Schermerhorn v. Barhydt

9 Paige Ch. 28 | New York Court of Chancery | 1841

The Chancellor.

Cases seldom occur, even in this court, where such a complication of conflicting rights and entangled equities are presented as in the one which is under consideration upon this appeal. And the difficulty of properly settling and adjusting - them in this suit is considerably increased by the provisions of the revised statutes relative to the proceedings of creditors against heirs and devisees. It is not improbable, therefore, that I may have erred in some of the conclusions at which I have arrived, as to the legal and equitable rights of the parties to this bill; as I think the vice chancellor has done in some of the provisions of the decree which is appealed from.

The case of Jackson v. Hoag, (6 John. Rep. 59,) and of Whitaker v. Young, (2 Cowen's Rep. 569,) have long since settled the point that the statute relative to proceedings against joint debtors, where a part of the defendants only are served with process, is not applicable to suits at law against heirs and devisees who are sued for debts due from the testator or intestate. And according to the decision in the first case, the sheriff’s sale to Adams conveyed no right or interest whatever in the brick house and lot on Green-street, or in the half morgan of land which were devised to the appellant in fee, I am inclined to think, therefore, that the amount bid by Adams upon that part of the property ought not in equity to be considered as a payment of any part of the debt due upon his judgment; and that the decree is right in setting aside that part of the sale, and the deed given by the sheriff in consequence thereof, as wholly inoperative and void.

Although it is at least doubtful whether any court can relieve against a mistake arising from mere ignorance of law, this court can relieve a party from the consequences of a mistake of fact. And there is room for doubt in this case whether Adams had seen the will of John J. Barhydt, at the time of the sheriff’s sale, so as to be fully cognizant of the fact that the premises which he was purchasing had been devised in fee to that one of the defendants in the suit against whom the judgment, upon its face, was wholly inoperative, on the ground that the writ was returned, as to him, non est inventus. The statute which was then in force, authorizing the supreme court to relieve certain purchasers at sheriffs’ sales who should be afterwards evicted from the lands purchased on account of irregularities in the proceedings, or want of title in the person against whom the execution issued, (1 R. L. of 1813, p. 594, § 11,) does not appear to have contemplated the case of a purchase by a party to the judgment; who is presumed to be cognizant of the proceedings which have been had in the suit. But the principle of that statute was wholly inconsistent with the idea that a sale of land in which the parties to the judgment had no estate or interest whatever, and which had been bid in by the plaintiff in the judgment under a misapprehension of the fact, should in equity be considered as a payment of the judgment, to the extent of such bid. In Lansing v. Quackenbush, (5 Cowen’s Rep. 38,) the supreme court refused to interfere in such a case upon motion; saying that the proper forum to apply to for relief was a court of equity. Subsequent to the commencement of the present suit, however, the supreme court has decided that it will relieve the plaintiff in such cases, on special motion. (See Mulks v. Allen, 12 Wend. 253.) So far, however, as relates to the property purchased by Henry Barhydt under the execution, there is no ground whatever for setting aside the sale ; as there is no allegation in the complainant’s bill that the purchaser in that case was not fully aware of the situation of the property and the rights of the several defendants in the judgment therein. And the subsequent arrangement between him and Adams, by which the latter took a bond and mortgage for the full amount of the judgment, instead of requiring payment of the bid when the property was conveyed by the sheriff to the purchaser, could not prevent that purchase from operating in favor of the other defendants as a satisfaction of the judgment fro tanto. Although the judgment was void as against the property of James Barhydt, who was not served with process, it was nevertheless a valid judgment as against his three brothers ; each of whom had a valuable interest in the premises bid in by Henry and conveyed to him by the sheriff. In addition to his own life estate in the eleven acre pasture lot, under the will of his father, Henry was entitled to a remainder in fee in one-sixth of the premises after the termination of such life estate, as one of the heirs. And his brothers John S. and Jeronimus were each entitled to a similar remainder in fee in one-sixth of the premises, as heirs at law. All those interests were vested in Henry, by the sheriff’s deed to him, and the complainant has a valid and subsisting claim thereon which he can enforce by a sale under the mortgage. The part of the decree therefore which sets aside the sale to Henry, and the conveyance by the sheriff to him, and the mortgage of the interest which he thus acquired therein, was erroneous and must be reversed. And the judgment must be deemed to be satisfied to the amount of Henry’s bid of $500, from the time of the sheriff’s sale to him ; after deducting from such bid the sheriff’s fees on the execution. The title to the other three-sixths of that lot, subject to Henry’s life estate therein as devisee, was in the appellant and his two sisters, as heirs at law of their father, and was not affected by the sheriff’s sale,

