Orem v. Wrightson

• Decision Date: 06 March 1879
• Citation: 51 Md. 34
• Parties: SARAH W. OREM, Executrix of NICHOLAS OREM, deceased v. WILLIAM L. WRIGHTSON and JOHN F. L. WRIGHTSON.
• Court: Maryland Court of Appeals

51 Md. 34

SARAH W. OREM, Executrix of NICHOLAS OREM, deceased v. WILLIAM L. WRIGHTSON and JOHN F. L. WRIGHTSON.

Court of Appeals of Maryland

March 6, 1879

APPEAL from the Orphans' Court for Talbot County.

This appeal was taken by a creditor from an order of the Orphans' Court for Talbot County, passed in the matter of the estate of Arthur W. Leeke, deceased. And thereupon the respective counsel for the appellant and appellees filed the following agreed statement of facts:

It is agreed in this case, that Arthur W. Leeke, was, on the 6th of April, in the year 1870, duly appointed by the Commissioners of Talbot County, Collector of State Taxes for said county for that year, and that, as such collector, he did, on the 7th of May following, execute his bond to the State of Maryland, with John F. L. Wrightson and William L. Wrightson as his securities, conditioned for the faithful execution of the duties of said office, and for the payment to the Treasurer of the State of Maryland, of the several sums of money which he might receive for said State; which bond was duly approved, as required by law. That the said Arthur W Leeke thereupon assumed upon himself the duties of the said office of Collector of State Taxes, and proceeded to collect and did collect a large amount of said taxes, but before paying to the Treasurer of the State the whole amount so collected by him, departed this life, largely indebted to the State of Maryland, on account of said taxes so collected by him; that letters of administration upon his personal estate were thereafter granted by the Orphans' Court for Talbot County, to Henry B. Leeke, who proceeded to administer said estate, but failing to pay the amount of taxes due to the said State, or any part thereof, suits were instituted by the said State upon said bond, in the Circuit Court for Talbot County, for the recovery of the same, against the said Henry B. Leeke, as administrator, and also against the said John F L. Wrightson and William L. Wrightson, the sureties therein and at the May Term of said Court, in the year 1875, judgments were rendered against the said administrator and against said sureties, for the penalty of the said bond, to be released on the payment of the sum of thirteen hundred and ninety-four dollars and sixty-nine cents, with interest thereon from the 25th of May, 1875, till paid, and costs. And the said judgment against the said sureties, less an allowance of one hundred and fifty-nine dollars and seventeen cents, for insolvencies, amounting, principal, interest and costs, to the sum of thirteen hundred and ninety-two dollars and eighty-one cents, was, on the 6th of January, in the year 1877, fully paid and satisfied by the said John F. L. Wrightson and William L. Wrightson, to Charles H. Gibson, State's Attorney for Talbot County, who gave his receipts therefor, endorsed on copies of said judgment, and paid the same to the Treasurer of the State of Maryland, upon warrants of the Comptroller, in the name of Arthur W. Leeke; that the said Henry B. Leeke, without rendering an account of his administration of the personal estate of the said Arthur W. Leeke, and without paying said judgments, or any part thereof, either to the State or to the said sureties, abandoned his residence in the State of Maryland, and removed to some other State; and thereupon the Orphans' Court for Talbot County, revoked the letters of administration so as aforesaid granted to him, and granted to H. Clay Dodson, of Talbot county, letters of administration d. b. n., upon said estate, who duly qualified as such administrator, and assumed upon himself the duties of said office.

It is further agreed, that certified copies of said judgments against the said sureties, with the receipts of the said Charles H. Gibson, State's Attorney, endorsed thereon, were duly filed by said sureties, in the Registry of the Orphans' Court for Talbot County, against the personal estate of the said Arthur W. Leeke, claiming, in virtue of the payment thereof by them, to be subrogated to such priority of payment out of the assets of said estate, as the State of Maryland would have been entitled to, if the said judgments had not have been paid by them, and remained still unsatisfied.

