Hammond v. Hammond
This text of 2 Md. Ch. 306 (Hammond v. Hammond) is published on Counsel Stack Legal Research, covering High Court of Chancery of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Bland, Chancellor.
This case standing ready for hearing and being submitted, the proceedings were read and considered. Whereupon it is Decreed, that the auditor take an account of the real and personal estate of the late Philip Hammond which came to the hands of the said Elizabeth Hammond, Rezin Hammond, Thomas Hammond, and Charles Hammond, as executors or otherwise of the late Philip Hammond; and of the manner in which the same may have been administered or distributed. And also an account of the debts due and owing from the said late Philip Hammond at the time of his death which are yet remaining unpaid. And that the auditor state said accounts from the pleadings and proofs now in the case, and from such other evidence as the parties may have taken before him, or have taken before any justice of the peace, on giving three days notice as usual, and lay before him.
[310]*310After which the case was brought before the court to have the creditors of the testator called in, for the purpose of having the assets properly administered, and of making a final settlement, and distribution of the estate.
11th September, 1828.
Bland, Chancellor.—
Ordered, that the creditors of Philip Hammond, late of Anne Arundel county, deceased, file the vouchers of their claims in the chancery office on or before the 17th day of January next., And that' a copy of this order be inserted in some newspaper or newspapers once in each of three successive weeks before the 17th day of' October next.
The object of this suit being to adjust the rights and liabilities-of the respective parties, as claimants under the will of Philip Hammond, deceased, it was obviously liable to abate by the death of any one of them, whose interest did not survive or fall into the common stock for the benefit of any one or all of the others; although as regarded the creditors. of' the deceased, it was to .be treated as a mere creditor’s suit. Therefore, on the death of the plaintiff Philip Hammond, the surviving plaintiffs filed a supplemental bill of revivor against his widow Juliana Hammond, and his infant children Philip Hammond, Marianna Hammond, Harriet Hammond, Edward Hammond, and Cecelia Hammond; who all answered and admitted the facts as stated in the bill.
The auditor reported, that, in consequence of the imperfect state of the accounts and vouchers of the defendant Rezin, who was one of the executors, he had taken unusual pains to prepare his account ; that he, the auditor, had made a statement, to make a report' of which to the court, the affidavit of Rezin-was necessary; that several days had been appointed for him to appear and verify the statement; but he had failed to do so; from which, and his conduct the auditor alleged, that he was convinced he should be unable to report any account unless Rezin should be compelled to attend.
8th Jiugust, 1829.
It having been made the duty of the auditor to state such accounts as the Chancellor may direct; and as he has, for that purpose, been clothed with authority to administer an oath to all witnesses' and persons proper to be examined upon such accounts;
Ordered, that the said Bezin Hammond forthwith attend before the auditor, and give such information and testimony, or make such affidavit as may be deemed pertinent and necessary to enable the auditor to state such an account as he has been directed to state, or the nature of the case may require; provided, that a copy of this order be served on the said Bezin Hammond.
The auditor on the 25th of August, 1829, filed his report of the accounts which' he had stated in obedience to the decree of the 27th of August, 1828, in which he set forth, that the overpayments of Charles, Thomas, and Elizabeth, amounted together to $2,047 29; and that there was due from the defendant Rezin $555 19; that the outstanding claims against the testators, as then shewn, amounted to $3,086 29; that Charles and Harriet claimed to have their legacies charged against the general fund, which, if allowed, would leave the sum of $5,908 39 to be provided for; that, assuming this as the amount to be raised from the estate, he had stated the amount of contribution with which the respective devisees were chargeable; that there was a debt due to the estate amounting to $605 with interest and costs, which had not then been collected; and of the parcel of land devised to be sold for the payment of debts, there remained one hundred and fifteen acres yet to be disposed of; neither of which items had been included in his estimate of the estate.
To this report of the auditor the defendant Rezin excepted; because Charles and Harriet had been allowed their legacies out of the general fund to the prejudice of the other devisees.
The parties Thomas, Charles, Rezin, and Elizabeth, as executors of the late Philip Hammond, by their petition stated, that a judgment had been recovered against them, and their sureties, on their bond, as executors, for the use of JYicholas G. Ridgely for [312]*312the sum of $471 36, with interest and costs, it being a debt due from their testator; and that Ridgely had sued out a fieri facias against them. Whereupon they prayed that he might be restrained from proceeding at law, &c.
On the 29th of September, 1829, an-injunction was granted as. prayed, \ . •
The plaintiffs, with the leave .of the court, on the 28th of. October, 1829, so amended their bill as to make Jinn Hammond, the wife, and Matthias. Hammond, t Denton Hammond, Susan Hammond, and Jinn Hammond, the infant children of the defendant Rezin; and Harriet Hammond, the wife, with Henry Hammond, Thomas Hammond, and Margaret Hammond, the' infant children' of the plaintiff J.ohn, parties to this suit, on the ground of their having an interest in the .estate of the testator under his will. The adult defendants put in their answers, and the infant defendants answering by their guardian ad litem to this amended bill, admit- . ted all the facts as set forth by the plaintiffs.
On the 7th of November, 1829, the parties filed the following agreement: ‘Whereas there is a cause now depending in the Court of Chancery, for the settlement of the estate of Philip Hammond, deceased; and it is ascertained, that the estate specially devised by said Hammond, for payment of debts, is insufficient, for that purpose; and whereas there'.is some doubt whether the contribution provided for by the will, should be made by the devisees of said Hammond,
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Bland, Chancellor.
This case standing ready for hearing and being submitted, the proceedings were read and considered. Whereupon it is Decreed, that the auditor take an account of the real and personal estate of the late Philip Hammond which came to the hands of the said Elizabeth Hammond, Rezin Hammond, Thomas Hammond, and Charles Hammond, as executors or otherwise of the late Philip Hammond; and of the manner in which the same may have been administered or distributed. And also an account of the debts due and owing from the said late Philip Hammond at the time of his death which are yet remaining unpaid. And that the auditor state said accounts from the pleadings and proofs now in the case, and from such other evidence as the parties may have taken before him, or have taken before any justice of the peace, on giving three days notice as usual, and lay before him.
