Warden v. . McKinnon , 94 N.C. 378 ( 1886 )

It must be remembered that this is a special proceeding, brought in the Superior Court, before the Clerk thereof, by creditors, against an administrator, "to compel him to an account of his administration, and to pay the creditors (of his intestate) what may be payable to them respectively," as allowed by the statute (Bat. Rev., ch. 45, Sec. 73). The jurisdiction was that of the Court — not that of the Clerk. The latter acted as and for the Court. If there were exceptions to his decision, upon questions of law, an appeal lay to the Judge, and the decision of the latter became that of the Court. If in the course of the proceeding, issues of fact were raised, then the case was to be transferred to the civil issue docket, to the end that the issues may be tried in Term, under the supervision of the Judge. The issues being tried, and any questions of law arising before the Clerk, and decided by him, and there being an appeal from his decision, and that affirmed or (388) reversed by the Judge, then it was the duty of the Clerk to proceed, in the course of the proceeding, according to law, without aprocedendo, or any order remanding the proceeding to the Clerk. This is so, because the jurisdiction is that of the Court, and not that of the Clerk. There is but one jurisdiction — that of the Superior Court. The Clerk, in special proceedings, superintends the pleadings, and makes all orders and decisions in respect thereto, and all orders, and judgments in the course of the same, subject to the right of appeal mentioned, except in such respects, as to which action must be taken in Term, or before the Judge, as the statute directs. The Code, Secs. 251 to 257. Brittain v. Mull, 91 N.C. 498; Jones v. Desern, ante, 32.

In this case, the complaint having been filed, it was the duty of the Clerk to advertise, as directed by the statute, for all creditors of the intestate of the administrator, to appear before him on or before the return day, and file the evidence of their claims, and it then became the right of the creditor, and he was required so to do, to file his demand with the Clerk, as directed by the statute, if he would avail himself of the benefit of the proceeding. If the claim of a creditor was contested, then, in a proper way, it was to be put in question, as by complaint and answer, and if issues of law were raised, the papers were to be sent to the Judge; if issues of fact were raised, these were to be sent to the next term of the Court for trial. Bat. Rev., ch. 45, Secs. 73 to 84. These sections apply to this particular kind of special proceeding, and are slightly different from the provisions of the Code of Civil Procedure, applicable to such proceedings generally.

The procedure, in respect to claims so contested, is of, but only incidental to, the special proceeding, and although such incidental litigation of a contested claim may be ended, this does not terminate the proceeding — it continues untill [until] all claims presented by creditors shall be settled and discharged according to law, in its course, and (389) and there shall be a final judgment. Sundry creditors presented their respective demands to the Clerk, and it seems that all these, except one presently to be mentioned, were contested by the former administrator, and by his successor, the present administratrix, and the litigation lasted for several years. The termination of this litigation did not end the proceeding. It could only be ended regularly, after all the debts presented had been paid, if there were sufficient assets for that purpose. The appellees presented and filed with the Clerk their demand, shortly after the special proceeding began.

The Clerk, as and for the Court, and the Judge upon appeal, found as a fact, that they filed the bond in question with the Clerk, and the latter took note of it. This was sufficient to entitle the appellees to take benefit of the special proceeding. The filing of the claim was sufficient to give them standing as creditors in Court; that, indeed, was all they were required to do, if the claim was not contested, as it seems at first, it was not. The claim being filed, the special proceeding could not be properly terminated, until it had been paid. The long pendency of the proceeding, cannot be allowed to prejudice the appellees, because the Clerk failed to take, state and report an account of the dealings of the administratrix with the estate; nor was any notice given them, as the statute required. They had the right, under the statute, to expect the account to be taken and reported by the Clerk, and notice to be given them of the same.

It does not appear from the record, that the special proceeding ever was terminated. There was no report of an account taken and stated, nor any notice given of such account, as the statute directed, nor was there any final judgment. It seems that it was simply allowed to be left off the current docket of proceedings. The appellants suggest in their answer, that it was "dismissed," but no order of dismissal appears in the record, and it must be taken there was none. There was no necessity, therefore, for the petition of the appellees to "reopen and rehear" the special proceeding. If it had been improvidently dropped from the current docket of the Court, a simple motion (390) ought to have been made, to bring it forward and before the Court, to the end it might be determined according to law. But the petition might be, indeed, was, treated as in effect such a motion, and the facts appearing as the Clerk found them to be, it was competent and proper for the Clerk to make the order to bring forward the proceeding, and allow the appellees to assert their rights as creditors therein, as in effect he did.

