Butler v. Johnson — 19 N.Y. St. Rep. 85

Majority

p. 85

Chauncy S. Butler et al., Resp’ts, v. Julia A. Johnson, as Executrix, etc., App’lt^[1] .

(Court of Appeals,

Filed November 27, 1888.)

Headnote

1. Statute of Limitations — Executors and administrators when DEBTS AGAINST AN ESTATE BARRED BY.

The testator was indebted at his death, in 1871, to three persons to an amount aggregating $1,500. The executrix in 1872 advertised for the presentment of claims against the estate, and these three claims were pre

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seated and accepted by the executrix. ' The three debts above mentioned! not being paid, suit was brought against the executrix and judgment recovered against her in 1877, and these three judgments were assigned to the same person. By one of the codicils to the testator’s will a legacy of $1,500 was given to Emma J. Darrow, which had never been paid. All the debts and legacies have been paid, except those before-mentioned and some incurred by the executrix in managing the estate. In 1881 Emma J. Darrow filed a petition in the surrogate’s court, in which petition B., who held the assignments of the three judgments aforesaid joined asking for an order that the debts and legacy be paid. The surrogate made a decree that all the debts and legacy be paid by Julia A. Johnson, the executrix, and Mary J. Butler, out of the assets in their hands. This decree was reversed as to Mary J. Butler on her appeal, b.ut the executrix did not appeal. In 1888, the executrix, who is defendant herein, advertised certain premises (acquired from Mary J. Butler), for sale, to satisfy the debts and pay the legacy, and the plaintiffs thereupon commenced this action to perpetually enjoin her from so doing. Reid, that the debts-were barred by the Statute of Limitations at the time the defendant commenced her advertisement of her intended sale of the real estate of the plaintiffs for the purp .se of paying them. They were simple contract debts and became outlawed at most, in six years after the expiration of eighteen months from the death of the testator.

2. Same—When action to collect legacy barred.

Although the form of the remedy against the executrix, by commencing an action to compel her to exercise her power of sale given by the will is of an equitable nature, and if it had been the only remedy the ten years statute would apply, yet as there had been several other equally efficient remedies of a legal nature to collect the legacies, the legal statute applies to the equitable remedy, and hence at the time of the adoption of the Code of Civil Procedure in 1880, the claim of the legatee by reason of the non-payment of the legacies was barred and there was therefore no legal demand against the estate at that time either for the payments of the debts or legacies.

3. Same—Right to injunction.

In 1882, the residuary legatees and devisees divided the esl ate left by the testatrix together with the land in question. Thereafter, the executrix, who is defendant herein, advertised the premises in question for sale, to satisfy the debts and pay the legacy of one D. Under the facts of this case, it appeared to be the duty of the defendant to contest these very claims, on the ground that they were barred, and she substantially acts as representative of those who own the r; al estate, bound in the discharge of her duty to set up the bar, but in stead of so doing she violates her duty as quasi trustee, and takes steps toward selling such real estate, and toward placing a ■cloud upon the title of those who own it, and whose interest therein it washer duty to protect, Reid, that the plaintiffs are entitled to an injunction restraining the trustee from violating her duty, even though in so doing, they used the Statute of Limitations as a foundation of their claim. That in so doing, the plaintiff did not run counter to the principle that the Statute of Limitations can only be used as a shield and not as a sword.

4. Same—Duty of executor as to bar of statute—Effect of payment OF DEBT BARRED.

An executor or administrator is bound to set up the bar of the statute, and he would not be allowed in his' accounting any sum which at the time of its payment by him was barred by the statute. As against an estate, therefore, a debt barred by the statute, must be regarded as no debt. There is not only no moral obligation to pay it, but on the contrary, there is a duty to set up the bar of the statute, resting upon the executor or administrator.

