Creditor and Debtor
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1744 |
| Date | 01 January 1744 |
| Court | High Court of Chancery |
English Reports Citation: 21 E.R. 941
HIGH COURT OF CHANCERY
[138] GAP. XXII. creditor and debtor. (A) Where there is a Provision by Deed or Will for Payment of Debts, what Debts shall be paid. (B) The Order and Manner in which Debts shall be paid, or what Precedence one kind of Debt shall have over another in Equity. (C) What shall be a good Payment, to whom and at what Time. (D) Where Debts of a different Nature are due, and a general Payment is made, to which Debt shall it be applied. (E) What Conveyance or Disposition shall be fraudulent as to Creditors. (A) where there is a provision by deed or will for payment of debts, what debts shall be paid. 1. If A. makes a Deed of Trust of Lands for Payment of his Debts, to take Effect after his Death, and the Words of the Deed are, Monies owing by him, and a Schedule is annexed to the Deed, wherein Mention is made of £1000 to A. and £500 owing to B. and then there is this Item, vis:. The Sum of £3000 owing to other Persons ; this Deed shall not be construed to charge the Lands with Debts contracted afterwards, though they exceed not the Sum mentioned in the Schedule. Decreed Hil. 1681, Purefoy and Purefoy, 1 Vern. 28. 2. A. had a Demand of £500 against B. and had run it up to £2700 and obtained a Decree for it in Chancery, from which B. appealed to the House of Lords, where the Decree was affirmed : It was observed, that B. at the pronouncing this Decree in the House of Lords, fell down in a Swoon, and within a Week afterwards died as supposed, of Grief; but he first got a Petition answered, for a Rehearing, and in his Sickness devised all his Lands for the Payment of his Debts; and Ld. K. said, That this could not be in-[139]-tended a Provision for A. 's Demand, which he denied upon Oath, and in which he died a Martyr; however at length decreed, that after all Debts upon simple Contract were paid, A. should come in and be paid his Debt, if he could find Assets. Hil. 1682, Norden and Norden, 1 Vern. 142. [Hollis . Carr,] Ibid. 431, S. 0. cited, and said to be adjudged by Ld. K. North, not to lie within the Intent of the Provision for Payment of the Testator's Debts. 3. A Man devised his Lands for the Payment of his just Debts; the Testator, whilst a Student at Cambridge (but of Age), had by Surprise been prevailed upon to give a Covenant for Payment of a Portion to his Sister ; but he afterwards contested this Debt; and though he was decreed to levy a Pine to subject Lands for the Pay ment of it, yet he refused so to do : Per Cur', This being a just Debt, shall be paid, though not perhaps within the Intent of the Provision. Decreed Hil. 1686, Lord Hollis and Lady Carr, 1 Vern. 431. 4. If one by Will or Deed subject his Lands to the Payment of his Debts, Debts CREDITOR AND DEBTOR 1 BQ. CA. ABE. 140. ha11 be Paid ; for they are Debts in Equity, and for Repavmentof tT P ^ ' ^ W^ rePav ' but there was no Covenant the Principal Money itself; the Mortgagee insures the Shin and ; then the ShiP Preeds ^ her VoyagS and *? & out on another Voyage, the Mortgagee thejlnsural!e but coukl not "agree for the Rate, out and was Iost in the vyage : and now between * the Mortgagor, the Qu^estiok was, whether he T' M aM* aS a CreditOT * simple Contract ' n0t' beCaUSe there WaS no Covenant for Payment mUSt be SUpPSed to rest himself on the Ship only S 1S ^ Mn^ to ' but on the other Side " Ö , at a11 for his Mo^' ^ had then, without / "^P-16 CntraCt ; and SUre1^ the takinS Security ought Conditaon, especially now that the Security being lost and 7 n the Simple Contract^ and of the same Opinion was 1713- Thomas and clar the Land g neral general treated w P and therein sp ^ ' P P and of the Mort P for hL Se urged that Question been not to Öt WÖ eone Ms nlT ? D f Lands' f wWch there is a Term in Trustees to attend ' a,nd ,byTDeed SUbjects the Land to a Debt of £1000, but ^' ^ Land shuld be to the old Uses, and after deVises 1 T ^^ "? 2*** ShaH be Hable t0 a11 ** Debts in Mich. 1682, Turner and ffwwnn, 1 Vern 99 But the Tenant ^ Tail of the Inheritance, and e had Sti11 a Power of doinS de-[i4o]-ciared Plaitiff ^^ JMwa* Earl of WaÖ^^. ^ 1696, n the Earl tO the Use of two Trustees' ^ l and Countess should so long jointly live in Trust out her sePa'ate and f^^^ the E] T ò fp' SUbjeCt theret that and the ' Sri er reason f the previous thereto ninl y nine of t , of and TthrefStPr, offf P aWC^ At the Time of Ws Death there was a Year other Persons in ooiid ^T11^ '? frrear' and h ^s likewise indebted to several extend to p"; Tnd a LfT and ^ t^7' ^Ch ^ PerSnal Estate W0uld not Sfe BicA /fiq Cf 7 ' ò d the^re b,emg no Executor named in the Will, the Lady WH annexed fnd n aS.Pnf lpal 'Creditor, took out Administration to him, with the in his Power to cLr?e ^f h t^ * P ^^ ? Fee f the whole Settled ^skte being affected oHold durfnf thTr ?' ^'f ,f ^1S DebtS' this ^^rsion could not bt by a Recovery bv the T C^tl^uance Lof ^ Estate Tail, as