Summary
In Pierce v. Allen, 12 R.I. 510, the court held that an appeal lies from the order of a Probate Court appointing commissioners on an insolvent estate, clearly an interlocutory order.
Summary of this case from Tillinghast v. Brown UniversityOpinion
February 10, 1880.
An appeal lies from an order of a Probate Court appointing commissioners on the insolvent estate of a decedent. The solvency or insolvency of a decedent's estate is not a matter for a jury trial, and can only be determined by the statutory procedure. The representative of a decedent's estate should have reasonable time to determine whether or not to represent it insolvent, and obtain the appointment of commissioners. If after paying debts he represents the estate insolvent, he should be allowed the amount which the creditors would have received from the commissioners.
APPEAL from the Municipal Court of Providence. On motion to dismiss the appeal.
This court has probate jurisdiction in Providence.
This appeal was taken under Gen. Stat. R.I. cap. 170, § 1, from a decree of the Municipal Court of the city of Providence, the court having probate jurisdiction in that city, appointing commissioners to receive claims against the estate of Edwin L. Howland, which had been represented insolvent by the executor, J. Edward Allen.
The reasons of appeal are as follows:
1. That said estate was not insolvent or insufficient to pay all the just debts which the deceased, Edwin L. Howland, owed.
2. That said J. Edward Allen, executor, has not represented the condition and circumstances of said estate unto the said court, which granted the letters testamentary, as by law required.
3. That said J. Edward Allen, executor, as aforesaid, before the making and entry of said order and decree, and before application to said Municipal Court to make such decree, had made payments from said estate to creditors thereof, and had distributed legacies and parts of legacies of personal property of said estate to legatees under said will.
4. That if said estate is now insolvent, it has been rendered and made so in the hands of said J. Edward Allen, executor, by extravagant expenses and mismanagement and maladministration thereof.
5. That said order and decree is erroneous and contrary to law, and ought to be reversed.
Lapham Lockwood, for appellants.
Hopkins Potter, for appellees.
We cannot doubt the right of appeal in this case.
The fourth reason of appeal is, that if the estate is insolvent it has been made so by the conduct of the executor. This might be a proper charge as a ground for his removal and for his being called to account.
The third reason is, that the executor had made payments of debts before representing the estate insolvent. If any executor, believing the estate solvent, pays debts, and this fact is to prevent his afterward representing it insolvent, and to be construed as an admission of assets, Bates v. Kimball, 1 Vt. 95, so as to render him liable for all debts, it would operate in many cases as a monstrous injustice, and we cannot give the statute, Gen. Stat. R.I. cap. 175, § 2, such a construction unless its language absolutely requires it.
The language of this section and of the next preceding one is: .
"SECTION 1. Whenever the estate of any person deceased shall be insolvent or insufficient to pay all the just debts which the deceased owed, the same shall be distributed to and among all the creditors, in proportion to the sums to them respectively owing, so far as the said estate will extend; saving that the debts due to the United States and necessary funeral charges of the deceased, the charges for attendance, and medicines in the last sickness, debts due to this State, and all state and town taxes, are to be first paid, and in the order in which they are named.
"SECT. 2. The executor or administrator of any such insolvent estate, before payment to any be made, except as aforesaid, shall represent the condition and circumstances thereof unto the Court of Probate which granted letters testamentary, or of administration thereon; and the said court shall appoint three fit and disinterested persons to be commissioners, with full power to receive and examine all claims of the several creditors, against such estates."
NOTE BY MR. JUSTICE POTTER. — The words "before payment,"c., are found in the first act for the settlement of insolvent estates of deceased persons passed in Rhode Island, A.D. 1758. They are also in the Digest of 1798, and in the succeeding ones. They are also in the Massachusetts Act of 1696 (Ancient Charters and Laws), and in the Connecticut revision of 1784, and probably earlier. The substantive parts of the acts were very much the same.
The language is: "The executor or administrator of any such insolvent estate before payment to any be made, except,c., . . . shall represent the circumstances and condition thereof unto the Court of Probate," c.
If the executor knows or has reason to suspect that the estate is insolvent and chooses to pay any debts in full, it may be said that he does it at his own risk. But the act mentions only the executor of an insolvent estate. Who is to decide? Must every estate be represented insolvent? The legislature certainly could not have so intended. The Court of Probate has no discretion. The law says it shall appoint commissioners.
The proper construction seems to us to be that the executor must exercise a discretion as to the representation. And for this he should be allowed a reasonable time; if he, believing the estate solvent, pays a debt in full, and afterwards represents it insolvent, there is no reason in justice or in the law why he should not be allowed the amount to which the creditor he has paid would have been entitled if allowed by commissioners.
Under the old English system the executor was required to pay the debts in a certain order. And if by paying a debt of a lower order he exhausted the assets, so that a debt of a higher order remained unpaid, he became personally liable. The only legal notice to the executor of the existence of a claim was by suit, and the creditors might by bill in chancery compel an equitable distribution of the assets. The executor might have his accounts passed by the ordinary, but the only way in which he could be exonerated was in equity. Low v. Carter, 1 Beav. 426; Knatchbull v. Fearnhead, 3 Myl. C. 122, 126, and cases there cited; and it has been held there that as to the disposition of assets not already applied, the executor who has paid a debt is substituted to the rights of the creditor paid by him. Jones v. Jukes, 2 Ves. Jun. 518. And in Massachusetts, where an executor before probate paid a debt, and afterwards discovered the estate to be insolvent, and so represented it to the Court of Probate, it was held that the executor could present the debt before commissioners, and be entitled to pro rata payment, and could recover back the overplus of the creditor to whom he had paid it. Bliss v. Lee, 17 Pick. 83; Richards v. Nightingale, 9 Allen, 149.
The first reason of appeal, that the estate was not actually insolvent, must be overruled. That can only be determined by following the course pointed out by law. It is not a matter for jury trial. The other reasons of appeal are also overruled. Whether, if the executor had settled an account in which payment by him of any debt had been allowed, the court could relieve, is not involved in this case, and we do not mean to decide it.
Appeal dismissed and decree of the Municipal Court confirmed.