Wambaugh v. Gates

Jewett, Ch. J.

A testator’s personal estate is, in equity as well as at law, the natural and first fund for the payment of his *263debts, (Booth v. Blundell, Merrivale’s Rep. 192; 2 R. S. 87,) and if such estate be insufficient, his real estate, except such as is devised expressly charged with the payment of debts, is next liable and may be leased, mortaged, or sold, by order of the surrogate having jurisdiction, on the application of his personal representatives or any of his creditors, and the proceeds applied in payment or satisfaction of such debts as remain unsatisfied and not' secured by mortgage upon land executed by the ancestor or testator. (2 R. S. 99, § 1, 20 ; Laws 1837, p. 531, § 41; p. 536, §§ 72-74; 1 R. S. 749, § 4.) In case the testator’s personal estate, out of which the legacies bequeathed are payable, proves insufficient for the payment of his debts, for which it is liable, and such legacies have been paid, the legatees in general are bound to refund their legacies or such rateable part thereof as will be sufficient to satisfy such unpaid debts. (6 Bac. Abr. Ed. 1844, tit. Legacies, H. 298.)

By 2 R. S. 451, § 26, provision is made for actions by creditors of any deceased persons to recover the value of any assets that may have been paid by an executor or administrator to any legatees of their testator, against all of such legatees jointly or against any single legatee separately, on the ground of a deficiency of assets to satisfy the debts of the testator.

The statute (2 R. S. 452, § 32) makes the heirs of every person who shall have died intestate and the heirs and devisees of any person who shall have died after the making of his last will and testament, respectively liable for the debts of such person arising by simple contract or by specialty to the extent of the estate interest and right in the real estate which shall have descended to them from, or been devised to them by, such person.

By the 2 R. S. 454, § 42, 456, § 60, all the heirs or all the devisees of the testator, when the latter are liable for his debts, are required to be sued jointly in a court of equity, but should not be liable to any suit in a court of law.

So far as this provision applied to heirs, was changed by the statute of 1837, (ch. 460, § 73,) which provided that they might be sued jointly and not separately in a court of law or equity, and the 42d section above referred to was repealed by § 74 of the act of 1837.

*264The foundation of the complainant’s claim arises upon an alleged subsisting debt, due to him from J. Boyer, the testator, and according to his own showing he must make title to recover, if at all, against the defendants, as legatees or devisees of the testator. In either case it is obvious that the objection of want of parties is well taken. If the claim is against them as legatees, it is seen that all of the legatees are not jointly sued, or any single legatee separately. If the claim is against them as devisees, the case shows that all of the devisees are not made parties, which, I think, under the provisions of the statute, is fatal.

But as it was strenuously urged on the argument, that if there was no other objection, exercising a proper discretion under the circumstances, the court of chancery should have allowed the cause to stand over and proper parties to be brought in, I will proceed to see whether a case upon the merits has been stated in the bill provided proper parties were in. The relief to which the complainant supposes himself entitled, as appears by the prayer of his bill, is either, that the defendants should be decreed to desist from selling under the decree in favor of Gates and wife, Beard and wife, and Susannah Van Derin, made 22d September, 1838, the premises devised to Samuel Boyer, and quiet his title thereto under his purchase at the sheriff’s sale; or that the defendants should be decreed to pay his judgment, together with interest and costs, and the surplus of the bid over and above that judgment and costs; and that such claim should be decreed to be a prior lien upon the premises devised to Samuel Boyer to the lien of Gates and wife, Beard and wife, and Susannah Van Derin; and that when a sale should be made of said premises upon that decree, the complainant’s claims should be first paid. I am unable to discover any principle upon which such claim as set forth in the bill can be sustained against the defendants, Gates and wife, Beard and wife, and Van Derin. I do not see that the complainant has shown that he has acquired any title whatever to the premises, legal or equitable, under his judgment.

