Baxter v. Baxter
| Decision Date | 19 May 1885 |
| Citation | 23 S.C. 114 |
| Parties | BAXTER v. BAXTER. |
| Court | South Carolina Supreme Court |
1. A debt due by a surety at the time of his death on a county treasurer's bond, for a default of his principal, is a " debt due to the public," and as such is entitled to priority of payment out of the assets of one deceased under the act of 1789 (Gen. Stat. (1872), 457); but it has not a preference over antecedent liens, either general or special, in the distribution of the proceeds of sale of the property covered by such liens. Cases reviewed .
2. Under action to marshal the assets of one deceased, costs disbursements, and counsel fees are primarily chargeable on the unencumbered assets, but the expenses incident to the enforcement of liens should be paid out of the proceeds of the encumbered estate.
Before FRASER, J., Newberry, February, 1884.
This was an action by Fannie N. Baxter in her own right and as administratrix of her deceased husband, against the children and creditors of the deceased. The decree of the Circuit Judge was as follows:
This case came before me on the report of the master, dated November 14, 1883, and exceptions filed by W. J. Duffie and the State of South Carolina, defendant creditors. I shall announce my conclusions as briefly as I can, not to be obscure:
1. The order in which the debts of a decedent testate or intestate are to be paid out of his estate does not form any part of the contract by which the debt is incurred in his life-time. It pertains only to the remedy. The act of 1878, which was of force at the death of the intestate in this case, controlled the order of payment, and it is the debt, and not the mortgage, which is a mere security for the debt, which is to give the rank in the administration of the assets.
2. I see no reason why a treasurer's bond should hold any higher rank in the administration than the bond of every other public officer, or even recognizance in the sessions. They are all debts due on contracts. If such debts are to be ranked as " debts due the public," and payable as such in the administration, there would be absolutely nothing in this State on which to base a credit. I do not see how even a judicial ascertainment of the amount due on the treasurer's bond would alter the situation, except to make the claim rank as a judgment, which in this case has not been obtained.
3. It has never been the practice, so far as I know, to order the general costs, fees, and disbursements in a case like the one now before me paid out of any other than the unencumbered estate. The master seems to have followed this rule.
It is therefore ordered and adjudged, that the exceptions be overruled, and the report of the master be confirmed.
The State of South Carolina duly served notice of appeal from said decree upon the following exceptions:
1. Because his honor erred in overruling appellant's exceptions to the master's report, that the master erred in recommending that the demand against the estate of James M. Baxter, deceased, arising out of his suretyship on the bond of Jesse C. Smith, late county treasurer of Newberry County, should only be paid pro rata with the specialty debts of the said intestate; whereas it is submitted that he should have found that the same ranked as a debt due to the public in the administration of the assets of the intestate.
2. Because his honor erred in overruling appellant's exceptions to the master's report, that the master erred in not finding that said demand on account of the suretyship of the intestate on said official bond, takes precedence under the act of 1789 of all other claims against the intestate's estate.
3. Because his honor erred in overruling appellant's exceptions to the master's report, that the master erred in not finding the costs and disbursements of this action including counsel fees of the estate, should be paid out of the unencumbered personal estate of the intestate; whereas it is submitted that the same should at least be apportioned among the whole personal and real estate of the intestate.
Messrs. George Johnstone and Geo. S. Mower , for appellant.
Messrs. Suber & Caldwell and J. Y. Culbreath , contra.
On February 5, 1881, James M. Baxter departed this life intestate, leaving real estate, various articles of tangible personal property, together with sundry choses in action, which being insufficient for the payment of his debts, this proceeding was commenced to marshal the assets of his estate, call in creditors, and sell the lands. The claims consisted of bonds secured by mortgages of real estate, judgments upon which executions were issued in 1869, bonds unsecured, sealed notes, and open accounts. Amongst the unsecured bonds was one in favor of the State, given by Jesse C. Smith, with the intestate as surety, to secure the faithful performance of his duties as county treasurer. Upon this bond it is conceded, for the purposes of this case, that default has been made, though no judgment has yet been recovered thereon; and one of the main questions in the case is whether this bond constitutes a debt due to the public, and if so whether this will give it priority over the debts secured by liens, either special or general. The only other question is whether the costs and disbursements of this action, including the counsel fees of those representing the estate, should be a charge, primarily, on the unencumbered estate, or whether they should be a charge upon the whole estate.
What constitutes " debts due to the public" in the sense of those terms as used in the act of 1789 (Gen Stat. (1872), 457), the law in force at the time of the death of the intestate, does not seem ever to have been judicially ascertained in this State. In the case of The Commissioners of Public Accounts v. Greenwood , it seemed to be assumed that a liability for a default on the bond of one of the commissioners of the treasury was such a debt, though the question was not discussed or decided in that case, inasmuch as the decision was rested upon another ground. In State v. Harris ( ), O'Neall, J., in delivering the opinion of the court, expressed the opinion that the meaning of the term " debts due to the public," as used in the act of 1789, was " debts which are due to the State as a sovereign, and...
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