author: Mr. Justice WOODBURY

text:
    John West, Appellant, v. Joseph Smith and Ellen, his Wife.
    Where a bill was filed in the Circuit Court of the United States for the County of Alexandria, by a legatee, against the executor and residuary deyisee, praying for the sale of the real estate in order to pay legacies, the personal estate being exhausted, it was not necessary to make a special devisee of land in Virginia, who •resided in Virginia, a party defendant.
    The Orphans’ Court had power to allow a commission to the executor for paying over a specific legacy, and a right to extend this commission to ten per cent.
    Under the laws of Virginia, the executor had a right to refrain from pleading the statute of limitations when sued, and to pay a judgment thus obtained against him. The judgment, at all events, must stand good until reversed.
    Where the executor paid legacies to persons who had occupied property which, it was alleged, belonged to the deceased, and the occupiers claimed to hold it in consequence of an uninterrupted possession of twenty years, the justice of their claim could not be tried in a collateral manner, by objecting to this item of the executor’s account, on the ground that he should have set up the claim for rent in set-off to the legacy.
    This was an appeal from the Circuit Court of the United States for the District of Columbia and County of Alexandria^itting as a court of equity.
    It was a bill filed in the Circuit Court by Ellen Smith, then Ellen Mandeville, one of the legatees of Joseph Mandeville, deceased, whose will was before this court for construction at January term, 1844, The case is reported in 2 Howard, 560. It will be seen by reference to that case, that John West became a party to the proceedings, upon the ground of being the residuary legatee, and, as the court then held, residuary devisee also.
    Ellen Mandeville, who intermarried with Joseph Smith pending the suit, was a legatee under that will for $> 3,000. One of the clauses of the will was this. “ If my personal property should not cover the entire amount of legacies I have or may give, my executors will dispose of so much of my real estate as will fully pay them.”
    Mandeville, the testator, died in July, 1837.
    In May, 1839, Ellen Mandeville filed her bill in the Circuit Court, (to which suit her husband, Smith, afterwards became a party,)charging the making and publication of the will, the bequest to herself and others of certain legacies, which in default of personal assets were chargeable upon the real estate, the death of the testator, and the deficiency of personal assets; and praying a sale of lands for the satisfaction of her legacy. To this bill, all the other pecuniary legatees,, the residuary devisee, West, and the executor of Mandeville, were made defendants.
    It is not necessary to trace the progress of the suit through its successive stages. It was at last referred to a master in chancery, who reported sundry matters of account, to some of which exceptions were taken by the defendant, West. The court, however, overruled these exceptions, and proceeded to decree a sale of so much of the real estate as might be necessary to pay the legacies. From this decree West appealed, and the case now came before this court upon the exceptions to the master’s report. Only four of these exceptions were insisted on in the argument, viz. the second, third, seventh, and eighth.
    They were as. follows. The first exception is inserted for the purpose of explaining the second.
    1. For that said commissioner has improperly allowed William C. Gardner, deceased, a credit in his account as executor of Joseph Mandeville, deceased, the sum of eight hundred and forty-two dollars and ninety cents, as having been paid to Sarah A. Hill, “ a specific legacy of slaves, furniture, &c., as appraised,” which said property was properly subject, at the time of its delivery to the said legatee, Sarah A. Hill, to the payment of the debt of Joseph Mandeville, deceased.
    2. For that the said commissioner has improperly allowed the said William G. Gardner, deceased, as a credit in his said executorial account on the estate of Joseph Mandeville, deceased, the sum of eighty-four dollars and twenty-nine cents, as a commission on the said $842.90, mentioned in the first foregoing exception, which said sum was not so due to said Gardner.
    3. For that the said commissioner has improperly allowed the said Gardner, as a credit in his said executorial account, the sum of three hundred and sixteen dollars and thirty-seven cents, and a further credit in said account of nine hundred and twenty dollars and twenty-six cents ($920.26), as having been paid by said Gardner on account of a judgment in favor of Samuel Bartle, against said Gardner, as executor of Joseph Mandeville, deceased, the items or most of them forming the account of said Bartle against said Mandeville’s estate, on which said judgment is predicated, being unsustained by legal proof, and barred by the statute of limitations.
    7. For that the said commissioner has improperly reported the sum of fifteen hundred dollars, with the several sums of two hundred and twenty-five dollars and four hundred and fifty dollars interest thereon, after allowing a credit of one hundred and fifty dollars, as a legacy due to Mary Mandeville, under the will of Joseph Mandeville, deceased; the said legacy being subject to a further credit of two hundred and twenty-five dollars, for the use and occupation of a portion of the real estate of Joseph Mandeville, deceased.
    8, For that the said commissioner has improperly reported ' the sum of fifteen hundred dollars, with seven hundred and thirty-five dollars, the interest due thereon, as a legacy to Julia Mandeville, under the will of Joseph Mandeville, deceased, when the same should have been credited with the sum of two hundred .and twenty-five dollars for the' use and occupation of' a portion of the real estate of Joseph Mandeville, deceased.
    ' The cause was argued by Mr. Jones, for the appellant, and Mr. Neale and Mr. Davis, for the appellees.

      Mr. Jones

    submitted a preliminary objection of a defect of parties, because of the nonjoinder as a defendant of James Mandeville, a nephew of the testator, and a specific devisee of ten thousand acres of land upon the head-waters of Guyandotte River, in Virginia. - :
    He then proceeded to argue, in support of the second exception, that no commission was allowable on the specific legacy, in addition to the general commissions incident to the administration of the assets.
    Of the third, that the executor suffered judgment at the suit of Bartle, in consequence of his improper and illegal concessions, and of evident negligence, amounting to a devastavit.

    Of the seventh and eighth, we maintain, —1st. That the evidence clearly entitled the exceptant to the set-offs claimed in these exceptions. 2d. That the pretence set up,- of long possession under a parol gift, was wholly unsupported by evidence,— indeed disproved, — and was moreover barred by estoppel, the parties claiming both under and against the will.
    And further maintained, that the court erred in proceeding to the final decree, whilst the claims of the two creditors and the two legatees named in these exceptions remained sub judice.

    Lastly, that the court had ho jurisdiction to decree satisfaction of the creditors out of the real estate.

      Mr. Neale, for defendants in error.
    2d Exception. If this exception is made as a legal and valid objection, it is thought that such is not the law; on the contrary, the allowance is fully authorized by law. No doubt the commissioner was guided by the allowance made the executor .of Mandeville by the Orphans’ Court of Alexandria County, in which the accounts were settled ; and that court had full power and authority, under the testamentary system of Maryland, to make the allowance, it being a matter within the admitted discretion of the court; and being in its discretion, not even an appeal, much less this exception, is sustainable. 2 Laws of Maryland, 482; Dorsey’s Testamentary Law of Maryland, 17; 1 Peters, 565; 5 ib. 224.
    The exception, if sustained, might, by a future proceeding on the part of the appellant against the executor’s legal representative, tend to defeat, at least in part, the commission allowed Mandeville’s executor by the Orphans’ Court aforesaid, and which could only have been done, in the first instance, by an appeal, alleging and proving fraud in its procurement. It would, therefore, seem to be an attempt to do that indirectly, which could not have been- done directly and lawfully.
    3d Exception. This exception is clearly untenable for the following reasoi is; that is to say, because the judgments of every court of competent jurisdiction, if fairly obtained, are conclusive upon the parties, until reversed by writ of error or supersedeas; nor can a court of equity look into them, unless fraud, mistake, accident, or surprise in their procurement be alleged and proved; in such a case, it is admitted that chancery has jurisdiction. But no such allegations are to be found in the record of this cause, and for want thereof, this honorable court, sitting as an appellate chancery court, will not, it is imagined, disturb the allowance. The appellant was made a party defendant on the 8th of June, 1842, and although Commissioner Eaches made his report on the 31st of May, 1839, the appellant never filed exceptions thereto until the 3d of October, 1846, long after the death of Mandeville’s executor; and having so long failed to do so, it is submitted whether the court will now entertain the samé. 2 Robinson’s Practice, 214,'383; 3 Howard, 691; and the same remarks apply to Commissioner Green’s report.