[310]*310After which the case was brought before the court to have the creditors of the testator called in, for the purpose of having the assets properly administered, and of making a final settlement, and distribution of the estate.
11th September, 1828.
Bland, Chancellor.—
Ordered, that the creditors of Philip Hammond, late of Anne Arundel county, deceased, file the vouchers of their claims in the chancery office on or before the 17th day of January next., And that' a copy of this order be inserted in some newspaper or newspapers once in each of three successive weeks before the 17th day of' October next.
The object of this suit being to adjust the rights and liabilities-of the respective parties, as claimants under the will of Philip Hammond, deceased, it was obviously liable to abate by the death of any one of them, whose interest did not survive or fall into the common stock for the benefit of any one or all of the others; although as regarded the creditors. of' the deceased, it was to .be treated as a mere creditor’s suit. Therefore, on the death of the plaintiff Philip Hammond, the surviving plaintiffs filed a supplemental bill of revivor against his widow Juliana Hammond, and his infant children Philip Hammond, Marianna Hammond, Harriet Hammond, Edward Hammond, and Cecelia Hammond; who all answered and admitted the facts as stated in the bill.
The auditor reported, that, in consequence of the imperfect state of the accounts and vouchers of the defendant Rezin, who was one of the executors, he had taken unusual pains to prepare his account ; that he, the auditor, had made a statement, to make a report' of which to the court, the affidavit of Rezin-was necessary; that several days had been appointed for him to appear and verify the statement; but he had failed to do so; from which, and his conduct the auditor alleged, that he was convinced he should be unable to report any account unless Rezin should be compelled to attend.
8th Jiugust, 1829.
It having been made the duty of the auditor to state such accounts as the Chancellor may direct; and as he has, for that purpose, been clothed with authority to administer an oath to all witnesses' and persons proper to be examined upon such accounts;
Ordered, that the said Bezin Hammond forthwith attend before the auditor, and give such information and testimony, or make such affidavit as may be deemed pertinent and necessary to enable the auditor to state such an account as he has been directed to state, or the nature of the case may require; provided, that a copy of this order be served on the said Bezin Hammond.
The auditor on the 25th of August, 1829, filed his report of the accounts which' he had stated in obedience to the decree of the 27th of August, 1828, in which he set forth, that the overpayments of Charles, Thomas, and Elizabeth, amounted together to $2,047 29; and that there was due from the defendant Rezin $555 19; that the outstanding claims against the testators, as then shewn, amounted to $3,086 29; that Charles and Harriet claimed to have their legacies charged against the general fund, which, if allowed, would leave the sum of $5,908 39 to be provided for; that, assuming this as the amount to be raised from the estate, he had stated the amount of contribution with which the respective devisees were chargeable; that there was a debt due to the estate amounting to $605 with interest and costs, which had not then been collected; and of the parcel of land devised to be sold for the payment of debts, there remained one hundred and fifteen acres yet to be disposed of; neither of which items had been included in his estimate of the estate.
To this report of the auditor the defendant Rezin excepted; because Charles and Harriet had been allowed their legacies out of the general fund to the prejudice of the other devisees.
The parties Thomas, Charles, Rezin, and Elizabeth, as executors of the late Philip Hammond, by their petition stated, that a judgment had been recovered against them, and their sureties, on their bond, as executors, for the use of JYicholas G. Ridgely for [312]*312the sum of $471 36, with interest and costs, it being a debt due from their testator; and that Ridgely had sued out a fieri facias against them. Whereupon they prayed that he might be restrained from proceeding at law, &c.
On the 29th of September, 1829, an-injunction was granted as. prayed, \ . •
The plaintiffs, with the leave .of the court, on the 28th of. October, 1829, so amended their bill as to make Jinn Hammond, the wife, and Matthias. Hammond, t Denton Hammond, Susan Hammond, and Jinn Hammond, the infant children of the defendant Rezin; and Harriet Hammond, the wife, with Henry Hammond, Thomas Hammond, and Margaret Hammond, the' infant children' of the plaintiff J.ohn, parties to this suit, on the ground of their having an interest in the .estate of the testator under his will. The adult defendants put in their answers, and the infant defendants answering by their guardian ad litem to this amended bill, admit- . ted all the facts as set forth by the plaintiffs.
On the 7th of November, 1829, the parties filed the following agreement: ‘Whereas there is a cause now depending in the Court of Chancery, for the settlement of the estate of Philip Hammond, deceased; and it is ascertained, that the estate specially devised by said Hammond, for payment of debts, is insufficient, for that purpose; and whereas there'.is some doubt whether the contribution provided for by the will, should be made by the devisees of said Hammond, equally, or in proportion to the value of the property severally devised to them. It is, therefore,, agreed, in order to save expense, that' said, doubt shall be submitted to the Chancellor. And in case the Chancellor should determine that the said contribution shall be borne by the said property in pr'opor-' tion to its value, then the property devised to Thomas Hammond, shall be estimated to be worth $10,000; the property devised to Charles Hammond, shall be estimated to be worth $10,000; the property devised to Henry Hammond, shall be estimated to be worth $10,000; the real property devised to John Hammond, shall be estimated to be worth $2,000; the property devised to, George: W. Hammond, shall be estimated to be worth $10,000; the property devised to Rezin Hammond, shall be estimated to be worth $10,000; the property devised to Matilda Hammond, shall be estimated to be worth $10,000; the property devised to Harriet Ham-mond, shall be estimated to be worth.$10,000; the^property devised to Philip Hammond, Jr. shall be estimated to be worth [313]*313$10,000; and the property devised to Philip H. Mewburn, shall be estimated to be worth $10,000. It is also agreed, that no advantage shall be taken of any alleged defect in the bill, in not charging, that Charles and Harriet Hammond, are entitled to have their pecuniary legacies raised by contribution.’
22d December, 1829.
This case standing ready for hearing, and the solicitors of the parties having been fully heard, the proceedings were read and considered.