Conceding that his judgment was a lien upon the lands of Samuel and Philip Boyer at the time of its docket, and that is *265as much, and I think more, than can be claimed for it, they did not then own or have any interest in the land in question. It is shown that Samuel conveyed to Philip these lands on the 20th day of January, 1830, and that Philip conveyed the same to Poultney and Ellicott on the 15th day of August, 1832, upon the consideration mentioned in the deeds, which are not attempted to be impeached for fraud or otherwise by the complainant ; and the suit in which the judgment was rendered was not commenced until July, 1833. But it is said that it is not averred or proved that the purchasers from Samuel Boyer were bona fide for a good consideration and without notice.

The answer is, as against a purchase under a judgment against Samuel and Philip Boyer as executors, or as against them generally, the prior conveyance is presumed to, have been fairly made upon the consideration expressed in the conveyance, and bona fide. If it is claimed to be fraudulent, the burden of showing it lies with the other side.

The argument seems to have proceeded upon the ground that this judgment was recovered against Samuel and Philip Boyer as heirs or devisees of the testator, and that the land sold and purchased by the complainant under it had descended from or been devised to them by the testator. If the judgment was such, the land of the heir or devisee, descended from, or devised by the testator, would be subject to be sold; and on a sale the purchaser would acquire a valid title, although it had been previously aliened by the heir or devisee, unless such alienation had been made in good faith before the commencement of the suit; and the purchaser, in order to show a good title against the purchaser under such judgment, would be under the necessity of showing that the heir or devisee had so aliened it in good faith.

In the second place, I see no ground on which the complainant has made by his bill a valid claim against the defendants, Gates and wife, Beard and wife, and Van Derin, or either of them, to be decreed payment of his debt. Under no circumstances could he maintain his claim or any part of it as against them, unless he presented a case showing either that they are legatees and had been paid their legacies or some part thereof *266out of the personal estate, and that no assets had been delivered by the executor or administrator of the deceased to his next of kin; or that the value, of such assets had been recovered by some other creditor; or that such assets were not sufficient to satisfy his demand, (2 R. S. 452, § 27;) or that they are the heirs or devisees of Jonathan Boyer, and that some estate interest and right in the real estate of "the deceased had descended from or been devised by him to them; and that the personal assets of the deceased were not sufficient to pay and discharge his debts; or that, after due proceedings before the proper surrogate’s court and at law, he had been unable to collect his debts or some part thereof from the personal representatives of the deceased, or from his next of kin or legatees. (2 R. S. 452, §§ 33, 36, 456, §§ 59, 60; Butts v. Genung, 5 Paige R. 254.)

The complainant has failed to show’by his bill, if he claims to recover against them as legatees strictly, that the defendants, Gates and wife, Beard and wife, and Van Derin, or either of them, had ever been paid any portion of their legacies.

If he claims against them as heirs, and as such, if it be conceded that he has shown that some estate interest and right in the real estate descended to them from the testator, he has omitted to show or allege that the personal assets of the deceased were not sufficient originally to pay and discharge his debts, or that after due proceedings before the proper surrogate’s court, and at law, he had been unable to collect his debt or some part thereof from the personal representatives of the deceased or from his next of kin or legatees. (2 R. S. 452, § 33.) Or if he claims against them as devisees, he has omitted to allege or show that the personal assets of the testator, and the real estate which descended to his heirs, were insufficient to discharge his debt; or that, after due proceedings before the proper surrogate’s court, and at law, he had been unable to recover such debt or some part thereof, from the personal representatives of the testator, or from his next of kin or legatees, or from his heirs. Such allegations were necessary, without which no cause of complaint appears by the bill against them. (2 R. S. 452, § 33,455, § 56; Schermerhorn v. Barhydt, 9 Paige R. 28.)

*267It seems to me, therefore, that in whatever character complainant claims against Gates and wife, Beard and wife, and Van Derin, whether as legatees, heirs, or devisees, conceding to them the character of one or the other, he has failed to make such allegations, without which being made and proved or admitted, he does not show a case subjecting them to the payment of his debt or any part thereof.