it was liable to be docked one Years ^nl7lVflJ "J Tal ; Earl Edward-HenrV attained his Age of twenty- r, Sf mteState and ^married ; and upon his Death the \ and the Plaintiff th Countess, his Mother, took t.6 Said Earl ^ward-Henry- and now this Bill Sa]lsfaction of the said Arrears of Pin-money, and ' & Safactin of their Debts ; and in order of Earl Edward ; and that if might be paM Ut f the Male' WaS become Assets' and in 172 died EsLe deLend d ou Letters was brought by the othS Creto ireto, to ^ an lloul O the Personal Eltate ^er Real Estate, whcfno7 t ' ^ IeVled a Kne to the Use of himself and his Heirs, n tO , to the Will of Earl Edward I Öò SU6 Male' WaS become Assets' according ^ tn Mward. It was insisted upon, for the Defendant, that the Earl 1EQ. CA. ABE. 141. CREDITOR AND DEBTOR 943 and Countess living together, and no Demand being proved to be made of these Arrears of Pin-money, that it was in the Nature of a Present of them to the Earl, or a Waiver of them, and that at most .in such Cases, the Court never allowed more than a Year's Arrear; because it was impossible, but that at the Husband's Death some Arrears must be, unless they were always paid punctually at the Day, and therefore a Year has been always held to be as much as was reasonable to allow in those Cases. But in this Case the Court allowed the Whole, as the Whole were proved to be in Arrear; and that between Husband and Wife, who lived well together, three Quarters of a Year made but little Difference. Another Point insisted upon for the Defendant was, that by the Fine levied by Earl Edward-Henry the Estate-Tail was extinguished or consolidated with the Reversion or Eemainder in Fee in him, and that the Plaintiff's Title to demand their Debts [141] then attached upon the Estate, and cited 1 Salk. 333, Symonds and Scudmore; and therefore, that the Rents and Profits received by Earl Edward-Henry, ought to be applied towards a Satisfaction of the Plaintiff's Demands ; and by Consequence that the Plaintiff, the Countess being Administratrix to the said Earl, had Assets in her own Hands for that Purpose: But the Court was Clear of Opinion, that the Rents and Profits received by Earl Edward-Henry of his own Estate, whereof he was then owner, should not be applicable for that Purpose before a Demand made, because till then he did no Wrong in receiving the Rents and Profits of his own Estate ; and so it had been decreed lately in the Case of Montague and Bord, in this Court. Mich. 1728, Countess of Warwick and Edwards [S. C. Dick. 51]. The Testator charged his real Estate (which was subject to a Mortgage contracted by his Ancestor) and also all his Personal Estate with his Debts and Legacies. It was decreed by Ld. Thurlow, and afterwards in the House of Lords, that the Mortgage should be born by the Estate originally liable, and that the Executrix, having discharged it out of the Personal Estate, should be repaid. Lawson t . Hudson, [1] Bro. Chan. Ca. 58. So, notwithstanding the Testator charged a Term with Payment of his Debts, a Leasehold Estate mortgaged by the Testator's Ancestor, shall bear the Burden of such Mortgage. Ancaster v. Mayer, [1] Bro. Chan. Ca. 454. But where Sir R. W. reciting himself to be seised, subject to Incumbrances, of an Estate, which he had mortgaged, devised another Estate for a Term of twenty-one Years in aid of his Personal Estate to pay Bond and Book Debts, and by a subsequent Clause to pay all his Debts; Ld. Thurlow decreed, that the Personal Estate and the Term should exonerate the mortgaged Estate. Tweedale v. Coventry, [1] Bro. Chan. Ca. 240. (B) the order and manner in which debts shall be paid, or what precedence one kind of debt shall have over another in equity. 1. If Lands are devised to Trustees for Payment of Debts; Debts by simple Con tract, and Debts by Specialty, shall be paid in Proportion ; and though the Trustees are Creditors to the Testator, or Sureties for him, yet they shall not be allowed to prefer themselves. [Anonymous,] 2 Chan. Ca. 54. That all Debts, when the Devise is to a Trustee, shall be paid in Average, except those that affect the Land. Decreed, Vide [Girling v. Lee] 1 Vern. 63. 2. But if the Lands are devised to an Executor, (a) they become legal Assets, and shall be paid in a Course of Administration; and according to the Precedency or Superiority at Law. Decreed Mich. 1682, Girling and Lee, 1 Vern. 63 ; 2 Ghan. Rep. 262, S. C. (a) That they become legal Assets in the Hands of an Executor, Resolved [Hixon v. Wytham] 1 Chan. Ca. 248; 1 Rol. Abr. 920; Hob. 265. 3. If one devises Lands to his Nephew and his Heirs, whom he makes his Exe cutor in Trust to sell, for Payment of Debts and Lega.cies, the Debts and Legacies shall be paid in Average ; for he having devised to him and his Heirs, shews that he designed that it should go in a Course of Descent, and he to take as a Trustee. Anon. 2 Vern. 133. But qu&re whether the Debts should not be preferred; and vide in Greaves v. Powell, Ibid. 248, the Case of...
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