5. Same—Rights of creditors of estate in 1872—When statute commenced to RUN.

Even though a creditor of an estate was not bound as the law stood in

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1872, to institute proceedings and compel the sale oí real estate to pay debts until after an executor or administrator had rendered an account, such omission did not stop the running of the statute as against the debt. An executor or administrator could, at that time institute such proceedings for three years, and during or after that time could be compelled by the creditor so to do, provided the administrator had rendered an account.' This was a remedy open to the creditor to enforce the collection of the debt, but it did not enlarge the time for the running of the statute against it.

6. Same—Effect of Code of 1848 upon Statute of Limitations.

Causes of action, which before the adoption of the Code of 1848, the two courts (Law and Equity) had concurrent jurisdiction over, such actions are included in and provided for by the sections preceding section 77 of said Code, and hence are not included in that section as within the ten years Statute of Limitations.

7. Same—Provisions of said Code apply to equitable actions.

Those sections which precede said 77th section, wherein the time for the commencement of an action, of what would theretofore have been called a legal nature, is prescribed, must be taken to include causes of action over which courts of equity had theretofore had concurrent jurisdiction with courts of law. The said 77th section applied to all cases over which equity had theretofore had sole jurisdiction where no other rule had been specifically provided for one or more of such cases.

8. Same—Intent of legislature in prescribing six years Statute of Limitations.

When the legislature prescribed six years in which to commence an action upon a liability or obligation, expressed or implied, it meant to include in such description an action which might formerly have been prosecuted in either court (Law or Equity), upon or by reason of such obligation, and where the remedy would have been adequate in either, if the form of remedy chosen were such as would formerly have been cognizable in chancery, yet the limitation applicable to the remedy at law would apply.

Appeal from a judgment of the supreme court, general term, fourth department, reversing a judgment entered upon the trial at Otsego county, special term, and ordering a new trial.

The facts not contained in the opinion will be found stated in the report of this case at general term. 4 ÍT. Y. State Rep., 151.

J. A, Lynes, for appl’t; F. G. Fincke, for resp’ts.

The debts were barred by the Statute of Limitations at the time the defendant commenced her advertisement of her intended sale of the real estate of the plaintiffs for the purpose of paying them. They were simple contract debts, and became outlawed at most in six years after the expiration of eighteen months from the death of the testator.

Even though a creditor of an estate was not bound as the law stood in 1872, to institute proceedings to compel the sale of real estate to pay debts until after an executor or administrator had rendered an account, such omission did not stop the running of the statute as against the debt. Raynor v. Gordon, 23 Hun, 264 . The executor or administrator could institute such proceedings for three years, and during or

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after that time could he compelled by the creditor so to do, provided the administrator had rendered an account. Ferguson v. Broome, 1. Bradf. 10. This was a remedy open to a creditor to enforce the collection of a debt, but it did not enlarge the time for the running of the statute against it.

An executor or administrator is bound to set up the bar of the statute and he would not be allowed in his accounting any sum which at the time of its payment by him was barred by such statute. Bloodgood v. Bruen, 8 N. Y., 362 ; Bucklin v. Chapin, 1 Lans., 443 , 448; Burnett v. Noble, 5 Redf., 69.

As against an estate therefore a debt barred by the statute must be regarded as no debt. There is hot only no moral obligation to pay it, but on the contrary there is a duty to set up the bar of the statute resting upon the executor or administrator.

The debts in this case, therefore, constituted no legal claim against the estate, and could form no foundation for the proposed exercise by defendant of the power to sell real estate for the payment of debts given her by the will. It is not pretended that at this time she had any other power.

We have no doubt that the six years statute applies to the debts at all events.

In regard to the legacies the question is more troublesome. The defendant says the cause of action for the recovery of the legacies was not outlawed, because the legatee had a right under 2 R. S., 114, section 9, to commence an action to compel the executrix to exercise her power of sale of the real estate under the will, and with the proceeds pay her legacies, and that such cause of action was of an equitable nature; that such a cause of action did not become barred until the lapse of ten years, which had not passed when the Code of Civil Procedure took effect in September, 1880, and that the limitation prescribed in that Code then became applicable, and under that limitation the cause of action against the executrix does not accrue until her accounts are judicially settled. Code of Civil Procedure, sec. 1819.

