Kinderley v Jervis
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1856 |
| Date | 01 January 1856 |
| Court | High Court of Chancery |
English Reports Citation: 52 E.R. 1007
ROLLS COURT
S. C. 25 L. J. Ch. 538; 2 Jur (N. S.) 602; 4 W. R. 579. See Pickering v. Itfracombe Railway Company, 1868, L. R. 3 C. P. 248; Price v. Price, 1887, 35 Ch. D. 305.
Reports of CASES in CHANCERY ARGUED and DETERMINED in the ROLLS COURT during the time of the Right Honorable Sir JOHN ROM ILLY, Knight, Master of the Rolls. 1856. By CHARLES BEAYAN, Esqr., M.A., Barrister-at-Law. Vol. XXII. 1857. [1] kcnderley v. JERVis. April 11, 12, 14, May 22, 1856. [S. C. 25 L. J. Ch. 538; 2 Jur. (N. S.) G02 ; 4 W. R. 579. See Pickering v. Ilfmcombe. Railway Company, 1868, L. R. 3 C. P. 248 ; Pi-ice v. Price, 1887, 35 Ch. D. 305.] The rights of simple contract creditors of an ancestor as against the descended estates are not defeated by judgments entered up against the heir, for his personal debts, before suit. The 3 & 4 Will. 4, c. 104, makes real estate "assets to be administered in Courts of Equity " for payment of simple contract debts of the deceased, and the 1 & 2 Viet, c. 110, s. 13, makes a judgment a charge on any lands of which the judgment creditor is seised, &c., or over which he shall have any disposing power, for his own benefit, and it makes such judgment an equitable mortgage thereon. Held, that judgments, entered up against the heir for his own debt, before any action or suit by the simple contract creditors of the ancestor, have no priority over the simple contract creditors of the intestate, in respect of the descended estate. It was not the object, nor is it the operation, of the statute of the 3 & 4 Will. 4, c. 104, to make the simple contract debts of a deceased person in the nature of mortgages or specific charges on his real estate, but as the statute makes the land assets for the payment of his debts, these debts constitute a general charge upon them, but not so that a bona fide purchaser of the lands, from the heir or devisee, is bound to see to the application of the purchase-money, as he would be in the case of a particular mortgage on any portion of the lands themselves. The real estate of a deceased person constitutes assets, to be administered in a Court of Equity, according to the priorities specified by the statute, and all the incidents of assets attach to it, and, consequently, such assets are liable, in the first place, to pay the debts of the deceased debtor, and subject thereto, they belong to his devisee or heir at law, but the devisee or heir at law takes no beneficial interest therein, except subject to and after payment of the debts of the deceased testator or ancestor. By the 1 & 2 Viet. c. 110, a. 13, the Legislature meant that a judgment was to operate on all lands and interest in lands over which the debtor might have a disposing power, for his own benefit, without commiting a breach of duty, that is, over which he had a right, at law or in equity, to consider himself the beneficial owner. The introduction of such words as "honestly" or "without committing a breach of duty" appears to be superfluous, for they are necessarily to be understood as forming a part of the clause. Observations on Watts v. Porter, 3 Ellis & B. 743. Sir Sandford Graham died on the 18th of September 1852, intestate, indebted on 1007 1008 K.INDERLEY V. JERVIS 3Z BEAV. 2. specialty and simple contract. He was seised of considerable real estate [2] which descended on his heir at law, the Defendant Sir Sandford Graham. At the death of the intestate, and subsequently, judgments were entered up against the Defendant Sir Sandford Graham, which, being duly registered in the office of the Senior Master of the Court of Common Pleas, became charges on his real estate under the 1 & 2 Viet. e. 110, s. 13. This bill was filed, on the 2d March 1854, by the Plaintiff, on behalf of himself and the other creditors of the intestate, and a decree was made on the 15th of March 1855, for taking the accounts arid for inquiring as to the ineumbrances affecting the real estate of the intestate. The case came on, upon the Chief Clerk's certificate, when some of the judgment creditors of the heir insisted that their judgment charges had priority over the' simple contract debts of the testator. The question principally depended on the true construction of the statutes of the 3 & 4 Will. 4, c. 104, and the 1 & 2 Viet. c. 110, and it will, therefore, be convenient to state them shortly, in the first instance. The 3 & 4 Will. 4, c. 104, intituled "An Act to Eender Freehold and Copyhold Estates Assets for the Pay-[3]-ment of Simple and Contract Debts," is as follows :- " Whereas it is expedient that the payment of the debts of all persons should be secured more effectually than is done by the laws now in force; be it therefore enacted," &o., that " when any person shall die seised of or entitled to any estate or interest in lands," " which he shall not by his last will have charged with or devised subject to the payment of his debts, the