The court is applied to, for its aid in subjecting to the debts a fund which cannot be reached at law, and the terms of its interference are an impartial distribution. 647. Ibid. The decrees of the court still declare, "that the personal Equ. Draft. estate should be applied in payment of debts and funeral ex- 652. penses in a course of administration.” Newland's lbid. 332. In Newland's Practice are the minutes of a decrce entitled, prac. ed. 329. "minutes of a decree on creditors bill for payment of debts pari passu,” in which after the same direction for the application of the personal estate, in a course of administration, the real estate is declared to be charged with the debts by the will, and therefore directed to be sold for payment of all debts unsatisfied out of the personal estate." The charge made equitable assets. I apprehend there is nothing tending to establish the rule as to legal assets, except the language of the equity judges in speaking of decrees of account, from which it is considered as inferrible. There is not to be found an express decision or an explicit statement of such a rule. 1 Sch. & This language is of this character.-That a decree for an 8 Vesey, 520. account upon a creditor's general bill is in the nature of a judgment for all the creditors.-That it is a judgment in favor of Lefroy, 296. all the creditors. That the object of such a suit is to give a judg- 18 Vesey, ment to all the creditors, and to secure a distribution of the assets without preference to any.—That the creditors of a deceased 1 Camp. N. insolvent may always be compelled through the medium of a court P. 543. of equity to take an equal distribution of assets. It may be observed that the phrase, a judgment in favour of all the creditors, and phrases similar to it, have been used in reference to the point of an equality of a decree for an account to a judgment at law. On such a bill it is equal to a judgment, to prevent any advantage by a subsequent judgment at law, and therefore to stop proceedings at law. It may then be said, that these phrases do not necessarily imply, that all debts of every degree are converted by the decree into judgment debts of the same date, to be paid proportionately. 469. In opposition to this idea, the language of Lord Thurlow 3 Cox. 201. in Goate v. Fryer, appears very strong. He says, "That the decree for an account gives every creditor who goes in, a claim equal to that of a creditor by judgment at law, from the date of the decree." It may be remarked however that there is reason to suppose, the creditors in that case were all by simple contract. 4 Br. Ch. Rep. 167. If so understood, the position is not inconsistent with my construction. As to the phrases, securing a distribution without preference, and compelling the creditors to take an equal distribution of assets, or a rateable distribution; it may be suggested, that a distri bution may be termed rateable or equal, when the division is proportionably among all creditors of an equal degree, as well as when it is equally among all debts; and the preference then spoken of as prevented, is the preference which an executor can give to one debt of equal degree over another. It is this power in the executor which Lord Elden refers to, as the reason of the court of chancery interfering. 66 The case of Lowthian v. Hassell, appears to be of weight upon this point. "On a bill by creditors, the usual decree was made; and on further directions, the Master was ordered to state what sum was produced by personal estate, what by equitable assets, and what by legal assets; and also what were the specialty and simple contract debts. port came in, it was declared, that it appearing directed to be carried to the account of legal assets would not be sufficient to pay the specialty debts remaining unsatisfied, the specialty debts were to abate in proportion, and the Master was to settle in what proportion. When the rethat the funds One of the specialty creditors, by five bonds, had been paid the amount of one of them before bill filed; and the Master made the abatement upon the whole five, allowing him the amount of the dividends upon the five, less the sum receiv ed upon the one. An exception was taken, that the Master ought not to have made any deduction in respect to the sums paid, but that the defendant ought to have been suffered to come in upon the legal assets pari passu, with the other specialty creditors, for the whole of what remained due to him by specialty. Lord Commissioner Wilson said,-" In administering legal assets the court follows the law; but where there is a deficiency, it administers them pari passu." And so Lord Commissioner Eyre,-" The court proceeds on equitable assets by the rule of equality, but on legal assets it goes only a certain way; and until a deficiency appears, it must administer them according to the rule of law." I understand by this merely, that when a deficiency appears the court abates the debts of an equal degree in proportion; a course unknown at law. The exception and facts of the case show clearly that the court speak of a payment pari passu, and abating in proportion, in reference to debts of equal degree. There is another consideration which perhaps is of weight. The effect which the rule supposed naturally should have had. upon the doctrine of marshalling assets. The chancellor does not understand the rule in England to be confined to an equal distribution among all debts of that fund (the personal assets) which is legally liable to all debts; but he considers it as extending to all assets real as well as personal. I conclude this from the generality of his language, and the distinction not being noticed. It is true that marshalling assets in favor of Creditors cannot exist with us, since a statute has subjected real estate to simple contract debts; but we are considering whether the rule supposed, exists in England. The substitution of a simple contract creditor in the place of one by specialty who has been paid from the personal estate, or the compelling the latter to resort for satisfaction to that fund on which the other has no claim, is a provision of the English court to remedy, without violating, the