Bank v. Opie

• Decision Date: 14 November 1935
• Citation: Bank v. Opie, 165 Va. 334, 182 S.E. 255 (1935)
• Parties: GREENBRIER JOINT STOCK LAND BANK. v. OPIE.
• Court: Virginia Supreme Court

182 S.E. 255

GREENBRIER JOINT STOCK LAND BANK.

v.OPIE.

Supreme Court of Appeals of Virginia.

Nov. 14, 1935.

Appeal from Corporation Court of Staunton.

Suit by Elizabeth W. Opie, executrix of Hugh H. Kerr, deceased, against the Greenbrier Joint Stock Land Bank and others, wherein named defendant filed a cross-bill. From the decree, named defendant appeals.

Reversed and remanded.

Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, CHINN, and EGGLESTON, JJ.

Curry Carter, of Staunton, for appellant.

J. M. Perry and John D. White, both of Staunton, for appellee.

GREGORY, Justice.

The Greenbrier Joint Stock Land Bank is complaining of a decree entered in a cause pending in the corporation court for the city of Staunton wherein it was required to pay a portion of a certain attorney's fee awarded the attorney for the executrix for instituting and prosecuting the suit, and for the further reason that the court refused to permit it to participate in the general fund in the hands of the executrix on the basis of its entire debt against the estate as it existed at the death of the testator and as previously proven, audited, and reported by the commissioner, instead of allowing it to prove only the balance due after crediting on the claim the amount received from the sale of the security.

On December 14, 1932, Hugh H. Kerr died testate and insolvent, owning a valuable farm in Augusta county and considerable personal property. He owed some $40,000, approximately $24,000 of which was due and owing the. appellant, it being represented by a certain bond which had been reduced to the amount stated and which was payable on the amortization plan and secured by the lien of a first dec 1 of trust on the said farm.

Shortly after the death of Mr. Kerr, his daughter, Elizabeth W. Opie, qualified as his sole executrix and within three months thereafter she filed the bill in this cause alleging that the liens on the real estate and the rights and priorities of the creditors of the estate were subject to "great doubt and perplexity, " and that the estate was insolvent. She prayed for the construction of the will and that the conflict in the claims of the lien and general creditors be referred to a commissioner. She asked that he be required to convene the creditors and report upon the validity and priority of their respective claims and that their rights be settled. She further prayed that the real and personal property belonging to the estate be sold as soon as expedient andthat an attorney's fee be allowed her attorney for instituting and prosecuting this suit.

The creditors of the estate were made parties defendant and the appellant, one of the defendants in the court below, filed its answer. It was the largest single creditor of the estate. It denied that there was any great doubt and perplexity as to the liens and their priorities, but asserted that the liens were fixed at the date of the death of the decedent. It averred that its lien was the first and paramount lien on the real estate conveyed in the deed of trust; that said lien could not be disturbed by any subsequent transaction of the grantors; and that it was entitled to stand upon its said deed of trust and request a foreclosure of the same when it deemed it advisable to do so. It further averred that its debt was partially in default, and that under the terms of the said deed of trust it had elected to declare the whole amount secured therein due and payable.

The appellant asked by way of cross-relief that the said deed of trust be declared the first lien on the real estate therein conveyed; that it be entitled to foreclose said deed of trust and apply the net proceeds of sale as a credit on its debt; and that it have a judgment against the executix for any deficiency that might arise.

The court by its decree referred the matter to one of its commissioners who filed his report showing that Mr. Kerr owned at the time of his death a farm containing 362 acres; that its fee-simple value was $15,000; that there were specific liens binding said farm amounting to $33,104.52; and that the lien of the appellant was the first lien, subject only to the taxes.

In the commissioner's report the full amount of the claim of the appellant was allowed and reported. Later this report was confirmed by a decree, thus finally establishing the appellant's claim. The farm was ordered to be sold, and commissioners, who were appointed for that purpose, were directed to make a sale of the said lands after proper advertisement.

