McKenzie v. Standard Accident Ins. Co.

• Citation: 1 S.E.2d 502,189 S.C. 475
• Decision Date: 03 January 1939
• Docket Number: 14798.
• Parties: McKENZIE et al. v. STANDARD ACC. INS. CO.
• Court: United States State Supreme Court of South Carolina

1 S.E.2d 502

189 S.C. 475

McKENZIE et al. v. STANDARD ACC. INS. CO.

No. 14798.

Supreme Court of South Carolina

January 3, 1939

The order of Judge Gaston requested to be reported follows:

On the call of this case at Kingstree, S. C., on March 22, 1938 the right of the defendant to defend the action was argued by the attorneys for the parties as though the plaintiffs were demurring orally to the affirmative defense set up in the answer, and moving to strike the allegations of the answer.

These defenses are:

(1) That Probate Court had no jurisdiction of the real estate matters passed on in its judgment, and such judgment is absolutely void with respect to them. The allegations of the second defense are that the Probate Court in the judgment sought to be enforced in this action adjudicated matters concerning real estate over which it could not have any jurisdiction, by consent or otherwise; that the Probate Court undertook to pass on real estate transactions, which constitute a subject matter that is beyond the jurisdiction of any Probate Court; and that the judgment of the Probate Court is absolutely void.

(2) The answer alleges that all of the funds with which the administrator was charged by the judgment in the Probate Court except $379.61 were derived from a real estate contract made with M. L. McKenzie to handle the lands that had descended to the heirs of Mrs. A. V. Collins.

(3) The answer raises the issue as to the defendant surety company's right in this action to contest the validity of the judgment rendered by the Probate Court. The defendant contends that a person cannot be held liable without a hearing; as commonly stated, every man is entitled to his day in court, and unless he has had such day, the judgment of the court is not binding on him.

(4) The defendant contends that the judgment of the Probate Court that the plaintiffs are seeking to collect out of the defendant surety in this action is not res judicata against such surety.

(5) The defendant contends that the jurisdiction over these real estate matters was attempted to be conferred on the Probate Court by consent of the parties and as a fraudulent scheme to defeat the claims of the mortgagee.

On the other hand the plaintiffs stoutly insist upon the contention on their part that the defendant Surety Company is now liable for the balance remaining unpaid upon the account of said administration as fixed and determined by the judgment of the Probate Court, and that the full amount of the bond in the sum of $2,000 is due and owing to the plaintiffs and other distributees of the Estate, except M. L McKenzie. The plaintiffs base their contention upon the following grounds, to- wit:

(1) The extent to which the administrator of the Estate of Mrs A. V. Collins is responsible is res adjudicata by the Probate Court for Florence County; and the judgment of that Court not appealed from, is good and effectual against and binding upon the surety on the administrator's bond.

(2) There can be no question as to the jurisdiction of the Probate Court concerning the estate of the decedent.

(3) The effort made by the defendant through the affirmative defense in its answer is to attack collaterally the judgment of both the Probate Court and the Court of Common Pleas.

(4) That a judgment against the administrator is not a prerequisite to action on the bond. Therefore, in the present instance, regardless of the jurisdiction of the Probate Court and the validity of its decree, the surety is bound by the statements and by the return and accounting of the administrator and his testimony on the hearing. The administrator would be estopped thereby and his surety, who is in privity with him, cannot go behind the words of the administrator.

(5) Aside from the effect of the decree of the Probate Court, the matter is res adjudicata by the Court of Common Pleas for Florence County. The judgment entered in the Probate Court for Florence County on the decree which has been referred to was transcribed as provided by statute to the Court of Common Pleas for Florence County and thereby became a judgment of that Court against the administrator in favor of the heirs-at-law for the sum of $3,237.03. Execution was issued on the judgment in the Court of Common Pleas, returned by the Sheriff of Florence County Nulla Bona, and supplementary proceedings instituted as provided by statute.

(6) In view of the rulings of the Court of Common Pleas for Florence County concerning approximately one-third of the identical fund with which the administrator was charged, the Circuit Court cannot at this time determine that the matter was not res adjudicata.