      {Mr. Neale then went into an argument that the statute of limitations did not apply.)
    7th and 8th Exceptions. The claim set up by the appellant for use and occupation is strictly legal, and as a general principle can only be enforced in a court of law. Such claim must be founded on the privity of contract, either express or implied, and neither the one nor the other can arise without the previous relation of landlord and tenant. 1 Howard, 153.
    No such relation is pretended in this case; none such ever existed; the parties, on the contrary, are now contending before the court below, in a suit at law, about their legal rights to the lot of land in question, and to the rent of which lot the appellant in this chancery suit claims, to be entitled. It would therefore appear to be a fit subject for an action at law, and not a bill in equity, for the right of property in this case is a question which 'involves matters of fact as well as of law, and should be adjudicated in a court of law, where the appellant has adequate remedy; and having such remedy, a court of equity is not the proper forum. I Laws U. S., old edition, p. 59, sec. 16.
    The evidence in the record is, that the Misses Mandeville entered on the premises in dispute, under a gift from their uncle, the late Mr. Mandeville, and t.hat they held, used, and occupied it for more than twenty years prior to their said uncle’s death, and that, too, with his personal knowledge and consent, and that they still hold, use, and occupy it as their own property. If, then, the Misses Mandeville entered on the premises under color or claim of title, and held possession adversely to their uncle for so long a period, with his knowledge, and without any attempt on his part to eject them, it gives them good right and title under Yirginia law, and is a complete bar to a possessory action, although it might not be against a writ of right, founded on the seizin of the appellant’s devisor or testator, for in Yirginia it has been decided that a devisee, like an heir, may maintain a writ of right.

      Mr. Davis, for the defendant in error, contended that the exceptions were properly overruled: —
    As to the first exception, because, —
    1. The realty as well as personalty being liable, under the will and law, to both debts and legacies, it is immaterial to the residuary devisee and legatee to which object the personalty is applied. Tayloe v. Thomson, 5 Pet. 367; 5 Geo. II. ch. 7 (1732); Silk v. Prime, 1 Dick. 384; 1 Bro. C. 0. 138, note; 2 Stat. at Large, 103, 104, sec. 1-756, sec. 4.
    2. Had the executor sold the specific legacy for payment of debts, the legatee would have been substituted to the- creditor’s rights against the realty; it being liable to the debts by law, and charged with the legacies by will, and only the- residue given to West.
    By analogy to specialty creditors, 2 Lomax on Executors, 252, 253, <§, 7, 253, 254, <§4 14,-15, 16; Byrd v. Byrd, 2 Brock. 171.
    Or where the devise is of the residue of personalty and realty, Hanby v. Roberts, 1 Ambl. 129; 2 Smith’s Ch. Pr. 282; Norris v. Norris, 1 Dick. 253; Headly v. Redhead, Coop. 51.
    Or when the lands are charged with debts, Keeling v. Brown, 5 Ves. 359; 2 Smith’s Ch. Pr. 282, 283, (a); Eland v. Eland, 4 Myl. & Cr. 42; 1 Story’s Eq. Jur. 4$ 565, 566 ; Clifton v. Burt, 1 P. Wins. 678, 679, Cox’s note; Haslewood-y. Pope, 3 P. Wms. 323; 2 Lomax on Executors, 254, <§> 13.
    3.The language of the will imports a debt, and this legacy in satisfaction.
    As to the second exception, because the commission is an incident to the legacy, and has been allowed by the Orphans’ Court, and for the reasons given on the first exception.
    As to the third exception, because, —
    1. The exception does not specify item by item the part objected to, nor the grounds of objection, and is in the alternative. Harding v. Hardey, 11 Wheat. 103; Wilkes v. Rogers, 6 Johns. 568, 591, 592; Story v. Livingston, 13 Pet. 359, 365, 366; Buller v. Steele, reported in 2 Smith’s Ch. Pr. 372.
    2. If the exception covers all the items, then, as some are proper, it must be overruled. Green v. Weaver, 1 Simons, 404;' 3 Cond. Ch. R. 204, 218, 219.
    3. No objection was made before the master for want of, or to the competency of, the proof.
    4. The verdict and judgment fix the debt as due at testator’s death.; and the receipts on the execution show its payment. Garret v. Macon, 2 Brock. 213, 214; Strodes v. Patton, 1 Brock. 230, 231; Powell v. Myers, 1 Dev. & Batt. Eq. 502; Munford v. Overseers of Poor, 2 Rand. 313, 316; Chamberlayne v. Temple, 2 Rand. 384, 396, 397.
    5. There is no bill of particulars, nor any part of the record showing the items on which said judgment is founded.
    6. The burden of showing the items to be barred rests on the exceptant, the judgment being prima facie evidence of a just debt, and he has produced no proof, either of what the items were, or of what proof was before the jury, or that any of them were barred by limitation.
    ■ 7. If he rely on the report and account incorporated by the clerk in the record of Bartle v. Mandeville’s Executor, it is no part of the record, and so not competent evidence. Cunningham v. Mitchell, 4 Rand. 189, 190, 192; Moore v. Chapman, 3 Hen. &. Muni. 26C, 267; Lessor of Fisher v. Cockerel, 5 Pet. 248; Lessor of Reed v. Marsh, 13 Pet. 153. It does not appear ever to have been returned and filed in court, nor to have been confirmed or adopted by the court or parties. No judgment was entered on it. It does not appear even to have been read before the jury. Nor that it was all or the only evidence before them ; and in the absence of proof to the contrary, the verdict and judgment must be presumed right. Thompson v. Tomlie, 2 Pet. 165; Grignon’s Lessee v. Astor et al., 2 How. 319, 340; Voorhees v. Bank of United States, 10 Peters, 472, 473; Williams-u. United States, 1 How. 290; 1 Saund. 329, notes 3, 4, 330, note 5; 2 Saund. 50, note 3; 1 Saund. 334, note 9; 2 Lomax on Executors, 428, 429, § 33.
    8. If the report is to be considered, then it does not appear from it that any item allowed in that report accrued more than five" years before testator’s death, nor more than five years before the commencement of the suit, and it rests on the exceptant to show thát the items were barred. Adams v. Roberts, 2 How. 486, 496.
    . Testator died 25th July, 1837, nar. filed Aug. rules, 1838. - The reapias, must have been before May, 1838; it may have been ..before October, 1837, and on or at anytime after July'25, 1837, the date of testator’s death.
    All the items reported as due or as suspended, i. e. for further evidence, appear.to have accrued during or after 1834, — except $> 158.19|, the several sums of $ 26.88, .f 17.23, 22.37, making f> 66.48, and f> 37.62.
    The $ 37.62 is dated 1833; it may have accrued in January, or in December, 1833; in either case, it may have been within five years from the beginning of the suit; if after May, it must have been so.
    The items composing f 66.48 have nothing to fix their date, except that they are prior to April 30, 1835.
    The item of $ 158.19| has no date assigned; it is only said to have been found in a book for 1831, 1832, and 1833;. if it accrued due after July 25th, 1832, it may have been within five years of writ, and -was within five years before testator’s death.
    Rev. Code (1792), .167, s. lvi. 8. The law requiring the court to strike out the items barred, and dispensing with a plea of limitation, the presumption is that any item which, though apparently barred, has not been stricken out, was sustained by evidence removing the bar, 2 Lomax on Executors, 423, § 25; 2 Pet, 165; 2 Howard, 340; Brook v. Shelly, 4 Hen. & Munf. 266.
    9. If-any items be apparently more than five,years before suit, but not before testator’s death, the executor may have promised to pay them within the five years; which he had a right to do.
    The obligation to plead statute is discretionary, and failure should be shown to be unreasonable.