It has been urged, that the sums of money given to Charles and Harriet are merely pecuniary legacies, payable only out of the surplus after debts and specific legacies. It is alleged in the bill and admitted, that the personal estate of the testator is inadequate to pay his debts; hence it follows, that those sums of money given to Charles and Harriet, cannot be paid, unless, like the devises and bequests of the original will, they are to be considered as specific legacies, only chargeable with a proportional contribution for the payment of the debts, which the funds appropriated for that purpose by the testator, was insufficient to pay.
In questions of this kind, it is declared by all the authorities, that the intention of the testator is always to prevail, unless it contravenes some established rule of law. It is evident, from the general character of the testamentary instrument under consideration, that the late Philip Hammond, by his will, had designed to dispose of his whole estate, of every description, in a very especial manner. His wife, each one of his children, and his grandson, are named and provided for, by a donation of what he manifestly had estimated as a due proportion of his properly. And each share is given, in a manner, so carefully guarded, as clearly to shew, that the whole subject had been pondered over and well considered. Whether each one of the dividends, so made, was, in fact, of equal value is of no importance, as regards the present question. After the testator had thus established the proportions, in which the first and chosen objects of his bounty should take, he then gives to five of his slaves their freedom, with small pieces of property for their support during their lives; and then, in conclusion, he provides for his creditors: but, in doing so, he cautiously guards against disturbing the equilibrium he had established among his devisees, by expressly declaring, that in case the fund, so set apart for his creditors, should not be sufficient, £that the property devised to my sons and daughters, and to my grandson, shall contribute in equal proportion, to the discharge of my debts.’
[314]*314From this clause, and the general tenor of the win, there can be no doubt, that every devise, and every bequest, including the emancipation of his slaves, for the gift of freedom to a slave, is a most precious specific legacy, are all of them specific legacies which can, in no manner, be made abateable or reducible by any deficiency of the testator’s personal estate; but, in case of any deficiency of that which he has designated as the creditors’ fund, the several devisees, charged with contribution, might be compelled to contribute toward the satisfaction of the testator’s debts to the whole amount of the property given to them, before the donations to the wife and freed slaves, who are hot so charged, could be at all molested. Indeed it seems to be admitted, that the intention of the will, to this effect, is so unequivocally clear as not to leave room for the smallest doubt upon the subject.
But the testator, by his codicil, informs us, that he himself had broken in upon the proportionate distribution which he had previously made with so much precisión, and which he had manifested so much solicitude to preserve, by parting with some of the negroes he had given to-his son Charles, and his daughter Harriet, and then says, ‘ I do therefore, in lieu of the said devises, give and bequeath to my said son Charles the sum of $700, and to my said daughter Harriet the sum of $300, respectively.’
From which it clearly appears to. have been the intention of the testator to restore, in all respects, the proportions which had. been thus disturbed; and that thé money, so given, should .take 'the place, and stand in lieu of the negroes in those shares from which they had been withdrawn; and that he intended to declare, that-as the negroes had been given as specific legacies, subject only-to contributions in the event and manner designated, so those sums of money should, in like manner, be deemed and taken as specific legacies, attended with the.like benefits, and subject to the same extent of contingency and incumbrance, and no more..
I-am therefore of opinion, that these sums of money, given to. Charles and Harrietshotlld have been paid by the- executors in ■the first instance, as specific legacies, out of the fund set apart by the testator for. the payment of his debts, as, in fact, not forming any part of it; since it cannot be inferred from any thing said by him, that they were to be paid from any other portion of his estate. And that then each division, charged with contribution, must contribute, as prescribed by the will, to the payment of such debts as remain unpaid from that fund, after those two legacies have been [315]*315deducted from it. In so far as the executors, into whose hands a sufficiency of assets came to satisfy those two legacies failed to do so, they are chargeable with a devastavit; and consequently, they alone are liable for the whole amount, principal and interest; and the legatees cannot be allowed to take the place of creditors and have the amount raised by contribution from the devisees.
It is, in general, true, that pecuniary legacies bear interest from the end of one year after letters testamentary have been granted, allowing that time for the executors to collect the effects of the deceased,
It is alleged, that the whole fund, set apart by the testator for the payment of his debts, will not be sufficient for that purpose: and it is upon the truth of this fact, that the plaintiffs claim to have the assets accounted for by the executors; to have the amount of the unsatisfied claims against the deceased ascertained; and to have the other devisees compelled to contribute to the payment of such debts, according to the terms of the will. Although all the executors, and the legatees Charles and Harriet, as such, with all the devisees who have been charged with contribution by the will, have been made parties to this bill; yet it is not alleged, that the suit has been instituted generally for the benefit of those interested in the correct distribution of the real or personal assets of the testator; or for the benefit of those creditors and others who' may have an interest in the fund appropriated by the testator for the payment of his debts. The bill contains no distinct and express allegation, that the plaintiffs had instituted this suit, as [316]*316well for the benefit of creditors as of themselves; and yet the case has been hitherto so conducted as if it were by positive allegation and in its nature a creditor’s suit.
The defendants have urged, that there is nothing in the pleadings, as amended and aided by the agreement filed on the 7th of November last, which can warrant these plaintiffs in assuming the position of creditors; or which can give them a right to have their complaint considered as a creditor’s suit, under which they could, as has been done, give notice, in the usual manner, to the creditors of Philip Hammond, deceased, to come in and participate in the distribution of this fund. To answer this objection, and for the purpose of obtaining a clear view of the whole subject, I shall take this occasion to consider the nature of a creditor’s suit more at large, than the questions now presented, may seem to require.
