Piatt v. St. Clair's Heirs
Piatt v. St. Clair's Heirs
Opinion of the Court
delivered the opinion of the court. The complainant claims to be a judgment creditor o£ the estate of St. Clair, and to have issued execution, which has been returned nidia bona ; and he prays this court to charge his demand upon certain real estate which was of the intestate, now in the hands of the defendants. Voluminous matters are set forth in the bill, answers, exhibits and evidence, many of which, in the estimation of the court, have no material bearing upon the real controversy before it. I will not, therefore, state the allegations of the bill and answers in detail, but content myself with giving a statement of the material facts of the case, as the court understand them to be made out upon the papers, the documentary evidence and testimony on file.
The complainant and his brother, now deceased, in September, 1820, a few days before St. Clair’s death, entered into an agreement with him, by which they undertook to satisfy certain liabilities of St. Clair, to the Farmers’ and Mechanics’ Bank of Cincinnati, then about to be transferred to the Bank of the United States, and for the amount so satisfied, the Piatts were to have credit upon a mortgage St. Clair held against them for about $11,000, and were to be paid for the residue in land on Main street, in Cincinnati, at $75 a foot. In pursuance of this agreement, the Piatts satisfied for St.
263] *St. Clair died suddenly, in September, 1820, without will. Administration on the estate was granted to William Lytle, in March, 1821. The administrator did not pay the claim of the Piatts, but admitted a part of it as a general claim upon the estate, and confessed judgment for the amount, in favor of the Farmers’ and Mechanics’ Bank, for the use of Piatts, on the 10th of May, 1821, viz.: $17,741.12-|-, supposing thereby that he secured to himself the privilege of paying it in the notes of that bank.
When St. Clair died, the taxes upon his real estate were unpaid for the years 1819 and 1820. The adminstrator paid these taxes, and those for 1821; but having no faith in the validity of tax sales, and finding it inconvenient to raise money to pay the taxes for 1822, he suffered them to remain unpaid, expecting that no sale would take place, and that the tax would lie until another year. Contrary to his expectation, the lands were brought to sale for taxes, and bidders attended. Arthur St. Clair, Jr., one of the children and heirs, then a few months over nineteen years old, attended the sale without any intention of bidding, but being advised to bid, and assured of pecuniary aid, he did, on the 24th of. December, 1822, buy in the estate at the tax sale. Bjr his consent, the collector’s deed was made to Jones, his guardian, on the 24th of May, 1823. The administrator did not consider this sale as extinguishing the lien of creditors.
On the 26th of February, 1822, the administrator, representing the personal assets as insufficient to pay the demands against the estate, applied to the probate court, according to law, for an order to sell the real estate of the intestate. Upon his application an appraisement was made, in March, 1822. This was returned to the court and confirmed on the 17th of March, 1S23. On that day, a sale was ordered to be made, and to be returned on the 19th of August, 1823.
On the lltli of June, 1823, Jones, guardian of A. St. Clair, at' the request of his ward, conveyed the estate to Joseph S. Benham, in trust for the heirs of St. Clair. Two days after this, the ward filed a bill in the name of Benham, to quiet the title to these lands; the pendency of which he caused to be advertised in the newspapers. This bill was afterwards dismissed.
On the 20th of June, 1823, the administrator took out the order
On the 12th of November, 1823, Lytle, in his capacity of administrator, in conjunction with young St. Clair, conveyed the estate to Joseph S. Benham, as trustee, declared in the deed to be “without interest in or responsibility for the lands,” to hold to him or his successors, assigns, or grantees, in trust, to pay the purchase money, and for “liquidating such claims against the estate of A. St. Clair as the parties to the deed might see fit and' expedient.” Amongst other things, this deed recites that young St. Clair was “ desirous of securing to himself and co-heirs the ultimate resulting proceeds,” of the land, “ after paying the purchase money, and satisfying such claims as all the parties to the deed may agree upon.” The deed provides for the distribution of the residue of the proceeds equally amongst the children of St. Clair, or the division of land amongst them, as might be convenient. Benham' took both these trusts out of sympathy and regard for the St. Clair family.
Some time prior to this sale, a negotiation had been opened by the administrator, with the Bank of the United States, one of the creditors of St. Clair’s estate, having in view the liquidation of her claim, by the convej’'ance of a portion of the lands of the estate held by Benham under Jones’s conveyance. On the 13th of November, 1823, one day subsequent to the deed of the administrator to Ben-ham, the Bank of the United States adopted a resolution, in these words: “ Resolved, that if the legal representatives of Arthur St. Clair, deceased, convey to the president, directors and company of the Bank of the United States, by a clear, undisputed and uneneum
Piatt filed a bill in chancery, against the representatives of St. Clair, praying for a specific performance of the contract ma.de with St. Clair, in September, 1820, for the lot on Main Street, which was dismissed.
