Opinion
(December Term, 1849.)
Where the personal estate of a deceased debtor has been exhausted, and his lands have also been sold, creditors whose debts remain unsatisfied have a right in equity to have satisfaction decreed out of the rents and profits derived from the lands by the heirs — at least of so much as remains in their hands unexpended.
CAUSE removed from the Court of Equity of WAYNE, at Fall Term, 1849.
Strange, with whom was W. B. Wright, for plaintiffs.
J. H. Bryan for defendants
Bill and demurrer. The bill states that Edward Sasser was indebted to the plaintiffs respectively in certain sums stated, and that he was seized of certain lands in fee, and died intestate, and the land descended to his children as his heirs at law, some of whom were and still are infants; that Lewis Sasser, one of his sons, administered on his personal estate, and that the plaintiffs brought several actions against him, in which plene administravit was found for him, but the plaintiffs took judgment for their debts and sued out writs of scire facias against the said Lewis and the other heirs, and obtained judgment thereon against the lands descended, and that they were sold under execution, but did not bring enough to satisfy the debts to the plaintiffs. The bill further states that upon the death of the intestate the defendant Lewis, as one of the heirs and on behalf of the infants and other heirs, leased the lands descended for several years and received certain rents and now has them in his hands. The prayer is for an account of those rents and profits which accrued between the death of the intestate and the sale of the land and are held by the defendants, and for satisfaction thereout of the balances due to the plaintiffs respectively. (337)
Although this is the first time the point arising in this case has been presented to our courts, yet the principle on which the bill is founded seems to be clearly just, and to be established elsewhere by adjudications.
Rents and profits received by an heir cannot be reached at law, because judgment is given only against the land itself except when it is against the heir personally for false pleading. Still, as the profits of the land which came from the debtor, the rents are in conscience applicable to his debts, and the heir ought not to keep them to the hindrance of the creditors. It is true that the debts are purely legal demands, and that the liability of the land or heirs is also merely legal. Yet the jurisdiction is established of entertaining a creditor's bill for an account of the personal and real estate, and for satisfaction out of them, according to the order in which the parties are respectively liable. The cases in England are numerous and full to the point, and so they are in some of our sister States; and the doctrine has been recognized in this State. Simmons v. Whitaker, 37 N.C. 129; Wilson v. Leigh 39 N.C. (338) 97. Upon such bills there have been decrees for the sale of the land descended or devised, and also for satisfaction out of the rents and profits received since the death of the ancestor. As far as discovered by us, the first time the question occurred was in March v. Bennett, 1 Vern., 428. It was urged that the profits of an infant heir's estate could not be taken for the ancestor's bond debt, and that no such decree had even been made. But the Master of the Rolls very naturally thought such a decree to be just and equitable, and he declared that if the case came before him he would decree satisfaction. The point was again presented in Waters v. Ebrall, 2 Vern., 606, in which the report states the decision to have been that the profits in the time of the infant were not, after his death, applicable to his ancestor's debts, which is at least plausible as between the administrator and the heir of the infant. But in Mr. Raithby's edition of Vernon the decree itself is given, and from that the decision seems to have been the other way, for the plaintiff got a decree to raise from the land only such sums as might be due on the obligations after applying the personal estate of the original debtor and also the profits of the land in the deceased heir's time, first allowing out of the latter for the maintenance supplied to the infant. After that all the cases seem to be one way; that is, in favor of the creditor. It was taken by Lord Talbot, to be clear law, in Chaplin v. Chaplin, 3 Pr. Wms., 366. So in Davies v. Topp, 1 Bro. C. C., 524, the decree at the Rolls was that, after applying the personal estate, any deficiency should be supplied by a sale of the real estate descended; and if there should still be a deficiency, then it was declared that the rents and profits of the land descended should be applied to make it good, and an account of them was ordered; and, if all those funds should not be sufficient, that any deficiency should be made good out of land devised, subject to a charge for the payment of debts. Upon the appeal of the heir, (339) the argument was against imposing all the deficiency, after applying the personal estate, on the descended land in front of that devised. But there was not the least question that the land descended was liable as decreed; the rents and profits were also liable before the land devised; and, it bing [being] held that the decree was right as between the two descriptions of land, it was affirmed throughout, In Curtis v. Curtis, 2 Bro. C. C., 620, 633, the remark dropped incidentally from the Master of the Rolls that "It is the practice in equity that bond creditors coming for a distribution of the assets shall have an account of the rents and profits, which they could not have at law." Indeed, in Rowe v. Reavis, 1 Dick., 178, it is stated that rents and profits of land descended are to be applied before the court of equity will decree the sale of the inheritance. But in Waide v. Clark, 1 Dick., 382, upon a case like that of Davies v. Topp, there was a similar decree for the sale of the inheritance first, and then for an account and application of the rents and profits. The decrees in both of those cases are set out as precedents in Seaton's Forms and support the reports. The point would seem, then, to be perfectly settled in England; and the equity of the creditor is as strong here as there. To the purpose of relief in this Court against the lands of a deceased debtor or the profits, all debts stand upon the same ground as specialties in England, since our statute entitles all to satisfaction out of the real estate — regard being had, however, to their dignity in the course of administration. It is true that, upon simple contracts, the heir is not directly liable as he is in debt on a specialty in which he is named. But that does not affect this question; for the relief granted in equity to creditors by specialty is not founded at all on the personal responsibility of the heir for the debts, but on the legal liability (340) of the land in his hands and the inadequacy of the legal remedy against the land when compared with the more direct and perfect one in the court of equity. In other words, the relief here proceeds upon the ground of following the fund which ought to pay the debt as coming from the original debtor, and which can be more readily rendered here than at law. That principle applies alike to all debts for which the land is in any manner legally liable; and the more circuitous, dilatory, and expensive the remedy at law is for a articular debt, the greater are the reason and necessity for the interposition of the court of equity. In respect to the land itself, the ground of the jurisdiction seems plain. But in regard to profits received by the heir, the principle is not so apparently correct, since they cannot be reached at law at all. When this case was opened, therefore, there was an impression in the Court that the bill could not be sustained. But in looking for precedents, the cases before cited were soon collected; and, moreover, the principle established by them is stated in the text writers as a settled one inequity. It has also been declared judicially in this country, and that in reference to demands for which the heir was not bound by specialty. In Thompson v. Brown 4 John, C.C. 619, Chancellor Kent decreed the sale of land upon a bill by one partner against the executors and heirs of the other, for a balance due on the account, and the only reason why he did not decree an application of the profits also was that the heir was an infant and they had been bona fide applied to his maintenance and education by the guardian before notice. We think that was a very just ground of exception, and should be disposed to adopt it; but as the case is now before us, that matter is not a subject for consideration, for the bill alleges the profits belonging to the infants remain unexpended in the hands of the brother, who acted for them, and therefore there (341) can only be a decree for what he has or ought to have, which can come up only when answers shall have been put in and the facts ascertained upon the usual inquiry. At present the case is for the plaintiffs, as the demurrer admits there are unexpended profits; and to that extent, at least, the creditors ought to have satisfaction. The plaintiffs are therefore entitled to an account, and the demurrer must be overruled with costs, and the case remanded, that the defendants may answer and other proceedings had.
PER CURIAM. Remanded.
Cited: Moore v. Shields, 68 N.C. 331, 333; Jennings v. Copeland, 90 N.C. 580; Shell v. West, 130 N.C. 173.