The estate of a deceased person must be first applied to the payment of his debts, leaving the residue only to go, as directed by his will, or as the law has provided in cases of intestacy. But as the person who takes out administration of his estate, in most cases, cannot know who are his creditors, and may not know who are his next of kin; and the administration of his estate may be exposed to great delay and embarrassment; the Court of Chancery has long exercised a most wholesome jurisdiction, in such cases, for the prevention of delay and embarrassment; and for the assistance and protection of the representatives of the deceased, by assuming the administration of his estate,
By the common law, lands in the hands of the heir, were liable to1 bond creditors only, where the' heir was specially bound; and even to that extent, as they had no lien upon the real estate descended, the heir was only personally liable, in respect of and to the value of the real assets descended; and, therefore, a bond creditor could make no claim against such real estate in the hands of a bona fide purchaser for a valuable consideration without notice,
But the statute of 1691 is confined to cases, where a debtor devises his real estate away from his creditors, and leaves them to chance to obtain satisfaction of their debts, enriching third persons at their expense* And therefore, the devising of an estate for the payment of debts takes the case out of the statute; and leaves the debt to stand as it would have done before, so that the creditor can come upon the real estate only in such manner as the will directs. The mere inconvenience of the mode prescribed by the testator for the payment of his debts will not bring the devise within the statute ; provided the fund be ultimately sufficient; and the gift of the estate for the payment of debts has been made in an effectual and practicable manner, so as to answer the purpose.
[322]*322In England, where a debt is secured by specialty, by which the debtor binds himself and his heirs for the payment of the debt, [323]*323such bond creditor may file a bill in behalf of himself and other bond creditors against the heir and devisee with the executor or administrator of the deceased, to obtain satisfaction of their claims [324]*324from the personalty, if sufficient to pay all, or by a sale of the realty, if the personal estate be insufficient,
[325]*325By a British statute, passed in the year 1732, and which appears to have been introduced and practised under here so early as the year 1740, it is expressly declared, that the real estate of a debtor shall be assets for the satisfaction of all just debts, duties or demands of what nature or kind soever, in like manner as real estates are by the law of England, liable to the satisfaction of debts due by bond or other specialty, and shall be subject to the like remedies for seizing, extending and selling the same, and in like manner as personal estate,
At common law, lands were liable in the hands of the heir for the debts of his ancestor, due by specialty, in which the heir was bound; and they were also made liable by several English statutes giving an extent or elegit, which had been adopted here,
After the adoption here of the statute of 1732, subjecting lands to the payment of debts, the phraseology of the writ of fieri facias was altered so as to authorize the levying of it upon the goods and chattels, lands and tenements, of the debtor; and the statute was thus directly put into operation against living debtors according to its very letter. But it was soon perceived, that a statute, so extensive in its bearing, could not be, in any similar way, literally applied to the estates of deceased debtors in the hands of their heirs, without creating much confusion in the administration of such estates; and without putting it in the power of each sim[327]*327pie contract creditor to have the estate collusively seized and sold, in fraudulent exclusion of other creditors ; or so as to operate injuriously upon the interests of others, and particularly upon the heir by compelling him. to seek reimbursement from the personal estate, which was the primary fund for the payment of debts. And therefore, those principles of equity by which the rights of bond creditors had been so far modified and controlled as, in many cases, to do equal justice to all creditors; and so as, at once, to the full value of the personalty, to protect the realty in the hands of the heir, were so followed out, in the construction of this statute, as not to permit a simple contract creditor to maintain an action at ■common law, at all, against the heir merely in respect of the real assets descended; but to compel him to go immediately into .a court of equity against the heir, together with the personal representative of his deceased debtor, so as to enable the heir to protect himself, without any circuity of judicial proceeding; and to save the realty, by having the personal estate first applied to the .satisfaction of the debts; and to do justice to all the creditors by-allowing them to come in according to their respective priorities; or for their due proportions. The adoption of these principles, and the giving of this construction to this statute, necessarily threw the administration of all real assets into the Court of Chancery ; and gave a new and very enlarged scope to a creditor’s suit.
Such must have been the course of proceeding, in all cases, under this statute, after the death of a debtor, as well where his heir was of full age, as in those cases where he was a minor;
[330]*330Formerly, in equity as well as at law, where a suit was brought against an infant heir, or against coparceners, any one of whom [331]*331■was an infant, in respect of the real estate descended, the parol demurred; or, in other words, the further prosecution of the suit [332]*332was stayed, until the infant attained full age ;
After which it was, by a general law, declared, that in case an action at common law should be brought, in which the title to real estate was involved, which action should abate by the death of either plaintiff or defendant, and such title should' descend or be devised to an infant, the action should not be tried during the minority of such infant, unless his guardian or next friend should satisfy the court, that it would be for his benefit to have it tried,
But still, as in actions at law by bond creditors against infant heirs or devisees, as original defendants, the parol must demur; and as creditors by simple contract, or where the heir of the debtor was not bound, could only sue in equity to obtain satisfaction -from the real estate of their deceased debtor, where, as at law, the parol was allowed to demur in favour of infant heirs or devisees, to the great hindrance and delay of creditors, it was therefore, declared, that if any person should die without leaving personal estate sufficient to discharge his debts, and should leave real estate to descend, or which he had devised to a minor, the Chancellor might, upon the application of a creditor of the deceased, if he should deem it proper, after the minor had been summoned, and appeared by guardian, and the parties had been heard, and the justice of the claim had been fully established, order such real estate to be sold for the payment of the debts due by the deceased.