It is admitted that her accounts have never been thus settled. All this reasoning depends upon the question whether the action to recover payment of the legacy was outlawed by the six years statute which had run before the adoption of the Code of Civil Procedure in 1880. If it had, it was not revived by that Code.

After the death of the testator, and when the payment of the legacies became due, the legatee had several remedies to obtain such payment.

She could have asked the surrogate to decree payment of

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them to her by the executrix, and payment could have been enforced if there were assets. 2 R. S., 90, § 45; id., 116, § 18.

She could also after the expiration of eighteen months have cited the executrix to account before the surrogate, and an accounting could have been enforced. 2 R. S., 92, § 52, et seq.

She could also have proceeded by action for a simple accounting or for payment of the legacies, or she could have included in such action a prayer for relief that if there were not enough personal property to pay the legacies the executrix should be compelled to exercise the power of sale of the real estate given her by the will, and with the proceeds pay such legacies. The six years statute applied to all these remedies, for they were of a legal nature, excepting the last.

If there had been no other remedy than such last mentioned one, it is plain the ten years statute would apply. The claim is made upon the part of the plaintiff that the subject-matter of such a suit, the cause of action, is the recovery of payment of the legacy, and that all these various modes of obtaining payment thereof are simply different remedies to attain the same object, and that when such is the case, and the two courts under the old system of law and equity had concurrent jurisdiction over the subject-matter or cause of action, and the remedy at law was as effectual as the equitable one, the legal statute of limitations applied to the remedy in equity, and if the cause of action was barred at law it was equally so in equity. This was the rule in the days before the adoption of the Code, and plaintiffs claim that it still exists. _ All the relief obtainable by action in the nature of a suit in equity by the legatee herein could have been obtained by an action of a purely legal nature during six years. The proceedings before the surrogate were entirely adequate to obtain payment of the legacies. This rule of limitation, that equity follows the law, in cases of concurrent jurisdiction of the two courts, was not brought into being by the Revised Statutes.

In Hovenden v. Lord Annesley (2 Schoales & Lefroy, 607) Lord Chancellor Redesdale stated: “But it is said that courts of equity are not within the statutes of limitation. This is true in one respect. They are not within the words of the statutes, because the words apply to particular legal remedies. But they are within the spirit and meaning of the statutes and have been always so considered. I think it is a mistake in point of language to say that courts of equity act merely by analogy to the statutes. They act in obedience to them, the statute of limitations applying

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itself to certain legal remedies for recovering the possession of lands, for the recovering of debts, etc., and equity which in all cases follows the law, acts on legal titles and legal demands according to matters of conscience which arise and which do not admit of the ordinary legal remedies. Nevertheless, in thus administering justice according to the means afforded by a court of equity, it follows the law. * * * I think, therefore, courts of equity are bound to yield obedience to the statute of limitations upon all legal titles and legal demands, and cannot act contrary to the spirit of its provisions. I think the statute must be taken virtually to include courts of equity, for when the legislature by statute limited the proceedings by law in certain cases and provided no express limitation for proceedings in equity, it must be taken to have contemplated that equity followed the law, and therefore it must be taken to have virtually enacted in the same cases a limitation for courts of equity also.”

Chancellor Kent said in commenting upon the language of the court in the above case, that it meant that if the party had a legal title and a legal right of action, and instead of proceeding at law resorted to equity, instead of bringing nis action of account or detinue or case for money had and received at law, he files his bill for an account, the same period of time that would bar him at law would bar him in equity. Kane v. Bloodgood, 7 Johns. Ch., 89 .

