
    Smith vs. Watkins.
    A debt cfue to an administrator is extinguished by the receipt oí assets of the estate Sufficient to satisfy the debt; and such administrator can institute no suit after-wards for the recovery of such debt.
    Watkins sued Freeman, administrator of Samuel P. Walkins, in the circuit court of Maury county, in debt. The declaration averred the execution of a writing obligatory for the sum of $1237 by Samuel P. Watkins to F. H. Watkins.
    The defendant pleaded “the statute of limitations;” “payment;” “no assets;” “extinguishment byway of retainer as executor.” To which there were replications, “with leave to give special matter in evidence.”
    At the August term, 1846, and entry was made, which stated that Edmond Freeman “had resigned the trust, and that Mun-ford Smith had been, appointed administrator in his stead;” and it was ordered that suit “be renewed in the name of Mun-ford Smith.” Thereupon a jury camef and the case was submitted to them under the direction of Dillahunty, judge. It appeared that S. P. Watkins died in Florida, in 1834; that he appointed F. H. Watkins executor. The will was proven in Maury county according to law, and F. H. Watkins was duly qualified as executor and having accepted and acted as such till 1841, when “he resigned, by and with the advice and consent of the county court,” and Edtaond R. Freeman qualified as administrator, with the will annexed. Freeman resigned, and Claiborne Gee was appointed in his stead. Gee died, and Munford Smith was appointed administrator de bonis non. It appeared that the plaintiff received slaves and other property of the value of $1554, and that he paid out in his representative capacity money to the amount of $586, and handed the other estate in his hands over to his successor. The plaintiff read the note and endorsements thereupon.
    “The court charged the jury, that at the common law an executor or administrator who was also a creditor of the testator or of the intestate was bound to apply the assets to the satisfaction of his own debt or demand if it were of an equal or higher degree than the debts of the other creditors of the estate, and if he failed to apply the assets to the satisfaction of his own debt or demand, and paid over the assets to his successor, or to the distributees or legatees, his debt or demand was thereby extinguished, and the executor or administrator could not afterwards recover upon his debt or demand. But by the various acts of our legislature, the common law on the subject of retainer by an executor or an administrator would not by operation of law, even if he had assets sufficient to pay all the debts or demands against the estate of his testator or intestate, be extinguished as a matter of law. But if they had assets sufficient to ¿3ay all the debts and demands against the estate of the testator or of the intestate the law raised a presumption that the gxecutor or administrator had retained the amount of his own debt, but this presumption may be overturned by proof that the .executor or administrator has not retained his debt or demand. An executor or administrator is now governed by the statutes in disposing of the assets and not by the common law.
    The court also charged the jury that if an executor or administrator was also a creditor of his testator or of his intestate be could not institute a suit against himself for his debt or demand during the time he acted as executor or administrator and before the act of 1789, made for the benefit of dead men’s estates, would run against an executor or an administrator who was also a creditor, he must surrender the administration of the estate. And from the time of the qualification of his successor, the said act of 1789 would commence running and not before. And if in this case the plaintiff had been acting as the executor of S. P. Watkins, deceased, and had resigned, the statutes only commenced running against him from the time Freeman qualified as his successor, and if this suit was brought within two years from Freeman’s qualification, he ' would not be barred by virtue of the act 1789.”
    The jury rendered a verdict for the plaintiff. A motion for a new trial was made and overruled, and a judgment rendered for the plaintiff. The defendant appealed.
    
