Talbot J. Albert, for appellants. Fred. W. Story, for appellee.

FOWLER, J. The appellee, Harriet R. Hyatt, trustee, is a mortgage creditor, to the amount of $2,000, of the late Mary C. Macgill, who died in 1888 leaving a will duly executed and proved, the contents and purport of which do not appear in this record, except that it is alleged in the bill of complaint that her husband, the late Oliver P. Macgill, was thereby duly appointed executor. Nor does it appear whether the large and valuable real and personal estate of which it is alleged she died possessed was bequeathed and devised to her children or to others. The executor accepted the trust imposed upon him by the will, and gave bond in the sum of $6,000, but made no returns to the orphans' court of Baltimore county, from which his letters testamentary had been issued. The mortgage debt was overdue and in arrear during the lifetime of Mrs. Macgill, and so continued after her death and during the life of her executor, the interest having been duly paid to the 13th day of August, 1891. It does not appear that any demand for the payment of this indebtedness was made either upon the deceased or her executor. From first to last, no proceedings whatever appear to have been taken in the orphans' court by the appellee to have her account passed against the estate of her debtor, nor has she ever taken any steps to compel the executor to account for and distribute the estate, nor, after his death, to have appointed in his place an administrator d. b. n. For nearly a year before the institution of this suit, the mortgaged premises were in the possession of the appellee as mortgagee, and during that time she has collected the rent, and appropriated it to the payment of prior incumbrances. Under these circumstances, the appellee has filed a general creditor's bill against the sureties of the deceased excutor and the children of the deceased debtor, praying that the defendants may be required to discover and account for the whole real and personal property of the deceased, and especially that the two defendants who are sureties of said executor may account for all the estate which came or ought to have come into the hands of their principal; that the personal estate, as yet unadministered, may be applied, so far as it will go, to the payment of all debts; and that after the exhaustion of personal assets the real estate may be sold for the payment of any unpaid balance of debts. To this bill the defendants demurred upon several grounds, some of which we will proceed to consider.

1. The first is that the matters complained of are peculiarly within the jurisdiction of the orphans' court. There can be no doubt that, under the system prevailing in this state, the estates of deceased persons should ordinarily be administered and finally distributed in that court. In Hewitt's Case, 3

Bland, 184, it was said that "the power to make distribution *** of the personal estate remaining in the hands of the administrator has been conferred upon the orphans' court, with which this court should not interfere, except on account of some special circumstances, to which the powers of the orphans' courts may not be altogether adequate." And in Alexander v. Leakin, 72 Md. 199, 19 Atl. 532, in which the case just cited is referred to, we said (citing section 230 of article 93), These courts "have full power to take probate of wills, grant letters testamentary and administration, direct the conduct and settling of accounts of executors and administrators, superintend the distribution of the estates of intestates,✶✶ ✶ and to administer justice in all matters relative to the affairs of deceased persons." The last clause of the section just quoted is very broad, and shows the legislative intention was to confer adequate power and jurisdiction upon orphans' courts in every case in which their general powers would enable them to act. It is true that in a number of cases we have said that personal representatives, and others interested in the settlement of the estates of deceased persons, may seek the aid of a court of equity, as in Woods v. Fuller, 61 Md. 459, where it was held that, a trust having been imposed upon the executor, he may, if in doubt, have the direction of a court of equity as to how he shall discharge it; distributees may file a bill in equity against an administrator for their share of the intestate's estate, and a legatee may adopt same proceeding to recover a legacy. Conway v. Green, 1 Har. & J. 151; Woods v. Fuller, supra. And in Alexander v. Leakin, just cited, the application to a court of equity on the part of certain nonresidents, as next of kin, was maintained on the ground that the powers of the orphans' court were not altogether adequate to afford complete protection and relief. The bill in this case, however, does not, we think, make a case beyond the general and ordinary powers of the orphans' court. The debtor (having, as is alleged, a real and personal estate of great value) departed this life, leaving a will duly executed and proved. The executor named in the will, after duly qualifying, died without having fully or at all administered the estate. One of the children of the deceased debtor is charged with having concealed, and counseled others to conceal, information concerning the estate. Our Code (section 70, art. 93) provides for the appointment of a successor of the deceased executor, and sections 238 and 239 of the same article give the orphans' court full power to proceed against any administrator or other person charged with concealment. We think that the appellee should have proceeded in the orphans' court of Baltimore county to have an administrator d. b. n. c. t. a. appointed, who could, so far as we can now ascertain, have obtained the personal estate, and could have

distributed it without the aid of a court of equity.

