Bunn v. . Todd , 115 N.C. 138 ( 1894 )

The sale of the land by M. G. Todd, one of the heirs at law of James Todd, having been made more than two years after the grant of letters of administration, for value and without notice, was valid as to the purchaser, and it is now sought to subject the proceeds of such sale in the hands of the said heir to the payment of the outstanding indebtedness of the estate.

It is insisted by counsel that the proceeds in such cases cannot be so subjected, and that the liability of the heir is personal only. Although this question was not the distinct ground of decision in Winfield v. Burton, 79 N.C. 388 (the proceeds being in the hands of an assignee of the heir), it cannot be denied that the contention of counsel is sustained by what is said in the course of the opinion. But it is not a little remarkable that in the same volume (in Badger v. Daniel, 372) a contrary view is declared by the Court, though the same Justice who delivered the opinion in the former case. The Court said: "Whitfield held the (142) land as Henry Joyner did, and sales by Whitfield after the two years passed unincumbered estates to his vendees, Whitfield holding the price paid him in lieu of the land and subject to its liabilities." This view is fully adopted by the Court in Davis v. Perry, 96 N.C. 260, where the foregoing language is quoted with approval. The opinion sustains the principle succinctly stated in the head-note, as follows: "Where a devisee or heir at law sells land derived from the devisor, or ancestor, more than two years after the issuing of letters testamentary, etc., to a bona fide purchaser for value and without notice, such purchaser gets a good title against the creditors, of the devisor, or ancestor, but the devisee or heir holds the price received for the land in lieu thereof and subject to the claim of such creditors, just as the land would have been." And again, in Arrington v. Arrington, 114 N.C. 151, after declaring that one who purchased of the heir after two years and gave his note for the purchase money was a purchaser for value, the Court distinctly stated that the creditor could subject "the purchase money, or its securities in the hands of the vendor." This principle being determined, its application to the facts of the case before us is quite easy. Here the heir was also the administrator, and had notice of the claim of the plaintiff against his ancestor. It is his duty, the personal assets being exhausted, to apply the proceeds of the sale to the outstanding indebtedness of the estate; but, instead of doing this, he attempts to apply them to the settlement of a debt due by him to his wards, the Nowell children. Procuring a note for the purchase money to be made payable to himself, as the guardian of these children, did not constitute them assignees for value so as to preclude the rights of the plaintiff, as it is expressly found as a fact that the note due by him to the said children has never been credited or surrendered and that he has never settled with them. The said note is now in the hands of the clerk, and the bond of the guardian is solvent. These children have parted with nothing, and their claim is still subsisting and can be collected. Holderby (143)v. Blum, 22 N.C. 51. To take the proceeds of the sale of the land, which the administrator holds in trust by virtue of his office, and apply them to the payment of his own debt instead of the indebtedness of the estate would, under the circumstances of this case, be contrary to the plainest principles of equity. We think the plaintiff was entitled to judgment.

Reversed.

Cited: Lee v. Giles, 161 N.C. 546.