[337]*337But, although, according to all general principles, every part of the real estate of a debtor in the hands of his heir should be held applicable to the payment of his debts ; yet it seems to have been unsettled, at common law, how far estates in remainder or reversion were to be considered as assets present or future. And formerly here, as in England, a notion prevailed, that such estates could not be sold in the first instance,
[342]*342Hence it appears, that by the operation of these last mentioned acts of assembly, and which, it is clear, from a consideration of [343]*343the then existing law, could have had, and were always understood to have had no other object, that the privilege formerly [344]*344granted to infants, of allowing the parol to demur until they attained their full age, has been totally abolished as regards creditors’ suits in equity;
To enable a creditor to sue on behalf of himself and all others who stand in the same relation with him to the subject of the suit, it must appear, that the relief sought by him is, in its nature, beneficial to all those whom he undertakes to represent;
But, in so far as a mortgagee or the holder of a vendor’s lien has a claim beyond the extent of such lien; because of the deficiency of the premises to pay the debt; or because of some other claim, in addition to such debt, which there is not a sufficiency of personal estate to satisfy, he may, in respect of such claim, sustain a creditor’s suit by thus blending two distinct causes of suit, in only one of which the other creditors have a common interest. As where a vendor, in addition to a balance of the purchase money, set forth a large claim as due to him on another account, to pay which he alleged, that the personal estate of the deceased was insufficient; the case was treated as a creditor’s suit; because, as regarded such additional claim the plaintiff had an interest in common with the other creditors who he undertook to represent; and for whose general benefit it was necessary that the court [346]*346should assume the administration of all the assets of the deceased debtor,
And there are likewise instances in which a creditor’s suit may be engrafted upon another suit; which, in its origin and object, had no relation whatever to a case of debtor and creditor; or in which the only object was to enforce a lien, such as a mortgage or vendor’s lien, for the- payment of a single debt. As where a mortgagee had filed a bill against the heirs of a mortgagor to obtain a sale of the mortgaged realty for the payment of his debt; or where a bill had been filed to obtain a partition of an intestate debtor’s real estate; or where the real estate of a deceased debtor had been, or was about to be sold under the special provisions of an act of assembly;
[347]*347As to who may or must be made parties to a creditor’s suit, the general rule is, that all persons having an interest in the object of the suit, ought to be made parties. But as this rule results from a consideration of the advantage which all persons must have in the entire settlement of the matter in litigation, it is founded on convenience; and is therefore made to yield in cases of necessity, or where it would be attended with any inconvenience which may be safely avoided; upon the ground of their being a common interest among creditors, which any one of them may sufficiently represent; and to avoid the great inconvenience of making all of them parties, any one has been allowed to file a bill for himself, and in behalf of all others of his co-creditors. But, as regards the defendants to a creditor’s suit, the general rule would lead, in administering the assets of a deceased person, to taking notice of his credits, and following his estate beyond his personal representatives; and, consequently, to the bringing forward of his debtors; yet the practice of the court has prescribed bounds to the inquiry; and accordingly the rule is to stop short at the personal representatives of the deceased, unless the justice due to the plaintiffs, or the peculiar circumstances of the case, should require others to be called in.
The personal estate being the primary and natural fund for the payment of debts, must be first resorted to, even for the satisfaction of debts due to the state, as well as to individuals, so far as it remains and can be found,
If the deceased debtor at the time of his death, was a partner with others, then, upon the allegation of that fact; and because of his assets having been so, during his life-time, mixed up with the property of others, his surviving partners, upon whom the whole had devolved, must be also made parties, in order, that the plaintiffs may have an account of the personal estate entire; and so obtain, from the surviving partners, that which properly forms a part of the assets of the deceased,
In a creditor’s bill against the representatives of a deceased debtor, it was formerly not unusual to describe particularly the real estate of which the deceased debtor died seized; but as it may,in most cases, be impracticable for a creditor to do so, it has been held to be unnecessary to set forth any description of the deceased’s real estate,
The establishment of the whole, or a part, of the claims of all, or of some one or more of the originally suing creditors, is the first point to be determined. In all cases, it is indispensably necessary that the plaintiff should sustain the facts- of his case, either by proof, or by the admission of his opponents; for, otherwise he can have no standing in court, nor any right to sue, whatever may be the law arising out of such facts. If, therefore, the claim of the plaintiff be denied by all, or any one of the defendants, it must be proved,
A guardian ad litem of an infant defendant, being appointed by the court for the purpose of having the proceedings substantiated against him, so that justice may be done to the plaintiff,
[352]*352These principles of law and equity operated very prejudicially against creditors who had no other means of obtaining satisfaction of their claim than from the real estate of their deceased debtor in the hands of his infant heir or devisee; and therefore, it was, by an act of assembly, declared, that a decree for a sale of the real estate for the satisfaction of any claim against it might be obtained by the consent of the guardian of the infant heir or devisee,
It having been thus put upon infant defendants, in such cases, to defend their interests immediately, and as effectually as they can, by a mere guardian ad litem, who has been expressly authorized to consent to an immediate sale of the real estate; the answer of an infant by his guardian, in all such cases, must be taken to be as conclusive against him as if he had answered as an adult,
[354]*354The next point to be established in a creditor’s suit against the representatives of a deceased debtor to enable his creditors to ob[355]*355tain satisfaction by a sale of his real estate, is the insufficiency of his personal estate to pay his debts. If that fact be denied, an ae[356]*356count must be taken of the personalty; and the creditors must be notified to file the Touchers of their claims, so that that fact may be [357]*357determined before there can be a decree for a sale of the realty; or, even if the insufficiency of the personal estate be to some [358]*358extent- admitted, not denied, or established, still, for the benefit of the heirs or devisees, the creditors may be notified to bring in their [359]*359claims in order to ascertain what proportion of the real estate must fee sold,
The establishment of some claim of a creditor, and the insufficiency of the personal estate to discharge the debt due by the deceased, thus shewn, or not denied by the heirs, being the foundation on which a decree for a sale of the realty must rest; and without which it could not have been passed, such a decree, therefore, necessarily establishes the validity of such claim, and the insufficiency of the personalty, without leaving those matters open to any further question by any of the immediate parties to it.
Such a decree virtually takes possession of the property and vests it in the court, for the purpose of distribution;
So soon as the court has, by a decree, assumed the general administration of the assets, it will on motion or petition;
But, in granting an injunction, in cases of this kind, in order to protect the real or personal representatives from pressure at law, the court is always careful not to exclude creditors, proceeding at law, from.the benefit of their diligence, by which' they have established a right to be satisfied, either out of the assets of the deceased, or de bonis propriis of the representative; a right which, in some cases, the conduct of the representative will confer on them, and in others their activity; and will not indulge creditors who have lain by to the extent of depriving the diligent of the fruits of their diligence.