2. But assuming for the present that the appellee can, in any aspect of this case, file a creditor's bill to subject real estate to the payment of her mortgage debt, is the bill filed in this case a good one? The allegation necessary to give equity jurisdiction is wanting. There is no sufficient allegation anywhere in the bill that the personal estate left by the deceased debtor was insufficient to pay her debts. It is alleged in the ninth paragraph "that the personal estate, * * * or at least such portion thereof which now remains, is not sufficient," etc. But this is far from what is required. Non constat that sufficient personal property did not come into the hands of the executor to pay all debts, and if so the remedy of the creditor would be on the executor's bond. Wyse v. Smith, 4 Gill & J. 302. Before the real etsate of the deceased debtor can be appropriated to the payment of debts, the deficiency of the personal estate left by the decedent must be alleged and proved. Without such allegation a court of equity has no jurisdiction. Griffith v. Bank, 6 Gill & J. 445, etc.

3. Not only is the bill thus defective, but the appellee, being a mortgage creditor, has never attempted to avail herself of her special lien by exercising her power of sale, although she has had ample opportunity to

She could, therefore, have easily ascertained whether the proceeds would suffice to pay her claim, or, if not, what the deficiency would be. There may have been no deficiency, for the sale may have produced more than enough to pay her debt. It does not seem just to the other creditors (and the theory of the bill is that there are others) that the mortgagee should be allowed to hold onto the mortgage security, and at the same time demand payment of the mortgage debt out of the fund which should be appropriated to the satisfaction of the claims of the unsecured creditors. In this case the mortgagee does not appear to have offered to surrender her security, or to sell the mortgaged estate for the purpose of paying her claim in whole or in part. This latter, we think, under the circumstances of this case, would have been the equitable course for her to pursue, and one which is generally recognized and approved by courts of equity. Thus, in Hammond v. Hammond, 2 Bland, 384, the chancellor says that, while liens must be respected, they will not be allowed to be used to the injury of unsecured creditors, if they can be enforced without such injury, and therefore "a mortgage creditor, after having exhausted the mortgaged estate by a sale, may come in pari passu with the other creditors." And in Amory v. Francis, 16 Mass. 311, Parker, C. J., announces the rule to be that every creditor having a mortgage or other security shall, before he is admitted to prove his debt, surrender his security for the benefit of the other creditors,

-the proceeds going into the common fund, -or shall suffer the pledge to be sold, taking the proceeds towards his debt, and proving for the residue. And in conclusion he says, as we say here, "If the creditor had taken possession of the mortgaged premises, and foreclosed the mortgage, he would have a right to prove for the balance." See, also, to the same effect, Farnum v. Boutelle, 13 Metc. 159; Trustees v. Cronin, 4 Allen, 141. And in 1 Story, Eq. Jur. § 633, the learned author lays down the rule in substantially the same terms as those used by the chancellor in Hammond v. Hammond, supra.

There is another ground on which the demurrer was based, namely, the failure to make the personal representative of the deceased debtor a party to this proceeding. This, we think, it also a valid objection, for in our opinion, upon the facts alleged, the personal representative is a necessary party. It is conceded this is generally so where, as here, a creditor's bill is filed for the sale of a deceased debtor's real and personal estate. Tyler v. Bowie, 4 Har. & J. 333; David v. Grahame, 2 Har. & G. 94; Mayor, etc., v. Chase, 2 Gill & J. 376; Birely v. Staley, 5 Gill & J. 432; and Hammond v. Hammond, supra. But it is contended that, under the circumstances of this case, the rule may be disregarded, because it is not applicable. To sustain this position, Hammond v. Hammond, supra, and Tessier v. Wyse, 3 Bland, 57, were cited, but we do not think they help the appellee's case. It is said in Hammond's Case that a creditor's bill may be sustained against heirs and devisees of the deceased debtor alone, without joining the personal representative, if it plainly appears in the case that the debtor left no personal property whatever, or so little that no one had taken out letters of administration. It is sufficient to say that the bill here alleges the deceased left "personal estate of great value." The other contingency, as stated by the chancellor in Hammond's Case, which will justify the omission of the personal representative as a party, is the death or insolvency of such representative. But it seems to us clear that he is not to be understood as saying that the allegation of either of these, or both together, would alone give jurisdiction, in the absence of any proper allegation of the insufficiency of the personal estate, for such a construction of the chancellor's language would put him in conflict with the settled rule, that, to give jurisdiction, such insufficiency must be clearly alleged. The case of Tessier v. Wyse, supra, is based upon a state of facts very different from that presented by the bill in this case. There it was held that the children of William Wyse being entitled to the real estate as heirs at law, and to the personal as his next of kin, they had both funds in them, and that so circumstanced, it was immaterial as to them, out of which fund the debt was paid, and therefore it was held that the adminis

