MCARTHUR v. MACDONNELL. Executor preferring creditor. An executor or administrator is entitled to prefer one creditor at the expense of another. He may even confess judgment to a creditor in equal degree with another suing him pending the action and plead it in bar, and that although done for the express purpose of depriving the plaintiff of his debt. Con. Stat. c. 37, s. 96 as to preferential assignments does not apply to executors or administrators. An assignment of all the assets of an estate for the benefit of some creditors cannot be attacked by the others. This was an action by the executors of a mortgagee against the executor of the mortgagor upon a covenant for payment contained in the mortgage, and upon the common counts. The pleas were satisfaction as to a portion of the money and plene administravit præter. S. Blanchard, Q. C., and W. R. Mulock for the plaintiffs. [11th April, 1885.] TAYLOR, J.-(After discussing the evidence) decided the plea of satisfaction in favor of the plaintiffs. Upon the other plea he delivered the following judgment. The second plea raises the defence of plene administravit. The judgments set out in the plea are all proved to have been recovered against the intestate except a small one in the County Court for $52.80. The total amount of them is $11,267.53. Several sums of money are shown to have been received by the defendant, and he still has in his hands a small amount of chattels, and there are uncollected book debts, the greater part of which are, however, of exceedingly doubtful value. He has paid out for general expenses, and in other ways a good deal more than he has actually received. It is true, the propriety of many of the payments made is questioned, but even if they were all disallowed, and the defendant stood to-day chargeable with what has come to his hands, and with the value of the unrealized chattels and uncollected book debts, the amount would fall far short of the amount for which judgments have been recovered. The main question arises respecting the proceeds of two policies of insurance upon the life of the intestate amounting to $20,000 not yet received by the administrator, but for which the plaintiffs contend he has by his own course of dealing made himself liable. He has executed an assignment of the moneys, and in Jenkins v. Plombe, 6 Mod., at p. 93, it is said, "If an executor appoint another to receive a debt of his testator, and he receives it, it is the same thing as if he had actually received it himself, and will be assets in his hands; and by consequence appointing another to receive who will not repay is a devastavit." From the evidence it appears that the life of the intestate was insured in the Standard Life Insurance Company under two policies of insurance of $10,000 each. These policies were issued in the Province of Quebec, the premiums were payable there, and the amount of insurance was, on the death of the intestate, according to the terms of the policies, payable at the chief office of the company in that Province. No action can be brought by the defendant in this Province to recover the amount of these policies. Pritchard v. Standard Insurance Co., 7 O. R. 188; McArthur v. Macdonnell, 1 Man. L. R. 334. But, it is argued, the defendant is estopped from saying that he cannot recover this money under his letters of administration, granted in this Province, because he has already executed an assignment of it in trust for the benefit of certain specified creditors. This assignment, it is claimed, is fraudulent and void, as having been made to hinder, defeat or delay the plaintiffs, Earl Vane v. Rigden, 5 Chan. App. 663 is an authority, that an assignment made by an executor may be impeached on the ground of fraud and collusion between him and the creditor, and may be set aside on that account. That the assignment in question was made for the express purpose of giving those particular creditors a preference is not denied. There is no evidence of any collusion between the defendant and any of the creditors. Indeed, it appears that neither the trustee nor any creditor knew of the assignment until after it had been actually executed. Neither is there any clear evidence of any act done by the defendant or his agent here which can be said to have been done to deceive the plaintiffs or throw them off their guard. Blanchard is very positive that he had an interview with Morice, the agent, about the first garnishing order which the plaintiffs obtained, and says he consented to that order being discharged upon an express agreement that the plaintiff's mortgage should be paid out of the insurance money, and not later than the 15th or 20th of May. This Morice denies. He says Blanchard proposed that, and he then told him that the defendant was not satisfied about the Grant sale, upon which Blanchard said he could easily satisfy the defendant as to that. To that Morice replied that if he could do so, perhaps the defendant would pay it out of the proceeds of the policies. He says, too, there was another condition spoken of, and that was the getting Machar, who was also a creditor, to take other securities. The garnishing order which was at that time discharged was one obtained upon defective material. Even if the material had not been defective, it could not have been upheld on the merits as the one afterwards obtained was also discharged, and