      10. The dealings between Bartle and Mandeville were mutual, long continued, and complex, and probably neither party kept or had full proof of all items, so that the only mode of making a fair settlement was by reference to a commissioner, with production of books and papers, and it should be shown that this proceeding was ill advised, as in case of submission to arbitration. Strodes v. Patton, 1 Brock. 230, 231.
    11. It appears, on the contrary, to have been prudent and beneficial, for, — 1st. Mandeville gets credit by his own books for f 912.01, 17th February, 1834. 2d. For $ 1314.06, for none of which is there any proof in the record or report, and which seems to have come entirely from Mandeville’s books by consent of plaintiff. 3d. For the claims of S. B. Larmour & Co., Daniel Cawood & Co., against Bartle, included in the above $ 1314.06, otherwise than by consent not an offset.
    As to the seventh and eighth exceptions: —
    1. A joint demand cannot be set off a'gainst a several demand. 2 Story’s Eq. Jur. <§> 1437.
    2. Credit for the whole sum is claimed against each legacy.
    3; It does not appear that any such sumí is due as claimed, no tenancy being proved, and, on the contrary, an adverse occupation being expressly reported.
   Mr. Justice WOODBURY

delivered the opinion of the court.

The original proceeding in this case was a bill in chancery instituted in September, 1839, in the Circuit Court for the District of Columbia, sitting for the County of Alexandria. The object was to recover a legacy of $ 3,000, bequeathed by Joseph* Mandeville, in 1837, to Ellen Mandeville, now the wife of Smith.

William C. Gardner, the executor, took upon himself the execution of the will, and was made one of the original defendants, with West and several other legate'esT West, being residuary legatee, took a leading part in conducting the defence in the Circuit Court, and made the appeal to this court. Yarious answers were put in by the respective respondents, several depositions filqd, and some documentary evidence. From these it appears, that proceedings had for some time been instituted in the Orphans’ Court for. the County of Alexandria, for the purpose of settling the estate of Joseph Mandeville. Most of the. debts had been adjusted, and some of the legacies ,• and the personal estate being exhausted, permission had been asked to sell and apply a part of the real estate, situated in said county of Alexandria, to pay the residue.

To this application, as well as to some of the previous proceedings and decrees in the Orphans’ Court, sundry objections had been interposed. But the exceptions made by West to the last report of the commissioner, in the Circuit Court, in May, 1846, disclose all the matter finally relied on in opposition in that court by the respondent. Those exceptions having been there overruled, this appeal was taken.

Before going into the consideration of those exceptions in detail, and the correctness of the decision which was pronounced upon them, it may be well to dispose of a preliminary question raised here, that James Mandeville of Virginia, a legatee of 10,000 acres of land there situated, ought to be made a party defendant, with those already before the court.

We feel obliged to overrule this objection.

It is not clear, that it -could be made here after an appeal; though, if proper, the case might perhaps be sent back, and an amendment made there, — as new parties can be admitted there as late as the final hearing. (Mitford, Pl. 144, 145; Owing’s case, 1 Bland, Ch. 292; Clark v. Long, 4 Rand. 451.)

At the same time, it is true as to exceptions to a master’s report, that none can generally be. made in the appellate court which were not taken below. Brockett et al. v. same, 3 How. 691. The objection here, however, must in .any view be overruled, because the Orphans’ as well as the Circuit Court, for the county of Alexandria,..proceeded, and ought to have proceeded, against parties and property situated within their limits, and not against either situated like James Mandeville and his land in Virginia, and without their jurisdiction. Hallett v. Hallett, 2 Paige, 15; Townsend v. Auger, 3 Conn. 354. Though he held his land under- the same will, yet it is admitted that he and his land were both in another State. Another excuse for not joining him is, that property enough existed within the county of Alexandria to discharge the claims of the original plaintiffs, without a resort to James Mandeville, or the land devised to him. Russell v. Clarke’s Executors, 7 Cranch, 72.

Especially must West and all the property devised to him be first made liable-, as he is -only a residuary legatee, or, in other words, is entitled only to what is-left, after all other's are satisfied. And, finally,- it. was not necessary to make James Mandeville a party to this bill, when neither he nor his land could be affected by a decree made against other persons and other lands, and in a case instituted in another jurisdiction and in which no service had^been made on him. West v. Randall, 2 Mason, C. C. 181; Joy v. Wirtz, 1 Wash. C. C. 517; Elmendorf v. Taylor, 10 Wheat. 152; Wheelan v. Wheelan, 3 Cowen, 538.

To proceed next to the consideration of the exceptions made below, it is to be remembered that the first one was waived at the hearing, and need not, therefore, be repeated. The second exception is, that the executor, Gardner, was improperly allowed a commission of $ 84.29 on a specific legacy of slaves, furniture, &c., made and paid to Sarah A. Hill.

This commission was at the rate of ten per cent.; and though that .rate seems high, yet, if the Orphans’ Court had authority to make any allowance in such a case, its decision within its authority and jurisdiction must be considered binding. 1 Peters, 566; Thomas v. Fred. City School, 9 Gill & Johns. 115.

On. general principles, it would seem just and proper for all such courts to make some compensation to executors for such services as paying over legacies, no less than for paying debts. In the case of specific legacies, the trouble and risk are as great, if not greater, than in moneyed legacies, and it would be difficult to find elementary principles to justify commissions in one case, and withhold them in the other.

If this.point is to be governed by these principles, as it'must be, provided the laws of Yirginia at that time controlled the matter in the county of Alexandria, then the exception must fail under those principles, and under a practice, well settled there, authorizing in such cases a quantum meruit. Under that, as much as ten per cent, on moneys received and paid out has iii several instances been sanctioned. McCall v. Peachy, 3 Munf. 301; and Hutchinson v. Kellam, Ibid. 202.

But if it is to be governed by the laws of Maryland, as is contended by the plaintiffs, a like result will follow, by means of express statutory provisions and decisions in that State.

They contend this, because in February, 1801, Congress established in Washington and Alexandria Counties an Orphans’ Court for each county, and provided that they “shall have all the powers, perform all the duties, and receive the like fees, as are exercised, performed, and received by the register of wills and judges of the Orphans’ Court within the State of Maryland,” &c. 2 Statutes at. Large, p. 107, § 12; Yeaton v. Lynn, 5 Peters, 230.

It is argued, that this provision extended to the power and duty of the Orphans’ Court in Yirginia to allow commissions as large as here, and for specific as well as moneyed legacies, and not to the mere organic structure and jurisdiction af the Orphans’ Court, leaving all else in Alexandria County to be governed by the laws of Yirginia, and in Washington County by the laws of Maryland.

If this view be correct, which is supposed to be the one usually acted on in this District, it was provided in Maryland by statute in 1798, ch. 101, that a commission may be allowed, not under five per cent., nor exceeding ten per cent, on the amount of the inventory.” Nichols et al. v. Hodges, 1 Peters, 565; 5 Gill &. Johns. 64.

The third exception is, that a judgment was allowed by the executor to be recovered by one Bartle against the estate of the deceased Mandeville, which “ was unsustained by legal proof, and barred by the statute of limitations.”