(7) The affirmative defense in the answer should not be allowed to stand because it attempts to collaterally attack the judgments of the Probate Court and the Court of Common Pleas hereinabove referred to.

(8) Whatever legal right the surety may have had to question the binding effect upon it of the judgments against the administrator, it is certainly now estopped from asserting them. Plaintiffs say that "on the final hearing in connection with the matter before the Probate Judge for Florence County, the attorney for the surety, Standard Accident and Insurance Company, having been notified by counsel for the administrator, was present. It is true that he did not participate in the hearing, but it is undisputed that the surety whom he represented had notice of the proceedings at that time and of the decree and other proceedings hereinabove referred to holding the administrator responsible in a definite sum. Subsequent to this hearing and after such notice to the Surety Company, the funds actually in the hands of the administrator amounting to nine hundred sixteen and 60/100 ($916.60) dollars were paid out under the order of the Court of Common Pleas, consented to by the attorneys for the administrator, in accordance with the original decree of the Probate Court. The surety took no step to prevent the payment of the funds in this manner and they were applied, first, to the payment of the remaining claims against the estate of the decedent, and to the costs of the administration of the estate. The heirs-at-law received only such amount as was left after the payment of these items. The Surety Company having sat idly by with notice of what was going on, and permitted such funds to be applied as part of the assets of the estate, will not now be permitted to say that the estate was not the owner of the funds and that it is not liable on the bond for the deficiency in the accounts of the administrator."

The attorneys for both parties have filed able and exhaustive written arguments, on the hearing before me. I understand, therefore, that all contentions and issues raised orally and set forth in written arguments are properly submitted to the Court at this time, and in this manner, for determination and adjudication. I am to decide the case upon the pleadings and upon on the legal questions raised. No objection has been raised in respect to the manner or procedure by reason of which the case is presented to the Court for final disposition. I am to pass upon each issue unhampered by any question as to procedure or technicalities in regard to the method employed in raising these issues.

By reference to the complaint and the answer the facts appear to be confined within a narrow compass. It is undisputed that Mrs. A. V. Collins died intestate, and that on October 18, 1934, M. L. McKenzie was appointed administrator of the Estate of Mrs. A. V. Collins, by the Probate Court for Florence County; and that the Standard Accident Insurance Company, as surety, executed a bond, dated October 15, 1934, in the sum of $2,000, with M. L. McKenzie, as principal, conditioned for the faithful discharge of his duties as administrator as required by law. It also further appears that M. L. McKenzie, as administrator, made his final return to the Probate Court for Florence County, and was charged with the sum of $3,237.03 by decree of said Probate Court, dated October 29, 1936; that judgment was entered for said sum on February 26, 1937, in the Probate Court against M. L. McKenzie, as administrator, and in favor of the heirs-at-law and distributees of the Estate of Mrs. A. V. Collins, except the said M. L. McKenzie, and that said judgment was transcribed to and became a judgment of the Court of Common Pleas for Florence County. Thereafter certain orders were granted by Judge Stoll and by Judge Dennis against M. L. McKenzie on motions and hearings for the enforcement of the judgment, which resulted in the enforcement of the payment by M. L. McKenzie of $916.60, on December 11, 1937, upon said judgment; and that the balance remains unsatisfied. Also that all claims filed against the Estate have been paid to creditors, and all costs of administration are paid.

This suit is brought in behalf of and for the benefit of all of the heirs-at-law and distributees of Mrs. A. V. Collins, deceased, except M. L. McKenzie, who as administrator is indebted to the Estate for the balance unpaid on the said judgment, under his bond. One of the plaintiffs resides in Williamsburg County and this suit is pitched for battle in the kingly County of Williamsburg as no doubt being a kindly place to settle the dispute.

The answer denies the alleged liability of the Surety Company as the defendant herein, for any part of said unpaid judgment heretofore rendered against the said M. L. McKenzie on his bond as administrator. The answer alleges by way of defense, that Mrs. A. V. Collins died seized and possessed of certain real estate, towit, two farms in Florence...