Where the same subject matter of the demand in equity can also be made the subject of an action at law, the rule of analogy applies with all its force., Kane v. Bloodgood, 7 John. Ch., 89.

In Murray v. Coster ( 20 Johns., 575 , 585), the same rule was announced by the court of errors.

The Revised Statutes (2 R. S., 801, art. 6, §§ 49, 50_, 51), enacted the same rule, and in cases of concurrent jurisdiction the legal limitation was applied. The revisors in their notes to these sections stated that no new rule was intended, but the sections adopted the language of the court of errors in the case of Murray v. Coster {supra). In truth the Revised Statutes simply enacted the then existing law on that subject.

The Code of 1848 (Laws of 1848, p. 511, §. 66), repealed the provisions of the Revised Statutes as to limitations upon the time for the commencement of actions other than for those relating to real property, and substituted provisions of its own on that subject. Provision being, made in other sections for many cases it was enacted by section 77 of that Code that “an action for relief not hereinbefore provided for must be commenced within ten years after the cause of action shall have acqrued.”

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The claim is now made that by this repeal of the Revised •Statutes, upon the subject of the limitation of actions and by the adoption of affirmative provisions on that subject by the Code, the old rule under discussion has been abolished and does not now exist; that it was repealed in terms and has not been re-enacted.

In Loder v. Hatfield ( 71 N. Y., 92 , at 104), the question is mooted by Folgeií, J., but not discussed.

In Salisbury v. Morss ( 7 Lans., 359 ), the learned judge, writing the opinion, stated his conviction that the "rule was abrogated by the Code and had never been re-enacted. The point was not necessary to the decision of the case, but it appears that it is one of some doubt or at least open to a possible variety of views.

The argument urged is that the Code in terms has repealed the statute and it has not been re-enacted. That it was inappropriate to the new system under which all actions were to be prosecuted in the same forms and before the same tribunals whether they were to enforce legal or equitable rights, and for that reason it became necessary that changes should be made in the provision of the statutes concerning the time limited for their commencement; that in such changes the provision relating to concurrent jurisdictions was omitted, and that prescribing the time in which actions for relief could be brought was reenacted, subject to the single exception, including certain actions for relief on account of fraud.

The argument, it must be conceded, is quite strong. The effect of it would, however, be to lengthen, by four years, the time in which many actions could be commenced, which, under the old rule, would have been limited to six, and in actions, too, where no reason can be given for such a change.

"We think that in causes of action which, before the adoption of the Code, the two courts had concurrent jurisdiction over, or, in other words, where the subject of the action was the same in both courts and the remedy only was different, such actions are included in and provided for by the sections preceding the above mentioned seventy-seventh section, and hence are not included in that section as within the ten years’ statute.

The simple repeal of those sections of the Revised Statutes relating to the commencement of actions, would not have made any alteration in the law applicable to those causes of action over which the two courts had theretofore had concurrent jurisdiction, for, as we have seen, the law was the same before their enactment, "We must look further and see if the Code has provided any rule on this subject, which is at war with the law as it stood before it was

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adopted. We do not think it has. Those sections which precede the 77th, wherein the time for the commencement of actions of what would theretofore have been called a legal nature is prescribed, must be taken to include causes of actions over which courts of equity had theretofore had concurrent jurisdiction with courts of law, because as was said by Lord Bedesdale in the case of Hovenden v. Lord Annesley (supra), the legislature must be taken to have contemplated the rule then existing, that equity followed the law in such cases and to have virtually enacted for them the same limitation. This would leave the 77th section to apply to all cases over which equity had theretofore had sole jurisdiction, where no other rule had been specifically provided for one or more of such cases.

When the legislature prescribed, for instance, six years in which to commence an action upon a liability or obligation, express or implied, we think it meant to include in such description an action which might formerly have been prosecuted in either court upon or by reason of such obligation, and where the remedy would have been adequate in either, and if the form of the remedy chosen were such as would formerly have been cognizable in chancery, yet the limitation applicable to the remedy at law would apply. There can be no sense in enlarging the time by a mere change of the form of the remedy sought, where the subject-matter of the action is precisely the same and the remedy in either was adequate.

