; or if he plead to each plene administravit, at the trial a verdict must be against him upon each demand to the amount of the assets, because at the time of the plea pleaded each plea was untrue, and the jury in each cause must upon such evidence say that it was not a true plea at the time when pleaded; and so the verdict in each cause must be for the plaintiff. If he plead to some of these suits the amount of the assets, and to the others that he hath made an appropriation of his assets, that will not be good pleading, because after suits commenced he has not a right to pay whom he pleases first, but only such of them as could first get judgment. In such case, where there is a deficiency of assets to pay all, the proper method to be observed by an executor is to confess judgment to some of the creditors to the amount of his assets, and plead the judgments to the other suits. Wood's Inst., 332; Nels. Ab., 787; God., 219, 223, 324; 1 P. Wil., 295. As to the case cited from Douglas, that is not applicable to this. There the assets were not sufficient to satisfy the demand of either plaintiff, and for that reason the plaintiff (297) to whose suit the appropriation was made would not enter judgment so that it could be pleaded to the other suit, and the executor had no means to compel him to enter it; but in the case now before the Court the assets in the hands of the executor were to a much larger amount than the several demands sued for in the county court, and had the executors confessed judgment severally to the amount of each demand, the Court would have compelled the plaintiffs in those suits to have entered their respective judgments so that they might be pleaded to this suit.
Where there are several demands of equal dignity, and a deficiency of assets to pay all the creditors, before any suit brought the executor may pay, to the amount of the assets, which of them he pleases; but if suit be brought, he can no longer make a voluntary payment; the commencement of the suit, and his having notice thereof, restrains him from making any voluntary payment; but still it is not priority of suit that entitles to priority of payment, but the first obtaining of judgment. Consequently the pleading a former suit, as the executor has done here, is no good plea in bar of the plaintiff. It should have been a plea of a former judgment, and that would have been good. The proper course for an executor to take, when there is a deficiency of assets and he is sued by several creditors of equal degree, is to confess judgment to as many of their demands as will cover his assets, and plead these judgments in bar of the other creditors. Where there are two or more suits of equal dignity commenced against him by several creditors, and he hath not assets enough to pay any one of them, he must plead to some one of them the amount of his assets, making an appropriation of them to that demand, and plead that matter in bar to the other suits.
The plaintiff had judgment.
Cited: Bryan v. Miller, 32 N.C. 130; Wadsworth v. Davis, 63 N.C. 252.