But this judgment was recovered after due notice and hearing. No fraud or collusion is set up or proved between the parties to it, for the purpose of charging the estate. And the chief, if not only, exception to its fairness or validity is, that Gardner, the executor, did not plead the statute of limitations to a part of the claim on account, when he might have done it under the apparent time when the cause of action accrued on that item. ' But in Virginia, and especially if the court, by not striking out the item, sanction a waiver of the statute, as is inferred to have been done here, the executor seems fully justified in not pleading it. (2 Lomax on Executors, 419; Bishop v. Harrison, 2 Leigh, 532; 1 Robinson’s Practice, 112; 1 Rev. Stat. 492.) So in England, formerly, the executor was held excused in his discretion from interposing as a defence the statute of limitations. (Norton v. Frecker, 1 Atk. 526.) But in a recent case, doubt is cast over this in England, in 9 Dowl. & Ryl. 43.

The Virginia law, however, must control here, and conduces to justice, when the court or the executor is satisfied no payment has been made, or that there had been a re-promise by the deceased. Holladay’s Ex’rs v. Littlepage, 2 Munf. 316; 4 Hen. & Munf. 266.

At" all events, on elementary principles, the judgment thus obtained must stand as binding till duly reversed, and be till then for most purposes presumed correct. Voorhees v. Bank of United States, 10 Peters, 472, 489; 2 Howard, 319; Lupton v. Janney, 13 Peters, 381.

' Under the sixth and ^seventh exceptions, the respondent insists that Mary and Julia Mandeville, legatees of the deceased, ought to have been charged rent for a piece of land which they occupied, and that the amount thereof ought to have been deducted from these legacies.

It is true that this land once belonged to the deceased, but Mary and Julia insist that they have been in the exclusive occupation of it for more than twenty years. They had always since their entry claiméd it as their own, and this land was not, by name, devised by the deceased to any one, as if still his property. The legatees insisted, that at first, being relations of J. Mapdeville, and the premises contiguous to their house, they were given to them for a garden, and that their possession' had ever since been adverse to all the world. Nor was there any contract shown to pay rent by them to him; nor any proof that rent had ever been demanded by him, while living. Without, then, settling here the disputed title to this property, it is sufficient to say, that under these peculiar circumstances such a use and occupation of these premises would not warrant the recovery of rent from .them in an action of assumpsit at law. 1 Chit. Pl. 107; Birch v. Wright, 1 D. & E. 387; Smith v. Stewart, 6 Johns. 46. Such an action must rest on a contract express or implied. Lloyd v. Hough, 1 Howard, 159, and cases there cited. And if no implied promise could be raised to recover rent, when the occupation is adverse, and no express one is pretended to exist, the executor could not legally set off this claim against their legacies.

The rights to the land, or to any rent thereon, must be settled by a direct action at law, and not in this collateral manner ; and if the legatees do not succeed there, they can be made to pay, in trespass, for mesne profits, what they are not liable for as rent, ex contractu, when holding adversely.

A concluding objection to the proceedings below, subsequent to overruling the written exceptions to the report, is, that the court proceeded to a final decree Avhilst the claims of íavo of the creditors and two of the legatees were held under consideration.

But either those claims are independent and not necessary to be decided.before a final decision on the rest, —or they are so connected, that a decision on them was proper at the same time, and then this appeal itself would be premature, and would have to be dismissed. 4 Howard, 524; Perkins v. Fourniquet et al., 6 Howard, 206. This, it is understood, is not moved, nor desired by either party.

Such independent claims, hoAvever, may properly be suspended under the circumstances existing here, according to Royal’s Administrators v. Johnson et al., 1 Randolph, 421.

The judgment below must, therefore, be affirmed.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Columbia, holden in and for the County of Alexandria, and was argued by counsel. On consideration whereof, it is now here ordered, adjudged, and decreed by this court, that the decree of the said Circuit Court, in this cause be, and the same is hereby, affirmed, with costs.


source: Caselaw Access Project

author: Mr. Justice DANIEL

license: Public Domain

text:
    John D. Murrill and The Bank of New Orleans, Appellants. v. Alexander Neill and William T. Somerville.
    A merchant who owed debts upon his own private account, and was also a partner in two commercial houses which owed debts-upon partnership account, executed a deed of trust containing the following provisions, viz.:—
    It recited a relinquishment of dower by his wife in property previously sold and in the property then conveyed, and also a debt due to the daughter of the grantor, which was still unpaid, and then proceeded to declare that ho was indebted to divers other persons residing in different parts of the United States, the names of whom he was then unable to specify particularly, and that the trustee should rev mit from time to time to Alexander Neill, of the first moneys arising from sales, ' until he shall have remitted the sum of $ 15,000, to be paid by the said Neill to the creditors of the said grantor, whose demands shall then have been ascertained; and if such demands shall exceed the sum of $15,000, then to be divided amongst such creditors pari passu-, and out of further remittances there was to be paid the sum of $12,000 to his wife as a compensation for her relinquishment of dower, and next the debt due to his daughter, and after that the moneys arising from further sales were to be applied to the payment of all the creditors of the grantor .whose demands shall then have been ascertained. In case of a surplus, it was to revert to the grantor.
    The construction of this deed must be, that the grantor intended to provide for his private creditors only out of this fund, leaving the partnership creditors to be paid out of the partnership funds.
    Under the deed, it was the duty of the trustee to divide the first $ 15,000 amongst the private creditors of the grantor, and exclude from all participation, therein the creditors of the two commercial houses with which the grantor was connected; next to pay the debts due to the wife and daughter; then to pay in full the private creditors, or divide the amount amongst them, proportionally.
    The rule is, that, partnership creditors shall, in the first instance, be satisfied from the partnership estate; and separate or private creditors of the individual partners from the separate and private estate of the partners, with whom they have made private and individual contracts; and that the private and individual property of the partners shall not be applied in extinguishment of partnership debts, until the separate and individual creditors of the respective partners shall be paid.
    The American and' English cases respecting this rule examined.
    • This was an appeal from the Circuit Court of the United States for the District of Maryland, under the following circumstances.
    On the 24th' of September, 1839, Luke Tiernan, of the city of Baltimore, and Anne, his wife, made a deed of trust to Charles H. Carroll, of Livingston County, New York, thereby conveying' to said Carroll about 5,888 acres of land, part of Tuscarora Tract in said Livingston County, of which Luke Tiernan .was seized in fee simple as his individual property. The property so conveyed is in said deed-estimated to be. worth •about $ 120,000.•