The principle upon which an injunction rests in such cases, is, that substantially, a bill by a creditor, in behalf of himself and all others; or a suit by any one, in which all the creditors may be represented, and allowed to come in to obtain satisfaction, is considered as making all of them parties to it; and that the decree is in the nature of a judgment for them all; and, therefore, the court, to prevent difficulty, confusion, and injustice; and to sustain its jurisdiction, thus assumed over the administration of the estate, will never permit another suit to be instituted for the same object, with the same parties, and directed to -the same relief. If the relief in the first suit can be extended ; if expense can be saved by incorporating with it any proceeding which will avoid the necessity of a second bill, there is an obvious propriety in not permitting another suit to go on. But a second suit may be rendered necessary either, by collusion in the former suit; or by its having- left out some principal matters of charge; or by its having omitted, from ignorance or negligence, some important ground of relief,
Such an injunction may, however, in some cases be made an instrument of fraud and injury to the whole body of the creditors, by persons, who have more interest in forbearing than urging their demands against the representatives of the deceased, so managing it as to leave the representatives in almost as undisturbed enjoyment of the assets as before the bill was filed. To prevent such an abuse of its authority, the court, when asked for such an injunction, may look into the answer of the executor or administrator and see what amount he admits to be in his hands; or if he has not there stated [363]*363it, may order him to make affidavit of the amount, and to bring into court that, if any, which he so admits to be in his hands. Yet it is not an absolute rulé of the court to refuse an injunction, unless there- is an affidavit stating the assets in the hands of the personal representative. Or, should a case arise, of assets wasted by a personal representative, from the neglect of- the solicitor, by whom the suit was conducted, the court would hold him responsible ;
I am, therefore, of opinion, that this is, in effect, and may properly be considered as a creditor’s suit; although it is not expressly alleged to have been instituted for the benefit as well of the creditors of the testator, as of these plaintiffs; and that the. order directing notice to be given to the creditors of the late Philip Hammond to bring in their claims, was, in every respect, proper; and must have the effect and operation of allowing a satisfaction to be awarded to those creditors who shall come in as thus warned,- and of making a distribution of the residue of the estate among the respective claimants. And, moreover, that the injunction granted on the 29th of September last, to prevent the creditor, Ridgely, from proceeding at law on the judgment he had obtained against these executors, was proper and well warranted by the nature of the case.
In order to ascertain who are creditors, and also, where necessary, who are the next of kin of the deceased, the court directs public notice to be given by advertisements in newspapers, or [364]*364otherwise, subject to the restrictions of the act of assembly,
If, however, a part only of the- fund remains in court, such part will be charged with no more, than its due proportion, leaving the [365]*365claimant to seek satisfaction for the residue from the next of kin, legatees, heirs or devisees to whom the other shares of the iund had been actually paid. But after the court has actually parted with the whole fund, upon a bill filed by a creditor, next of kin, heir, or devisee against those alleged representatives of the deceased, among whom the property had been distributed, the court will, upon proof of no wilful default on the part of such creditor, next of kin, heir or devisee; nor any want of reasonable diligence, compel the next of kin or distributees to pay or restore to such plaintiff that to which he may appear to be justly entitled,
A publication warning all claimants, unknown to the court, to come in and file the vouchers of their claims against the estate, is a constructive notice, upon which it is presumed to be safe to proceed to make a distribution of it among all those who then, after such notice, shall have come in and made claim. That, however, cannot apply to a legatee, or any other claimant who then fails to come in and assert his right, but whose title appears upon the face of the proceeding; and who must, therefore, have a proportional share of the fund set apart for his satisfaction,
Should a claimant find it necessary, for any purpose advantageous to himself, to introduce any matter, not apparent upon the face of the voucher of his claim, he may be permitted to do so by petition ; or if the relief he seeks cannot be so obtained he may file a cross bill,
In general no claim can be considered as a debt due by the deceased ; and, as such, entitled to be paid out of his estate, but that which he owed-at the time of his death, and was then, or thereafter payable; and the balance only of such a claim, for which the deceased was then liable, is the amount to be satisfied in whole, or in due proportion,
[367]*367A statement liquidating the amount due to each creditor, inclusive, or exclusive of interest, must always be made, in a creditor’s suit, according to the nature of each claim. And therefore, it is necessary, in all such suits, that the nature of the claim for interest, and the mode of computing it should be attended to, in order, that a correct distribution may be made, even where the fund may be sufficient to pay all; and more particularly so where, the estate being insufficient, the several claimants can only be satisfied in part and in due proportion.
Interest on money is defined to be the compensation which the borrower pays to the lender for the profit which he has an opportunity of making by the use of the money; part of that profit naturally belonging to the borrower who runs the risk, and takes the trouble of employing it; and part to the lender who affords him the opportunity of making the profit.
In England, according to the principles of the common law, interest was not allowed upon a sum certain, payable at a given day. The action of debt being the only mode of recovering a sum certain, except where there was a breach of covenant; and, in that action, the defendant being commanded to render to the plaintiff the debt, or shew cause, the. payment of the specified debt, without any thing more, answered the action and put an end to the suit. And thus, interest forming no proper part of the original debt at law, it was held to be created only by the nature of the security. This general rule, it is said, prevents acts of kindness from being converted into mercenary bargains; and, by making it the interest of traders to press for payment, thereby checks that pernicious extension of credit which is so often ruinous to both parties.
In Maryland interest on money is not only given in all cases where, in England, it would be awarded, to the creditor; but, in many other cases where, according to the English law, he would not be allowed to recover any thing in the nature of interest for the detention of. his money. It is 'here given by the court, or left to the jury, as in some cases in England, to give or not, at their pleasure, in almost all kinds of cases;
In the year 1760, it was declared, by the court of King’s Bench, of England, that nothing could be more agreeable to justice, than that interest should be carried down to the actual payment of the money,
It has -been declared by an act of assembly, that, in all actions brought for the penalty of any bond or contract, the jury may, under the direction of the court, upon the plea of payment or performance, find what sum of money is really due to the plaintiff; upon which judgment shall be entered for the penalty to be released upon the payment of the sum so found due, and interest on the same until paid and costs,
Equity, in this respect, follows the law; or, rather has always pursued a similar course, and allows interest in all cases where, under like circumstances, it might be recovered at law.
[380]*380This judicial conversion of the interest into principal, has, in some respects, the appearance of allowing compound interest, [381]*381and of being in fact usurious; but it is not so.