same shall be assets to be administered in Courts of Equity, for the payment of the just debts of such persons, as well as debts due on simple contract as on specialty; and that the heir or heirs at law, customary heir or heirs, devisee or devisees of such debtor shall be liable to all the same suits in equity at the suit of any of the creditors of such debtor, whether creditors by simple contract or by specialty as the heir or heirs at law, devisee or devisees, of any person or persons who died seised of freehold estates was or were before the passing of this Act liable to in respect of such freehold estates, at the suit of creditors by specialty in which the heirs were bound : provided always, that in the administration of assets by Courts of Equity, under and by virtue of this Act, all creditors by specialty, in which the heirs are bound, shall be paid the full amount of the debts due to them, before any of the creditors by simple contract or by specialty, in which the heirs are nob bound, shall be paid any part of their demands." The 1 & 2 Viet. c. 110, s. 13, enacts that a judgment entered up against any person "shall operate as a charge upon all lands," &c., "of or to which such person shall, at the time of entering up such judgment or at any time afterwards, be seised, possessed or entitled, for any estate of interest whatever, at law or in equity, whether in possession, reversion, remainder or expectancy, or over which such person shall, at the time of [4] entering up such judgment or at any time afterwards, have any disposing power, which he might, without the assent of any other person, exercise for his own benefit," &c., &c.; "and that every judgment creditor shall have such and the same remedies, in a Court of Equity, against the hereditaments so charged by virtue of this Act, or any part thereof, as he would be entitled to in case the person against whom such judgment shall have been so entered up had power to charge the same hereditaments, and had, by writing under his hand, agreed to charge the same with the amount of such judgment debt and interest thereon." Mr. R. Palmer, Mr. Follett and Mr. Osborne, for the Plaintiff. The simple contract debts of the intestate are payable out of his real estate, in priority of the judgment creditors of the heir. To hold the contrary would be to produce the absurd result of paying one man's debts out of another man's estate: to apply the ancestor's estate in paying his heir's debts in priority of his own, and thus the judgment debts of the heir, entered up prior to the ancestor's death, would, immediately on such death, become a charge on the descended real estate, so as to defeat the creditors of the ancestor himself. But such is not the law, for the heir is only entitled to take beneficially, by descent, that which remains after paying all the debts and obligations of the ancestor; if so, those claiming as judgment creditors of the heir can take no more than the debtor himself. The statute of the 3 & 4 Will. 4, c. 104, differs in its form from the previous 22BEAV.K. KINDERLEY V. JERVIS 1009 Acts, which made the heir and devisee liable in respect of the lands descended or devised. Here tie language is-" shall be assets to be administered in Courts of Equity for the payment of the just debts." This constitutes the real estate "assets to [5] be administered" in equity/and an equitable charge is thereby attached on the assets themselves, which the heir is bound to give effect to. The Court would attach and sell those assets, and grant an injunction against the heir, to prevent their being misapplied, so as to defeat the rights given by the statute to the creditors of the ancestor. Thus, in Price v. Price (15 Simons, 484), the Vice-Chancellor of England held, that the Court had jurisdiction to order the real estates of a deceased debtor to be sold for the payment of his debts in a suit for the administration of his estate, though instituted not by a creditor, but by the heir and the next of kin of the deceased. The same question which had been decided in Price v. Price was subsequently discussed in Rodney v. Rodney (16 Simons, 307), and the Vice-Chancellor pronounced a judgment which was substantially the same as his judgment in Price v. Price. In Primm v. Insall (7 Hare, 193, and 1 Hall & Twells, 487, 491), where the personal estate of a debtor was insufficient to discharge all his debts, it was held that the right of his simple contract creditors to have their debts satisfied out of his real estate, which had descended to his heiress at law, was not defeated by articles executed by her while still a minor, previously to and in contemplation of her marriage. There Lord Cottenham says :-" This case on the articles is simply that of an agreement by an infant heir on marriage, never carried into effect. It is too late to contend that such a contract is binding; how, then, can such an agreement defeat the claims of creditors which existed at the time it was entered into? There is neither...
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