That the said H. Clay Dodson, administrator as aforesaid, rendered a final account of administration of said estate, from which it appeared that there remained a balance to the credit of said estate of twelve hundred and ninety-two dollars and seventy-three cents, of which balance he made a dividend, distributing the same rateably among all the creditors of Arthur W. Leeke, including said sureties, and presented the same for the approval of the said Orphans' Court, but the said Court, upon the motion of said sureties, rejected the said dividend, and ordered, (there being no other claims of preference against said estate,) the said balance to be applied to said judgment of the State, against the said sureties, so paid by them as aforesaid, pursuant to which order, the said administrator d. b. n., presented on the 11th of June, 1878, to the said Orphans' Court, an account, applying the whole of said balance to said judgment, which said account was, on the same day, approved and passed by the said Court, and from the order approving and passing the same, this appeal is taken. The case is further stated in the opinion of the Court.

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

Joseph B. Seth, for the appellant.

The judgment against the administrator of Leeke, as a judgment, conferred no right of priority on the State, and a fortiori conferred none on the sureties of Leeke; judgment was not recovered, nor was suit instituted against A. W. Leeke, the principal in the bond, during his life-time, and it is well settled that judgments against executors and administrators, give no rights of priority in the distribution of an estate under our testamentary laws. If the judgment had not been paid, the State would have had a priority; but the assignment thereof does not subrogate the sureties to the same rights.

Prior to the Act of 1864, ch. 243, a surety paying a judgment to the State could not have the judgment assigned for want of authority in the State's agents to make the assignment. The right to assign being conferred by statute, the provisions of the statute must be strictly complied with. McKnew vs. Duval, 45 Md., 508; Peacock vs. Pembroke, 8 Md., 348.

The Act only authorizes the assignment of judgments that have been recovered against the principal debtor, and no such judgment exists or ever existed in this case; but this is a judgment against the administrator, and there is no authority in the State's agents to assign such a judgment. McKnew vs. Duval, 45 Md., 508.

In ordinary cases, upon a surety paying the debt, he is entitled to an assignment of all collaterals, but not to an assignment of the bond, for by payment the debt is extinguished. 1 Story's Equity, sec. 499; Carroll vs. Bowie, 7 Gill, 34; Copie vs. Middleton, 1 Turner & Russell, 229; Hodgdon vs. Shaw, 3 Mylne & Keene, 189; Jones vs. Davids, 4 Russell, 277.

Now what were the collaterals or rights which gave the State a priority? It is unquestioned that if this debt had not been paid by the sureties, the State would have been entitled to a priority in the distribution, but this was not in virtue of any lien or other right conferred by the judgment, but the right exists where there is no judgment, and is a prerogative right. It is a personal privilege attached to the sovereign, and comes into existence when his rights, and the rights of private persons are brought into conflict; it confers no lien, but is only a rule in the distribution of the property of the debtor-- requiring the debt due the State to be first paid--where the individual creditor has no antecedent lien. It is a personal right in the State given for public policy, to enable the State to collect the public revenue, for the public good. Conrad vs. Ins. Co., 1 Peters, 439; Murray vs. Redley's Adm'r, 3 H. & McH., 171; State vs. Bank of Md., 6 G. & J., 205; State vs. Mayor & C. C., 10 Md., 515; Smith vs. State, 5 Gill, 45.

But where, as in this case, the public revenue has been collected by the payment of the debt, the reason fails. Why should these sureties on the bond to the State have preference over sureties on other bonds, such as trustee bonds, if such exist? There is no rule of equity in their favor. Equity would distribute the fund equally among all the creditors. These sureties, like other accommodation endorsers or guarantors, undertook for the faithful discharge of the duties of their principal, and a strict accounting by him and when they became sureties for him, it is to be supposed they knew that if the State had to sue for and recover judgment for any balance that might be due, upon paying such judgment, they would, by virtue of the Act of 1864, be entitled to all the remedies conferred by the judgment, as a judgment, i. e., the right of execution, or of any lien on real or other estate, but to nothing more. This gave them an equal chance with his other creditors, and in the event of his insolvency during life the most vigilant of his creditors, those that first acquired liens, would have had the advantage. Why should the appellees be benefited by the death of their principal? His death prevented other creditors acquiring liens. Why not the same with the appellees? When they have secured a proper assignment of the judgment they will be entitled to all the rights and privileges which it, as a judgment, conferred on the State, but nothing more. The State was not a party to the distribution in the Orphans' Court, and as the right of priority is only a rule in distribution, it was not...