The bill merely states that the testator, at the time of his death, was possessed of considerable personal estate, hut without alleging that it was not sufficient to pay his debts. For aught that appears by the bill, the personal estate of the testator was sufficient to have paid all his debts, if it had been applied to that purpose by his executors. The devisees of the real estate or of any interest or rights therein can not be subject to contribute any thing for the payment of debts until it is shown that the complainant has taken all proper steps to obtain satisfaction from the executors, or from the legatees of the personal estate, if it has been paid over to them leaving debts unpaid, or from the real estate, if any, descended to his heirs.

I agree with the chancellor, that the issuing of the execution upon the judgment recovered against the executors did not exhaust the remedy against them, for the personal estate which had come to their hands and had been misapplied by them. For under that execution, the sheriff could only levy the demand out of the personal property which still remained in their hands, and which was the proper subject of sale on execution. The return of such execution unsatisfied, therefore, was no evidence that there was not in fact sufficient personal assets originally, or even then, to satisfy the judgment, or that the debt or demand could not be recovered from the executors personally, if the complainant had taken the proper steps to call them to account befor the surrogate. And conceding that the interest of the legatees in the real estate, their legacies being liens thereon, could be reached in any way, they clearly can not be until the complainant has proceeded against the surviving executor personally for the satisfaction of his demand.

It was however insisted on the argument that the defendants *268could not raise the objection that the testator’s personal assets were not exhausted, on the ground that their proceedings to enforce their lien upon the real estate, to satisfy their legacies, was an admission of a deficiency of assets of the testator, and that they had been duly applied in the course of administration.

I think there are are at least two conclusive answers to such objection. One is, if the legatees had gone against the executors for payment of their legacies, conceding that the surplus of the personal assets over and above sufficient to satisfy all the debts of the testator chargeable upon them could properly be appropriated to satisfy the legacies, non constat that they did, and that the personal assets of the testator were claimed by the executors to be retained by them equal in amount with the complainant’s debt, on the grounds of its existence and being outstanding.

The other is, the defendant’s bill, in the first suit, expressly alleges that the personal assets of the testator which came to the hands of the executors were more than sufficient to pay all his debts, which fact is admitted by the complainant in his answer or stipulation in that suit.

It is not perhaps very material in the decision of this case to express an opinion as to the effect of the judgment obtained by the complainant against S. and P. Boyer, as executors of their testator. But as it was strongly urged that the complainant acquired a valid title to the premises in question upon the sale and conveyance under it, as against the defendants, it may be well enough to give an opinion upon that point.

That judgment was rendered against the defendants therein as-executors for $1,459,16 damages and $41,16 for costs, to be levied of the goods and chattels which were of the testator at the time of his death in their hands to be administered, if they had so much thereof in their hands to be administered, and if they had not so much in their hands to be administered, then $41,16, parcel of the damages aforesaid, being for the costs and charges aforesaid, to he levied of the proper goods and chattels of said Samuel and Philip Boyer. This is in conformity to the English practice as formerly pursued in the entry of such judg*269ments, and by its terms was not a lien upon the lands, even of the defendants, for any portion of the recovery. (Lansing v. Lansing, 18 John. R. 502.)

If there had been a further direction, which is warranted by our statutes on a proper application to the court, to wit: “ and if sufficient goods and chattels of the executors can not be found, &c., that then the said $41,16 be made of the real estate of the executors,” the judgment for that amount would have been a lien upon the lands of the executors; but as it was rendered only against their goods and chattels, in my opinion it never was a lien upon any real estate.