In August, 1824, the administrator not having credited anything to Piatt upon the mortgage, or paid him anything on account of the judgment, brought a sci. fa. upon the mortgage against him. To this he set up as a defence, payment under the contract of September, 1820, and on trial, in May, 1824, he gave in evidence to the jury the contract aforesaid, and the whole amount of claims paid under it (including the note embraced in the payment in his favor) against the administrator, and obtained a verdict of the jury, that the defendant was entitled to have so much of the matter set forth in his plea, arising under an agreement made with Arthur St. Clair, in his lifetime, as is equal to the amount due upon the mortgage,
*Martin, one of the jurors, testifies that the jury allowed [266 Piatt’s entire claim, which consisted of various notes, one or two accounts, and a judgment, and gave him a verdict for $20,000.
There is some uncertainty attending the transaction between Piatt and the administrator. The arrangement with the bank, by which the Piatts took up St. Clair’s paper, was completed as early as the 14th of October, 1820. The amount, at that time, is conceded to have been $23,875.49. The mortgage money then amounted to $10,872.24, which would leave due from the estate to Piatt, at that date, $23,003.25. The judgment against the administrator, of the 10th of May, 1821, was for the sum of $17,740.77-2, besides costs.
It does not appear, that any part of the sum due from St. Clair’s estate to Piatt was ever paid by the administrator, or the heirs, though it is testified by Kirby, that in behalf of Gen. Lytle, he once called on Piatt, and offered to convey to him in satisfaction of his claim, a lot on Vine street, a part of the premises held by Benham; This offer was refused, because the lot was remote, and of but little value.
The out lots in Cincinnati, which were conveyed to Benham, were subdivided into four or more squares of small building lots, and sold from time to time, under the direction of the trustee, the heirs, and their guardians. And many claims against the estate of St. Clair were liquidated by the conveyance of portions of this estate, as subdivided; and Benham, the trustee, conveyed some thirty or forty different lots in the subdivision, to satisfy claims upon the estate, between the date of the deed to him and the year 1823. Many of these lots have been resold and passed through various 'hands. Much of the estate has been enhanced in value by improvements.
Lytle, the administrator, died in 1831, without having settled up his administration account. The greater proportion of the disbursements he made were of the proceeds of sales of portions of the trust property.
From the month of June, 1827, down to March, 1832, the heirs of St. Clair made numerous conveyances of portions of the trust property included in Benham’s deed, and by him subdivided. The consideration for these conveyances, as expressed in the deeds, amounts to upwards of $41,000.
The conveyance to Benham in trust, and by him to his various grantees, has been recognized and confirmed by repeated acts of the administrator, of the adult heirs, and the guardians of the minor heirs, and the estate divided by the partition is still held under the conveyance of Benham.
■ There can be little doubt but the arrangement with Benham was made with the assent of Lytle, the administrator, and the other persons concerned, with the intention to place the real estate of the intestate in a situation to be managed for the benefit of the heirs, and to use it advantageously for them to discharge the demands against the estate. In this, no fraud was intended by the administrator and the others concerned. The measures were prosecuted with good feeling for the children, without intention of injury to creditors, and without any distinct impression that injury would result to them. Such things are frequently done; and it is quite probable, that the proceeding in this case saved this estate from actual insolvency.
Besides the claim of the complainant, there are still some other claims upon the estate, outstanding and unpaid.
The first question which arises in the case, is, whether the complainant shows himself a judgment creditor, entitled to come into this court for relief ?
Lytle, the administrator, confessed a judgment in favor of the complainant, as early as 1821, one month after he was appointed. By the chancery act, judgment creditors, where the debtor has not sufficient effects subject to levy to satisfy the execution, may proceed in chancery to subject the effects of the debtor, in the hands of any person, to the payment of the judgment; 29 O. L. 84. The chancery act of 1824 gave to judgment creditors the same power, but restrained them from proceeding in this court, in some cases, until after execution had been issued, and returned at law; 22 O. L. 85, 86, 87, 88. The jurisdiction of the court may be sustained upon either of these laws, on the case made, if the judgment remains in force, or upon general principles, because the case is so connected with trusts and equities, and involves such a variety of interests, that plain and adequate remedy cannot be had at law.