This holding retains the application of the statute to a number of cases, which before the adoption of the Code had been limited to six years, and where no good reason can be suggested for lengthening such time to ten years.

The question whether the Code has altered this old rule, does not seem to have been heretofore decided by this court. In Borst v. Corey ( 15 N. Y., 505 ), the old rule was enforced because the cause of action arose prior to the Code, yet nothing in the opinion intimates that there was any change effected by the Code. The same may be said of Clark v. Ford, 3 Keyes, 370. In Rundle v. Allison ( 34 N. Y., 180 ), it seems to have been assumed that the old rule still existed, and no discussion is had regarding it, although the cause of action in that case arose subsequent to the adoption of the Code.

The present case seems to demand its decision and we hold as already indicated.

It thus appears that although the form of the remedy against the executrix, by commencing an action to compel her to exercise her power of sale given by the will, is of an equitable nature, and if it had been the only remedy the ten years statute would apply, yet as there had been seve

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ral other equally efficient remedies of a legal nature to collect the legacies, the legal statute applies to the equitable remedy, and hence at the time of the adoption of the Code of Civil Procedure, the claim of the legatee by reason of the non-payment of the legacies was barred, and there was therefore no legal demand against the estate at that time either for the payment of debts or legacies.

The further question now arises whether the plaintiffs have a cause of action against the defendant and a right to come into court 'and ask for an injunction restraining her further proceedings towards such sale, when the foundation of the right rests upon the proposition that there are no» legal claims against the estate, and that again depends upon the barring of such claims by setting up the Statute of Limitations against them. Can the defendant.be prevented from voluntarily doing what no creditor or legatee could now compel her to do?

Assuming that the claims are outlawed and that the executrix if sued by the creditors of the estate or the legatee» could successfully interpose the bar of the statute to the maintenance of such suit or of any proceedings against her, can these plaintiffs properly enjoin the defendant from taking steps to voluntarily pay debts which are thus outlawed?

We think they can. As it is the duty of an executrix to set up the bar of the statute, she is guilty of a breach of her duty in taking any steps towards the payment of debts which are outlawed, and hence are no valid claims against the estate. And if her proceedings are continued to a sale and a conveyance by her under such sale and in assumed execution of her power of sale created by the will, it is apparent that a cloud will be placed upon the title to the property owned by the plaintiffs and of which they are in possession. In taking proceedings under such circumstances to prevent the further action of the defendant which would otherwise result in placing such a cloud upon the title to their property, we think the plaintiffs do not run counter to any principle or decision holding the general view that the Statute of Limitations can only be used as a. shield and not as a sword.

Under the facts of this case where it appears to be the duty of defendant to contest these very claims on the ground that they are barred, and where in such case she substantially acts as a representative of those who own the real estate, bound in the discharge of her duty to set up the bar; and where instead of so doing, she violates her duty as a quasi trustee and takes steps towards selling such real estate and towards placing a cloud upon the title of those who own it, and whose interests therein it is her duty to protect, we think that the plaintiffs have a right to ask the aid of the court to prevent this substantial trustee from violating her duty and from placing this cloud upon their

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title, even though in so doing the plaintiffs necessarily use the Statute of Limitations as the foundation of their claim. Under such circumstances the bar of the statute is simply a defense to the affirmative and improper proceedings of the defendant, and is not an attack .upon any right of a third person.

We admit the general rule as stated by the learned judge who wrote at special term, but think this case is no violation thereof.

We think the order of the general term reversing the judgment of the special term was right, and should be affirmed, and judgment absolute granted against the defendant, with costs in accordance with her stipulation.

All concur, except Earl, J., taking no part.