Still later said commissioners of sale reported to the court that they had sold the land; that the Greenbrier Joint Stock Land Bank had become the purchaser at its bid of $12,000. The sale having been duly reported to the court, it was, by decree, ratified and confirmed. It was decreed that the lien debt of the Greenbrier Joint Stock Land Bank be credited with the sum of $11,536.25 (the difference be-tween the purchase price of $12,000 and the share of cost of suit and sale to be borne by petitioner). Later the cause was recommitted to a commissioner in chancery to report upon such matters as might thereafter be required by the court or requested by any person in interest.

On February 19, 1934, the commissioner filed his second report in which it was disclosed that $6,216.11 remained for distribution among the creditors. He found that the Greenbrier Joint Stock Land Bank was entitled to receive a dividend, not on its entire debt as it existed at the time of Mr. Kerr's death and as reported and established by the commissioner in his first report, but only on what remained of its debt after crediting it with the proceeds from the sale of the farm. The commissioner also found that the attorney for the executrix was entitled to a fee of $350 to be paid out of the fund in the hands of the executrix. This report was duly confirmed, notwithstanding the exceptions filed by the Greenbrier Joint Stock Land Bank, and the executrix was directed to make distribution of the funds in her hands in accordance with the report of the commissioner.

There are two assignments of error to the decree. First, the court erred in allowing the attorney for the executrix a fee to be paid in such a manner that any part thereof would directly or indirectly he borne by the appellant. Second, the court erred in refusing to permit the appellant to participate in the general fund ratably on the basis of its entire debt as it existed at Mr. Kerr's death and as proven, audited, and reported by the commissioner in his first report, rather than on the balance after crediting what was realized from the sale of the land.

There are certain pertinent observations that might be made about the suit which shed light upon it. For instance, the complainant in the bill asked that the court construe the testator's will, but this request evidently was abandoned for the record does not disclose that the court ever construed the will. The complainant alleged that the liens on the real estate and the rights and priorities of the creditors were subject to great doubt andperplexity, but she failed to show that there was any "doubt or perplexity" about the liens. In fact, the record fails to show that there was any conflict in the claims against the estate. It was alleged that the estate was insolvent and she requested the court to decree a sale of both the real estate and the personal property. If there was any necessity for the executrix to institute the suit, it is not shown by the record. It being perfectly obvious from the beginning that the estate was insolvent, the devisees under the will manifested no interest in the suit. No answer appears to have been filed by them though they were made parties defendant to the cause. While the suit purports to have been instituted by the executrix for the purpose of construing the testator's will and the settlement of the estate, it in reality is a creditor's suit in which one general creditor is contesting the right of the appellant to a dividend on the basis of its entire debt, and asserting that the appellant is entitled to a dividend only upon the balance of its debt after the proceeds of the sale of the land has been applied as a credit to its original debt.

The record also discloses that the appellant was opposed to having its deed of trust enforced in this suit. It was anxious to be dismissed from the suit in order that it might foreclose the deed of trust according to its terms whenever it was deemed to be desirable, the appellant having the first lien on the land subject only to taxes amounting to only $141.

Adverting now to the first assignment of error relating to the award of an attorney's fee to be paid the attorney for the executrix, a portion of which was directed to be paid out of the amount that is due the appellant. We perceive no new principle to be applied. The appellant was represented by its own counsel from the beginning. Its interests were adverse to those of the other creditors and the executrix. No fund was discovered, created, or preserved by the executrix or her counsel which enured to the common benefit of all. This seems to be the test of the power of the court to require one party to contribute to the fees of counsel of another party. Of course, there have been cases where an executor has been allowed counsel fees in a suit to maintain the will when warranted by the circumstances. This principle is exemplified in the case of Butt et al. v. Murden et al., 154 Va. 10, 152 S. E. 330, 69 A. L. R. 1048, where the executor was allowed counsel fees in an unsuccessful attempt to uphold the will. In Lake's Adm'r v. Pattie, 116 Va. 130, 81 S. E. 78, it was held that an administrator should be allowed counsel fees for defending a claim which he had good reason to believe was not a just or legal one against the estate when the other distributees refused to defend it. Those cases, however, have no application here. The appellant was represented by its...