      The deed, among other things, recites that Anne, the wife of Luke, had previously joined in a conveyance of various portions of said tract, the property of said Luke, which before that time had been sold, without receiving for her separate use any consideration therefor.
    It also recites, that said Luke was indebted to Anne E. Brien, at the time of her death, in the sum of $ 4,450, which on her death became due to Luke Tiernan Brien, her only child and heir at law.
    It also, recites, that said Luke “ is indebted to divers other persohs, residing in different parts of the United States of America, in a large amount of money in the aggregate, but the names of all the persons to whom he is so indebted, and the amount due to each respectively, the said Luke Tiernan is now unable to specify particularly.”
    The deed then conveys said land to said Carroll in trust, to sell and convey the .same in the manner therein specified, and after paying expenses, including a commission for his services, to remit the net proceeds of the first moneys arising from the sales, in bank checks or drafts, to Alexander Neill, of Maryland, “ until he shall have remitted the sum of $ 15,000,- to be paid by the said Alexander Neill to the creditors of the said Luke Tiernan, whose demands shall then have been ascertained; and if the demands so ascertained shall exceed the said sum of $ 15,000, the same shall be applied in part payment„of each of said demands, in the ratio that each of said demands respectively shall bear to the whole sum to be so applied.”
    After said sum of $ 15,000 shall have been remitted, then the sum of $ 12,000 is to be remitted by said Carroll to such person as said Anne Tiernan may designate, which is to be invested for the sole and separate use of said Anne, as a compensation to hér for relinquishing her dower in the land by the deed conveyed.
    Then the sum of $ 4,450, with interest from the 1st of Janu-. ary, 1841, is to be remitted by said Carroll in payment of the above-mentioned debt due to Luke Tiernan Brien.
    “ And after the last-mentioned sum shall have been remitted as aforesaid, all the residue of the moneys arising from such sales (after deducting the expenses and commissions as aforesaid) shall be remitted by the said Charles H. Carroll from time to time, as the same shall be received, to the said Alexander Neill, in the manner herein before provided for the remission of the said sum of $ 15,000, and the same shall be applied by the said Alexander Neill to the payment of the debts due from the said Luke Tiernan to all the creditors of the said Luke, whose demands shall then have been ascertained by the said AJextmder Neill; ánd in case that the sum so to bé applied shall be insufficient for the payment of all such demands, then and in this case the same shall be applied in part payment of each of said demands, in the ratio that each of said demands respectively shall bear to the whole sum to be so applied to that object; and in case the said, sum shall be more than equal to the payment -of such demands, then and in that case the residue thereof shall be paid by the said Alexander Neill to the said Luke Tiernan, his heirs, executors, administrators, or assigns.”
    The said Carroll, in pursuance of said deed, proceeded to make sale of various parts of the property thereby conveyed, and from time to time, from the 1st of March, 1841, to the 22d of April, 1844, remitted to said Neill, in various amounts, the whole sum of $ 15,000, provided to be paid in the first place to said Neill out of the net proceeds of sales as above mentioned. This sum increased in the hands of Neill, by interest and premiums on the drafts in which it was remitted, to $ 16,440.55.
    Luke Tiernan was a partner in the commercial firm of Luke JTiernan & Son, of Baltimore, the only other partner therein being his son Charles Tiernan. This firm was dissolved previously to the death of Luke Tiernan, which occurred on the 9th of November, 1839, and after his death it was conducted under the -same name by Charles Tiernan.
    Luke Tiernan was also a partner in the commercial firms of Luke & Charles Tiernan, and Tiernan, Cuddy, & Co., of New Orleans, The partners of the first-named firm were Luke and Charles Tiernan,' -and of the second, Luke Tiernan, Charles Tiernan, Calvin Tate, and James Meó. Cuddy.
    The firm of Tiernan, Cuddy, & Co. failed in' December, 1835, for a large sum of money. -Charles' Tiernan was the liquidating partner thereof, jmd was engaged from April, 1836, to May, 1842, in collecting the- assets of the firm. He collected about $ 100,000j the whole of which, and a good deal more, he paid in satisfaction of the debts of the firm. Calvin Tate, one of the partners, applied for the benefit of the bankrupt law of the United States on the 18th of February, 1842, and obtained his discharge under said application. The amount of debts returned by him as due by Tiernan, Cuddy, & Co. was'$ 569,069.49, and the amount as due to. said firm was $ 800,743.47.
    On the 29th of May, 1845, the executors of Luke Tiernan, on an account then passed by them with the Orphans’ Court of Baltimore County, had in hand a balance in cash to the amount of $ 506.91. They conjecture that, with this balance, debts may be collected and other assets may be realized, including the entire real and personal property of said Luke, to the amount in all of about § 30,000. None of this amount, however, so far as appears, was ever collected, except said sum of § 506.91, and the entire estimate is merely conjectural.
    The individual debts of Luke Tiernan, as proved and allowed in this case, amount to § 31,586.25.
    The partnership debts of all the firms in which Luke Tier-nan was concerned as a partner, as proved in this case, amount" to § 295,025.74.
    In October, 1843, John D. Murrill, a citizen of the State of Virginia, and the Bank of New Orleans, filed their bill in equity against Mr. Neill, claiming from him an account of his trust under the deed now described, and a distribution of any fund in his hands among the creditors of Mr. Tiernan. The bill was amended by making William T- Somerville a defendant, as executor, along with Mr. Neill, of Luke Tiernan.
    The answer of Neill admits the receipt under the deed of § 15,000, increased, by interest from investment, to § 16,440.55; and this sum he asks may be distributed among the creditors of Mr. Tiernan who may under the trust have right to it. Testimony was taken to show.the insolvency, and the debts and assets, of the partnership in New Orleans, and of Luke Tier-nan. The separate estate of the latter in Maryland is shown to have been administered, leaving only § 506 in the hands of the executors, and some good debts to be collected,» and some unsalable stocks.
    The court passed an order for notifying creditors of Luke Tiernan to file their claims, and under it a number of claims have been presented, partnership and individual, against Luke Tiernan. The individual amount to §31,586.25, the partnership to §295,025.74.
    The matters being referred to an auditor to report an account upon the claims, he stated two accounts, one applying the fund to payment of only the individual creditors, the other to payment of them and of the partnership creditors pari passu.

    Upon exceptions taken, the court determined that the individual creditors were to be preferred, and the funds of the trust should go to their satisfaction before any payments should be made to the partnership creditors.
    The trustee was therefore directed to proceed to distribute and pay over the funds accordingly. From this decree, the complainants appealed to this court.
    The case was argued by Mr. Mayer scad Mr. Johnson (Attorney-General), for the appellants, and by Mr. Broum, and Mr. Meredith, for the appellees;

