McLaughlin v. McGee

Boyd, C. J., delivered the opinion of the Court. This is an appeal from' three decrees of the lower Court sustaining demurrers to and dismissing the petition of William D. McLaughlin, .seeking to have an indebtedness due by Bridget McGee to him paid out of a surplus remaining in the hands of a trustee who, under a decree appointing him to sell certain real and leasehold properties which were included in & mortgage given by Bridget McGee to Lawrence •J. McGee, trustee, sold them, and the sales were duly ratified. The decree of sale was passed under the Public Local Laws of Baltimore City and J. Boyall Tippett was .appointed trustee to make the sales. He reported sales of two leasehold properties included in the mortgage, amounting to $775.00, and of four properties in fee simple, the proceeds of which amounted to $5,850.00—the total being $6,625.0'0.

The- sales were excepted to by Mary E. O’Hare, ¹⁵⁹ a daughter of Bridget McGee, who had died in 1913, but the exceptions were dismissed and the sales ratified on October 20th, 1916. The petition of the appellant alleges that he loaned Bridget McGee $4,000.00 upon a mortgage, and on foreclosure of it there was a deficit of $1,408.77. Lawrence J. McGee, executor of Bridget McGee, was duly summoned, and on March 29th, 1915, a decree in 'personam was entered against said executor for said sum, as authorized by section 731-A of Article 4 of Public Local Laws. The appellant filed his claim in the Orphans’ Court of Baltimore City, where it was duly passed, but he alleges in his petition that Bridget McGee had no estate, real or personal, at the time of her death, other than that included in the two mortgages, and that she did not have personal estate sufficient to pay her debts and the costs of administration.

She made a will by which she left $700.00 to her daughter, Mary Ellen 0’IIare, and the residue of her estate to her two sons, Bev. Joseph Francis McGee and Lawrence John McGee. The latter she also appointed her executor. The will was admitted to probate on the 15th of April, 1915, and letters testamentary were issued to Lawrence J. McGee the same day.

Mary E. O’Hare filed a caveat to the will on the 17th of April, 1915, and Lawrence J. McGee, executor, filed an answer to it on April 30th, and since that time nothing has been done in relation to the caveat. Demurrers were filed to the petition of the appellant by Lawrence J'. McGee, individually, and as trustee, by J. Boyall Tippett, trustee, and by Mary Ellen O’Hare, on the ground (1) that the petition did not state a cause of action which gave the Court jurisdiction; (2) because of the lack of necessary parties; (3) because the Court, was without jurisdiction in the premises; (4) because the jurisdiction of the matters and things alleged in the petition is exclusively within that of the Orphans’ Court, and not within the Circuit Court of Baltimore City, and (5) for other reasons ¹⁶⁰ to be made known at the hearing. No opinion was filed, and hence we are not informed as to the reasons for the action-of the lower Court.

In the brief of the appellees it is contended that as‘two of the properties were leasehold the jurisdiction of the Orphans’ Court over them was exclusive, and as the other properties described in the mortgage and reported sold, after the payment of the mortgage debt and expenses, would leave in the hands of the trustee less than $2,500, the Orphans’ Court, under Article 93, section 293 of the Code, had_ concurrent, jurisdiction with Courts of Equity and its jurisdiction should not be disturbed. But the language of that statute does not justify the contention made. In the first place, it only applies to the real estate of intestates, and hence is not applicable to this case, but beyond that the object of the statute is manifest. It was intended to give the Orphans’ Court jurisdiction of the real estate of intestates to- the amount of $2,500, but- not to confer generally equity powers on them beyond what was necessary for the sales specifically authorized.

In order to give Orphans’ Courts jurisdiction in the cases referred to in that section, the real estate must be appraised, and in section 295 provision is- made for the appointment of the appraisers. The statute does not give them jurisdiction in a proceeding such as this, and the fact that the surplus is less than $2,500.00 can make no possible difference. The mere fact that $775.00 of the proceeds of sales were from leasehold properties could not affect the jurisdiction of the Circuit Court, which already had jurisdiction over the-fund in the hands of the trustee. The petition alleges that' there is not enough personal property to pay the debts and co-sts o-f administration—indeed, it alleges that Mrs. McGee-had no estate, real or personal, other than the property .covered by the two mortgages.