The judgment recovered upon the bond in 1816, having been recovered upon the default of the defendants who were served with process therein, was not only a valid lien upon all their interests in lands which had come to them by devise or descent from their father, but it became also a personal debt against each of them, so as to create a valid lien upon any other real estate which they or any of them owned at the time of the docketing of that judgment. The appellant, therefore, insists that the recovery of that judgment extinguished all claim against him, upon the bond,-as one of the heirs of the obligor to whom assets had come by descent and devise. Such was undoubtedly the effect of that judgment at law. And if the complainant or his testator has lost his remedy under that judgment, by neglecting to proceed to collect the judgment against those defendants or their property, or has suffered them to sell or incumber their lands which ought to have been levied upon and sold under execution while the judgment was a valid lien thereon, neither the appellant, nor the property which has come to him from his father by devise or descent, can be liable in equity to make good the loss, beyond his proportionate share in reference to the property which came to him as one of the heirs. That part of the decree which authorizes the complainant to apply for further relief against the parties who have contributed their full shares towards the satisfaction of the debt, in case there shall be a deficiency arising from alienation or otherwise in paying the shares of other parties, is unquestionably erroneous as respects the appellant. That provision of the decree also appears to be inconsistent with the statute on the subject of proceedings against heirs and devisees. (2 R. S. 455, § 52.)

But if the whole amount of the debt due from the ancestor of the defendants had been paid by the three sons against whom the judgment was recovered, or either of them, the defendant who had thus paid the whole debt would have been entitled to call upon the other heirs at law for contribution, in proportion to the value of the lands which each had received by descent, not exceeding the actual value of such lands. For this reason I think the recovery of the judgment against a part of the heirs, without actual satisfaction thereof, except as to the $500 bid upon the sale to Henry Barhydt, was not, in equity, a discharge of the whole debt as against the other heirs of the obligor in the bond.

A similar remark may be made in reference to the objection that the giving of the bond and mortgage by Henry Barhydt, for the whole amount of the debt and costs, was a novation, or extinguishment of the original indebtedness.

As Henry was one of the debtors, who by suffering a general judgment to pass against him without showing the particular property which had come to him by devise or descent had become personally liable for the payment of the whole debt, a payment of the bond and mortgage by Mm would undoubtedly have been a satisfaction of the judgment at law as well as in equity ; so far as the rights of the judgment creditor were concerned. But as Henry stood in the situation of a mere surety for the other heirs and devisees, so far as the property which they had received by descent or devise was bound to contribute for the payment of the debt due to Adams, if he had paid the bond and mortgage in full he would have been entitled to claim contribution, against such heirs and devisees, even at law. And in equity he would have been subrogated to all the rights and remedies of the original creditor against the other heirs and devisees, and the property devised or descended to them, to that extent, as well as against his co-defendants in the judgment who had also become personally liable to the plaintiff in that judgment. (Cuyler v. Ensworth, 6 Paige’s Rep. 32. 1 Story’s Eq. 477, § 499.) This principle of equitable substitution is distinctly recognized and adopted by the legislature in the provisions of the revised statutes relative to contribution between several persons, whose lands are bound by a judgment. (2 R. S. 376, § 72.) As the bond and mortgage in this case were not in fact valid and available securities for the whole amount of the judgment, and Adams took such bond and mortgage under a misapprehension of fact as to the Hen of the judgment upon the brick house and lot on Green-street, I think in equity his executor has a subsisting claim against the other heirs and devisees, or rather against the lands descended or devised to them, for their proportions of the original debt which was not satisfied by the sale to Henry Barhydt of his life estate in the pasture lot, and of the remainder in fee of himself and his co-defendants in the same premises, which passed under the sheriff’s deed to him. And as John S. Barhydt and Jeronimus Barhydt W7ere peisonally liable to Adams upon the judgment, they may in equity be liable for any deficiency which may exist after applying the assets which came to the hands of all the heirs and devisees of John J. Barhydt, to the satisfaction of the debt. But in no event can the appellant or his íyío sisters, if they had not aliened the estate which came to them from their father at the time of the commencement of this suit, have a personal decree against them ¡ nor can they be liable to contribution personally. For the statute is explicit, that if it appears that the lands, tenements, or hereditaments descended to an heir were not aliened by him at the commencement of the suit, the court shall decree his proportion of the debt to be levied of the real estate so descended to him; and not otherwise. (2 R. S. 454. 47. 7 Paige's Ref. 361.) It does not appear from the pleadings and proofs in this case that none of the lands descended to the appellant or his two sisters as heirs at law of their father had been aliened before the filing" of the complainant’s bill ; though it may perhaps be fairly inferred from the appellant’s ansvrcr that his interest in the lands descended to him had not been thus aliened. I, therefore, see nothing improper in that part of the decree which directs the master to ascertain and report upon that subject. But the decree should in terms have directed, that if it appeared from the report of the master that they had not aliened, the execution should go against the lands descended to them respectively, for their proportions of the debt; and not against them personally, or against their other property.