      The counsel for the appellants, contending that they were entitled to share ratably with the individual creditors in the funds proceeding from the lands conveyed, submitted these propositions: —
    1.There is no rule at law, nor in equity, which gives sepa rate creditors a priority of payment over joint creditors, out of separate estates; although the principle is well established that joint, that is (more properly) partnership, creditors are first to be paid out of partnership property. This principle is founded upon the consideration that each partner is interested in the partnership fund, and concerned to see it applied for his exoneration by its paying the common liabilities; and it is pledged accordingly, not only for partnership debts, in favor of partnership creditors, but from each to the other partner for the indemnity of both. The prior right of partnership claims upon the partnership estate arises, therefore, from the nature of that estate, in reference to the rights of the partners ; and does not grow out of any limitation of the rights or remedies of the partnership creditors. Such being the nature of the partnership fund, it is regarded, too, as under a prior lien in favor of the partnership creditors. The principle, then, which gives the priority is not restrictive, but is cumulative, in furnishing a security, by this preferred claim to the partnership property, in favor of partnership creditors. The rule contended for by the appellee has reference only to the marshalling of assets, not to the satisfaction, directly or ultimately, of the joint claims. It' is a rule only “ of convenience.”
    2. Whatever may be the rule as to the distinctive appropriation of separate and joint estates of debtors, it is believed to be clear from the authorities, that where there is no joint estate, or it is inadequate, or there are no solvent partners, the partnership creditors are admitted to dividends, with separate creditors, out of the separate estates.
    3. Modern decisions in equity regard partnership claims, and satisfy them, as jointly and severally binding the partners. In this respect, equity follows the law, and would virtually make the property here, under that position, legal assets. The whole idea of separate claims having a priority upon separate estates, arose from the impression that the partnership claims should not be treated in equity as joint and several.
    4. Whether the proceeds of sales under Mr. Tiernan’s deed be regarded as legal or as equitable assets, the terms of the deed demand a distribution among all creditors, without preference to any-class.
    5. .But those proceeds are to be regarded as legal assets, and the partnership creditors can no more rightfully be excluded from them than they could have been denied, after judgment against all the partners, the privilege of levying an execution c>n the lands, if they had not been conveyed. So far as the deed provides for creditors generally, it does but what the law had ordained, in subjecting the lands to all creditor claims.. Equity here must follow the law in applying the avails of this property. That is -the true equity.
    Under the first proposition, the following authorities were relied upon. 5 Cranch, 34; 5 Serg. & Rawle, 78; Eden on Bankruptcy, 169; 3 Yes. jr. 238 ; 4 ib. 838, 437; 6 ib. 813; 9 ib. 118, 124, 125; Ex parte Haydon, 2 Bro. C. C. 5; 14 Yes. 447; 15 ib. 496 ; 17 ib. 210; 5 Johns. Oh. 60, 74; 2 P. Wms. 500; 2 Russ. 191,-194, 196; 1 Har. & Gill, 96; 8 Peters, 271; 4 Johns. Ch. 525; 3 Madd. 229; Buck’s Cases in Bankr. 227; 2 Madd. Ch. Pr. 464; 3 Kent, 43, 64, 65; 8 Law Reporter, 273, Judge Ware’s Decision; Story on Partnership, 363; West v. Skip, 1 Yes. sen. 239.
    Under the second, the cases from Yesey and 2 Bro. C. C. 5; 2 Madd. 464;.5 Serg. &• Rawle, 78, cited under the first proposition, were relied on.
    Under the third proposition, 1 Story’s Equity, 626, § 676é; 1 Mylne & Keen, 582; 1 Meriv. 539, 572; 2 Johns. Ch. 508; 1 P. Wms. 682; 3 Yes. jr. 238; 4 ib. 838; 1 Har. & Gill, 96; 2 Russ. & Mylne, 495'; 1 Keen, 219; 1 Gall. 371, 630; 2 Yern. 292; 2 Yes. 100, 371.
    Under the fourth proposition, Ram on Assets, 317 (8 Law Lib.); 1 Yern. 63, 101; 2 ib. 61, 763.
    Under the fifth, 1 Yern. 63, 410, 411; 2 Yem. 764; 1 Story’s Equity, 521, <§> 553; 22 Pick. 450, 454,- 455;
    The counsel for the appellees contended, —
    1st. That the language of that clause in the deed of the 24th September, 1839, which directs that the first $ 15,000 remitted by the trustee shall be paid to “ the creditors of the said Luke Tiernan,” throws upon the appellants the onus of showing that the creditors of the partnership firms of Tiernan, Cuddy, & Co. and L. & C. Tiernan were meant to be included. Thomas v. Beynon, 12 Adolph. & Ellis, 431.
    2d. That, for the purpose of determining the meaning attached by the grantor to the language of the provisions of said deéd, and to ascertain what he intended by the same, the court, by means of extrinsic evidence, will place itself in his situation, by inquiring into all the collateral facts and circumstances that can be made ancillary to those objects. Wigram’s Extrinsic Evidence', (2 Lib. of Law and Equity,) Introductory Observations, <§> 9; the whole of Proposition V., with the notes, and especially 61, 62, 71, 72, 73, 74, 77, 78, 79, 95, %; the whole of Proposition YII., with the notes, and particularly <§><§> 150, 151, 152; General Conclusions, '§<§> 211, 212, 213, 214, 215.. Broom’s •Legal Maxims, 262, 263, 294 (1 Lib. of Law and Equity); Gresley’s' Evidence in Equity, 203; Cheyney’s- case, 5 Rep. 68; Altham’s case,. 8 Rep. 155; Counden v. Clark, Hob. 32; Smith v. Jersey, 2 Brod. & Bing. 473; Doe v. Harvey, 8 Bing. 239; Gord v. Needs, 2 Mees. & Weis. 129; Hiscocks v. Hiscocks, 5 Mees. & Weis. 367, 368 ; Allen v. Allen, 12 Adolph. & Ellis, 451; 1 Greenleaf’s Ev., ^286, 287, 288, 290,-297; Blackwell v. Bull, 1 Keen, 176; Doe v. .Morgan, 1 Cromp. & Mees. 235; Shore v. Wilson, 5 Scott, N. R. 1037,1038; Bradley v. Steam Packet Co., 13 Peters, 89; Barry v. Combe, 1 Peters, 640; Barkley v. Barkley, 3 McCord, 269; Doe v. Roe, Geo. Decis., Part I. 80.
    3d. That the deed per se, without looking beyond it, or out of it, ought to be construed to include only the creditors of Luke Tiernan, on his own individual account. Broom’s Legal Maxims, (1 Lib. of Law and Equity,) pp. 120, 126, 127, 128, 140, 141, 150, 151; 1 Preston’s Shep. Touch, ch. 5; 30 Law Lib. 150 et seq.

    4th. If this construction be not correct, they will maintain that the money in question in this case, which consists of the $ 15,000 first mentioned in the deed, with the increase thereof, should be divided solely among the individual creditors, and that the partnership creditors of said Luke Tiernan, if embraced at all in said deed, are secured by the subsequent part thereof, which provides that the residue of the proceeds of sales shall be divided among all the creditors.of said Luke.
    5th.- And if neither of said constructions shall be sustained by the court, they will further maintain that said Luke Tier-nan, if all his debts, both individual and partnership, be taken into consideration, made said, deed with reference to the rule common both to courts of equity and bankruptcy, that individual creditors shall first be paid out of individual property, and partnership creditors out of partnership property, and that all the property conveyed by said deed, being the individual property of Luke Tiernan, must be applied in the first instance to the payment of his individual debts
    They relied on the • decree of Lewis H. Sandford, Assistant Vice-Chancellor of the First Circuit of the State of New York,'made with reference to this deed in, the case of Blatter v. Carroll, 2 Sandf. Ch, R. 573 ; Cary on Part. 220, (5 Law. Lib.); lb. 296; Gow on Part. 386; Story on Part. <§>§ 363 -366, 376; 3. Kent, 64, 65 (4th ed.); Collyer on Part. 337-341; 3 Bland, 356; McCulloh v. Dashiell, 1 Har. & Gill, 97; Pierce v. Tiernan, 10 Gill & Johns. 253; Tuckers v. Oxley,' 5 Cranch, 44, 45; United States v. Hack, 8 Pet.'271; Wilder v. Keeler, 3 Paige, 171; Payne v. Matthews, 6 Paige, 19; 1 Story’s Eq. § 675; Eden on Bankruptcy, 169 et seq., 34 Law Lib.
   Mr. Justice DANIEL

delivered the opinion of the court

The original bill in this case having been framed upon a palpable misapprehension of the position of the parties, and of the facts connected with and entering into their rights or their obligations, reference to that bill beyond this remark is deemed unnecessary. The object of the amended bill filed by the complainants on behalf of themselves and others, creditors of the mercantile houses of Luke Tiernan and Charles' Tiernan of Baltimore, and of Tiernan, Cuddy, & Co-., of New Orleans, is to procure an appropriation to those creditors of the sum of $ 15,000, remaining in the hands of the defendant Alexander Neill, and derived to him from Charles H. Carroll, the trustee in the deed from Luke Tiernan, filed as an exhibit with the answer of Neill in this cause. This controversy depends, first, upon the construction of those clauses, of the deed above mentioned, which direct the payment by the trustee to Alexander Neill, and the application by the latter of the sum so paid, and, secondly, upon the operation of the rules of law, as controlling such application in reference to the rights of the separate creditors of Luke Tiernan, and of the joint creditors of the firms of Luke <fc Charles Tiernan, and of Tiernan, Cuddy, & Co.