It is evident from the whole tenor of the will, that the testator intended to charge his son Philip with the payment of the legacies bequeathed to his daughter Betsey, and his son Samuel, with the payment of the several legacies bequeathed to his four daughters Polly, Susannah, Mary, and Catharine, in case of their acceptance of the devises, in consideration of the lands so devised to them respectively in aid of the personalty. That being so, it is well settled that such real estate is in equity chargeable with the payment of those legacies. (Harris v. Fly, 7 Paige R. 421.) It is plain that the daughters of the testator, who have legacies bequeathed to them, to be.paid by his two sons in consideration of the devise of the. real estate tp them and the representatives of those who are deceased, if liable at all for the payment of the complainant’s debt, can only be subjected to the payment upon the ground that their legacies are interests in the real estate so devised to Philip and Samuel to the extent of the value thereof, and equitable charges upon the lands so devised. I am inclined to the opinion that such legacies are interests in such real estate, which under a proper state of facts would subject them to the payment of the debts of the testator to the extent mentjoned, although the devisees charged with the payment of the legacies may have aliened their interests in the estate in good faith before the commencement of a suit by a creditor for the recovery of such debt. The interests of the legatees in the land would remain unaffected by such conveyance. But it is not necessary to decide that question in this case, as I think I have shown that the bill is not so framed *270as to charge any of the daughters on the ground of having such interests.

I agree with the chancellor, that there- was enough in the pleadings and proofs to entitle the complainant to the decree made against S. Boyer. Several other questions were made on the argument; among them the defendants insisted that the complainant’s debt was barred by the statute of limitations. Having come to the conclusion that there is no error in the decree of the chancellor, I do not deem it necessary to give an opinion upon any other question made. The decree should be affirmed.

Decision.—Decree affirmed, unanimous.

Note.—Held, that personal estate is first liable, at law and in equity, for the ' payment of the debts of a testator. The real estate, in case of insufficient personal estate, is next liable, except such as is expressly charged with the payment of debts.

Where legacies are made payable and have been paid out of the personal estate, the legatees, in general, are bound to refund where the personal estate proves insufficient to pay the debts.

In thisicase the complainant, by his bill, must make title, if at all, against the defendants as legatees or devisees of the testator. Not having jointly sued all of the legatees, or any single legatee separately, and not having made all of the devisees parties, under the provisions of the statute, there is a fatal defect of parties.

As against a purchaser under a judgment against Samuel and Philip Boyer ap executors, or as against them generally, the prior conveyance (to Poultney and Ellicott) is presumed to have been fairly made upon the consideration expressed in it. If it is claimed to be fraudulent, the burden of showing it is with the other side.

If the judgment had been recovered against Samuel and Philip Boyer as heirs or devisees, and the land sold under it had descended from or been devised to them by the testator, then a prior bona fide purchaser to the judgment would be bound to show that the heir or devisee had aliened the land in good faith.

If the complainant claims to recover against Gates and wife, Beard and wife, and Van Derin, as legatees, he has failed to show, by his bill, that either of them have ever been paid any portion of their legacies.

If he claims to recover against them as heirs, he has omitted to allege that the personal assets of the deceased were not sufficient originally to pay his debts, or that all the proper proceedings and remedies before the surrogate, and at law, had been instituted against the personal representatives, and exhausted.

And if he claims against them as devisees, he has omitted to allege or show, that the personal assets of the testator, and the real estate which descended to his heirs, were insufficient to discharge his debts, or after proceedings against the personal representatives, next of kin, legatees, or heirs-at-law, before the surrogate and at law, he had been unable to recover the debt or some part thereof.

*271The issuing of the execution upon the judgment recovered against the executors, and its return unsatisfied, was no evidence that there was not in fact sufficient personal assets originally, or even then, to satisfy the judgment, or that the debt or demand could not be recovered from the executors personally, if the proper steps to call them to account were instituted.

The complainant’s judgment being against the defendants as executors, and the amount thereof to be levied of the goods and chattels which were of the testator at the time of his death in their hands to be administered, and if they had not so much in their hands to be administered, then the amount of costs and charges to be levied of the proper goods and chattels of the executors personally, it never was a lien upon any real estate.

There was enough in the pleadings and proofs to entitle the complainant to the decree made by the chancellor against S. Boyer.

Not reported in this court.