I think the decree was also erroneous in directing the master to take and state an account of all subsisting debts due to other creditors of the estate of John J. Barhydt; as subjecting the parties to an unnecessary expense. The revised statutes contemplate a proceeding by each creditor of the decedent separately, against his heirs, to obtain satisfaction of the debt, or the proportion thereof for which the heirs respectively are liable, after satisfying all legal priorities, and the proportionate claims of other creditors belonging to the same class. (6 Paige’s Rep. 259.) When such a suit therefore is commenced against the heirs, the defendants may show by their answers that there are other unsatisfied debts of the decedent belonging to the same or to a prior class. And in that case the decree against each heir is only to be for such portion of the debt as will be equal to the value of the estate descended, after satisfying prior claims thereon and a proportionate part of the debts of the same class. (2 R. S. 454, §39, 40.) Or if a defendant has paid any debt of the same class, or debt which was entitled to priority, he may set up that defence to the suit pro tanto. Even in such cases the decree should only direct an inquiry as to the subsisting debts, or the debts which have been paid by the heirs of the same class, or of a higher class than that of the complainant in the suit; so as to enable the court to determine the portions of the debt for which the several heirs are still liable, in reference to the value of the real estate descended to them respectively. As some of the defendants in this suit were infants, such an inquiry might have been proper, although no such defence was stated in their answers, or in the answer of the appellant; if such infants had not been the representatives of one of the defendants in the judgment, who by suffering such judgment to be rendered against him by default had rendered himself and his estate absolutely liable to the complainant for the payment of the whole debt, without reference to the amount of property he had received from his father.

In the case of Butts v. Genung, (6 Paige’s Rep. 254,) I had occasion to examine the provisions of the revised statutes relative to proceedings in this court against heirs and devisees, to enforce their legal liabilities to pay the debts of the intestate or devisor in respect to the lands descended or devised. I there came to the conclusion that it was no longer allowable for a creditor to file his bill against the personal representatives, and the heirs and devisees of the decedent jointly, either for the recovery of his own debt, or for the benefit of all other creditors who might think proper to come in under the decree. And that to entitle the complainant to obtain a decree against the heirs, or devisees, he must show by his bill that the personal estate of the decedent was not sufficient to pay his debts originally ; or that that the complainant had exhausted his remedy against the personal representatives without being able to obtain satisfaction of his debt. This construction of the statute was founded, in part, upon the section which declares that the heirs shall not be liable for any debt of the intestate unless it shall appear that the personal assets of the deceased were not sufficient to pay and discharge the same, or that after due proceedings before the proper surrogate’s court, and at law, the creditor had been unable to collect his debt, or some part thereof, from the personal representatives of the deceased, or from his next of kin or legatees. (2 R. S. 452, § 33.) The statute also contains a similar provision in reference to the liability of devisees ¡ which declares that they shall not be liable unless it shall appear that the personal assets of the testator, and the real estate which descended to his heirs, were insufficient to discharge the debt; or unless it shall appear that after due proceedings before the proper surrogate and at law, the creditor has been unable to secure such debt, or some part thereof, from the personal representatives of the testator, or from his next of kin or legatees, or from Ms heirs. (2 R. S. 455, § 56.) One section of the statute requires the heirs to be prosecuted jointly by the creditor, for the debt of the decedent; and another section declares that devisees shall be liable in the same manner and to the same extent as heirs. But there is nothing in the statute which, even by implication, authorizes the commencement of a joint suit against heirs and devisees; and without any averment in the bill that the real estate of the testator which had descended to the heirs at law was insufficient to pay the complainant’s debt.