In other words, whether the separate creditors of Luke Tier-nan have a prior right of satisfaction from the subject of the trust constituting the separate private estate of said Tiernan, or have the right to claim against that separate estate pari passu only with the several creditors of the mercantile houses of which Luke Tiernan was a partner. The facts of this case are few and simple, and are scarcely in any respect controverted; the cause turns: as has already been remarked, upon the construction of the deed, and upon the rules of equity as applicable to the position of the grantor, in relation to the different classes of his creditors, at the period of its execution. The language of the deed, as indicative of the intention of the grantor, will in the first place be adverted to. And in considering this language, it may be remarked, that it nowhere speaks of debts due from Luke Tiernan, as a member of the firms of Luke & Charles Tiernan, or of Tiernan, Cuddy, & Co., nor mentions nor alludes to those firms, nor to any other mercantile firms whatsoever. This deed recites the facts of the relinquishment by Mrs. Tiernan of her dower right in a large amount of property previously sold by her husband, and of her consent to a similar relinquishment in future sales to be made by the trustee, Carroll; it recites also a debt due from the grantor to Mrs. Anne E. Brien, deceased, which was still unpaid, and- was due and owing to her son, Luke Tiernan Brien. It then proceeds to declare, — “ That whereas the said Luke Tiernan is indebted to divers other persons, residing in different parts of the United States, in a large sum of money in the aggregate, but the names of all the persons to whom he is indebted, and the amounts due to each respectively, the said Luke Tiernan is now unable to specify particularly. And whereas the said Luke Tiernan is desirous of conveying the lands hereinafter described, in trust that the same shall be sold, and the proceeds thereof applied in the manner hereinafter particularly specified.” The deed then, after directing a sale by the trustee, provides, that he shall remit from time to time, as the same shall be received, to Alexander Neill of Maryland, and payable to his order, of the first moneys arising from such sales, until he shall have remitted the sum of $ 15,000, to be paid by the said Alexander Neill to the creditors of the said Luke Tiernan whose demands shall then have been ascertained; and if the demands so ascertained shall exceed the said sum of $ 15,000, the same shall be applied in part payment of each of the said demands, in the ratio that each of said demands shall respectively bear to the whole sum $ 15,000, so to be applied.” The deed then provides, out of further remittances arising from sales to be made by the trustee, for the payment of $> 12,000 to Mrs. Tiernan, in-compensation-for her right of dower; and next, for the payment of the debt due to the son of Mrs. Anne E. Brien, and then declares,'that after the last-mentioned sum (i. e. the sum due to Mrs. Brien or to her son) shall have been paid, all the moneys arising from such sales (after deducting expenses, &c.) shall be remitted by the trustee to the said Neill, and the same shall be applied by the said Neill to the payment of the debts due from the said Luke Tiernan to all the creditors of the said Luke, whose demands shall then have been ascertained by the said Alexander Neill ; “ and in case that the sum so to be applied shall be insufficient for the payment of all such demands; then, and in this case, the same shall be applied in part payment of each of said demands, in the ratio that each of said demands respectively shall bear to the whole sum to be so applied to that object; and in case the said sum shall be more than equal to the payment of such demands, then, and in that case, the residue thereof shall be paid by the said Alexander Neill to the said Luke Tiernan, his heirs,” &c.

We have already adverted to the circumstance, that the grantor in ibis deed has nowhere alluded to any mercantile concern with which he was associated) that he was disposing of a subject confessedly his own separate property; that he has not said, that'whereas Luke Tiernan &. Son, or Tiernan, Cuddy, & Co., but that Luke Tiernan, was indebted to Mrs. Tiernan and to Mrs. Brien, and to divers other persons residing in different quarters of the country. This would not be the language of a merchant, (still less of a practised and extensive merchant,) when intending to designate the firm of which he makes a part. On such occasions he never mentions himself -individually, unless he. intends expressly to distinguish between himself and his house, and would always be so understood by established mercantile acceptation. And again, if, in the construction of this deed, the name of Luke Tiernan is to be taken as synonymous with Luke Tiernan & Son, and Tier-nan, Cuddy, & Co., we should be driven to the conclusion, that these several firms were indebted to Mrs. Tiernan in consideration of her relinquishment of her dower in her husband’s estaté, and to Mrs. Brien for the private debt due to her, — for all these creditors are grouped in the same category. Their claims originate in the same source, — in the obligations of Luke Tiernan. The language of the deed is, that Luke Tiernan is indebted to Mrs. Tiernan, and to Mrs. Brien; and the same Luke Tiernan it is who is also indebted to divers other persons residing in different parts of the United States. Such a construction of the deed involves, we think, a violation of the plain meaning of the terms of the instruhaent, and leads to confusion and absurdity.

It has been-insisted for the appellants in this case, that the admission by the grantor of a large amount of drums against him, of the diversity of the residence of his creditors, and of the inability on his part at once to designate those*creditors and their demands, should be received as proof that the deed was never intended to be limited to the private creditors of the grantor, who, it is contended, must, as well as the e: .tent of their claims, have been known; but was designed to embrace all his partnership liabilities. We have just stated that such an interpretation of the deed is inconsistent with the meaning of its language. But if we look beyond the deed, to the position of the, parties at the time of its execution, is there any probability arising from that position, which can justify the conclusions urged in this respect for the appellants? The grantor in this deed appears to have been at one time' the possessor of great wealth; the deed made an exhibit in this case shows that he was the possessor of an unusual extent of property. It is almost certain, too, from the character and situation of the subject of this conveyance, as well as from other circumstances disclosed by the record, that its owner must have been the proprietor of many other constituents of a large estate, both within and without the city and State of his residence. That a man thus situated should necessarily be engaged in a variety of transactions; should employ numerous agents; that many of his transactions, both as to persons and contracts, should be conducted by agents; that his knowledge with respect to persons and undertakings should in their detail be dependent on information to be derived from agents thus employed, — are circumstances, in our view, falling’ within the range of daily experience, and such as not only may explain the language of an instrument intended to embrace the transactions of one so situated, but which in fact render such language proper, in order to bring it within the bounds of experience and truth. The daily habits of one so situated must imply, to some extent, an ignorance of the precise detail of all that may be consequent upon them. We think it natural, (nay, with a due regard to truth, inevitable,) that one so situated, if called upon on an emergency, should admit his inability to enumerate all that he had done, — all that he had authorized to be done through others, — and every consequence which might flow from the one or the other. The language of Mr.Tiernan we consider, therefore, as not more comprehensive than was appropriate to embrace his private liabilities. The debts due to his wife and to Mrs. Brien were strictly domestic obligations, necessarily within his knowledge; were regarded as of a peculiarly sacred character; and therefore were provided for, exempt from the contingency of an ultimate insufficiency of funds. But even these claims, however sacred they may have been deemed, were not permitted absolutely to precede a contribution at least to other creditors whose condition might be known; but they have been postponed to these pro tanto. The language of that portion of the deed which, after the payment directed to be madé to Mrs. Tiernan and to Luke Tiernan Brien, and after distribution of the first fifteen thousand dollars received from the trustee, directs the' application of the subsequent proceeds of the trust subject to all the creditors of the grantor then ascertained, and, in the event of a surplus, the payment of that surplus to the grantor, has been earnestly pressed on our attention. It has been argued upon this provisión of the deed, either that it is expressive of the intention of Lnke Tiernan to let in all his creditors, social as well as individual, or that it is fraudulent, as interposing a hindrance on one or the other class, or on both the classes of his creditors, by an attempt to retain the proceeds of the land, in opposition to their rights. We cannot yield to this argument the ends it was designed to accomplish. We think that the terms of this latter provision, so far from enlarging the meaning of the former, so as to let in _ upon the trust subject the creditors of the firms before mentioned, tend rather to strengthen the limit presented by the former provision when standing alone. For although the distribution of the money to be received by Neill is to be made amongst all the creditors, they are still the creditors of the said Luke Tiernan before spoken of, and the creditors of no other person. This mode of expression, coming from an individual practised in the habits and language of merchants, we regard as a confirmation of the intention previously expressed, rather-than as proof of a departure from that intention. Next, as to any evidence of fraud resulting from the direction to pay Over to the grantor in the deed any surplus which might remain after satisfying the separate creditors; we can perceive no • proof of fraud, no attempt to hinder or delay the creditors in this direction. Nothing is more probable than that Luke Tiernan might have considered the effects of Luke Tiernan' & Son and of Tiernan, Cuddy, & Co., represented to be of a large amount, as ade.quate to meet the joint responsibilities of those firms; or, at any rate, he might have insisted-upon his right to refer the partnership creditors to the partnership funds in the first instance, and, until these should be shown to be insufficient, to retain possession of his separate private estate. The argument then appears to be defective in either aspect in which it is applied.

