Opinion
(December Term, 1850.)
1. Where it is alleged that a note, belonging to an estate, has been fraudulently and in breach of trust, transferred by the executor, there must be an inquiry into the state of the assets; for if a balance was due to the executor to the amount of the note, it was not a fraud in him to appropriate it to the payment of his own debt.
2. Plaintiffs are not allowed to impeach a single item in the administration of assets. It can only be reached by a general account, which will be final, not only as to the item particularly complained of, but as a settlement of a whole subject.
APPEAL from a decree of the Court of Equity of MARTIN, at Fall Term, 1849, Battle, J., presiding.
Rodman for the plaintiffs.
Heath for the defendants. (74)
Upon the pleadings and proof the following case appeared.
The defendant Hammond, as the executor of one Ward, sold the property, and, in payment, took the note, among others, of one Spruill for $276, six months after date payable to the said Hammond, "executor to the last will and testament of Will W. Ward."
Hammond became insolvent, and left the State, without settling the estate of the testator or in any way accounting for the assets. After his departure, his wife, in pursuance of directions from him, gave the note to the defendant Price, to be applied to the payment of a debt, for which he was bound as the surety of Hammond. The note was overdue at the time Price received it. He sold it to the defendant Turner, who collected it from Spruill.
One of the plaintiffs is a creditor of the testator. He has obtained judgment at law against the executor, which has not been satisfied. The other plaintiffs are the children and legatees of Ward. The prayer is, to follow the note and to subject Price and Turner to the payment thereof, as a part of the estate of the testator. The bill is taken pro confesso as to Hammond. The answers of Price and Turner do not vary the case as stated above, with the exception of an allegation, that Hammond, before he went away, had a settlement with the guardian of the children, who are the plaintiffs, and was allowed to retain the note in discharge of a balance found to be due him. There is no proof of this allegation.
In the Court below, the plaintiffs had a decree, and his Honor declared his opinion to be, that Price is primarily liable. Price appealed.
We assume, that Hammond was put out of the question, being (75) admittedly insolvent and having removed to parts unknown, and the question as to primary liability was between Price and Turner.
Price took the note after it was dishonored. It appeared on its face to be the property of the estate of Ward. He received it to relieve himself, as the surety of Hammond, and sold it to Turner. It is too plain for argument, not only that Price is bound to account for the value of the note, but that he is primarily liable, and must satisfy the decree, if he is able, before recourse is had to his vendee.
We should, therefore, have no difficulty in affirming the decree, but for the fact, that a preliminary question, necessary to the equity set up in the bill, has not been disposed of.
The equity rests upon the allegation, that the note in question was fraudulently and in breach of trust transferred by the executor. This involves an inquiry as to the state of the assets; for, until an account is taken, it cannot be known how the balance stands; whether for or against the executor. If the balance be in his favor to the amount of the note, it was not fraud in him to appropriate it to the payment of his own debt. There is no admission, which relieves the plaintiff from the necessity of having a general account of the estate, so as to show a balance against the executor, and thereby fix him with the fraud.
Plaintiffs are not allowed to impeach a single item in the administration of assets. This might lead to endless litigation and multiplicity of suits. One item cannot be singled out as the foundation of a suit. It can only be reached by a general account, which will be final, not only as to the item particularly complained of, but as a settlement of the whole subject. Huson v. McKenzie, 16 N.C. 463.
So, in the case of partners, a bill will not lie for a (76) misapplication of one note or one sum of money belonging to the firm, because the alleged misapplication cannot be established without a general account, and because such account will settle the whole and prevent multiplicity of suits. Baird v. Baird, 21 N.C. 524.
A final decree is entered without taking notice of this point. It may be, the parties waived it, being satisfied how the account would result, but there is no entry to that effect on the transcript. The decree, therefore, must be reversed; and this opinion certified, to the end that an account may be taken of the estate which came into the hands of the executor; unless the defendants waive it, and admit that there is a balance against the executor, equal to the amount of the note of Spruill, or unless the parties agree on some other amount. We allow no costs.
PER CURIAM. Reversed.
Cited: S. c., post. 213.
(77)