Pugh v. Russell

27 Va. 789
CourtSupreme Court of Virginia
DecidedSeptember 28, 1876
StatusPublished

This text of 27 Va. 789 (Pugh v. Russell) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pugh v. Russell, 27 Va. 789 (Va. 1876).

Opinion

Staples, J.,

delivered the opinion of the court.

The act of March 1st, 1842, was the first statute of this state making real estate assets for the payment of simple contract debts. That act, however, was subject [796]*796to a proviso, which declared that no debt which is not evidenced by writing, signed by the debtor or some legally empowered by him, shall be charged on ^he real estate by virtue of this act. This proviso was omitted at the revisal of 1849, so that' as the law now stands, the real estate is subject to the payment of all the just debts of the decedent, without qualification.

In this ease, the judgment of the appellee, Russell, against the administrator was upon a claim not evidenced by writing. That claim was therefore not a charge upon the real estate under the act of 1842, nor does it constitute such charge under the Code of 1850, because the debtor died before the revisal took effect. This was not seriously controverted in the argument. The appellee claims that inasmuch as judgments which did constitute liens on the real estate of the debtor, were paid by the administrator of the latter out-of the personalty, he is entitled, upon the principle of marshalling assets, to be subrogated to the lien of the judgments thus paid.

It is a well settled doctrine of equity, that if a specialty creditor, whose debt binds the heirs, receives satisfaction out of the personal assets of the decedent, a simple contract creditor will in equity stand in his place against the real assets, to the extent that the specialty creditor shall have exhausted the personal assets in the payment of the debts. The reason is that when-there is both real and personal assets, creditors by ■specialty, in which the heirs are bound, are by the common law entitled to payment out of either of these funds. At,law they may take their remedy against the heir, or against the executor. Having their election of remedies, if they exhaust the only fund to which the simple contract creditors can apply, equity places the latter in the position of the former, so far [797]*797as the specialty creditors have exhausted the personal estate. 2 Lomax on Executors, pp. 418, 419.

The question is whether this principle applies to creditor having a judgment recovered in the life time of the debtor: under the law, as it stood previous to the Code of 1849, a judgment was a debt of superior dignity in the administration of the personal estate. It also constituted a lien upon the real estate, but it conferred no right of election, as in the case of a specialty binding the heirs. The creditor was bound to exhaust the personal estate before he could resort to the land in the possession of the heir. The judgment being a debt of higher dignity than bonds or simple contract debts, the executor was required to pay the former before the latter. If the personal estate was exhausted in paying the judgment, the simple contract creditor was utterly without remedy. And this was upon the very absurd principle that the right of subrogation only occurs where -one of the creditors has two funds, upon either of which he may rely at his discretion.

This is the view taken by Judge Lomax in his work on Executors, volume 2, page 419, where it is said “In the application of the principle of marshaling assets, simple contract creditors will be substituted for specialty creditors, but not for judgment creditors; that is, the simple contract creditors cannot charge the lands for so much of the personal fund as has been applied to the payment of the debts due by judgments obtained against the ancestor.” In support of this doctrine he quotes the opinion of Chief Justice Marshall in Alston v. Munford, 1 Brock. R. 266, who declared “ there is not a case in the books, nor a dictum on the bench, in which it is said that simple contract creditors may stand in the place of judgment creditors, who have-[798]*798exhausted the personal fund, although the principle of marshaling assets has been discussed perhaps as frequently as any other on which a court of equity acts.” Thig decision of Judge Marshall is approved by this court in Rogers v. Denham’s heirs, 2 Gratt. 200. That was a scire facias against the heir to revive a judgment recovered against' the ancestor. This court was uanimously of the opinion that as the object of the scire facias is to give the creditor the benefit of his judgment obtained against the ancestor, and as upon a writ of elegit against the ancestor the chattels must first be delivered, and if they are sufficient, the lands are not extended, the judgment after the decease .of the ancestor must affect his lands in the same way. The personal estate should be first charged, and the judgment creditor should not proceed against the heir or terretenants until he has exhausted the same. Upon these authorities the question must be regarded as settled in Virginia.

In the present ease the appellee claims to be substituted in the place of William H. Baker and Robert B. Wolfe, creditors of the decedent, whose debts were paid out of the personal assets in the hands of the administrator. Whether the judgments in favor of these creditors were recovered in the lifetime of the decedent, or against his administrator since his death, does not appear. In an ex parte settlement of the administration accounts, made in the year 1854, the commissioner mentions these debts as binding on the realty. And this is all we have on the subject in this record.

It is impossible to say whether this opinion of the commissioner, for it is a mere opinion, is “well founded or not.” He may have supposed that a judgment, prior to the Code of 1849, constituted a lien on the debtor’s [799]*799-real estate; and so it did, subiect, however, to the quali- „ . . . fieations already mentioned.

The judgment might be a lien, and yet, as we seen, furnish no ground for marshaling the assets. If the judgment was against the obligor himself, upon a specialty binding the heirs after the death of the former,- there would be no remedy against the heir upon the specialty. The bond no longer exists as a security, being superseded, merged and extinguished in the judgment. -The creditor has no longer a remedy either at law or in equity on his bond, but only on his judgment, The obligor is no longer bound by the bond but by the judgment. It has become the evidence of his indebtedness and the measure of his liability. The United States v. Price, 9 How. U. S. R. 93, 94; Smith’s Lead. Cases, vol. 1, part 1, 619; 2 Am. Lead. Cases 663.

On the other hand, if the judgment was against the administrator, it would not merge the bond as against the heir. If originally bound by the specialty, he, the heir, would still be bound. And the creditor is at liberty to prosecute a suit against him and the personal representative at the same time, though he is of course entitled to but one satisfaction. It will thus be seen that the lien of a judgment is a question of law, and was sometimes a very difficult one under our former system of laws. If the judgments alluded to by the commissioner in his report were recovered in the lifetime of the decedent, as there is strong reason to believe, they will not avail the appellee. If they were recovered against his administrator upon a bond binding the heirs, the liabilities of the latter still remain; and there is a right of substitution.

Hpon these points the appellee ought to have produced proof.

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27 Va. 789, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pugh-v-russell-va-1876.