No. 4.

In re Rownson: Field v. White, 29 Ch. D. 361, 362.

administrator who, by taking out administration, became unable to sue himself, should lose the possibility of obtaining priority, and therefore he was allowed, if he had a claim, to retain. But no action could be maintained on such a promise as is alleged in this case, although it is clear that under the section of the statute the promise is not made void, for it is only enacted that no action can be maintained upon it. It is difficult to see how an executor or administrator can retain a debt on which, if vested in another

person, no action could be maintained. But it has been [* 362] held that * an executor or administrator can retain a debt, although it is barred by the Statute of Limitations, and it is said if an executor or administrator may retain a debt against which there is a good defence under the Statute of Limitations, why should he not retain a debt where there is nothing which makes the contract void, but the statute only prevents an action being brought upon it, just as the Statute of Limitations, if pleaded, would prevent an action being successfully brought? It has been held that an executor or administrator is not bound as against a creditor who has a claim that is barred by the Statute of Limitations to plead the statute. If he thinks fit he may pay a debt, although it were proved that the Statute of Limitations would afford a good defence, but it has never been held that an executor is at liberty to pay a claim under a contract which is by parol and within the 4th section of the Statute of Frauds. It is said that if we follow logically the analogy of cases on the Statute of Limitations we ought to come to the conclusion that as an administrator or an executor may retain a claim barred by the Statute of Limitations, so he may one on which, under the 4th section of the Statute of Frauds, no action could be brought. If we were to hold that the liberty given to an administrator or executor not to plead the Statute of Limitations, and, consequently, the right to retain a statute-karred claim which he himself possessed, was really an instance of a general principle, it would follow that in this case there ought also to be a right of retainer. But in my opinion we ought not to come to such a conclusion. It is quite uncertain what the origin was of allowing an executor to pay a debt against which he had a good defence under the Statute of Limitations, it being the duty of an executor or administrator not to pay claims he is not bound to pay; that is, he is not unnecessarily to diminish the estate which comes to his

No. 4. In re Rownson: Field v. White, 29 Ch. D. 362, 363.

hands by paying a claim to which he has a defence. We know that there are some people, both Judges and other persons, who think that to plead the Statute of Limitations is unconscionable, and in my opinion we must look upon that liberty which has been conceded to an executor not to plead the Statute of Limitations, or, if he has a statute-barred claim of his own, to retain it, not as a principle applicable to other similar cases, but as an exception from the general rule, admitted on the ground* of [* 363] the dislike which is entertained by many people to the plea of the Statute of Limitations.

In my opinion, as there is no case where such liberty has been given except where the Statute of Limitations would be the defence, we ought not to extend the liberty to other cases, but to consider the liberty allowed as to statute-barred debts as an exceptional instance in which executors are allowed to depart from what otherwise would be their duty. I certainly am not inclined to extend it to other cases where there is a defence to a claim of a similar nature to that under the Statute of Limitations, namely, one which does not destroy the claim but only prevents an action being successfully brought in respect of it.

In my opinion, therefore, without going into the evidence, the administratrix was not entitled to retain this amount of £500 and interest. I think the appeal must fail on this point.

BOWEN, L. J.—

I am of the same opinion. The duty of executors or administrators is, after paying the funeral expenses and collecting the assets, to pay the just debts and to satisfy just claims against a testator's estate. But it is clearly his duty not to waste an estate not his own, which he is administering for the benefit of others, in satisfying demands that are equally untenable in law and in equity.

However, it has been said that there is an exception to this duty with respect to claims barred by the Statute of Limitations. Since the time, at all events, of Lord HARDWICKE, it has been said, with a passing dissent on the part of an eminent commonlaw Judge in M'Culloch v. Dawes, 9 Dow. & Ry. 40, 43, and now it is established law, both in Courts of Equity and Law, that no executor is compellable to take advantage of the Statute of Limitations against debts otherwise justly owing.

We have been asked to extend that qualification of the general

No. 4. In re Rownson: Field v. White, 29 Ch. D. 363, 364.

rule to the case of a contract or agreement which is void, or rather which cannot be enforced as falling within the 4th section of the Statute of Frauds. It seems to me that although we are [*364] bound by * a current of authority with regard to the Statute of Limitations we should not be justified in extending that exception further than the authorities have gone. There is to my mind this difference also between a case under the Statute of Limitations and a case under the 4th section of the Statute of Frauds. The Statute of Limitations does not destroy the debt but only the remedy, and it has been held that an executor may waive that defence in the case of a debt which existed and which appears to be well founded. But a parol contract within the Statute of Frauds, though not void to all intents and purposes, but capable of being dealt with for certain purposes as a valid agreement, is incapable, nevertheless, of being enforced in an action either directly or indirectly. And if you have a contract which is not capable of being enforced either at law or in equity, I fail to see that a contract of that sort creates a debt or liability against the estate of a testator.

It seems to me it would be going further than the cases have yet gone to say that a debt which the executors can recognise is created against a testator's estate when there is only a parol agreement invalidated by the 4th section of the Statute of Frauds. If the executor would not be justified in satisfying such a claim preferred by others it seems to me to follow on the principle on which the doctrine of retainer is founded that the executor could not retain for his own benefit.