rule of law. The real assets are liable, solely by virtue of the specialty creditor's lien, and therefore liable to the amount of his demand only. If the specialty and simple contract creditors' demand are of equal amount, and the former is fully paid from the personal, the latter will be so from the real assets. But here is the limit of the relief given by marshalling. If the simple contract debt is greater, the excess cannot be paid out of the real estate. Now the proposition is, that in a case of general insolvency, that is, where all the assets of every description, are insufficient to pay all the debts, there shall be an equal distribution without any preferences, except as to judgments obtained before the decrce. If so, why should not the court also say, that where there is a partial insolvency as respects a class of creditors, by the insufficiency of that fund on which alone they have a legal claim, that they shall be allowed to go upon the other fund with an equal claim. Why does not the principle of the former rule involve this conclusion? The court would do no more in one case than in another. It would admit in both the simple contract creditors to participate in that property, upon which they had no legal claim. It is supposed to do this in a case where specialty creditors must be losers; and why not do it in a case where they may be fully satisfied, that is where the real assets would cover the balance of all the debts? If this conclusion is correct, the doctrine of marshalling assets would have been superseded by one far more efficient, and would no longer appear among the rules of the court. The court would say distinctly that the personal assets, and a suffi 7 Vesey, 207. 12 Ibid. 416. 1 Sch. and ciency of the real, should be applied for the payment of all the debts. If that doctrine does still appear, and is acted upon, there either is a falsity in the reasoning deducing its inconsistency with the alleged rule, or that rule does not exist. That marshalling still prevails is very clear. I need but refer to the cases of Powell v. Robbins, in 1802, and Gibbs v. Angier, in 1806. If the language of Lord Redesdale in Largin v. Bowen is Lefroy, 296. nicely examined, it will appear either very loose which is difficult to suppose, or inconsistent with the doctrine supposed. He says that "from the moment of the decree to account, the court proceeds upon the ground, that the decree is a judgment in favor of all the creditors, and that all ought to be paid according to their priorities as they then stand. Cases Temp. Would Lord Redesdale have thus expressed himself, if he had intended to say, that anterior judgments are to be paid according to their date, and all other debts equally, whatever may be the nature of the assets ? It seems surprising to me, that a doctrine of so much importance and so plainly an innovation upon a principle which is admitted to have been the settled rule of the court as late as the time of Lord Talbot, should no where be distinctly and positively expressed; that the strongest arguments to support this assumed doctrine, arise from expressions of equity judges, susceptible, certainly without any barsh bending of the language, of a different meaning, viz. that the equal distribution, the rateable distribution of legal assets means equality amongst debts of equal degree; checking all the common law power of preference by the executor, and all adverse proceedings at law to gain a superiority, by the creditor. or In the decree in Thompson v. Browne, it is directed that the personal estate be applied, in the first place to satisfy judgments, according to their respective priorities in point of time. This appears to be sanctioned by the leading case, Morrice v. The Bank of England, in which Lord Talbot said," That decrees and judgments stood upon an equal footing, and that such as is first obtained against an executor ought to be first paid out of the assets ;" and the decrees and judgments were paid according to their priority in time. It is somewhat singular, that a preference should be given in equity to priority in time against personal assets, which does not exist at law. The executor may at law pay which judgment he will without regard to its date. It is not materi al which judgment is precedent in time. But he who first sues Office of Exexecution must be preferred.And before execution sued by either it is at the executor's election to pay which he will first. 137. Law of Exec Mr. Toller also states, that a scire facias sued out gives a preference; but if two creditors sue out a scire facias each, utors, 207, the executor may confess to which he chooses. The reason is that personal property is not bound until the writ is lodged with the sheriff. Why does not the court follow out its principles in this instance, and apportion personal assets, rateably among judgments? It deviates as Lord Talbot says, from its ordinary rule of justice and equality, in allowing preferences against legal assets, in order to follow the law; and yet in this instance it deviates from the law, to establish inequality. The case of Morrice v. The Bank of England, may not, on an accurate examination prove as strong upon this point, as it at first appears. Perhaps the assets applied in the manner decreed were real assets, the produce of real estate. In the executrix's plea in 1731, she plead bonds and specialties to £15,000; and that she had only £1000, assets to pay; and in 1734. the real estate was declared subject to the debts, and directed to be sold. Now against the real estate, and justly against its produce on a sale, judgments would be preferred by their dates. See the report in 2 Br. P. C. 465. 2 Coxes In Goate v. Fryer, however Lord Thurlow says," The cases, 201. court does not take from a creditor the benefit of a judgment if prior to a decree, but it only supports the decree as equal in point of rank to a judgment; and then follows the rule of law in giving preference to the prior debt in point of time." But the rule of law does not give that preference as to personal assets. CAP. X. SECTION 1. REFERENCE TO COMPUTE AMOUNT ON A BOND us. THIS is the most frequent species of reference with |