In framing these provisions of the revised statutes, the revisers may not have intended to change the form of proceedings in this court against the heirs and devisees. For by referring to their notes, it will be seen that these statutory proceedings, as originally reported, were intended to apply to actions at law, against heirs and devisees. (2 R. S. 2d ed. App. 752.) But when the legislature changed these provisions as reported by the revisers, so as to make them applicable to such suits in this court, and prohibited the bringing of actions at law against heirs and devisees, this court became bound to carry into effect the will of the legislature thus expressed. The proceedings in this court, in such cases, must therefore be in conformity to these statutory regulations; although the effect of the statute, when applied to suits against heirs and devisees in this court, is not only to increase the number of separate suits, but also to make the remedy of the creditor in each suit more complicated and expensive than it would have been under the former practice here.

This, however, is not an ordinary bill to obtain payment of a subsisting legal demand against the estate of the decedent, according to the original rights of the parties as they existed at his death. But the complainant comes into this court for relief upon a state of facts which renders his claim against some of the defendants purely equitable. It would therefore be wrong to compel him to conform strictly to the requirements of these statutory regulations in matters of form merely. It is sufficient if they have been complied with in substance; so far as they are applicable to this case, and may affect the equitable rights of the complainant as against any of the defendants. I shall not, therefore, dismiss the bill, even as to the claim against the appellant as a devisee of the house and lot and half morgan of land in Green-street.

It only remains therefore to modify the decree of the vice chancellor, according to my views of what is just and equitable between the parties under the peculiar circumstances of this case. The following must be substituted for the decree of the vice chancellor, which is reversed and modified accordingly, without costs to either party on the appeal:

1st. Declare that the judgment was inoperative and void as against the appellant and his estate; and that the sale and conveyance by the sheriff to Adams of the property devised to the appellant was a nullity, and conveyed no title to the purchaser, and was not, in equity, a satisfaction of any part of the judgment. And decree that the sheriff’s sale and conveyance, and the subsequent deed to Henry Barhydt from Adams and so much of the mortgage as includes those premises, be annulled and set aside.

2d. Declare that by the will of the testator, Henry Barhydt took an estate for life only, under the will, in the pasture lot bought of Maybie ; and that the remainder in fee in that lot, subject to such life estate, descended to him and his other five brothers and sisters in equal shares, as the heirs at law of the testator John J. Barhydt • that the sale of that lot by the sheriff, and the conveyance thereof, was valid and effectual to transfer to the purchaser such life estate, and the interests of Henry, John S. and Jeronimus in the remainder of the fee as such heirs; that such sale was a satisfaction of the judgment upon the bond, to the extent of the bid of $500, less the sheriff’s fees on that sale, from the time when the property was sold and bid off by Henry ; and that the mortgage to Adams is a valid and subsisting security upon the interest in that property thus acquired under the sheriff’s deed, for the amount of the $500 and interest thereon from the time when the property was struck off to the mortgagor by the sheriff. Direct a reference to a master to compute amount due, upon that principle, and decree a sale, in the usual form, of the undivided moiety of the lot thus acquired under the sheriff’s sale, to satisfy the amount reported to be due, upon the coming in and confirmation of the master’s report. Or, if the complainant prefers it, the decree may merely declare his rights under the mortgage, and leave him to proceed upon the foreclosure bill previously filed against the heirs at law of Henry.

