Crisfield v. State, to Use of Handy

• Decision Date: 17 December 1880
• Citation: 55 Md. 192
• Parties: JOHN W. CRISFIELD v. THE STATE OF MARYLAND, at the instance and for the use of HENRIETTA M. HANDY, use of MARY E. HANDY, use of LEVIN WOOLFORD.
• Court: Maryland Court of Appeals

55 Md. 192

JOHN W. CRISFIELD v. THE STATE OF MARYLAND, at the instance and for the use of HENRIETTA M. HANDY, use of MARY E. HANDY, use of LEVIN WOOLFORD.

Court of Appeals of Maryland

December 17, 1880

APPEAL from the Circuit Court for Somerset County.

The case is stated in the opinion of the Court.

The cause was argued before BARTOL, C.J., MILLER, ALVEY and ROBINSON, J.

Henry Page and William H. Tuck, for the appellant.

John H. Handy, for the appellee.

ROBINSON J., delivered the opinion of the Court.

This is a suit on the bond of John W. Crisfield, executor of Samuel K. Handy, to recover a sum of money claimed to be due the equitable plaintiff, as residuary legatee under the will of the testator.

A few days after the institution of the suit, the defendant Crisfield, was adjudicated a bankrupt, and among other claims proved against the bankrupt estate, was that set forth in the breach assigned in plaintiff's declaration.

Subsequently the Court of its own motion directed a stay of proceedings as against the bankrupt, now the appellant in this case.

The suit was afterwards entered to the use of Mary E. Handy, and judgment was recovered against Levin Woolford and William W. Wise, sureties on the bond of the appellant as executor, for $2561.79.

The amount thus recovered by the judgment was subsequently paid by Woolford as surety, and the assignee of the equitable plaintiff assigned the judgment and cause of action to the said Woolford, and directed the clerk of the Court to make entry of same.

On motion of the plaintiff the Court directed the suit to be brought forward, and the stay theretofore entered as to Crisfield to be stricken out.

Sundry pleas were then filed by the defendant, to some of which the plaintiff demurred, and upon others issues were joined. The cause was tried before the Court and judgment was recovered for $4003.21.

In the view we take of this case, the only questions necessary to be considered are:--

1st. Whether the appellant's discharge in bankruptcy releases him from liability for a debt due by him as executor to the equitable plaintiff as legatee?

2nd. If not, whether upon the payment of said debt by Woolford, a surety on the executor's bond, he can maintain an action at law on the bond against Crisfield, the principal, to recover the money thus paid?

The first question depends upon the construction of sec. 33 of the Bankrupt Act, which provides: "that no debt created by the fraud or embezzlement of the bankrupt, or by his defalcation as a public officer, or while acting in any fiduciary character shall be discharged, but the debt may be proved, and the dividend thereon shall be a payment on account of such debt."

Is then the debt due by the appellant as executor to the equitable plaintiff as legatee, a fiduciary debt? And this seems to us too plain for contention. A fiduciary debt is one founded or arising upon some confidence or trust as distinguished from a debt founded simply upon contract. And an executor is one to whom is confided by last will and testament the personal estate of the testator, to be held and administered by him in pursuance of the will of the testator and the rights of all parties in interest. If a trustee in the broadest meaning of that term, is a person in whom some estate, interest or power affecting property, is vested to be held, used or exercised for the benefit of another, then the office of an executor is to all intents and purposes a trust, to be held and exercised by him for the benefit of creditors, legatees, and parties entitled to distribution. And for the proper administration of the trust he always has been held amenable alike to Courts of law and equity.

In the Bankrupt Act of 1841, debts due by executors were in express terms recognized as fiduciary debts, the language of the Act excepting such debts from the operation of law being, "All persons owing debts created in consequence of defalcation as a public officer or as executor, administrator, guardian, or trustee, or while acting in any other fiduciary capacity."

It was unnecessary to enumerate specifically such debts in the Act of 1867, because they had both by legislative and judicial construction received a fixed and determinate meaning. The debt due by Crisfield, executor, was therefore in our opinion a fiduciary debt, from the payment of which he was not released by his discharge in bankruptcy.

Nor does it seem to us that the facts set forth in the appellant's eighth plea, in any manner change the nature or character of the debt. This plea alleges that the appellant offered and was ready to pay the debt due the plaintiff, but that at her instance and request, it remained in his hands with the understanding, he was to pay to her interest on the same and such parts of the principal as might be necessary for her support, and the residue upon reasonable notice. This plea is not set up by the sureties on the bond, but by the executor himself. The fact that money due to a cestui que trust is allowed to remain in the hands of a trustee with the consent of the cestui que trust, does not change the nature of the debt itself. It still remains a debt due by the trustee in his character as trustee.

We come now to the second question. The original suit was brought on the joint and several bond of Crisfield the appellant, Woolford and Wise. Judgment was recovered against Woolford and Wise, and further proceedings were stayed as to Crisfield pending the proceedings in bankruptcy. The judgment was subsequently paid by Woolford, one of the sureties, and the question now is, whether he can maintain an action at law on the bond against Crisfield the principal, to recover the money thus paid by him.

And here we are met with the well settled principle of the common law, that the payment by a surety of a debt...