Newell v. Morgan

Johns, Jr., Chancellor.

My first impressions were in favor of the preference claimed for the complainants.

I have no doubt that wherever a legal right has been established it will be recognized in equity. Wherever a party has established a j udicial preference at law, by judgment or execution,a court of chancery will recognize such preference and give effect to the right. But the term j udicial preference is not used with reference to the speed of the parties in pressing their claims at law, but with reference to their having obtained a prior legal lien upon the property. In this case no such legal lien was obtained by the complain-" ants. Their judgment never bound the property at law. *23ÍTo claim could be asserted against the property, or the fund arising from it, otherwise than through a court of equity. Considering, then, that none of the creditors have obtained a legal priority, I must treat their equities as equal, and adopt the principle of pari passu distribution.

Decree accordingly.

On appeal, the Court of Errors and Appeals, at the June T. 1837, affirmed the decree of the Chancellor, so far as it had declared the conveyance of the property to be fraudulent and void and had directed a sale ; but the appellate court held that the complainants had, by their superior diligence at law, gained a preference in equity, and were entitled to be first paid out of the fund—the other creditors taking the residue pari passu. 2. Harring. R. 225.