44 N.J. Eq. 173 | N.J. Super. Ct. App. Div. | 1888
Two questions of law are raised by the appeal in this case. The facts are few and undisputed. Jeremiah Counsellor died intestate in March, 1887, possessed of a small personal estate, consisting principally of money, which on his death, became due on a policy of insurance on his life. He owned no land. His estate was insolvent, and was so declared. After the payment of the expenses of administration, funeral charges, and the physician’s bill during the intestate’s last sickness, the surplus remaining in the hands of the administrator, for distribution among
“Judgments entered of record against a decedent in his lifetime, funeral charges and expenses, and the physician’s bill during his last sickness, shall have preference, and be first paid out of the personal and real estate of the testator or intestate.” Rev. p. 764 l 58.
This regulation controls, whether the decedent’s estate is solvent or insolvent. If his estate is insolvent, then, by a subsequent section, it is directed, that after the debts above enumerated have been paid, the balance of his estate, real and personal, shall be distributed among his other creditors in proportion to the sums that shall be due to them respectively. Hev. p. 770 § 81. The orphans court, in decreeing distribution in this case, directed that the surplus remaining in the hands of the administrator should be distributed among the creditors holding debts of record, ratably; that is to say, in proportion to the sums due to them respectively. Two faults are imputed to this decree. First, that a decree in equity is not a judgment, within the meaning of the statute above quoted; and secondly, that priority in date gives priority in right, and that, where there are several judgments, distribution must;, under this statute, be made not pro rata, but by preferences, those first in date being entitled to be first paid.
The first ground of appeal is, in my judgment, unsupported by either precedent or reason. A decree in equity, adjudging that
Uor do I think the other ground of appeal can be sustained. It stands, it will be observed, on nothing but the mere fact that the appellants obtained the first judgment. They were more diligent than the other creditors, but they gained nothing by their diligence. Their diligence gave them no advantage. It does not appear that an execution was issued on their judgment; they do not claim under a levy; it is certain that they did not, by the simple recovery of their judgment, acquire a lien on the fund now in the hands of the administrator, or a legal right to priority in payment out of it, for the fund did not become a part of the intestate's estate until his death. So it would seem to be entirely clear, that the most that can he said in favor of the distinction or preference they claim is, that their judgment stands first in date of recovery; but, except in this single particular, they stand, both in point of equity and legal right, precisely on the same level with the other judgment creditors. Unless, therefore, mere priority in date of recovery, unsupported by a lien of any kind, is sufficient to give them a legal right to priority in payment, the preference they claim cannot be allowed.
Mere priority in date of recovery gave no right to preference in payment at common law. According to the rule of common law, where two or more judgments had been entered against the same person, at different dates, neither, after the defendant's
This was the state of the law when the statute under consideration was passed. The statute is an old one. It was passed in 1799. Pat. 485. It has undergone some changes in phraseology, but it is unnecessary, for present purposes, to trace them. The direction is, that judgments, entered of record against a decedent, in his lifetime, shall have preference and be first paid. Nothing is said about the order of their payment as among themselves. They are spoken of as a class — preference is given to them as an aggregation — the language being, that judgments shall have preference and be first paid; so that the words of direction embrace the last in date just as completely as the first. No hint is given that it was the legislative purpose that a distinction should be made between the first and the last. None iu fact exists. As between two judgments recovered against the same person, at different dates, under which neither has, as against the other, acquired, by levy or otherwise, a right to be first paid out of the property of the defendant, and a court is called upon to apply, in payment of the judgments, money belonging to the defendant, to which neither judgment creditor
Thompson v. Brown, 4, Johns. Ch. 619, was cited by the counsel of the appellants as an authority in point. As I understand that case, it has no bearing whatever on the question under consideration. A question of priority is there discussed, but only as it relates to the rights of creditors, who, subsequent to the death of their common debtor, have recovered judgments at law and decrees in equity against his legal representative. The question, as to the relative rights of creditors holding debts of record against a decedent, is not touched. The case presented no such question.