      M. 8. Frierson, for the plaintiff in error.
    1. We insist that the circuit judge erred, in charging the jury, that if the plaintiff, during the time he acted as the executor of Samuel P. Watkins, had assets in his hands sufficient to satisfy all the debts of his testator — his own amongst the rest— and before he had appropriated any portion of the assets of his testator to the satisfaction of his own demand, he resigned and handed over the assets to the administrator with the will annexed, without retaining his own debt, his debt would not be extinguished by mere operation of law, and he might, notwithstanding sue the administrator, and recover the amount of his debt. We insist, that the court should have told the jury, that if assets sufficient come to the hands of the plaintiff below, as executor, to satisfy all the demands against the estate of his testator, he was bound to appropriate them to the satisfaction of his own debt; and if he resigned and handed over the assets to the administrator, with the will annexed, without retaining his own debt, his debt would be extinguished by operation of law, and being once extinguished, he could not afterwards recover the same of the administrator with the will annexed. This is not only the common law, but it has been recognized as the law of this country, by the highest judicial tribunal known to our government, the supreme court of the United States. Page vs. Patton, 5 Peters’ Rep. 303, 311 to 314. Muse vs. Sawyers, N. O. T. Reports, 204. 4 Bacon’s Abs. new ed. 13. 10 Yerg. 192.
    2d. This being the common law, is the court below sustained in its charge to the jury by any legislative enactment of this state? We think not. The act of 1786, ch. 4, sec. 2, repeals the common law, only so far as the dignity of debts are concerned, and places all demands against the estates of deceased persons upon an equality. This, then, so far from abridging the executor’s right to retain for his own debt, operates as an extension of this right. At common law an executor could not retain against debts of a higher degree; but under this statute he may retain his own debt, although it is a debt of inferior degree, and this right of preference is expressly retained by this act. And the courts of North Carolina have uniformly held, that the common law doctrine of retainer is applicable to executors under our system of law, &c. 1 Dev. & Batt. Lav/ Rep. 246. 1 Iredell’s Law Rep. 36. Salkeld, 304. 2 Page, 149. 6 Page, 415.. 2 W’ms. Ex. 945.
    3d. Then do the acts of 1833, ch. 36, and 1837, operate as a repeal of the executor’s right to retain for his own debt? We think they do not. 1st. Because they do not profess to repeal the common lav/ doctrine of retainer, but only to limit him as to the amount he should retain, under the circumstances specified in said acts; and an executor has as much right to retain his pro rdta under these insolvent acts, as he has to retain his whole debt where the estate is solvent. 2d. But if this is not so, the acts take the management of the estate out of his hands and place it under the management of the courts therein specified, and the executor thereby becomes the mere agent of the court to collect the assets of the estate; and upon a distribution had, the executor receives his pro rata like any other creditor. And at most, these acts can only effect the right of the executor to retain in cases of insolvency; but in all others the law of retainer remains as it did before the passage of these acts. If we are right in this, then there is error in the judgment of the court below, and the same should be reversed.
    2. We insist that the circuit court erred in charging the jury, that the statute of limitations of two years, made in favor of dead men’s estates, would not commence running against an executor, who is a creditor of his testator, until he resigns and his successor is qualified. And if this suit was instituted within two years after the resignation of the plaintiff, and the qualification of his successor, he would not be barred. The court in the above charge evidently applied a principle to this case, which is only applicable to creditors who have no other means of enforcing the collection of their debts, but by a regular suit at law. As to this class of creditors, we admit that the statute of limitations would not bar until there is, some person who can be sued. But this principle does not apply to the case of an executor, who is also a creditor of his testator, because he has other remedies given him by law, besides the remedy given to other creditors of the estate, to enable him to enforce the collection of his debt, that are more effectual for that purpose than are the remedies of the other creditors of the estate. 1st. The executor, as we have seen, may retain his debt out of the assets of the estate, in preference to the other creditors, when the estate is solvent. 2d. If the assets arising from the perishable property are insufficient to satisfy his debt, he may procure an order of court for the purpose of selling the slaves belonging to the estate to pay his demand. 3d. If all of these means proves insufficient, he may file a bill against the heirs to have the real estate of his testator sold to pay his debt; and for these reasons, in the language of the supreme court of Massachusetts; ‘'this statute applies with double force to an executor, who is a creditor, to what it does to the other creditors of the estate, who have to collect their debts by due course of law.” 13 Mass. 162. 16 Mass. 172. 15 Mass. 58. 3 Metcalf, 369. 4th would this court entertain a petition for the sale of slaves or land belonging' to the estate of a dead man by an executor, for the purpose of paying a debt that has been due from his testator’s estate for more than two years after his qualification as executor? We think not. If he is not then barred, the statute of two years would not run against him at all, and he might at any future period compel said estate to pay his demand. And if the court would not sell property to pay such a demand, will the court sustain an action against his successor after two years have elapsed from the qualification of the first executor? We think not.
    
      W. F. Cooper, for the plaintiff in error.
    It is insisted, upon the part of the plaintiff in error, that the court below erred in^ charging that the rule of the common law on the subject of retainer has been modified and altered by the vai’ious acts of our legislature. .The doctrine of the common law is:
    1st. Receipt of sufficient assets will satisfy a debt due to an executor or administrator, and nothing ex post facto-will set it up again. Chaffm vs. Harris, 4 Dev. 103. Saunders vs. Saunders’ ex’r. 2 Lit. Rep. 315.
    2d. .Receipt of sufficient assets operates an extinguishment of the right of action; and the right of action being once extinguished cannot be revived. Ib. 1 Com. Dig. 476. 3 Bac. 10. 3 Bl. Com. 18. Page vs.-Patton etal. 5 Peters’ Rep. 304, 311.
    