3d. Declare that the residue of the judgment is a subsisting claim in equity against the lands, or any future, contingent, or reversionary interest in lands, which descended to the children of John J. Barhydt, deceased, as his heirs at Jaw; but that in ascertaining the value of the lands thus descended, and which are liable to contribute for the payment of the balance still due, the three-sixths of the remainder in fee in the pasture lot which were legally transferred to the purchaser under the sheriff’s deed, should not be taken into account; that the lands which thus descended, and which are liable to contribution for the satisfaction of such balance, are the remaining three-sixths of the remainder in fee in the pasture lot which descended to the appellant and his two sisters, the remainder in fee in the lot which by the will was also devised to Henry for life only on the north end of the lot devised to the appellant, and the remainder in fee, after the termination of the life estate of Jeronimus, in the two lots devised to him, in which two lots Jeronimus only took a life estate under the will of his father.

4th. Declare that if the value of the estate so descended to the heirs of the decedent is not sufficient to satisfy the balance due on the judgment, the devisees of the testator are bound to contribute rateably towards the satisfaction of the deficiency in proportion to the value of the lands, or the interests therein, which were devised to them respectively, at the death of their testator; but that the interest of Henry in the pasture lot from the time when the same was sold under the judgment, is not to be taken into the account in ascertaining the interests in the lands devised which are thus liable to contribution. And that the lands and interests in lands devised, which were thus hound to contribute are as follows : First. The value of the term of two years devised to Henry in the brick house and lot in Green-street, and of his life estate in the lot north of the property devised to the appellant, according to the principles of life annuities, and of his interest in the pasture lot from the death of the testator down to the time of the sheriff’s sale. Second. The value of the interest devised to the appellant in the brick house and premises on Green-street, subject to the term of two years therein devised to Henry, and also subject to the payment of the legacy of £200 charged thereon. Third. The value of the life estate of Jeronimus, in the two lots devised to him for life, at the time of the death of the testator, upon the principles of life annuities. Fourth. The value of the upper half of the farm devised to John S. subject to the charge thereon of the several legacies to his brother and sisters and niece. And fifth. The value of the lower half of the farm devised to the_ son of John S. in fee, according to the decision of the court for the correction of errors upon the construction of this will.

5th. Direct a reference to a master to ascertain the value of the real estate descended to each of the defendants as an heir of John J. Barhydt as aforesaid, or te-the heirs of such heir, and to compute the amount remaining due to the complainant upon his judgment, and to apportion the same and the taxed costs of the complainant, except his costs as to the foreclosure and sale of the mortgaged premises, among the heirs and representatives of heirs according to the value of the lands liable to contribution ; and to ascertain and report whether any and what part or parts of the lands thus liable to contribution had been aliened previous to the commencement of this suit, and by whom. And if the value of the lands of the heirs so liable to contribute is not sufficient to pay the whole amount due upon the judgment, and costs as aforesaid, then the master is to ascertain the value of the lands and interests in lands devised, and apportion the residue of the debt, accordingly, among the devisees and representatives of devisees.

6th. Declare that if the lands and interest in lands descended and devised shall not be sufficient to pay the complainant’s debt and costs, or if the complainant shall not he able to obtain satisfaction of any part of such debt and costs in consequence of the insolvency or otherwise of any defendant or other person who was bound to contribute, and who had rendered himself personally liable by the alienation of his estate, or otherwise, then the defendants John S. Barhydt and Jeronimus Barhydt, who are personally liable to the complainant for the payment of the whole of the balance due on the judgment, must make good the loss.

Lastly. Decree that upon the confirmation of the master’s report, the complainants have execution for the amounts due from the defendants respectively for debt and costs apportioned against them; such execution to be special against the lands descended or devised, as to the defendants who have not become personally liable by the alienation of the lands descended or devised. But as to the defendants John S. Barhydt and Jeronimus Barhydt, who are personally liable in consequence of the recovery of the judgment, and as to any other defendant who shall appear by the master’s report to have rendered himself personally liable by the alienation of the lands descended or devised, the execution may be general, or both general and special. The complainant must pay the costs of the guardian ad litem, for his services as such guardian for the infants during their minority, but not afterwards; and the amount to be thus paid may be taxed with the complainant’s costs. The heirs at law of Henry are not however to be made personally liable beyond the amount or value of the lands descended to them from him.