FRY, L. J.

The right of the administratrix to retain in this case appears to me to depend upon the question whether or not it is a devastavit in an executor to pay a debt which by reason of the provisions of the 4th section of the Statute of Frauds could not be enforced.

Now the general rule with regard to the duty of an executor has been laid down long ago. It is stated in Comyns' Digest that it is a devustavit if an executor or an administrator pay that which need not be paid. That I conceive to be the general rule of law on the point, but on that general rule an exception has undoubtedly been grafted in the case of a debt not enforceable by reason of the Statute of Limitations. It has been long established that an executor is not bound to plead that statute, and that he is not guilty of a devastavit if he do not plead it.

No. 4. In re Rownson: Field v. White, 29 Ch. D. 365. Notes.

*Is that an exception that should not be extended, or [* 365] is it an illustration of some such general principle as this: that an executor may, at the expense of the estate, pay a debt due on an oral contract, but which debt is incapable of being enforced either at law or in equity? Now, if it be an illustration of a general principle of that sort we should certainly find other illustrations of it, but although there must be, as it seems to me, many cases of debts due on existing contracts which would have been paid but for their being incapable of being enforced at law, no other case can be found, so far as the diligence of counsel or the investigations by the Bench can discover, as to a general right in an executor to pay anything more than he is bound to pay. That appears to me very cogent evidence to show that the case of the Statute of Limitations is an anomaly, a single exception, and is not to be extended. No case has been found upon the Statute of Frauds, though a number of cases must have occurred in the hundreds or thousands of estates administered under the Court of Chancery.

I think, therefore, that this attempt to extend the exception fails, and we must hold that to pay a debt which is not enforceable by reason of the Statute of Frauds would be a devastavit, and, consequently, that the administratrix has no right to retain.

ENGLISH NOTES.

A short view of the extent of the right of retainer, and an enumeration of the persons who are entitled to exercise the right, will be found in the notes to Warner v. Wainsford, No. 17 of "Administration," 2 R. C. 150, 151.

In the principal case the right of retainer is rested upon this, that an executor or administrator could not sue himself, and was accorded this right as a set-off. It has however, also been rested on the right of an executor to prefer creditors in equal degree. Whichever view is the correct one, the right can only be exercised under the circumstances mentioned in the rule.

The right could not be exercised against the right of a creditor in higher degree to the executor or administrator. Re Jones, Calver v. Laxton (1885), 31 Ch. D. 440, 55 L. J. Ch. 350. Where it has been declared by a Court of competent jurisdiction, in proceedings in which the plea is properly raised, that a debt is barred by the Statute of Limitations, an executor would commit a devastavit if he subsequently paid the debt. Midgley v. Midgley (C. A. 1893), 1893, 3 Ch. 282, 62 L. J. Ch. 905, 62 L. T. 241, 41 W. R. 659.

No. 4. In re Rownson: Field v. White. - Notes.

A beneficiary can insist that the personal representative shall set up the statute, where proceedings have resulted in an administration judgment. Re Wenham, Hunt v. Wenham (1892), 1892, 3 Ch. 59, 61 L. J. Ch. 565, 67 L. T. 648, 40 W. R. 636. So too after a decree for administration a Court of Equity would have restrained a creditor from proceeding at law, where the assets were ascertained. Paxton v. Douglas (1803), 8 Ves. 520; Gilpin v. Lady Southampton (1812), 18 Ves. 469. It might have been thought that the right of retainer was lost under similar circumstances. This, however, was not the case, as appears from the cases cited in the Notes to Warner v. Wainsford, No. 17 of "Administration," 2 R. C. 150, 151. It may be that the Court considered that the executor had as great an equity as the other creditors, and that he should be entitled to assert his legal right, or that he must be taken to have asserted his right from the date when the proceedings were instituted. Before a decree, the Court of Chancery did not interpose. Rush v. Higgs (1799), 4 Ves. 638.

AMERICAN NOTES.

Mr. Schouler (Executors and Administrators, sect. 392), correctly observes: "While the bar of limitations may thus be disregarded, in the case of demands once binding, an executor or administrator exercises no such option as to debts or claims which never had a binding force, since the law invests him with no authority on the decedent's behalf to dispense favors or perform obligations simply moral. Hence he cannot pay a debt that accrued under a contract that is void because within the Statute of Frauds; and if he does so, he is chargeable with devastavit; though the promise may be said to create a personal liability on his part." Citing Baker v. Fuller, 69 Maine, 152, which sustains his text.

But in Berry v Graddy, 1 Metcalfe (Kentucky), 553, it was held that the administrator might retain for his own debt although it was within the Statute of Frauds, because it arose on a contract, not to be performed within a year, but had been performed on his part. This is put on the ground that the statute only cuts off the remedy on the contract by action. The Court rely on Roberts v. Tennell, 3 T. B. Monroe (Kentucky), 247, where the landlord's right of distress was held to exist although he could not have maintained an action on the oral contract of letting. "The Statute of Frauds does not affect the common-law right of retainer by an administrator."