      3d. There is nothing in our statutes altering or destroying this rule, so long as estates are left in the hands of the personal representatives. The statute placing all debts on an equal footing, only extends the right of retainer. The acts touching insolvent estates limits the right to retain the pro rata, or at most, only operates in cases where the insolvency is suggested according to law.
    4th. To destroy the right of retainer would interfere with one object, constantly kept in view throughout the statutory enactments of this state, touching the estates of deceased persons. From the earliest legislation on this subject, the limiting of rights of action, and the speedy winding up and distri-' bution of estates, has always been had in view. To destroy the right of retainer would directly conflict with this object. If the executor or administrator is not forced to retain, his debt may be perpetually kept alive, or the distributees forced in every instance to compel the satisfaction to be made, by proper legal steps. The whole scope and spirit of our statutes are in favor of the continuance of the common law rule.
    
      A. O. P. Nicholson, for defendant in error.
    1st. By the common law, if a debtor appoint his expeditor his executor, the debt is not extinguished unless assets come to his hands sufficient to pay all other debts of higher grade, as well as the debt due to the executor. 2 W’ms. Ex’r. 4 Dev. 103. 2 W’ms. Ex’r. 685.
    To sustain the plea of satisfaction by retainer, therefore, the defendant must show that assets came to the hands of the executor more than sufficient to pay all debts of a higher grade.
    2. The doctrine of retainer was adopted for the benefit of the executor, to save him from loss in cases of insolvency, in as much as he could not sue for his debt. Toller, 295. Wm’s. 685. 2 Blk. Com. 511.
    3. The entire reason on which the rule was based at the common law is swept away by our acts, 1833,1838, and 1841, in regard to the administration, and distribution of insolvent estates. 5 Humph. 6a, 428. All that remains of the rule, is, that the executor has a right to pay his own debt first, when the assets are sufficient, and the law presumes that he will exercise this right; but this presumption is subject to be rebutted by proof.
    4. The presumption of satisfaction by retainer cannot be insisted on by a distributee, or legatee, or subsequent administrator; all the honest debts must be paid, and all the assets are charged with their payment. The cases in 4 Dev. 103, and 1 Salk. 305, do not assert a contrary doctrine.
    5. The statute of limitations only commences running from the time that there is a party capable of suing, and, therefore, it cannot apply in this case. 3 Yerg. 318. 9 Yerg. 433. 10 Yerg. 484. 5 Pick. 321.
   Gkeen, J.

delivered the opinion of the court.

This is an action of debt brought by Frederick H. Watkins, against the administrator with the will annexed of Samuel P. Watkins, deceased. The defendant pleaded. 1. Stat. Lim. 2. Payment. 3. No assets, and 4. Extinguishment by way of retainer as executor, &c,

Upon the trial it appeared from the proof, that in 1839, Samuel P. Watkins died, having made his last will and testament, in which he appointed Frederick H. Watkins his executor. In July, 1839, the said Frederick Ii. Watkins proved the will and qualified as executor thereof, tie continued to act as executor until March, 1841, when he resigned, and Edward R. Freeman was appointed administrator with the will annexed. In December, 1841, the said Frederick H. commenced this suit against the said administrator. Freeman subsequent-iy resigned, and one Claiborne Gee was appointed in bis stead. Gee afterwards died; and Smith, the present plaintiff in error was appointed administrator de lords non of said estate. There came to the hands of the said Frederick H. of the assets of said estate, a negro man worth §650, a girl worth $250, a watch worth $125, and other assets to the value of $1554. Said Watkins paid out $584, in discharge of debts, and when he resigned his executorship, he delivered over to Freeman, the administrator, the two negroes, the watch, and the other assets not paid out by him in discharge of debts.

The court charged the jury among other things, “that at common law, an executor or administrator, who was also a creditor of the testator or intestate, was bound to apply the assets to the satisfaction of his own debt, or demand, if it were of an equal or higher degree than the debt of the other creditors of the estate, and if he failed to apply the assets to the ■satisfaction of his own debt or demand, and paid over the assets to his successor, or to the distributees, or legatees, his debt or demand, was thereby extinguished, and the executor or administrator, could not afterwards recover upon his debt or demand. But by the various acts of our legislature, the common law upon this subject of retainer by an executor or administrator has been modified, and the debt of an executor or administrator would not by operation of law, even if he had assets sufficient to pay all the debts or demands against the estate of his testator or intestate, be extinguished as a matter of law. But, if he had assets sufficient to pay all the debts and demands against the estate of the testator, or intestate, the law raised a presumption that the executor or administra- ■ tor had retained the amount of his own debt, but this presumption may be overturned by proof, thatthe executor or administrator has not retained his debt or demand. An executor or administrator is now governed by our statutes in disposing of the assets, and not by the common law.”