The respondents are entitled to a decree of affirmance, with costs.
Note. — Decrees in equity against a decedent stand on the same footing as judgments at law in regard to preference in payment out of his assets. Searle v. Hale, 8 Vern. 37, 2 Freem. Ch. 103; Searle v. Lane, 2 Vern. 88; Shafto v. Powel, 3 Lev. 355; Morrice v. Bank of England, Cas. t. Talb. 217, 4 Bro. P. C. 287; Tucker v. Yell, 25 Ark. 420; Woddrop v. Price, 3 Desaus. 203; although a few cases hold that this equality is limited to decrees relating to land, and does not apply to those for the payment of money only, Astley v. Powis, 1 Ves. Sr. 496; Mildred v. Robinson, 19 Ves. 585; Lee v. Green, 6 De G. M. & G. 155.
It must be a final decree, Smith v. Stiles, 2 Atk. 385; Perry v. Phelips, 10 Ves. 34; Farrar’s Case, 13 S. C. 254; or judgment, McIntosh v. Wright, Rich. Eq. Cas. 385; Thomas v. McElvee, 3 Strobh. 131.
A decree of foreclosure in Ireland does not participate equally in English assets, Wilson v. Dunsany, 18 Beav. 293 [criticised in Kloebe’s Case, L. R. (28 Ch. Div.) 180]; or a judgment obtained there, Harris v. Saunders, 4 B. & C. 411; or in another state, Gainey v. Sexton, 29 Mo. 449; Colt’s Estate, 4 W. & S. 314; Cameron v. Wurtz, 4 McCord 278; McElmoyle v. Cohen, 13 Pet. 312; Brown v. Pub. Admr., 2 Bradf. 103; or a judgment of a justice of the peace, Clingman v.Hopkie,78 Ill. 152; Scott v. Ramsay, 1 Binn. 221; Patterson’s Estate, 1 Ashm. 336; State v. Johnson, 7 Ired. 231; Bettinger v. Ridgway, 4 Cranch C. C. 340; Stevenson v. Weisser, 1 Bradf. 343; Sherwood v. Johnson, 1 Wend, 443; or one obtained in the United States courts, Bernes v. Weisser, 2 Bradf. 212.
A judgment is entitled to such priority if obtained before, although not actually entered until after the debtor’s death, Burnet v. Holden, 1 Mod. 6; see
Judgments of record and decrees are preferred although the representatives have no actual notice thereof, Littleton v. Hibbins, Cro. Eliz. 793; Searle v. Hale, 2 Vern. 37, 88; Fuller v. Redman, 26 Beav. 600; Nimmo v. Commonwealth, 4 Hen. & Munf. 57, 76; see Herberts Case, 3 P. Wms. 117; Hickey v. Harris, 6 T. R. 384; Hutchcroft v. Titford, 5 Dana 353; Bassett v. Slater, 81 Mo. 75; but not judgments of record in another county, Commonwealth v. Barstow, 2 B. Mon. 290; Nimmo v. Commonwealth, 4 Hen. & Munf. 57, 66, 79.
In some states, by statute, such judgments are entitled to priority of payment according to their dates, Davis v. Smith, 5 Ca. 274; King v. Morris, 40 Ga. 63; Kerr v. Wirmer, 40 Mo. 544; Trust v. Harned, 4 Bradf 213; Galloway v. Bradfield, 86 N. C. 163; Mauney v. Holmes, 87 N. C. 428; Girard v. McDermott, 5 Serg. & R. 128; see First Nat. Bank v. Gage, 93 Ill, 172; Meyers v. Meyers, 19 Grant’s Ch.185; Black v. Barton, 6 S. & M. 239.
Such statutes are not retroactive, Woodworth v. Paine, Breese 374; see Deichman’s Appeal, 2 Whart. 395; McClure v. Melton, 24 S. C. 559.
Other preferred claims, in the same class, are paid pro rata where the assets are inadequate to pay them all in full. Bennett v. Ives, 30 Conn. 329; Ritter’s Estate, 11 Phila. 12. — Rep.