trator was not a necessary party. Here the deceased left a will, but whether her personal and real estate are in the hands of the defendants we do not know, for, as we have said, her will is not to be found in this record. But we are not willing to sanction the rule of practice which is sought to be established by the case of Tessier v. Wyse, namely, that without regard to the insufficiency of the personal property, and in the absence of any attempt to invoke the aid of the orphans' court, a creditor's bill may be filed in equity to administer a decedent's estate because the whole of his estate, real and personal, happens to belong to his children. Such a rule would not only deprive the orphan's court of a large part of its jurisdiction, and vest it in a court of equity, but would be in conflict with the settled rule we have just referred to.

There were other grounds on which the demurrer was based, but we need not consider them. What we have said disposes of the case. It follows that the demurrer must be sustained and the bill dismissed, without prejudice, however, to the right of the appellee to take such further proceedings as she may be advised may be necessary. Bill dismissed without prejudice, order reversed, with costs to appellants.

Where the terms of a verbal contract, which was admittedly made, are disputed by the contracting parties, and the evidence is evenly balanced, the terms that are most just should prevail.

Appeal from court of common pleas, Washington county.

Bill by J. W. Smiley against J. E. Gallagher and others for an accounting. From a judgment apportioning the interests of the parties in the property in question, and ordering an account, plaintiff appeals. Affirmed.

The following are the opinion of the court below and the decree:

"J. W. Smiley, plaintiff, in his bill claims: (1) That he is the owner of an undivided one-fourth interest in a certain oil and gas lease; that the lease was made September 23, 1893, by J. C. and K. Noble McDonald to J. E. and William Gallagher, James O'Donnell, and J. W. Smiley, as tenants in common, and granted to them as lessees the privilege of mining for oil and gas on 10 acres of land situate in Mt. Pleasant township, Washington county, for a period of three years, or so long as oil or gas are produced in paying quantities, they, the lessees, agreeing to drill two wells within one year from the date of said lease, to give the lessors a fixed proportion of the oil pro

duced, a stipulated price for each gas well, and $1,000 bonus, $500 to be paid when the lease was delivered, and the remaining $500 to be paid out of the first oil produced. (2) That he and defendants have taken possession and have drilled and completed two wells, both of which are producing oil at the rate of 150 barrels per day, and at the time of filing this bill 1,700 barrels of oil had been run from said wells into the pipeline tanks. (3) That no understanding or arrangements have been made between himself and his cotenants as regards the expenses of drilling said wells, and that no division order has ever been signed by them and filed with the pipe-line company for the oil that has been run into the tanks, and that may hereafter be run into the company's lines. (4) That he was not a party to the contract made with the person who drilled said wells, said contract having been made by William and J. E. Gallagher; that said contractors have not been paid, and that the contractor who drilled the first well has issued a foreign attachment against J. E. and William Gallagher of Olean, N. Y., and attached their interest in all the machinery and oil in and about said leasehold, and oil run into the pipe-line company. (5) That he has already contributed to his share of the expenses of procuring said lease and drilling and operating said leasehold the sum of $500, and is ready and willing to pay his full proportional share of the expense. (6) That J. E. and William Gallagher, on November 4, 1893, sold, transferred, and assigned their interest in said leasehold to J. R. Gallagher, who is now liable for his proportionate share of the expenses of operating said leasehold. (7) That his (plaintiff's) interests are being jeopardized by the defendants in their manner of operating said leasehold and refusing to pay their contractors. (8) That J. E. and William Gallagher and their assignee, J. R. Gallagher, have sold 1,700 barrels of oil run from said wells without his consent, and have failed to render any account to him, or to give any account of the use to which said money was placed. He prays that the court may decree: (1) Who are cotenants with him, and the proportionate interest of each of said cotenants in said leasehold, machinery, and oil produced from said leased premises; (2) to account between the parties; (3) that a division order may be made in accordance with the proportionate share of each owner; (4) several relief. The defendants in their answer admit: (1) That the lease was taken by the plaintiff and J. E. and William Gallagher and James O'Donnell from J. C. and K. Noble McDonald, and its terms. (2) That J. E. and William Gallagher have had two wells drilled on said leased premises, and that oil has been produced in paying quantities, but deny that plaintiff has contributed to the expense of drilling said wells, and that the contractors

have been paid (except as to a disputed bill), and that they have not been managing the operations of the lease improperly; on the contrary, they allege they have managed and conducted the operations of the leasehold in the best manner, and successfully, while the plaintiff has neglected to do anything towards assisting in its operation, and that there is no money coming to him after his dues and share of the expenses have been paid out of the receipts from oil sold. (3) They deny that the plaintiff is the owner of an undivided one-fourth interest in said leasehold and wells, and allege that he is the owner of but an undivid-ed one-sixteenth interest, or an equal owner of an undivided one-eighth with one of the defendants, James O'Donnell. Other Other denials and allegations are made in the answer, but we have stated all that is necessary to state, as the case is now before us.