[383]*383Interest is always allowed on debts secured by a mortgage; and where an account is stated, with the knowledge of the mortgagor, and the whole amount, principal and interest, is paid by an assignee of the mortgagee, with the assent of the mortgagor; such aggregate amount of principal and interest, shall bear interest in fa.vour of the assignee. And so too, where the principal and interest has been paid by a surety, he shall have interest upon the whole,
On a bill for an account and the like, by a creditor to obtain payment from his debtor; or on a bill to recover a legacy, the subsequent interest is computed, not upon the aggregate amount found due at the time of the decree; but on the principal only, from the time the debt was liquidated, or became payable, until it is paid or brought into court,
But where the estate of the deceased, or insolvent debtor is in[384]*384sufficient to pay his debts; the personal credit having ceased, and all hope of obtaining payment, by the personal exertions of the debtor, having come to an end, the estate, as in cases of bankruptcy in England, is treated as a dead fund, as a kind of shipwreck, in which there can only be a salvage of a part to each creditor,
If any one of the creditors has received a part of his claim from the estate of the debtor, he cannot be allowed to obtain any thing more, until the other creditors have received satisfaction in the same proportion;
Here, however, it may be well to observe, that although it is directed, by an act of assembly, that all judgments against the deceased shall be first discharged, if the assets be sufficient; but if not, and there be more judgments than one, a proportionable division of the assets shall be made among them, in affirmance of the common law, as to the personalty,
No man can be compelled to institute a suit for the recovery or establishment of his rights; because, as to the disposition of his own peculiar rights and property, his will stands for a law. But no one can be permitted either to use, or to neglect to use,, his rights to the prejudice of others. Hence, if a prior mortgagee attempts to use his incumbrance as a protection of the property of his debtor, it will be deemed a fraud upon the other creditors; and his lien will be postponed until the injured and junior incumbrances have been satisfied. And so, too, where a creditor has a lien upon a' particular fund, which has been previously mortgaged or incumbered, he may come here and redeem the property from such prior incumbrance, so as not to permit him to neglect to establish and receive his debt to the prejudice of others, who have an interest in the proper application' of the surplus.-
Hence, although it is clear that a creditor cannot be deprived of any lien he may hold upon property in a suit to which he is not a party;
[389]*389In the case under consideration, it is clear, that the creditors of the late Philip Hammond could only obtain satisfaction from his real estate in the manner in which his will directs; and that they could only enforce payment in that mode by a bill to which the heirs, devisees, and executors, were parties ; because, by the will a sufficiency of assets for the payment of all the debts of the testator have been lawfully passed into their hands. But the devisees and legatees, under the will of Philip Hammond, deceased, take an estate or interest which they have a right to have disencumbered and protected from the charge imposed upon it, either by means of the funds placed in the hands of his executors for that purpose, or that the incumbrance should be adjusted and reduced to its proper proportions, and lowest amount, by a contribution from all the devisees charged with contribution. In this respect, these devisees stand in the condition of junior mortgagees, or simple contract creditors, who have a right to redeem, or to have all superior incumbrances satisfied and removed, so as to give them the full benefit of the surplus. But, from the manner in which they take and hold, they have no means of ascertaining whether there are, in fact, any creditors or not; or if there are any, who they are, and the amount due to each, which has been left unpaid out of the fund set apart by the testator for their satisfaction. Unless they are permitted to have their complaint for all these purposes considered and treated as a creditor’s suit, and the creditors of the testator notified to come in, establish their claims, and receive satisfaction, they can, in no way, disengage their respective portions from the incumbrance charged upon it; the cloud that has been thus suspended over them may long remain, or, at some future day, burst upon them to their ruin.
The next difficulty is, as to the proportions in which these devisees are to contribute. It has been contended, that the testator having given to each one of them what he, at least, considered as portions of equal value, must therefore have intended that they should contribute share and share alike. But I understand the testator differently.
As I have before remarked, it is perfectly evident that the testator had adjusted the divisions and distribution of his estate with great deliberation and care; and by the very act of setting apart a separate fund for the payment of his debts, he strongly indicated an intention, that the relative value of the divisions he had made, should not be disturbed. The language used in the codicils, giv[390]*390ing the sums of money to Charles and Harriet, shews that by placing those sums in lieu of the negroes he had disposed of, he meant to restore, so far, that previously adjusted apportionment, which he himself had interfered with. But this is not all; for, as if determined that even his creditors, whose rights he knew he could not absolutely control, should not break down the equilibrium which he had established among those objects of his bounty, by taking from one more than from another, he declares, that in case the fund set apart for the satisfaction of his creditors should not be sufficient, that then ‘ my executors pay the balance of my debts from my estate generally, and from the rents and profits; and I request and will that they give bond for their payment, and that no administration on my estate be had in the ordinary manner, but that the property devised to my sons and daughters, and my grandson, shall contribute in equal proportion to the discharge of my debts;’ that is, in equal proportion, having regard to the actual value of each portion so charged. That this was his intention is clear, from another view of the matter. It must be admitted, that the testator meant, in all events, to give something to each one of those devisees ; but if their portions were of unequal value, as they are admitted to be, and they were notwithstanding to contribute share and share alike, then it is clear that if the amount of debts were large, the.portion of one might be wholly exhausted, and he might ultimately get nothing, and yet leave a large donation to the others. I am therefore of opinion, that the contribution must be in due proportion to the actual relative value of the whole property given to each one of these devisees.
But to adjust this proportion, the principal of the sums of money given to Charles and Harriet must be taken into the estimate as parcels of their respective portions; and after those sums, principal and interest, have been charged against the executors who received the assets, and first taken from the fund set apart by the testator for the payment of his debts, as being in fact not properly a part of it, the whole of the residue must be applied, as far as it will go, to the discharge of the testator’s debts; and then the several devisees must contribute, as'specified, towards the payment of the debts which shall then appear to be unsatisfied.
But it is said, that there remains about one hundred and fifteen acres of land, parcel of the creditors’ fund, as yet unsold; conse[391]*391quently the amount to be made up by contribution from the devisees, cannot be adjusted and determined until that has been sold, and the proceeds brought in and applied in satisfaction of the debts.