The jury found for the plaintiif and the defendant appealed in error to this court.

The counsel for the plaintiff in error insists that the debt of the plaintiff below is extinguished by operation of law — he having received, as executor of the debtor, assets more than sufficient to satisfy it; the law applied those assets in discharge of his debt, by way of retainer. Blackstone (3 Com. 18) lays down the doctrine of retainer, thus “a remedy by mere operation of law, and grounded upon this reason, that the executor cannot without an apparent absurdity commence a suit against himself: but having the whole in his hands, so much as is sufficient to answer his demand is by operation of law applied to-that particular purpose.” Toll Ex. 295. 1 Com. Dig. 476. 3 Bac. ab. 10. In Darcy’s case, Plow, the court say, “that the reason why the action is lost forever, is, because in judgment of lav/ he is satisfied before; for if the executor has in his hands as much goods as his own debt amounts to, the property in these goods is altered and vested in himself; that is, he has them as his own proper goods in satisfaction of the debt, and not as executor: so that there is a transmutation of property by the operation of law, without suit and execution: for inasmuch as he could not have an action against himself as executor, the operation of law is equivalent to a recovery and execution for him, and the property is as strongly altered, as it could be by recovery and execution &c.” If this were not so, the assets thus coming into the hands of the executor, would remain assets still, and so liable to suing creditors, which is not the case. So in Wankford vs. Wankford. 1 Salk 305, Lord Holt said, that if an executor who is a creditor, has assets, that amounts to payment.

These authorities establish, that the reception of assets by an executor, extinguishes his debt. He holds the goods in satisfaction of his debt, and not as executor. The debt is paid; — the operation of law- being equivalent to a recovery by execution. If this be so, it is plainly impossible that the debt should be revived by any subsequent act of the executor. If he pay out the assets, and do not actually retain for his own debt, it is his folly, for by a conclusion of law he is held to have retained; for as the court say in Dorchester vs. Webb, Cro. Car. 373, as he may retain, he shall do so. There is no act to be done by an executor to constitute a retainer; no volition on his part, as to whether he will retain or not; but the moment he receive assets sufficient to discharge his debt, the law applies them in payment, and the debt becomes extinct instanter.

This doctrine of the common law, so beneficial to executors and administrators, although it may sometimes work a hardship, is recognized and upheld in all its vigor, by the supreme court of the United States in the case of Page vs. Patton, 5 Pet. R. 311, and in the case of Muse vs. Sawyer, (Taylor L. R. 637,) by the supreme court of North Carolina. There is no reason why it should not exist in this state, as it exists in England. In the instruction to the jury, his honor the circuit judge, held, that our legislation had so weakened the doctrine of retainer, that in this state, an executor or administrator might retain for his debt, or not, at his pleasure, and that although as a matter of fact, the law would presume he did retain, yet he might prove that he did not do so, and in such case recover.

To support his honor’s judgment, we must overturn the whole theory of the doctrine of retainer as it exists at common law. That doctrine is, that the reception of assets is a payment of the debt; the assets being held, not as executor, but in satisfaction of his demand. Plainly therefore, it can never be matter of evidence, whether the executor retained in fact, or not; the only enquiry is, did he receive assets.

We do not think this doctrine is at all affected by our legislation, except in relation to insolvent’s estates. Our insolvent laws require a distribution pro rata of an insolvent estate, among all the creditors; and of course, in such case, the right of retainer does not exist.

But in relation to estates not operated on by these laws, the common law doctrine of retainer applies in all its force: But for those laws it is admitted the doctrine would exist here; and we are unable to perceive the force of the argument, that the change our legislation has made in relation to the estates of insolvent persons, by consequence works such a change in the principle of retainer, so as to the modify the doctrine, from a conclusion of law, to a mere presumption of fact.

We think the laws referred to have made no such change as is contended for, nor indeed any change, except in relation to the estates to which they apply in terms. With these views, we think his honor erred in his instruction to the jury; and the judgment must be reversed and the cause remanded for another trial.  