"To this answer the plaintiff filed a replication, and we have for present determination the issue: (1) What is the interest of plaintiff in said leasehold, and the oil produced from the leased premises? and (2) is he entitled to an account?

"J. W. Smiley is superintendent of the Belmont Oil Company, and James O'Donnell is a tank gauger, and both live in the McDonald oil field, near the premises operated in the lease in question. J. E. and William Gallagher are residents of Olean, N. Y., and are oil producers and operators, and have been in the business in the McDonald field some time before September 23, 1893. O'Donnell and Smiley, who are not operators or producers, but who occasionally took oil and gas leases with the purpose of having them developed by other parties, learned that ten acres of land belonging to the McDonald Bros. could be leased for $1,000 bonus and the usual royalty. They sought out some one who was able and willing to operate this piece of land, if a lease should be obtained upon it. They and the Gallagher Bros. finally came together, and agreed to take a lease from the McDonald Bros. On the 14th of September, 1893, O. R. Cook, Esq., prepared a lease, and it was signed by J. C. and K. Noble McDonald and J. E. and William Gallagher, and left the lease in his office for the signatures of O'Donnell and Smiley, who were not present, and that same day the following paper was prepared by Mr. Cook: 'Article of agreement made and entered into this 14th day of September, A. D. 1893. Articles of agreement made and entered into this 14th day of September, A. D. 1893, by and between Gallagher Bros., of Olean, in the state of New York, parties of the first part, and James O'Donnell, parties of the second part, as follows, to wit: Whereas, the said parties to this agreement have leased for oil and gas purposes from J. J. C. and K. Noble McDonald a certain tract of land situated in Mount Pleasant

township, in the county of Washington and state of Pennsylvania, near Primrose station, containing ten acres, said lease being dated September 14, A. D. 1893. Now, therefore. this agreement witnesseth that the said party of the first part agrees to drill at their own proper cost; the first well to be drilled on said premises as provided in said lease, and to furnish all material necessary to complete said well, and to give or allow to the said party of the second part a full equal one-eighth interest in said first well. In consideration whereof the said party of the second part agrees to pay the one thousand (1,000) dollars bonus as provided for in said lease; that is to say, five hundred (500) dollars in cash, and the remaining five hundred (500) dollars out of the share of production first set apart to the said party of the second part. The said party of the second part also agrees to pay their proportionate share of the running expenses of said first well after the same has been completed, and also their proportionate share of the cost and expense of drilling and operating any well or wells that may be drilled on said premises after the said first well. In witness whereof the said parties of the first part and second parts have hereunto set their hands and seals the day and year aforesaid. Gallagher Bros. [Seal.] James O'Donnell. [Seal.] -. [Seal.] [Seal.] At

test: Wm. C. Buchheib.' In witness whereof this paper was signed by Gallagher Bros. and James O'Donnell some time before September 23, 1893. On the last-mentioned day the parties were at Mr. Cook's office to close up the matter, when it was discovered that the lease written September 14, 1893, and partly executed, contained a mistake in the description that might lead to a misunderstanding between the parties. The lease was rewritten, and there signed by all the parties. The Gallagher Bros. took possession under the lease, and commenced operations; at the time this bill was filed had completed two wells, which were producing considerable oil, and are now drilling a third well. Neither Smiley nor O'Donnell have taken any active part in the operations upon this lease, but have allowed the Gallagher Bros. to make the contracts and drill and operate the wells, which, so far as the testimony shows, was done in their own name; at least, Mr. Smiley says he had no part in making the contracts for the development of the territory. No division order has ever been signed by the parties interested and given to the pipe-line company; that is, no division of the oil produced has been agreed upon in writing, and filed with the company, and no settlement has been made as to the expenses incurred by the Gallagher Bros. in operating the lease, at least so far as the plaintiff is concerned. All that Smiley ever paid on account of the lease and its development was the $250 to the McDonald Bros., his half or share of the bonus which had to