But it is urged that the judgment of Piatt, having been set off in satisfaction of the suit upon the mortgage, no longer exists, but is
The following statement shows the state of case as it appears to-us:
The amount of Piatt’s claim, on the 14th of
October, 1820, was, ..... $23,875 49
The mortgage of the same date, . . . 10,872 24
Left due Piatt,
Interest on this balance to 2d May, 1833,
$13,003 25 9,789 50
Balance due Piatt then,
To which add costs and interest on the two judgments,......
$22,792 75 121 22
Sum due Piatt, 2d May, 1833,
$22,913 97
In this state of case, we do not feel warranted in saying that the-complainant’s judgment is satisfied and inoperative. It seems satisfactorily made out that the complainant does sustain the relation of a judgment creditor to the estate of St. Clair, and that his execution cannot be satisfied at law. The personal assets are exhausted. Thireal estate has been passed into the hands of a trustee, subdivded and sold out, and is now colorably held discharged of the lien of the creditors of the intestate. The case seems to us one in which chancery will afford redress unless the complainant has done some act to deprive himself of its aid.
“Memorandum of an agreement made between Arthur St. Clair, John St. Clair, Eliza St. Clair, of full age; Francis M. St. Clair, Margaret Belfour St. Clair, Laura St. Clair, heirs of St. Clair, dee’d, by their guardians, on the one part — and George Wallace and Daniel Gano, as securities for D. Shepherd, Benjamin M. Piatt, survivor of John H. Piatt, dec’d, and Richard Fosdick, on the second part:
“Whereas, the Bank of the United States holds a large and valuable real estate, which was of the late Arthur St. Clair, dec’d, which the said bank received in payment of certain debts against said estate, amounting, as is supposed, to the sum stated in the schedule below; and whereas, it is considered that the proceedings by virtue of which they (the bank) became the holders of said real estate are void, or voidable, and irregular, especially that the said arrangement was so made as to secure to said bank the whole amount of her debt, to the exclusion of the other creditors aforesaid; and whereas, it is supposed that the real estate aforesaid is sufficient in'fact to pay all the debts held by the said bank, as aforesaid, against said estate, and all the other debts above enumerated, and as specified in the schedule below: — Therefore, for the purpose of a just and fair settlement of said debts of said estate, it is agreed by the said heirs, and the said creditors, as follows, to wit: The real estate, held by said bank aforesaid, shall be decreed to be sold by the court, either in the suit now pending, or such other suit as shall be brought — and Samuel Lewis on 'the part of creditors, and E. S. Haines, on the part of the heirs, shall, by consent of the court, be appointed special masters for the purpose of subdividing and selling to the best advantage said real estate, the proceeds of which shall be applied to the payment of the debts against the estate, as follows: first, the debt due to the bank, and the other debts aforesaid, to be paid, if from said proceeds there be funds sufficient to pay the same; and the res*276 idue of the funds, after paying said debts and expenses, to be divi271] *ded and paid over to the said heirs, according to law. It is agreed that no defence whatever shall be set up to the debts aforesaid, and no hindrance, either on the part of the administrator or the heirs of St. Clair, to the most speedy settlement of the said debts of said estate, according to this agreement: and it is further agreed that no other property of said estate shall be resorted to for the payment of said debts. But if the said property so held by said bank shall prove insufficient, then the loss to be sustained by the creditors aforesaid, in proportion to their several claims aforesaid. The defences put in, in the suit now pending, are to be withdrawn.
“ It is also understood that Charles Vattier has a claim against said estate which is contested, and is supposed to be without foundation; which claim, if recovered against said estate, is to be admitted to a pro rata dividend with the creditors above enumerated: provided, however, that no greater sum shall be admitted to a distribution than what will, with the debts above enumerated, amount in all to ten thousand dollars, besides the Piatt debt.
“In witness whereof, the parties have hereunto set their hands this fourteenth day of May, A. D. 1831.
“John St. Clair,for myself and Arthur St. Clair, and Eliza St. Clair, and as guardian for Margaret B. St. Clair and Laura St. Clair.
“ Charles Fox, guardian for Erancis M. St. Clair.
“ Benjamin M. Piatt, survivor, &of
Schedule of the debts tabeen into view in this agreement.