The second principal position assumed for the appellant is this; that, conceding the fifteen thousand dollars in controversy to have been ever so clearly appropriated by Luke Tiernan to his separate creditors, still, under principles of equity/ such an appropriation cannot be maintained; but that those principles authorize the partnership creditors of Tiernan & Son, and of Tiernan, Cuddy, &. Co., to charge that fund pari passu with the separate creditors of said Tiernan.

The rule in equity governing the administration of insolvent partnerships is one of familiar acceptation and practice; it is one which will be found to have been in practice in this country from the beginning of our judicial history, and to have been generally, if not universally, 'received. This rule, with one or two eccentric variations in the English practice which may be noted hereafter, is believed to be identical with that prevailing in England, and is this: — That partnership creditors shall in the first instance be satisfied from the partnership estate; and separate or private creditors of the individual partners from the separate and private estate of the partners with whom they have made private and individual contracts; and that the private and individual property of the partners shall not be applied in extinguishment of partnership debts, until the separate and individual creditors of the respective partners shall be paid. The reason and foundation of this rule, or its equality and fairness, the court is not called on to justify. Were these less obvious than they are, it were enough to show the early adoption and general prevalence of this rule, to stay the hand of innovation at this day; at least, under any motive less strong than the most urgent propriety.

This rule may bé traced back in England, with certainty, to the cases of Ex parte Crowder, in 2 Vernon, 706, (in 1715,) and of Ex parte Cook, 2 P. Wms. 500, (in 1728,) nearly a century and a half since. It was affirmed by Lord Hardwicke in Ex parte Hunter, in 1 Atkyns, 228, (in 1742,) and continued unchanged until the year 1785, when a material innovation was riiade upon it by Lord Thurlow, in the case of Ex parte Hodgson, 2 Bro. Ch. Hep. 5. By the decision last mentioned, the established practice then of sixty years was so changed, and the distinction between joint and separate creditors so broken up, that the former were permitted to come in, and to receive dividends pari passu with the latter, from the separate estate.

This change led to the practice of filing a bill on behalf of the separate creditors, to restrain the order in bankruptcy whenever there was a' joint estate, and by this means the rights of the joint and separate creditors on their respective funds were maintained: a proceeding which could rest on no other foundation, than the peculiar equities of these different parties with respect to the funds with which they had been respectively connected. In consequence of the inconvenience of Lord Thurlow’s rule, and of the injustice it was thought to involve, Lord Loughborough reestablished the practice that had so long previously existed, with the single modification of permitting the joint creditors to prove under a separate commission; but denying to them any right to dividends, until after the separate creditors'^. re satisfied. The reasoning of his Lordship, as going to . w ■ nat his decision is founded in pure principles of equity, is -ihiarly forcible. Speaking of the rule of Lord Thurlow, he says, — “ The difficulty that has struck me upon it is, that what I order here sitting in bankruptcy, I shall forbid to-morrow sitting in chancery ; for it is quite of course to stop the dividend upon a bill filed. The plain rule of distribution is, that each estate shall bear its own debts. The equity is so plain, that it is of course upon a bill filed. The object of the commission is to distribute the effects with the least expense. Every order I make to prove a joint debt on a. separate estate, must produce a bill in equity. It is not fundamentally a just distribution, nor a convenient distribution. Every creditor of the partnership would come upon the separate estate. The consequence would be, the assignees of the separate estate must file a bill to restrain the dividend upon all these proofs, and make the partners parties. But there is another circumstance. It is a contrivance to throw this upon the separate estate.” Again his Loi’dship says, — It is not stated as a case where there are no joint funds. Here it is only that there are two funds. Their proper fund is the joint estate, and they must get all they can from that first. I have no difficulty in ordering them to be permitted to prove; but not to receive a dividend.” This doctrine of Lord Loughborough, deduced, as he tells us, not less from fundamental principles of equity, than from convenience in the administration of bankrupts’ estates, appears to have been followed in England ever since. The numerous cases chiefly before Lord Eldon going to sustain this position, would, if quoted, unnecessarily encumber our opinion; they are collected in note 1 to the case of Elton ex parte, 3 Vesey by Sumner, p. 242. It may be proper in this place to mention the two departures permitted, by the Court of Chancery in England from the general rule pursued by that court, which departures were adverted to in a previous part of this opinion. The first is presented in the instance in which the petitioning creditor, though a joint creditor, is permitted to charge the separate effects pari passu with the separate creditors, because, as it is said, his petition, being prior in time, is in the nature of an execution in behalf of himself and the separate creditors. The second is that in which there are 'no joint effects at all. In this last instance it is said that the joint creditors may come in for dividends pari passu on the separate effects; though if there be joint effects, though of the smallest possible amount, this priviledge would not be allowed. These exceptions it seems difficult to’reconcile with the reason or equity on which the general rule is founded; they are but exceptions, however, and cannot impair that rule. They do not, for aught we have seen, appear to have been recognized by the courts of this country. The case of Tucker v. Oxley, 5 Cranch, 34, was a case at law, and the court in that case, whilst they admitted the joint creditors to prove and to receive dividends against the separate estate, explicitly recognized the authority of Ex parte Elton, and the power and the duty of a court of chancery, upon application thereto, to prevent the diversion of the separate fund. The latter exception above referred to was considered by the Court of Appeals of Maryland, in the case of McCulloh v. Dashiell, 1 Harris and Gill’s Reports, 97, and by that court expressly repudiated.

The doctrine upon this question of distribution, as illustrated both in the English and American decisions, will- be found to be ably treated in the case of Murray v. Murray, 5 Johnson’s Chancery Reports, 72 et seq.; and by Archer, Justice, in the case of McCulloh v. Dashiell in 1 Harris and Gill, pp. 99 to 107; and the authorities, both English and American, are collated in a learned note in the third volume of Kent’s Commentaries, beginning on'p. 65 of that volume.

The proper conclusion from these authorities we deem to be this, as is stated also by Justice Story in his treatise on Partnership, p. 376, where he says, —“ It is a general rule, that the joint debts are primarily payable out of the joint effects, and are entitled to a preference over separate debts of the bankrupt; and so, in the. converse case, the separate debts are primarily payable out of the separate effects, and possess a like preference; and the surplus, only after satisfying such priorities, can be reached'by the other class of creditors.”

Upon a full consideration of this cause, we are of the opinion that, upon either ground of objection urged to the decree of the Circuit Court, that decree should be affirmed, and it is hereby accordingly affirmed.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Maryland, and was argued by counsel. On consideration whereof, it is now here ordered, adjudged, and decreed by this court, that the decree of the said Circuit Court in this cause be, and the same is hereby, affirmed, with costs.