be paid when the lease was executed, and the Gallaghers have never paid anything on account of money received from oil produced and sold. By reason of a written notice served by Smiley upon the pipe-line company, one-fourth of the oil now being produced is held by the pipe-line company subject to a determination of this suit. The exact amount of oil that has been produced from the leased premises, and the exact amount of money expended in operating, does not appear in the pleading or testimony, nor does it appear how much of the expenses incurred has not been paid by the Gallagher Bros.; in other words, the account between the tenants in common, the plaintiff and defendants, is open and unsettled, and, if the parties cannot agree on a settlement, will have to be stated by the court upon a further hearing. The questions now before us are the preliminary, and must be determined before an account is stated. Collyer v. Collyer, 38 Pa. St. 257. We must first determine the extent of the plaintiff's interest, and to this question we will now turn our attention.

"J. W. Smiley testified that prior to the execution of the said lease of September 23, 1893, he and O'Donnell had an agreement with the Gallagher Bros. that they were to pay the bonus money, and that this was to stand off that much put into the operation of the lease by them (the Gallaghers); in other words, that the four lessees were to be equal owners in the leasehold, and in drilling for oil and gas; or, to use his own words, he was to be let in on the ground floor,every dollar of his money was to be as good as what they would put in. The Gallaghers deny this, and say that they agreed to operate the lease and carry a one-eighth interest in the first well for O'Donnell and Smiley free of cost, if they would pay in cash the first half of the bonus, and allow the other half to be paid out of their oil; and that in other wells drilled if oil was found they (O'Donnell and Smiley) should have a one-eighth interest between them, but should pay their proportionate share of the expenses; and that this verbal agreement, made before this lease was executed, with both O'Donnell and Smiley, was reduced to writing by Mr. Cook at their instance, and was signed by O'Donnell, but that Smiley omitted to sign it, not, however, repudiating the verbal contract until some time after the lease had been executed and operations commenced. The only corroboration of Mr. Smiley's version of the contract is found in the lease, which is made to four persons, and the presumption is that each had an equal interest in the leasehold estate thereby created. But a knowledge of the oil business, the manner in which leases are taken and the working interest in wells are carried, and the fact that the consideration is a royalty of the oil produced by labor bestowed upon the leasehold, to some extent

weakens this presumption, and it is not as strong as where land is conveyed in fee simple for a fixed sum, which, on the face of the deed, appears to have been paid by all the partics jointly. In such a case, equality of ownership arises out of the supposition that each party paid an equal part of the purchase money, but the privilege to drill for oil or gas may be, and usually is, obtained on the covenants of the lease to deliver a certain proportion of the oil produced and the expenditure of money by the lessees in operating the lease, and the proportion each puts in for this purpose is frequently made the basis for calculating their respective interests in the production. But over against this presumption, giving it full weight, and the testimony of the plaintiff, we have the testimony of the two Gallaghers, corroborated by that of James O'Donnell and Edward Morely, and the weight of the testimony as a whole is clearly against the plaintiff.

It is very evident from the testimony, and is not seriously disputed, that the purpose of O'Donnell and Smiley in this and other leasing ventures was to take a lease, and then have some producer who had money develop it, they retaining as large a working interest as possible, which was to be carried by the operators in the first well; then, if the first well was good, their interest would enable them to carry for themselves their interest in succeeding wells; and, if the first well was dry, the operators would be out all the expenses of drilling the first well, and they would be out only what it cost to get into the lease. Such contracts are common. Smiley himself admits enough to show that he and O'Donnell of the one part, and the Gallagher Bros. of the other part, had some kind of a contract between themselves in reference to taking and operating this lease, and that part of that contract was that he and O'Donnell should pay in cash, when the lease was executed, $500 of the bonus then due, and that the Gallagher Bros. should pay nothing. It is true that Smiley says that this was done because the Gallaghers then had no ready money, and that they were to put that much more into the expenses of drilling the first well, and thus put them on an equality as owners and operators of the lease; but this version of the transaction is inconsistent with the fact that Smiley and O'Donnell borrowed of the Gallagher Bros. $167 to pay this $500, and afterwards paid it back to them, which they did, as cle. ly appears from the testimony. Again, the testimony of Edward Morely shows that O'Donnell and Smiley were working together as contracting parties as against the Gallagher Bros., and that the four lessees in this lease did not expect to go in as equal owners in the lease and its operation. The contract which O'Donnell admits, and which was afterwards put in writing, is consistent with the other facts in the case, while Smiley's claim is inconsistent.