$2,253 45 1,100 OO 202 81 20,113 41 Claim of George Wallace, 8th April, 1824, D. Shepherd, . . . . Fosdick, January 20, 1820, . Benjamin M. Piatt, May 30, 1828,
Claims of Bank United States:
September 25, 1820, May 11, 1821, . June 29, 1820, . March 6, 1820, . December 8, 1823, Taxes, $12,422 00 8,107 90 14,587 00 4,000 00 2,250 00 350 00 --$41,716 90
The 27th section of the judgment and execution law, of the 4th February, 1824 (22 O. L. 118), allows judgment creditors, after the
■ This brings us to consider whether the sale to Arthur St. Clair for taxes, and by the administrator, were' such 'as to discharge the lauds which descended to him and others, from the payment of the debts of their ancestor? At the death of St. Clair, his real estate descended at once to his children as heirs-at-law, encumbered, it is true, with a liability for his debts: but until actually subjected to the debts by the personal representative, or by the creditor in some judicial proceeding, they were the property of the heirs. The possession was theirs, the rents and profits theirs; and they were bound of course to pay the taxes. It would be strange, indeed, if either a court of law or equity should feel compelled to give such effect to the culpable omission of the heir to keep down the taxes, as to enable him by the omission to acquire a perfect title to the estate, to the total exclusion of those whose rights he was bound to protect. We look upon the purchase by the heir for taxes as but his own method of paying them. He was bound to pay, and the conveyance to the heir, or under his direction, to his guardian, in no way changed the situation of the estate. The guardian could not purchase up the estate of his ward and acquire any right, except for his ward. Whatever, therefore, passed by the sale for taxes, accrued to the benefit of the heirs who before held the fee. The conveyance by the guardian to Benham, as trustee, effected no change in the estate, at least so far as it regarded creditors. None of the parties at the time regarded these transactions as disencumbering the estate from the debts of the intestate. This is conclusively evidenced by the subsequent sale to the same person by the administrator. If, as is contended, the first sale passed the estate from the heirs of St. Clair, what was there left for the administrator to sell ?
If the sale by the administrator was made in pursuance of an understanding on his part to place the intestate estate out of the reach of creditors for the benefit of the heirs, it was in legal contemplation fraudulent and void, however laudable the motives which influenced the act on the part of the administrator. As administrator, he was the legal trustee of the fund, guarding alike the interest of the creditor and heir. He had no legal right to engage in any act tending to the advantage of one of those for whom he held in
It is strenuously argued that the Bank of the United States and the other defendants and alienees .are bona fide purchasers without notice, and entitled to be protected against the creditor. Is this true as a fact ? Did the bank suppose the legal title in the guardian or trustee ? It is .declared as a fact in the evidence printed by the bank, and urged in argument, that the bank agent considered the sale for taxes void, and threatened suit, and that the guardian, to avoid the vexation • of the suit, conveyed to Benham. The bank became the grantee of Benham, himself a trustee, for a large portion
Considering, then, as we do, the conveyances to Benham, and all the mesne conveyances from him, as but the conveyances of the heirs and their alienees, there can be no question but that all who derive title from that source are legally affected with notice, and take their respective portions of the estate subject to the encumbrance of the intestate’s debts. The question iioav presented, is-.. IIow will equity enforce the lien of a creditor upon the estate in the hands of heirs or their alienees ?- At Kaa-, the heir is only liable to-the creditor for what he has received of his ancestors by descent;.
In cases where several distinct tracts of land have descended to the heir, some of which have been aliened by him, and some not, ■equity will so far control the creditor in asserting his lien as to require him to resort first to the land remaining in the heir unaliened, and will discharge the residue from the lien upon payment of the balance due. It will ascertain the value of the property descended, 'and the amount of the claim upon it. Where justice requires it, we doubt not the power of the court to permit a liquidation of the ■demand in discharge of the lien; or to impose such conditions upon the sale of the estate as shall do justice to all having an interest in the subject. It seems to us equally clear, that the demands of justice cannot require, and that a court of equity will not lend its aid, to enforce a lien upon a particular tract of land, which has passed into the hands of third persons, until the residue of the estate subject to the lien, which can be conveniently realized, is exhausted. It is a rule of equity perfectly well established, that where one has a lien upon tAvo funds, and another a posterior lien upon only one of them, the one having both liens will be compelled to assert his claim first upon the subject of his exclusive lien, so that he may be ■satisfied, if possible, without interfering with the rights of the junior creditor; 1 Hopk. 66, 460; 4 J. Ch. 123; 19 John. 486; 2 Atk. 446; 1 H. Blk. 150; and M. H. Co. v. Bank U. S. and Ruffners, decided at Hamilton (ante 206). The rule, in our view, is directly applicable to this case. That portion of the real estate of St. Clair which remains unsold is subject to the lien of the creditors of the estate, and to no other lien. That portion aliened by the heirs, either directly or through the intervention of their agent and trustee, Benham, is subject to the same lien, and also to that of the alienee. The application of the obviously just rule referred to, requires of the court, first to subject the lands Avhich remain in the hands of the heirs, to the creditors of the estate.