It is also represented, that some of the executors have overpaid. According to the course of the court, in such cases, the executor takes the place of the creditor whose claim he has thus satisfied, and is allowed interest accordingly. I see nothing erroneous in the mode of charging interest as stated in the accounts reported by the auditor.
Whereupon, it is Ordered, that the exceptions to the auditor’s report be over-ruled, and the case is hereby again referred to the auditor, with directions to state an account accordingly, after the whole fund set apart by the will and codicil shall have been applied as therein directed; which may be effected either by a sale of so much of it as yet remains undisposed of, under a decree to be passed for that purpose, or by having it disposed of and adjusted by consent.
After which, the parties having adjusted some of the matters in controversy by an agreement filed in the case, the auditor made a report of the amount with which each of the devisees was chargeable, as contributors to the sum necessary to be raised to meet the amount of claims against the estate, and the case was again submitted to the court.
4th February, 1830.
This case standing ready for hearing, and being submitted, the proceedings were read and considered,; whereupon it is Decreed, that the auditor’s report of the 28th of January last, and his additional report of this day, be, and the same are hereby in all respects ratified and confirmed.
And it is further Decreed, that the complainant Thomas Hammond, on or before the first day of March next, bring into this court the sum of $240 37|, with interest thereon from the said 28th of January last; that the defendants Philip Hammond, Marianna Hammond, Harriet Hammond, Edward Hammond, and Cecidia Hammond, who are the children of Philip Hammond, Jr. deceased, on or before the first day of March next, bring into this court the sum of $555 28f, with interest thereon from the 28th of January last; that the defendant Rezin Hammond, on or before the first day of March next, bring into this court the sum of $1,377 98f, with interest thereon from the 28th of January last; that the complainant John Hammond, on or before the first day of March next, [392]*392bring into this court the sum of $555 28|, with interest thereon from the 28th of January last; that the defendant Matilda Hammond, on or before the first day of March next, bring into this court the sum of $555 28f, with interest thereon from the 28th of January last; that the defendant Harriet Hammond, on or before the first day of March next, bring into this court the sum of $145 93f, with interest thereon from the 28th of January last; that the complainant George W. Hammond, on or before the first day of March next, bring into this court the sum of $555 28f, with interest thereon from the 28th of January last; and that the defendant Philip Hammond Mewbern, on or before the first day of March next, bring into this court the sum of $555 281, with interest thereon from the 28th of January last.
And in case the parties aforesaid, or any of them, shall fail to bring into court the sums or sum of money so as aforesaid decreed to be brought into court by them, him, or her, respectively, in manner as aforesaid, it is further Decreed, that the real and personal property devised by the last will and testament of Philip Hammond, Sr. deceased, to the persons or person so making default, or such parts or part thereof as maybe necessary, be sold for the purpose of raising the sums or sum of money decreed to be brought in by the persons or person so making default respectively; that Thos. S. Alexander, of the city of Annapolis, be, and he is hereby appointed trustee to make the said sales, See. Sec.
And in pursuance of the agreement of the parties, filed on the 16th of January last, and of the additional agreement entered into on the 2d instant, it is further Decreed, that the complainants Thomas Hammond and Charles Hammond, and the defendant Elizabeth Hammond, as executors and trustees of the late Philip Hammond, Sr. deceased, by a good and sufficient deed, to be executed, acknowledged, and recorded agreeably to law, convey unto the defendant Rezin Hammond, and his heirs and assigns, the real estate in the said agreement mentioned, and therein described as the residue of the real estate of the said Philip Hammond, Sr. deceased, yet undisposed of by his executors, and consisting of a part of a tract of land called Abington, and supposed to contain about one hundred and fifteen acres and twenty perches of land; and the said real.estate shall thereupon be held by the said Rezin Hammond, and his heirs and assigns, free, clear, and discharged from all claim of the parties to this suit, or any or every of them; but in ea¡?e the said Rezin Hammond shall fail to bring into court [393]*393the aforesaid sum of money with interest, as herein before ordered to be brought in by him, or any part thereof, the said trustee, Thomas S. Alexander, be, and he is hereby authorized and empowered to make sale of the said parcel of land called Abington, upon the terms, and in the manner, and for the purposes herein before prescribed.
Robert Welch, of Ben. and Isaac Holland, administrators of Barrett, by their petition stated, that they had recovered a judgment against the defendant Elizabeth, as executrix, upon which there was due $395 05, to secure the payment of which a judgment obtained against Charles Ridgely, by the executors of this testator, was, in October, 1828, entered for the use of the petitioner Welch ; that since that time the amount of this last mentioned judgment had been collected by these executors and brought into this court. Whereupon the petitioners prayed, that the amount due on their judgment might be ordered to be paid to them out of the moneys so brought in.
25th February, 1830.
The judgment against Charles Ridgely, was assets in the hands of the executors, and as such could not be applied exclusively by them to the satisfaction of any one of the creditors of their testator, after the decree to account in this case; but it appears that the use was entered, in this instance, some time after that decree; therefore, it is Ordered, that the aforegoing petition be, and the same is hereby dismissed, with costs.
The trustee, Alexander, reported, that being under an impression that the infant defendant Philip H. Mewbern, had no means of raising the sum which he had been ordered by the decree to pay; and, at the instance of his guardian, he had sold a part of his personal estate, which the trustee submitted to the consideration of the court. After a publication of the usual order nisi, this sale was finally ratified. The amount which some of the other parties were ordered to contribute not having been brought in as ordered, the trustee, Alexander, further reported, that he had made sale of a part of the property devised to the plaintiff John and his children; of a part of that devised to the late plaintiff Philip and his children; and of that parcel of land described in the decree as the residue of the tract yet undisposed of by the executors. And he subsequently reported, that he had sold a part of the real estate devised to the [394]*394defendant Rezin and his children; and a part of that which had been devised to the plaintiff George W. Hammond. These sales were all finally ratified, and the proceeds having been collected, were applied in full satisfaction of all the creditors of the testator; the contributions charged upon the several devisees were finally adjusted, and the estate entirely cleared and settled.
1785, ch. 72,a. 17.
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2 Md. Ch. 306, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hammond-v-hammond-mdch-1828.