The appellants certainly were favored in being allowed, under the circumstances, to contest the existence of the bond in question, and to insist that it had been paid, or was barred by the statute of limitations, etc. The administrator ought to have contested the claim at first, if he intended to do so. The evidence sent up as part of the case on appeal, shows plainly, that he had notice of it, and that it had been filed. To contest it seems to have been an afterthought. Strictly, the appeal from the order of the Clerk, bringing forward the proceeding, etc., ought to have been heard and determined, before the pleadings — the complaint and answer — putting the demand of the appellees in issue, were filed; but as these pleadings were filed, and there was no objection made on this account, it was competent to dispose of the appeal, and try the issues of fact raised by the pleadings, at the same time in Term, as was done; because the Court had general jurisdiction of the matter, and the particular form and order of procedure was not essential, if the parties did not object.

The appellees, by filing the bond in question in the special proceeding, became identified with and of it, as creditors of the estate of the intestate, and time ceased to run against the bond, after the commencement of the proceeding. Dobson v. Simonton, 93 N.C. 268.

The proceeding began in the month of April, 1876. The bond was due on the 17th of May, 1860. So that it is obvious that no presumption of payment of it arose.

The time from the 20th of May, 1861, to the 1st of January, 1870, being excluded, ten years did not elapse next after the maturity (391) of the note, and before the commencement of the proceeding. It is likewise obvious, that the statutes relied upon as a bar to the rights of the appellees, could not have such effect. The bond in question was in, and of, and protected by the proceeding, from and continually next after it was filed therein.

The next-of-kin, and the heirs-at-law of the intestate, were before the Court, and pleaded, and it appears that they all have an interest in the proceeding. There is, therefore, no reason why they may not be held to account to the appellees in this proceeding. It appears that the next-of-kin appellants, received some part of the personal estate of the intestate in 1883. To this they were not entitled, while the debt in question was unpaid. They must, therefore, be required to account for the distributive shares received by them respectively. If this shall not be sufficient to pay the debt due the appellees, and proper costs, then so much of the money, the proceeds of the land sold or partitioned among the heirs-at-law of the intestate, as may be necessary, must be applied to the payment of the debt and costs, unless it shall appear that the real estate of the intestate was not, for some good cause, that may be shown, liable to make assets to pay debts.

It will be observed that this special proceeding is equitable in its nature, and the Superior Court has general jurisdiction of the parties, and the whole subject matter of the proceeding, including the next-of-kin and the heirs-at-law of the intestate, in respect to the personal and real estate of the intestate that has come to them respectively, and is necessary and liable to pay, and to make assets to pay, debts. The Court may, therefore, in this proceeding, compel the next-of-kin to account for the personal property received by them first, and, if need be, order the land to be sold to make assets to pay debts, if the same is so liable. If the heirs who have sold the land are before the Court, and have the proceeds of the sale, the Court may direct an appropriation of the same as assets, if it shall appear that the land was liable. Where the jurisdiction of the Court is complete, there is no reason why this may not be done, and indeed it ought to be done, with a view (392) to avoid circuity of action, economize costs, and facilitate the administration of justice. The Court will be careful, however, so see that no prejudice or injustice is done to any party by reason of such procedure.

The record is very voluminous and confused, and we have found it difficult to see clearly the scope and bearings of some of the appellants' numerous objections and exceptions, not clearly specified, but we think we have in effect disposed of all of them.

The judgment of the Superior Court must be so modified as to conform to this opinion, and to that end let the opinion be certified to the Superior Court. It is so ordered.

Modified and remanded.

Cited: Click v. R. R., 98 N.C. 392; West v. Laughinghouse, 174 N.C. 219;Trust Co. v. McDearman, 213 N.C. 144; Gibbs v. Smith, 218 N.C. 384.