If the whole of the $775.00 was. applied, it would not be much more than half of the petitioner’s claim. There could be no valid reason for subjecting: ¹⁶¹ the fund, or such part of it as might be held to be personalty, to the commissions of the executor and other expenses of administration, and there is no statute or decision in this State ‘which require that to be done in a case of this kind. The Circuit Court had jurisdiction over the proceeding to foreclose the mortgage, and it must not only make distribution to the mortgage debt and expenses, but it must see that the excess is properly disposed of. If, then, a creditor goes into that Court, and makes such allegations as are necessary to sustain a creditor’s bill, and sustains them by the necessary proof, there could be no reason for sending him to the Orphans’ Court, especially if there are no funds there.

There is no ground for contending, as the appellees do, that because the appellant filed a copy of his decree against the executor of the estate of Bridget McGee in the Orphans’ Court, he is estopped from thereafter going into a Court of equity. It may be well to say in passing that, although absolute judgments at law obtained by a creditor of a deceased person against his executor or administrator generally amount to an admission, of assets, and could not, prior to Ch. 11 of Acts of 1916, be resisted by him, on the ground of a deficiency of assets, yet as between the creditors and the heirs at law, in a proceeding to subject the real estate to the payment of his debt, such a judgment was not conclusive, and a creditor must show a deficiency of assets. Gaither v. Welch, 3 G. & J. 259 ; Boteler v. Beall, 7 G. & ,1. 389, 391. Creditors of deceased persons have the right to have their claims passed in the Orphans’ Court, but that does not prevent them from proceeding in a Court of equity, by way of a creditor’s bill, in case of an insufficiency of assets.

Section 218 of Article 16 in terms provides that if a person leaves real estate but does not leave personal estate sufficient to> pay his debts and costs of administration a Court of equity may decree a sale of so much thereof as may bo necessary to pay bis debts. Moreover, section 219 of that Article expressly provides that the certificate of the register of wills to the proof of ¹⁶² such claims or distribution thereto' in the Orphans’ Court shall be-prima facie evidence of the claims, and sufficient to entitle them to distribution out of the proceeds of the real •estate of the deceased debtor, unless excepted to by some person interested in the estate. There is, therefore, not only no estoppel, but the statute expressly provides for filing the certificate of register of wills, which is made prima facie evidence. The case of Macgill v. Hyatt, 80 Md. 253 , relied on by the appellees, was a wholly different case.

There the bill alleged that the debtor had real and personal estate of great value, and it did not allege that the personal estate was insufficient to pay the debts. It was said by the Court that it was not shown that sufficient personal property to pay all the debts had not come into the hands of the executor, and, if it had, the remedy of the creditor was against the executor’s bond. Nor does the case of Wright v. Williams, 93 Md. 66 also relied on by the appellees, in any way prevent the appellant from coming into a Court of equity. Of course, when two Courts have concurrent jurisdiction, the one first taking jurisdiction retains it, but there are no such conditions here.

We did not suppose until we heard this case that the right of a creditor to proceed against a surplus in the hands of a ■trustee, in a mortgage foreclosure proceeding, would now be questioned in this State, if the necessary allegations are made, and the necessary parties are before the Court. The ■question is so thoroughly settled that we will only refer to some of the authorities, without deeming it necessary to quote from .them. Miller's Equity Proc., 458, sec. 377; Fenwick v. Laughlin, 1 Bland. 474; Gaither, et al., v. Welch, 3 G. & J. 259, 263 ; Griffith v. Parks, 32 Md. 1 , and many other cases might be cited. In Griffith v. Parks , Judge Alyey, on page 5 of 32 Md., in showing that it was not necessary to proceed by original bill, but that a petition was sufficient in the ease before him, relied on the practice in cases of this ¹⁶³ kind, as established by Fenwick v. Laughlin and Gaither v. Welch .

It is also objected that there is a lack of necessary parties —the appellees claiming that the executor of Mrs.