not upon a technical ground but on the merits. But an executor or administrator is entitled to prefer one creditor at the expense of another; he may even confess judgment to a creditor in equal degree with the plaintiff pending the action and plead it in bar, and though done for the express purpose of depriving the plaintiff of his debt, it is good both at bar and in equity. Actual fraud may under Earl Vane v. Rigden justify the Court in setting aside such a preference, but the mere act of preferring is not, in itself, fraud. This right of preferring one creditor at the expense of another has not been interferred with by the 32 & 33 Vic. c. 46, which took away the right to priority from specialty creditors. The assignment is not void under the 13 Eliz. c. 5. The persons for whose benefit it has been made are creditors of the intestate. It has been communicated to them, and some of them, at all events, have assented to it. It is in evidence that they, on the faith of its having been executed, refrained from pressing their claims against the estate, or taking legal proceedings upon them. It is further claimed that the assignment is void under Con. Stat. Man. c. 37 s. 96. But I do not see that this section affects a The principle upon which the courts in case like the present. Ontario decided such cases as Bank of Upper Canada v. Brough, 2 U. C. E. & A. 95; Lowell v. Bank of Upper Canada, 10 Gr. 57, is applicable here. The defendant is not a person in insolvent circumstances, unable to pay his debts in full, or knowing himself to be, or in fact being, on the eve of insolvency, and the assignment was not made to hinder, delay or defeat his creditors, or any of them, or with intent to give any of his creditors a preference or priority over his other creditors. That this is not a case of the payment of money to these creditors, but an assignment for their benefit, of assets of the estate, does not make any difference. In Earl Vane v. There the executrix Rigden, 5 Chan. App. 663, it was so held. executed in favor of her brother, a creditor of the testator for £532, an assignment of book debts of the nominal value of £2,000. The assignment gave him full power to collect these debts as her attorney. The estate was insolvent. It was argued that although she might have had the right of paying money to a creditor, she had not the right to assign what was in effect the whole of the assets to one creditor, and surrender to him her power of collecting them. The Court of Appeal, however, reversing the decree of V. C. Malins, upheld the transaction, both Lord Hatherley and James, L.J., holding that as she might have mortgaged the assets to a stranger in order to raise money to pay the creditor, there was no reason why she should not mortgage them to the creditor that he might pay himself. James, L.J., said, "If the executor can give a preference to a creditor by paying money to him, it appears impossible to say that he cannot give the preference by mortgaging the assets to him, which would be the same thing in effect as if he mortgaged to a stranger to raise the money, and paid the money to the creditor." In my judgment the defendant is entitled to a verdict upon his second plea; but I reserve leave to the plaintiffs to move in Term to enter a verdict for them, if so advised. BLANCHARD v. SCANLAN. Tax sale.-Bill to set aside.-Costs. Where a purchaser at a tax sale is not a party to any irregularity or impropriety, he will not be ordered to pay the costs of a pro confesso suit to set it aside, unless he has been afforded an opportunity of investigating the matter, and electing to abandon any claim without suit. E. H. Morphy for plaintiff. [11th June, 1885.] KILLAM, J.-The plaintiff files his bill, asking to have an alleged sale of lands for taxes declared illegal and void and a conveyance of the lands made by the Municipality of Westbourne to the defendant declared void, and the registration thereof declared a cloud on the plaintiff's title to the lands. The bill contains a number of allegations of omissions and informalities sufficient to show the sale to be void, and alleges that the conveyance was made by the municipality and registered by the defendant; and the bill is taken pro eonfesso. The plaintiff asks that the defendant be ordered to pay the costs of suit, but does not allege in the bill any application to the defendant to release the apparent claim shown by the registered conveyance. I do not think that the defendant should be ordered to pay costs. In Black v. Harrington, 12 Gr. 175, a tax deed was set aside without costs, as the defendants had nothing to do with the erroneous proceedings by reason of which the sale was held void. In Ford v. Proudfoot, 9 Gr. 478, a tax deed was set aside without costs, on the ground that "the purchaser had a right to presume that the official acts of the treasurer and sheriff were rightly done." In Henry v. Burness, 8 Gr. 345, a tax sale was declared void on account of there having been shown to have been a combina tion among bidders to keep down prices, but without costs, on the ground of the defendant not having been a party to the combination. In Logie v. Young, and Logie v. Austin, 10 Gr. 217, similar cases to Henry v. Burness, the same disposition as to costs was made, for the same reason as in that case. All of these were cases in which the defendants answered and sought |