It was urged in argument, that the claim of the alienees rested on the same foundation with that of the heirs, and if the sale by the administrator was considered invalid, that all the proceedings under it should be disregarded, and the creditor left to assert his lien upon ■the entire estate descended, or upon such portions of it as he should
As there is an administrator of St. Clair’s estate party defendant,, there will be little difficulty in ascertaining the outstanding claims upon the estate, chargeable upon the realty, and so shaping our proceedings as to effect a complete adjustment, not only of the claim of the complainant, but of all others remaining unpaid. The continuing minority of some of the heirs is no obstacle in the way. A creditor’s lien for debts of the ancestor may be enforced against minor as well as adult heirs coming into an estate by descent. The conveyances to and by Benham ; the subdivision of the estate-by him ; the partition amongst the heirs, are all acts of confirmation of those transfers, and more or less obligatory upon the-heirs ; perfectly obligatory upon the adult heirs who have done-any act of confirmation since they have attained to majority, or-shown a disposition to acquiesce. But we are not called upon now, in the view we take of the case, to decide the questions amongst the heirs. Questions touching their interests may arise in some-future stage of the cause : and if they do, they will then be considered.
Upon the whole, we consider—
1. That the complainant has an outstanding judgment against the estate of Arthur St. Clair, for which he can have relief in this court, and that there are other outstanding claims against the estate.
2. That the personal assets of the estate have been exhausted..
3. That the purchase of the realty for taxes, accrued to the benefit of the heirs and the estate.
4. That the pretended sale of the realty by the administrator is fraudulent and void as against creditors ; and that the estate descended upon the children and heirs-at-law, subject to the payment of the debts, and is still liable for the same.
5. That the estate be charged with the sum necessary to pay the outstanding debts, the costs of the complainant, and the master’s, further proceeding.
The.following decree was entered in the cause:
1. IIow much is due from the intestate to other creditors than the complainant, including interest up to the second of May, eighteen hundred and thirty-three, showing the name of the creditor, and the amount of each claim and interest.
279] *3. What parcels of said lands are still held in common by the heirs-at-law,
4. What portions of the land descended have been since aliened by the heirs, or the trustee, or otherwise; specifying the date of the conveyance, the names of the grantors and grantees, the tract conveyed, and the person holding the same on the tenth of July, one thousand eight hundred and twenty-eight, at the filing of the bill in this case.
In the taking of which accounts the said master may examine the documents and evidence on file, and the parties may take other testimony, and may, if necessary, compel the parties or witnesses to produce before him any books or vouchers, or written evidence in their possession or control; and if the sum due the complainant, and those found due to other creditors of the intestate, with the accruing interest, the costs of this suit, and of the master in executing this order, be not paid, within sixty days thereafter, into the hands of the master, for those interested, the said master shall forthwith, after the expiration of said sixty days, proceed to raise the money required to discharge the said claims and costs, by sale of so much of the real estate descended as aforesaid, according to the laws of Ohio regulating sales on execution, as may be necessary to raise said moneys, in the following order: that is to say—
1. Those lands, if any, which the said heirs still hold in common.
2. Those now held by the heirs in severalty, apportioning to each heir the proportion of the sum required, and selling so much of each one’s share as may be necessary to raise from each so much of his proportion of said sum as shall not be otherwise paid to said master.
3. Those which have been aliened or conveyed by the trustee or heirs since the tenth of July, one thousand eight hundred and twenty-sight, or so much of them, beginning with the latest conveyed, as may be necessary to produce the required sum.
4. And if after the foregoing sales, the sum raised is insufficient to discharge said claims, that then the master report the deficiency to the court, with his proceedings, and the evidence by him taken.
And it is further ordered, that if the parties are dissatisfied with any of the accounts stated and allowed by the master, or his proceedings from time to time in the progress of his acts, and file ex
And for the coming in of the report and further proceedings, the cause is continued.
[Referred to Piatt v. St. Clair, 7 O. 2d pt. 165, 166. Ultimate beneficiary of trust may be plaintiff; Darst v. P., F. W. & C. R R., 4 W. L. G. 379.]
Reference
- Full Case Name
- PIATT v. ST. CLAIR'S HEIRS, BANK UNITED STATES AND OTHERS
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